EXHIBIT 4.2
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Resorts International Hotel and Casino, Inc.
as Issuer
and
The Guarantors
Named Herein
11 1/2% First Mortgage Notes
due 2009
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INDENTURE
Dated as of March 22, 2002
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Bankers Trust Company
as Trustee
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CROSS-REFERENCE TABLE*
Trust Indenture Indenture
Act Section Section
310(a)(1)................................................... 7.10
(a)(2)................................................... 7.10
(a)(3)................................................... N.A.
(a)(4)................................................... N.A.
(a)(5)................................................... 7.10
(b)...................................................... 7.10
(c)...................................................... N.A.
311(a)...................................................... 7.11
(b)...................................................... 7.11
(c)...................................................... N.A.
312(a).......... ............................................ 2.05
(b)...................................................... 13.03
(c)...................................................... 13.03
313(a)...................................................... 7.06
(b)(1)................................................... 10.03
(b)(2)................................................... 7.07
(c)...................................................... 7.06;13.02
(d)...................................................... 7.06
314(a)...................................................... 4.03
(b)...................................................... 10.02
(c)(1)................................................... 13.04
(c)(2)................................................... 13.04
(c)(3)................................................... N.A.
(d)...................................................... 10.03, 10.09
(e)...................................................... 13.05
(f)...................................................... N.A.
315(a)...................................................... 7.01
(b)...................................................... 7.05,13.02
(c)...................................................... 7.01
(d)...................................................... 7.01
(e)...................................................... 6.11
316(a) (last sentence)...................................... 2.09
(a)(1)(A)................................................ 6.05
(a)(1)(B)................................................ 6.04
(a)(2)................................................... N.A.
(b)...................................................... 6.07
(c)...................................................... 2.12
317(a)(1)................................................... 6.08
(a)(2)................................................... 6.09
(b)...................................................... 2.04
318(a)...................................................... 13.01
(b)...................................................... N.A.
(c)...................................................... 13.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Page
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SECTION 1.01. Definitions.............................................................................1
SECTION 1.02. Other Definitions......................................................................26
SECTION 1.03. Incorporation by Reference of Trust Indenture Act......................................27
SECTION 1.04. Rules of Construction..................................................................28
ARTICLE 2
THE NOTES
SECTION 2.01. Form and Dating........................................................................28
SECTION 2.02. Execution and Authentication...........................................................29
SECTION 2.03. Registrar and Paying Agent.............................................................29
SECTION 2.04. Paying Agent to Hold Money in Trust....................................................30
SECTION 2.05. Holder Lists...........................................................................30
SECTION 2.06. Transfer and Exchange..................................................................30
SECTION 2.07. Replacement Notes......................................................................31
SECTION 2.08. Outstanding Notes......................................................................31
SECTION 2.09. Treasury Notes.........................................................................32
SECTION 2.10. Temporary Notes........................................................................32
SECTION 2.11. Cancellation...........................................................................32
SECTION 2.12. Defaulted Interest.....................................................................32
SECTION 2.13. Deposit of Monies......................................................................33
SECTION 2.14. CUSIP Number...........................................................................33
SECTION 2.15. Book-Entry Provisions for Global Notes.................................................33
SECTION 2.16. Registration of Transfers and Exchanges................................................34
SECTION 2.17. Restrictive Legends....................................................................38
ARTICLE 3
REDEMPTION
SECTION 3.01. Notices to Trustee.....................................................................39
SECTION 3.02. Selection of Notes to Be Redeemed......................................................39
SECTION 3.03. Notice of Redemption...................................................................40
SECTION 3.04. Effect of Notice of Redemption.........................................................41
SECTION 3.05. Deposit of Redemption Price............................................................41
SECTION 3.06. Notes Redeemed in Part.................................................................41
SECTION 3.07. Optional Redemption....................................................................42
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SECTION 3.08. No Mandatory Redemption................................................................42
SECTION 3.09. Mandatory Disposition in Accordance with Gaming Laws...................................42
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Notes.......................................................................43
SECTION 4.02. Maintenance of Office or Agency........................................................43
SECTION 4.03. Reports................................................................................44
SECTION 4.04. Compliance Certificate.................................................................45
SECTION 4.05. Taxes..................................................................................45
SECTION 4.06. Stay, Extension and Usury Laws.........................................................45
SECTION 4.07. Restricted Payments....................................................................46
SECTION 4.08. Incurrence of Indebtedness and Issuance of Preferred Equity Interests..................49
SECTION 4.09. Liens..................................................................................50
SECTION 4.10. Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries..............50
SECTION 4.11. Asset Sales............................................................................51
SECTION 4.12. Business Activities....................................................................54
SECTION 4.13. Corporate Existence....................................................................55
SECTION 4.14. Offer to Repurchase upon Change of Control.............................................55
SECTION 4.15. [Reserved].............................................................................57
SECTION 4.16. Events of Loss.........................................................................57
SECTION 4.17. [Reserved].............................................................................60
SECTION 4.18. Additional Guarantees..................................................................60
SECTION 4.19. Maintenance of Properties; Insurance, Books and Records................................60
SECTION 4.20. Further Assurances.....................................................................62
SECTION 4.21. Sale and Leaseback Transactions........................................................62
SECTION 4.22. Deposit of Proceeds of Notes on Issue Date into the Accounts...........................63
SECTION 4.23. Transactions with Affiliates...........................................................63
SECTION 4.24. Designation of Restricted and Unrestricted Subsidiaries................................65
SECTION 4.25. Expansion Project......................................................................65
ARTICLE 5
SUCCESSORS
SECTION 5.01. Merger, Consolidation or Sale of Assets................................................66
SECTION 5.02. Successor Corporation Substituted for the Company......................................67
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ARTICLE 6
DEFAULTS AND REMEDIES
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SECTION 6.01. Events of Default......................................................................68
SECTION 6.02. Acceleration...........................................................................70
SECTION 6.03. Other Remedies.........................................................................71
SECTION 6.04. Waiver of Past Defaults................................................................71
SECTION 6.05. Control by Majority....................................................................71
SECTION 6.06. Limitation on Suits....................................................................71
SECTION 6.07. Rights of Holders to Receive Payment...................................................72
SECTION 6.08. Collection Suit by Trustee.............................................................72
SECTION 6.09. Trustee May File Proofs of Claim.......................................................72
SECTION 6.10. Priorities.............................................................................73
SECTION 6.11. Undertaking for Costs..................................................................73
ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee......................................................................74
SECTION 7.02. Rights of Trustee......................................................................75
SECTION 7.03. Individual Rights of Trustee...........................................................76
SECTION 7.04. Trustee's Disclaimer...................................................................76
SECTION 7.05. Notice of Defaults.....................................................................76
SECTION 7.06. Reports by Trustee to Holders..........................................................77
SECTION 7.07. Compensation and Indemnity.............................................................77
SECTION 7.08. Replacement of Trustee.................................................................78
SECTION 7.09. Successor Trustee by Merger, etc.......................................................79
SECTION 7.10. Eligibility; Disqualification..........................................................79
SECTION 7.11. Preferential Collection of Claims Against Company......................................79
SECTION 7.12. Force Majeure..........................................................................79
ARTICLE 8
DISCHARGE OF INDENTURE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. Satisfaction and Discharge.............................................................79
SECTION 8.02 Option to Effect Legal Defeasance or Covenant Defeasance...............................80
SECTION 8.03. Legal Defeasance and Discharge.........................................................80
SECTION 8.04. Covenant Defeasance....................................................................81
SECTION 8.05. Conditions to Legal or Covenant Defeasance.............................................81
SECTION 8.06. Deposited Money and Government Securities to Be Held in Trust;
Other Miscellaneous Provisions.........................................................82
SECTION 8.07. Repayment to Company...................................................................83
SECTION 8.08. Reinstatement..........................................................................83
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ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
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SECTION 9.01. Without Consent of Holders.............................................................84
SECTION 9.02. With Consent of Holders................................................................84
SECTION 9.03. Compliance with Trust Indenture Act....................................................86
SECTION 9.04. Revocation and Effect of Consents......................................................86
SECTION 9.05. Notation on or Exchange of Notes.......................................................86
SECTION 9.06. Trustee to Sign Amendments, etc........................................................86
ARTICLE 10
COLLATERAL
SECTION 10.01. Collateral Documents; Additional Collateral; Substitute Collateral.....................86
SECTION 10.02. Recording, Registration and Opinions...................................................89
SECTION 10.03. Release of Collateral..................................................................89
SECTION 10.04. Possession and Use of Collateral.......................................................90
SECTION 10.05. Specified Releases of Collateral.......................................................90
SECTION 10.06. Unconditional Release of Collateral From Lien of Indenture and Collateral Documents....93
SECTION 10.07. Form and Sufficiency of Release........................................................94
SECTION 10.08. Purchaser Protected....................................................................95
SECTION 10.09. Authorization of Actions to Be Taken by the Trustee Under the Collateral Documents.....95
SECTION 10.10. Authorization of Receipt of Funds by the Trustee Under the Collateral Documents......95
SECTION 10.11. Powers Exercisable by Receiver or Trustee..............................................95
ARTICLE 11
APPLICATION OF TRUST MONIES
SECTION 11.01. Collateral Account and Construction Disbursement Account...............................96
SECTION 11.02. Withdrawal of Net Loss Proceeds........................................................96
SECTION 11.03. Withdrawal of Net Proceeds to Fund an Asset Sale Offer and
Net Loss Proceeds to Fund a Event of Loss Offer........................................99
SECTION 11.04. Withdrawal of Trust Monies for Investment in Replacement Assets.......................100
SECTION 11.05. Investment of Trust Monies............................................................101
SECTION 11.06. Use of Trust Monies; Retirement of Notes..............................................102
SECTION 11.07. Disposition of Notes Retired..........................................................103
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ARTICLE 12
GUARANTEES
Page
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SECTION 12.01. Guarantees............................................................................103
SECTION 12.02. Execution and Delivery of Guarantees..................................................104
SECTION 12.03. Guarantors May Consolidate, etc., on Certain Terms....................................105
SECTION 12.04. Limitation of Guarantor's Liability...................................................106
SECTION 12.05. Application of Certain Terms and Provisions to the Guarantors.........................107
ARTICLE 13
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls..........................................................107
SECTION 13.02. Notices...............................................................................107
SECTION 13.03. Communication by Holders with Other Holders...........................................108
SECTION 13.04. Certificate and Opinion as to Conditions Precedent....................................109
SECTION 13.05. Statements Required in Certificate or Opinion.........................................109
SECTION 13.06. Rules by Trustee and Agents...........................................................109
SECTION 13.07. No Personal Liability of Directors, Officers, Employees,
Member, Partner, Incorporator and Stockholders........................................109
SECTION 13.08. Governing Law.........................................................................110
SECTION 13.09. No Adverse Interpretation of Other Agreements.........................................110
SECTION 13.10. Successors............................................................................110
SECTION 13.11. Severability..........................................................................110
SECTION 13.12. Counterpart Originals.................................................................110
SECTION 13.13. Table of Contents, Headings, etc......................................................110
SECTION 13.14. Gaming Authorities......... ..........................................................115
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EXHIBITS
EXHIBIT A FORM OF NOTE AND SUBSIDIARY GUARANTEE
EXHIBIT B FORM OF CERTIFICATE OF TRANSFER
EXHIBIT C FORM OF TRANSFEREE LETTER OF REPRESENTATION
EXHIBIT D FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH REGULATION S TRANSFERS
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INDENTURE, dated as of March 22, 2002, among Resorts International
Hotel and Casino, Inc., a Delaware corporation (the "Company"), the Guarantors
(as defined) and Bankers Trust Company, a New York banking corporation, as
trustee (the "Trustee").
Each party agrees as follows for the benefit of each other and for the
equal and ratable benefit of the Holders:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. Definitions.
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"Accounts" means the Construction Disbursement Account, the Liquidity
Disbursement Account or the Segregated Account.
"Accrued Bankruptcy Interest" means, with respect to any Indebtedness,
all interest accruing thereon after the filing of a petition by or against the
Company or any of the Guarantors under any Bankruptcy Law, in accordance with
and at the rate (including any rate applicable upon any default or event of
default, to the extent lawful) specified in the documents evidencing or
governing such Indebtedness, whether or not the claim for such interest is
allowed as a claim after such filing in any proceeding under such Bankruptcy
Law.
"Additional Equity Contribution" has the meaning specified in the
Disbursement Agreement.
"Adjusted Consolidated EBITDA" means, for any period, Consolidated
EBITDA for such period, plus the Released Amount for such period.
"Affiliate" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. 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, will mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such person, whether through the
ownership of voting securities, by agreement or otherwise; provided that, for
purposes of Section 4.23 hereof only, beneficial ownership of 10% or more of the
voting securities of a person will be deemed to be control.
"After-Acquired Property" means any property (including Equity
Interests) relating to the RIH Hotel acquired after the Issue Date.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Asset Sale" means any direct or indirect sale, conveyance, transfer,
lease or other disposition (including, without limitation, any merger,
consolidation or Sale and Leaseback Transaction) to any person other than the
Company or a Subsidiary, in one transaction or a series of related transactions,
of:
(1) any Equity Interest of any Subsidiary (excluding minimum issuances
of directors' qualifying shares); or
(2) the property of the Company or any of its Subsidiaries which
constitute substantially all of an operation unit or line of business of the
Company or any of its Subsidiaries; or
(3) any other property of the Company or any of its Subsidiaries
outside of the ordinary course of business;
provided that notwithstanding the foregoing, the term "Asset Sale" will not
include:
(a) the sale, lease, conveyance, disposition or other transfer of all
or substantially all of the property of the Company and its Subsidiaries, as
permitted pursuant to Article 5 hereof;
(b) the sale or lease of equipment, inventory, accounts receivable or
other property in the ordinary course of business and to the extent that such
sales or leases are not part of the sale of the business in which such equipment
was used or in which such inventory or accounts receivable arose;
(c) sales of property that has become worn out, obsolete or damaged or
otherwise unsuitable for use in connection with the business of the Company or
any Subsidiary;
(d) any transaction or series of related transactions involving
property with a Fair Market Value not in excess of $100,000;
(e) the surrender or waiver of contract rights or the settlement,
release or surrender of contract, tort or other claims of any kind;
(f) the grant in the ordinary course of business of any non-exclusive
license of patents, trademarks, registrations therefor and other similar
intellectual property;
(g) an exchange of Warehouse Assets for other warehouse assets,
provided that the Company effecting such exchange receives at least
substantially equivalent value (including Equity Interests in the person owning
such Warehouse Assets) in such exchange for the property disposed of;
(h) the making of any Restricted Payments permitted by Section 4.07
hereof or the making of any Permitted Investment; or
(i) any sale, conveyance, transfer, lease or other disposition
occasioned by an Event of Loss.
"Attributable Debt" in respect of a Sale and Leaseback Transaction
means, at the time of determination, the present value of the obligation of the
lessee for net rental payments during the remaining term of the lease included
in such Sale and Leaseback Transaction, including any period for which such
lease has been extended or may, at the option of the lessor, be extended. Such
present
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value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.
"Bankruptcy Code" means Title 11, U.S. Code or any similar federal or
state law for relief of debtors.
"Board of Directors" means the Board of Directors of the Company or
managers (or the equivalent governing body), or any authorized committee of the
Board of Directors or managers (or the equivalent governing body) of the
Company.
"Board Resolution" means a resolution duly adopted by the Board of
Directors and certified by an Officers' Certificate and delivered to the
Trustee.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Cash Equivalents" means:
(1) securities issued or directly and fully guaranteed or insured by
the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States is pledged in
support thereof) having maturities not more than 12 months from the date of
acquisition;
(2) U.S. dollar denominated (or foreign currency fully hedged) (a)
time deposits, money-market deposits on accounts, certificates of deposit,
Eurodollar time deposits or Eurodollar certificates of deposit and bankers'
acceptance of (i) any domestic commercial bank of recognized standing
having capital and surplus in excess of $500.0 million or (ii) any domestic
commercial bank whose short-term commercial paper rating from S&P is at
least A-1 or the equivalent thereof or from ▇▇▇▇▇'▇ is at least P-1 or the
equivalent thereof (any such bank being an "Approved Lender"), in each case
with maturities of not more than 12 months from the date of acquisition,
and (b) overnight bank deposits and federal funds transactions with a bank
meeting the qualifications specified in clauses (a)(i) or (a)(ii) above;
(3) commercial paper and variable or fixed rate notes issued by any
Approved Lender (or by the parent company thereof) or any variable rate
notes issued by, or guaranteed by, any domestic corporation rated A-2 (or
the equivalent thereof) or better by S&P or P-2 (or the equivalent thereof)
or better by Moody's and maturing within 12 months of the date of
acquisition;
(4) repurchase agreements with a term of not more than 60 days with a
bank or trust company or recognized securities dealer having capital and
surplus in excess of $500.0 million for underlying securities of the types
described in subparagraphs (1), (2), or (3) above and having, on the date
of purchase thereof, a Fair Market Value of at least 100% of the amount of
repurchase obligations;
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(5) investments in securities with maturities of 12 months or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof; and
(6) interests in money market mutual funds at least 95% of the
property of which are of the types described in subparagraphs (1) through
(5) hereof, inclusive.
"Certificated Notes" means one or more certificated Notes in registered
form.
"Change of Control" means such time as:
(1) a "person" or "group" (within the meaning of Section 13(d) of the
Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all securities that such person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time), other than any of the Permitted Holders, has become, directly or
indirectly, the "beneficial owner," of 35% or more of the voting power of
the Equity Interests of the Company, provided that the Permitted Holders do
not, directly or indirectly, beneficially own a greater percentage of the
voting power of the Equity Interests of the Company; or
(2) during any period of two consecutive calendar years, individuals
who at the beginning of such period constituted the Board of Directors of
the Company (together with any new directors whose election by the Board of
Directors of the Company or whose nomination for election by the
stockholders of the Company was approved by a vote of a majority of the
directors then still in office who either were directors at the beginning
of such period or whose election or nomination for election was previously
so approved) cease for any reason to constitute a majority of the directors
of the Company, as the case may be, then in office; or
(3) the adoption of a plan of liquidation or dissolution of the
Company.
"Clearstream" means Clearstream Banking, societe anonyme.
"Collateral" means, collectively, all of the property that is from time
to time subject to the Lien of the Collateral Documents.
"Collateral Account" means the collateral account established pursuant
to the Disbursement Agreement and this Indenture.
"Collateral Documents" means, collectively, the Mortgages, the Security
Agreement, the Disbursement Agreement and all other mortgages, deeds of trust,
pledge agreements, collateral assignments, security agreements, fiduciary
transfers, debentures, fiduciary assignments or other instruments evidencing or
creating any security interests in favor of the Trustee in all or any portion of
the Collateral, in each case, as amended, amended and restated, extended,
renewed, supplemented or otherwise modified from time to time, in accordance
with the terms thereof and the Indenture.
"Consolidated EBITDA" means, with respect to the Company for any
period, the sum of, without duplication:
(1) the Consolidated Net Income for such period; plus
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(2) provision for taxes based on income or profits of the Company and
its Subsidiaries for such period, to the extent that such provision for
taxes was deducted in computing such Consolidated Net Income; plus
(3) consolidated interest expense of the Company and its Subsidiaries
for such period, whether paid or accrued and whether or not capitalized
(including, without limitation, amortization of debt issuance costs and
original issue discount, non-cash interest payments, the interest component
of any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, commissions, discounts and other
fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net of the effect of all payments made or
received pursuant to Hedging Obligations), to the extent that any such
expense was deducted in computing such Consolidated Net Income; plus
(4) consolidated depreciation, amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) and other non-cash items
(excluding any such non-cash expense to the extent that it represents an
accrual of or reserve for cash items in any future period or amortization
of a prepaid cash expense that was paid in a prior period) of the Company
and its Subsidiaries for such period to the extent that such depreciation,
amortization and other non-cash expenses were deducted in computing such
Consolidated Net Income; plus
(5) pre-opening costs incurred in connection with the Expansion
Project that are required by GAAP to be charged as an expense prior to or
upon opening, to the extent that such expenses were deducted in computing
such Consolidated Net Income; minus
(6) non-cash items increasing such Consolidated Net Income for such
period, other than the accrual of revenue in the ordinary course of
business.
