EXHIBIT 4.1
THE MAJESTIC STAR CASINO, LLC
THE MAJESTIC STAR CASINO CAPITAL CORP.
as Issuers
and the Subsidiary Guarantors referred to herein
9-1/2% Senior Secured Notes due 2010
-------------------------------------
INDENTURE
Dated as of October 7, 2003
--------------------------------------
THE BANK OF NEW YORK,
Trustee
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE.................................................... 1
Section 1.1 Definitions.................................................................... 1
Section 1.2 Other Definitions.............................................................. 20
Section 1.3 Incorporation by Reference of Trust Indenture Act.............................. 21
Section 1.4 Rules of Construction.......................................................... 21
ARTICLE II THE NOTES.................................................................................... 22
Section 2.1 Form and Dating................................................................ 22
Section 2.2 Execution and Authentication................................................... 22
Section 2.3 Registrar, Paying Agent and Depositary......................................... 23
Section 2.4 Paying Agent to Hold Money in Trust............................................ 23
Section 2.5 Holder Lists................................................................... 23
Section 2.6 Transfer and Exchange.......................................................... 23
Section 2.7 Replacement Notes.............................................................. 27
Section 2.8 Outstanding Notes.............................................................. 27
Section 2.9 Treasury Notes................................................................. 27
Section 2.10 Temporary Notes................................................................ 27
Section 2.11 Cancellation................................................................... 28
Section 2.12 Defaulted Interest............................................................. 28
Section 2.13 Legends........................................................................ 28
Section 2.14 Deposit of Moneys.............................................................. 29
Section 2.15 CUSIP Numbers.................................................................. 29
ARTICLE III REDEMPTION.................................................................................. 29
Section 3.1 Notices to Trustee............................................................. 29
Section 3.2 Selection of Notes to Be Redeemed.............................................. 29
Section 3.3 Notice of Redemption........................................................... 29
Section 3.4 Effect of Notice of Redemption................................................. 30
Section 3.5 Deposit of Redemption Price.................................................... 30
Section 3.6 Notes Redeemed in Part......................................................... 31
Section 3.7 Optional Redemption............................................................ 31
Section 3.8 Required Regulatory Redemption................................................. 31
Section 3.9 No Mandatory Redemption........................................................ 31
ARTICLE IV COVENANTS.................................................................................... 32
Section 4.1 Payment of Notes............................................................... 32
Section 4.2 Maintenance of Office or Agency................................................ 32
Section 4.3 Reports........................................................................ 32
Section 4.4 Compliance Certificate......................................................... 33
Section 4.5 Taxes.......................................................................... 33
Section 4.6 Stay, Extension and Usury Laws................................................. 33
Section 4.7 Limitation on Restricted Payments.............................................. 34
Section 4.8 Limitation on Restrictions on Subsidiary Dividends............................. 37
Section 4.9 Limitation on Incurrence of Indebtedness....................................... 37
Section 4.10 Limitation on Asset Sales...................................................... 39
Section 4.11 Limitation on Transactions With Affiliates..................................... 41
Section 4.12 Limitation on Liens............................................................ 42
Section 4.13 Existence...................................................................... 42
Section 4.14 Repurchase Upon Change of Control.............................................. 42
Section 4.15 Maintenance of Properties...................................................... 44
Section 4.16 Maintenance of Insurance....................................................... 44
Section 4.17 Restrictions on Sale and Issuance of Subsidiary Stock.......................... 44
Section 4.18 Line of Business............................................................... 44
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Section 4.19 Restrictions on BHR Joint Venture.............................................. 44
Section 4.20 Restrictions on Activities of Capital.......................................... 45
ARTICLE V SUCCESSORS.................................................................................... 45
Section 5.1 When the Company May Merge, etc................................................ 45
Section 5.2 Successor Substituted.......................................................... 46
ARTICLE VI DEFAULTS AND REMEDIES........................................................................ 47
Section 6.1 Events of Default.............................................................. 47
Section 6.2 Acceleration................................................................... 48
Section 6.3 Other Remedies................................................................. 48
Section 6.4 Waiver of Past Defaults........................................................ 49
Section 6.5 Control by Majority............................................................ 49
Section 6.6 Limitation on Suits............................................................ 49
Section 6.7 Rights of Holders to Receive Payment........................................... 49
Section 6.8 Collection Suit by Trustee..................................................... 50
Section 6.9 Trustee May File Proofs of Claim............................................... 50
Section 6.10 Priorities..................................................................... 50
Section 6.11 Undertaking for Costs.......................................................... 51
ARTICLE VII TRUSTEE..................................................................................... 51
Section 7.1 Duties of Trustee.............................................................. 51
Section 7.2 Rights of Trustee.............................................................. 52
Section 7.3 Individual Rights of Trustee................................................... 53
Section 7.4 Trustee's Disclaimer........................................................... 53
Section 7.5 Notice of Defaults............................................................. 53
Section 7.6 Reports by Trustee to Holders.................................................. 54
Section 7.7 Compensation and Indemnity..................................................... 54
Section 7.8 Replacement of Trustee......................................................... 55
Section 7.9 Successor Trustee by Merger, etc............................................... 56
Section 7.10 Eligibility; Disqualification.................................................. 56
Section 7.11 Preferential Collection of Claims Against Issuers.............................. 56
ARTICLE VIII DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE........................................ 57
Section 8.1 Discharge; Option to Effect Legal Defeasance or Covenant Defeasance............ 57
Section 8.2 Legal Defeasance and Discharge................................................. 57
Section 8.3 Covenant Defeasance............................................................ 57
Section 8.4 Conditions to Legal Defeasance or Covenant Defeasance.......................... 58
Section 8.5 Deposited Cash and U.S. Government Obligations to be Held in Trust; Other
Miscellaneous Provisions....................................................... 59
Section 8.6 Repayment to the Issuers....................................................... 59
Section 8.7 Reinstatement.................................................................. 59
ARTICLE IX AMENDMENTS................................................................................... 60
Section 9.1 Without Consent of Holders..................................................... 60
Section 9.2 With Consent of Holders........................................................ 60
Section 9.3 Compliance with Trust Indenture Act............................................ 61
Section 9.4 Revocation and Effect of Consents.............................................. 61
Section 9.5 Notation on or Exchange of Notes............................................... 62
Section 9.6 Trustee to Sign Amendments, etc................................................ 62
ARTICLE X COLLATERAL AND SECURITY AND GUARANTEE......................................................... 62
Section 10.1 Collateral Documents........................................................... 62
Section 10.2 Additional Collateral.......................................................... 63
Section 10.3 Opinions....................................................................... 63
Section 10.4 Release of Collateral.......................................................... 63
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Section 10.5 Certificates of the Issuers.................................................... 64
Section 10.6 Authorization of Actions to be Taken by Trustee Under Security Documents....... 64
Section 10.7 Authorization of Receipt of Funds by Trustee Under Security Documents.......... 64
Section 10.8 Subsidiary Guarantee........................................................... 64
Section 10.9 Execution and Delivery of Subsidiary Guarantee................................. 66
Section 10.10 Limitation on Subsidiary Guarantor's Liability................................. 66
Section 10.11 Rights under the Subsidiary Guarantee.......................................... 66
Section 10.12 Primary Obligations............................................................ 67
Section 10.13 Guarantee by Subsidiary........................................................ 67
Section 10.14 Release of Subsidiary Guarantors............................................... 67
Section 10.15 Gaming Law and Liquor Law Considerations....................................... 67
ARTICLE XI MISCELLANEOUS................................................................................ 68
Section 11.1 Trust Indenture Act Controls................................................... 68
Section 11.2 Notices........................................................................ 68
Section 11.3 Communication by Holders with Other Holders.................................... 69
Section 11.4 Certificate and Opinion as to Conditions Precedent............................. 69
Section 11.5 Statements Required in Certificate or Opinion.................................. 70
Section 11.6 Rules by Trustee and Agents.................................................... 70
Section 11.7 Legal Holidays................................................................. 70
Section 11.8 No Recourse Against Others..................................................... 70
Section 11.9 Governing Law.................................................................. 70
Section 11.10 No Adverse Interpretation of Other Agreements.................................. 71
Section 11.11 Successors..................................................................... 71
Section 11.12 Severability................................................................... 71
Section 11.13 Counterpart Originals.......................................................... 71
Section 11.14 Table of Contents, Headings, etc............................................... 71
Section 11.15 Trustee Authorization.......................................................... 71
EXHIBIT A FORM OF NOTE......................................................................... A-1
EXHIBIT B CERTIFICATE OF TRANSFEROR............................................................ B-1
EXHIBIT C FORM OF GUARANTY..................................................................... C-1
EXHIBIT D FORM OF INTERCREDITOR AGREEMENT...................................................... D-1
EXHIBIT E FORM OF SECURITY AGREEMENT........................................................... E-1
EXHIBIT F FORM OF TRADEMARK SECURITY AGREEMENT................................................. F-1
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CROSS-REFERENCE TABLE*
TRUST INDENTURE ACT SECTION INDENTURE SECTION
310(a)(1)............................................................................... 7.10
(a)(2)............................................................................... 7.10
(a)(3)............................................................................... N.A.
(a)(4)............................................................................... N.A.
(a)(5)............................................................................... 7.10
(b).................................................................................. 7.8; 7.10
(c).................................................................................. N.A.
311(a).................................................................................. 7.11
(b).................................................................................. 7.11
(c).................................................................................. N.A.
312(a).................................................................................. 2.5
(b).................................................................................. 11.3
(c).................................................................................. 11.3
313(a).................................................................................. 7.6
(b).................................................................................. 7.6
(c).................................................................................. 7.6
(d).................................................................................. 7.6
314(a).................................................................................. 4.3; 4.4; 11.5
(b).................................................................................. 10.3
(c)(1)............................................................................... 11.4
(c)(2)............................................................................... 11.4
(c)(3)............................................................................... N.A.
(d).................................................................................. 10.5
(e).................................................................................. 11.5
(f).................................................................................. N.A.
315(a).................................................................................. 7.1(b)
(b).................................................................................. 7.5
(c).................................................................................. 7.1(a)
(d).................................................................................. 7.1(c)
(e).................................................................................. 6.11
316(a), (last sentence)................................................................. 2.9
(a)(1)(A)............................................................................ 6.5
(a)(1)(B)............................................................................ 6.4
(a)(2)............................................................................... N.A.
(b).................................................................................. 9.2
(c).................................................................................. 9.4
317(a)(1)............................................................................... 6.8
(a)(2)............................................................................... 6.9
(b).................................................................................. 2.4
318(a).................................................................................. 11.1
(b).................................................................................. N.A.
(c).................................................................................. 11.1
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
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INDENTURE, dated as of October 7, 2003, among The Majestic Star Casino,
LLC, an Indiana limited liability company, The Majestic Star Casino Capital
Corp., an Indiana corporation, the Subsidiary Guarantors (as defined) named
herein and The Bank of New York, a New York banking corporation, as trustee.
The Issuers (as defined) and the Trustee (as defined) agree as follows
for the benefit of each other and for the equal and ratable benefit of the
Holders (as defined) of the Issuers' 9-1/2% Senior Secured Notes due 2010.
ARTICLE I
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.1 DEFINITIONS.
"Acquired Debt" means Indebtedness of a Person existing at the time
such Person is merged with or into the Company or a Restricted Subsidiary or
becomes a Restricted Subsidiary, other than Indebtedness incurred in connection
with, or in contemplation of, such Person merging with or into the Company or a
Restricted Subsidiary or becoming a Restricted Subsidiary.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, means (a)
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise or (b) beneficial
ownership of 10% or more of the voting securities of such Person.
"Affiliate Transaction" means, with respect to any Person, (1) the
sale, lease, transfer or other disposition of any of such Person's properties or
assets to, or the purchaser of any property or assets from, any Affiliate, and
(2) the entering into by such Person, or the suffering to exist by such Person,
of any contract, agreement, understanding, loan, advance or guaranty with or for
the benefit of any Affiliate of such Person.
"Agent" means any Registrar, Paying Agent or co-registrar.
"AMB Parking" means AMB Parking, LLC, a Delaware limited liability
company.
"Applicable Capital Gain Tax Rate" means a rate equal to the sum of (i)
the highest marginal Federal capital gain tax rate applicable to an individual
who is a citizen of the United States plus (ii) an amount equal to the sum of
the highest marginal state and local capital gain tax rates applicable to an
individual who is a resident of the State of New York, multiplied by a factor
equal to 1 minus the rate described in clause (i) above.
"Applicable Income Tax Rate" means a rate equal to the sum of (i) the
highest marginal Federal income tax rate applicable to an individual who is a
citizen of the United States plus (ii) an amount equal to the sum of the highest
marginal state and local income tax rates applicable to an individual who is a
resident of the State of New York, multiplied by a factor equal to 1 minus the
rate described in clause (i) above.
"Appraised Value" means, with respect to a particular asset, the value
of such asset as of a particular date of determination, as set forth in a
written appraisal or valuation report by a nationally recognized investment
banking firm or independent appraisal firm.
"Asset Sale" means any (i) transfer (as defined), other than in the
ordinary course of business, of any assets of the Company or any Restricted
Subsidiary; (ii) direct or indirect issuance or sale of any Capital Stock of any
Restricted Subsidiary (other than directors' qualifying shares), in each case to
any Person; or (iii) Event of Loss. For purposes of this definition, (a) any
series of transactions that are part of a common plan shall be deemed a single
Asset Sale and (b) the term "Asset Sale" shall not include (1) any series of
transactions that have a fair market value (or result in gross proceeds) of less
than $1,000,000, until the aggregate fair market value and gross proceeds of the
transactions excluded from the definition of Asset Sale pursuant to this clause
(b)(1) exceed $5,000,000, (2) any disposition of all or substantially all of the
assets of the Company that is governed under and complies with the terms of
Article V, (3) the conveyance, sale, transfer, assignment or other disposition
of inventory and other assets acquired and held for resale in the ordinary
course of business, in each case made in the ordinary course of business,
consistent with past practices of the Company and its Restricted Subsidiaries,
(4) the sale or disposition by the Company or any of its Restricted Subsidiaries
of damaged, worn out or other obsolete personal property in the ordinary course
of business so long as such property is no longer necessary for the proper
conduct of the Company's business or the business of such Restricted Subsidiary,
as applicable, and (5) the liquidation of Cash Equivalents. A transfer of assets
by the Company to a Wholly Owned Subsidiary or by a Wholly Owned Subsidiary to
the Company or another Wholly Owned Subsidiary, and an issuance of Equity
Interests by a Wholly Owned Subsidiary to the Company or to another Wholly Owned
Subsidiary, shall not be deemed to be an Asset Sale. Any Investment that is not
prohibited by Section 4.7 will not be deemed to be an Asset Sale.
"Bankruptcy Code" means title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"BDI" means ▇▇▇▇▇▇ Development, Inc., an Indiana corporation.
"beneficial owner" has the meaning attributed to it in Rules 13d-3 and
13d-5 under the Exchange Act (as in effect on the Issue Date), whether or not
applicable.
"Berthing Agreement" means the Majestic Berthing Agreement, dated as of
April 23, 1996, as amended, by and between the Company and the BHR Joint
Venture.
"BHR Attributed Debt" means the product of (i) the aggregate principal
amount of all outstanding Indebtedness incurred pursuant to Section 4.19(a)(ii)
times (ii) the Company's percentage interest in the BHR Joint Venture; provided
that, any such Indebtedness shall cease to be BHR Attributed Debt, as of the
first date after the date such Indebtedness is so incurred on which the Company
can incur at least $1.00 of additional Indebtedness under the Interest Coverage
Ratio Test set forth in Section 4.9
"BHR Joint Venture" means ▇▇▇▇▇▇▇▇▇▇ Harbor Riverboats, LLC, a Delaware
limited liability company, in which the Company currently owns a 50% membership
interest, and any other Flow Through Entity owned solely by the members of the
BHR Joint Venture.
"Board of Directors" means the board of directors or any duly
constituted committee of any corporation or of a corporate general partner of a
partnership and any similar body empowered to direct the affairs of any other
entity.
"Business Day" means any day other than a Legal Holiday.
"Capital" means The Majestic Star Casino Capital Corp., an Indiana
corporation and a wholly owned subsidiary of the Company, until a successor
replaces such Person in accordance with the terms of this Indenture, and
thereafter means such successor.
"Capital Contribution" means any contribution to the equity of the
Company from a direct or indirect parent of the Company for which no
consideration other than the issuance of Qualified Capital Stock is given.
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"Capital Lease Obligation" means, as to any Person, the obligations of
such Person under a lease that are required to be classified and accounted for
as capital lease obligations under GAAP, and the amount of such obligations at
any date shall be the capitalized amount of such obligations at such date,
determined in accordance with GAAP.
"Capital Stock" means, (i) with respect to any Person that is a
corporation, any and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock, (ii) with respect to a
limited liability company, any and all membership interests, and (iii) with
respect to any other Person, any and all partnership, joint venture or other
equity interests of such Person.
"Cash Equivalent" means (i) any evidence of Indebtedness issued or
directly and fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that, the full faith and credit of
the United States of America is pledged in support thereof); (ii) time deposits
and certificates of deposit and commercial paper or bankers acceptance issued by
the parent corporation of any domestic commercial bank of recognized standing
having combined capital and surplus in excess of $250,000,000 and commercial
paper issued by others rated at least A-2 or the equivalent thereof by Standard
& Poor's Corporation or at least P-2 or the equivalent thereof by ▇▇▇▇▇'▇
Investors Service, Inc. and in each case maturing within one year after the date
of acquisition; (iii) investments in money market funds substantially all of
whose assets comprise securities of the type described in clauses (i) and (ii)
above and (iv) repurchase obligations for underlying securities of the types and
with the maturities described above.
"Cash Flow-Based Management Distributions" is defined in the definition
of Management Agreement.
"Casino" means a gaming establishment owned by the Company or a
Restricted Subsidiary and containing at least 400 gaming devices and 10,000
square feet of space dedicated to the operation of games of chance.
"Change of Control" means
(i) any merger or consolidation of the
Company with or into any Person or any sale, transfer or other
conveyance, whether direct or indirect, of all or substantially all of
the assets of the Company, on a consolidated basis, in one transaction
or a series of related transactions, if, immediately after giving
effect to such transaction(s), any "person" or "group" (as such terms
are used for purposes of Sections 13(d) and 14(d) of the Exchange Act,
whether or not applicable) (other than an Excluded Person) is or
becomes the "beneficial owner," directly or indirectly, of more than
50% of the total voting power in the aggregate of the Voting Stock of
the transferee(s) or surviving entity or entities,
(ii) any "person" or "group" (as such
terms are used for purposes of Sections 13(d) and 14(d) of the Exchange
Act, whether or not applicable) (other than an Excluded Person) is or
becomes the "beneficial owner," directly or indirectly, of more than
50% of the total voting power in the aggregate of the Voting Stock of
the Company,
(iii) during any period of 12 consecutive
months after the Issue Date, individuals who at the beginning of any
such 12-month period constituted the Managers of the Company (together
with any new directors whose election by such Managers or whose
nomination for election by the members of the Company 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, including new
directors designated in or provided for in an agreement regarding the
merger, consolidation or sale, transfer or other conveyance, of all or
substantially all of the assets of the Company, if such agreement was
approved by a
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vote of such majority of directors) cease for any reason to constitute
a majority of the Managers of the Company then in office,
(iv) the Company adopts a plan of
liquidation,
(v) the first day on which the Company
fails to own 100% of the issued and outstanding Equity Interests of
Capital, or
(vi) the first day on which (A) the
Company fails to own at least 45% of the issued and outstanding Equity
Interests of the BHR Joint Venture (provided that, a Change of Control
shall not be deemed to occur pursuant to this clause (A) if the Company
and the Restricted Subsidiaries sell all, but not less than all, of the
issued and outstanding Equity Interests of the BHR Joint Venture owned
by them concurrently with or promptly after a Permitted Vessel
Relocation and the sale of such issued and outstanding Equity Interests
complied with, and the Net Cash Proceeds therefrom were applied in
compliance with Section 4.10 and the other applicable provisions of
this Indenture), (B) any Person owns a greater percentage interest than
the Company in the BHR Joint Venture or (C) any Excluded Person
directly or indirectly owns any interest in the BHR Joint Venture other
than the interest owned by the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means any assets of the Issuers or any Subsidiary defined
as "Collateral" in any of the Security Documents and assets from time to time on
which a Lien exists as security for any of the Obligations hereunder or under
the Notes, the Security Documents or the Registration Rights Agreement; provided
that, in no event shall Collateral include Excluded Assets.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the TIA, then the body performing such duties at
such time.
"Company" means The Majestic Star Casino, LLC, an Indiana limited
liability company, until a successor replaces such Person in accordance with the
terms of this Indenture, and thereafter means such successor.
"Company Order" means a written request or order signed in the name of
each of the Issuers by the Chairman, President or Senior Vice President of each
of the Company and Capital, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of each and delivered to the Trustee.
"Consolidated Cash Flow" means, with respect to any Person (the
referent Person) for any period,
(a) consolidated income (loss) from operations
of such Person and its subsidiaries for such period, determined in accordance
with GAAP,
(b) plus, to the extent such amounts are
deducted in calculating such income (loss) from operations of such Person for
such period, and without duplication (i) amortization, depreciation and other
non-cash charges (including, without limitation, amortization of goodwill,
deferred financing fees, and other intangibles but excluding (x) non-cash
charges incurred after the Issue Date that require an accrual of or a reserve
for cash charges for any future period and (y) normally recurring accruals such
as reserves against accounts receivables), (ii) provision for taxes based on
income or profits of such Person and its subsidiaries and Permitted Tax
Distributions, and (iii) Pre-Opening Expenses, and
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(c) adjusted to exclude (only to the extent
included in calculating such income (loss) from operations of such Person for
such period, and without duplication) losses from retirement of Indebtedness
incurred during the Issuers' fiscal quarter ended December 31, 2003 and
nonrecurring items that would be permitted to be excluded in accordance with
Item 10 of Regulation S-K under the Securities Act if the Consolidated Coverage
Ratio were included in a filing with the Commission;
provided that, (1) the income from operations of any Person that is not a Wholly
Owned Subsidiary of the referent Person or that is accounted for by the equity
method of accounting will be included only to the extent of the amount of
dividends or distributions paid during such period to the referent Person or a
Wholly Owned Subsidiary of the referent Person, (2) the income (loss) from
operations of any Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition will be excluded, and (3) the
income from operations of any Restricted Subsidiary will not be included to the
extent that declarations of dividends or similar distributions by that
Restricted Subsidiary are not at the time permitted, directly or indirectly, by
operation of the terms of its organizational documents or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its owners.
"Consolidated Interest Expense" means, with respect to any Person for
any period, (a) the consolidated interest expense of such Person and its
subsidiaries for such period, whether paid or accrued (including noncash
interest payment, and the interest component of Capital Lease Obligations), to
the extent such expense was deducted in computing Consolidated Net Income of
such Person for such period less (b) write-off of deferred financing costs, the
amortization of original issue discount, and any charge related to any premium
or penalty paid, in each case accrued during such period in connection with
redeeming or retiring any Indebtedness before its stated maturity, as determined
in accordance with GAAP, to the extent such expense, cost or charge was included
in the calculation made pursuant to clause (a) above.
"Consolidated Net Income" means, with respect to any Person (the
referent Person) for any period, the aggregate of the Net Income of such Person
and its subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP; provided that, (i) the Net Income of any Person relating
to any portion of such period that such Person (a) is not a Wholly Owned
Subsidiary of the referent Person or (b) is accounted for by the equity method
of accounting will be included only to the extent of the amount of dividends or
distributions paid to the referent Person or a Wholly Owned Subsidiary of the
referent Person during such portion of such period, (ii) the Net Income of any
Person acquired in a pooling of interests transaction for any period prior to
the date of such acquisition will be excluded, (iii) the Net Income of any
Restricted Subsidiary will not be included to the extent that declarations of
dividends or similar distributions by that Restricted Subsidiary are not at the
time permitted, directly or indirectly, by operation of the terms of its
organizational documents or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Restricted
Subsidiary or its owners, and (iv) solely for the avoidance of doubt, any
Returns from Unrestricted Subsidiaries shall be included.
"Consolidated Net Worth" means, with respect to any Person, the total
stockholders' (or members') equity of such Person determined on a consolidated
basis in accordance with GAAP, adjusted to exclude (to the extent included in
calculating such equity), (i) the amount of any such stockholders' (or members')
equity attributable to Disqualified Capital Stock or treasury stock of such
Person and its consolidated subsidiaries, (ii) all upward revaluations and other
write-ups in the book value of any asset of such Person or a consolidated
subsidiary of such Person subsequent to the Issue Date, and (iii) all
Investments in subsidiaries of such Person that are not consolidated
subsidiaries and in Persons that are not subsidiaries of such Person.
"Corporate Trust Office" shall be at the address of the Trustee
specified in Section 11.2 or such other address as the Trustee may specify by
notice to the Issuers.
"Credit Facility" means (a) the credit facility, dated as of the Issue
Date, between the Company and ▇▇▇▇▇ Fargo Foothill, Inc., as agent (any related
notes, guarantees, collateral documents, instruments
5
and agreements executed in connection therewith), and (b) any amendment,
modification, supplement, refunding, refinancing or replacement thereof that has
terms and conditions (including with respect to applicable interest rates and
fees) customary for similar facilities extended to borrowers comparable to the
Company, in each case, that does not permit the Company and its Restricted
Subsidiaries to incur Indebtedness in an aggregate principal amount at any time
outstanding in excess of $80,000,000.
"Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Code.
"Default" means any event that is, or after notice or the passage of
time or both would be, an Event of Default.
"Depositary" means the Person specified in Section 2.3 as the
Depositary with respect to the Notes issuable in global form, until a successor
shall have been appointed and become such pursuant to the applicable provision
of this Indenture, and, thereafter, "Depositary" shall mean or include such
successor.