Notwithstanding the foregoing, the provision for taxes based on the income or
profits of, and the depreciation and amortization and other non-cash charges of,
a Subsidiary of the Company will be added to Consolidated Net Income to compute
Consolidated EBITDA only to the extent (and in the same proportion) that the Net
Income of such Subsidiary was included in calculating the Consolidated Net
Income of the Company.
"Consolidated Net Income" means, with respect to the Company for any
period, the aggregate of the Net Income of the Company and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
provided that:
(1) the Net Income (but not loss) of any person that is not a
Subsidiary 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 in cash to the Company or a Wholly Owned Subsidiary that is a
Guarantor;
(2) the Net Income of any Subsidiary will be excluded to the extent
that the declaration or payment of dividends or similar distributions by
that Subsidiary of that Net Income is not at the date of determination
permitted without any prior governmental approval (that has not been
obtained) or, directly or indirectly, by operation of the terms of its
charter or any
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agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary or its stockholders;
(3) the Net Income of any person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded;
(4) the cumulative effect of a change in accounting principles shall
be excluded;
(5) any net gain or loss realized in connection with (a) any Asset
Sale or (b) the disposition of any securities by the Company or any of its
Subsidiaries or the extinguishment of any Indebtedness of the Company or
any of its Subsidiaries shall be excluded; and
(6) any extraordinary gain or loss shall be excluded.
"Construction Disbursement Account" means the construction disbursement
account to be maintained by the Disbursement Agent and pledged to the Trustee
pursuant to the terms of the Disbursement Agreement.
"Construction Disbursement Budget" means itemized schedules setting
forth on a line item basis all of the costs (including financing costs)
estimated to be incurred in connection with the financing, design, development,
construction and equipping of the Expansion Project, as such schedules are
delivered to the Disbursement Agent on the Issue Date as amended from time to
time in accordance with the terms of the Disbursement Agreement.
"Contested Collateral Lien Conditions" shall mean the following
conditions:
(1) any proceeding instituted contesting such Lien shall conclusively
operate to stay the sale or forfeiture of any portion of the Collateral on
account of such Lien;
(2) at the option and upon request of the Trustee, the Company or any
Guarantor, as applicable, shall maintain cash reserves in an amount
sufficient to pay and discharge such Lien and the Trustee's reasonable
estimate of all interest and penalties related thereto; and
(3) such Lien shall in all respects be subject and subordinate in
priority to the Lien and security interest created and evidenced by the
Collateral Documents, except if and to the extent that the law or
regulation creating, permitting or authorizing such Lien provides that such
Lien is or must be superior to the Lien and security interest created and
evidenced by the Collateral Documents.
"Corporate Trust Office" shall be at the address of the Trustee
specified in Section 13.02 hereof or such other address as to which the Trustee
may give notice to the Company.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Depository" means, with respect to the Notes issuable or issued in
whole or in part in global form, the person specified in this Indenture as the
Depository with respect to the Notes, until a
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successor shall have been appointed and become such Depository pursuant to the
applicable provision of this Indenture, and, thereafter, "Depository" will mean
or include such successor.
"directly or indirectly" when used in connection with a restriction
applicable to the Company or any Subsidiary shall not refer to any action taken
by an Unrestricted Subsidiary.
"Disbursement Agreement" means the Disbursement Agreement, dated as of
the Issue Date, by and among the Company and the Trustee as Trustee and
Disbursement Agent.
"Disqualified Equity Interest" means any Equity Interest which, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable at the option of the holder thereof), or upon the happening
of any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable, at the option of the holder thereof, in
whole or in part, or exchangeable into Indebtedness on or prior to 91 days after
the maturity date of the notes; provided, however, that any Equity Interest that
would not constitute Disqualified Equity Interests but for provisions thereof
giving holders thereof the right to require the issuer to purchase or redeem
such Equity Interests upon the occurrence of an "asset sale" or "change of
control" occurring prior to 91 days after the maturity date of the notes shall
not constitute Disqualified Equity Interests if (1) the "asset sale" or "change
of control" provisions applicable to such Equity Interest are not more favorable
in any material respect (as to the conditions giving rise to such obligation to
purchase or redeem) to the holders of such Equity Interests than the terms
applicable to the notes under Sections 4.11 and 4.14 hereof and (2) any such
requirement only becomes operative after compliance with such terms applicable
to the notes, including the purchase of any notes tendered in respect of any
Change of Control Offer or Asset Sale Offer, as the case may be.
"Energy Arrangement" has the meaning given to it in the Security
Agreement.
"Equity Contribution" means the $25.0 million of proceeds to be
received from the sale of Equity Interests of Holdings on or prior to the Issue
Date and in connection with the issuance of the Series A Notes.
"Equity Interest" in any person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) corporate stock or other equity
participations, including membership interests and partnership interests,
whether general or limited, in such person, including any Preferred Equity
Interests and any right or interest which is classified as equity in accordance
with GAAP.
"Equity Offering" means an underwritten public offering pursuant to a
registration statement filed with the SEC in accordance with the Securities Act
of (1) Equity Interests (other than Disqualified Equity Interests) of the
Company or (2) Equity Interests (other than Disqualified Equity Interests) of
the Company's parent or indirect parent corporation to the extent that the cash
proceeds therefrom are contributed to the equity capital of the Company or are
used to purchase Equity Interests (other than Disqualified Equity Interests) of
the Company.
"Euroclear" means ▇▇▇▇▇▇ Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
-7-
"Event of Loss" means, with respect to any property, any:
(1) loss, destruction or damage of such property;
(2) condemnation, seizure or taking by exercise of the power of
eminent domain or otherwise of such property, or confiscation of such
property or the requisition of the use of such property; or
(3) settlement in lieu of clause (2) above.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange Series B Notes for
Series A Notes issued in the Offering.
"Existing Indebtedness" means the Indebtedness of the Company and its
Subsidiaries in existence on the Issue Date, until such amounts are repaid.
"Expansion Project" means the construction and expansion of the RIH
Hotel in accordance with the Plans.
"Fair Market Value" means, with respect to any property, the price
(after taking into account any liabilities relating to such property) which
could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of which is under
any compulsion to complete the transaction; provided, however, that the Fair
Market Value of any such property shall be determined in each case by the Board
of Directors of the Company, or the Guarantor which is the owner of such
property, in good faith, which determination shall be conclusive absent manifest
error, and as evidenced by a resolution by the Board of Directors set forth in
an Officers' Certificate delivered to the Trustee.
"FF&E" means machinery, furniture, fixtures or equipment used in the
ordinary course of business of the Company and its Subsidiaries.
"FF&E Financing" means the incurrence of Indebtedness, the proceeds of
which are utilized solely to finance the acquisition of (or entry into a capital
lease by the Company or one of its Subsidiaries with respect to) FF&E in
connection with the Expansion Project.
"Fixed Charges" means, with respect to the Company for any period, the
sum, without duplication, of:
(1) the consolidated interest expense incurred by such person and its
Subsidiaries for such period, whether paid or accrued, including, without
limitation, amortization of original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease
Obligations, imputed interest with respect to the Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of
letter of credit or bankers' acceptance financings, and the net effect of
all payments (if any) pursuant to Hedging Obligations;
-8-
(2) the consolidated interest incurred by such person and its
Subsidiaries that was capitalized during such period;
(3) any interest expense on Indebtedness of another person that is
guaranteed by such person or one of it Subsidiaries or secured by a Lien on
property of such person or one of its Subsidiaries (whether or not such
guarantee or Lien is called upon);
(4) the product of (a) all cash dividend payments (and non-cash
dividend payments in the case of a person that is a subsidiary) on any
series of Preferred Equity Interests of such person payable to a party
other than the Company or a Wholly Owned Subsidiary, times (b) a fraction,
the numerator of which is one and the denominator of which is one minus the
then current combined federal, state and local statutory tax rate of such
person, expressed as a decimal, on a consolidated basis and in accordance
with GAAP; and
(5) the product of (a) all dividend payments or accruals on any series
of Disqualified Equity Interests of such person payable to a party, times
(b) a fraction, the numerator of which is one and the denominator of which
is one minus the then current combined federal, state and local statutory
tax rate of such person, expressed as a decimal, on a consolidated basis
and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to the Company for any
period, the ratio of the Consolidated EBITDA of such person and its Subsidiaries
for such period to the Fixed Charges of such person and its Subsidiaries for
such period. In the event that the Company or any of its Subsidiaries incurs,
assumes, guarantees, defeases or redeems any Indebtedness or issues, repurchases
or redeems Preferred Equity Interests subsequent to the commencement of the
four-quarter reference period for which the Fixed Charge Coverage Ratio is being
calculated but prior to the date on which the event for which the calculation of
the Fixed Charge Coverage Ratio is made the (the "Calculation Date"), then the
Fixed Charge Coverage Ratio will be calculated giving pro forma effect to such
incurrence, assumption, guarantee, defeasance or redemption of Indebtedness, or
such issuance or redemption of Preferred Equity Interests (including a pro forma
application of the proceeds of such Indebtedness or Preferred Equity Interests),
as if the same had occurred at the beginning of the applicable four-quarter
reference period.
In addition, for purposes of calculating the Fixed Charge Coverage
Ratio:
(1) acquisitions that have been made by the Company or any of its
Subsidiaries, including through mergers or consolidations and including any
related financing transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the Calculation Date
will be deemed to have occurred on the first day of the four-quarter
reference period;
(2) the Consolidated EBITDA attributable to operations or businesses
disposed of prior to the Calculation Date will be excluded;
(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed
of prior to the Calculation Date, will be excluded, but only to the extent
that the obligations giving rise to such Fixed
-9-
Charges will not be obligations of the referent person or any of its
Subsidiaries following the Calculation Date;
(4) all pro forma adjustments shall be made in accordance with and to
the extent they would be permitted by Regulation S-X of the SEC under the
Securities Act; and
(5) if any Indebtedness incurred bears a floating rate of interest and
is being given pro forma effect, the interest rate on such Indebtedness
shall be calculated as if the rate in effect on the date of determination
had been the rate for the entire period (taking into account any agreement
under which Hedging Obligations relating to interest are outstanding
applicable to such Indebtedness if such agreement under which such Hedging
Obligations are outstanding has a remaining term at the date of
determination in excess of 12 months).
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Gaming Authority" means the New Jersey Casino Control Commission, New
Jersey Division of Gaming Enforcement or any other governmental agency which
regulates gaming in a jurisdiction in which the Company or any of its
Subsidiaries conducts gaming activities.
"Gaming Law" means any law relating to gaming or gaming activities
established by any Gaming Authority.
"Gaming Licenses" means every material license, material franchise, or
other material authorization required to own, lease, operate or otherwise
conduct or manage gaming in any state or jurisdiction where the Company, RIH or
its Subsidiaries conduct business, and any applicable liquor licenses.
"Gaming Subsidiary" means any Subsidiary that holds a License or is
otherwise involved in a material respect in the gaming business.
"GMP" shall have the meaning specified in Section 3.3 of the
Disbursement Agreement.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"guarantee" means a guarantee (other than by endorsement of negotiable
instruments for deposit or collection in the ordinary course of business and
indemnity obligations arising in favor of officers, directors or employees of
the guarantor under corporation statutes, charter and bylaw provisions or by
contract or under contracts entered into with suppliers and customers in the
ordinary course of business of the guarantor), 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.
-10-
"Guarantees" means the guarantees by the Guarantors of the Guarantee
Obligations.
"Guarantors" means, collectively, RIH, New Pier Operating Company,
Inc., a New Jersey corporation, and their respective successors and any other
Subsidiary that executes a Guarantee in accordance with the provisions of this
Indenture, and their respective successors and assigns.
"Hedging Obligations" means, with respect to any specified person, the
obligations of such person under:
(1) interest rate swap agreements, interest rate cap agreements and
interest rate collar agreements; and
(2) other agreements or arrangements, in each case, designed to
protect such person against fluctuations in interest rates, currency rates
and the prices of commodities actually at that time used in the ordinary
course of business of such person.
"Holder" means a person in whose name a Note is registered on the
Registrar's books.
"Holdings" means Colony RIH Holdings, Inc., a Delaware corporation.
"Indebtedness" means, with respect to any person, any indebtedness of
such person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof);
(3) in respect of bankers' acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase price
of any property;
(6) representing any Hedging Obligations.
In addition, the term "Indebtedness" includes:
(1) all Indebtedness of others secured by a Lien on any property of
the specified person (whether or not such Indebtedness is assumed by the
specified person) (with the amount of such Indebtedness being deemed to be
the lesser of the Fair Market Value of such property and the amount of the
Indebtedness secured by such Lien;
(2) to the extent not otherwise included, the guarantee by the
specified person of any Indebtedness of any other person; and
-11-
(3) the liquidation preference and any mandatory redemption payment
obligations in respect of any Disqualified Equity Interests of the Company
or any Preferred Equity Interests of any Subsidiary.
For purposes of computing the outstanding amount of Indebtedness (a) the amount
of any Indebtedness in respect of any letter of credit shall be equal to the
undrawn amount of such letter of credit, (b) the amount of any Indebtedness
defeased in accordance with the terms thereof shall be zero regardless of the
amount of such Indebtedness that would appear on a balance sheet prepared in
accordance with GAAP and (c) the amount of any other Indebtedness shall be the
outstanding principal amount (or in the case of any discount Indebtedness the
accreted value) of such Indebtedness.
"Indenture" means this Indenture, as amended, supplemented or otherwise
modified in accordance with the terms hereof from time to time.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act that is not also a QIB.
"Intellectual Property" means "Intellectual Property Collateral" as
defined in the Security Agreement.
"Interest Payment Date" means each March 15 and September 15,
commencing September 15, 2002.
"Investments" means, with respect to any person, all investments by
such person in other persons (including Affiliates) in the form of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities and all other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Company or any of its Subsidiaries sells or otherwise disposes of any
Equity Interests of any direct or indirect Subsidiary of the Company such that,
after giving effect to any such sale or disposition, such person is no longer a
Subsidiary of the Company, the Company will be deemed to have made an Investment
on the date of any such sale or disposition equal to the Fair Market Value of
the Company's Investments in such Subsidiary that were not sold or disposed of
in an amount determined as provided in Section 4.07. The amount of the
Investment in the Subject Person shall be deemed to be an Investment in the
Subject Person (but without duplication of the Investment in the Acquired
Person) equal to that portion of the cost of the Investment in the Acquired
Person allocated between the Acquired Person and the Subject Person by reference
to their respective relative Fair Market Values. The amount of any Investment
shall be the original cost of such Investment, plus the cost of all additions
thereto, and minus the amount of any portion of such Investment repaid to such
person in cash as a repayment of principal or a return of capital, as the case
may be, but without any other adjustments for increases or decreases in value,
or write-ups, write-downs or write-offs with respect to such Investment.
"Issue Date" means March 22, 2002.
"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
-12-
to remain closed. If a payment date is a Legal Holiday at a place of payment,
payment may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
"Lien" means, with respect to any property, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
property, whether or not filed, recorded or otherwise perfected under applicable
law (including, without limitation, any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or other
agreement to sell or give a security interest in and any filing of or agreement
to give any financing statement under the UCC (or equivalent statutes) of any
jurisdiction.)
"Liquidated Damages" means all liquidated damages then owing pursuant
to the Registration Rights Agreement.
"Maturity Date" means March 15, 2009.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and its successors.
"Mortgage" means each mortgage and/or leasehold mortgage, as
applicable, substantially in the form and substance reasonably satisfactory to
the Collateral Agent as the same may be amended, amended and restated, extended,
renewed, supplemented or otherwise modified from time to time in accordance with
the terms hereof and thereof.
"Mortgaged Property" means each Real Property encumbered by a Mortgage.
"Net Income" means, with respect to any person, the net income (loss)
of such person, determined in accordance with GAAP and before any reduction in
respect of dividends on Preferred Equity Interests.
"Net Loss Proceeds" means the aggregate cash proceeds received by the
Company or any of its Subsidiaries in respect of any Event of Loss, including,
without limitation, insurance proceeds from condemnation awards or damages
awarded by any judgment, net of the direct costs in recovery of such Net Loss
Proceeds (including, without limitation, legal, accounting, appraisal and
insurance adjuster fees and any relocation expenses incurred as a result
thereof), amounts required to be applied to the repayment of Indebtedness
secured by a Lien on the property that was the subject of such Event of Loss,
any taxes attributable to such Event of Loss paid or payable as a result thereof
and amounts required by a governmental authority to be incurred in connection
with the receipt of condemnation awards or damages awarded by any judgment.
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees and expenses, and sales and brokerage commissions)
and any relocation expenses incurred as a result thereof, taxes paid or payable
by the Company or any of its Subsidiaries as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements) amounts required to be applied to the repayment of Indebtedness
(other than the Notes or the Guarantees) secured by a Lien on the property that
was the subject of such Asset Sale, and any reserve
-13-
for indemnifications or any reserve for adjustment in respect of the sale price
of such property established in accordance with GAAP.
"Note Custodian" means the Trustee, as custodian with respect to the
Global Notes, or any successor entity thereto.
"Notes" means the Series A Notes and the Series B Notes.
"Offering" means the offering of the Notes by the Company.
"Officer" means, with respect to any person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such person.
"Officers' Certificate" means, with respect to any person, a
certificate signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of such person and otherwise complying with
the applicable requirements of this Indenture and delivered to the Trustee.
"Opinion of Counsel" means an opinion in writing from legal counsel who
is reasonably acceptable to the Trustee that meets the requirements of Section
13.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Option Property" means those parcels of land identified as "Premises"
in that certain Option Agreement, dated April 25, 2001, by and between Colony
RIH Acquisitions, Inc. and Sun International North America, Inc.
"Participant" means, with respect to the Depository, Euroclear or
Clearstream, a person who has an account with the Depository, Euroclear or
Clearstream, respectively (and, with respect to The Depository Trust Company,
shall include Euroclear and Clearstream).
"Permitted Acquired Investments" means any Investment by any Acquired
Person in another person (the "Subject Person") made prior to the time:
(1) the Acquired Person became a Subsidiary;
(2) the Acquired Person merged into or consolidated with a Subsidiary;
or
(3) another Subsidiary merged into or was consolidated with the
Acquired Person (in a transaction in which the Acquired Person became a
Subsidiary);
provided, that such Investment in the Subject Person was not made in
anticipation of any such transaction and was outstanding prior to such
transaction; provided, further, that the book value of such Investments
(excluding all Permitted Investments (other than those referred to in clause (4)
of the definition thereof)) do not exceed 5% of the consolidated assets (as
determined in accordance with GAAP) of the Acquired Person immediately prior to
the Acquired Person becoming a Subsidiary.
-14-
"Permitted Business" means the gaming business and other businesses
necessary for, incident to, connected with, arising out of, or developed or
operated to permit or facilitate the conduct or pursuit of the gaming business
(including developing and operating lodging facilities, restaurants, sports or
entertainment facilities, transportation services or other related activities or
enterprises and any additions or improvements thereto) and potential
opportunities in the gaming business.
"Permitted Holders" means Colony Investors IV, L.P. and any Affiliates
thereof and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Colony RIH Voteco, LLC,
Colony ▇▇ ▇▇, Inc., Colony Capital IV, L.P. and any investment fund, partnership
or other person sponsored by or formed at the direction of Colony Capital LLC, a
Delaware limited liability company, or any successor organization (unless such
investment fund, partnership or other person is not managed by a person that is
an Affiliate or Related Person of any of the foregoing). As used herein, the
term "Related Person" means (a) any controlling stockholder, 80% (or more)
directly or indirectly owned subsidiary, or immediate family member (in the case
of an individual), of any Permitted Holder, or (b) any trust, corporation,
partnership or other entity if (x) the beneficiaries, stockholders, partners,
members, owners or other persons beneficially owning (as defined in Rule 13d-3
and Rule 13d-5 under the Exchange Act) in the aggregate 80% or more of the
voting stock of such trust, corporation, partnership or entity consist of any
one or more Permitted Holders or such other Permitted Holders referred to in
clause (a), or (y) a general partner or managing member or person otherwise
controlling or having the power to direct or cause the direction of the
management and policies of such trust, corporation, partnership or entity is any
one or more of the Permitted Holders or such other persons referred to in clause
(a).
"Permitted Indebtedness" means, without duplication, each of the
following:
(1) the incurrence by the Company or any Guarantor of Indebtedness
under any Revolving Credit Facility in an aggregate principal amount at any
time outstanding not to exceed an amount equal to $10.0 million;
(2) Existing Indebtedness;
(3) Indebtedness represented by the notes and the Guarantees and
Indebtedness incurred to effect a Legal Defeasance or Covenant Defeasance
in compliance with the provisions of the Indenture;
(4) the incurrence by the Company or any of the Guarantors of FF&E
Financing; provided, however, that (a) the principal amount of such
Indebtedness does not exceed the cost (including sales and excise taxes,
installation and delivery charges and other direct costs of, and other
direct expenses paid or charged in connection with, such purchase) of the
FF&E purchased or leased with the proceeds thereof, (b) no Indebtedness
incurred under the notes is utilized for the purchase or lease of such FF&E
and (c) the aggregate principal amount of such Indebtedness does not exceed
$15.0 million outstanding at any time;
(5) the incurrence by the Company or any of its Subsidiaries of
Indebtedness represented by Capital Lease Obligations or Purchase Money
Obligations other than in respect of the FF&E Financing, in each case
incurred for the purpose of financing all or any part of the purchase price
or cost of construction or improvement of property used in the business of
the Company or such Subsidiary, in an aggregate principal amount not to
exceed $5.0 million at any time outstanding;
-15-
(6) the incurrence by the Company or any of its Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds of
which are used to extend, refinance, renew, replace, defease, repurchase or
retire or refund, Indebtedness that was permitted by the Indenture to be
incurred;
(7) the incurrence by the Company or any of the Guarantors of
intercompany Indebtedness between the Company and any of the Guarantors or
between or among any Wholly Owned Subsidiaries; provided, however, that (a)
any subsequent issuance or transfer of Equity Interests that results in any
such Indebtedness being held by a person other than the Company or a Wholly
Owned Subsidiary and (b) any sale or other transfer of any such
Indebtedness to a person that is neither the Company nor a Wholly Owned
Subsidiary will be deemed, in each case, to constitute an incurrence of
such Indebtedness by the Company or such Subsidiary, as the case may be,
not permitted pursuant to this clause (7);
(8) the incurrence by the Company or any of the Guarantors of Hedging
Obligations;
(9) Indebtedness of the Company or any of the Guarantors solely in
respect of bankers' acceptances, letters of credit and performance bonds or
similar arrangements, all in the ordinary course of business;
(10) the incurrence by the Company or any Guarantor of Indebtedness
represented by Capital Lease Obligations or Purchase Money Obligations
incurred for the purpose of financing all or any part of the purchase price
of the Option Property, in an aggregate principal amount not to exceed the
lesser of $30.0 million at any time outstanding or 80% of the Fair Market
Value of the Option Property as determined by an independent appraisal firm
of national standing;
(11) guarantees by the Company or any of its Subsidiaries of
Indebtedness of the Company or a Guarantor otherwise permitted to be
incurred under the Indenture; provided that such person would have been
itself permitted to incur the Indebtedness; and
(12) the incurrence by the Company or any Guarantor of Indebtedness
represented by Capital Lease Obligations incurred for the purpose of
financing all or a portion of the Energy Arrangement in an aggregate
principal amount not to exceed $ 10.0 million at any time outstanding.
Notwithstanding any other provision of this definition, Indebtedness or
Preferred Equity Interests of any person which is outstanding at the time such
person becomes a Subsidiary of the Company or is merged with or into or
consolidated with the Company or a Subsidiary of the Company shall be deemed to
have been incurred at the time such person becomes such a Subsidiary of the
Company or is merged with or into or consolidated with the Company or a
Subsidiary of the Company, as applicable.
For purposes of determining compliance with Section 4.08 hereof, in the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Indebtedness described in clauses (1) through (12) above
or is entitled to be incurred pursuant to the Fixed Charge Coverage Ratio
provisions of such covenant, the Company shall, in its sole discretion, classify
such
-16-
item of Indebtedness in any manner that complies with such Section 4.08. Accrual
of interest, accretion or amortization of original issue discount, the payment
of interest on any Indebtedness in the form of additional Indebtedness with the
same terms, and the payment of dividends on Disqualified Equity Interests in the
form of additional shares of the same class of Disqualified Equity Interests
will not be deemed to be an incurrence of Indebtedness or an issuance of
Disqualified Equity Interests for purposes of Section 4.08 hereof.
"Permitted Investments" means:
(1) any Investments in the Company or in a Wholly Owned Subsidiary of
the Company that is a Guarantor and that is engaged in the same or a
similar line of business as the Company and its Subsidiaries were engaged
in on the Issue Date and reasonable extensions or expansions thereof;
(2) any Investments in cash and Cash Equivalents;
(3) Investments by the Company or any Subsidiary of the Company in a
person (such person, an "Acquired Person") if as a result of such
Investment (a) such person becomes a Wholly Owned Subsidiary of the Company
that is a Guarantor and that is engaged in the same or a similar line of
business as the Company and its Subsidiaries were engaged in on the Issue
Date and reasonable extensions or expansions thereof or (b) such person is
merged or consolidated with or into, or transfers or conveys substantially
all of its property to, or is liquidated into, the Company or a Wholly
Owned Subsidiary of the Company that is a Guarantor and that is engaged in
the same or a similar line of business as the Company and its Subsidiaries
were engaged in on the Issue Date and reasonable extensions or expansions
thereof;
(4) Permitted Acquired Investments;
(5) Investments made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.11 hereof;
(6) loans or advances to officers and employees of the Company or any
Subsidiary in an aggregate amount not exceeding $250,000 at any one time
outstanding;
(7) Investments in the form of intercompany Indebtedness to the extent
permitted by Section 4.08 hereof;
(8) Hedging Obligations, provided that such Hedging Obligations
constitute Indebtedness permitted by Section 4.08 hereof;
(9) Investments received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, suppliers and customers, in each
case arising in the ordinary course of business;
(10) Investments consisting of (x) Receivables created or acquired in
the ordinary course of business and payable or dischargeable in accordance
with customary terms, (y) endorsements of negotiable instruments for
collection in the ordinary course of business endorse
-17-
negotiable instruments for collection in the ordinary course of business,
and (z) lease, utility and other similar deposits in the ordinary course of
business;
(11) Investments in persons to the extent such entities are created to
hold the Warehouse Assets (or such property exchanged therefor) and
Investments in Wholly Owned Subsidiaries or other persons acquired in
connection with the exchange of Warehouse Assets for other warehouse assets
and related property but only so long as relating to Warehouse Assets and
related property;
(12) Investments required to be made in order to comply with the rules
and regulations of Gaming Authorities and/or Gaming Laws, including, but
not limited to, Investments made by RIH in connection with its annual
investment alternative tax obligation; and
(13) Investments in any of the notes, so long as such Investment does
not cause any Holder to own more 15% of the aggregate principal amount of
the notes outstanding.
"Permitted Liens" means:
(1) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due and payable or delinquent and Liens for taxes,
assessments or governmental charges or levies, which (i) are being
contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP, which proceedings
(or orders entered in connection with such proceedings) have the effect of
preventing the forfeiture or sale of the property subject to any such Lien,
or (ii) in the case of any such charge or claim which has or may become a
Lien against any of the Collateral, such Lien and the contest thereof shall
satisfy the Contested Collateral Lien Conditions;
(2) Liens in respect of property of the Company or any Subsidiary
imposed by law, which were incurred in the ordinary course of business and
do not secure Indebtedness for borrowed money, such as carriers',
warehousemen's, materialmen's, landlord's and mechanics' liens and other
similar Liens arising in the ordinary course of business, and (i) which do
not in the aggregate materially detract from the value of the property of
the Company and its Subsidiaries, taken as a whole, and do not materially
impair the use thereof in the operation of the business of the Company and
its Subsidiaries, taken as a whole, (ii) which are being contested in good
faith by appropriate proceedings for which adequate reserves have been
established in accordance with GAAP, which proceedings (or orders entered
in connection with such proceedings) have the effect of preventing the
forfeiture or sale of the property subject to any such Lien, and (iii) in
the case of any such Lien which has or may become a Lien against any of the
Collateral, such Lien and the contest thereof shall satisfy the Contested
Collateral Lien Conditions;
(3) Liens existing on the Issue Date to the extent identified in the
Collateral Documents;
(4) easements, rights-of-way, restrictions (including zoning
restrictions), covenants, encroachments, protrusions and other similar
charges or encumbrances, and minor title deficiencies on or with respect to
any Real Property, in each case whether now or hereafter in existence, not
(i) securing Indebtedness, (ii) individually or in the aggregate materially
impair-
-18-
ing the value or marketability of such Real Property and (iii) individually
or in the aggregate materially interfering with the conduct of the business
of the Company or any Subsidiary at such Real Property;
(5) Liens on property arising out of judgments or awards not resulting
in a Default and in respect of which the Company or any Subsidiary shall in
good faith be prosecuting an appeal or proceedings for review in respect of
which there shall be secured a subsisting stay of execution pending such
appeal or proceedings;
(6) Liens (other than any Lien imposed by the United States Employee
Retirement Income Security Act of 1974, as amended) (i) imposed by law or
deposits made in connection therewith in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
types of social security or public utility obligations, (ii) incurred in
the ordinary course of business to secure the performance of tenders,
statutory obligations (other than excise taxes), surety, stay, customs and
appeal bonds, statutory bonds, bids, leases, government contracts, trade
contracts, performance and return of money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money) or
(iii) arising by virtue of deposits made in the ordinary course of business
to secure liability for premiums to insurance carriers; provided that (x)
with respect to clauses (i), (ii) and (iii) hereof, such Liens are amounts
not yet due and payable or delinquent or, to the extent such amounts are so
due and payable, such amounts are being contested in good faith by
appropriate proceedings for which adequate reserves have been established
in accordance with GAAP, which proceedings or orders entered in connection
with such proceedings have the effect of preventing the forfeiture or sale
of the property subject to any such Lien, (y) to the extent such Liens are
not imposed by law, such Liens shall in no event encumber any property
other than cash and Cash Equivalents, and (z) in the case of any such Lien
against any of the Collateral, such Lien and the contest thereof shall
satisfy the Contested Collateral Lien Conditions;
(7) leases, subleases, franchise agreements, licenses, occupancy or
concession agreements with respect to the properties of the Company or any
Subsidiary, in each case entered into in the ordinary course of the
Company's or any Subsidiary's business, so long as such leases, subleases,
franchise agreements, licenses, occupancy or concession agreements are
subordinate in all respects to the Liens granted and evidenced by the
Collateral Documents and do not, individually or in the aggregate, (i)
interfere in any material respect with the ordinary conduct of the business
of the Company or any Subsidiary and (ii) materially impair the use (for
its intended purposes) or the value of the property subject thereto;
(8) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by
the Company or any Subsidiary in the ordinary course of business in
accordance with the past practices of the Company or any Subsidiary;
(9) Liens arising pursuant to Purchase Money Obligations or Capital
Lease Obligations incurred pursuant to clauses (4), (5), (10) and (12) of
the definition of "Permitted Indebtedness"; provided that (i) the
Indebtedness secured by any such Lien (including refinancings thereof) does
not exceed 100% of the cost of the property being acquired or leased at the
time of the incurrence of such Indebtedness and (ii) any such Liens attach
only to the property being financed pursuant to such Purchase Money
Obligations or Capital Lease Obligations
-19-
and do not encumber any other property of the Company or any Subsidiary (it
being understood that all Indebtedness to a single lender shall be
considered to be a single Purchase Money Obligation, whether drawn at one
time or from time to time);
(10) bankers' Liens, rights of setoff and other similar Liens existing
solely with respect to cash and Cash Equivalents not constituting
Collateral on deposit in one or more accounts maintained by the Company or
any Subsidiary, in each case granted in the ordinary course of business in
favor of the bank or banks with which such accounts are maintained,
securing amounts owing to such bank with respect to cash management and
operating account arrangements, including those involving pooled accounts
and netting arrangements; provided that in no case shall any such Liens
secure (either directly or indirectly) the repayment of any Indebtedness;
(11) Liens securing obligations under the Indenture, the Notes, the
Guarantees and the Collateral Documents;
(12) licenses of the patents, patent applications, trademarks,
trademark applications, service marks, service ▇▇▇▇ applications, trade
names, copyrights, trade secrets, know-how and processes, granted by the
Company or any Subsidiary in the ordinary course of business and not
interfering in any material respect with the ordinary conduct of the
business of the Company or any Subsidiary;
(13) Liens arising under applicable Gaming Laws, provided that no such
Lien constitutes a Lien securing repayment of Indebtedness;
(14) Liens on property of a person at the time the person becomes a
Subsidiary; provided that (x) any Indebtedness that is secured by such
Liens is permitted to be incurred by Section 4.08 hereof, and (ii) such
Liens are not incurred in connection with, or in contemplation or
anticipation of, the acquisition of such person and do not attach to any
other property of the Company or any of its Subsidiaries;
(15) Liens on property not constituting Collateral securing
unsubordinated Indebtedness (other than Permitted Indebtedness but
including Permitted Indebtedness specified in clause (1) and to the extent
related thereto, (6) of the definition of "Permitted Indebtedness")
permitted to be incurred by Section 4.08 hereof; and
(16) maintenance, operation, servicing and improvement licenses
relating to the Energy Arrangement;
provided, however, that no Liens shall be permitted to exist, directly or
indirectly, on any Securities Collateral (as defined in the Security Agreement)
constituting Collateral.
"Permitted Refinancing Indebtedness" means any Indebtedness and
Disqualified Equity Interests of the Company or any Indebtedness of its
Subsidiaries issued in exchange for, or the net proceeds of which are used to
extend, refinance, renew, replace, defease or refund, Indebtedness of the
Company or any of its Subsidiaries incurred pursuant to Section 4.08 (excluding
Permitted Indebtedness other than Permitted Indebtedness set forth in clauses
(2), (3) or (10) of the definition thereof), provided, that:
-20-
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness or the liquidation
preference of the Disqualified Equity Interest so extended, refinanced,
renewed, replaced, defeased or refunded (plus the amount of premium, if
any, and reasonable expenses incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the notes, such
Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and is subordinated in right of payment to, the
notes on terms at least as favorable to the Holders of notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and
(4) such Indebtedness or Disqualified Equity Interest is incurred
either by the Company or by the Subsidiary that is the obligor on the
Indebtedness or Disqualified Equity Interest being extended, refinanced,
renewed, replaced, defeased or refunded;
provided, that Preferred Equity Interests may only be refinanced with other
Preferred Equity Interests.
"person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or agency or political subdivision
thereof (including any subdivision or ongoing business of any such entity or
substantially all of the property of any such entity, subdivision or business).
"Plans" shall have the meaning assigned to such term in the
Disbursement Agreement.
"Pledgor" means each of the Company and its Subsidiaries party to any
of the Collateral Documents executed on the date hereof and each other party
that becomes a pledgor, mortgagor, transferor or assignor under any Collateral
Document.
"Preferred Equity Interest" in any person means an Equity Interest of
any class or classes (however designated) which is preferred as to the payment
of dividends or distributions, or as to the distribution of property upon any
voluntary or involuntary liquidation or dissolution of such person, over Equity
Interests of any other class in such person.
"Private Exchange" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange the Notes for Private
Exchange Notes.
"Private Exchange Notes" has the meaning assigned to such term in the
Registration Rights Agreement.
"property" shall mean any right, title or interest in or to property or
assets of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible and including all con-
-21-
tract rights, Real Property, trademarks, trade names, equipment and proceeds of
the foregoing and Equity Interest or other ownership interests of any person.
"Purchase Money Obligations" of any person means any obligations of
such person to any seller or any other person incurred or assumed to finance the
purchase, or the cost of construction or improvement, of real or personal
property to be used in the business of such person or any of its Subsidiaries in
an amount that is not more than 100% of the cost, or Fair Market Value, as
appropriate, of such property, and incurred within 135 days after the date of
such acquisition (excluding accounts payable to trade creditors incurred in the
ordinary course of business).
"QIB" or "Qualified Institutional Buyer" shall have the meaning
ascribed to "qualified institutional buyer" in Rule 144A promulgated under the
Securities Act.
"Real Property" shall mean all right, title and interest of the Company
or any Subsidiary (including, without limitation, any leasehold estate) in and
to a parcel of real property owned or operated by the Company or any Subsidiary,
whether by lease, license or other use or occupancy agreement, together with, in
each case, all improvements and appurtenant fixtures, equipment, personal
property, easements and other property and rights incidental to the ownership,
lease or operation thereof or thereon.
"Receivables" shall include all receivables, including all casino
receivables (markers, instruments, notes and checks) both undeposited and
returned, hotel receivables, credit card receivables, interest receivable
including interest on CRDA investments, and progressive jackpot receivables
(wide area progressives or multiple casinos linked progressives).
"Record Date" for interest payable on any Interest Payment Date (except
a date for payment of default interest) means the March 1 and September 1
(whether or not a Business Day) as the case may be, immediately preceding such
Interest Payment Date.
"Redemption Date" when used with respect to any Note to be redeemed
means the date fixed for such redemption pursuant to this Indenture.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Issue Date, by and among the Company, the Guarantors
and the Initial Purchasers, as such agreement may be amended, modified or
supplemented from time to time.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Remaining Funds" shall have the meaning assigned to such term in
Section 2.5 of the Disbursement Agreement.
"Responsible Officer," when used with respect to the Trustee, means any
managing director, director, vice-president, assistant vice president, assistant
treasurer, assistant secretary, associate or any officer within the Corporate
Trust and Agency Services of the Trustee (or any successor group of the Trustee)
or any other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
having direct responsibility for the administration of this Indenture and also
means, with respect to a particular corporate trust matter,
-22-
any other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"Restricted Security" has the meaning set forth in Rule 144(a)(3)
promulgated under the Securities Act; provided that the Trustee shall be
entitled to request and conclusively rely upon an Opinion of Counsel with
respect to whether any Note is a Restricted Security.
"Restricted Subsidiary" means any Subsidiary other than the
Unrestricted Subsidiaries.
"Revolving Credit Facility" means one or more revolving lines of credit
providing for working capital and other ordinary course financing.
"RIH" means Resorts International Hotel, Inc., a New Jersey
corporation.
"RIH Hotel" means the Resorts Atlantic City hotel and casino and the
related parking facilities (other than any facility located on the Option
Property) located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ and shall,
upon completion thereof, include the Expansion Project.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Sale and Leaseback Transaction" means any arrangement with any person
providing for the leasing by the Company or any Subsidiary of the Company of any
real or tangible personal property, which property has been or is to be sold or
transferred by the Company or such Subsidiary to such person in contemplation of
such leasing.
"S&P" means Standard & Poor's Ratings Group and its
successors.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means the Security Agreement, dated as of the
Issue Date, by and among the Company and the other parties named on the
signature pages thereof, as such agreement may be amended, modified or
supplemented from time to time.
"Series A Notes" means $180,000,000 aggregate principal amount of the
Company's Series A 11 1/2% First Mortgage Notes due 2009 issued to the Initial
Purchasers of the Issue Date.
"Series B Notes" means up to $180,000,000 aggregate principal amount of
the Company's Series B 11 1/2 % First Mortgages Notes due 2009 issued in
exchange for a like aggregate principal amount of Series A Notes.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date
hereof.