"Disqualified Capital Stock" means any Equity Interest that (i) either
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable) is or upon the happening of an event would be
required to be redeemed or repurchased prior to the final stated maturity of the
Notes or is redeemable at the option of the holder thereof at any time prior to
such final stated maturity, or (ii) is convertible into or exchangeable at the
option of the issuer thereof or any other Person for debt securities.
"DTC" means The Depository Trust Company.
"Equity Holder" means (a) with respect to a corporation, each holder of
stock of such corporation, (b) with respect to a limited liability company or
similar entity, each member of such limited liability company or similar entity
(in each case, which is not disregarded for Federal income tax purposes), (c)
with respect to a partnership, each partner of such partnership and (d) with
respect to any entity that is disregarded for Federal income tax purposes, the
owner of such entity.
"Equity Interests" means Capital Stock or warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or the rules and regulations promulgated thereunder.
"Event of Loss" means, with respect to any property or asset, any (i)
loss, destruction or damage of such property or asset or (ii) any condemnation,
seizure or taking, by exercise of the power of eminent domain or otherwise, of
such property or asset, or confiscation or requisition of the use of such
property or asset.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the offer that may be made by the Issuers
pursuant to the Registration Rights Agreement to exchange Series B Notes for
Series A Notes.
"Excluded Assets" means (i) cash and cash equivalents to the extent a
Lien thereon may not be perfected through the filing of a UCC-1 financing
statement or through the obtaining of "control" (as defined in the Uniform
Commercial Code); (ii) assets securing Purchase Money Obligations or Capital
Lease Obligations permitted to be incurred pursuant to clause (b) of the second
paragraph of Section 4.9; (iii) all Gaming Licenses and any license, contract or
agreement to which such debtor is a party, to the extent, but only to the
extent, that a grant of a Lien on such license (other than any Gaming License or
license issued under any Liquor Laws), contract or agreement is prohibited by
law, results in a breach or termination of the terms of, or constitutes a
default under or termination of any such license, contract or agreement (other
than to the extent that any such term would be rendered ineffective pursuant to
Section 9-
6
406, 9-407 or 9-408 of the Uniform Commercial Code (or any successor provision
or provisions) of any relevant jurisdiction) and, in any event, immediately upon
the ineffectiveness, lapse or termination of any such terms of or default under
such license, contract or agreement, the Excluded Assets shall not include, and
such debtor shall be deemed to have granted a security interest in, all such
licenses, contracts or agreements as if such terms or defaults had never been in
effect and (iv) the membership interest in ▇▇▇▇▇▇ Nevada, so long as it is an
Unrestricted Subsidiary; provided that, Excluded Assets does not include the
proceeds of the assets under clauses (ii) or (iii) or of any other Collateral to
the extent such proceeds do not constitute Excluded Assets under clause (i)
above; without limiting the foregoing, Excluded Assets shall include gaming
equipment subject to such Purchase Money Obligations or Capital Lease
Obligations.
"Excluded Person" means (i) any employee benefit plan of the Company or
any trustee or similar fiduciary holding Capital Stock of the Company for or
pursuant to the terms of any such plan, (ii) BDI, so long as it is controlled by
▇▇▇ ▇. ▇▇▇▇▇▇ or his spouse or an entity controlled by either of them, (iii) ▇▇▇
▇. ▇▇▇▇▇▇ or his spouse or an entity controlled by either of them, (iv) the
estate of ▇▇▇ ▇. ▇▇▇▇▇▇, (v) any descendant of ▇▇▇ ▇. ▇▇▇▇▇▇ or the spouse of
any such descendant, (vi) the estate of any such descendant or the spouse of any
such descendant, (vii) any trust or other arrangement for the benefit of the
spouse of ▇▇▇ ▇. ▇▇▇▇▇▇ or any such descendant or the spouse of any such
descendant, and (viii) any charitable organization or trust established by ▇▇▇
▇. ▇▇▇▇▇▇.
"Expense Reimbursement Agreement" means that certain Expense
Reimbursement Agreement, to be dated the Issue Date, by and between the Company
and ▇▇▇▇▇▇ Nevada Gaming, LLC pursuant to which ▇▇▇▇▇▇ Nevada Gaming, LLC
reimburses the Company for certain expenses (the "Expense Reimbursements"),
which Expense Reimbursement, for any fiscal year, is the greater of $500,000 and
the actual out-of-pocket expenses incurred by the Company for that fiscal year.
"Expense Reimbursements" is defined in the definition of Expense
Reimbursement Amount.
"Federal Flow Through Entity" is defined in the definition of Flow
Through Entity.
"FF&E" means furniture, fixture and equipment acquired by the Company
or a Restricted Subsidiary in the ordinary course of business.
"FF&E Financing" means Purchase Money Obligations, Capital Lease
Obligations, or Industrial Revenue Bond Obligations incurred solely to acquire
or lease, respectively, FF&E; provided that, the principal amount of such
Indebtedness does not exceed the cost (including sales and excise taxes,
installation and delivery charges and other direct costs and expenses) of the
FF&E purchased or leased with the proceeds thereof.
"FF&E Lender" means a Person that is not an Affiliate of the Company
and is a lender under FF&E Financing.
"Flow Through Entity" means an entity that (a) for Federal income tax
purposes constitutes (i) an "S corporation" (as defined in Section 1361(a) of
the Code), (ii) a "qualified subchapter S subsidiary" (as defined in Section
1361(b)(3)(B) of the Code), (iii) a "partnership" (within the meaning of Section
7701(a)(2) of the Code) other than a "publicly traded partnership" (as defined
in Section 7704 of the Code), (iv) a business entity that is disregarded as an
entity separate from its owner under the Code, the Treasury Regulations or any
published administrative guidance of the Internal Revenue Service, or (v) any
other substantially similar pass-through entity for Federal income tax purposes
(each of the entities described in the immediately preceding clauses (i), (ii),
(iii), (iv) and (v), a "Federal Flow Through Entity") and (b) for state and
local jurisdictions in respect of which Permitted Tax Distributions are being
made, is subject to treatment on a basis under applicable state or local income
tax law substantially similar to a Federal Flow Through Entity.
"gaap" means generally accepted accounting principles, as in effect
from time to time, set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified
7
Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as approved by
a significant segment of the accounting profession, and in the rules and
regulations of the Commission.
"GAAP" means gaap as in effect from time to time.
"Gaming Authorities" means the Indiana Gaming Commission, the
Mississippi Gaming Commission, the Colorado Limited Gaming Control Commission,
the Colorado Division of Gaming, and any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States or foreign government, any state, province or any city or
other political subdivision, whether now or hereafter existing, or any officer
or official thereof, including, without limitation, any other agency with
authority to regulate any gaming operation (or proposed gaming operation) owned,
managed or operated by the Company or any of its Subsidiaries.
"Gaming Law" means the provisions of any gaming laws or regulations of
any state or jurisdiction to which the Company or any of its Subsidiaries is, or
may at any time after the date of this Indenture, be subject.
"Gaming Licenses" means every finding of suitability, registration,
license, franchise or other finding of suitability, registration, approval or
authorization required to own, lease, operate or otherwise conduct or manage
riverboat, dockside or land-based gaming activities in any state or jurisdiction
in which the Company or any of its Subsidiaries conducts business and all
applicable liquor licenses.
"GNC Land" means the approximately 150 acres of land located adjacent
to the ▇▇▇▇▇▇▇▇▇▇ Harbor gaming complex.
"Government Securities" means (i) direct obligations of the United
States of America for the timely payment of which its full faith and credit is
pledged or (ii) obligations of a Person controlled or supervised by and acting
as an agency or instrumentality of the United States of America the timely
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act), as custodian with respect to any such Government Security
or a specific payment of principal of or interest on any such Government
Security held by such custodian for the account of the holder of such depository
receipt; provided that, (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
Government Security or the specific payment of principal of or interest on the
Government Security evidenced by such depository receipt.
"Governmental Authority" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States of America or foreign government, any state, province or any
city or other political subdivision or otherwise and whether now or hereafter in
existence, or any officer or official thereof, and any maritime authority.
"guaranty" or "guarantee," used as a noun, means any guaranty (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner (including, without
limitation, letters of credit and reimbursement agreements in respect thereof),
of all or any part of any Indebtedness or other Obligation. "guarantee," used as
a verb, has a correlative meaning.
"Hedging Obligations" means, with respect to any Person, the
Obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"Holder" means the Person in whose name a Note is registered in the
register of the Notes.
8
"Indebtedness" of any Person means (without duplication) (i) all
liabilities and obligations, contingent or otherwise, of such Person (A) in
respect of borrowed money (regardless of whether the recourse of the lender is
to the whole of the assets of such Person or only to a portion thereof), (B)
evidenced by bonds, debentures, notes or other similar instruments, (C)
representing the deferred purchase price of property or services (other than
trade payables on customary terms incurred in the ordinary course of business),
(D) created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), (E) representing
Capital Lease Obligations, (F) under bankers' acceptance and letter of credit
facilities, (G) to purchase, redeem, retire, defease or otherwise acquire for
value any Disqualified Capital Stock, or (H) in respect of Hedging Obligations;
(ii) all Indebtedness of others that is guaranteed by such Person; and (iii) all
Indebtedness of others that is secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness; provided that, the amount of such
Indebtedness shall (to the extent such Person has not assumed or become liable
for the payment of such Indebtedness) be the lesser of (x) the fair market value
of such property at the time of determination and (y) the amount of such
Indebtedness. The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date.
Notwithstanding the foregoing, the term Indebtedness shall not include
obligations arising from the honoring by a bank or other financial institution
of a check, draft or similar instrument drawn against insufficient funds in the
ordinary course of business; provided that, such obligation is extinguished
within two business days of its incurrence. The principal amount outstanding of
any Indebtedness issued with original issue discount is the accreted value of
such Indebtedness.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Industrial Revenue Bond Obligations" means obligations of the Company
or any of its Restricted Subsidiaries in connection with industrial revenue
bonds issued by the Mississippi Business Finance Corporation ("MBFC"), all of
the proceeds of which are loaned by the MBFC to the Company or its Restricted
Subsidiaries for the acquisition, construction or development of hotels or other
improvements at the Company's or its Restricted Subsidiaries' Casino located in
Tunica County, Mississippi.
"Initial Purchasers" means ▇▇▇▇▇▇▇▇▇ & Company, Inc. and ▇▇▇▇▇ Fargo
Securities, LLC.
"Intercreditor Agreement" means that certain Intercreditor Agreement,
dated as of the date hereof, among the Trustee and ▇▇▇▇▇ Fargo Foothill, Inc.,
as agent under the Credit Facility, substantially in the form attached hereto as
Exhibit D, entered into on the Issue Date in accordance with Section 7.1(g),
including any amended or supplemented agreement or any replacement or substitute
agreement, in each case substantially in the form of Exhibit D attached hereto.
"Interest Coverage Ratio" means, for any period, the ratio of (i)
Consolidated Cash Flow of the Company for such period, to (ii) Consolidated
Interest Expense of the Company for such period. In calculating the Interest
Coverage Ratio for any period: (a) pro forma effect shall be given to the
incurrence, assumption, guarantee, repayment, repurchase, redemption or
retirement by the Company or any of its Restricted Subsidiaries of any
Indebtedness subsequent to the commencement of the period for which the Interest
Coverage Ratio is being calculated, as if the same had occurred at the beginning
of the applicable period; (b) acquisitions that have been made by the Company or
any of its Restricted Subsidiaries, including all mergers and consolidations,
subsequent to the commencement of such period shall be calculated on a pro forma
basis, assuming that all such acquisitions, mergers and consolidations had
occurred on the first day of such period, including giving effect to reductions
in costs for such period that are directly attributable to the elimination of
duplicative functions and expenses (regardless of whether such cost savings
could then be reflected in pro forma financial statements under GAAP, Regulation
S-X promulgated by the Commission or any other regulation or policy of the
Commission) as a result of such acquisition, merger or consolidation, provided
that, (x) such cost savings were identified and quantified in
9
an Officers' Certificate delivered to the Trustee at the time of the
consummation of such acquisition, merger or consolidation and such Officers'
Certificate states that such officers believe in good faith that actions will be
commenced or initiated within 90 days of the consummation of such acquisition,
merger or consolidation to effect such cost savings and sets forth the specific
steps to be taken within the 90 days after such acquisition, merger or
consolidation to accomplish such cost savings, and (y) with respect to each
acquisition, merger or consolidation completed prior to the 90th day preceding
such date of determination, actions were commenced or initiated by the Company
or any of its Restricted Subsidiaries within 90 days of such acquisition, merger
or consolidation to effect the cost savings identified in such Officers'
Certificate (regardless, however, of whether the corresponding cost savings have
been achieved); and (c) the financial information of the Company with respect to
any portion of such period that falls before the Issue Date shall be adjusted to
give pro forma effect to the issuance of the Notes and the application of the
proceeds therefrom as if they had occurred at the beginning of such period.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of loans,
guarantees and other forms of direct and indirect credit support, advances or
capital contributions (excluding (i) payroll commission, travel and similar
advances to officers and employees of such Person made in the ordinary course of
business and (ii) bona fide accounts receivable arising from the sale of goods
or services in the ordinary course of business consistent with past practice),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, and any other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
"Issue Date" means the date upon which the Notes are first issued.
"Issuers" means Capital and the Company.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in The City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed.
"Lien" means any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind, regardless of whether filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or other
agreement to sell or give a security interest in and any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction).
"Liquidated Damages" means liquidated damages payable under the
Registration Rights Agreement.
"Liquor Authorities" means the Mississippi State Tax Commission, the
State of Mississippi Alcoholic Beverage Control Division of the Mississippi
State Tax Commission, the State Licensing Authority of the State of Colorado,
City of Black Hawk, the State of Colorado Liquor Enforcement Division, the State
of Indiana Alcohol and Tobacco Commission, the Department of the Treasury Bureau
of Alcohol, Tobacco and Firearms, and any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States or foreign government, any state, province or any city or
other political subdivision, whether now or hereafter existing, or any officer
or official thereof, including without limitation, any other agency with
authority to regulate the sale or distribution of alcoholic beverages by the
Company or any of its Subsidiaries.
"Liquor Laws" means the statutes regarding the sale and distribution of
alcoholic beverages enforced by the Liquor Authorities and the rules and
regulations of the Liquor Authorities.
"Majestic Investor" means Majestic Investor, LLC, a Delaware limited
liability company.
10
"Majestic Investor Holdings" means Majestic Investor Holdings, LLC, a
Delaware limited liability company.
"Majestic Star Casino Vessel" means the Majestic Star riverboat casino
currently operated by the Company.
"Management Agreement" means that certain Management Agreement, dated
the Issue Date, by and between the Company and BDI, pursuant to which the
Company may pay to BDI distributions (the "Management Distributions") for acting
as the Manager of the Company, which Management Distributions, for any fiscal
quarter, shall not exceed 1% of net revenues (such Management Distributions, the
"Revenue-Based Management Distributions") plus 5% of Consolidated Cash Flow
(such Management Distributions, the "Cash Flow-Based Management Distributions")
for the immediately preceding fiscal quarter; provided that, the payment of such
Management Distributions shall be subordinated to the payment in full of
principal, interest, premium and Liquidated Damages, if any, then due on the
Notes.
"Management Distributions" is defined in the definition of Management
Agreement.
"Managers" means (i) for so long as the Company is a limited liability
company, the Managers appointed pursuant to the Operating Agreement or (ii)
otherwise, the Board of Directors of the Company.
"Members" means the members of the Company.
"Net Cash Proceeds" means the aggregate amount of cash or Cash
Equivalents received by the Company in the case of a sale, or Capital
Contribution in respect, of Qualified Capital Stock upon any exercise, exchange
or conversion of securities (including options, warrants, rights and convertible
or exchangeable debt) of the Company that were issued for cash or Cash
Equivalents on or after the Issue Date, the amount of cash or Cash Equivalents
originally received by the Company upon the issuance of such securities
(including options, warrants, rights and convertible or exchangeable debt) less,
in each case, the sum of all payments, fees, commissions and expenses
(including, without limitation, the fees and expenses of legal counsel and
investment banking fees and expenses) incurred in connection with such sale of
Qualified Capital Stock or Capital Contribution.
"Net Income" means, with respect to any Person for any period, the net
income (loss) of such Person for such period, determined in accordance with
GAAP, reduced by the maximum amount of Permitted Tax Distributions for such
period, excluding (to the extent included in calculating such net income) (i)
any gain or loss, together with any related taxes paid or accrued on such gain
or loss, realized in connection with any Asset Sales and dispositions pursuant
to sale-leaseback transactions, and (ii) any extraordinary gain or loss,
together with any related taxes paid or accrued on such gain or loss.
"Net Proceeds" means the aggregate proceeds received in the form of
cash or Cash Equivalents in respect of any Asset Sale (other than an Event of
Loss) (including payments in respect of deferred payment obligations and any
cash or Cash Equivalents received upon the sale or disposition of any non-cash
consideration received in any Asset Sale, in each case when received and the net
proceeds received in the form of cash or Cash Equivalents in respect of any
Event of Loss (including insurance or other payments)), net of
(i) the reasonable and customary direct
out-of-pocket costs relating to such Asset Sale (including, without
limitation, legal, accounting and investment banking fees and sales
commissions), other than any such costs payable to an Affiliate of the
Company,
(ii) taxes required to be paid by the
Company or any of its Subsidiaries in connection with such Asset Sale
in the taxable year that such sale is consummated or in the immediately
succeeding taxable year or any Permitted Tax Distributions during the
taxable year within which such Asset Sale is consummated or in
11
the immediately succeeding taxable year that would not otherwise be
permitted to be distributed but for such Asset Sale,
(iii) amounts required to be applied to
the permanent repayment of Purchase Money Obligations and Capital Lease
Obligations in connection with such Asset Sale, and
(iv) appropriate amounts provided as a
reserve by the Company or any Restricted Subsidiary, in accordance with
GAAP, against any liabilities associated with such Asset Sale and
retained by the Company or such Restricted Subsidiary, as the case may
be, after such Asset Sale (including, without limitation, as
applicable, pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification arising from such Asset Sale).
"Notes" means, collectively, the Series A Notes and the Series B Notes.
"Obligation" means any principal, premium, interest, penalty, fee,
indemnification, reimbursement, damage and other obligation and liability
payable under the documentation governing any liability.
"Officers" means the Chairman of the Board, the President, the Chief
Operating Officer, Chief Financial Officer, the Treasurer, any Assistant
Treasurer, Controller, Secretary, any Assistant Secretary or any Vice President
of the Issuers.
"Officers' Certificate" means a certificate signed on behalf of the
Issuers by two Officers of each of the Company and Capital, in each case, one of
whom must be the President, Chief Operating Officer, Chief Financial Officer,
Treasurer, Controller or a Senior Vice President.
"Operating Agreement" means the Limited Liability Company agreement of
the Company, as amended from time to time.
"Opinion of Counsel" means an opinion from legal counsel. Such counsel
may be an employee of or counsel to the Company or any Subsidiary of the
Company.
"Permitted Investments" means:
(i) Investments in the Company or in
any Wholly Owned Subsidiary;
(ii) Investments in Cash Equivalents;
(iii) Investments in a Person, if, as a
result of such Investment, such Person (A) becomes a Wholly Owned
Subsidiary, or (B) is merged, consolidated or amalgamated with or into,
or transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a Wholly Owned Subsidiary;
(iv) Hedging Obligations;
(v) Investments as a result of
consideration received in connection with an Asset Sale made in
compliance with Section 4.10;
(vi) Investments existing on the Issue
Date;
12
(vii) Investments paid for solely with
Capital Stock (other than Disqualified Capital Stock) of the Company;
(viii) credit extensions to gaming
customers in the ordinary course of business, consistent with industry
practice;
(ix) stock, obligations or securities
received in settlement of debts created in the ordinary course of
business and owing to the Company in satisfaction of judgments;
(x) loans or advances to Affiliates or
to employees of the Company and its Restricted Subsidiaries in an
aggregate amount not to exceed $1,000,000 at any one time outstanding
pursuant to this clause (x);
(xi) Investments in a joint venture
between the Company or any of its Restricted Subsidiaries and the
municipality of Black Hawk, Colorado, in an amount not to exceed
$2,500,000;
(xii) contribution by the Company or any
of its Restricted Subsidiaries of Undeveloped Land to a joint venture
between the Company or any of its Restricted Subsidiaries, on the one
hand, and the municipality of Gary, Indiana, on the other hand, for the
purposes of developing on such Undeveloped Land non-gaming facilities;
and
(xiii) Investments in Unrestricted
Subsidiaries or Affiliates, provided that, the aggregate amount of all
such Investments outstanding at any time after the Issue Date pursuant
to this clause (xiii) shall not in the aggregate exceed $5,000,000
(measured by the value attributed to the Investment at the time
outstanding).
"Permitted Liens" means:
(i) Liens arising by reason of any
judgment, decree or order of any court for an amount and for a period
not resulting in an Event of Default with respect thereto, so long as
such Lien is being contested in good faith and is adequately bonded,
and any appropriate legal proceedings that may have been duly initiated
for the review of such judgment, decree or order shall not have been
finally adversely terminated or the period within which such
proceedings may be initiated shall not have expired;
(ii) security for the performance of
bids, tenders, trade, contracts (other than contracts for the payment
of money) or leases, surety bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business, consistent with industry practice;
(iii) Liens (other than Liens arising
under ERISA) for taxes, assessments or other governmental charges not
yet due or that are being contested in good faith and by appropriate
proceedings if adequate reserves with respect thereto are maintained on
the books of the Company in accordance with gaap;
(iv) Liens of carriers, warehousemen,
mechanics, landlords, materialmen, repairmen or other like Liens
arising by operation of law in the ordinary course of business
consistent with industry practices (other than Liens arising under
ERISA) and Liens on deposits made to obtain the release of such Liens
if (a) the underlying obligations are not overdue for a period of more
than 30 days or (b) such Liens are being contested in good faith and by
appropriate proceedings and adequate
13
reserves with respect thereto are maintained on the books of the
Company in accordance with gaap;
(v) Liens arising by virtue of any
contractual, statutory, or common law provision relating to bankers'
liens, rights of set-off, or similar rights and remedies regarding
deposit accounts or other funds maintained with a creditor depository
institution;
(vi) easements, rights of way, zoning
and similar restrictions, covenants, conditions and restrictions and
other encumbrances or title defects incurred in the ordinary course of
business, consistent with industry practices that do not in any case
materially detract from the value of the property subject thereto (as
such property is used by the Company or a Subsidiary) or interfere with
the ordinary conduct of the business of the Company or any of its
Subsidiaries; provided that, such Liens are not incurred in connection
with any borrowing of money or any commitment to loan any money or to
extend any credit;
(vii) pledges or deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security legislation;
(viii) Liens securing Refinancing
Indebtedness incurred in compliance with this Indenture to refinance
Indebtedness secured by Liens, provided, (a) such Liens do not extend
to any additional property or assets; (b) if the Liens securing the
Indebtedness being refinanced were subordinated to or pari passu with
the Liens securing the Notes or any intercompany loan, as applicable,
such new Liens are subordinated to or pari passu with such Liens to the
same extent, and any related subordination or intercreditor agreement
is confirmed; and (c) such Liens are no more adverse to the interests
of Holders than the Liens replaced or extended thereby;
(ix) Liens that secure Acquired Debt;
provided that, such Liens do not extend to or cover any property or
assets other than those of the Person being acquired and were not put
in place in anticipation of such acquisition;
(x) Liens that secure FF&E Financing
permitted to be incurred pursuant to clause (b) of the second paragraph
of Section 4.9; provided that, such Liens do not extend to or cover any
property or assets other than those being acquired or developed;
(xi) those matters shown as exceptions
to title on the title policies, dated as of the Issue Date, and issued
by Fidelity National Title Insurance Company for the benefit of the
Trustee;
(xii) Liens securing Obligations under
this Indenture, the Notes or the Security Documents;
(xiii) Liens on assets of the Company and
the Subsidiaries, and the proceeds of any or all the foregoing,
securing Indebtedness under the Credit Facility incurred pursuant to
clause (a) of the second paragraph of Section 4.9;
(xiv) Liens on the assets of a gaming
establishment owned by the Company or a Restricted Subsidiary and
containing at least 1,000 gaming devices and securing additional
Indebtedness incurred under the Credit Facility, in an amount not to
exceed $10,000,000;
14
(xv) with respect to any vessel included
in the Collateral, certain maritime liens, including liens for crew's
wages and salvage;
(xvi) leases or subleases granted in the
ordinary course of business not materially interfering with the conduct
of the business of the Company or any of its Restricted Subsidiaries;
(xvii) Liens evidenced by precautionary
Uniform Commercial Code financing statement filings regarding operating
leases entered into by the Company or any of its Subsidiaries in the
ordinary course of business; and
(xviii) Liens on the GNC Land securing
Indebtedness incurred pursuant to Section 4.9, so long as the aggregate
amount of the Indebtedness secured by such Liens shall not exceed at
any one time outstanding exceed 50% of the value of the aggregate
consideration paid or given by the Company and its Restricted
Subsidiaries for the GNC Land.