-23-
"Subsidiary" means, with respect to any specified person:
(1) any corporation, limited liability company, association or other
business entity of which more than 50% of the total voting power of shares
of Equity Interests entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
person or one or more of the other Subsidiaries of such person (or a
combination thereof); and
(2) any partnership (a) the sole general partner or the managing
general partner of which is such person or a Subsidiary of such person or
(b) the only general partners of which are such person or one or more
Subsidiaries of such person (or any combination thereof).
Unrestricted Subsidiaries will not be included in the definition of
"Subsidiary" for any purposes of this Indenture (except, as the context may
otherwise require, for purposes of the definition of "Unrestricted Subsidiary").
"Survey" means a survey of any parcel of Real Property (and all
improvements thereon):
(1) prepared by a surveyor or engineer licensed to perform surveys in
the state or province in which such Real Property is located;
(2) dated (or redated) not earlier than six months prior to the date
of delivery thereof (unless there shall have occurred within six months
prior to such date of delivery any exterior construction on the site of
such Real Property, in which event such survey shall be dated (or redated)
after the completion of such construction or if such construction shall not
have been completed as of such date of delivery, not earlier than 20 days
prior to such date of delivery);
(3) certified by the surveyor in a manner reasonably acceptable to the
title company providing title insurance in respect of the Liens granted
under the Mortgages; and
(4) complying in all respects with the minimum detail requirements of
the American Land Title Association, or local or foreign equivalent, as
such requirements are in effect on the date of preparation of such survey.
"Tax" or "Taxes" means (i) all federal, state, local or foreign taxes,
charges, fees, imposts, levies or other assessments, including, without
limitation, all net income, alternative minimum, gross receipts, capital, sales,
use, ad valorem, value added, transfer, franchise, profits, inventory, capital
stock, license, withholding, payroll, employment, social security, unemployment,
excise, severance, stamp, occupation, property and estimated taxes, customs
duties, fees, assessments and charges of any kind whatsoever, (ii) all interest,
penalties, fines, additions to tax or other additional amounts imposed by any
taxing authority in connection with any item described in clause (i) and (iii)
all transferee, successor, joint and several or contractual liability
(including, without limitation, liability pursuant to Treas. Reg. ss. 1.1502-6
(or any similar state, local or foreign provision)) in respect of any items
described in clause (i) or (ii).
-24-
"Tax Return" means all returns, declarations, reports, estimates,
information returns and statements required to be filed in respect of any Taxes.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ▇▇.▇▇.
77aaa-77bbbb) as amended and as in effect on the date on which this Indenture is
qualified under the TIA.
"Trust Monies" means all cash and Cash Equivalents received by the
Trustee:
(1) upon the release of Collateral from the Lien of the Indenture or
the Collateral Documents, including all Net Proceeds and Net Loss Proceeds
in respect of Collateral;
(2) together with any Government Securities held in the Construction
Disbursement Account pursuant to the Disbursement Agreement;
(3) pursuant to the Collateral Documents or the Indenture; or
(4) as proceeds of any sale or other disposition of all or any part of
the Collateral by or on behalf of the Trustee or any collection, recovery,
receipt, appropriation or other realization of or from all or any part of
the Collateral pursuant to this Indenture or any of the Collateral
Documents or otherwise.
provided, however, that Trust Monies shall in no event include any property
deposited with the Trustee for any redemption, legal defeasance or covenant
defeasance of notes, for the satisfaction and discharge of the Indenture or to
pay the purchase price of notes pursuant to a Change of Control Offer, Asset
Sale Offer or Event of Loss Offer.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"UCC" means the Uniform Commercial Code as in effect on the date hereof
and as it may hereafter be in effect from time to time in the relevant states.
"Unrestricted Subsidiary" means any Subsidiary of the Company (other
than the Subsidiaries operating the RIH Hotel) that is designated by the Board
of Directors as an Unrestricted Subsidiary pursuant to a Board Resolution, but
only to the extent that such Subsidiary on the date of Designation:
(1) has no Indebtedness other than Indebtedness for which neither the
Company nor any other Subsidiary is liable nor has guaranteed or otherwise
directly or indirectly provided credit support for any Indebtedness of the
Company or any of its Subsidiaries except (a) Indebtedness which will
either be repaid on the date of Designation, (b) Indebtedness consisting
solely of a pledge of the Equity Interests of the Unrestricted Subsidiary
which pledge is recourse solely to the pledged Equity Interests and (c)
Indebtedness which is permitted as a Restricted Payment or Permitted
Investment; and
(2) is not party to any agreement, contract, arrangement or
understanding with the Company or any Subsidiary of the Company unless the
terms of any such agreement, contract,
-25-
arrangement or understanding are no less favorable to the Company or such
Subsidiary than those that might be obtained at the time from persons who
are not Affiliates of the Company.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of
each then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that shall elapse between such date and the making of such
payment; by
(2) the then outstanding principal amount of such Indebtedness.
"Warehouse Assets" shall mean all right, title and interest of the
Company in and to the parcels of land located at ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ and ▇▇▇-▇▇ ▇.
▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, together with all existing strips,
gores, easements, rights-of-way, privileges, appurtenances, development rights
and other rights pertaining thereto and located thereon.
"Wholly Owned Subsidiary" of any person means a Subsidiary of such
person all of the outstanding Equity Interests or other ownership interests of
which (other than directors' qualifying shares) will at the time be owned by
such person or by one or more Wholly Owned Subsidiaries of such person.
Unrestricted Subsidiaries will not be included in the definition of "Wholly
Owned Subsidiary" for any purposes of the Indenture (except, as the context may
otherwise require, for purposes of the definition of "Unrestricted Subsidiary").
SECTION 1.02. Other Definitions.
-----------------
Defined in
Term Section
---- -------
"Affiliate Transaction" 4.23
"Agent Member" 2.15
"Approved Lender" 1.01
"Asset Sale Offer" 4.11
"Asset Sale Offer Amount" 4.11
"Asset Sale Offer Period" 4.11
"Asset Sale Purchase Date" 4.11
"Asset Sale Offer Trigger Date" 4.11
"Authentication Order" 2.02
"Bankruptcy Law" 6.01
"Benefited Party" 12.01
"Change of Control Offer" 4.14
"Change of Control Payment" 4.14
"Change of Control Offer Period" 4.14
"Change of Control Purchase Date" 4.14
"Company Notice" 10.05
"Company Obligations" 4.01
-26-
Defined in
Term Section
---- -------
"Covenant Defeasance" 8.04
"Custodian" 6.01
"Designation" 4.02
"Event of Default" 6.01
"Event of Loss Offer" 4.16
"Event of Loss Offer Trigger Date" 4.16
"Excess Loss Proceeds" 4.16
"Excess Loss Proceeds Payment Date" 4.16
"Excess Proceeds" 4.11
"Gaming Redemption" 3.09
"Global Note" 2.01
"Global Note Legend" 2.17
"Guarantee Obligations" 12.01
"incur" 4.08
"Legal Defeasance" 8.03
"Minimum Facilities" 4.25
"Paying Agent" 2.03
"Payment Default" 6.01
"Private Placement Legend" 2.17
"Registrar" 2.03
"Regulation S Global Notes" 2.01
"Released Collateral" 10.05
"Released Trust Monies" 11.04
"Replacement Assets" 4.11
"Resale Restriction Termination Date" 2.16
"Restricted Payments" 4.07
"Rule 144A Global Notes" 2.01
"Subject Property" 4.16
"Surviving Entity" 5.01
"Surviving Guarantor Entity" 12.03
"Valuation Date" 10.05
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
-27-
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes means the Company 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 SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.04. 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; and
(6) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement or successor sections or rules
adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
SECTION 2.01. Form and Dating.
---------------
(a) General. The Notes and the Trustee's certificate of authentication
-------
shall be substantially in the form of Exhibit A hereto. The Notes may have
----------------
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.
(b) Global Notes. The Notes shall be issued initially in the form of
------------
three or more permanent global Notes (the "Global Notes"). Notes offered and
sold (i) in reliance on Rule 144A shall be issued initially in the form of one
or more permanent Global Notes in registered form, substantially in the form set
forth in Exhibit A (the "Rule 144A Global Note") (ii) to a limited number of
---------
-28-
institutional accredited investors as defined in Rule 501 (a)(1), (2), (3) or
(7) of the Securities Act in a transaction exempt for the registration
requirements of the Securities Act, shall be issued initially in the form of one
or more permanent Global Notes in the registered form, substantially in the form
set forth in Exhibit A (the "IAI Global Note") and (iii) in offshore
---------
transactions in reliance on Regulation S shall be issued initially in the form
of one or more permanent global Notes in registered form, substantially in the
form set forth in Exhibit A (the "Regulation S Global Note"). Global Notes shall
---------
be substantially in the form of Exhibit A attached hereto (including the Global
Note Legend). Notes issued in definitive form shall be substantially in the form
of Exhibit A attached hereto (but without the Global Note Legend). Each Global
Note shall represent such of the outstanding Notes as shall be specified therein
and each shall provide that it shall represent the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Notes represented
thereby shall be made by the Trustee or the Note Custodian, at the direction of
the Trustee, in accordance with written instructions given by the Holder thereof
as required by Section 2.06 hereof.
(c) Euroclear and Clearstream Procedures Applicable. The provisions of
-----------------------------------------------
the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream" and "Customer Handbook" of Clearstream shall be applicable to
transfers of beneficial interests in the Regulation S Global Notes that are held
by Participants through Euroclear or Clearstream.
SECTION 2.02. Execution and Authentication.
----------------------------
One Officer shall sign the Notes for the Company by manual or facsimile
signature. If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless be
valid. A Note shall not be valid until authenticated by the manual or facsimile
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture. The Trustee shall, upon a
written order of the Company signed by an Officer (an "Authentication Order"),
authenticate Notes for original issue up to the aggregate principal amount of
$180,000,000. The aggregate principal amount of Notes outstanding at any time
may not exceed such amount except as provided in Section 2.07 hereof. In
addition, upon receipt of an Authentication Order, the Trustee shall
authenticate Series B Notes in an aggregate principal amount not to exceed the
principal amount of the then outstanding Series A Notes for issuance in exchange
for all Series A Notes previously issued pursuant to an Exchange Offer
registered under the Securities Act or pursuant to a Private Exchange. The
Trustee may appoint an authenticating agent acceptable to the Company to
authenticate Notes. An authenticating agent may authenticate Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with Holders or an Affiliate of the Company.
SECTION 2.03. Registrar and Paying Agent.
--------------------------
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more addi-
-29-
tional paying agents. The term "Registrar" includes any co-registrar and the
term "Paying Agent" includes any additional paying agent. The Company may change
any Paying Agent or Registrar without notice to any Holder. The Company shall
notify the Trustee in writing of the name and address of any Agent not a party
to this Indenture. If the Company fails 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. The Company initially
appoints The Depository Trust Company to act as Depository with respect to the
Global Notes. The Company initially appoints the Trustee to act as the Registrar
and Paying Agent.
SECTION 2.04. Paying Agent to Hold Money in Trust.
-----------------------------------
The Company 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
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidation Damages, if any, or interest on the Notes, and
shall notify the Trustee in writing of any default by the Company 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 Company 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) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee shall serve as Paying Agent for the Notes.
SECTION 2.05. Holder Lists.
------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company 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 and the
Company shall otherwise comply with TIA ss. 312(a).
SECTION 2.06. Transfer and Exchange.
---------------------
Subject to the provisions of Sections 2.15 and 2.16, when Notes are
presented to the Registrar or a co-Registrar with a request to register the
transfer of such Notes or to exchange such Notes for an equal principal amount
of Notes of other authorized denominations of the same series, the Registrar or
co-Registrar shall register the transfer or make the exchange as requested if
its requirements for such transaction are met; provided, however, that the Notes
presented or surrendered for registration of transfer or exchange shall be duly
endorsed or accompanied by a written instrument of transfer in form satisfactory
to the Company and the Registrar or co-Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing. To permit registrations of
transfer and exchanges, the Company shall execute and the Trustee shall, upon
receipt of an Authentication Order, authenticate Notes at the Registrar's or
co-Registrar's request. No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge in connection therewith
payable by the transferor of such Notes (other than any such transfer taxes or
similar governmental charge payable upon
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exchanges or transfers pursuant to Sections 2.10, 3.06, 3.07, 3.09, 4.11, 4.14,
4.16 or 8.07, in which event the Company shall be responsible for the payment of
such taxes).
The Company shall not be required to register the transfer of or
exchange of any Note (i) during a period beginning at the opening of 15 Business
Days before the mailing of a notice of redemption of Notes and ending at the
close of business on the day of such mailing and (ii) selected for redemption in
whole or in part pursuant to Article 3, except the unredeemed portion of any
Note being redeemed in part.
Any Holder of a Global Note shall, by acceptance of such Global Note,
agree that transfers of beneficial interests in such Global Notes may be
effected only through a book entry system maintained by the Holder of such
Global Note (or its agent), and that ownership of a beneficial interest in the
Note shall be required to be reflected in a book entry.
SECTION 2.07. Replacement Notes.
-----------------
If a mutilated Note is surrendered to the Trustee or if the Holder
presents evidence to the satisfaction of the Company and the Trustee that the
Note has been lost, destroyed or wrongfully taken, the Company shall issue and
the Trustee, upon receipt of an Authentication Order, shall authenticate a
replacement Note. An indemnity bond may be required by the Company or the
Trustee that is sufficient in the judgment of the Company and the Trustee to
protect the Company, the Trustee or any Agent from any loss which any of them
may suffer if a Note is replaced. In every case of destruction, loss or theft,
the applicant shall also furnish to the Company and to the Trustee evidence to
their satisfaction of the destruction, loss or the theft of such Note and the
ownership thereof. Each of the Company and the Trustee may charge for its
expenses in replacing a Note. In the event any such mutilated, lost, destroyed
or wrongfully taken Note has become due and payable, the Company in its
discretion may pay such Note instead of issuing a new Note in replacement
thereof. The provisions of this Section 2.07 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to replacement
or payment of mutilated, lost, destroyed or wrongfully taken Notes.
Every replacement Note is an additional obligation of the Company.
SECTION 2.08. Outstanding Notes.
-----------------
Notes outstanding at any time are all Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
and those described in this Section 2.08 as not outstanding.
If a Note is replaced pursuant to Section 2.07 (other than a mutilated
Note surrendered for replacement), it ceases to be outstanding until the Company
and the Trustee receive proof satisfactory to each of them that the replaced
Note is held by a protected purchaser. A mutilated Note ceases to be outstanding
upon surrender of such Note and replacement thereof pursuant to Section 2.07.
If on a Redemption Date or the Maturity Date, the Paying Agent holds
U.S. legal tender sufficient to pay all of the principal and interest due on the
Notes payable on that date and is not prohibited from paying such money to the
Holders thereof pursuant to the terms of this Indenture, then on and after that
date such Notes cease to be outstanding and interest on them ceases to accrue.
-31-
SECTION 2.09. Treasury Notes.
--------------
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver, consent or notice, Notes owned by
the Company or any of its Affiliates shall be considered as though they are not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes which a Responsible Officer actually knows are so owned shall be so
considered. The Company shall notify the Trustee, in writing, when it or any of
its Affiliates repurchases or otherwise acquires Notes, of the aggregate
principal amount of such Notes so repurchased or otherwise acquired.
SECTION 2.10. Temporary Notes.
---------------
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes upon receipt of a written
order of the Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of temporary Notes to be authenticated and
the date on which the temporary Notes are to be authenticated. Temporary Notes
shall be substantially in the form of definitive Notes but may have variations
that the Company considers appropriate for temporary Notes. Without unreasonable
delay, the Company shall prepare and the Trustee shall authenticate upon receipt
of an Authentication Order pursuant to Section 2.02 definitive Notes in exchange
for temporary Notes.
SECTION 2.11. Cancellation.
------------
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee, or at the direction of the Trustee, the Registrar or the Paying
Agent, and no one else, shall cancel and, at the written direction of the
Company, dispose of and deliver evidence of such disposal of all Notes
surrendered for registration of transfer, exchange, payment or cancellation.
Subject to Section 2.07, the Company may not issue new Notes to replace Notes
that it has paid or delivered to the Trustee for cancellation. If the Company
shall acquire any of the Notes, such acquisition shall not operate as a
redemption or satisfaction of the Indebtedness represented by such Notes unless
and until the same are surrendered to the Trustee for cancellation pursuant to
this Section 2.11.
SECTION 2.12. Defaulted Interest.
------------------
The Company shall pay interest (including Accrued Bankruptcy Interest
in any proceeding under any Bankruptcy Law) on overdue principal at the rate
equal to 2% per annum in excess of the then applicable interest rate on the
Notes to the extent lawful. The Company shall pay interest (including Accrued
Bankruptcy Interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Liquidated Damages (without regard to any
applicable grace period) at the rate equal to 2% per annum in excess of the then
applicable interest rate on the Notes to the extent lawful.
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest, plus (to the extent lawful) any interest payable on
the defaulted interest to the persons who are Holders on a subsequent special
Record Date, which date shall be the fifteenth day next preceding the date fixed
by the Company for the payment of defaulted interest or the next succeeding
-32-
Business Day if such date is not a Business Day. At least 15 days before the
subsequent special Record Date, the Company shall mail to each Holder, as of a
recent date selected by the Company, with a copy to the Trustee, a notice that
states the subsequent special Record Date, the payment date and the amount of
defaulted interest, and interest payable on such defaulted interest, if any, to
be paid.
Notwithstanding the foregoing, any interest which is paid prior to the
expiration of the 30-day period set forth in Section 6.01(1) shall be paid to
Holders as of the Record Date for the Interest Payment Date for which interest
has not been paid.
SECTION 2.13. Deposit of Monies.
-----------------
Prior to 10:00 a.m., New York City time, on each Interest Payment Date,
Redemption Date, Change of Control Purchase Date and Maturity Date, the Company
shall deposit with the Paying Agent in immediately available funds U.S. legal
tender sufficient to make payments, if any, due on such Interest Payment Date,
Redemption Date, Change of Control Purchase Date or Maturity Date, as the case
may be, in a timely manner which permits the Trustee to remit payment to the
Holders on such Interest Payment Date, Redemption Date, Change of Control
Purchase Date or Maturity Date, as the case may be. The principal and interest
on Global Notes shall be payable to the Depository or its nominee, as the case
may be, as the sole registered owner and the sole Holder of the Global Notes
represented thereby. The principal and interest on Notes in certificated form
shall be payable at the office of the Paying Agent.
SECTION 2.14. CUSIP Number.
------------
The Company in issuing the Notes may use one or more "CUSIP" numbers,
and if so, the Trustee shall use such CUSIP numbers in notices of redemption or
exchange as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
numbers printed in the notice or on the Notes, and that reliance may be placed
only on the other identification numbers printed on the Notes. The Company shall
promptly notify the Trustee in writing of any change in the CUSIP number.
SECTION 2.15. Book-Entry Provisions for Global Notes.
--------------------------------------
(a) The Global Notes initially shall (i) be registered in the name of
the Depository or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear legends as set forth in
Section 2.17.
Members of, or Participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depository or under the Global Note, and the Depository may
be treated by the Company, the Trustee and any Agent of the Company or the
Trustee as the absolute owner of the Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any Agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder.
(b) Interests of beneficial owners in the Global Notes may be
transferred or exchanged for Certificated Notes in accordance with the rules and
procedures of the Depository and the
-33-
provisions of Section 2.16. In addition, Certificated Notes shall be transferred
to all beneficial owners in exchange for their beneficial interests in Global
Notes if (i) the Depository (x) notifies the Company that it is unwilling or
unable to continue as Depository for any Global Note or (y) has ceased to be a
clearing company registered under the Exchange Act and, in each case, a
successor depository is not appointed by the Company within 90 days of such
notice or (ii) a Default or an Event of Default has occurred and is continuing
and the Registrar has received a written request from the Depository to issue
Certificated Notes.