"Permitted Tax Distributions" in respect of the Company and each
Subsidiary that qualifies as a Flow Through Entity shall mean, with respect to
any taxable year, the sum of:
(a) the product of (i) the excess of (A) all
items of taxable income or gain (other than capital gain) of the Company that is
allocated (or otherwise flows through) to Equity Holders (or the Upper Tier
Equity Holders, as the case may be) for such year over (B) all items of taxable
deduction or loss (other than capital loss) of the Company that is allocated (or
otherwise flows through) to Equity Holders (or the Upper Tier Equity Holders, as
the case may be) for such year and (ii) the Applicable Income Tax Rate, plus
(b) the product of (i) the net capital gain
(i.e., net long-term capital gain over net short-term capital loss), if any, of
the Company that is allocated (or otherwise flows through) to Equity Holders (or
the Upper Tier Equity Holders, as the case may be) for such year and (ii) the
Applicable Capital Gain Tax Rate, plus
(c) the product of (i) the net short-term
capital gain (i.e., net short-term capital gain in excess of net long-term
capital loss), if any, of the Company that is allocated (or otherwise flows
through) to Equity Holders (or the Upper Tier Equity Holders, as the case may
be) for such year and (ii) the Applicable Income Tax Rate, minus
(d) the aggregate Tax Loss Benefit Amount for
the Company for such year;
provided that, in no event shall the Applicable Income Tax Rate or the
Applicable Capital Gain Tax Rate exceed the greater of (1) the highest aggregate
applicable effective marginal rate of Federal, state, and local income to which
a corporation doing business in the State of New York would be subject in the
relevant year of determination (as certified to the Trustee by a nationally
recognized tax accounting firm) plus 5%; and (2) 60%. For purposes of
calculating the amount of the Permitted Tax Distributions, the proportionate
part of the items of taxable income, gain, deduction, or loss (including capital
gain or loss) of any Subsidiary that is a Flow Through Entity shall be included
in determining the taxable income, gain, deduction, or loss (including capital
gain or loss) of the Company.
Estimated tax distributions shall be made within fifteen days following
March 31, May 31, August 31, and December 31 based upon an estimate of the
excess of (x) the tax distributions that would be payable for the period
beginning on January 1 of such year and ending on March 31, May 31, August 31,
and December 31 if such period were a taxable year (computed as provided above)
over (y) distributions attributable to all prior periods during such taxable
year; provided that, the estimated tax distribution with respect to the period
ending December 31 may be made within the last five days of such period.
15
Prior to making any estimated tax distribution, the Company shall
require each Equity Holder and Upper Tier Equity Holder to agree that (a)
promptly after the Company and each Subsidiary file their respective annual tax
return, (i) such Equity Holder and Upper Tier Equity Holder shall be jointly and
severally liable to reimburse the Company to the extent the estimated tax
distributions made to such Equity Holder exceeded the actual Permitted Tax
Distributions, as determined on the basis of such tax returns filed in respect
of such taxable year for that Equity Holder (or Upper Tier Equity Holder, as the
case may be) and (ii) the Company shall make a further payment to such Equity
Holder to the extent such estimated tax distributions were less than the actual
Permitted Tax Distributions, as determined on the basis of such tax returns
filed in respect of such taxable year for that Equity Holder (or Upper Tier
Equity Holder, as the case may be) and (b) if the appropriate Federal or state
taxing authority finally determines that the amount of the items of taxable
income, gain, deduction, or loss (including capital gain or loss) of the Company
or any Subsidiary that is treated as a Flow Through Entity for any taxable year
or the aggregate Tax Loss Benefit Amounts carried forward to such taxable year
should be changed or adjusted (including by reason of a final determination that
the Company or such Subsidiary was not a Flow Through Entity), then (i) such
Equity Holder and Upper Tier Equity Holder shall be jointly and severally liable
to reimburse the Company in an amount (such amount, until reimbursed to the
Company, an "Unreimbursed Tax Distribution Amount") equal to the sum of (A) the
excess of (x) the Permitted Tax Distributions previously made to such Equity
Holder in respect of that taxable year over (y) the Permitted Tax Distributions
with respect to such taxable year, taking into account such change or adjustment
for such Equity Holder, plus (B) interest and penalties imposed on the Company
and its Subsidiaries by a Governmental Authority resulting from a final
determination that the Company or a Subsidiary was not a Flow Through Entity,
and (ii) the Company shall make a further payment to such Equity Holder to the
extent the Permitted Tax Distributions previously made to such Equity Holder in
respect of that taxable year were less than the Permitted Tax Distributions
payable to such Equity Holder with respect to such taxable year taking into
account such change or adjustment.
To the extent that any tax distribution would otherwise be made to any
Equity Holder at a time when an obligation of such Equity Holder to make a
payment to the Company pursuant to the previous paragraph remains outstanding,
the amount of any tax distribution to be made shall be reduced by the amounts
such Equity Holder is obligated to pay the Company.
"Permitted Vessel Lien" means a Lien on the Majestic Star Casino Vessel
that secures FF&E Financing; provided that, (a) the FF&E Lender agrees (i) to
release such Lien upon satisfaction of such FF&E Financing, (ii) to release such
Lien upon payment (or promise of payment) to such FF&E Lender of that portion of
the proceeds of the sale of the Majestic Star Casino Vessel attributable to the
related FF&E, and (iii) that such Lien is subordinate and inferior in every
respect to the Lien of the Trustee pursuant to the Preferred Ship Mortgage on
the hull and other equipment constituting the Majestic Star Casino Vessel (other
than the related FF&E), and (b) such Lien shall not have an adverse impact on
the Holders.
"Permitted Vessel Relocation" means the relocation of the Majestic Star
Casino Vessel from its current location at the docking facilities owned by the
BHR Joint Venture to new docking facilities on the GNC Land; provided that, each
of the following conditions precedent shall have been satisfied: (x) the Company
or any of its Restricted Subsidiaries shall have acquired the GNC Land, (y) the
Company shall have constructed or acquired new docking facilities thereon, which
new docking facilities have substantially similar amenities as or better
amenities than those of the docking facilities owned by the BHR Joint Venture
immediately prior to such relocation, and (z) the Company shall have entered
into a berthing agreement with the owner or owners of such facilities (if such
owner or owners are other than the Company or its Restricted Subsidiaries) on
terms no less favorable to the Company or such Restricted Subsidiary than those
set forth in the Berthing Agreement as in effect immediately prior to such
relocation.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof, or any other entity.
"Preferred Ship Mortgages" means (i) the preferred ship mortgage on the
Tunica Vessel, dated as of the Issue Date, by and between ▇▇▇▇▇▇ Mississippi
Gaming, LLC and the Trustee, and (ii) the preferred
16
ship mortgage on The Majestic Star Casino Vessel, dated as of the Issue Date, by
and between the Company and the Trustee.
"Pre-Opening Expenses" means all costs of start-up activities that are
required to be expensed (and are not capitalized) in accordance with SOP 98-5.
"Purchase Money Obligations" means Indebtedness representing, or
incurred to finance, the cost (i) of acquiring any assets and (ii) of
construction or build-out of facilities (including Purchase Money Obligations of
any other Person at the time such other Person is merged with or into or is
otherwise acquired by the Issuers); provided that, (x) the principal amount of
such Indebtedness does not exceed 80% of such cost, including construction
charges, (y) any Lien securing such Indebtedness does not extend to or cover any
other asset or property other than the asset or property being so acquired,
constructed or built and (z) such Indebtedness is incurred, and any Liens with
respect thereto are granted, within 180 days of the acquisition or commencement
of construction or build-out of such property or asset.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Qualified Capital Stock" means, with respect to any Person, Capital
Stock of such Person other than Disqualified Capital Stock.
"Qualified Equity Offering" means (1) an underwritten registered public
offering of Qualified Capital Stock of the Company for cash, other than pursuant
to Form S-8 (or any successor thereto) under the Securities Act and other than
shares of Qualified Capital Stock of the Company issued pursuant to employee
benefit plans or as compensation to employees, and (2) an unregistered offering
of Qualified Capital Stock of the Company for cash resulting in net proceeds to
the Company in excess of $10,000,000.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Issue Date, by and among the Issuers and the Initial
Purchasers as such agreement may be amended, modified or supplemented from time
to time.
"Related Business" means the gaming and hotel businesses conducted by
the Company as of the Issue Date and any and all businesses that in the good
faith judgment of the Managers are materially related businesses.
"Required Regulatory Redemption" means a redemption by the Issuers of
any Holder's Notes pursuant to, and in accordance with, any order of any
Governmental Authority with appropriate jurisdiction and authority relating to a
Gaming License, or to the extent necessary in the reasonable, good faith
judgment of the Managers to prevent the loss, failure to obtain or material
impairment or to secure the reinstatement of, any Gaming License, where such
redemption or acquisition is required because the Holder or beneficial owner of
Notes is required to be found suitable or to otherwise qualify under any Gaming
Laws and is not found suitable or so qualified within a reasonable period of
time.
"Responsible Officer" when used with respect to the Trustee, means any
officer within the corporate trust department of the Trustee located at the
Corporate Trust Office (or any successor group of the Trustee) or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the designated officers, and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular subject
and who shall have direct responsibility for the administration of this
Indenture.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Securities" means Notes that bear or are required to bear
the legends set forth in Exhibit A hereto.
"Restricted Subsidiary" means a Subsidiary other than an Unrestricted
Subsidiary.
17
"Return from Unrestricted Subsidiaries" means (a) 50% of the fair
market value of any dividends or distributions received by the Company or a
Restricted Subsidiary from an Unrestricted Subsidiary, to the extent that such
dividends or distributions were not otherwise included in Consolidated Net
Income of the Company, plus (b) to the extent not otherwise included in
Consolidated Net Income of the Company, an amount equal to the net reduction in
Investments in Unrestricted Subsidiaries resulting from (i) repayments of the
principal of loans or advances or other transfers of assets to the Company or
any Restricted Subsidiary from Unrestricted Subsidiaries or (ii) the sale or
liquidation of any Unrestricted Subsidiaries (other than the sale, distribution
or liquidation of an Unrestricted Subsidiary that as of the Issue Date had been
designated as an Unrestricted Subsidiary); plus (c) to the extent that any
Unrestricted Subsidiary is designated to be a Restricted Subsidiary, the fair
market value of the Company's Investment in such Subsidiary on the date of such
designation.
"Revenue-Based Management Distributions" is defined in the definition
of Management Agreement.
"Rule 144A" means Rule 144A under the Securities Act, as such Rule may
be amended from time to time, or under any similar rule or regulation hereafter
adopted by the Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means that certain Pledge and Security Agreement
to encumber substantially all of the assets of the Company, including the
Company's interest in the Berthing Agreement, in favor of the Trustee, for the
ratable benefit of the Holders of the Notes, as the same may be amended in
accordance with the terms thereof and this Indenture.
"Security Documents" means, collectively, the BDI Pledge Agreement, the
Preferred Ship Mortgages, the Security Agreement, the Trademark Security
Agreement, and any other agreements, instruments, financing statements or other
documents that evidence, set forth or limit the Lien of the Trustee in the
Collateral.
"Series A Notes" means the Issuers' 9-1/2% Series A Senior Notes due
2010, as authenticated and issued under this Indenture.
"Series B Notes" means the Issuers' 9-1/2% Series B Senior Notes due
2010, as authenticated and issued under this Indenture.
"subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity (including a limited liability company) of
which more than 50% of the total voting power of shares of Voting Stock thereof
is at the time owned or controlled, directly or indirectly, by such Person or
one or more of the other subsidiaries of that Person or a combination thereof
and (ii) any partnership in which such Person or any of its subsidiaries is a
general partner.
"Subsidiary" means any subsidiary of the Company.
"Subsidiary Guarantor" means any Restricted Subsidiary that has
executed and delivered in accordance with this Indenture an unconditional and
irrevocable Subsidiary Guarantee of the Issuers' obligations under the Notes and
such Person's successors and assigns.
"Tax Loss Benefit Amount" means, with respect to any taxable year, the
amount by which the Permitted Tax Distributions would be reduced were a net
operating loss or net capital loss from a prior taxable year of the Company
ending subsequent to the Issue Date carried forward to such taxable year;
provided that, for such purpose the amount of any such net operating loss or net
capital loss shall be utilized only once and in each case shall be carried
forward to the next succeeding taxable year until so utilized. For purposes of
calculating the Tax Loss Benefit Amount, the proportionate part of the items of
taxable income, gain, deduction, or loss (including capital gain or loss) of any
Subsidiary that is a Flow
18
Through Entity for a taxable year of such Subsidiary ending subsequent to the
Issue Date shall be included in determining the amount of net operating loss or
net capital loss of the Company.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb), as amended, as in effect on the date hereof until such time as
this Indenture is qualified under the TIA, and thereafter as in effect on the
date on which this Indenture is qualified under the TIA.
"Trademark Security Agreement" means that certain Trademark Security
Agreement, dated as of the Issue Date, by and among the Issuers, the Subsidiary
Guarantors and the Trustee, substantially in the form of Exhibit F hereto, as
amended or supplemented from time to time.
"transfer" means, with respect to any asset, any direct or indirect
sale, assignment, transfer, lease, conveyance, or other disposition (including,
without limitation, by way of merger or consolidation).
"Trustee" means The Bank of New York, a New York banking corporation,
until a successor replaces it in accordance with the applicable provisions of
this Indenture and thereafter means the successor serving hereunder.
"Tunica Vessel" means that certain vessel and appurtenances described
as:
Name Fitzgeralds Tunica
Official Number: 262757
Type: Barge
"Undeveloped Land" means any unimproved land owned by the Company or
any of its Restricted Subsidiaries; provided that, for the avoidance of doubt,
for purposes of determining the amount of any Permitted Investment pursuant to
clause (xii) of the definition thereof, (a) the amount of such contribution
attributable to the amount or value of any Investments in, or capital
expenditures or other payments with respect to, or development of or improvement
on, such Undeveloped Land after the Issue Date (other than minor improvements
and other than payments for reasonable costs incurred in connection with such
contribution, which costs would customarily be incurred by a seller of
unimproved land, including, without limitation, for title charges, environmental
studies, surveys and legal fees) shall not constitute a Permitted Investment,
and (b) any Investments in, or capital expenditures or other payments with
respect to, such joint venture after the Issue Date shall not constitute a
Permitted Investment.
"Unreimbursed Tax Distribution Amount" is defined in the definition of
Permitted Tax Distributions.
"Unrestricted Subsidiary" means (1) ▇▇▇▇▇▇ Nevada Gaming, LLC, a Nevada
limited liability company, and (2) any other Subsidiary that, at or prior to the
time of determination, shall have been designated by the Managers as an
Unrestricted Subsidiary; provided that, such Subsidiary (a) does not hold any
Indebtedness or Capital Stock of, or any Lien on any assets of, the Company or
any Restricted Subsidiary; (b) is not party to any agreement, contract,
arrangement or understanding with the Company or any Restricted Subsidiary
unless the terms of any such agreement, contract, arrangement or understanding
are no less favorable to the Company or such Restricted Subsidiary than those
that might be obtained at the time from Persons who are not Affiliates of the
Company; (c) is a Person with respect to which neither the Company nor any of
its Restricted Subsidiaries has any direct or indirect obligation (x) to
subscribe for additional Equity Interests or (y) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results; and (d) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of the Company or any of
its Restricted Subsidiaries. If, at any time, any Unrestricted Subsidiary would
fail to meet the foregoing requirements as an Unrestricted Subsidiary, it shall
thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture
and any Indebtedness of such Subsidiary shall be deemed to be incurred by a
Restricted Subsidiary as of such date. The Managers may at any time designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that, such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of any outstanding Indebtedness of such Unrestricted Subsidiary and
such
19
designation shall only be permitted if (i) such Indebtedness is permitted under
the Interest Coverage Ratio test set forth in Section 4.9 calculated on a pro
forma basis as if such designation had occurred at the beginning of the
four-quarter reference period, and (ii) no Default or Event of Default would be
in existence following such designation. The Managers may designate any
Restricted Subsidiary to be an Unrestricted Subsidiary so long as no Default or
Event of Default is in existence at the time of such designation or would be in
existence following such designation. The Company shall be deemed to make an
Investment in each Subsidiary designated as an Unrestricted Subsidiary
immediately following such designation in an amount equal to the Investment in
such Subsidiary and its subsidiaries immediately prior to such designation. Any
such designation by the Managers shall be evidenced to the Trustee by filing
with the Trustee a certified copy of the resolution of the Managers giving
effect to such designation and an Officers' Certificate certifying that such
designation complies with the foregoing conditions and is permitted by Section
4.9.
"Upper Tier Equity Holder" means, in the case of any Flow Through
Entity the Equity Holder of which is, in turn, a Flow Through Entity, the person
that is ultimately subject to tax on a net income basis on the items of taxable
income, gain, deduction, and loss of the Company and its Subsidiaries that are
Flow Through Entities.
"U.S. Government Obligations" means direct obligations of the United
States of America, or any agency or instrumentality thereof for the payment of
which the full faith and credit of the United States of America is pledged.
"Voting Stock" means, with respect to any Person, (i) one or more
classes of the Capital Stock of such Person having general voting power to elect
at least a majority of the Board of Directors, managers or trustees of such
Person (regardless of whether at the time Capital Stock of any other class or
classes have or might have voting power by reason of the happening of any
contingency) and (ii) any Capital Stock of such Person convertible or
exchangeable without restriction at the option of the holder thereof into
Capital Stock of such Person described in clause (i) above.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years (rounded to the nearest
one-twelfth) obtained by dividing (i) the then outstanding principal amount of
such Indebtedness into (ii) the total of the product obtained by multiplying (A)
the amount of each then remaining installment, sinking fund, serial maturity or
other required payments of principal, including payment at final maturity, in
respect thereof, by (B) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment.
"Wholly Owned Subsidiary" of any Person means a subsidiary of such
Person all the Capital Stock of which (other than directors' qualifying shares)
is owned directly or indirectly by such Person or by a Wholly Owned Subsidiary
of such Person; provided that, with respect to the Company, the term Wholly
Owned Subsidiary shall exclude Unrestricted Subsidiaries.
SECTION 1.2 OTHER DEFINITIONS.
TERM DEFINED IN SECTION
---- ------------------
"Change of Control Offer" ......................................... 4.14
"Change of Control Payment" ....................................... 4.14
"Change of Control Payment Date" .................................. 4.14
"Covenant Defeasance" ............................................. 8.3
"Definitive Notes" ................................................ 2.1
"Event of Default" ................................................ 6.1
"Excess Proceeds" ................................................. 4.10
"Excess Proceeds Offer" ........................................... 4.10
"Excess Proceeds Offer Period" .................................... 4.10
"Excess Proceeds Payment Date" .................................... 4.10
"Global Notes" .................................................... 2.1
"Legal Defeasance" ................................................ 8.2
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"Maximum Credit Facility Amount" .................................. 4.9(a)
"Paying Agent" .................................................... 2.3
"Purchase Amount" ................................................. 4.10
"Refinance" ....................................................... 4.9(h)
"Refinancing Indebtedness" ........................................ 4.9(h)
"Registrar" ....................................................... 2.3
"Restricted Payments" ............................................. 4.7
"Subsidiary Guarantee" ............................................ 10.8
SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Issuers, the Subsidiary Guarantors
and any successor obligor upon the Notes.
All other terms used in this Indenture that are defined by the TIA, defined by
TIA reference to another statute, or defined by Commission rule under the TIA
have the meanings so assigned to them.
SECTION 1.4 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions;
(6) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular article, section or other
subdivision, and the terms "Article," "Section," and "Exhibit," unless otherwise
specified or indicated by the context in which used, mean the corresponding
article or section of, or the corresponding exhibit to, this Indenture; and
(7) references to agreements and other instruments include
subsequent amendments, supplements and waivers to such agreements or instruments
but only to the extent not prohibited by this Indenture.
21
ARTICLE II
THE NOTES
SECTION 2.1 FORM AND DATING.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A attached hereto, the terms of which are
incorporated in and made a part of this Indenture. Each Note shall include the
Subsidiary Guarantee executed by each of the Subsidiary Guarantors in the form
of Exhibit C attached hereto, the terms of which are incorporated into and made
a part of this Indenture. The Notes may have notations, legends or endorsements
required by law, stock exchange rule, agreements to which the Issuers are
subject or usage. Each Note shall be dated the date of its authentication. The
Notes shall be issued in denominations of $1,000 and integral multiples thereof.
The Notes will be issued (i) in global form (the "Global Notes"),
substantially in the form of Exhibit A attached hereto (including the text
referred to in footnotes 1 and 3 thereto) and (ii) under certain circumstances,
in definitive form (the "Definitive Notes"), substantially in the form of
Exhibit A attached hereto (excluding the text referred to in footnotes 1 and 3
thereto). Each Global Note shall represent the aggregate amount of outstanding
Notes from time to time endorsed thereon; provided that, the aggregate amount of
outstanding Notes represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions. Any endorsement
of a Global Note to reflect the amount of any increase or decrease in the amount
of outstanding Notes represented thereby shall be made by the Trustee, in
accordance with instructions given by the Holder thereof as required by Section
2.6.
SECTION 2.2 EXECUTION AND AUTHENTICATION.
Two Officers of each of the Issuers shall sign the Notes for the
Issuers by manual or facsimile signature. If an Officer whose signature is on a
Note no longer holds that office at the time the Note is authenticated, the Note
shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature of the Trustee shall be conclusive evidence that
the Note has been authenticated under this Indenture. The form of Trustee's
certificate of authentication to be borne by the Notes shall be substantially as
set forth in Exhibit A attached hereto.
The Trustee shall, upon a Company Order, authenticate for original
issue Notes in any aggregate principal amount. The aggregate principal amount of
Notes that may be authenticated and delivered under this Indenture is unlimited.
Subject to Section 4.9, additional Notes may be issued hereunder from time to
time, without the consent of the Holders of previously issued Notes, in an
aggregate principal amount to be determined from time to time by the Issuers;
provided that, additional Notes may not be issued with original issue discount
as determined under section 1271 et seq. of the Code.
The Trustee may appoint an authenticating agent acceptable to the
Issuers to authenticate Notes. Unless limited by the terms of such appointment,
an authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authenticating by the Trustee includes
authenticating by such agent. An authenticating agent has the same rights as an
Agent to deal with the Issuers or an Affiliate of the Issuers.
The Issuers, the Trustee and any agent of the Issuers or the Trustee
may treat the Person in whose name any Note is registered as the owner of such
Note for the purpose of receiving payment of principal of and (subject to the
provisions of this Indenture and the Notes with respect to record dates)
interest on such Note and for all other purposes whatsoever, whether or not such
Note is overdue, and neither the Issuers, the Trustee nor any agent of the
Issuers or the Trustee shall be affected by notice to the contrary.
22
SECTION 2.3 REGISTRAR, PAYING AGENT AND DEPOSITARY.
The Issuers shall maintain (i) an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and (ii) an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Issuers initially appoint the Trustee as Registrar and Paying Agent. The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Issuers may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Issuers may change any
Paying Agent or Registrar without notice to any Holder. The Issuers shall notify
the Trustee of the name and address of any Agent not a party to this Indenture.
If the Issuers fail to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may
act as Paying Agent or Registrar, except that for purposes of Articles III and
VIII and Sections 4.1, 4.10 and 4.14, neither the Company nor any of its
Subsidiaries shall act as Paying Agent.
The Issuers shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which shall incorporate the provisions of
the TIA. The agreement shall implement the provisions of this Indenture that
relate to such Agent.
The Issuers initially appoint DTC to act as Depositary with respect to
the Global Notes. The Trustee shall act as custodian for the Depositary with
respect to the Global Notes.
SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST.
The Issuers shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent shall hold in trust for the benefit of
the Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium, if any, or interest on the Notes and shall notify the
Trustee in writing of any default by the Issuers in making any such payment.
While any such default continues, the Trustee may require a Paying Agent to pay
all money held by it to the Trustee. The Issuers at any time may require a
Paying Agent to pay all money held by it to the Trustee. Upon payment over to
the Trustee, the Paying Agent (if other than the Company or a Subsidiary of the
Company) shall have no further liability for the money delivered to the Trustee.
If the Company or a Subsidiary of the Company acts as Paying Agent (subject to
Section 2.3), it shall segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy
or reorganization related to the Company, the Trustee shall serve as Paying
Agent for the Notes.
SECTION 2.5 HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA 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,
including the aggregate principal amount of Notes held by each such Holder, and
the Issuers shall otherwise comply with TIA Section 312(a).
SECTION 2.6 TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Definitive Notes.
When Definitive Notes are presented by a Holder to the Registrar with a request
(1) to register the transfer of the Definitive Notes or (2) to exchange such
Definitive Notes for an equal principal amount of Definitive Notes of other
authorized denominations, the Registrar shall register the transfer or make the
exchange as requested if its requirements for such transactions are met;
provided that, the Definitive Notes so presented (A) have been duly endorsed or
accompanied by a written instruction of transfer in form satisfactory to the
Registrar duly executed by such Holder or by his attorney, duly authorized in
writing; and (B) in the case of a Restricted Security, such request shall be
accompanied by the following additional documents:
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(i) if such Restricted Security is
being delivered to the Registrar by a Holder for registration in the
name of such Holder, without transfer, a certification to that effect
(in substantially the form of Exhibit B attached hereto); or
(ii) if such Restricted Security is
being transferred to a QIB in accordance with Rule 144A or pursuant to
an effective registration statement under the Securities Act, a
certification to that effect (in substantially the form of Exhibit B
attached hereto); or
(iii) if such Restricted Security is
being transferred in reliance on another exemption from the
registration requirements of the Securities Act, a certification to
that effect (in substantially the form of Exhibit B attached hereto)
and an opinion of counsel reasonably acceptable to the Issuers and the
Registrar to the effect that such transfer is in compliance with the
Securities Act.
(b) Transfer of a Definitive Note for a
Beneficial Interest in a Global Note. A Definitive Note may be exchanged for a
beneficial interest in a Global Note only upon receipt by the Trustee of a
Definitive Note, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Trustee, together with:
(i) written instructions directing the
Trustee to make an endorsement on the appropriate Global Note to
reflect an increase in the aggregate principal amount of the Notes
represented by such Global Note; and
(ii) if such Definitive Note is a
Restricted Security, a certification (in substantially the form of
Exhibit B attached hereto) and, if applicable, a legal opinion, in each
case similar to that required pursuant to Section 2.6(a)(i)-(iii), as
applicable;
in which case the Trustee shall cancel such Definitive Note and cause the
aggregate principal amount of Notes represented by the appropriate Global Note
to be increased accordingly. If no Global Note is then outstanding, the Issuers
shall issue and the Trustee shall authenticate a new Global Note in the
appropriate principal amount.
(c) Transfer and Exchange of Global Notes. The
transfer and exchange of Global Notes or beneficial interests therein shall be
effected through the Depositary in accordance with this Indenture and the
procedures of the Depositary therefor, which shall include restrictions on
transfer comparable to those set forth herein to the extent required by the
Securities Act.