(c) In connection with the transfer of Global Notes as an entirety to
beneficial owners pursuant to paragraph (b), the Global Notes shall be deemed to
be surrendered to the Trustee for cancellation, and the Company shall execute,
and the Trustee shall, upon receipt of an Authentication Order, authenticate and
deliver, to each beneficial owner identified by the Depository in writing in
exchange for its beneficial interest in the Global Notes, an equal aggregate
principal amount of Certificated Notes of authorized denominations.
(d) Any Certificated Note constituting a Restricted Security delivered
in exchange for an interest in a Global Note pursuant to paragraph (b) or (c)
shall, except as otherwise provided by Section 2.16, bear the Private Placement
Legend.
(e) The Holder of any Global Note may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
SECTION 2.16. Registration of Transfers and Exchanges.
---------------------------------------
(a) Transfer and Exchange of Certificated Notes. When Certificated
-------------------------------------------
Notes are presented to the Registrar or co-Registrar with a request:
(i) to register the transfer of the Certificated Notes; or
(ii) to exchange such Certificated Notes for an equal principal amount
of Certificated Notes of other authorized denominations, the Registrar or
co-Registrar shall register the transfer or make the exchange as requested
if the requirements under this Indenture as set forth in this Section 2.16
for such transactions are met; provided, however, that the Certificated
Notes presented or surrendered for registration of transfer or exchange:
(I) shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing;
and
(II) in the case of Certificated Notes the offer and sale of which
have not been registered under the Securities Act and are presented for
transfer or exchange prior to (x) the date which is two years after the
later of the date of original issue and the last date on which the Company
or any Affiliate of the Company was the owner of such Note or any
predecessor thereto and (y) such later date, if any, as may be required by
any subsequent change in applicable law (the "Resale Restriction
Termination Date"), such Certificated Notes shall be ac-
-34-
companied, in the sole discretion of the Company, by the following additional
information and documents, as applicable:
(A) if such Certificated Note is being delivered to the Registrar
or co-Registrar by a Holder for registration in the name of
such Holder, without transfer, a certification to that effect
(substantially in the form of Exhibit B hereto); or
(B) if such Certificated Note is being transferred to a Qualified
Institutional Buyer in accordance with Rule 144A, a
certification to that effect (substantially in the form of
Exhibit B hereto); or
(C) if such Certificated Note is being transferred in reliance on
Regulation S, delivery of a certification to that effect
(substantially in the form of Exhibit B hereto) and a
transferor certificate for Regulation S transfers
substantially in the form of Exhibit D hereto; or
(D) if such Certificated Note is being transferred to an
Institutional Accredited Investor, delivery of certification
to that effect (substantially in the form of Exhibit B
hereto), certificates of the transferee in substantially the
form of Exhibit C and, at the option of the Company, an
Opinion of Counsel reasonably satisfactory to the Company to
the effect that such transfer is in compliance with the
Securities Act; or
(E) if such Certificated Note is being transferred in reliance on
Rule 144 under the Securities Act, delivery of a certification
to that effect substantially in the form of Exhibit B hereto
and, at the option of the Company, an Opinion of Counsel
reasonably satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(F) if such Certificated Note is being transferred in reliance on
another exemption from the registration requirements of the
Securities Act, a certification to that effect (substantially
in the form of Exhibit B hereto) and, at the option of the
Company, an Opinion of Counsel reasonably satisfactory to the
Company to the effect that such transfer is in compliance with
the Securities Act.
(b) Restrictions on Transfer of a Certificated Note for a
-----------------------------------------------------
Beneficial Interest in a Global Note. A Certificated Note may not be exchanged
------------------------------------
for a beneficial interest in a Global Note except upon satisfaction of the
requirements set forth below. Upon receipt by the Registrar or co-Registrar of a
Certificated Note, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Registrar or co-Registrar, together with:
(A) in the case of Certificated Notes the offer and sale of which have
not been registered under the Securities Act and which are presented for
transfer prior to the Resale Restriction Termination Date, certification,
substantially in the form of Exhibit B hereto, that such Certificated Note
is being transferred (I) to a Qualified Institutional Buyer or (II) in an
offshore transaction in reliance on Regulation S (and, in the case of this
clause II, the Company shall have received a transferor certificate for
Regulation S transfers substantially in the form of Exhibit D hereto and,
at the option of the Company, an Opinion of Counsel reasona-
-35-
▇▇▇ satisfactory to the Company to the effect that such transaction is in
compliance with the Securities Act); and
(B) written instructions from the Holder thereof directing the
Registrar or co-Registrar to make, or to direct the Depository to make, an
endorsement on the applicable Global Note to reflect an increase in the
aggregate amount of the Notes represented by the Global Note,
then the Registrar or co-Registrar shall cancel such Certificated Note and
cause, or direct the Depository to cause, in accordance with the standing
instructions and procedures existing between the Depository and the Registrar or
co-Registrar, the principal amount of Notes represented by the applicable Global
Note to be increased accordingly. If no Global Note representing Notes held by
Qualified Institutional Buyers or persons acquiring Notes in offshore
transactions in reliance on Regulation S, as the case may be, is then
outstanding, the Company shall issue and the Trustee shall, upon receipt of an
Authentication Order in accordance with Section 2.02, authenticate such a 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
Depository in accordance with this Indenture (including the restrictions on
transfer set forth herein) and the procedures of the Depository therefor. Upon
receipt by the Registrar or co-Registrar of written instructions, or such other
instruction as is customary for the Depository, from the Depository or its
nominee, requesting the registration of transfer of an interest in a Rule 144A
Global Note or Regulation S Global Note, as the case may be, to another type of
Global Note, together with the applicable Global Notes (or, if the applicable
type of Global Note required to represent the interest as requested to be
transferred is not then outstanding, only the Global Note representing the
interest being transferred), the Registrar or Co-Registrar shall cancel such
Global Notes (or Global Note) and the Company shall issue and the Trustee shall,
upon receipt of an Authentication Order in accordance with Section 2.02,
authenticate new Global Notes of the types so canceled (or the type so canceled
and applicable type required to represent the interest as requested to be
transferred) reflecting the applicable increase and decrease of the principal
amount of Notes represented by such types of Global Notes, giving effect to such
transfer. If the applicable type of Global Note required to represent the
interest as requested to be transferred is not outstanding at the time of such
request, the Company shall issue and the Trustee shall, upon receipt of an
Authentication Order in accordance with Section 2.02, authenticate a new Global
Note of such type in principal amount equal to the principal amount of the
interest requested to be transferred.
(d) Transfer of a Beneficial Interest in a Global Note for a
--------------------------------------------------------
Certificated Note. (i) Any person having a beneficial interest in a Global Note
-----------------
may upon request exchange such beneficial interest for a Certificated Note. Upon
receipt by the Registrar or co-Registrar of written instructions, or such other
form of instructions as is customary for the Depository, from the Depository or
its nominee on behalf of any person having a beneficial interest in a Global
Note and upon receipt by the Trustee of a written order or such other form of
instructions as is customary for the Depository or the person designated by the
Depository as having such a beneficial interest containing registration
instructions and, in the case of any such transfer or exchange of a beneficial
interest in Notes the offer and sale of which have not been registered under the
Securities Act and which Notes are presented for transfer or exchange prior to
the Resale Restriction Termination Date, the following additional information
and documents:
-36-
(A) if such beneficial interest is being transferred to the person
designated by the Depository as being the beneficial owner, a certification
from such person to that effect (substantially in the form of Exhibit B
---------
hereto); or
(B) if such beneficial interest is being transferred to a Qualified
Institutional Buyer in accordance with Rule l44A, a certification to that
effect (substantially in the form of Exhibit B hereto); or
---------
(C) if such beneficial interest is being transferred in reliance on
Regulation S, delivery of a certification to that effect (substantially in
the form of Exhibit B hereto) and a transferor certificate for Regulation S
---------
transfers substantially in the form of Exhibit D hereto; or
---------
(D) if such beneficial interest is being transferred to an
Institutional Accredited Investor, delivery of certification (substantially
in the form of Exhibit B hereto), a certificate of the transferee in
---------
substantially the form of Exhibit C and, at the option of the Company, an
---------
Opinion of Counsel reasonably satisfactory to the Company to the effect
that such transfer is in compliance with the Securities Act; or
(E) if such beneficial interest is being transferred in reliance on
Rule 144 under the Securities Act, delivery of a certification to that
effect (substantially in the form of Exhibit B hereto) and, at the option
---------
of the Company, an Opinion of Counsel reasonably satisfactory to the
Company to the effect that such transfer is in compliance with the
Securities Act; or
(F) 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 (substantially in the form of Exhibit B
hereto) and, at the option of the Company, an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such transfer is in
compliance with the Securities Act,
then the Registrar or co-Registrar shall cause, in accordance with the standing
instructions and procedures existing between the Depository and the Registrar or
co-Registrar, the aggregate principal amount of the applicable Global Note to be
reduced and, following such reduction, the Company shall execute and, upon
receipt of an Authentication Order in accordance with Section 2.02, the Trustee
shall authenticate and deliver to the transferee a Certificated Note in the
appropriate principal amount.
(ii) Certificated Notes issued in exchange for a beneficial interest in
a Global Note pursuant to this Section 2.16(d) shall be registered in such names
and in such authorized denominations as the Depository, pursuant to instructions
from its direct or indirect Participants or otherwise, shall instruct the
Registrar or co-Registrar in writing. The Registrar or co-Registrar shall
deliver such Certificated Notes to the persons in whose names such Certificated
Notes are so registered.
(e) Restrictions on Transfer and Exchange of Global Notes.
-----------------------------------------------------
Notwithstanding any other provisions of this Indenture, a Global Note may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such successor Depository.
-37-
(f) Private Placement Legend. Upon the transfer, exchange or
------------------------
replacement of Notes not bearing the Private Placement Legend, the Registrar or
co-Registrar shall deliver Notes that do not bear the Private Placement Legend.
Upon the transfer, exchange or replacement of Notes bearing the Private
Placement Legend, the Registrar or co-Registrar shall deliver only Notes that
bear the Private Placement Legend unless, and the Trustee is hereby authorized
to deliver Notes without the Private Placement Legend if (i) the Resale
Restriction Termination Date shall have occurred, (ii) there is delivered to the
Trustee an Opinion of Counsel reasonably satisfactory to the Company and the
Trustee to the effect that neither such legend nor the related restrictions on
transfer are required in order to maintain compliance with the provisions of the
Securities Act or (iii) such Note has been sold pursuant to an effective
registration statement under the Securities Act.
(g) General. By its acceptance of any Note bearing the Private
-------
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it shall transfer such Note only as provided in this
Indenture.
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 Agent Members or
beneficial owners of interest in any Global Note) other than to require delivery
of such certificates and other documentation or evidence as are expressly
required 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 hereof.
The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 2.15 or this Section
2.16. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Registrar.
SECTION 2.17. Restrictive Legends.
-------------------
Each Global Note and Certificated Note that constitutes a Restricted
Security shall bear the following legend (the "Private Placement Legend") on the
face thereof until the Resale Restriction Termination Date, unless otherwise
agreed to by the Company and the Holder thereof:
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
--------------
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT
(A)(1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR
RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) TO AN
INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (4) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE
144 THEREUNDER (IF
-38-
AVAILABLE) OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES.
Each Global Note shall also bear the following legend (the "Global
Note Legend"):
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS NOTE IS NOT
EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS
NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, AND TRANSFERS OF INTERESTS IN THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.16 OF THE INDENTURE.
ARTICLE 3
REDEMPTION
SECTION 3.01. Notices to Trustee.
------------------
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 45 days (unless a shorter period is acceptable to the Trustee) but not
more than 60 days before a Redemption Date, an Officers' Certificate setting
forth (i) the clause of this Indenture pursuant to which the redemption shall
occur, (ii) the Redemption Date, (iii) the principal amount of Notes to be
redeemed, (iv) the amount of any interest (including any Liquidated Damages) and
(v) the redemption price.
In the event of a Gaming Redemption, the Company shall notify the
Trustee in writing as soon as practicable but in any event not less than 15 days
before notice of the Gaming Redemption is to be mailed to any Holder (unless a
shorter notice shall be satisfactory to the Trustee).
SECTION 3.02. Selection of Notes to Be Redeemed.
---------------------------------
If less than all of the Notes are to be redeemed at any time (other
than pursuant to Section 3.09 hereof), the Trustee shall select the Notes to be
redeemed among the Holders
(1) in compliance with the requirements of the principal national
securities exchange, if any, on which the Notes are listed or,
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(2) if the Notes are not so listed, on a pro rata basis, by lot or in
accordance with any other method the Trustee considers fair and
appropriate;
provided that (x) no Notes of $1,000 or less will be redeemed in part and (y) if
a partial redemption is made with the proceeds of any Equity Offering, the
Trustee will select the Notes only on a pro rata basis or on as nearly a pro
rata basis as is practicable (subject to the procedures of the Depository),
unless such method is otherwise prohibited. In the event of partial redemption
by lot, the particular Notes to be redeemed shall be selected, unless otherwise
provided herein, not less than 30 nor more than 60 days prior to the Redemption
Date by the Trustee from the outstanding Notes not previously called for
redemption.
The Trustee shall promptly notify the Company 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 integral multiples of $1,000,
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not an integral
multiple of $1,000, shall be redeemed. Except as provided in the preceding
sentence, provisions of this Indenture that apply to Notes called for redemption
also apply to portions of Notes called for redemption.
SECTION 3.03. Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before a Redemption Date
(other than in connection with a Gaming Redemption), the Company shall mail or
cause to be mailed, by first class mail, an unconditional notice of redemption
to each Holder (or to the affected Holder in the case of a Gaming Redemption)
whose Notes are to be redeemed at its registered address.
In the event of a Gaming Redemption, notice of redemption shall be
given in accordance with Section 3.09.
The notice shall identify the Notes to be redeemed and shall state:
(a) the Redemption Date;
(b) the redemption price and the amount of interest (including any
premium or Liquidated Damages), if any;
(c) if any Note is being redeemed in part only, the portion of the
principal amount of such Note to be redeemed and that, after the Redemption
Date upon surrender of such Note, a new Note or Notes in principal amount
equal to the unredeemed portion thereof shall be issued upon cancellation
of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date;
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(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
Redemption Date (or 5 days prior to the date of any Gaming Redemption), an
Officers' Certificate requesting that the Trustee give such notice and a copy of
the notice as provided in the preceding paragraph.
SECTION 3.04. Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
Redemption Date at the redemption price. A notice of redemption may not be
conditional.
SECTION 3.05. Deposit of Redemption Price.
---------------------------
On or prior to 11:00 a.m. (New York Time) on the Redemption Date, the
Company shall deposit with the Trustee or with the Paying Agent 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
promptly return to the Company any money deposited with the Trustee or the
Paying Agent by the Company in excess of the amounts necessary to pay the
redemption price of, and accrued interest on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph,
on and after the Redemption Date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest Record Date but on or prior to the related Interest Payment Date,
then any accrued and unpaid interest shall be paid to the person in whose name
such Note was registered at the close of business on such Record Date. If any
Note called for redemption shall not be so paid upon surrender for redemption
because of the failure of the Company to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the Redemption Date until
such principal is paid, and to the extent lawful on any interest not paid on
such unpaid principal, in each case at the rate provided in the Notes and in
Section 2.12 hereof.
SECTION 3.06. Notes Redeemed in Part.
----------------------
Upon surrender of a Note that is redeemed in part (with, if the Company
or the Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company and the Trustee duly executed by,
the Holder thereof or his attorney duly authorized in writing), the Company
shall issue and, upon receipt of an Authentication Order, the Trustee shall
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.
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SECTION 3.07. Optional Redemption.
-------------------
(a) At any time on or prior to March 15, 2005, the Company may on any
one or more occasion redeem up to 35% of the aggregate principal amount of Notes
issued under this Indenture at a redemption price of 111.50% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
to the Redemption Date, with the net cash proceeds of one or more Equity
Offerings resulting in gross proceeds to the Company of not less than $20.0
million; provided that:
(1) at least 65% of the aggregate principal amount of Notes issued
under this Indenture remains outstanding immediately after the occurrence
of such redemption (excluding from the amount of Notes included in such 65%
Notes held by the Company and its Subsidiaries); and
(2) the redemption must occur within 60 days after the date of the
consummation of such Equity Offering.
(b) On or after March 15, 2007, the Company may redeem all or a part of
the Notes at the redemption prices (expressed as percentages of principal
amount) set forth below plus accrued and unpaid interest and Liquidated Damages,
if any, thereon to the applicable Redemption Date, if redeemed during the
12-month period beginning on March 15 of each of the years indicated below:
Year Percentage
2007................................................... 106.0%
2008................................................... 103.0%
2009................................................... 100.0%
SECTION 3.08. No Mandatory Redemption.
-----------------------
The Company shall not be required to make mandatory redemption or
sinking fund payments with respect to the Notes.
SECTION 3.09. Mandatory Disposition in Accordance with Gaming Laws.
----------------------------------------------------
Notwithstanding any other provision of this Indenture or the Notes, if
any Gaming Authority requires that a Holder or beneficial owner of Notes be
licensed, qualified or found suitable under any applicable Gaming Law and such
Holder or beneficial owner (i) fails to apply for a license, qualification or a
finding of suitability within 30 days (or such lesser period as may be required
by the applicable Gaming Authority) after being requested to do so by the Gaming
Authority or (ii) is denied such license or qualification or not found suitable,
the Company shall have the right, at its option, (1) to require any such Holder
or beneficial owner to dispose of its Notes within 30 days (or such earlier date
as may be required by the applicable Gaming Authority) of the occurrence of the
event described in clause (i) or (ii) above or (2) to redeem the Notes of such
Holder or beneficial owner at a redemption price equal to the lesser of (x) the
principal amount thereof, together with accrued and unpaid interest and
Liquidated Damages, if any, to the date of the denial of license or
qualification or of the finding of unsuitability by such Gaming Authority, (y)
the price at which such Holder or beneficial
-42-
owner acquired the Notes, together with accrued and unpaid interest and
Liquidated Damages, if any, to the date of the denial of license or
qualification or of the finding of unsuitability by such Gaming Authority and
(z) the Fair Market Value of such Notes. The Company shall notify the Trustee in
writing of any redemption pursuant to this Section 3.09 within 15 days prior to
any such redemption. A redemption of the Notes pursuant to this Section 3.09 is
herein referred to as a "Gaming Redemption."
Immediately upon a determination by a Gaming Authority that a Holder or
beneficial owner of the Notes shall not be licensed, qualified or found
suitable, the Holder or beneficial owner will, to the extent required by
applicable law, have no further rights:
(1) to receive any interest or dividends with respect to the Notes;
(2) to exercise, directly or through any trustee or nominee, any right
conferred by the Notes; or
(3) receive any remuneration in any form for services rendered or
otherwise.
The Holder or beneficial owner that is required to apply for a license,
qualification or a finding of suitability shall pay all fees and costs of
applying for and obtaining the license, qualification or finding of suitability
and of any investigation by the applicable Gaming Authorities. Neither the
Company nor any Subsidiary shall be liable therefor.
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Notes.
----------------
The Company shall pay or cause to be paid the principal of, premium, if
any, interest and Liquidated Damages on the Notes on the dates and in the manner
provided in the Notes and this Indenture. Principal, premium, if any, and
interest shall be considered paid on the date due if the Paying Agent, if other
than the Company or a Subsidiary thereof, holds as of 10:00 a.m. New York City
time on the due date money deposited by the Company in immediately available
funds and designated for and sufficient to pay all principal, premium, if any,
and interest then due. The Company shall pay all Liquidated Damages, if any, in
the same manner on the dates and in the amounts set forth in the Registration
Rights Agreement. The Company's obligations under the Notes, this Indenture, the
Registration Rights Agreement and the Collateral Documents are referred to
herein as the "Company Obligations."
SECTION 4.02. Maintenance of Office or Agency.
-------------------------------
The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-Registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required
-43-
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 Company may also from time to time designate "Designation" one or
more other offices or agencies where the Notes may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in the Borough of Manhattan, the City of New York for such purposes. The Company
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03
hereof.
SECTION 4.03. Reports.