(d) Transfer of a Beneficial Interest in a
Global Note for a Definitive Note. Upon receipt by the Trustee of written
transfer instructions (or such other form of instructions as is customary for
the Depositary), from the Depositary (or its nominee) on behalf of any Person
having a beneficial interest in a Global Note, the Trustee shall, in accordance
with the standing instructions and procedures existing between the Depositary
and the Trustee, cause the aggregate principal amount of Global Notes to be
reduced accordingly and, following such reduction, the Issuers shall execute and
the Trustee shall authenticate and deliver to the transferee a Definitive Note
in the appropriate principal amount; provided that, in the case of a Restricted
Security, such instructions shall be accompanied by the following additional
documents:
(i) if such beneficial interest is
being transferred to the Person designated by the Depositary as being
the beneficial owner, a certification to that effect (in substantially
the form of Exhibit B attached hereto); or
(ii) if such beneficial interest is
being transferred to a QIB in accordance with Rule 144A or pursuant to
an effective registration statement under the
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Securities Act, a certification to that effect (in substantially the
form of Exhibit B attached hereto); or
(iii) if such beneficial interest is
being transferred in reliance on another exemption from the
registration requirements of the Securities Act, a certification to
that effect (in substantially the form of Exhibit B attached hereto)
and an opinion of counsel reasonably acceptable to the Issuers and to
the Registrar to the effect that such transfer is in compliance with
the Securities Act.
Definitive Notes issued in exchange for a beneficial interest in a Global Note
shall be registered in such names and in such authorized denominations as the
Depositary shall instruct the Trustee.
(e) Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture, the Global Note may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary; provided that,
if:
(i) the Depositary (a) notifies the
Issuers that the Depositary is unwilling or unable to continue as
Depositary and a successor Depositary is not appointed by the Issuers
within 90 days after delivery of such notice, or (b) has ceased to be a
clearing agency registered under the Exchange Act; or
(ii) the Issuers, at their sole
discretion, notify the Trustee in writing that they elect to cause the
issuance of Definitive Notes under this Indenture;
then the Issuers shall execute and the Trustee shall authenticate and deliver,
Definitive Notes in an aggregate principal amount equal to the aggregate
principal amount of the Global Note in exchange for such Global Note.
(f) Cancellation and/or Adjustment of Global
Notes. At such time as all beneficial interests in the Global Note have either
been exchanged for Definitive Notes, redeemed, repurchased or cancelled, the
Global Note shall be returned to (or retained by) and cancelled by the Trustee.
At any time prior to such cancellation, if any beneficial interest in the Global
Note is exchanged for Definitive Notes, redeemed, repurchased or cancelled, the
aggregate principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee to reflect such reduction.
(g) General Provisions Relating to Transfers and
Exchanges. To permit registrations of transfers and exchanges, the Issuers shall
execute and the Trustee shall authenticate Definitive Notes and Global Notes at
the Registrar's request. All Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive Notes or Global Notes shall
be legal, valid and binding obligations of the Issuers, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Definitive
Notes or Global Notes surrendered upon such registration of transfer or
exchange.
No service charge shall be made to a Holder for any registration of
transfer or exchange, but the Issuers may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar governmental charge
payable upon exchange (without transfer to another person) pursuant to Sections
2.10, 3.7, 3.8, 4.10, 4.14 and 9.5).
The Issuers shall not be required to: (i) issue, register the transfer
of or exchange Notes during a period beginning at the opening of business 15
days before the day of any selection of Notes for redemption under Section 3.2
and ending at the close of business on the day of selection; or (ii) register
the transfer of or exchange any Note so selected for redemption in whole or in
part, except the unredeemed
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portion of any Note being redeemed in part; or (iii) register the transfer of or
exchange a Note between a record date and the next succeeding interest payment
date.
Prior to due presentment for the registration of a transfer of any
Note, the Trustee, any Agent and the Issuers may deem and treat the Person in
whose name any Note is registered as the absolute owner of such Note for all
purposes, and neither the Trustee, any Agent nor the Issuers shall be affected
by notice to the contrary.
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Note (including any transfers between or among Depositary Participants or
beneficial owners of interests in any Global Note) other than to require
delivery of such certificates and other documentation or evidence as are
expressly require by, and to do so if and when expressly required by the terms
of this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements thereof.
(h) Exchange of Series A Notes for Series B
Notes. The Series A Notes may be exchanged for Series B Notes pursuant to the
terms of the Exchange Offer. The Trustee and Registrar shall make the exchange
as follows:
The Issuers shall present the Trustee with an Officers' Certificate
certifying the following:
(A) upon issuance of the Series B
Notes, the transactions contemplated by the Exchange Offer
have been consummated; and
(B) the principal amount of
Series A Notes properly tendered in the Exchange Offer that
are represented by a Global Note and the principal amount of
Series A Notes properly tendered in the Exchange Offer that
are represented by Definitive Notes; the name of each Holder
of such Definitive Notes; the principal amount properly
tendered in the Exchange Offer by each such Holder; and the
name and address to which Definitive Notes for Series B Notes
shall be registered and sent for each such Holder.
The Trustee, upon receipt of (i) such Officers' Certificate, (ii) an
Opinion of Counsel (x) to the effect that the Series B Notes have been
registered under Section 5 of the Securities Act and this Indenture has been
qualified under the TIA and (y) with respect to the matters set forth in Section
6(p) of the Registration Rights Agreement and (iii) a Company Order, shall
authenticate (A) a Global Note for Series B Notes in aggregate principal amount
equal to the aggregate principal amount of Series A Notes represented by a
Global Note indicated in such Officers' Certificate as having been properly
tendered and (B) Definitive Notes representing Series B Notes registered in the
names of, and in the principal amounts indicated in such Officers' Certificate.
If the principal amount at maturity of the Global Note for the Series B
Notes is less than the principal amount at maturity of the Global Note for the
Series A Notes, the Trustee shall make an endorsement on such Global Note for
Series A Notes indicating a reduction in the principal amount at maturity
represented thereby.
The Trustee shall deliver such Definitive Notes for Series B Notes to
the Holders thereof as indicated in such Officers' Certificate.
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SECTION 2.7 REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or the Issuers and
the Trustee receive evidence to their satisfaction of the destruction, loss or
theft of any Note, the Issuers shall issue and the Trustee shall authenticate a
replacement Note if the Trustee's requirements for replacements of Notes are
met. If required by the Trustee or the Issuers, an indemnity bond must be
supplied by the Holder that is sufficient in the judgment of the Trustee and the
Issuers to protect the Issuers, the Trustee, any Agent or any authenticating
agent from any loss that any of them may suffer if a Note is replaced. The
Issuers or the Trustee may charge for their expenses in replacing a Note.
Every replacement Note is an obligation of the Issuers and shall be
entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
SECTION 2.8 OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section 2.8 as not outstanding.
If a Note is replaced pursuant to Section 2.7, the replaced Note ceases
to be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.1, it ceases to be outstanding and interest on it ceases to accrue.
Subject to Section 2.9, a Note does not cease to be outstanding because
the Issuers or an Affiliate of the Issuers holds the Note; however, Notes held
by the Trustee shall not be deemed to be outstanding for purposes of Section
3.7.
SECTION 2.9 TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Issuers or any Affiliate of the Issuers shall be considered as though not
outstanding, except that for purposes of determining whether the Trustee shall
be protected in relying on any such direction, waiver or consent, only Notes
that a Responsible Officer of the Trustee actually knows to be so owned shall be
considered as not outstanding.
SECTION 2.10 TEMPORARY NOTES.
Pending the preparation of definitive Notes, the Issuers (and the
Subsidiary Guarantors) may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Notes that are printed, lithographed,
typewritten, mimeographed or otherwise reproduced, in any authorized
denomination, substantially of the tenor of the definitive Notes in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Notes may
determine, as conclusively evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuers (and the Subsidiary
Guarantors) shall cause definitive Notes to be prepared without unreasonable
delay. The definitive Notes shall be printed, lithographed or engraved, or
provided by any combination thereof, or in any other manner permitted by the
rules and regulations of any principal national securities exchange, if any, on
which the Notes are listed, all as determined by the Officers executing such
definitive Notes. After the preparation of definitive Notes, the temporary Notes
shall be exchangeable for definitive Notes upon surrender of the temporary Notes
at the office or agency maintained by the Issuers for such purpose pursuant to
Section 4.2, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Notes, the Issuers (and the
27
Subsidiary Guarantors) shall execute, and the Trustee shall authenticate and
deliver, in exchange therefor the same aggregate principal amount of definitive
Notes of authorized denominations. Until so exchanged, the temporary Notes shall
in all respects be entitled to the same benefits under this Indenture as
definitive Notes.
SECTION 2.11 CANCELLATION.
The Issuers at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall retain or
destroy cancelled Notes in accordance with its normal practices (subject to the
record retention requirement of the Exchange Act) unless the Issuers direct them
to be returned to the Issuers. The Issuers may not issue new Notes to replace
Notes that have been redeemed or paid or that have been delivered to the Trustee
for cancellation. All cancelled Notes held by the Trustee shall be disposed of
by the Trustee in its customary manner.
SECTION 2.12 DEFAULTED INTEREST.
If the Issuers default in a payment of interest on the Notes, the
Issuers shall pay the defaulted interest in any lawful manner plus, to the
extent lawful, interest payable on the defaulted interest, to the Persons who
are Holders on a subsequent special record date, which date shall be at the
earliest practicable date but in all events at least five Business Days prior to
the payment date, in each case at the rate provided in the Notes and in Section
4.1. The Issuers shall, with the consent of the Trustee, fix or cause to be
fixed each such special record date and payment date. At least 15 days before
the special record date, the Issuers (or the Trustee, in the name of and at the
expense of the Issuers) shall mail to the Holders a notice that states the
special record date, the related payment date and the amount of such interest to
be paid.
SECTION 2.13 LEGENDS.
(a) Except as permitted by Sections 2.13(b) or
(c), each Note shall bear legends relating to restrictions on transfer pursuant
to the securities laws in substantially the form set forth on Exhibit A attached
hereto.
(b) Upon any sale or transfer of a Restricted
Security (including any Restricted Security represented by a Global Note)
pursuant to Rule 144 under the Securities Act or pursuant to an effective
registration statement under the Securities Act:
(i) in the case of any Restricted
Security that is a Definitive Note, the Registrar shall permit the
Holder thereof to exchange such Restricted Security for a Definitive
Note that does not bear the legends required by Section 2.13(a); and
(ii) in the case of any Restricted
Security represented by a Global Note, such Restricted Security shall
not be required to bear the legends required by Section 2.13(a), but
shall continue to be subject to the provisions of Section 2.6(c);
provided that, with respect to any request for an exchange of a
Restricted Security that is represented by a Global Note for a
Definitive Note that does not bear the legends required by Section
2.13(a), which request is made in reliance upon Rule 144, the Holder
thereof shall certify in writing to the Registrar that such request is
being made pursuant to Rule 144.
(c) The Issuers (and the Subsidiary Guarantors)
shall issue and the Trustee shall authenticate Series B Notes in exchange for
Series A Notes accepted for exchange in the Exchange Offer. The Series B Notes
shall not bear the legends required by Section 2.13(a) unless the Holder of such
Series A Notes is either (A) a broker-dealer who purchased such Series A Notes
directly from the Issuers to
28
resell pursuant to Rule 144A or any other available exemption under the
Securities Act, (B) a Person participating in the distribution of the Series A
Notes or (C) a Person who is an affiliate (as defined in Rule 144A) of the
Issuers.
SECTION 2.14 DEPOSIT OF MONEYS.
Subject to Section 3.5, prior to 10:00 a.m. on each date on which the
principal of, premium, if any, and interest on the Notes are due, the Issuers
shall deposit with the Trustee or Paying Agent in immediately available funds,
money sufficient to make cash payments, if any, due on such date in a timely
manner that permits the Trustee or the Paying Agent to remit payment to the
Holders on such date.
SECTION 2.15 CUSIP NUMBERS.
The Issuers may use "CUSIP" numbers (if then generally in use), and, if
so, the Trustee shall use "CUSIP" numbers in notices of redemption as a
convenience to Holders; provided that, any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Notes or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Notes, and any
such redemption shall not be affected by any defect in or omission of such
numbers. The Issuers will promptly notify the Trustee in writing of any change
in the "CUSIP" numbers.
ARTICLE III
REDEMPTION
SECTION 3.1 NOTICES TO TRUSTEE.
If the Issuers elect to redeem Notes pursuant to Section 3.7, or are
required to redeem Notes pursuant to Section 3.8, the Issuers shall furnish to
the Trustee, at least 45 days but not more than 60 days before a redemption date
(except in the case of a Required Regulatory Redemption requiring less notice),
an Officers' Certificate setting forth (i) the clause of Section 3.7 pursuant to
which the redemption shall occur or if the redemption is required by Section
3.8, (ii) the redemption date, (iii) the principal amount of Notes to be
redeemed and (iv) the redemption price.
SECTION 3.2 SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed pursuant to Section
3.7 or 3.8, the Trustee shall select the Notes to be redeemed in compliance with
the requirements of the principal national securities exchange, if any, on which
the Notes are listed, or, if the Notes are not so listed, on a pro rata basis,
by lot or by such method as the Trustee deems to be fair and reasonable.
The Trustee shall promptly notify the Issuers in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
SECTION 3.3 NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date
(except in the case of a Required Regulatory Redemption requiring less notice),
the Issuers shall mail a notice of redemption by first class mail to each Holder
whose Notes are to be redeemed at such Holder's registered address.
The notice shall identify the Notes to be redeemed and shall state:
(1) the redemption date;
29
(2) the redemption price;
(3) if any Note is being
redeemed in part only, the portion of the principal amount of such Note
to be redeemed and that, after the redemption date, upon cancellation
of the original Note, a new Note or Notes in principal amount equal to
the unredeemed portion shall be issued;
(4) the name and address of
the Paying Agent;
(5) that Notes called for
redemption must be surrendered to the Paying Agent to collect the
redemption price;
(6) that, unless the Issuers
default in making such redemption payment, interest on Notes or
portions of Notes called for redemption ceases to accrue on and after
the redemption date;
(7) the paragraph of the
Notes and/or the section of this Indenture pursuant to which the Notes
called for redemption are being redeemed; and
(8) the CUSIP number of the
Notes to be redeemed.
At the Issuers' request, the Trustee shall give the notice of
redemption in the name of the Issuers and at the Issuers' expense; provided
that, the Issuers shall deliver to the Trustee, at least 15 days (unless a
shorter period is acceptable to the Trustee) prior to the date such notice is to
be given, an Officers' Certificate requesting that the Trustee give such notice
and setting forth the information to be stated in such notice as provided in the
preceding paragraph.
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption has been mailed to the Holders in accordance
with Section 3.3 herein, Notes called for redemption become due and payable on
the redemption date at the redemption price. At any time prior to the mailing of
a notice of redemption to the Holders pursuant to Section 3.3, the Issuers may
withdraw, revoke or rescind any notice of redemption delivered to the Trustee
without any continuing obligation to redeem the Notes as contemplated by such
notice of redemption.
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE.
At or before 10:00 a.m. on the redemption date, the Issuers shall
deposit with the Trustee (to the extent not already held by the Trustee) or with
the Paying Agent money in immediately available funds sufficient to pay the
redemption price of and accrued interest on all Notes to be redeemed on that
date. The Trustee or the Paying Agent shall return to the Issuers any money
deposited with the Trustee or the Paying Agent by the Issuers in excess of the
amounts necessary to pay the redemption price of, and accrued interest on, all
Notes to be redeemed.
Interest on the Notes to be redeemed shall cease to accrue on the
applicable redemption date, whether or not such Notes are presented for payment,
if the Issuers make or deposit the redemption payment in accordance with this
Section 3.5. If any Note called for redemption shall not be paid upon surrender
for redemption because of the failure of the Issuers to comply with the
preceding paragraph, interest shall be paid on the unpaid principal, from the
redemption date until such principal is paid, and to the extent lawful on any
interest not paid on such unpaid principal, in each case at the rate provided in
the Notes.
30
SECTION 3.6 NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Issuers shall
issue and the Trustee shall authenticate for the Holder at the expense of the
Issuers a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.
SECTION 3.7 OPTIONAL REDEMPTION.
(a) Except as set forth in Sections 3.7(b) and
3.8, the Notes are not redeemable at the Issuers' option prior to October 15,
2007. Thereafter, the Notes will be subject to redemption at the option of the
Issuers, in whole or in part, at the redemption prices (expressed as percentages
of principal amount) set forth below, plus accrued and unpaid interest thereon
and Liquidated Damages, if any, to the applicable date of redemption, if
redeemed during the 12-month period beginning on October 15 of the years
indicated below:
Year Percentage
---- ----------
2007 104.750%
2008 102.375%
2009 and thereafter 100.000%
(b) Notwithstanding the foregoing, at any time
or from time to time prior to October 15, 2006, the Issuers may redeem, at their
option, up to 35% of the aggregate principal amount of the Notes then
outstanding at a redemption price of 109.500% of the principal amount thereof,
plus accrued and unpaid interest thereon and Liquidated Damages, if any, through
the applicable date of redemption, with the Net Cash Proceeds of one or more
Qualified Equity Offerings; provided that, (a) such redemption shall occur
within 60 days of the date of closing of such Qualified Equity Offerings and (b)
at least 65% of the aggregate principal amount of Notes issued on or after the
Issue Date remains outstanding immediately after giving effect to each such
redemption.
SECTION 3.8 REQUIRED REGULATORY REDEMPTION.
The Notes shall be redeemable by the Issuers, in whole or in part, at
any time upon not less than 20 Business Days nor more than 60 days notice (or
such earlier date as may be required by any Gaming Authority) at 100% of the
principal amount thereof plus accrued and unpaid interest thereon (or, if
required by any Gaming Authority, the fair market value of such Notes, or such
other amount as may be required by applicable law or order of such Gaming
Authority) and Liquidated Damages (if permitted by relevant Gaming Authorities),
if any, to the redemption date, pursuant to a Required Regulatory Redemption.
Any Required Regulatory Redemption shall, except as specifically provided in
this Section 3.8, be made in accordance with the applicable provisions of
Sections 3.3, 3.4 and 3.5 unless other procedures are required by any Gaming
Authority. In addition, where such redemption is required because the Holder or
beneficial owner of Notes is required to be found suitable or to otherwise
qualify under any Gaming Laws and is not found suitable or so qualified, the
Issuers shall have the right to require any such Holder or beneficial owner to
dispose of its Notes upon 30 days' notice (or such earlier date as may be
required by the applicable Gaming Authority).
SECTION 3.9 NO MANDATORY REDEMPTION.
The Issuers shall not be required to make mandatory redemption payments
with respect to the Notes (except for a Required Regulatory Redemption). The
Notes shall not have the benefit of any sinking fund.
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ARTICLE IV
COVENANTS
SECTION 4.1 PAYMENT OF NOTES.
The Issuers shall pay the principal and premium, if any, of, and
interest on, the Notes on the dates and in the manner provided in the Notes.
Principal, premium, if any, and interest shall be considered paid on the date
due if the Paying Agent, other than the Company or a Subsidiary of the Company,
holds on or before that date money deposited by the Issuers in immediately
available funds and designated for and sufficient to pay all principal, premium,
if any, and interest then due. Such Paying Agent shall return to the Issuers, no
later than three Business Days following the date of payment, any money that
exceeds such amount of principal, premium, if any, and interest then due and
payable on the Notes. The Issuers shall pay any and all amounts, including,
without limitation, Liquidated Damages, if any, on the dates and in the manner
required under the Registration Rights Agreement.
The Issuers shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Code) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Code) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY.
The Issuers shall maintain an office or agency (which may be an office
of the Trustee, Registrar or co-registrar) in the Borough of Manhattan, The City
of New York where Notes may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Issuers in respect of the
Notes and this Indenture may be served. The Issuers shall give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Issuers shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee.
The Issuers may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided
that, no such designation or rescission shall in any manner relieve the Issuers
of their obligation to maintain an office or agency for such purposes. The
Issuers shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
The Issuers hereby designate the Corporate Trust Office of the Trustee
as one such office or agency of the Issuers in accordance with Section 2.3.
SECTION 4.3 REPORTS.
(a) Regardless of whether required by the rules
and regulations of the Commission, so long as any Notes are outstanding, the
Issuers will furnish to the Trustee and Holders, within 15 days after either
Issuer is or would have been required to file such with the Commission, (i) all
quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if either of
the Issuers were required to file such Forms, including for each a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and,
with respect to the annual information only, a report thereon by the Issuers'
independent certified public accountants and (ii) all information that would be
required to be contained in a filing with the Commission on Form 8-K if either
of the Issuers were required to file such reports. From and after the time
either of the Issuers files a registration statement with the Commission with
respect to the Notes, the Issuers will file such information with the Commission
so long as the Commission will accept such filings.
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Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
(b) So long as is required for an offer or sale
of the Notes to qualify for an exemption under Rule 144A, the Issuers (and the
Subsidiary Guarantors) shall, upon request, provide the information required by
clause (d)(4) thereunder to each Holder and to each beneficial owner and
prospective purchaser of Notes identified by any Holder of Restricted
Securities.
SECTION 4.4 COMPLIANCE CERTIFICATE.
(a) The Issuers shall deliver to the Trustee,
within 120 days after the end of each fiscal year, an Officers' Certificate
(provided that, two of the signatories to such Officers' Certificate shall be
the principal executive officer, principal financial officer or principal
accounting officer of each of the Issuers) stating that a review of the
activities of the Issuers and the Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determine whether each has kept, observed, performed and fulfilled their
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that each of the Issuers and the Subsidiaries has
kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions hereof or thereof (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he may have knowledge and what action each is taking or
proposes to take with respect thereto).
(b) The year-end financial statements delivered
pursuant to Section 4.3 above shall be accompanied by a written statement of the
independent public accountants of the Company (which shall be a firm of
established national reputation reasonably satisfactory to the Trustee) that in
making the examination necessary for certification of such financial statements
nothing has come to their attention which would lead them to believe that either
the Company or any of its Subsidiaries has violated any provisions of this
Indenture or, if any such violation has occurred, specifying the nature and
period of existence thereof, it being understood that such accountants shall not
be liable directly or indirectly to any Person for any failure to obtain
knowledge of any such violation.
(c) So long as any of the Notes are outstanding,
the Issuers shall deliver to the Trustee forthwith upon any Officer becoming
aware of (i) any Default or Event of Default or (ii) any event of default under
any mortgage, indenture or instrument referred to in Section 6.1(e), an
Officers' Certificate specifying such Default, Event of Default or other event
of default and what action the Issuers are taking or propose to take with
respect thereto.
SECTION 4.5 TAXES.
The Company shall, and shall cause its Subsidiaries to, file all tax
returns required to be filed and to pay prior to delinquency all material taxes,
assessments and governmental levies except as contested in good faith and by
appropriate proceedings and for which reserves have been established in
accordance with GAAP.
SECTION 4.6 STAY, EXTENSION AND USURY LAWS.
The Issuers (and each Subsidiary Guarantor) covenant (to the extent
that it may lawfully do so) that neither of them shall at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension, usury or other law, wherever enacted, now or at any time
hereafter in force, that would prohibit or forgive the payment of all or any
portion of the principal of or interest on the Notes, or that may affect the
covenants or the performance of this Indenture; and each of the Issuers and each
Subsidiary Guarantor (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law and covenants that it shall not,
by resort to any such law, hinder, delay
33
or impede the execution of any power herein granted to the Trustee but shall
suffer and permit the execution of every such power as though no such law has
been enacted.
SECTION 4.7 LIMITATION ON RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make
any distribution on account of any Equity Interests of the Company or
any of its Subsidiaries or make any other payment to any Excluded
Person or Affiliate thereof (other than (A) dividends or distributions
payable in Equity Interests (other than Disqualified Capital Stock) of
the Company or (B) amounts payable to the Company or any Restricted
Subsidiary);
(ii) purchase, redeem or otherwise
acquire or retire for value any Equity Interest of the Company or any
Affiliate (other than any Restricted Subsidiary of the Company) of the
Company (other than any such Equity Interest owned by the Company or
any Restricted Subsidiary);
(iii) make any principal payment on, or
purchase, redeem, defease or otherwise acquire or retire for value, any
Indebtedness of the Company or any Subsidiary Guarantor that is
subordinated in right of payment to the Notes or such Subsidiary
Guarantor's Subsidiary Guarantee thereof, as the case may be, prior to
any scheduled principal payment, sinking fund payment or other payment
at the stated maturity thereof; or
(iv) make any Restricted Investment
(all such payments and other actions set forth in clauses (i) through (iv) above
being collectively referred to as "Restricted Payments"), unless, at the time of
such Restricted Payment:
(a) no Default or Event of Default has occurred
and is continuing or would occur as a consequence thereof, and
(b) immediately after giving effect to such
Restricted Payment on a pro forma basis, the Company could incur at least $1.00
of additional Indebtedness under the Interest Coverage Ratio test set forth in
Section 4.9, and
(c) such Restricted Payment (the value of any
such payment, if other than cash, being determined in good faith by the Managers
of the Company and evidenced by a resolution set forth in an Officers'
Certificate delivered to the Trustee), together with the aggregate of all other
Restricted Payments made on or after the Issue Date (including Restricted
Payments permitted by clauses (ii), (vi) (viii) (to the extent such payments do
not reduce Consolidated Net Income), (ix), (x), (xi), (xii) and, to the extent
the Company is given credit for such Net Cash Proceeds pursuant to clause (2) of
this paragraph, (iii) of the next following paragraph and excluding Restricted
Payments permitted by clauses (i), (iv), (v) and (vii) of the next following
paragraph), is less than the sum, without duplication, of
(1) 50% of the Consolidated
Net Income of the Company for the period (taken as one accounting
period) from the beginning of the first fiscal quarter commencing
immediately after the Issue Date to the end of the Company's most
recently ended fiscal quarter for which internal financial statements
are available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, 100% of such
deficit), plus
34
(2) 100% of the aggregate Net
Cash Proceeds received by the Company from the issuance or sale, other
than to a Subsidiary, of Equity Interests of the Company (other than
Disqualified Capital Stock) after the Issue Date and on or prior to the
time of such Restricted Payment, plus
(3) 100% of the aggregate Net
Cash Proceeds received by the Company from the issuance or sale, other
than to a Subsidiary, of any convertible or exchangeable debt security
of the Company that has been converted or exchanged into Equity
Interests of the Company (other than Disqualified Capital Stock)
pursuant to the terms thereof after the Issue Date and on or prior to
the time of such Restricted Payment (including any additional net cash
proceeds received by the Company upon such conversion or exchange),
plus
(4) the aggregate Return from
Unrestricted Subsidiaries after the Issue Date and on or prior to the
time of such Restricted Payment (excluding any returns of or from
Permitted Investments made pursuant to clause (xiii) of the definition
of "Permitted Investments").
The foregoing provisions shall not prohibit:
(i) so long as clause (a) above is
satisfied, the sale, distribution or liquidation of a Subsidiary that
as of the Issue Date has been designated as an Unrestricted Subsidiary;
(ii) the payment of any dividend within
60 days after the date of declaration thereof, if at said date of
declaration such payment would not have been prohibited by the
provisions of this Indenture;
(iii) the redemption, purchase,
retirement or other acquisition of any Equity Interests of the Company
or Indebtedness of the Company or any Restricted Subsidiary in exchange
for, or out of the Net Cash Proceeds of, the substantially concurrent
sale (other than to a Subsidiary) of, other Equity Interests of the
Company (other than Disqualified Capital Stock);
(iv) so long as clause (a) above is
satisfied, with respect to each taxable year that the Company qualifies
as a Flow Through Entity, the payment of Permitted Tax Distributions;
provided that, (A) prior to any payment of Permitted Tax Distributions
the Company provides an Officers' Certificate and Opinion of Counsel to
the effect that the Company and each Subsidiary in respect of which
such distributions are being made, qualify as Flow Through Entities for
Federal income tax purposes and for the states in respect of which such
distributions are being made and (B) at the time of such distribution,
the most recent audited financial statements of the Company provided to
the Trustee pursuant to Section 4.3, provide that the Company and each
such Subsidiary were treated as Flow Through Entities for the period of
such financial statements, provided that, the requirement set forth in
this subclause (B) shall not apply to the extent that such Subsidiary
that is acquired after the date hereof is not a Flow Through Entity on
the date of such acquisition but subsequently becomes a Flow Through
Entity after any period covered by such financial statements;
(v) the redemption, repurchase or
payoff of any Indebtedness of the Company or a Restricted Subsidiary
with cash proceeds of or in exchange for any Refinancing Indebtedness
permitted to be incurred pursuant to clause (h) of the second paragraph
of Section 4.9;
35
(vi) cash capital contributions, loans
or advances to the BHR Joint Venture that are used by the BHR Joint
Venture to make capital expenditures in the ordinary course of
business; provided that, concurrently with such contribution, loan or
advance all other members of the BHR Joint Venture make cash capital
contributions, loans or advances, as the case may be, on a pro rata
basis, based on each member's ownership interest in the BHR Joint
Venture;
(vii) so long as clause (a) above is
satisfied, (x) the acquisition of the GNC Land or (y) the acquisition
of all of the membership interests of AMB Parking and, in the case of
each of clauses (x) and (y) the payment of the purchase price therefor,
provided that, in the case of each of clauses (x) and (y) such
transaction complies with Section 4.11;
(viii) so long as clause (a) above is
satisfied any employment agreement entered into, or any compensation or
employee benefits paid to employees, in each case, in the ordinary
course of business, consistent with customary industry practices and
not involving the purchase, redemption or other acquisition or
retirement for value of any Equity Interests of the Company or any
Affiliate (other than any Restricted Subsidiary of the Company);
(ix) so long as clause (a) above is
satisfied, Cash Flow-Based Management Distributions payable under the
Management Agreement as in effect on the Issue Date, without giving
effect to any amendment, supplement or modification thereof; provided
that, the Interest Coverage Ratio for the Company's most recently ended
four full fiscal quarters for which internal financial statements are
available immediately preceding the date on which such payment is made
would have been not less than 1.50 to 1.0, determined on a pro forma
basis, as if such payment had been made during such four-quarter
period;
(x) so long as clause (a) above is
satisfied, Revenue-Based Management Distributions payable under the
Management Agreement as in effect on the Issue Date, without giving
effect to any amendment, supplement or modification thereof; provided
that, the Interest Coverage Ratio for the Company's most recently ended
four full fiscal quarter for which internal financial statements are
available immediately preceding the date on which such payment is made
would have been not less than 1.25 to 1.0, determined on a pro forma
basis, as if such payment had been made during such four-quarter
period;
(xi) the redemption and repurchase of
any Equity Interests or Indebtedness of the Company or any of its
Subsidiaries to the extent required by any Gaming Authority or, if
determined in the good faith judgment of the Managers of the Company as
evidenced by a resolution of the Managers that has been delivered to
the Trustee, to prevent the loss, or to secure the grant or
establishment, of any gaming license or other right to conduct lawful
gaming operations; and
(xii) any Unreimbursed Tax Distribution
Amounts.
Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.7 were computed (or, in the case of a
Restricted Payment made pursuant to subsection (iv) of the immediately preceding
paragraph, a summary of such calculations as reasonably determined or estimated
in good faith by the Company), which calculations may be based upon the
Company's latest available financial statements. Notwithstanding the foregoing,
the Company shall not be required to deliver an Officers' Certificate to the
Trustee pursuant to this covenant if any action is taken pursuant to subsection
(iii), (v), (viii), (ix) or (x) of the immediately preceding paragraph.
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SECTION 4.8 LIMITATION ON RESTRICTIONS ON SUBSIDIARY
DIVIDENDS.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any Restricted
Subsidiary to:
(i) pay dividends or make any other
distributions to the Company or any of its Restricted Subsidiaries (a)
on such Restricted Subsidiary's Capital Stock or (b) with respect to
any other interest or participation in, or measured by, such Restricted
Subsidiary's profits, or
(ii) pay any Indebtedness owed to the
Company or any of its Restricted Subsidiaries, or
(iii) make loans or advances to the
Company or any of its Restricted Subsidiaries, or
(iv) transfer any of its assets to the
Company or any of its Restricted Subsidiaries,
except, with respect to clauses (i) through (iv) above, for such encumbrances or
restrictions existing under or by reason of:
(1) any Credit Facility
containing dividend or other payment restrictions that are not more
restrictive than those contained in the documents governing the Credit
Facility on the Issue Date, including the Intercreditor Agreement;
(2) this Indenture, the
Security Documents and the Notes;
(3) applicable law;
(4) Acquired Debt; provided
that, such encumbrances and restrictions are not applicable to any
Person, or the properties or assets of any Person, other than the
Person, or the property or assets of the Person, so acquired;
(5) customary non-assignment
and net worth provisions of any contract, lease or license entered into
in the ordinary course of business;
(6) customary restrictions on
the transfer of assets subject to a Permitted Lien imposed by the
holder of such Lien; and
(7) the agreements governing
permitted Refinancing Indebtedness; provided that, such restrictions
contained in any agreement governing such Refinancing Indebtedness are
no more restrictive than those contained in any agreements governing
the Indebtedness being refinanced.
SECTION 4.9 LIMITATION ON INCURRENCE OF INDEBTEDNESS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, (i) create, incur, issue, assume,
guaranty or otherwise become directly or indirectly liable with respect to,
contingently or otherwise (collectively, "incur"), any Indebtedness (including,
without limitation, Acquired Debt) or (ii) issue any Disqualified Capital Stock;
provided that, the Company and the
37
Subsidiary Guarantors may incur Indebtedness (including, without limitation,
Acquired Debt) and the Company may issue shares of Disqualified Capital Stock if
(x) no Default or Event of Default shall have occurred and be continuing at the
time of, or would occur after giving effect on a pro forma basis to such
incurrence or issuance, and (y) the Interest Coverage Ratio for the Company's
most recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Capital Stock is issued would have
been not less than 2.0 to 1.0, determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred, or the Disqualified Capital Stock had been
issued, as the case may be, at the beginning of such four-quarter period.
Notwithstanding the foregoing, the foregoing limitations will not
prohibit the incurrence of:
(a) Indebtedness under the Credit Facility in an
aggregate principal amount not to exceed, at any time outstanding, $80,000,000
less the aggregate amount of repayments of such indebtedness contemplated by
clause (iii) of the first paragraph of Section 4.10 (the "Maximum Credit
Facility Amount");
(b) FF&E Financing in an aggregate principal
amount not to exceed, at any time, $10,000,000;
(c) performance bonds, appeal bonds, surety
bonds, insurance obligations or bonds and other similar bonds or obligations
(including Obligations under letters of credit) incurred in the ordinary course
of business, and any guarantees thereof;
(d) Hedging Obligations incurred to fix the
interest rate on any variable rate Indebtedness otherwise permitted by this
Indenture; provided that, the notional principal amount of each such Hedging
Obligation does not exceed the principal amount of the Indebtedness to which
such Hedging Obligation relates and that such Hedging Obligations shall not have
been incurred for purposes of speculation;
(e) Indebtedness outstanding on the Issue Date
(other than Indebtedness under the Credit Facility which shall not be deemed to
be outstanding pursuant to this clause (e)), including the Notes and the
Security Documents, to the extent they constitute Indebtedness outstanding on
the Issue Date;
(f) Indebtedness incurred by the Company in an
aggregate principal amount not to exceed, at any time outstanding pursuant to
this clause (f), $10,000,000;
(g) any Subsidiary Guarantee of the Notes or the
Indebtedness permitted by clause (f) above; and
(h) Indebtedness issued in exchange for, or the
proceeds of which are contemporaneously used to extend, refinance, renew,
replace, or refund (collectively, "Refinance"), Indebtedness incurred pursuant
to the Interest Coverage Ratio test set forth in the immediately preceding
paragraph, clause (e) above or this clause (h) (the "Refinancing Indebtedness");
provided that, (i) the principal amount of such Refinancing Indebtedness does
not exceed the principal amount of Indebtedness so Refinanced (including any
required premiums and out-of-pocket expenses reasonably incurred in connection
therewith), (ii) the Refinancing Indebtedness has a final scheduled maturity
that equals or exceeds the final stated maturity, and a Weighted Average Life to
Maturity that is equal to or greater than the Weighted Average Life to Maturity,
of the Indebtedness being Refinanced, (iii) the Refinancing Indebtedness ranks,
in right of payment, no more favorable to the Notes than the Indebtedness being
Refinanced, and (iv) such Refinancing Indebtedness shall only be used to
refinance outstanding Indebtedness of such Person issuing such Refinancing
Indebtedness.
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SECTION 4.10 LIMITATION ON ASSET SALES.
The Company shall not, and shall not permit any Restricted Subsidiary
to, make any Asset Sale unless
(i) the Company or such Restricted
Subsidiary receives consideration at the time of such Asset Sale not
less than the fair market value of the assets subject to such Asset
Sale;
(ii) at least 75% of the consideration
for such Asset Sale is in the form of (A) cash or Cash Equivalents, (B)
liabilities of the Company or any Restricted Subsidiary (other than
liabilities that are by their terms subordinated to the Notes or the
Subsidiary Guarantees) that are assumed by the transferee of such
assets (provided that, following such Asset Sale there is no further
recourse to the Company or its Restricted Subsidiaries with respect to
such liabilities), or (C) fixed assets or property that, in the good
faith judgment of the Managers, at the time of such Asset Sale will be
used in a Related Business of the Company or its Restricted
Subsidiaries; and
(iii) within 270 days of such Asset Sale
(or within 30 days in the case of an Asset Sale or series of related
Asset Sales with Net Proceeds of $15,000,000 or more), the Net Proceeds
thereof are (A) invested in fixed assets or property that, in the good
faith judgment of the Managers, at the time of such Asset Sale will be
used in a Related Business of the Company or its Restricted
Subsidiaries, (B) applied to repay Indebtedness under Purchase Money
Obligations incurred in connection with the asset so sold, (C) applied
to repay Indebtedness under the Credit Facility and permanently reduce
the commitment thereunder in the amount of the Indebtedness so repaid
or (D) to the extent not used as provided in clauses (A), (B), or (C)
applied to make an offer to purchase Notes as described below (an
"Excess Proceeds Offer"); provided that, the Company will not be
required to make an Excess Proceeds Offer until the amount of Excess
Proceeds is greater than $5,000,000.
The foregoing provisions in (i) or (ii) above shall not apply to an Event of
Loss.
Pending the final application of any Net Proceeds, the Company may
temporarily reduce Indebtedness under the Credit Facility or temporarily invest
such Net Proceeds in Cash Equivalents.
Net Proceeds not invested or applied as set forth in subclause (A), (B)
or (C) of clause (iii) above constitute "Excess Proceeds." If the Company
elects, or becomes obligated to make an Excess Proceeds Offer because such
Excess Proceeds exceed $5,000,000, the Issuers shall offer to purchase Notes
having an aggregate principal amount equal to the Excess Proceeds (the "Purchase
Amount"), at a purchase price equal to 100% of the aggregate principal amount
thereof, plus accrued and unpaid interest thereon and Liquidated Damages, if
any, to the purchase date. The Issuers must consummate such Excess Proceeds
Offer not later than 30 days after the expiration of the 270-day (or 30-day)
period following the Asset Sale that produced such Excess Proceeds. If the
aggregate purchase price for the Notes tendered pursuant to the Excess Proceeds
Offer is less than the Excess Proceeds, the Company and its Restricted
Subsidiaries may use the portion of the Excess Proceeds remaining after payment
of such purchase price for general corporate purposes.
Each Excess Proceeds Offer shall remain open for a period of 20
Business Days and no longer, unless a longer period is required by law (the
"Excess Proceeds Offer Period"). Promptly after the termination of the Excess
Proceeds Offer Period (the "Excess Proceeds Payment Date"), the Issuers shall
purchase and mail or deliver payment for the Purchase Amount for the Notes or
portions thereof tendered, pro rata or by such other method as may be required
by law, or, if less than the Purchase Amount has been tendered, all Notes
tendered pursuant to the Excess Proceeds Offer.
39
To the extent that the provisions of any securities laws or regulations
conflict with the provisions of this Section 4.10, the Issuers shall comply with
the applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 4.10 by virtue thereof. The Company
shall not, and shall not permit any of its Restricted Subsidiaries to, create or
suffer to exist or become effective any restriction that would impair the
ability of the Issuers to make an Excess Proceeds Offer upon an Asset Sale or,
if such Excess Proceeds Offer is made, to pay for the Notes tendered for
purchase.
The Issuers shall, no later than 30 days following the expiration of
the 12-month period following the Asset Sale that produced Excess Proceeds,
commence the Excess Proceeds Offer by mailing to the Trustee and each Holder, at
such Holder's last registered address, a notice, which shall govern the terms of
the Excess Proceeds Offer, and shall state:
(1) that the Excess Proceeds
Offer is being made pursuant to this Section 4.10, the principal amount
of Notes which shall be accepted for payment and that all Notes validly
tendered shall be accepted for payment on a pro rata basis;
(2) the purchase price and
the date of purchase;
(3) that any Notes not
tendered or accepted for payment pursuant to the Excess Proceeds Offer
shall continue to accrue interest;
(4) that, unless the Issuers
default in the payment of the purchase price with respect to any Notes
tendered, Notes accepted for payment pursuant to the Excess Proceeds
Offer shall cease to accrue interest after the Excess Proceeds Payment
Date;
(5) that Holders electing to
have Notes purchased pursuant to an Excess Proceeds Offer shall be
required to surrender their Notes, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Note completed, to the
Issuers prior to the close of business on the third Business Day
immediately preceding the Excess Proceeds Payment Date;
(6) that Holders shall be
entitled to withdraw their election if the Issuers receive, not later
than the close of business on the second Business Day preceding the
Excess Proceeds Payment Date, a telegram, telex, facsimile transmission
or letter setting forth the name of the Holder, the principal amount of
Notes the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Notes purchased;
(7) that Holders whose Notes
are purchased only in part shall be issued Notes representing the
unpurchased portion of the Notes surrendered; provided that, each Note
purchased and each new Note issued shall be in principal amount of
$1,000 or whole multiples thereof; and
(8) the instructions that
Holders must follow in order to tender their Notes.
On or before the Excess Proceeds Payment Date, the Issuers shall (i)
accept for payment on a pro rata basis the Notes or portions thereof tendered
pursuant to the Excess Proceeds Offer, (ii) deposit with the Paying Agent money
sufficient to pay the purchase price of all Notes or portions thereof so
accepted and (iii) deliver to the Trustee the Notes so accepted, together with
an Officers' Certificate stating that the Notes or portions thereof tendered to
the Issuers are accepted for payment. The Paying Agent shall promptly mail to
each Holder of Notes so accepted payment in an amount equal to the purchase
price of
40
such Notes, and the Trustee shall promptly authenticate and mail to such Holders
new Notes equal in principal amount to any unpurchased portion of the Notes
surrendered.
The Issuers shall make a public announcement of the results of the
Excess Proceeds Offer as soon as practicable after the Excess Proceeds Payment
Date. For the purposes of this Section 4.10, the Trustee shall act as the Paying
Agent.
SECTION 4.11 LIMITATION ON TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into, consummate or suffer to
exist any Affiliate Transaction, except for:
(i) Affiliate Transactions that,
together with all related Affiliate Transactions, have an aggregate
value of not more than $2,000,000; provided that, (a) such transactions
are conducted in good faith and on terms that are no less favorable to
the Company or the relevant Restricted Subsidiary than those that would
have been obtained in a comparable transaction at such time by the
Company or such Restricted Subsidiary on an arm's-length basis from a
Person that is not an Affiliate of the Company or such Restricted
Subsidiary and (b) the Company shall have delivered to the Trustee an
Officers' Certificate certifying to such effect;
(ii) Affiliate Transactions that,
together with all related Affiliate Transactions, have an aggregate
value of not more than $5,000,000; provided that, (i) a majority of the
Managers that are disinterested in such transaction (or, if none of the
Managers is disinterested in such transaction, a representative
appointed by the Managers to make such determination, which
representative, in the reasonable good faith judgment of a majority of
the Managers, is disinterested in the transaction and is qualified to
make such determination) determine that such transactions are conducted
in good faith and on terms that are no less favorable to the Company or
the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction at such time by the Company or
such Restricted Subsidiary on an arm's-length basis from a Person that
is not an Affiliate of the Company or such Restricted Subsidiary and
(ii) prior to entering into such transaction the Company shall have
delivered to the Trustee an Officers' Certificate certifying to such
effect; or
(iii) Affiliate Transactions for which
the Company delivers to the Trustee an opinion as to the fairness to
the Company or such Restricted Subsidiary from a financial point of
view issued by an accounting, appraisal or investment banking firm of
national standing.
Notwithstanding the foregoing, the following shall be deemed not to be
Affiliate Transactions:
(a) Restricted Payments (other than payments
permitted under clause (vii) of the second paragraph of Section 4.7) permitted
by Section 4.7;
(b) payments pursuant to the Berthing Agreement;
(c) the Management Agreement and the Expense
Reimbursement Agreement, in each case, as in effect on the Issue Date, without
giving effect to any amendment, supplement or modification thereof, and payment
of the Management Distributions and the receipt of the Expense Reimbursements,
respectively, thereunder;
(d) the non-exclusive licensing of any service
▇▇▇▇ or other trademarks of the Company or any Restricted Subsidiary to an
Affiliate or Affiliates of the Company or such Restricted Subsidiary;
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(e) transactions between or among the Company
and any Wholly Owned Subsidiary of the Company; and
(f) the acquisition of the GNC Land, provided
that, (i) the Company shall have delivered to the Trustee an Officers'
Certificate certifying compliance with item (iii) below, (ii) the Company shall
have delivered to the Trustee a copy of a written appraisal or valuation report
by a nationally recognized investment banking firm or independent appraisal
firm, which appraisal or report sets forth the Appraised Value of the GNC Land
as of a date no earlier than 90 days prior to the date of the acquisition of the
GNC Land by the Company or its Restricted Subsidiaries, and (iii) the value of
the aggregate consideration to be paid or given by the Company and its
Restricted Subsidiaries for the GNC Land shall not exceed 80% of such Appraised
Value and the other terms of the transaction shall be on terms no less favorable
to the Company or the relevant Restricted Subsidiary than those that would have
been obtained in a comparable transaction at such time by the Company or the
relevant Restricted Subsidiary on an arm's-length basis from a Person that is
not an Affiliate of the Company or such Restricted Subsidiary.
SECTION 4.12 LIMITATION ON LIENS.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, create, incur, assume or suffer to exist any Lien on
any asset (including, without limitation, all real, tangible or intangible
property) of the Company or any Restricted Subsidiary, whether now owned or
hereafter acquired, or on any income or profits therefrom, or assign or convey
any right to receive income therefrom, except Permitted Liens.
SECTION 4.13 EXISTENCE.
Subject to Article V, the Issuers shall do or cause to be done all
things necessary to preserve and keep in full force and effect (i) their
respective limited liability company and corporate existence, and corporate,
partnership or other existence of each of the Restricted Subsidiaries, in
accordance with their respective organizational documents (as the same may be
amended from time to time) and (ii) their (and the Subsidiaries') rights
(charter and statutory), licenses (including gaming and related licenses) and
franchises; provided that, the Issuers shall not be required to preserve any
such right, license or franchise, or the corporate, partnership or other
existence of any Restricted Subsidiary, if the Board of Directors on behalf of
the Company shall determine in good faith that the preservation thereof is no
longer desirable in the conduct of the business of the Issuers and the Company's
Subsidiaries taken as a whole and that the loss thereof is not adverse in any
material respect to the Holders.
SECTION 4.14 REPURCHASE UPON CHANGE OF CONTROL.
Upon the occurrence of a Change of Control, the Issuers shall offer to
repurchase all of the Notes then outstanding (the "Change of Control Offer") at
a purchase price equal to 101% of the aggregate principal amount thereof, plus
accrued and unpaid interest thereon and Liquidated Damages, if any, to the date
of repurchase (the "Change of Control Payment").
To the extent that the provisions of any securities laws or regulations
conflict with the provisions of this Section 4.14, the Issuers shall comply with
the applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 4.14 by virtue thereof.
Within 30 days following any Change of Control, the Issuers shall
commence the Change of Control Offer by mailing to the Trustee and each Holder a
notice, which shall govern the terms of the Change of Control Offer, and shall
state that:
(i) the Change of Control Offer is
being made pursuant to this Section 4.14 and that all Notes tendered
will be accepted for payment,
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(ii) the purchase price and the purchase
date, which shall be a Business Day no earlier than 30 days nor later
than 45 days from the date such notice is mailed (the "Change of
Control Payment Date"),
(iii) that any Note not tendered for
payment pursuant to the Change of Control Offer shall continue to
accrue interest,
(iv) that, unless the Issuers default in
the payment of the Change of Control Payment, all Notes accepted for
payment pursuant to the Change of Control Offer shall cease to accrue
interest on the Change of Control Payment Date,
(v) that any Holder electing to have
Notes purchased pursuant to a Change of Control Offer shall be required
to surrender such Notes, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Notes completed, to the Paying
Agent at the address specified in the notice prior to the close of
business on the third Business Day preceding the Change of Control
Payment Date,
(vi) that any Holder shall be entitled
to withdraw such election if the Paying Agent receives, not later than
the close of business on the second Business Day preceding the Change
of Control Payment Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of
Notes such Holder delivered for purchase, and a statement that such
Holder is withdrawing his election to have such Notes purchased,
(vii) that a Holder whose Notes are being
purchased only in part shall be issued new Notes equal in principal
amount to the unpurchased portion of the Notes surrendered, which
unpurchased portion must be equal to $1,000 in principal amount or an
integral multiple thereof,
(viii) the instructions that Holders must
follow in order to tender their Notes, and
(ix) the circumstances and relevant
facts regarding such Change of Control.
On the Change of Control Payment Date, the Issuers shall, to the extent
lawful, (i) accept for payment the Notes or portions thereof tendered pursuant
to the Change of Control Offer, (ii) deposit with the Paying Agent an amount
equal to the Change of Control Payment in respect of all Notes or portions
thereof so tendered and not withdrawn, and (iii) deliver or cause to be
delivered to the Trustee the Notes so accepted, together with an Officers'
Certificate stating that the Notes or portions thereof tendered to the Issuers
are accepted for payment. The Paying Agent shall promptly mail to each Holder of
Notes so accepted payment in an amount equal to the purchase price for such
Notes, and the Trustee shall authenticate and mail (or cause to be transferred
by book entry) to each Holder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any; provided that, each such
new Note will be in the principal amount of $1,000 or an integral multiple
thereof.
The Issuers shall make a public announcement of the results of the
Change of Control Offer on or as soon as practicable after the Change of Control
Payment Date. For the purposes of this Section 4.14, the Trustee shall act as
the Paying Agent.
The Issuers shall not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements set
forth in this Section 4.14 and purchases all Notes validly tendered and not
withdrawn under such Change of Control Offer.
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SECTION 4.15 MAINTENANCE OF PROPERTIES.
The Company shall, and shall cause each of its Restricted Subsidiaries
to, maintain their properties and assets in normal working order and condition
as on the date of this Indenture (reasonable wear and tear excepted) and make
all necessary repairs, renewals, replacements, additions, betterments and
improvements thereto, as shall be reasonably necessary for the proper conduct of
the business of the Issuers and the Restricted Subsidiaries taken as a whole;
provided that, nothing herein shall prevent the Issuers or any of the Restricted
Subsidiaries from discontinuing any maintenance of any such properties if the
Company determines that such discontinuance is desirable in the conduct of the
business of the Issuers and the Restricted Subsidiaries taken as a whole.