-------
(a) Whether or not required by the SEC, so long as any Notes are
outstanding, the Company shall furnish to the Trustee and the Holders (x) prior
to the consummation of the Exchange Offer, within 30 days following the time
periods specified in the SEC's rules and regulations and (y) following the
consummation of the Exchange Offer, within the time periods specified in the
SEC's rules and regulations:
(i) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K if
the Company were required to file such forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
and, with respect to the annual information only, a report thereon by the
Company's and the Subsidiaries', certified independent accountants, and
(ii) all current reports that would be required to be filed with the
SEC on Form 8-K if the Company were required to file such reports.
(b) In addition, following consummation of the Exchange Offer, whether
or not required by the rules and regulations of the SEC, the Company shall file
a copy of all information and reports referred to in clause (a) with the SEC for
public availability within the time periods specified in the SEC's rules and
regulations (unless the SEC shall not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. The Company shall at all times comply with TIA ss. 314(a).
(c) For so long as any Notes are not freely transferable, the Company
and the Guarantors shall furnish to the Trustee, Holders and to securities
analysts and prospective investors, upon their request, the information required
to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(d) Delivery of the reports, information and other documents set forth
in this Section 4.03 to the Trustee is for informational purposes only and the
Trustee's receipt of such reports, information and other documents 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 under this Indenture.
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SECTION 4.04. Compliance Certificate.
----------------------
(a) The Company and each Guarantor (to the extent that such Guarantor
is so required under the TIA) shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture and the Collateral Documents, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge, the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and the Collateral Documents
and is not in default in the performance or observance of any of the terms,
provisions and conditions of this Indenture or the Collateral Documents (or, if
a Default or Event of Default shall have occurred, describing all such Defaults
or Events of Default of which he or she may have knowledge and what action the
Company is taking or proposes to take with respect thereto) and that to the best
of his or her knowledge no event has occurred and remains in existence by reason
of which payments on account of the principal of or interest, if any, on the
Notes is prohibited or if such event has occurred, a description of the event
and what action the Company is taking or proposes to take with respect thereto.
(b) [Reserved]
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
SECTION 4.05. Taxes.
------
The Company shall pay or discharge or shall cause each of its
Subsidiaries to pay or discharge, before the same shall become delinquent, (1)
all material Taxes levied or imposed upon the Company or any of its Subsidiaries
or upon its or any of its Subsidiaries' income, profits or property and (2) all
lawful material claims for labor, materials and supplies which, in each case, if
unpaid, might by law become a Lien upon the property of the Company or any of
its Subsidiaries; provided, however, that, subject to the terms of the
applicable Collateral Documents, neither the Company nor any of its Subsidiaries
shall be required to pay or discharge or cause to be paid or discharged any such
tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings and for which disputed
amounts adequate reserves have been made in accordance with GAAP. The Company
and each of its Subsidiaries shall prepare and timely file with the appropriate
governmental agencies all material Tax Returns required to be filed for any
period (or portion thereof), taking into account any extension of time to file
granted to or obtained on behalf of the Company and/or such Subsidiary, and each
such Tax Return shall be complete and accurate in all material respects. The
Company shall not be obligated to comply with the provision of this Section 4.05
if the failure to so comply will not have a material adverse effect on the
ability of the Company to pay the Company Obligations when due.
SECTION 4.06. Stay, Extension and Usury Laws.
-------------------------------
The Company and each of the Guarantors covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the
-45-
benefit or advantage of, any stay, extension or usury law wherever enacted, now
or at any time hereafter in force, that may affect the covenants or the
performance of this Indenture; and the Company and each of the Guarantors (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not, by resort to any
such law, hinder, delay or impede the execution of any power herein granted to
the Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.
SECTION 4.07. Restricted Payments.
-------------------
(a) The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any distribution on account of
the Company's or any of its Subsidiaries' Equity Interests other than
dividends or distributions payable in Equity Interests (other than
Disqualified Equity Interests) of the Company or dividends or distributions
payable to the Company or any Subsidiary of the Company (and, if such
Subsidiary is not a Wholly Owned Subsidiary, to the other equity holders of
such Subsidiary on a pro rata basis or on a basis that results in the
receipt by the Company or a Subsidiary of dividends or distributions of
greater value that it would receive on a pro rata basis);
(2) purchase, redeem or otherwise acquire or retire for value any
Equity Interests of the Company or any direct or indirect parent of the
Company or Subsidiary of the Company (other than any such Equity Interests
owned by the Company or any Wholly Owned Subsidiary of the Company that is
a Guarantor);
(3) make any principal payment on, or purchase, redeem, defease or
otherwise acquire or retire for value, prior to any scheduled maturity,
scheduled repayment or scheduled sinking fund payment, any Indebtedness
that is subordinated to the Notes; or
(4) make any Investment (other than Permitted Investments);
(all such payments and other actions set forth in clauses (1) through (4) above
being collectively referred to as "Restricted Payments") unless, at the time of
and after giving effect to such Restricted Payment:
(i) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(ii) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) pursuant to the test set forth in Section 4.08
hereof; and
(iii) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments made by the Company and its Subsidiaries
after the Issue Date (including those permitted by the following paragraphs
unless noted), is less than the sum, without duplication, of:
-46-
(A) 50% of the Consolidated Net Income of the Company for the period
(taken as one accounting period) from the January 1, 2002 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, less 100% of such deficit), plus
(B) to the extent not included in the amount described in clause (A)
above, 100% of the aggregate net cash proceeds (excluding the net cash
proceeds from the Equity Contribution and the Additional Equity
Contribution) received after the Issue Date by the Company from the
issue or sale of, or from additional capital contributions in respect
of, Equity Interests of the Company or of debt securities of the
Company or any Guarantor that have been converted into, or canceled in
exchange for, Equity Interests of the Company or of any direct or
indirect parent of the Company or from the issue or sale of
convertible or exchangeable Disqualified Equity Interests that has
been converted into or exchanged for such Equity Interests (other than
Equity Interests (or convertible debt securities) sold to a Subsidiary
of the Company and other than Disqualified Equity Interests or debt
securities that have been converted into Disqualified Equity
Interests), plus the aggregate net cash proceeds received by the
Company upon any such conversion or exchange; plus
(C) to the extent that an Investment in an Unrestricted Subsidiary was
treated as a Restricted Payment after the Issue Date, an amount equal
to the Fair Market Value of the equity investment in such Unrestricted
Subsidiary owned by the Company or any Subsidiary at the time of
redesignation as a Subsidiary; plus
(D) without duplication of amounts in clause (C) above and without giving
effect to the last sentence of the definition of "Permitted
Investments", to the extent that any Investment (other than Permitted
Investments) that was made after the Issue Date is sold for cash or
otherwise liquidated or repaid for cash, the amount of net cash
proceeds received with respect to such Investment not in excess of the
original amount of such Investment.
(b) The foregoing provisions shall not prohibit the following
Restricted Payments:
(1) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions of this Indenture;
(2) the making of any Investment (other than Permitted Investments):
(A) in exchange for Equity Interests of the Company (other than
Disqualified Equity Interests), or
(B) out of the net cash proceeds of, the substantially concurrent sale
(other than to a Subsidiary of the Company) of, or from substantially
concurrent additional cash capital contributions (excluding the Equity
Contribution) in respect of Equity Interests of the Company (other
than Disqualified Equity Interests);
-47-
(3) the redemption, repurchase, retirement or other acquisition
of any Equity Interests of the Company or any direct or indirect
parent of the Company:
(A) in exchange for other Equity Interests of the Company (other than
any Disqualified Equity Interests);
(B) out of the net cash proceeds of, the substantially concurrent
sale (other than to a Subsidiary of the Company) of, or from
substantially concurrent additional cash capital contributions in
respect of, other Equity Interests of the Company (other than any
Disqualified Equity Interests); and
(C) to the extent required by any Gaming Authority or, if determined
in the good faith judgment of the Board of Directors of the
Company, to prevent the loss or to secure the grant or
establishment of any Gaming License or other right to conduct
gaming operations; provided that the aggregate price paid for all
such redeemed, repurchased, retired or acquired Equity Interests
shall not exceed $2.0 million;
(4) the defeasance, redemption or repurchase of subordinated
Indebtedness with the net cash proceeds from either (x) an incurrence
of Permitted Refinancing Indebtedness or (y) the substantially
concurrent sale (other than to a Subsidiary of the Company) of, or
from substantially concurrent additional capital contributions in
respect of, Equity Interests of the Company (other than Disqualified
Equity Interests);
(5) the repurchase, redemption or other acquisition or retirement
for value, directly or indirectly, of any Equity Interest of the
Company (or any of its direct or indirect parents) or any Subsidiary
held by any current or former employees of the Company (or any of its
Subsidiaries) (or their heirs or estates) pursuant to any management
equity subscription agreement, stock option agreement or similar
written agreement; provided that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests shall not
exceed $1.0 million in any twelve-month period.
(6) the declaration and payment of dividends to holders of the
Company's Disqualified Equity Interests, in each case with respect to
Equity Interests issued in compliance with Section 4.08 hereof;
(7) repurchases of Equity Interests deemed to occur upon exercise
of Equity Interest options if such Equity Interests represent a
portion of the exercise price of such options;
(8) the declaration and payment of dividends to pay out-of-pocket
expenses of Holdings, for administrative, legal and accounting
services, whether internal or provided by third parties (including
Affiliates to the extent permitted under Section 4.23 hereof),
incurred in the ordinary course of business for professional services,
or to pay franchise fees and similar costs;
(9) the declaration and payment of dividends to pay taxes of the
Holdings, the Company and the Company's Subsidiaries as part of a
consolidated, combined or unitary tax filing group or of the separate
operations of Holdings which are actually due and payable arising from
the ownership of the Equity Interests of the Company by Holdings (not
to exceed in
-48-
any event the amount of tax that the Company and its Subsidiaries
would otherwise pay if not part of such filing group);
(10) without duplication of the Restricted Payments permitted to
be made in clauses (3)(B) and (5) above, the declaration and payment
of dividends to Holdings to enable it to make the payments set forth
in clause (3)(B) or (5) above; and
(11) subsequent to (x) the delivery of financial statements for
the four fiscal quarter period ending on December 31, 2004 pursuant to
Section 4.03(a)(1) hereof and (y) and release of funds required to be
made to the Company if the Company's Adjusted Consolidated EBITDA is
less than $28.0 million, the declaration and payment of dividends to
Holdings in the amount of the Remaining Funds.
provided, however, that in the case of each of clauses (2), (3)(a), (4), (6) and
(11) no Default or Event of Default shall have occurred and be continuing or
would arise therefrom.
(c) In determining the aggregate amount of Restricted Payments made
subsequent to the Issue Date in accordance with paragraph (a)(iii) of this
Section 4.07, (x) amounts expended pursuant to clauses (1), (2)(B), (3)(B) and
(4)(B) shall be included in such calculation, and (y) amounts expended pursuant
to clauses (2)(A), (3)(A), 3(C), (4)(A) and (5) through (11) shall be excluded
from such calculation; provided, that clauses (6), (8) and (9) shall only be
excluded to the extent that the amounts thereunder were expenses deducted in
connection with the calculation of Net Income.
(d) The amount of all Restricted Payments (other than cash) shall be
the Fair Market Value on the date of the Restricted Payment of the property or
securities proposed to be transferred or issued to or by the Company or such
Subsidiary, as the case may be, pursuant to the Restricted Payment. The Fair
Market Value of any property or securities that are required to be valued by
this Section 4.07 shall be determined by the Board of Directors, whose Board
Resolution with respect thereto shall be delivered to the Trustee.
SECTION 4.08. Incurrence of Indebtedness and Issuance of Preferred Equity
-----------------------------------------------------------
Interests.
---------
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (other than Permitted Indebtedness) and
the Company will not issue any Disqualified Equity Interests and will not permit
any of its Subsidiaries to issue any Preferred Equity Interests or Disqualified
Equity Interests; provided, however, that the Company may incur Indebtedness or
issue Disqualified Equity Interests and the Company's Subsidiaries that are
Guarantors may incur Indebtedness if:
(1) the Fixed Charge 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 Disqualified Equity Interests is issued would have been at least
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 Disqualified Equity Interests had been issued, as the case may be,
at the beginning of such four-quarter period; and
-49-
(2) no Default or Event of Default will have occurred and be continuing
or would occur as a consequence thereof.
SECTION 4.09. Liens.
-----
The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien on any property 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 4.10. Dividend and Other Payment Restrictions Affecting Restricted
------------------------------------------------------------
Subsidiaries.
------------
(a) The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary to:
(1) (A) pay dividends or make any other distributions to the
Company or any of its Subsidiaries (x) on its Equity Interests or (y)
with respect to any other interest or participation in, or measured
by, its profits, or (B) pay any Indebtedness owed to the Company or
any of its Subsidiaries;
(2) make loans or advances to the Company or any of its
Subsidiaries; or
(3) transfer any of its properties to the Company or any of its
Subsidiaries.
(b) The preceding restrictions shall not apply to encumbrances or
restrictions existing under or by reason of:
(1) the Revolving Credit Facility (so long as it expressly
permits payments to the Company under all circumstances to enable the
Company to make timely payments of all amounts due under or in respect
of the Indenture, the notes and the Collateral Documents);
(2) Existing Indebtedness and any documents or agreements entered
into pursuant thereto or securing obligations thereunder, all as in
effect on the Issue Date;
(3) this Indenture, the Notes and the Guarantees and the
Collateral Documents;
(4) applicable law;
(5) customary non-assignment provisions in leases and licenses
entered into in the ordinary course of business and consistent with
past practices;
(6) Purchase Money Obligations or Capital Lease Obligations for
FF&E acquired or leased with FF&E Financing or under contractual
obligations relating to property subject to Permitted Liens that
impose restrictions of the nature described in clause (a)(3) above on
the property so acquired;
(7) any restriction or encumbrance contained in contracts for
sale of property permitted by the Indenture in respect of the property
being sold pursuant to such contract;
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(8) Permitted Refinancing Indebtedness; provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are no more restrictive, taken as a whole,
than those contained in the agreements governing the Indebtedness
being refinanced (as determined by the Company in good faith, which
determination shall be conclusive absent manifest error);
(9) restrictions imposed by Gaming Authorities on the payment of
dividends by entities holding Gaming Licenses;
(10) Liens on the property of a person acquired at the time of
acquisition of such person to the extent such Liens are not incurred
or created in contemplation of the acquisition and only impose
restrictions of the nature described in clause (a)(3) of this Section
4.10 on the property so acquired; provided such acquired property is
not intended or required to constitute Collateral; and
(11) contracts with customers entered into in the ordinary course
of business in the nature of restrictions on cash or other deposits,
which restrictions are imposed by such customers.
Nothing contained in this Section 4.10 shall prevent the Company or any
Subsidiary of the Company from creating, incurring, assuming or suffering to
exist any Liens permitted by Section 4.09 hereof.
SECTION 4.11. Asset Sales.
-----------
(a) The Company shall not, and shall not permit any of its Subsidiaries
to, engage in Asset Sale unless:
(1) the Company (or the Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the
Fair Market Value of the property or Equity Interests sold or
otherwise disposed of in such Asset Sale;
(2) at least 80% of the consideration therefor received by the
Company or such Subsidiary is in the form of cash or Cash Equivalents;
provided that, for purposes of this provision, each of the following
shall be deemed to be cash:
(A) the amount of any liabilities (as shown on the Company's or such
Subsidiary's most recent balance sheet or in the notes thereto,
excluding contingent liabilities and trade payables), of the
Company or any Subsidiary (other than liabilities that are by
their terms subordinated to the Notes or any Guarantee thereof)
that are assumed by the transferee of any such property; and
(B) any securities, notes or other obligations received by the
Company or any such Subsidiary from such transferee that are
substantially contemporaneously (subject to ordinary settlement
periods) converted by the Company or such Subsidiary into cash
(to the extent of the cash received in that conversion);
-51-
(3) if such Asset Sale involves the disposition of Collateral,
the Company or such Subsidiary has complied with the provisions of
Article 10 and the Net Proceeds thereof shall be paid directly by the
purchaser of the Collateral to the Trustee for deposit into the
Collateral Account, and, if any property other than cash or Cash
Equivalents is included in such Net Proceeds, such property shall be
made subject to the Lien of this Indenture and the applicable
Collateral Documents; and
(4) the Company or such Subsidiary, as the case may be, applies
the Net Proceeds of such Asset Sale as provided in this Section 4.11.
(b) The Company may, at its option, apply any such Net Proceeds within
365 days of the related Asset Sale to either (x) in the case of the Net Proceeds
of property other than Collateral, the retirement or permanent reduction of
Indebtedness permitted to be incurred under clause (1) of the definition of
Permitted Indebtedness or (y) in the case of Net Proceeds (whether or not
relating to Collateral) the acquisition of another business or the acquisition
of other long-term property, in each case, in the same or a similar line of
business as the Company or any of its Subsidiaries was engaged in on the Issue
Date or any reasonable extensions or expansions thereof ("Replacement Assets");
provided, that any Replacement Assets acquired with any Net Proceeds of
Collateral shall be owned by the Company or by the Guarantor that made the Asset
Sale and shall not be subject to any Liens other than Permitted Liens (and the
Company or such Guarantor, as the case may be, shall execute and deliver to the
Trustee such Collateral Documents or other instruments as shall be reasonably
necessary to cause such Replacement Assets to become subject to a Lien in favor
of the Trustee, for the benefit of the Holders of the Notes, securing its
obligations under the Notes or its Guarantee, as the case may be, and otherwise
shall comply with the provisions of the Indenture applicable to After-Acquired
Property).
(c) If the Company does not use any portion of the Net Proceeds as
described in paragraph (b) above within 365 days, such unused portion of the Net
Proceeds period shall constitute "Excess Proceeds" subject to disposition as
provided below. When the aggregate amount of Excess Proceeds exceeds $10.0
million (such date the "Asset Sale Offer Trigger Date"), the Company will make
an offer to all Holders of Notes (an "Asset Sale Offer") to purchase the maximum
principal amount of Notes that may be purchased out of the aggregate amount of
Excess Proceeds (the "Asset Sale Offer Amount") pursuant to the terms of this
Section 4.11. The offer price of any Asset Sale Offer shall be equal to 100% of
the principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages thereon, if any, to the date of purchase, and will be payable in cash in
accordance with the procedures set forth in this Indenture. To the extent that
the aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less
than the Excess Proceeds, remaining Excess Proceeds shall be released to the
Company and may be used free and clear of the Lien of the Collateral Documents
for general corporate purposes. Upon completion of such Asset Sale Offer, the
amount of Excess Proceeds shall be reset at zero.
(d) All Net Proceeds of any Collateral in respect of any Asset Sale
shall, pending their application in accordance with this Section 4.11 or the
release thereof in accordance with Articles 10 and 11, be deposited in the
Collateral Account under this Indenture.
(e) The Asset Sale Offer will remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "Asset Sale Offer Period"). No
later than five Business Days after the termination of the
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Asset Sale Offer Period (the "Asset Sale Purchase Date"), the Company will
purchase the principal amount of Notes required to be purchased pursuant to this
Section 4.11 or, if less than the Asset Sale Offer Amount has been tendered, all
Notes tendered in response to the Asset Sale Offer. Payment for any Notes so
purchased will be made in the same manner as interest payments are made. If the
Asset Sale Purchase Date is on or after the Interest Record Date and on or
before the related Interest Payment Date, any accrued and unpaid interest shall
be paid to the person in whose name a Note is registered at the close of
business on such Record Date, and no additional interest will be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.
(1) (f) If the Company is required to make an Asset Sale Offer,
the Company shall mail, within 10 days following the Asset Sale Offer
Trigger Date, an unconditional notice to the Holders. Such notice
shall be sent by first-class mail, postage prepaid, to the Trustee and
to each Holder, at the address appearing in the register maintained by
the Registrar of the Notes, and shall state:
(2) that the Asset Sale Offer is being made pursuant to this
Section 4.11;
(3) that such Holders have the right to require the Company to
apply the Excess Proceeds to repurchase such Notes at a purchase price
in cash equal to 100% of the principal amount thereof plus accrued and
unpaid interest, and Liquidated Damages if any, to the Asset Sale
Purchase Date, which shall be a Business Day no later than five
Business Days after termination of the Asset Sale Offer Period;
(4) that any Note not tendered or accepted for payment shall
continue to accrue interest;
(5) that any Notes accepted for payment pursuant to the Asset
Sale Offer shall cease to accrue interest after the Asset Sale
Purchase Date;
(6) that Holders accepting the offer to have their Notes
purchased pursuant to an Asset Sale Offer shall be required to
surrender the Notes, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Note completed, to the Paying Agent at
the address specified in the notice prior to the close of business on
the Business Day preceding the Asset Sale Purchase Date;
(7) that Holders shall be entitled to withdraw their acceptance
of the Asset Sale Offer if the Paying Agent receives, not later than
the close of business on the third Business Day preceding the Asset
Sale Purchase Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of
the Notes delivered for purchase, and a statement that such Holder is
withdrawing his election to have such Notes purchased;
(8) that if the aggregate principal amount of Notes surrendered
by Holders exceeds the amount of Excess Proceeds, the Company shall
select the Notes to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Company so that only
Notes in denominations of $1,000 or integral multiples thereof shall
be purchased);
(9) that Holders 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; provided
-53-
that each Note purchased and each such new Note issued shall be in an
original principal amount in denominations of $1,000 and integral multiples
thereof;
(10) the calculations used in determining the amount of Excess
Proceeds to be applied to the purchase of such Notes;
(11) any other procedures that a Holder must follow to accept an Asset
Sale Offer or effect withdrawal of such acceptance; and
(12) the name and address of the Paying Agent.
(g) On or before the Asset Sale Purchase Date, the Company shall, to
the extent lawful, (1) accept for payment, on a pro rata basis to the extent
necessary, Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Asset Sale Offer Amount has been tendered, all Notes
tendered, (2) deposit with the Paying Agent U.S. legal tender sufficient to pay
the purchase price plus accrued and unpaid interest, and Liquidated Damages, if
any, on the Notes to be purchased or portions thereof, (3) deliver or cause to
be delivered to the Trustee Notes so accepted together with an Officers'
Certificate stating that such Notes or portions thereof were accepted for
payment by the Company in accordance with the terms of this Section 4.11. The
Paying Agent shall promptly (but in any case not later than five days after the
Asset Sale Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price for such Notes tendered by such Holder and accepted
by the Company for purchase, and the Company shall execute and issue, and the
Trustee shall, upon receipt of an Authentication Order, promptly authenticate
and make available for delivery to such Holder, a new Note equal in principal
amount to any unpurchased portion of the Notes surrendered; provided that each
such new Note shall be issued in an original principal amount in denominations
of $1,000 and integral multiples thereof. Any note not so accepted will be
promptly mailed or delivered by the Company to the Holder thereof. The Company
shall publicly announce the results of the Asset Sale Offer on the Asset Sale
Purchase Date.
(h) The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations or Gaming Laws conflict with
the Asset Sales provisions of this Indenture, the Company shall comply with the
applicable securities laws and regulations or Gaming Laws and shall not be
deemed to have breached its obligations under the Asset Sale provisions of this
Indenture by virtue of such compliance.
SECTION 4.12. Business Activities.
-------------------
The Company will not, and will not permit any of its Subsidiaries to,
engage in any business or investment activities other than a Permitted Business.
Neither the Company nor any of its Subsidiaries may conduct a Permitted Business
in any gaming jurisdiction in which the Company or such Subsidiary is not
licensed on the Issue Date if the Holders of the Notes would be required to be
licensed as a result thereof; provided, however, that the provisions described
in this sentence will not prohibit the Company or any of its Subsidiaries from
conducting a Permitted Business in any jurisdiction that does not require the
licensing or qualification of all the Holders, but reserves the discretionary
right to require the licensing or qualification of any Holder. The Company will
not, and will not permit any of its Subsidiaries to, engage in any business,
development or investment activity other than at
-54-
the RIH Hotel or in conjunction therewith or with the Expansion Project until
the Expansion Project is complete.
SECTION 4.13. Corporate Existence.
-------------------
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Company or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and its Subsidiaries; provided, however, that the Company shall
not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of its Subsidiaries, if the
Board of Directors shall determine that the preservation thereof will not have a
material adverse effect on the ability of the Company to pay the Company
Obligations when due.
SECTION 4.14. Offer to Repurchase upon Change of Control.
------------------------------------------
(a) If a Change of Control occurs, the Company shall be obligated to
make an offer to purchase (the "Change of Control Offer") all or any part of
each Holder's outstanding Notes at a purchase price (the "Change of Control
Payment") in cash equal to 101% of the principal amount thereof plus accrued and
unpaid interest, and Liquidated Damages thereon, if any, to the Change of
Control Purchase Date (as defined below) in accordance with the procedures set
forth below.
(b) Within 30 days following any Change of Control, the Company shall
send by first-class mail, postage prepaid, to the Trustee and to each Holder, at
the address appearing in the register maintained by the Registrar of the Notes,
a notice stating:
(1) a Change of Control has occurred, describing the Change of
Control transaction and that the Change of Control Offer is being made
pursuant to this Section 4.14 and that all Notes tendered shall be
accepted for payment;
(2) the Change of Control Purchase Price and the purchase date
(which shall be a Business Day no later than five days after the
termination of the Change of Control Offer Period (as defined below)
(the "Change of Control Purchase Date"));
(3) that any Note not tendered shall continue to accrue interest;
(4) that, unless the Company defaults in the payment of the
Change of Control Purchase Price, any Notes accepted for payment
pursuant to the Change of Control Offer shall cease to accrue interest
after the Change of Control Purchase Date;
(5) that Holders accepting the offer to have their Notes
purchased pursuant to a Change of Control Offer shall be required to
surrender the Notes, with the form entitled "Option of the Holder to
Elect Purchase" on the reverse of the Note completed, to the Paying
Agent at the address specified in the notice prior to the close of
business on the Business Day preceding the Change of Control Purchase
Date;
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(6) that Holders shall be entitled to withdraw their acceptance
if the Paying Agent receives, not later than the close of business on
the third Business Day preceding the Change of Control Purchase Date,
a telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Notes delivered for
purchase, and a statement that such Holder is withdrawing his election
to have such Notes purchased;
(7) that Holders 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;
(8) any other procedures that a Holder must follow to accept a
Change of Control Offer or effect withdrawal of such acceptance; and
(9) the name and address of the Paying Agent.
(c) On the Change of Control Purchase Date, the Company shall, to
the extent lawful:
(1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer;
(2) 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
(3) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions thereof being purchased by the
Company.
(d) The Paying Agent shall promptly mail to each Holder of Notes so
tendered the Change of Control Purchase Price for such Notes, and the Trustee,
upon receipt of an Authentication Order, shall promptly authenticate and mail
(or cause to be transferred by book entry) to each Holder a new Note equal in
principal amount to any unpurchased portion of the Notes surrendered, if any;
provided that each such new Note shall be in a principal amount of $1,000 or an
integral multiple thereof.
(e) The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Purchase
Date.
(f) The Change of Control Offer will remain open for a period of 20
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "Change of Control Offer
Period"). No later than five Business Days after the termination of the Change
of Control Offer Period, the Company will purchase all Notes tendered in
response to the Change of Control Offer. Payment for any Notes so purchased will
be made in the same manner as interest payments are made. If the Change of
Control Purchase Date is on or after an Interest Record Date and on or before
the related Interest Payment Date, any accrued and unpaid interest will be paid
to the person in whose name a Note is registered at the close of business on
such Re-
-56-
cord Date, and no additional interest will be payable to Holders who tender
Notes pursuant to the Change of Control Offer.
(g) The Company 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 Indenture applicable to a Change of Control Offer made by the
Company and purchases all Notes validly tendered and not withdrawn under such
Change of Control Offer.
(h) The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes in connection with a Change of Control. To the extent that
the provisions of any securities laws or regulations or Gaming Laws conflict
with the Change of Control provisions of this Indenture, the Company shall
comply with the applicable securities laws and regulations or Gaming Laws and
shall not be deemed to have breached its obligations under the Change of Control
provisions of this Indenture by virtue of such compliance.
(i) This Section 4.14 will apply to any transaction that constitutes or
would constitute a Change in Control, notwithstanding that the provisions of
this Indenture may also apply to the transaction.
SECTION 4.15. [Reserved]
SECTION 4.16. Events of Loss.
--------------
(a) In the event of an Event of Loss with respect to any Collateral
with a Fair Market Value (or replacement cost, if greater) in excess of $1.0
million, the Company or the affected Guarantor, as the case may be, may apply
the Net Loss Proceeds from such Event of Loss to the rebuilding, repair,
replacement or construction of improvements to the property affected by such
Event of Loss (the "Subject Property"), with no concurrent obligation to offer
to purchase any of the Notes; provided, however, that the Company delivers to
the Trustee within 90 days of such Event of Loss:
(1) a written opinion from a reputable contractor (as determined
in good faith by the Company) that the Subject Property can be
rebuilt, repaired, replaced or constructed, and operating within 365
days from the date of such certification;
(2) an Officers' Certificate certifying that the Company or the
affected Guarantor has available from Net Loss Proceeds (including
amounts collectible from the applicable insurance carrier) or other
sources sufficient funds to complete the rebuilding, repair,
replacement of construction described in clause (1) above (in the case
of the Expansion Project) or otherwise.
(b) Any Net Loss Proceeds that are not reinvested or not permitted to
be reinvested as provided in subsection (a) of this Section 4.16 shall be deemed
"Excess Loss Proceeds." Within ten days following the date on which the
aggregate amount of Excess Loss Proceeds exceeds $10.0 million (the "Event of
Loss Offer Trigger Date"), the Company shall make an offer (an "Event of Loss
Offer") to all Holders to purchase with the proceeds of Events of Loss the
maximum principal amount of Notes that may be purchased out of the Excess Loss
Proceeds. The offer price in any Event
-57-
of Loss Offer shall be equal to 100% of the principal amount plus accrued and
unpaid interest and Liquidated Damages, if any, to the date of purchase, and
shall be payable in cash. If any Excess Loss Proceeds remain after consummation
of an Event of Loss Offer, the Company may use such Excess Loss Proceeds for any
purpose not otherwise prohibited by this Indenture and the Collateral Documents.
If the aggregate principal amount of Notes tendered pursuant to an Event of Loss
Offer exceeds the Excess Loss Proceeds, the Trustee shall select the Notes to be
purchased on a pro rata basis based on the principal amount of Notes tendered.
Upon completion of any such Event of Loss Offer, the amount of Excess Loss
Proceeds shall be reset at zero.
(c) If the Company is required to make an Event of Loss Offer, the
Company shall mail, within 10 days following the Event of Loss Offer Trigger
Date, an unconditional notice to the Holders. Such notice shall be sent by
first-class mail, postage prepaid, to the Trustee and to each Holder, at the
address appearing in the register maintained by the Registrar of the Notes, and
shall state:
(1) that the Event of Loss Offer is being made pursuant to this
Section 4.16;
(2) that such Holders have the right to require the Company to
apply the Excess Loss Proceeds to repurchase such Notes at a purchase
price in cash equal to 100% of the principal amount thereof plus
accrued and unpaid interest and Liquidated Damages, if any, to the
purchase date which shall be no earlier than 30 days and not later
than 60 days from the date such notice is mailed (the "Excess Loss
Proceeds Payment Date");
(3) that any Note not tendered or accepted for payment shall
continue to accrue interest;
(4) that any Notes accepted for payment pursuant to the Event of
Loss Offer shall cease to accrue interest after the Excess Loss
Proceeds Payment Date;
(5) that Holders accepting the offer to have their Notes
purchased pursuant to an Event of Loss Offer shall be required to
surrender the Notes, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Note completed, to the Paying Agent at
the address specified in the notice prior to the close of business on
the Business Day preceding the Excess Loss Proceeds Payment Date;
(6) that Holders shall be entitled to withdraw their acceptance
of the Event of Loss Offer if the Paying Agent receives, not later
than the close of business on the third Business Day preceding the
Excess Loss Proceeds Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of the Notes delivered for purchase, and a statement
that such Holder is withdrawing his election to have such Notes
purchased;
(7) that if the aggregate principal amount of Notes surrendered
by Holders exceeds the amount of Excess Loss Proceeds, the Company
shall select the Notes to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Company so that only
Notes in denominations of $1,000 or integral multiples thereof, shall
be purchased);
-58-
(8) that Holders 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; provided that each Note purchased
and each such new Note issued shall be in an original principal amount
in denominations of $1,000 and integral multiples thereof;
(9) the calculations used in determining the amount of Excess
Loss Proceeds to be applied to the purchase of such Notes;
(10) any other procedures that a Holder must follow to accept an
Event of Loss Offer or effect withdrawal of such acceptance; and
(11) the name and address of the Paying Agent.
(d) On the Excess Loss Proceeds Payment Date, the Company shall, to the
extent lawful, (1) accept for payment, on a pro rata basis to the extent
necessary, Notes or portions thereof tendered pursuant to the Event of Loss
Offer, (2) deposit with the Paying Agent U.S. legal tender sufficient to pay the
purchase price plus accrued and unpaid interest, if any, on the Notes to be
purchased or portions thereof, (3) deliver or cause to be delivered to the
Trustee Notes so accepted together with an Officers' Certificate stating that
such Notes or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 4.16. The Paying Agent shall promptly
mail to each Holder so accepted payment in an amount equal to the purchase price
for such Notes, and the Company shall execute and issue, and the Trustee shall,
upon receipt of an Authentication Order, authenticate and make available for
delivery to such Holder, a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered; provided that each such new Note shall be
issued in an original principal amount in denominations of $1,000 and integral
multiples thereof. The Company shall publicly announce the results of the Event
of Loss Offer on the Excess Loss Proceeds Payment Date.
(e) Prior to the date on which the Expansion Project is completed, the
Net Loss Proceeds shall, pending their application in accordance with this
Section 4.16 or the release thereof in accordance with Article 11, be deposited
in the Construction Disbursement Account under this Indenture; provided,
however, that any such Net Loss Proceeds will be disbursed in a manner
consistent with the Plans and the Construction Disbursement Budget. All other
Net Loss Proceeds of any Collateral shall, pending their application in
accordance with this Section 4.16 or the release thereof in accordance with
Article 11 be deposited in the Collateral Account.
(f) With respect to any Event of Loss pursuant to clause (3) of the
definition of "Event of Loss" with respect to property that has a Fair Market
Value (or replacement cost, if greater) in excess of $10.0 million, the Company
or the affected Guarantor, as the case may be, shall be required to receive
consideration (i) at least equal to the Fair Market Value of the property
subject to the Event of Loss and (ii) with respect to any Event of Loss of any
portion of the Expansion Project, at least 90% of which is in the form of cash
or Cash Equivalents.
(g) The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws or regulations are applicable in connection with the repurchase
of the Notes as a result of an Event of Loss Offer. To the extent that the
provisions of any applicable securities laws or regulations conflict with the
Event of Loss provisions of this Indenture, the Company shall comply with the
applicable securi-
-59-
ties laws and regulations and shall not be deemed to have breached its
obligations under this Section 4.16 by virtue of such compliance.
SECTION 4.17. [Reserved]
----------
SECTION 4.18. Additional Guarantees.
---------------------
If the Company or any of its Subsidiaries acquires or creates another
Subsidiary after the Issue Date, then that newly acquired or created Subsidiary
must become a Guarantor and, within five Business Days of the date on which it
was acquired or created (except (i) all Subsidiaries that have been properly
designated as Unrestricted Subsidiaries in accordance with this Indenture for so
long as they continue to constitute Unrestricted Subsidiaries and (ii) any
Subsidiary having property with an aggregate Fair Market Value of not more than
$25,000), execute and deliver to the Trustee (A) a supplemental Indenture, (B) a
joinder to the Security Agreement in the form of Exhibit 3 to the Security
Agreement, (C) an Opinion of Counsel and (D) all the Collateral Documents and
other items required pursuant to Section 10.01 relating to such Subsidiary's
property to the extent required by the terms of the Security Agreement.
SECTION 4.19. Maintenance of Properties; Insurance, Books and Records.
-------------------------------------------------------
(a) Subject to, and in compliance with, the provisions of Article 10
and the provisions of the applicable Collateral Documents, the Company shall
cause all material properties used or useful in the conduct of its business or
the business of any of the Subsidiaries to be maintained and kept in operating
condition, repair and working order (ordinary wear and tear and casualty loss
excepted) and supplied with all necessary Equipment and shall cause to be made
all necessary repairs, renewals, replacements, betterments and improvements
thereto; provided, that the Company shall not be obligated to make such repairs,
renewals, replacements, betterments and improvements that would not result in a
material adverse effect on the ability of the Company and the Subsidiaries to
pay the Company Obligations or the Guarantee Obligations when due.
(b) The Company shall maintain, and shall cause the Subsidiaries to
maintain, insurance with responsible carriers against such risks and in such
amounts, and with such deductibles, retentions, self-insured amounts and
co-insurance provisions, as are customarily carried by similar businesses of
similar size in the locations which such business is conducted. Customary
insurance coverage will be deemed to include, without limitation, the following:
(1) workers' compensation insurance to the extent required to
comply with all applicable state, territorial or United States laws
and regulations, or the laws and regulations of any other applicable
jurisdiction;
(2) comprehensive general liability insurance;
(3) umbrella or excess liability insurance providing excess
liability coverages over and above the foregoing underlying insurance
policies;
(4) business interruption insurance at all times, and
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(5) property insurance protecting the property against losses or
damages as is customarily covered by an "all-risk" policy or a
property policy covering "special" causes or loss for a business of
similar type and size; provided, however, that such insurance will
provide coverage of not less than the lesser of (a) 120% of the
outstanding principal amount of the notes plus accrued and unpaid
interest or (b) 100% of actual replacement value (as determined at
each policy renewal based on recognized means) of any improvements
customarily insured consistent with industry standards and, in each
case, with a deductible no greater than 2% or such greater amount as
is available on commercially reasonable terms (other than earthquake
or flood insurance, for which the deductible may be up to 10% of such
replacement value).
(c) All insurance required by this Section 4.19 (except worker's
compensation and property insurance relating to property not constituting
Collateral) will name the Company and the Trustee as additional insureds or loss
payees, as the case may be, with losses in excess of $1.0 million payable
jointly to the Company and the Trustee (unless a Default or Event of Default has
occurred and is then continuing, in which case all losses are payable solely to
the Trustee), with no recourse against the Trustee for the payment of premiums,
deductibles, commissions or club calls, and for at least 30 days' notice of
cancellation.
(d) All such insurance policies will be issued by carriers having an
A.M. Best & Company, Inc. rating of A or higher and a financial size category of
not less than X or, if such carrier is not rated by A.M. Best & Company, Inc.,
having the financial stability and size deemed appropriate by an opinion from a
reputable insurance broker.
(e) The Company will deliver to the Trustee on the Issue Date and each
anniversary thereafter a certificate of an insurance agent describing the
insurance policies obtained by the Company and its Subsidiaries, together with
an Officers' Certificate stating that such policies comply with this Section
4.19 and the related applicable provisions of the Collateral Documents.
(f) The Pledgors shall not purchase separate insurance policies
concurrent in form or contributing in the Event of Loss with the insurance
policies required to be maintained under this Section 4.19 unless the Trustee is
included thereon as an additional insured and, if applicable, with loss payable
to the Trustee under an endorsement containing the provisions described in
Section 4.19(b). The Pledgors shall immediately notify the Trustee in writing
whenever any such separate insurance policy is obtained and shall promptly
deliver to the Mortgagee the insurance policy or Insurance Certificate
evidencing such insurance.