SECTION 4.16 MAINTENANCE OF INSURANCE.
The Company shall, and shall cause each of its Restricted Subsidiaries
to, maintain liability, casualty and other insurance (including self-insurance
consistent with prior practice) with responsible insurance companies in such
amounts and against such risks as is in accordance with customary industry
practice in the general areas in which the Issuers and the Restricted
Subsidiaries operate.
SECTION 4.17 RESTRICTIONS ON SALE AND ISSUANCE OF SUBSIDIARY
STOCK.
The Company shall not sell, and shall not permit any Restricted
Subsidiary to issue or sell, any Equity Interests (other than directors'
qualifying shares) of any Restricted Subsidiary to any Person other than the
Company or a Wholly Owned Subsidiary of the Company; provided that, the Company
and its Restricted Subsidiaries may sell all (but not less than all) of the
Capital Stock of a Restricted Subsidiary owned by the Company and its Restricted
Subsidiaries if the Net Proceeds from such Asset Sale are used in accordance
with the terms of Section 4.10.
SECTION 4.18 LINE OF BUSINESS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries or the BHR Joint Venture to, directly or indirectly, engage to any
substantial extent in any line or lines of business activity other than a
Related Business.
SECTION 4.19 RESTRICTIONS ON BHR JOINT VENTURE.
The Company shall not permit the BHR Joint Venture to, directly or
indirectly:
(a) incur any Indebtedness or issue any
Disqualified Capital Stock; provided that, the BHR Joint Venture may incur:
(i) Indebtedness if immediately after
giving effect to such incurrence on a pro forma basis, the Company
could incur at least $1.00 of additional Indebtedness under the
Interest Coverage Ratio Test set forth in Section 4.9,
(ii) Indebtedness if immediately after
giving effect to the incurrence of such Indebtedness, the aggregate
principal amount of BHR Attributed Debt does not exceed the Maximum
Credit Facility Amount less the aggregate principal amount of
Indebtedness then outstanding under clause (a) of the second paragraph
of Section 4.9, and
(iii) Indebtedness incurred to Refinance
any Indebtedness incurred pursuant to clause (i) above or Indebtedness
of the BHR Joint Venture outstanding on the Issue Date;
44
(b) create, incur, assume or suffer to exist any
Lien on any asset of the BHR Joint Venture, or on any income or profits
therefrom, or assign or convey any right to receive income therefrom, except
Permitted Liens;
(c) declare or pay any dividend or make any
distribution on account of any Equity Interests of the BHR Joint Venture, unless
such distributions are made on a pro rata basis to all members of the BHR Joint
Venture, based on each member's ownership interest therein;
(d) purchase, redeem or otherwise acquire or
retire for value any Equity Interest of the BHR Joint Venture (other than any
such Equity Interest owned by the Company or any Restricted Subsidiary); or
(e) transfer, other than in the ordinary course
of business, any assets of the BHR Joint Venture, unless:
(i) the BHR Joint Venture receives
consideration at the time of such transfer not less than the fair
market value of the assets subject to such transfer,
(ii) at least 75% of the consideration
for such transfer is in the form of cash or Cash Equivalents or
liabilities of the BHR Joint Venture that are assumed by the transferee
of such assets (provided that, following such transfer there is no
further recourse to the BHR Joint Venture with respect to such
liabilities), and
(iii) within 270 days of such transfer,
the net proceeds thereof are (A) invested in assets related to the
business of the BHR Joint Venture, (B) applied to permanently repay
Indebtedness of the BHR Joint Venture, or (C) distributed to the
members of the BHR Joint Venture in accordance with Section 4.19(c).
SECTION 4.20 RESTRICTIONS ON ACTIVITIES OF CAPITAL.
Capital shall not hold any material assets, become liable for any
obligations or engage in any business activities; provided that, Capital may be
a co-obligor of the Notes (including any additional Notes incurred pursuant to
Section 4.9) pursuant to the terms of this Indenture and as contemplated by the
Purchase Agreement, dated as of September 26, 2003, by and among the Issuers,
the Subsidiary Guarantors and the Initial Purchasers and, as necessary, may
engage in any activities directly related or necessary in connection therewith.
ARTICLE V
SUCCESSORS
SECTION 5.1 WHEN THE COMPANY MAY MERGE, ETC.
Neither Issuer shall consolidate or merge with or into, or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its properties or assets (determined on a consolidated basis for the Company
and its Restricted Subsidiaries) in one or more related transactions to, any
other Person, unless:
(i) such Issuer is the surviving Person
or the Person formed by or surviving any such consolidation or merger
(if other than such Issuer) or to which such sale, assignment,
transfer, lease, conveyance or other disposition has been made is a
corporation organized and existing under the laws of the United States
of America, any state thereof or the District of Columbia;
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(ii) the Person formed by or surviving
any such consolidation or merger (if other than such Issuer) or the
Person to which such sale, assignment, transfer, lease, conveyance or
other disposition has been made assumes all the Obligations of such
Issuer, pursuant to a supplemental indenture and in a form reasonably
satisfactory to the Trustee, under the Notes, this Indenture, the
Security Documents and the Registration Rights Agreement;
(iii) immediately after giving effect to
such transaction on a pro forma basis, no Default or Event of Default
exists;
(iv) such transaction would not result
in the loss or suspension or material impairment of any Gaming License
unless a comparable replacement Gaming License is effective prior to or
simultaneously with such loss, suspension or material impairment; and
(v) such Issuer, or any Person formed
by or surviving any such consolidation or merger, or to which such
sale, assignment, transfer, lease, conveyance or other disposition has
been made, (A) has Consolidated Net Worth (immediately after the
transaction but prior to any purchase accounting adjustments resulting
from the transaction) equal to or greater than the Consolidated Net
Worth of such Issuer immediately preceding the transaction and (B) will
be permitted, at the time of such transaction and after giving pro
forma effect thereto as if such transaction had occurred at the
beginning of the applicable four-quarter period, to incur at least
$1.00 of additional Indebtedness pursuant to the Interest Coverage
Ratio test set forth in Section 4.9.
The Issuers shall deliver to the Trustee prior to the consummation of
any proposed transaction an Officers' Certificate to the foregoing effect, an
Opinion of Counsel, stating that all conditions precedent to the proposed
transaction provided for in this Indenture have been complied with and a written
statement from a firm of independent public accountants of established national
reputation reasonably satisfactory to the Trustee stating that the proposed
transaction complies with clause (v).
For purposes of this Section 5.1, the transfer of all or substantially
all of the properties and assets of one or more Subsidiaries of the Company,
which properties and assets, if held by the Company instead of such
Subsidiaries, would constitute all or substantially all of the properties and
assets of the Company on a consolidated basis, shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Company.
Notwithstanding the foregoing clause (v), the Company may reorganize as
a corporation or other business entity in accordance with the procedures
established in this Article V, provided that, (x) such transaction is solely for
the purpose of such reorganization and not for the purpose of evading this
provision or any other provision of this Indenture and not in connection with
any other transaction, and (y) prior to such reorganization, the Company has
delivered to the Trustee an Opinion of Counsel confirming that (i) the Holders
will not recognize income, gain or loss for Federal income tax purposes as a
result of the reorganization 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 reorganization had not occurred, and (ii) the Company will not
recognize income, gain or loss for Federal and state income tax purposes as a
result of the reorganization.
SECTION 5.2 SUCCESSOR SUBSTITUTED.
In the event of any transaction (other than a lease or a transfer of
less than all of the Issuers' assets) contemplated by Section 5.1 in which
neither of the Issuers is the surviving Person, the successor formed by such
consolidation or into or with which the applicable Issuer is merged or to which
such transfer is made, or formed by such reorganization, as the case may be,
shall succeed to, and be substituted for, and may exercise every right and power
of, such Issuer, and such Issuer shall be discharged from its
46
Obligations under this Indenture, the Security Documents, the Notes and the
Registration Rights Agreement with the same effect as if such successor Person
had been named as such Issuer herein or therein. The Trustee shall have the
right to require any such Person to ensure, by executing and delivering
appropriate instruments and Opinions of Counsel, that the Trustee continues to
hold a first priority Lien on all Collateral for the benefit of the Holders.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT.
Each of the following is an "Event of Default":
(a) The Issuers default in the payment of
interest on any Note when the same becomes due and payable and the Default
continues for a period of 30 days;
(b) The Issuers default in the payment of
principal (or premium, if any) on any Note when the same becomes due and payable
at maturity, upon redemption, by acceleration, or otherwise;
(c) the Issuers default in the performance of or
breaches the provisions of Section 4.10 or 4.14 or Article V;
(d) either of the Issuers or any Subsidiary
Guarantor fails to comply with any of its other agreements or covenants in, or
provisions of, the Notes or this Indenture and the Default continues for 60 days
after written notice thereof has been given to the Issuers by the Trustee or to
the Issuers and the Trustee by the Holders of at least 25% in aggregate
principal amount of the then outstanding Notes, such notice to state that it is
a "Notice of Default";
(e) default under (after giving effect to any
applicable grace periods or any extension of any maturity date) any mortgage,
indenture, agreement or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness by the Issuers or any
Restricted Subsidiary (or the payment of which is guaranteed by the Issuers or
any Restricted Subsidiary), whether such Indebtedness or guaranty now exists or
is created after the Issue Date, if (A) either (1) such default results from the
failure to pay principal of or interest on such Indebtedness or (2) as a result
of such default the maturity of such Indebtedness has been accelerated, and (B)
the principal amount of such Indebtedness, together with the principal amount of
any other such Indebtedness with respect to which such a payment default (after
the expiration of any applicable grace period or any extension of the maturity
date) has occurred, or the maturity of which has been so accelerated, exceeds
$5,000,000 in the aggregate;
(f) a final nonappealable judgment or judgments
for the payment of money (other than judgments as to which a reputable insurance
company has accepted full liability) is or are entered by a court or courts of
competent jurisdiction against the Issuers or any Restricted Subsidiary and such
judgment or judgments remain undischarged, unbonded or unstayed for a period of
60 days after entry, provided that, the aggregate of all such judgments exceeds
$5,000,000;
(g) the cessation of a material portion of the
gaming operations of the Company and its Subsidiaries, taken as a whole, for
more than 60 days, except as a result of an Event of Loss;
(h) any revocation, suspension, expiration
(without previous or concurrent renewal) or loss of any Gaming License for more
than 60 days other than as a result of any Asset Sale made in accordance with
the provisions of this Indenture or any voluntary relinquishment that is, in the
judgment of the Managers, both desirable in the conduct of the business of the
Company and its Subsidiaries, taken as a whole, and not disadvantageous to the
Holders in any material respect;
47
(i) any failure to comply with (after giving
effect to any applicable grace periods) any material agreement or covenant in,
or material provision of, any Security Document;
(j) either of the Issuers or any Subsidiary
Guarantor, pursuant to or within the meaning of any Bankruptcy Code:
(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) admits in writing its inability to
pay debts as the same become due; and
(k) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Code that:
(i) is for relief against either of the
Issuers or any Subsidiary Guarantor in an involuntary case,
(ii) appoints a Custodian of either of
the Issuers or any Subsidiary Guarantor or for all or substantially all
of their property, or
(iii) orders the liquidation of either of
the Issuers or any Subsidiary Guarantor,
and such order or decree remains unstayed and in effect for 60 days.
The Issuers shall, upon becoming aware of any Default or Event of
Default, deliver to the Trustee a statement specifying such Default or Event of
Default and what action the Issuers are taking or propose to take with respect
thereto.
SECTION 6.2 ACCELERATION.
Subject to the terms of the Intercreditor Agreement, if an Event of
Default (other than an Event of Default specified in Section 6.1(j) or (k))
occurs and is continuing, the Trustee by written notice to the Issuers, or the
Holders of at least 25% in principal amount of the then outstanding Notes by
written notice to the Issuers and the Trustee, may declare the unpaid principal
of and any accrued interest on all the Notes to be due and payable. Upon such
declaration the principal and interest shall be due and payable immediately. If
an Event of Default specified in Section 6.1(j) or (k) occurs, all outstanding
Notes shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder.
SECTION 6.3 OTHER REMEDIES.
If an Event of Default occurs and is continuing, subject to the terms
of the Intercreditor Agreement, the Trustee may pursue any available remedy
(under this Indenture or otherwise) to collect the payment of principal or
interest on the Notes to enforce the performance of any provision of the Notes,
this Indenture or the Security Documents.
48
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. All remedies are cumulative
to the extent permitted by law.
SECTION 6.4 WAIVER OF PAST DEFAULTS.
Holders of a majority of the aggregate principal amount of the then
outstanding Notes, by written notice to the Trustee, may on behalf of the
Holders of all of the Notes (a) waive any existing Default or Event of Default
and its consequences under this Indenture except a continuing Default or Event
of Default in the payment of interest on, or the principal of, any Note or a
Default or an Event of Default with respect to any covenant or provision which
cannot be modified or amended without the consent of the Holder of each
outstanding Note affected, and/or (b) rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal or
interest that has become due solely because of the acceleration) have been cured
or waived. Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
SECTION 6.5 CONTROL BY MAJORITY.
The Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, that the Trustee determines may be unduly
prejudicial to the rights of other Holders, or that may involve the Trustee in
personal liability.
SECTION 6.6 LIMITATION ON SUITS.
A Holder may pursue a remedy with respect to this Indenture or the
Notes only if:
(a) the Holder gives to the Trustee written
notice of a continuing Event of Default;
(b) the Holders of at least 25% in principal
amount of the then outstanding Notes make a written request to the Trustee to
pursue the remedy;
(c) such Holder or Holders offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
(d) the Trustee does not comply with the request
within 60 days after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(e) during such 60-day period the Holders of a
majority in principal amount of the then outstanding Notes do not give the
Trustee a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another Holder or
to obtain a preference or priority over another Holder.
SECTION 6.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal and interest on the Note, on or
after the respective due dates expressed in the Note, or
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to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of the
Holder.
SECTION 6.8 COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.1(a) or (b) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Issuers for the whole amount of
principal and interest remaining unpaid on the Notes and interest on overdue
principal (and premium, if any) and, to the extent lawful, interest on overdue
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Issuers (or any
other obligor under the Notes), their creditors or their property and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.7. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.7 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 of the Notes may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.10 PRIORITIES.
Subject to the terms of the Intercreditor Agreement, if the Trustee
collects any money pursuant to this Article, it shall pay out the money in the
following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.7, including payment of all compensation, expense and liabilities
incurred, and all advances made, by the Trustee and the costs and expenses of
collection;
Second: to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal and
interest, respectively;
Third: without duplication, to Holders for any other Obligations owing
to the Holders under the Notes or this Indenture; and
Fourth: 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.
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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 and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.6, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE VII
TRUSTEE
SECTION 7.1 DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of his or her own affairs.
(b) Except during the continuance of an Event of
Default:
(i) The duties of the Trustee shall be
determined solely by the express provisions of this Indenture, and the
Trustee need perform only those duties that are specifically set forth
in this Indenture and the Security Documents, and no others, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee.
(ii) In the absence of bad faith on its
part, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture and the Security Documents. However, in
the case of certificates specifically required by any provision hereof
to be furnished to it, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture and the Security Documents (but need not confirm or
investigate the accuracy of mathematical calculations or other facts
stated therein).
(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.
(iii) The Trustee shall not be liable
with respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 6.5.
(d) 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.
51
(e) No provision of this Indenture shall require
the Trustee to expend or risk its own funds or incur any liability. The Trustee
may refuse to perform any duty or exercise any right or power unless it receives
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest
on any money received by it except as the Trustee may agree in writing with the
Issuers. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
(g) The Trustee is hereby authorized and
directed to enter into the Intercreditor Agreement upon execution thereof by the
other parties thereto.
(h) If the Issuers shall enter into any FF&E
Financing secured by a Permitted Vessel Lien, the Trustee is hereby authorized,
at the Company's request, to enter into an intercreditor agreement with the
related FF&E Lender, provided that, (a) such agreement contains the agreements
required under clause (a) of the definition of Permitted Vessel Lien, (b) the
rights of the Trustee and the Holders hereunder and under the Security Documents
are not adversely affected thereby in any respect, and (c) the Holders are not
otherwise adversely affected thereby.
SECTION 7.2 RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any
document (whether in original or facsimile form) 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 advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon.
(c) The Trustee may act through agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any
action it takes or omits to take in good faith which it believes to be
authorized or within its rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in
this Indenture or the Security Documents, any demand, request, direction or
notice from the Issuers shall be sufficient if signed by an Officer of each of
the Issuers, on behalf of the Issuers.
(f) Except with respect to Section 4.1, the
Trustee shall have no duty to inquire as to the performance of the Issuers'
covenants in Article IV. In addition, the Trustee shall not be deemed to have
knowledge of any Default or Event of Default except (i) any Event of Default
occurring pursuant to Sections 6.1(a), (b) and 4.1, or (ii) any Default or Event
of Default of which a Responsible Officer of the Trustee shall have received
written notification or obtained actual knowledge.
(g) The Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Indenture, unless such
Holders shall have offered to the Trustee security or indemnity satisfactory to
the Trustee against the costs, expenses and liabilities which might be incurred
by it in compliance with such request or direction.
(h) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request,
52
direction, consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney at the sole cost of the
Company and shall incur not liability or additional liability of any kind by
reason of such inquiry or investigation.
(i) The Trustee shall not be deemed to have
notice of any Default or Event of Default unless a Responsible Officer of the
Trustee has actual knowledge thereof or unless written notice of any event which
in fact such a default is received by the Trustee at the Corporate Trust Office
of the Trustee, and such notice references the Securities and this Indenture.
(j) The rights, privileges, protections,
immunities and benefits given to the Trustee, including, without limitation, its
right to be indemnified, are extended to, and shall be enforceable by, the
Trustee in each of its capacities hereunder, and each agent, custodian and other
Person employed to act hereunder.
(k) The Trustee may request that the Company
deliver and Officers' Certificate setting forth the names of individuals and/or
titles of officers authorized at such time to take specified actions pursuant to
this Indenture, which Officer's Certificate may be signed by any person
authorized to sign an Officers' Certificate, including any person specified as
so authorized in any such certificate previously delivered and not superseded.
(l) In no event shall the Trustee be responsible
or liable for special, indirect, or consequential loss or damage of any kind
whatsoever (including loss of profit) irrespective of whether the Trustee has
been advised of the likelihood of such loss or damage and regardless of the form
of action.
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Issuers or an
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 (as defined in the TIA) 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. The Trustee is also subject to Sections 7.10 and
7.11.
SECTION 7.4 TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture, the Security Documents or the
Notes or as to the adequacy of the security for the Notes, it shall not be
accountable for the Issuers' use of the proceeds from the Notes or any money
paid to the Issuers or upon the Issuers' direction under any provision hereof,
it shall not be responsible for the use or application of any money received by
any Paying Agent other than the Trustee and it shall not be responsible for any
statement or recital herein or any statement in the Notes or any other document
in connection with the sale of the Notes or pursuant to this Indenture other
than its certificate of authentication.
SECTION 7.5 NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if the
Trustee has knowledge thereof (within the meaning of Section 7.2(f)), the
Trustee shall mail to the Holders a notice of the Default or Event of Default
within 90 days after it occurs. Except in the case of a Default or Event of
Default in payment of principal of, premium, if any, or interest on, any Note,
the Trustee may withhold the notice if and so long as
53
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 7.6 REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, the Trustee shall mail to the Holders a brief report
dated as of such reporting date that complies with TIA Section 313(a) (but if no
event described in TIA Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA Section 313(b). The Trustee shall also transmit by mail
all reports as required by TIA Section 313(c).
Commencing at the time this Indenture is qualified under the TIA, a
copy of each report at the time of its mailing to the Holders shall be filed
with the Commission and each stock exchange on which the Notes are listed. The
Issuers shall promptly notify the Trustee when the Notes are listed on any stock
exchange or any delisting thereof.
At the express written direction of the Company and at the Company's
expense, the Trustee will provide any Gaming Authority with:
(i) copies of all notices, reports and
other written communications that the Trustee gives to Holders;
(ii) a list of all of the Holders
promptly after the original issuance of the Notes and periodically
thereafter if the Company so directs in writing;
(iii) notice of any Default or Event of
Default under this Indenture, any acceleration of the Indebtedness
evidenced hereby, the institution of any legal actions or proceedings
before any court or governmental authority in respect of a Default or
Event of Default hereunder;
(iv) notice of the removal or
resignation of the Trustee within five Business Days of the
effectiveness thereof;
(v) notice of any transfer or
assignment of rights, by the Issuers or any Guarantor, under this
Indenture known to the Trustee within five Business Days thereof; and
(vi) a copy of any amendment to the
Notes or this Indenture within five Business Days of the effectiveness
thereof.
Subject to Sections 7.1 and 7.2, to the extent reasonably requested by
the Company in writing and at the Company's expense, the Trustee shall cooperate
with any Gaming Authority in order to provide such Gaming Authority with such
information and documentation as may be reasonably available to the Trustee and
as may be requested in writing by such Gaming Authority and as otherwise
permitted by applicable law.
SECTION 7.7 COMPENSATION AND INDEMNITY.
The Issuers shall pay to the Trustee from time to time such
compensation for its acceptance of this Indenture and services hereunder as the
Issuers and the Trustee may from time to time agree in writing. 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
54
and counsel, except such disbursements, advances and expenses as shall be
determined to have been caused by its own negligence or willful misconduct.
Except as set forth below, the Issuers, jointly and severally, shall
indemnify the Trustee and its officers, directors, agents and employees against
any and all losses, liabilities, claims, damages or expenses incurred by it
without negligence or bad faith on its part arising out of or in connection with
the acceptance or administration of its duties under this Indenture and the
Security Documents, including the costs and expenses of enforcing this Indenture
or the Security Documents against the Issuers and defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder. The Trustee shall notify the Issuers promptly of any
claim of which it has received written notice 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. In the event that, in the reasonable opinion of
the Trustee, a conflict of interest or conflicting defenses would arise in
connection with the representation of the Issuers and the Trustee by the same
counsel, the Trustee may have separate counsel and the Issuers shall pay the
reasonable fees and expenses of such counsel. The Issuers need not pay for any
settlement made without its consent, which consent shall not be unreasonably
withheld.
The obligations of the Issuers under this Section 7.7 shall survive the
satisfaction and discharge of this Indenture.
To secure the Issuers' payment obligations in this Section 7.7, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal of (and
premium, if any) and interest on particular Notes. Such Lien shall survive the
satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(j) or (k) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Code.
SECTION 7.8 REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.8.
The Trustee may resign at any time and be discharged from the trust
hereby created by so notifying the Issuers. The Holders of a majority in
principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Issuers. The Issuers may remove the Trustee if:
(a) the Trustee fails to comply with Section
7.10;
(b) the Trustee is adjudged a bankrupt or an
insolvent or an order for relief is entered with respect to the Trustee under
any Bankruptcy Code;
(c) a Custodian or public officer takes charge
of the Trustee or its property;
(d) the Trustee becomes incapable of acting; or
(e) the Trustee is found unsuitable or
unqualified by any Gaming Authority.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Issuers shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Issuers.
55
If any Gaming Authority requires the Trustee to be approved, licensed
or qualified and the Trustee fails or declines to do so, such approval, license
or qualification shall be obtained upon the request of, and at the expense of,
the Company, unless the Trustee declines to do so in its sole discretion, in
which case the Trustee shall be replaced in accordance with this Section 7.8,
or, if the Trustee's relationship with the Company may, in the Company's
discretion, jeopardize any material Gaming License or franchise or right or
approval granted thereto, the Trustee shall resign, and, in addition, the
Trustee may, at its option, resign if the Trustee in its sole discretion
determines not to be so approved, licensed or qualified.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuers or the
Holders of at least 10% in principal amount of the then outstanding Notes may
petition, at the Issuers' expense, any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee after written request by any Holder who has been a
Holder for at least six months fails to comply with Section 7.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to the Holders. Upon payment of its charges hereunder, the retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, provided that, all sums owing to the Trustee hereunder have
been paid and subject to the Lien provided for in Section 7.7. Notwithstanding
replacement of the Trustee pursuant to this Section 7.8, the Issuers'
obligations under Section 7.7 shall continue for the benefit of the retiring
Trustee, and the Issuers shall pay to any such replaced or removed Trustee all
amounts owed under Section 7.7 upon such replacement or removal.
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation or
banking association, the successor corporation without any further act shall be
the successor Trustee.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that shall (a) be a
corporation organized and doing business under the laws of the United States of
America or of any state thereof or of the District of Columbia authorized under
such laws to exercise corporate trustee power, (b) be subject to supervision or
examination by Federal or state or the District of Columbia authority, and (c)
have a combined capital and surplus of at least $50,000,000 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 Sections 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee is
subject to TIA Section 310(b); provided that, there shall be excluded from the
operations of TIA Section 310(b)(1) any indenture or indentures under which
other securities, or certificates of interest or participation in other
securities, of the Issuers are outstanding, if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST
ISSUERS.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
The provisions of TIA Section 311 shall apply to the Issuers, as obligors on the
Notes.
56
ARTICLE VIII
DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1 DISCHARGE; OPTION TO EFFECT LEGAL DEFEASANCE OR
COVENANT DEFEASANCE.
This Indenture shall cease to be of further effect (except that the
Issuers' and the Subsidiary Guarantors' obligations under Section 7.7 and the
Trustee's and the Paying Agent's obligations under Sections 8.6 and 8.7 shall
survive) when all outstanding Notes theretofore authenticated and issued have
been delivered (other than destroyed, lost or stolen Notes that have been
replaced or paid) to the Trustee for cancellation and the Issuers or the
Subsidiary Guarantors have paid all sums payable hereunder. In addition, the
Issuers may elect at any time to have Section 8.2 or Section 8.3, at the
Issuers' option, applied to all outstanding Notes upon compliance with the
conditions set forth below in this Article VIII.
SECTION 8.2 LEGAL DEFEASANCE AND DISCHARGE.
Upon the Issuers' exercise under Section 8.1 of the option applicable
to this Section 8.2, except as set forth below, the Issuers and the Subsidiary
Guarantors shall be deemed to have been discharged from their respective
obligations with respect to all outstanding Notes on the date the conditions set
forth below are satisfied (hereinafter, "Legal Defeasance"). Following such
Legal Defeasance, (a) the Issuers shall be deemed to have paid and discharged
the entire indebtedness outstanding hereunder, and this Indenture shall cease to
be of further effect as to all outstanding Notes and Subsidiary Guarantees, and
(b) the Issuers and the Subsidiary Guarantors shall be deemed to have satisfied
all other of their respective obligations under the Notes, the Subsidiary
Guarantee and this Indenture (and the Trustee, on demand of and at the expense
of the Issuers, shall execute proper instruments acknowledging the same), except
for the following which shall survive until otherwise terminated or discharged
hereunder:
(i) the rights of Holders to receive
payments in respect of the principal of, premium, if any, and interest
(and Liquidated Damages, if any) on such Notes when such payments are
due from the trust described in Section 8.5;
(ii) the Issuers' obligations under Sections
2.4, 2.6, 2.7, 2.10, 4.2, 8.5, 8.6 and 8.7; and
(iii) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and the Issuers' and the Subsidiary
Guarantors' obligations in connection therewith.
Subject to compliance with the provisions of this Article VIII, the
Company may exercise its option under this Section 8.2 notwithstanding the prior
exercise of its option under Section 8.3.
SECTION 8.3 COVENANT DEFEASANCE.
Upon the Issuers' exercise under Section 8.1 of the option applicable
to this Section 8.3, the Issuers and the Subsidiary Guarantors shall be released
from their respective obligations under the covenants contained in Sections 4.3,
4.4, 4.7 through 4.12, and 4.14 through 4.20, and Article V on and after the
date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Notes shall thereafter be deemed not "outstanding" for the
purposes of any direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder. Following
such Covenant Defeasance, (a) neither the Issuers nor any Subsidiary Guarantor
need comply with, and none of them shall have any liability in respect of, any
term, condition or limitation set forth in any such covenant, whether directly
or indirectly, by reason of any reference elsewhere herein to any such covenant
or by reason of any reference in any such covenant to any other provision herein
or in any other document, but, except as specified above, the remainder of this
Indenture, the Notes and the Subsidiary Guarantee shall be
57
unaffected thereby, and (b) Sections 6.1(c) through (i) shall not constitute
Events of Default with respect to the Notes.
SECTION 8.4 CONDITIONS TO LEGAL DEFEASANCE OR COVENANT
DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.2 or 8.3 to the outstanding Notes:
(i) the Issuers shall irrevocably have
deposited or caused to be deposited with the Trustee, in trust, for the
benefit of the Holders, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if
any, and interest on the outstanding Notes on the stated maturity or on
the applicable redemption date, as the case may be, and the Issuers
shall specify whether the Notes are being defeased to maturity or to a
particular redemption date;
(ii) in the case of Legal Defeasance, the
Issuers shall have delivered to the Trustee an Opinion of Counsel
confirming that (A) the Issuers have received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the
Issue Date, there has been a change in the applicable Federal income
tax law, in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Holders will not recognize
income, gain or loss for Federal income tax purposes as a result of
such Legal Defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as would have
been the case if such Legal Defeasance had not occurred;
(iii) in the case of Covenant Defeasance,
the Issuers shall have delivered to the Trustee an Opinion of Counsel
confirming that the Holders 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;
(iv) no Default or Event of Default shall
have occurred and be continuing on the date of such deposit (other than
a Default or Event of Default resulting from the borrowing of funds to
be applied to such deposit);
(v) such Legal Defeasance or Covenant
Defeasance will not result in a breach or violation of, or constitute a
default under any material agreement or instrument (other than this
Indenture) to which the Issuers or any of the Restricted Subsidiaries
is a party or by which the Issuers or any of the Restricted
Subsidiaries is bound;
(vi) the Issuers shall have delivered to the
Trustee an Officers' Certificate stating that the deposit was not made
by the Issuers with the intent of preferring the Holders over the other
creditors of the Issuers with the intent of defeating, hindering,
delaying or defrauding creditors of the Issuers or others; and
(vii) the Issuers shall have delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel, each
stating, subject to certain factual assumptions and bankruptcy and
insolvency exceptions, that all conditions precedent provided for in
this Indenture relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
58
SECTION 8.5 DEPOSITED CASH AND U.S. GOVERNMENT OBLIGATIONS TO
BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.6, all cash and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this Section 8.5, the "Paying Agent")
pursuant to Section 8.4 in respect of the outstanding Notes shall be held in
trust and applied by the Paying Agent, in accordance with the provisions of such
Notes and this Indenture, to the payment, either directly or through any other
Paying Agent as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due thereon in respect of principal, premium, if any, and
interest (and Liquidated Damages, if any).
The Issuers shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 8.4 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of outstanding Notes.
SECTION 8.6 REPAYMENT TO THE ISSUERS.
(a) The Trustee or the Paying Agent shall
deliver or pay to the Issuers from time to time upon the request of the Issuers
any cash or U.S. Government Obligations held by it as provided in Section 8.4
which in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee (which may be the opinion delivered under Section 8.4(i)), are in excess
of the amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
(b) Any cash and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee or any Paying Agent,
or then held by the Issuers, in trust for the payment of the principal of,
premium, if any, or interest (and Liquidated Damages, if any) on any Note and
remaining unclaimed for two years after such principal, and premium, if any, or
interest has become due and payable shall be paid to the Issuers on their
request; and the Holder of such Note shall thereafter look only to the Issuers
for payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money shall thereupon cease; provided that, the Trustee or
such Paying Agent, before being required to make any such repayment, shall at
the expense of the Issuers cause to be published once, in the New York Times and
The Wall Street Journal (national edition), notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such notification or publication, any unclaimed balance
of such money then remaining will be repaid to the Issuers.
SECTION 8.7 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any cash or U.S.
Government Obligations in accordance with Section 8.2 or 8.3, as the case may
be, by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, or if any
event occurs at any time in the period ending on the 91st day after the date of
deposit pursuant to Section 8.2 or 8.3 which event would constitute an Event of
Default under Section 6.1(j) or (k) had Legal Defeasance or Covenant Defeasance,
as the case may be, not occurred, then the Issuers' and the Subsidiary
Guarantors' obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.2 or 8.3
until such time as the Trustee or Paying Agent is permitted to apply such money
in accordance with Section 8.2 or 8.3, as the case may be; provided that, if the
Issuers make any payment of principal of, premium, if any, or interest (and
Liquidated Damages, if any) on any Note following the reinstatement of its
obligations, the Issuers shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the cash or U.S. Government Obligations
held by the Trustee or Paying Agent.
59
ARTICLE IX
AMENDMENTS
SECTION 9.1 WITHOUT CONSENT OF HOLDERS.
The Issuers, the Subsidiary Guarantors and the Trustee may amend or
supplement this Indenture, the Notes and the Security Documents, without the
consent of any Holder:
(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 comply with Article V and Section 10.13;
(d) to make any change that would provide any
additional rights or benefits to the Holders or that does not adversely affect
the legal rights of any Holder under this Indenture or under the Notes;
(e) to comply with requirements of the
Commission in order to effect or maintain the qualification of this Indenture
under the TIA;
(f) to release any Subsidiary Guarantee of the
Notes permitted to be released under Section 10.14; or
(g) to comply with the requirements of the
Trustee and the Depositary (including its nominees) with respect to transfers of
beneficial interests in the Notes.
Upon the request of the Issuers, accompanied by a resolution of the
Board of Directors of each of the Issuers authorizing the execution of any such
supplemental indenture or amendment, and upon receipt by the Trustee of the
documents described in Section 9.6 required or requested by the Trustee, the
Trustee shall join with the Issuers in the execution of any supplemental
indenture or amendment authorized or permitted by the terms of this Indenture
and shall make any further appropriate agreements and stipulations which may be
therein contained, but the Trustee shall not be obligated to enter into such
supplemental indenture or amendment that affects its own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.2 WITH CONSENT OF HOLDERS.
(a) Subject to Sections 6.4 and 6.7, the Issuers
and the Trustee, as applicable, may amend, or waive any provision of, this
Indenture or the Notes, with the written consent of the Holders of at least a
majority of the aggregate principal amount of the then outstanding Notes
(including consents obtained in connection with a tender offer or exchange offer
for Notes).
(b) Upon the request of the Issuers, accompanied
by a resolution of the Board of Directors of each of the Issuers authorizing the
execution of any such supplemental indenture or amendment, and upon filing with
the Trustee of evidence satisfactory to the Trustee of the consent of the
Holders as aforesaid, and upon receipt by the Trustee of the documents described
in Section 9.6, the Trustee shall join with the Issuers in the execution of such
supplemental indenture or amendment unless such supplemental indenture or
amendment affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such supplemental indenture.
(c) It shall not be necessary for the consent of
the Holders under this Section 9.2 to approve the particular form of any
proposed supplemental indenture or amendment, but it shall be sufficient if such
consent approves the substance thereof.
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(d) After a supplemental indenture or amendment
under this Section 9.2 becomes effective, the Issuers shall mail to the Holders
of each Note affected thereby a notice briefly describing the amendment or
waiver. Any failure of the Issuers to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture, amendment or waiver.
(e) Notwithstanding any other provision hereof,
without the consent of each Holder affected, an amendment or waiver under this
Section 9.2 may not (with respect to any Notes held by a non-consenting Holder):
(i) reduce the principal amount of Notes
whose Holders must consent to an amendment, supplement or waiver;
(ii) reduce the principal of, or the premium
(including, without limitation, redemption premium) on, or change the
fixed maturity of, any Note; alter the provisions with respect to the
payment on redemption of the Notes; or alter the price at which
repurchases of the Notes may be made pursuant to Section 4.10 or 4.14,
after the Asset Sale or Change of Control, respectively, has occurred;
(iii) reduce the rate of or change the time
for payment of interest on any Note;
(iv) waive a Default or Event of Default in
the payment of principal of or premium, if any, or interest on the
Notes (except a rescission of acceleration of the Notes by the Holders
of a majority in aggregate principal amount of the Notes and a waiver
of the payment default that resulted from such acceleration);
(v) make any Note payable in money other
than that stated in the Notes;
(vi) make any change in Section 6.4 or 6.7
or in this Section 9.2;
(vii) waive a redemption payment with
respect to any Note in a redemption made pursuant to Article III; or
(viii) adversely affect the contractual
ranking of the Notes or Subsidiary Guarantees.
(f) Notwithstanding any other provision hereof,
without the consent of the Holders of not less than two-thirds in aggregate
principal amount of the Notes at the time outstanding, the Issuers, the
Subsidiary Guarantors and the Trustee may not amend or supplement the Security
Documents, or waive or modify the rights of the Holders thereunder or the
provisions of this Indenture relating thereto, in either case, in a manner
adverse to the Holders.
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT.
If, at the time of an amendment to this Indenture or the Notes, this
Indenture shall be qualified under the TIA, every amendment to this Indenture or
the Notes shall be set forth in a supplemental indenture that complies with the
TIA as then in effect.
SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS.
Until a supplemental indenture, an amendment or waiver becomes
effective, a consent to it by a Holder of a Note is a continuing consent by the
Holder and every subsequent Holder of a Note or portion of
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a Note that evidences the same debt as the consenting Holder's Note, even if
notation of the consent is not made on any Note. A supplemental indenture,
amendment or waiver becomes effective in accordance with its terms and
thereafter binds every Holder.
The Issuers may fix a record date for determining which Holders must
consent to such supplemental indenture, amendment or waiver. If the Issuers fix
a record date, the record date shall be fixed at (i) the later of 30 days prior
to the first solicitation of such consent or the date of the most recent list of
Holders furnished to the Trustee prior to such solicitation pursuant to Section
2.5, or (ii) such other date as the Issuers shall designate.
SECTION 9.5 NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about a supplemental
indenture, amendment or waiver on any Note thereafter authenticated. The Issuers
in exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment or waiver.
SECTION 9.6 TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment or supplemental indenture
authorized pursuant to this Article IX if the amendment does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. If it does,
the Trustee may, but need not, sign it. In signing or refusing to sign such
amendment or supplemental indenture, the Trustee shall be entitled to receive,
if requested, an indemnity reasonably satisfactory to it and shall be provided
with and, subject to Section 7.1, shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that such
amendment or supplemental indenture is authorized or permitted by this Indenture
and applicable Gaming Laws, that it is not inconsistent herewith and therewith,
and that it shall be valid and binding upon the Issuers in accordance with its
terms. The Issuers may not sign an amendment or supplemental indenture until the
Board of Directors of each of the Issuers approves it.
ARTICLE X
COLLATERAL AND SECURITY AND GUARANTEE
SECTION 10.1 COLLATERAL DOCUMENTS.
The due and punctual payment of the principal and premium, if any, of,
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, interest on the overdue principal of and interest (to
the extent permitted by law), if any, on the Notes and performance of all other
Obligations under this Indenture, the Notes, the Security Documents and the
Registration Rights Agreement, shall be secured as provided in the Security
Documents.
The Issuers shall, and shall cause each of the Restricted Subsidiaries
to, do or cause to be done all such acts and things as may be necessary or
proper, or as may be required by the provisions of the Security Documents, to
assure and confirm to the Trustee the security interest in the Collateral
contemplated hereby and by the Security Documents, 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 secured hereby, according to the intent and
purposes herein and therein expressed. The Issuers shall, and shall cause each
of the Restricted Subsidiaries to, take, upon request of the Trustee, any and
all actions required to cause the Security Documents to create and maintain, as
security for the Obligations under this Indenture, the Notes, the Security
Documents and the Registration Rights Agreement, valid and enforceable,
perfected (except as expressly provided herein or therein) Liens in and on all
the Collateral, in favor of the Trustee, superior to and prior to the rights of
all third Persons, and subject to no other Liens, other than as provided herein
and therein; provided that, the
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Trustee's Lien securing the Collateral may be subordinated pursuant to the terms
of the Intercreditor Agreement to a Lien securing Indebtedness outstanding
pursuant to clause (a) of the second paragraph of Section 4.9, but only to the
extent provided in the Intercreditor Agreement.
The Issuers shall, and shall cause each of the Restricted Subsidiaries
to, use all reasonable efforts to obtain all requisite consents necessary to
enable such Issuers or Restricted Subsidiary to provide a Lien on any license
(other than any Gaming License), contract or agreement to which such Issuer or
Restricted Subsidiary is a party and that constitutes an Excluded Asset
described in clause (iii) of the definition of "Excluded Assets."
SECTION 10.2 ADDITIONAL COLLATERAL.
The Company shall, and shall cause each of the Subsidiary Guarantors
to, grant to the Trustee a valid and perfected security interest in all property
and assets of the Company and such Subsidiary Guarantors, other than Excluded
Assets, whether owned on the Issue Date or thereafter acquired, and to execute
and deliver all documents and opinions and to take all action necessary or
desirable to perfect and protect such a security interest in favor of the
Trustee, subject only to Permitted Liens.
SECTION 10.3 OPINIONS.
The Issuers shall furnish to the Trustee within three months after each
anniversary of the Issue Date, an Opinion of Counsel, dated as of such date,
stating either that (i) in the opinion of such counsel, all action has been
taken with respect to the recording, registering, filing, re-recording,
re-registering and refiling of all supplemental indentures, financing
statements, continuation statements or other instruments of further assurance as
is necessary to maintain the Liens of the Security Documents and reciting the
details of such action, subject to customary assumptions and exclusions or (ii)
in the opinion of such Counsel, no such action is necessary to maintain such
Liens, which Opinion of Counsel also shall state what actions it then believes
are necessary to maintain the effectiveness of such liens during the next year,
subject to customary assumptions and exclusions.
SECTION 10.4 RELEASE OF COLLATERAL.
(a) Collateral shall be released from the Liens
created by the Security Documents from time to time at the sole cost and expense
of the Issuers:
(i) upon payment in full of the Notes and
all other Obligations under this Indenture, the Notes, the Security
Documents and the Registration Rights Agreement then due and owing,
(ii) unless an Event of Default shall have
occurred and be continuing, upon the (A) sale or other disposition of
such Collateral pursuant to an Asset Sale made in accordance with
Section 4.10, (B) sale or other disposition of such Collateral meeting
the conditions of (b)(1) of the definition of Asset Sale, or (C)
transfer or exchange of such Collateral in the ordinary course of
business,
(iii) upon the written consent of the
Holders of not less than two-thirds of the aggregate principal amount
of the then outstanding Notes (including consents obtained in
connection with a tender offer or exchange offer for Notes),
(iv) as required pursuant to the terms of
the Intercreditor Agreement, or
(v) upon a Legal Defeasance;
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provided that, the Trustee shall not release any Lien on any Collateral unless
and until it shall have received an Officers' Certificate certifying that all
conditions precedent hereunder have been met and such other documents required
by Section 10.5. Upon compliance with the above provisions, the Trustee shall
execute, deliver or acknowledge any necessary or proper instruments of
termination, satisfaction or release to evidence the release of any Collateral
permitted to be released pursuant to this Indenture or the Security Documents.
(b) The release of any Collateral from the terms
of the Security Documents shall not be deemed to impair the security under this
Indenture in contravention of the provisions hereof and of the Security
Documents if and to the extent the Collateral is released pursuant to the terms
of this Indenture and the Security Documents.
SECTION 10.5 CERTIFICATES OF THE ISSUERS.
The Issuers shall furnish to the Trustee, prior to each proposed
release of Collateral, all documents required by TIA Section 314(d). The Trustee
may, to the extent permitted by Sections 7.1 and 7.2, accept as conclusive
evidence of compliance with the foregoing provisions the appropriate statements
contained in such instruments. Any certificate or opinion required by TIA
Section 314(d) may be made by an Officer of each of the Issuers, except in cases
where TIA Section 314(d) requires that such certificate or opinion be made by an
independent engineer, appraiser or other expert within the meaning of TIA
Section 314(d).
SECTION 10.6 AUTHORIZATION OF ACTIONS TO BE TAKEN BY TRUSTEE
UNDER SECURITY DOCUMENTS.
Subject to the terms of the Intercreditor Agreement, the Trustee may,
in its sole discretion and without the consent of the Holders, on behalf of the
Holders, take all actions it deems necessary or appropriate in order to (a)
enforce any of the terms of the Security Documents and (b) collect and receive
any and all amounts payable in respect of the Obligations of the Issuers and the
Subsidiary Guarantors hereunder and under the Notes, the Security Documents and
the Registration Rights Agreement. Subject to the terms of the Intercreditor
Agreement, the Trustee shall have the power to institute and to maintain such
suits and proceedings as it may deem expedient to prevent any impairment of the
Collateral by any acts that may be unlawful or in violation of the Security
Documents or this Indenture, and such suits and proceedings as the Trustee may
deem expedient to preserve or protect its interest and the interests of the
Holders 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 or the Trustee).
SECTION 10.7 AUTHORIZATION OF RECEIPT OF FUNDS BY TRUSTEE
UNDER SECURITY DOCUMENTS.
The Trustee is authorized to receive any funds for the benefit of the
Holders distributed under the Security Documents, and to make further
distributions of such funds to the Holders according to the provisions of this
Indenture and the Security Documents.
SECTION 10.8 SUBSIDIARY GUARANTEE.
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, subject to Section 10.10, each Subsidiary
Guarantor, jointly and severally, hereby unconditionally guarantees (such
guarantees, together with further guarantees granted from time to time pursuant
to Section 10.13, being the "Subsidiary Guarantee") to each Holder and the
Trustee irrespective of the validity or enforceability of this Indenture, the
Notes, the Security Documents, the Registration Rights Agreement or the
Obligations of the Issuers hereunder or thereunder: (i) the due and punctual
payment of the principal and premium, if any, of, and interest on, the Notes
(including, without limitation,
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interest after the filing of a petition initiating any proceedings referred to
in Section 6.1(j) or (k)), whether at maturity or on an interest payment date,
by acceleration, call for redemption or otherwise; (ii) the due and punctual
payment of interest on the overdue principal and premium, if any, of, and
interest on, the Notes, if lawful; (iii) the due and punctual payment and
performance of all other Obligations of the Issuers under the Notes, this
Indenture, the Security Documents and the Registration Rights Agreement, all in
accordance with the terms set forth herein and in the Notes, the Security
Documents and the Registration Rights Agreement; and (iv) in case of any
extension of time of payment or renewal of any Notes or any of such other
Obligations hereunder or under the Notes, the Security Documents or the
Registration Rights Agreement, the due and punctual payment or performance
thereof in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise.
Failing payment when due by the Issuers of any amount so guaranteed for
whatever reason, the Subsidiary Guarantors shall be jointly and severally
obligated to pay the same immediately.
Each Subsidiary Guarantor hereby agrees that (i) its obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes, this Indenture, the Security Documents, the
Registration Rights Agreement or the Obligations of the Issuers hereunder or
thereunder, the absence of any action to enforce the same, any waiver or consent
by any Holder with respect to any provisions hereof or thereof, any releases of
Collateral, any amendment of this Indenture, the Notes or Security Documents,
any delays in obtaining or realizing upon or failures to obtain or realize upon
Collateral, the recovery of any judgment against either of the Issuers or any of
the Subsidiaries, any action to enforce the same, or any other circumstance that
might otherwise constitute a legal or equitable discharge or defense of a
guarantor and (ii) this Subsidiary Guarantee will not be discharged except by
complete performance of the Obligations of the Issuers under the Notes, this
Indenture, the Security Documents and the Registration Rights Agreement.
Each Subsidiary Guarantor hereby agrees that it shall not be entitled
to and irrevocably waives (i) diligence, presentment, demand of payment, filing
of claim with a court in the event of insolvency or bankruptcy of either of the
Issuers, any Subsidiary Guarantor, any other Subsidiary or any other obligor
under the Notes, any right to require a proceeding first against the applicable
Issuer, any Subsidiary Guarantor, any other Subsidiary or any other obligor
under this Indenture, the Notes or the Security Documents, protest, notice and
all demands whatsoever, (ii) any right of subrogation, reimbursement,
exoneration, contribution or indemnification in respect of any Obligations
guaranteed hereby and (iii) any claim or other rights that it may now or
hereafter acquire against the Issuers or any of the Subsidiaries that arise from
the existence or performance of its Obligations under this Subsidiary Guarantee,
including, without limitation, any right to participate in any claim or remedy
of a Holder against the Issuers or any of the Subsidiaries or any Collateral
that a Holder 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, and including, without limitation, the
right to take or receive from the Issuers or any of the Subsidiaries, directly
or indirectly, in cash or other property, by setoff or in any other manner,
payment or security on account of such claim or other rights.
If any Holder or the Trustee is required by any court or otherwise to
return to the Issuers, any Subsidiary Guarantor, any other Subsidiary of the
Issuers or any other obligor under this Indenture, the Notes or the Security
Documents, trustee, liquidator, or other similar official, any amount paid by
the Issuers, any Subsidiary Guarantor, any other Subsidiary of the Issuers or
any other obligor under this Indenture, the Notes or the Security Documents to
the Trustee or such Holder, this Subsidiary Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect.
Each Subsidiary Guarantor agrees that, as between the Subsidiary
Guarantors, on the one hand, and the Holders and the Trustee, on the other hand,
(i) the maturity of the Obligations guaranteed hereby may be accelerated as
provided in Section 6.2 for the purposes of this Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration as to the Issuers of the Obligations guaranteed hereby, and (ii) in
the event of any declaration of acceleration of those Obligations as provided in
Section 6.2, those Obligations (whether or not due and payable) will forthwith
become due and payable by each of the Subsidiary Guarantors for the purpose of
this Subsidiary Guarantee.
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SECTION 10.9 EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.
To evidence the Subsidiary Guarantee set forth in Section 10.8, the
Issuers and each Subsidiary Guarantor hereby agrees that (a) a notation of such
Subsidiary Guarantee substantially as set forth on Exhibit C hereto shall be
endorsed on each Note authenticated and delivered by the Trustee, (b) such
endorsement shall be executed on behalf of each Subsidiary Guarantor by its
Chairman of the Board, President, Chief Financial Officer, Chief Operating
Officer, Treasurer, Secretary or any Vice President and (c) a counterpart
signature page to this Indenture shall be executed on behalf of each Subsidiary
Guarantor by its Chairman of the Board, President or one of its Vice Presidents
and attested to by another officer acknowledging such Subsidiary Guarantor's
agreement to be bound by the provisions hereof and thereof.
Each Subsidiary Guarantor hereby agrees that its Subsidiary Guarantee
set forth in Section 10.8 shall remain in full force and effect notwithstanding
any failure to endorse on each Note a notation of such Subsidiary Guarantee.
If an officer whose signature is on this Indenture no longer holds that
office at the time the Trustee authenticates the Notes on which a Subsidiary
Guarantee is endorsed, the Subsidiary Guarantee shall nevertheless be valid.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee set
forth in this Indenture on behalf of the Subsidiary Guarantor.
SECTION 10.10 LIMITATION ON SUBSIDIARY GUARANTOR'S LIABILITY.
Each Subsidiary Guarantor and by its acceptance hereof each Holder
hereby confirms that it is the intention of all such parties that the guarantee
by such Subsidiary Guarantor pursuant to its Subsidiary Guarantee not constitute
a fraudulent transfer or conveyance for purposes of any Federal or state law. To
effectuate the foregoing intention, the Holders and the Subsidiary Guarantors
hereby irrevocably agree that the Obligations of each Subsidiary Guarantor under
its Subsidiary Guarantee shall be limited to the maximum amount as will, after
giving effect to all other contingent and fixed liabilities of such Subsidiary
Guarantor and to any collections from or payments made by or on behalf of any
other Subsidiary Guarantor in respect of the Obligations of such other
Subsidiary Guarantor under its Subsidiary Guarantee, result in the Obligations
of such Subsidiary Guarantor under the Subsidiary Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under Federal or state law or
render a Subsidiary Guarantor insolvent.
SECTION 10.11 RIGHTS UNDER THE SUBSIDIARY GUARANTEE.
(a) No payment by any Subsidiary Guarantor
pursuant to the provisions hereof shall entitle such Subsidiary Guarantor to any
payment out of any Collateral or give rise to any claim of the Subsidiary
Guarantors against the Trustee or any Holder.
(b) Each Subsidiary Guarantor waives notice of
the issuance, sale and purchase of the Notes and notice from the Trustee or the
Holders from time to time of any of the Notes of their acceptance and reliance
on this Subsidiary Guarantee.
(c) No set-off, counterclaim, reduction or
diminution of any obligation or any defense of any kind or nature (other than
performance by the Subsidiary Guarantors of their obligations hereunder) that
any Subsidiary Guarantor may have or assert against the Trustee or any Holder
shall be available hereunder to such Subsidiary Guarantor.
(d) Each Subsidiary Guarantor shall pay all
costs, expenses and fees, including all reasonable attorneys' fees, that may be
incurred by the Trustee in enforcing or attempting to enforce the Subsidiary
Guarantee or protecting the rights of the Trustee or the Holder, if any, in
accordance with this Indenture.
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SECTION 10.12 PRIMARY OBLIGATIONS.
The Obligations of each Subsidiary Guarantor hereunder shall constitute
a guaranty of payment and not of collection. Each Subsidiary Guarantor agrees
that it is directly liable to each Holder hereunder, that the Obligations of
each Subsidiary Guarantor hereunder are independent of the Obligations of the
Issuers or any other Subsidiary Guarantor, and that a separate action may be
brought against each Subsidiary Guarantor, whether such action is brought
against the Issuers or any other Subsidiary Guarantor or whether the Issuers or
any other Subsidiary Guarantor is joined in such action. Each Subsidiary
Guarantor agrees that its liability hereunder shall be immediate and shall not
be contingent upon the exercise or enforcement by the Trustee or the Holders of
whatever remedies they may have against the Issuers or any other Subsidiary
Guarantor, or the enforcement of any lien or realization upon any security
Trustee may at any time possess. Each Subsidiary Guarantor agrees that any
release that may be given by the Trustee or the Holders to the Issuers or any
other Subsidiary Guarantor shall not release such Subsidiary Guarantor.
SECTION 10.13 GUARANTEE BY SUBSIDIARY.
The Company shall cause (i) each Restricted Subsidiary that is formed
or acquired after the date hereof and (ii) each Subsidiary that becomes a
Restricted Subsidiary after the date hereof, in each case concurrently
therewith, to (i) become a Subsidiary Guarantor hereunder and execute and
deliver to the Trustee a Subsidiary Guarantee in the form of Exhibit C attached
hereto and a supplemental indenture in form reasonably satisfactory to the
Trustee pursuant to which such Restricted Subsidiary shall unconditionally
guarantee all of the Issuers' Obligations as set forth in Section 10.8; and (ii)
execute a Security Agreement (substantially in the form of the Security
Agreement entered into on the Issue Date) and other Security Documents necessary
or reasonably requested by the Trustee to grant the Trustee a valid,
enforceable, perfected Lien on the Collateral described therein, subject only to
Liens permitted under Section 4.12; and (iii) cause such Restricted Subsidiary
to deliver to the Trustee an Opinion of Counsel, in form reasonably satisfactory
to the Trustee, that (i) such Security Agreement, supplemental indenture and
Subsidiary Guarantee have been duly authorized, executed and delivered by such
Restricted Subsidiary and (ii) such Security Agreement, this Indenture and such
Subsidiary Guarantee constitute a legal, valid, binding and enforceable
obligation of such Restricted Subsidiary, subject to customary assumptions and
exceptions, including for bankruptcy, fraudulent transfer and equitable
principles.
Each Note issued after the date of execution by any Subsidiary
Guarantor of a Subsidiary Guarantee shall be endorsed with a form of Subsidiary
Guarantee that has been executed by such Subsidiary Guarantor. However, the
failure of any Note to have endorsed thereon a Subsidiary Guarantee executed by
such Subsidiary Guarantor shall not affect the validity or enforceability of
such Subsidiary Guarantee against such Subsidiary Guarantor.
SECTION 10.14 RELEASE OF SUBSIDIARY GUARANTORS.
If all of the Capital Stock of any Subsidiary Guarantor is sold by the
Company or any of its Subsidiaries to a Person (other than the Company or any of
its Subsidiaries) in a transaction that complies with the terms of this
Indenture and the Net Proceeds from such Asset Sale are used in accordance with
Section 4.10, then such Subsidiary Guarantor will be released and discharged
from all of its Obligations under its Subsidiary Guarantee of the Notes and this
Indenture.
SECTION 10.15 GAMING LAW AND LIQUOR LAW CONSIDERATIONS.
(a) The Trustee acknowledges, understands and
agrees that the Gaming Laws and Liquor Laws may impose certain licensing or
transaction approval requirements prior to or subsequent to the exercise of the
rights and remedies granted to it under this Indenture with respect to the
Collateral subject to the Gaming Laws and Liquor Laws.
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(b) If any consent or approval under the Gaming
Laws or Liquor Laws is required in connection with the taking of any of the
actions which may be taken by the Trustee in the exercise of its rights
hereunder, then the Issuers agree to use their reasonable best efforts to secure
such consent or approval and to cooperate with the Trustee in obtaining any such
consent or approval. Upon the occurrence and during the continuation of any
Event of Default, the Issuers shall promptly execute and/or cause the execution
of all applications, certificates, instruments and other documents and papers
that the Trustee may be required to file in order to obtain any necessary
consents or approvals under the Gaming Laws and Liquor Laws, and if the Issuers
fail or refuse to execute such documents, the Trustee or the clerk of the court
with jurisdiction may execute such documents on behalf of the Issuers.
(c) Notwithstanding any other provision of this
Indenture to the contrary, nothing in this Indenture shall (i) effect any
transfer of any ownership interest (within the meaning of 68 Indiana
Administrative Code 5 or the Colorado Gaming Laws) in the Company or (ii) effect
any transfer, sale, purchase, lease or hypothecation of, or any borrowing or
loaning of money against, or any establishment of any voting trust agreement or
other similar agreement with respect to (all within the meaning of Indiana Code
4-33-4-21), any certificate of suitability, finding of suitability,
registration, license or any owner's license heretofore or hereafter issued to
any Person, including the Company and the Restricted Subsidiaries, under any of
the Gaming Laws, including Indiana Code 4-33.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), the imposed duties shall control.
SECTION 11.2 NOTICES.
Any notice or communication by the Issuers 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' addresses:
If to the Issuers:
c/o The Majestic Star Casino, LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇▇ Companies, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
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and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PLLC
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Trustee:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
The Issuers or the Trustee by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; upon receipt, if deposited in the mail, postage prepaid; when
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. All notices and communications to the
Trustee shall be deemed to have been duly given only if actually received by the
Trustee.
Any notice or communication to a Holder shall be mailed by first-class
mail, certified or registered, return receipt requested, to his address shown on
the register kept by the Registrar. Failure to mail a notice or communication to
a Holder or any defect in it shall not affect its sufficiency with respect to
other Holders.
If a notice communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Issuers mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 11.3 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Issuers, the Trustee, the Registrar and any other person shall have the
protection of TIA Section 312(c).
SECTION 11.4 CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT.
Upon any request or application by the Issuers to the Trustee to take
any action under this Indenture, the Issuers shall furnish to the Trustee:
(a) an Officers' Certificate in form and
substance reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 11.5) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
69
(b) an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee (which shall include the statements set
forth in Section 11.5) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been complied with.
SECTION 11.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall include:
(a) a statement that the Person making such
certificate or opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope
of the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such
Person, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether or not, in the
opinion of such Person, such condition or covenant has been complied with,
provided that, (i) with respect to matters of fact, an Opinion of Counsel may
rely upon an Officers' Certificate or a certificate of a public official, and
(ii) with respect to Restricted Payments, the Company shall provide the
statements required by Section 4.7.
SECTION 11.6 RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 11.7 LEGAL HOLIDAYS.
If a payment date is a Legal Holiday at a place of payment, payment may
be made at that place on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period.
SECTION 11.8 NO RECOURSE AGAINST OTHERS.
No director, member, manager, officer, employee, incorporator,
stockholder or controlling person of the Issuers or any Subsidiary Guarantor, as
such, shall have any liability for any obligations of the Issuers or any
Subsidiary Guarantor under the Notes, this Indenture, the Security Documents or
the Registration Rights Agreement or for any claim based on, in respect of, or
by reason of such obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability. The waiver and release shall be part of
the consideration for the issuance of the Notes and the Subsidiary Guarantee.
Notwithstanding the foregoing, nothing in this provision shall be construed as a
waiver or release of any claims under the Federal securities laws. Further,
notwithstanding the foregoing, nothing in this provision shall, or shall be
construed in any way to, modify the rights or obligations of either of the
Issuers or any of the Subsidiary Guarantors as an Issuer or Subsidiary
Guarantor, respectively.
SECTION 11.9 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED, INTERPRETED AND THE RIGHTS OF THE
PARTIES DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, INCLUDING,
WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
70
GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE LAWS AND RULES 327(b). THE
ISSUERS HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY NEW YORK STATE
COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL
COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. THE ISSUERS IRREVOCABLY
WAIVE, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW,
TRIAL BY JURY AND ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE ISSUERS IRREVOCABLY CONSENT, TO
THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TO THE SERVICE
OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO THE ISSUERS AT THEIR ADDRESS SET FORTH HEREIN, SUCH SERVICE TO
BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF ANY PURCHASER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE ISSUERS IN ANY
OTHER JURISDICTION.
SECTION 11.10 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Issuers or any of the Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 11.11 SUCCESSORS.
All agreements of the Issuers and any Subsidiary Guarantors in this
Indenture and the Notes shall bind their respective successors. All agreements
of the Trustee in this Indenture shall bind its successor.
SECTION 11.12 SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.13 COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 11.14 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
articles and sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 11.15 TRUSTEE AUTHORIZATION.
Each of the Holders and the Issuers authorize and direct the Trustee to
enter into the Intercreditor Agreement and the Security Documents.
71
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Indenture as of the date first written above.
THE ISSUERS:
THE MAJESTIC STAR CASINO, LLC
By: __________________________________
Name:
Title:
THE MAJESTIC STAR CASINO CAPITAL CORP.
By: __________________________________
Name:
Title:
THE SUBSIDIARY GUARANTORS:
MAJESTIC INVESTOR, LLC
By: __________________________________
Name:
Title:
MAJESTIC INVESTOR HOLDINGS, LLC
By: __________________________________
Name:
Title:
MAJESTIC INVESTOR CAPITAL CORP.
By: __________________________________
Name:
Title:
▇▇▇▇▇▇ MISSISSIPPI GAMING, LLC
By: __________________________________
Name:
Title:
▇▇▇▇▇▇ COLORADO GAMING, LLC
By: __________________________________
Name:
Title:
THE TRUSTEE:
THE BANK OF NEW YORK, as Trustee
By: __________________________________
Name:
Title:
EXHIBIT A
(Face of Security)
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST
COMPANY (THE "DEPOSITARY") TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DEPOSITARY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR
SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.](1)
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE
WHICH IS TWO YEARS (OR SUCH OTHER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER
RULE 144(k) UNDER THE SECURITIES ACT AS PERMITTING RESALES OF RESTRICTED
SECURITIES BY NON-AFFILIATES WITHOUT RESTRICTION) AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH EITHER OF THE ISSUERS OR
ANY AFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR
OF THIS SECURITY) (THE "RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO THE
ISSUERS, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THIS SECURITY IS ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A UNDER THE SECURITIES ACT, (D) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1),
(2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS' AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D)
OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING
CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE AND IN EACH CASE IN
ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY U.S. STATE OR ANY OTHER
APPLICABLE JURISDICTION. THE HOLDER OF THIS SECURITY AGREES THAT IT WILL DELIVER
TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
__________________
(1) This paragraph should be included only if the Note is issued in global
form.
A-1
THE MAJESTIC STAR CASINO, LLC
THE MAJESTIC STAR CASINO CAPITAL CORP.
9 1/2% SENIOR SECURED NOTE
DUE 2010
NO. [__] [______________]
CUSIP NO.
The Majestic Star Casino, LLC, an Indiana limited liability company
(the "Company"), and The Majestic Star Casino Capital Corp., an Indiana
corporation ("Capital" and, together with the Company, the "Issuers"), as
obligors, for value received promise to pay to Cede & Co. or registered assigns,
the principal sum of [__________] Dollars on October 15, 2010. Interest Payment
Dates: April 15 and October 15 and on the maturity date. Record Dates: April 1
and October 1 (whether or not a Business Day).
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
A-2
IN WITNESS WHEREOF, the Issuers have caused this Note to be signed
manually or by facsimile by their duly authorized officers.
THE ISSUERS:
THE MAJESTIC STAR CASINO, LLC
By: __________________________________
Name:
Title:
By: __________________________________
Name:
Title:
THE MAJESTIC STAR CASINO CAPITAL CORP.
By: __________________________________
Name:
Title:
By: __________________________________
Name:
Title:
Trustee's Certificate of Authentication:
Dated:
This is one of the Notes referred to
in the within-mentioned Indenture:
The Bank of New York, as Trustee
By: ________________________________
Authorized Signatory
A-3
(Back of Security)
9-1/2% SENIOR SECURED NOTE
DUE 2010
1. Interest. The Majestic Star Casino, LLC, an Indiana limited
liability company (the "Company"), and The Majestic Star Casino Capital Corp.,
an Indiana corporation ("Capital" and, together with the Company, the
"Issuers"), as obligors, promise to pay interest on the principal amount of this
Note at the rate and in the manner specified below.
The Issuers shall pay, in cash, interest on the principal amount of
this Note, at the rate of 9.5% per annum. The Issuers shall pay interest
semi-annually on April 15 and October 15 of each year, and on the maturity date,
commencing on April 15, 2004, or if any such day is not a Business Day, on the
next succeeding Business Day (each an "Interest Payment Date").
Interest shall be computed on the basis of a 360-day year consisting of
twelve 30-day months. Interest shall accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the Issue Date. To
the extent lawful, the Issuers shall pay interest on overdue principal at the
rate of 1% per annum in excess of the then applicable interest rate on the
Notes; the Issuers shall pay interest on overdue installments of interest
(without regard to any applicable grace periods) at the same rate to the extent
lawful.
2. Method of Payment. The Issuers shall pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the record date next preceding the Interest Payment
Date, even if such Notes are cancelled after such record date and on or before
such Interest Payment Date. The Holder must surrender this Note to a Paying
Agent to collect principal payments. The Issuers shall pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. The Issuers may pay principal
and interest by check to a Holder's registered address.
3. Paying Agent and Registrar. Initially, the Trustee shall act
as Paying Agent and Registrar. The Issuers may change any Paying Agent,
Registrar or co-registrar without notice to any Holder. Subject to certain
exceptions, the Company or any of its Subsidiaries may act in any such capacity.
4. Indenture. The Issuers issued the Notes under an Indenture
dated as of October 7, 2003 (the "Indenture") among the Issuers, the Subsidiary
Guarantors named therein and the Trustee. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 (the "TIA") (15 U.S. Code Sections 77aaa-77bbbb) as
in effect on the date of the Indenture until such time as the Indenture is
qualified under the TIA and thereafter as in effect on the date the Indenture is
so qualified. The Notes are subject to all such terms, and Holders are referred
to the Indenture and the TIA for a statement of such terms. The terms of the
Indenture shall govern any inconsistencies between the Indenture and the Notes.
Terms not otherwise defined herein shall have the meanings assigned in the
Indenture. The aggregate principal amount of Notes that may be authenticated and
delivered under the Indenture is unlimited.
5. Optional Redemption. Except as set forth in Sections 3.7(b)
and 3.8 of the Indenture, the Notes are not redeemable at the Issuers' option
prior to October 15, 2007. Thereafter, the Notes shall be subject to redemption
at the option of the Issuers, in whole or in part, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest thereon and Liquidated Damages, if any, to the applicable date
of redemption, if redeemed during the 12-month period beginning on October 15 of
the years indicated below:
Year Percentage
---- ----------
2007 104.750%
2008 102.375%
2009 and thereafter 100.000%
A-4
Notwithstanding the foregoing, at any time or from time to time prior
to October 15, 2006, the Issuers may redeem, at their option, up to 35% of the
aggregate principal amount of the Notes then outstanding at a redemption price
of 109.500% of the principal amount thereof, plus accrued and unpaid interest
thereon and Liquidated Damages, if any, through the applicable date of
redemption, with the Net Cash Proceeds of one or more Qualified Equity
Offerings; provided that, (a) such redemption shall occur within 60 days of the
date of closing of such Qualified Equity Offering and (b) at least 65% of the
aggregate principal amount of Notes issued on or after the Issue Date remains
outstanding immediately after giving effect to each such redemption.
6. Mandatory Redemption. There shall be no mandatory redemption
of the Notes (other than a Required Regulatory Redemption).
7. Denominations, Transfer, Exchange. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Issuers may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar and the Issuers need not exchange
or register the transfer (i) of any Note or portion of a Note selected for
redemption or (ii) of any Notes for a period of 15 days before a selection of
Notes to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.
8. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes, subject to the provisions of the
Indenture with respect to the record dates for the payment of interest.
9. Amendments and Waivers. Subject to certain exceptions, the
Indenture or the Notes may be amended with the written consent of the Holders of
at least a majority in principal amount of the then outstanding Notes (including
consents obtained in connection with a tender offer or exchange offer for
Notes), and any existing Default or Event of Default (except certain payment
defaults) may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes (including consents obtained in
connection with a tender offer or exchange offer for Notes). Without the consent
of any Holders, the Indenture, the Notes and the Security Documents, may be
amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for assumption of the Issuers' obligations to the Holders in the case of
a merger or consolidation, to provide for uncertificated Notes in addition to or
in place of certificated Notes, to make any change that would provide any
additional rights or benefits to the Holders of the Notes, or that does not
adversely affect the legal rights hereunder or under the Indenture or the
Security Documents of any Holder, to release any Subsidiary Guarantee of the
Notes permitted to be released under the terms of the Indenture, to comply with
requirements of the Commission in order to effect or maintain the qualification
of the Indenture under the TIA, or to comply with the requirements of the
Trustee and the Depositary (including its nominees) with respect to transfers of
beneficial interests in the Notes. Notwithstanding the foregoing, without the
consent of not less than two-thirds in aggregate principal amount of the Notes
at the time outstanding, the Issuers, the Subsidiary Guarantors and the Trustee
may not amend or supplement the Security Documents, or waive or modify the
rights of the Holders thereunder or the provisions of the Indenture relating
thereto.
10. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the then outstanding Notes may declare by written notice to the
Issuers and the Trustee all the Notes to be due and payable immediately, except
that in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, all outstanding Notes become due and payable
immediately without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. The Trustee may
require security and indemnity satisfactory to it before it enforces the
Indenture or the Notes. Subject to certain limitations, Holders of a majority in
principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Issuers must furnish an annual compliance
certificate to the Trustee.
11. Trustee Dealings with Issuers. The Trustee under the
Indenture, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Issuers or their Affiliates, and may
otherwise deal with the Issuers or their Affiliates, as if it were not Trustee.
A-5
12. No Recourse Against Others. No director, member, manager,
officer, employee, incorporator, stockholder or controlling person of the
Issuers or any Subsidiary Guarantor, as such, shall have any liability for any
obligations of the Issuers or any Subsidiary Guarantor under the Notes, the
Indenture, the Security Documents or the Registration Rights Agreement or for
any claim based on, in respect of, or by reason of such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes and the Subsidiary Guarantees. Notwithstanding the foregoing,
nothing in this provision shall be construed as a waiver or release of any
claims under the Federal securities laws.
13. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
14. Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
15. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuers have caused
CUSIP numbers to be printed on the Notes and has directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
16. Governing Law. This Note and the Indenture shall be construed,
interpreted and the rights of the parties determined in accordance with the laws
of the State of New York, including, without limitation, Sections 5-1401 and 5 -
1402 of the New York General Obligations Law and New York Civil Practice Laws
and Rules 327(b).
[17. Holders' Compliance with Registration Rights Agreement. Each
Holder of a Note, by its acceptance thereof, acknowledges and agrees to the
provisions of the Registration Rights Agreement, dated as of October 7, 2003,
among the Issuers and the parties named on the signature page thereof (the
"Registration Rights Agreement"), including but not limited to the obligations
of the Holders with respect to a registration and the indemnification of the
Issuers and the Initial Purchasers (as defined therein) to the extent provided
therein.](2)
The Issuers shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to: The Majestic Star Casino, LLC, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Financial Officer.
__________________
(2) This paragraph should only be included in the Series A Notes.
A-6
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
agent to transfer this Note on the books of the Issuers. The agent may
substitute another to act for him.
Date: ___________________
Your Signature: __________________________________
(Sign exactly as your name appears
on the face of this Note)
Your Tax ID Number: ______________________________
Signature Guarantee*
__________________
* NOTICE: The signature must be guaranteed by an institution which is a member
of one of the following recognized signature guarantee programs:
(1) The Securities Transfer Agent Medallion Program (STAMP);
(2) The New York Stock Exchange Medallion Program (MSP);
(3) The Stock Exchange Medallion Program (SEMP).
A-7
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Note purchased by
the Issuers pursuant to Section 4.10 or Section 4.14 of the Indenture, as the
case may be, state the amount you elect to have purchased (if all, write "ALL"):
$______________
Date: ______________________
Your Signature: __________________________________
(Sign exactly as your name appears
on the face of this Note)
Your Tax ID Number: ______________________________
Signature Guarantee*
__________________
* NOTICE The signature must be guaranteed by an institution which is a member
of one of the following recognized signature guarantee programs:
(1) The Securities Transfer Agent Medallion Program (STAMP);
(2) The New York Stock Exchange Medallion Program (MSP);
(3) The Stock Exchange Medallion Program (SEMP).
A-8
SCHEDULE OF EXCHANGES OF DEFINITIVE NOTES(3)
The following exchanges of a part of this Global Note for Definitive
Notes have been made:
Principal Amount of
this Global Note
Amount of decrease Amount of increase in following such Signature of
in Principal Amount Principal Amount of decrease (or authorized officer
Date of Exchange of this Global Note this Global Note increase) of Trustee
__________________
(3) This schedule should be included only if the Note is issued in global form.
A-9
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF NOTES
Re: [Series A] [Series B] 9 1/2% Senior Secured Notes due 2010 (the
"Notes") of The Majestic Star Casino, LLC and The Majestic Star Casino
Capital Corp.
This Certificate relates to $______ principal amount of Notes held in *
[ ] book-entry or * [ ] definitive form by _______________________ (the
"Transferor").
The Transferor, by written order, has requested the Trustee:
[ ] to deliver in exchange for its beneficial interest in the Global Note
held by the depositary, a Note or Notes in definitive, registered form
of authorized denominations and an aggregate principal amount equal to
its beneficial interest in such Global Note (or the portion thereof
indicated above); or
[ ] to exchange or register the transfer of a Note or Notes. In
connection with such request and in respect of each such Note, the
Transferor does hereby certify that Transferor is familiar with the
Indenture relating to the above captioned Notes and, the transfer of
this Note does not require registration under the Securities Act of
1933, as amended (the "Securities Act") because such Note:
[ ] is being acquired for the Transferor's own account, without transfer;
[ ] is being transferred pursuant to an effective registration statement;
[ ] is being transferred to a "qualified institutional buyer" (as defined
in Rule 144A under the Securities Act), in reliance on such Rule 144A;
[ ] is being transferred pursuant to an exemption from registration in
accordance with Rule 904 under the Securities Act;**
[ ] is being transferred pursuant to Rule 144 under the Securities Act;**
or
[ ] is being transferred pursuant to another exemption from the
registration requirements of the Securities Act (explain:).**
______________________________________
[INSERT NAME OF TRANSFEROR]
By: __________________________________
Date: ______________________
* Check applicable box.
** If this box is checked, this certificate must be accompanied by an
opinion of counsel to the effect that such transfer is in compliance
with the Securities Act.
B-1
EXHIBIT C
FORM OF GUARANTEE
GUARANTEE
For good and valuable consideration received from the Issuers by the
undersigned (hereinafter referred to as the "Subsidiary Guarantors," which term
includes any successor or additional Subsidiary Guarantors), the receipt and
sufficiency of which is hereby acknowledged, subject to Section 10.10 of the
Indenture, each Subsidiary Guarantor, jointly and severally, hereby
unconditionally guarantees, irrespective of the validity or enforceability of
the Indenture, the Notes, the Security Documents, the Registration Rights
Agreement or the Obligations thereunder, (a) the due and punctual payment of the
principal and premium, if any, of and interest on the Notes (including, without
limitation, interest after the filing of a petition initiating any proceedings
referred to in Section 6.1(j) or (k) of the Indenture), whether at maturity or
on an interest payment date, by acceleration, call for redemption or otherwise,
(b) the due and punctual payment of interest on the overdue principal and
premium, if any, of and interest, if any, on the Notes, if lawful, (c) the due
and punctual payment and performance of all other Obligations under such
documents, all in accordance with the terms set forth in the Indenture, the
Notes, the Security Documents and the Registration Rights Agreement, and (d) in
case of any extension of time of payment or renewal of any Notes or any of such
other Obligations thereunder or under the Indenture, the Security Documents or
the Registration Rights Agreement, the due and punctual payment or performance
thereof in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise.
No director, member, manager, officer, employee, incorporator,
stockholder or controlling person of the Subsidiary Guarantor, as such, shall
have any liability under this Subsidiary Guarantee for any obligations of the
Subsidiary Guarantor under the Notes, the Indenture, the Security Documents or
the Registration Rights Agreement or for any claim based on, in respect of, or
by reason of, such obligations or their creation. Each Holder of the Notes by
accepting a Note waives and releases all such liability.
SUBSIDIARY GUARANTOR:
By: __________________________________
Name:
Title:
C-1