(g) The Pledgors may maintain the coverages required by Section 4.19
under blanket policies covering the Collateral and other locations owned or
operated by the Pledgors or an Affiliate of the Pledgors if the terms of such
blanket policies otherwise comply with the provisions of Section 4.19(b) and
contain specific coverage allocations in respect of the Premises complying with
the provisions of Section 4.19(b).
(h) If there shall occur any Event of Loss that has a Fair Market Value
(or replacement cost, if greater) in excess of $1.0 million, the applicable
Pledgor shall promptly send to the Trustee a written notice setting forth the
nature and extent of such Event of Loss in accordance with the provisions of
Section 11.02.
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SECTION 4.20. Further Assurances.
------------------
(a) The Company shall, and shall cause each of its Subsidiaries to,
execute and deliver such additional instruments, certificates or documents, and
take all such actions as may be reasonably required from time to time in order
to:
(1) carry out more effectively the purposes of the Collateral
Documents;
(2) create, grant, perfect and maintain the validity,
effectiveness and priority of any of the Collateral Documents and the
Liens created, or intended to be created, by the Collateral Documents;
and
(3) ensure the protection and enforcement of any of the rights
granted or intended to be granted to the Trustee under any other
instrument executed in connection therewith.
(b) Upon the exercise by the Trustee or any Holder of any power, right,
privilege or remedy under this Indenture or any of the Collateral Documents
which requires any consent, approval, recording, qualification or authorization
of any governmental authority (including any Gaming Authority), the Company
shall, and shall cause each of its Subsidiaries to, execute and deliver all
applications, certifications, instruments and other documents and papers that
may be required from the Company or any of its Subsidiaries for such
governmental consent, approval, recording, qualification or authorization,
subject to the last paragraph of Section 3.09 hereof.
SECTION 4.21. Sale and Leaseback Transactions.
-------------------------------
The Company shall not, and shall not permit any of its Subsidiaries to,
enter into any Sale and Leaseback Transaction; provided, however, that the
Company or any Subsidiary may enter into a Sale and Leaseback Transaction if:
(1) the Company could have (a) incurred Indebtedness in an amount
equal to the Attributable Debt relating to such Sale and Leaseback
Transaction under the Fixed Charge Coverage Ratio test in Section
4.08(1) and (b) incurred a Lien to secure such Indebtedness under
Section 4.09 hereof;
(2) the gross cash proceeds of that Sale and Leaseback
Transaction are at least equal to the Fair Market Value of the
property that is the subject of that Sale and Leaseback Transaction;
and
(3) the transfer of property in such Sale and Leaseback
Transaction is permitted by, and the Company applies the proceeds of
such transaction in compliance with, Section 4.11 hereof.
The Trustee will receive an Officer's Certificate from the Company with
respect to the satisfaction of the conditions set forth in (1), (2) and (3)
above.
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SECTION 4.22. Deposit of Proceeds of Notes on the Issue Date into the Accounts.
----------------------------------------------------------------
(a) On the Issue Date, the Company shall enter into the Disbursement
Agreement and deposit (or cause to be deposited) into (x) the Construction
Disbursement Account not less than $89.0 million of the net proceeds from the
issuance of the Notes and (y) the Liquidity Disbursement Account the Additional
Equity Contribution.
(b) The Company shall, pursuant to the Disbursement Agreement, grant a
first priority perfected security interest in the Accounts to the Trustee for
its benefit and the benefit of the Holders, in order to secure all monetary
obligations of the Company under the Notes and any other monetary obligation,
now or hereafter arising, of every kind and nature, owed by the Company under
this Indenture to the Holders or to the Trustee for the benefit of the Holders.
(c) Each Holder, by its acceptance of a Note, consents and agrees to
the terms of the Disbursement Agreement (including, without limitation, the
provisions providing for foreclosure and release of funds from the Construction
Disbursement Account) as the same may be in effect or may be amended from time
to time in accordance with its terms, and authorizes and directs the Trustee to
enter into the Disbursement Agreement and to perform its obligations and
exercise its rights thereunder in accordance therewith.
(d) The release of any funds from Construction Disbursement Account
pursuant to the Disbursement Agreement shall not be deemed to impair the
security under this Indenture in contravention of the provisions hereof.
(e) The Trustee, in its sole discretion and without the consent of the
Holders, may take all actions it deems necessary or appropriate in order to (i)
enforce any of the terms of the Disbursement Agreement and (ii) collect and
receive any and all amounts payable in respect of the monetary obligations of
the Company thereunder. The Trustee shall have power to institute and to
maintain such suits and proceedings as the Trustee may deem expedient to
preserve or protect its interests and the interests of the Holders in the
Construction Disbursement Account (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 under the
Disbursement Agreement or be prejudicial to the interest of the Holders or of
the Trustee).
SECTION 4.23. Transactions with Affiliates.
----------------------------
(a) The Company shall not, and shall not permit any of its Subsidiaries
to, make any payment to, or sell, lease, transfer or otherwise dispose of any of
its properties to, or purchase any property from, or enter into or make or amend
any contract, agreement, loan, advance or guarantee with, or for the benefit of,
any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless:
(1) such Affiliate Transaction is on terms that are no less
favorable to the Company or the relevant Subsidiary than those that
would have been obtained in a comparable transaction by the Company or
such Subsidiary with an unrelated person; and
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(2) the Company delivers to the Trustee:
(a) with respect to any Affiliate Transaction entered into after the
Issue Date involving aggregate consideration in excess of $1.0
million, a Board Resolution set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with clause
(a)(1) of this Section 4.23 and that such Affiliate Transaction
has been approved by a majority of the disinterested members of
the Board of Directors; and
(b) with respect to any Affiliate Transaction (x) involving aggregate
consideration in excess of $5.0 million, an opinion as to the
fairness to the Holders of such Affiliate Transaction from a
financial point of view issued by an independent accounting,
appraisal or investment banking firm of national standing.
(b) The following items shall not be deemed to be Affiliate
Transactions and, therefore, shall not be subject to the provisions of the
immediately preceding paragraph:
(1) any employment-related agreement (including noncompetition
and confidentiality agreements) entered into by the Company or any of
its Subsidiaries in the ordinary course of business and consistent
with the past practice of the Company or such Subsidiary;
(2) transactions between or among the Company and/or its Wholly
Owned Subsidiaries;
(3) dividends by the Company or one of its Subsidiaries permitted
by Section 4.07;
(4) reasonable fees and compensation paid to, and indemnity
provided on behalf of, officers, directors, employees, agents or
consultants of the Company or any of its Subsidiaries as determined in
good faith by the Board of Directors of the Company;
(5) any sale or other issuance of Equity Interests (other than
Disqualified Equity Interests) of the Company;
(6) tax sharing agreements with Holdings so long as any payments
made pursuant to such agreements are permitted by Section 4.07(b)(9);
and
(7) registration rights under applicable securities laws under
agreements in effect on the Issue Date and reasonable similar
agreements entered into from time to time after the Issue Date.
In addition to the exceptions set forth in Section 4.23(b), (x) any licensing
agreement relating to intellectual property, any Restricted Payments (other than
dividends) and Permitted Investments need only satisfy the requirements of
Section 4.23(a)(1) and 4.23(2)(a) and (y) payments by the Company or any
Guarantor to Colony Capital, LLC or any of its Affiliates as reimbursement for
all reasonable out-of-pocket expenses actually incurred in connection with its
direct or indirect ownership of the Company or its Subsidiaries and Unrestricted
Subsidiaries or the management, operation, construction, and expansion of the
RIH Hotel need only satisfy the requirements of Section 4.23(a)(1).
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SECTION 4.24. Designation of Restricted and Unrestricted Subsidiaries.
-------------------------------------------------------
(a) The Board of Directors may designate (a "Designation") any
Subsidiary of the Company to be an Unrestricted Subsidiary if such
Designation would not cause a Default. For purposes of making such
determination, all outstanding Investments by the Company and its
Subsidiaries in the Subsidiary so designated will be deemed to be
Restricted Payments at the time of such Designation and will reduce
the amount available for Restricted Payments under Section
4.07(a)(iii) hereof. All such outstanding Investments will be deemed
to constitute Investments in an amount equal to the Fair Market Value
of such Investments at the time of such Designation. Such Designation
will only be permitted if such Restricted Payment would be permitted
at such time and if such Subsidiary otherwise meets the definition of
an Unrestricted Subsidiary. Upon such Designation as an Unrestricted
Subsidiary, such Subsidiary shall no longer constitute a Guarantor or
Pledgor and the Trustee shall, at the written request of the Company
or the Guarantor execute and deliver such documents to confirm the
release of the Subsidiary as a Guarantor and Pledgor (and to release
such Subsidiary from its obligations under the Collateral Documents
and the Registration Rights Agreement).
(b) The amount of all Restricted Payments (other than cash) will
be the Fair Market Value on the date of the Restricted Payment of the
property proposed to be transferred by the Company or such Subsidiary,
as the case may be, pursuant to the Restricted Payment.
(c) Any designation of a Subsidiary of the Company as an
Unrestricted Subsidiary shall be evidenced to the Trustee by filing
with the Trustee a certified copy of the Board Resolution giving
effect to such designation and an Officers' Certificate certifying
that such designation complied with the conditions set forth in the
definition of "Unrestricted Subsidiary" and was permitted by Section
4.07 hereof. If, at any time, any Unrestricted Subsidiary would fail
to meet the conditions for continued designation as an Unrestricted
Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary
for purposes of this Indenture and any Indebtedness of such
Unrestricted Subsidiary shall be deemed to be incurred by a Subsidiary
of the Company as of such date and, if such Indebtedness is not
permitted to be incurred as of such date pursuant to Section 4.08
hereof, the Company shall be in default of such Section 4.08. The
Board of Directors may redesignate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided that such Designation shall be deemed
to be an incurrence of Indebtedness by a Subsidiary and such
Designation will only be permitted if (i) such Indebtedness is
permitted to be incurred under Section 4.08 hereof, and (ii) no
Default or Event of Default would be in existence following such
Designation.
(d) Upon the redesignation of an Unrestricted Subsidiary as a
Subsidiary, such Subsidiary shall execute a supplemental Indenture to
become a Guarantor and shall become a party to all applicable
Collateral Documents.
SECTION 4.25. Expansion Project.
-----------------
(a) Prior to making a change to the Plans relating to the Expansion
Project that is materially different from the minimum facilities ("Minimum
Facilities") set forth below, the Company shall obtain the prior written consent
of the Holders of a majority in principal amount of the notes then outstanding.
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(b) The Minimum Facilities are as follows:
(1) construction of a new hotel tower of at least 26 stories with
not less than 345 rooms of each not less than approximately 510 square
feet and 35 suites of each not less than approximately 900 square
feet;
(2) enlargement of the gaming floor of the casino by not less
than 12,000 square feet; and
(3) relocation and expansion of the existing lobby and porte
cochere areas substantially in accordance with Plans.
(c) The Company shall not implement a change to the Plans that
would cause budgeted construction and development costs to exceed $115.5
million, unless the Company and/or any of its Subsidiaries deposits into the
Construction Disbursement Account the amount of such budgeted excess from
sources other than borrowing under a Revolving Credit Facility pursuant to
clause (1) of the definition of "Permitted Indebtedness."
(d) The Company will cause the construction of the Expansion
Project to be undertaken with reasonable diligence and continuity.
ARTICLE 5
SUCCESSORS
SECTION 5.01. Merger, Consolidation or Sale of Assets.
---------------------------------------
The Company shall not, directly or indirectly, in a single
transaction or series of related transactions: (x) consolidate or merge with or
into another person ; or (y) sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of the properties of the Company and its
Subsidiaries taken as a whole, in one or more related transactions, to another
person, unless:
(1) the Company is the surviving corporation, or the entity or
the person formed by or surviving any such consolidation or merger (if
other than the Company) or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made (such
surviving corporation, entity or transferee person, the "Surviving
Entity"), is a corporation, limited liability company or partnership
organized or existing under the laws of the United States, any state
thereof or the District of Columbia;
(2) the Surviving Entity assumes all the obligations of the
Company under the Notes, this Indenture and the Collateral Documents
pursuant to a supplemental indenture in a form reasonably satisfactory
to the Trustee;
(3) the Surviving Entity causes such amendments, supplements or
other instruments to be filed and recorded in such jurisdictions as
may be required by applicable law to preserve and protect the Lien of
the Collateral Documents on the Collateral owned by or transferred to
the Surviving Entity, together with such financing statements as may
be required to
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perfect any security interests in such Collateral which may be perfected by the
filing of a financing statement under the UCC of the relevant states;
(4) the Collateral owned by or transferred to the Surviving
Entity shall:
(a) continue to constitute Collateral under this Indenture and the
Collateral Documents,
(b) be subject to the Lien in favor of the Trustee for the benefit of
the Holders of the Notes, and
(c) not be subject to any Lien other than Permitted Liens;
(5) the property of the person which is merged or consolidated
with or into the Surviving Entity, to the extent that it is property
of the type which would constitute Collateral under the Collateral
Documents, shall be treated as After-Acquired Property and the
Surviving Entity shall take such action as may be reasonably necessary
to cause such property to be made subject to the Lien of the
Collateral Documents in the manner and to the extent required in this
Indenture;
(6) immediately after giving pro forma effect to such
transaction, no Default or Event of Default exists;
(7) the Company or the person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such
sale, assignment, transfer, lease, conveyance or other disposition
shall have been made will, 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, be permitted to
incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 4.08; provided that this clause (7)
shall not be applicable if the sole purpose of such transaction (as
determined by the Board of Directors of the Company evidenced by a
Board Resolution) is to change the state of incorporation of the
Company and such person (if other than the Company) is, prior to such
transaction, a "shell" person formed solely for the purpose of such
transaction;
(8) immediately after such transaction, the Company or the
Surviving Entity, as applicable, holds all permits required for
operation of the business of, and such entity is controlled by a
person or entity (or has retained a person or entity which is)
experienced in, operating casino hotels or otherwise holds all permits
(including those required from Gaming Authorities) to operate its
business; and
(9) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel addressed to the Trustee, each
stating that such consolidation, merger, sale, assignment, transfer,
lease, conveyance or disposition and such supplemental indenture, if
any, comply with this Indenture and that such supplemental indenture
is enforceable.
SECTION 5.02. Successor Corporation Substituted for the Company.
-------------------------------------------------
Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the property of the Company in accordance with
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Section 5.01 hereof, the successor person formed by such consolidation or into
which the Company is merged or to which such sale, assignment, transfer, lease,
conveyance or other disposition is made shall succeed to, and be substituted for
(so that from and after the date of such consolidation, merger, sale, lease,
conveyance or other disposition, the provisions of this Indenture referring to
the "Company" or the "Subsidiary" shall refer instead to the successor
corporation and not to the Company or the Subsidiary), and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor person had been named as the Company, except in the case of a
lease, the predecessor person shall be relieved of all obligations and covenants
under the Notes and this Indenture and the Collateral Documents.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.
-----------------
An "Event of Default" wherever used herein means any one of the
following events:
(1) default for 30 days in the payment when due of interest on,
or Liquidated Damages, if any, with respect to, the Notes;
(2) default in payment when due of the principal of or premium,
if any, on the Notes;
(3) (a) default in the payment of principal of, premium, if any,
and interest, or Liquidated Damages, if any, on Notes required to be
purchased with respect to a Change of Control Offer, Asset Sale Offer
or Event of Loss Offer, when such payment would be due and payable
under the provisions of this Indenture; and (b) failure to perform or
comply with the provisions of Section 5.01 or Section 4.07 hereof but
only if the failure to comply with Section 4.07 is not able to be
cured and is caused by a Restricted Payment described in clauses (1)
through (3) of the paragraph (a) of such Section 4.07;
(4) failure by (a) the Company or any of the Guarantors for 45
days after notice thereof given as described below to comply with any
of the other agreements in this Indenture, the Notes or the Guarantees
not set forth in clause (3) above or (b) the Company or any of the
Guarantors for 30 days after notice thereof given as described below
to comply with any of the agreements in the Disbursement Agreement or
any other Collateral Document;
(5) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or
evidenced any Indebtedness of the Company or any of its Subsidiaries
(or the payment of which is guaranteed by the Company or any of its
Subsidiaries), whether such Indebtedness or guarantee now exists or is
created after the Issue Date, which default:
(a) is caused by a failure to pay principal of such Indebtedness at
final maturity (a "Payment Default"), or
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(b) results in the acceleration of such Indebtedness prior to its
final maturity,
and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of which
has been so accelerated, aggregates $5.0 million or more;
(6) failure by the Company, any Guarantor or any of the Company's
Significant Subsidiaries to pay final judgments aggregating in excess
of $5.0 million, which judgments are not paid, discharged or stayed
for a period of 60 days (net of applicable insurance coverage which is
acknowledged in writing by the insurer);
(7) failure by the Company or any Guarantor for 60 days following
notice thereof to be in material compliance with any representation or
warranty in any material respect in the Collateral Documents or in any
certificates delivered in connection therewith, the repudiation by the
Company or any Guarantor of any of its obligations under the
Collateral Documents or the unenforceability or invalidity of the
Collateral Documents against the Company or any Guarantor for any
reason;
(8) any revocation, suspension, expiration without any previous
or concurrent renewal, or loss of any Gaming License (other than a
liquor license) of the Company or any of its Subsidiaries (other than
any voluntary relinquishment of any such Gaming License if such
relinquishment, in the reasonable good faith judgment of the Board of
Directors of the Company, evidenced by a Board Resolution, is both
desirable in the conduct of the business of the Company and its
Subsidiaries, taken as a whole, and would not in any material respect
reasonably be expected to impair the Company's ability to pay
principal of and interest on the Notes or to materially impair the
value of the Collateral) that results in the cessation or suspension
for a period of more than 90 consecutive days of any material gaming
operations of the Company or any Subsidiary;
(9) the cessation or suspension of any material gaming operations
of the Company or any of its Subsidiaries, taken as a whole, for more
than 90 consecutive days (other than as a result of a casualty loss or
if the Company or one of its Subsidiaries has received the proceeds of
its business interruption insurance until such proceeds have been
expended);
(10) except as permitted by this Indenture, any Guarantee is held
in any judicial proceeding to be unenforceable or invalid or ceases
for any reason to be in full force and effect or any Guarantor, or any
person acting on behalf of any Guarantor, denies or disaffirms its
obligations under its Guarantee;
(11) the Company or any of its Significant Subsidiaries or any
group of Subsidiaries that, taken together, would constitute a
Significant Subsidiary pursuant to or within the meaning of any
Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it in an
involuntary case,
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(c) consents to the appointment of a Custodian of it or for all or
substantially all of its property,
(d) makes a general assignment for the benefit of its creditors, or
(e) generally is not paying its debts as they become due; or
(12) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(a) is for relief against the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken together,
would constitute a Significant Subsidiary in an involuntary case,
(b) appoints a Custodian of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken together,
would constitute a Significant Subsidiary or for all or
substantially all of the property of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken
together, would constitute a Significant Subsidiary, or
(c) orders the liquidation of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken together,
would constitute a Significant Subsidiary,
and such order or decree remains unstayed and in effect for 60
consecutive days.
The term "Bankruptcy Law" means the Bankruptcy Code or any
similar federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
SECTION 6.02. Acceleration.
------------
If an Event of Default (other than an Event of Default specified
in clauses (11) and (12) of Section 6.01 relating to the Company or any Gaming
Subsidiary occurs and is continuing, the Trustee by notice to the Company, or
the Holders of at least 25% in principal amount of the then outstanding Notes by
written notice to the Company and the Trustee may declare the unpaid principal,
premium, if any, of and any accrued interest on all the Notes to be due and
payable. Upon such declaration the principal, premium, if any, and interest
shall be due and payable immediately (together with the premium referred to in
Section 6.02, if applicable). If any Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default arising under
clauses (11) or (12) of Section 6.01 with respect to the Company or any Gaming
Subsidiary, all outstanding Notes will become due and payable without further
action or notice.
If an Event of Default occurs by reason of any willful action (or
inaction) taken (or not taken) by or on behalf of the Company with the intention
of avoiding payment of the premium that the Company would have had to pay if the
Company then had elected to redeem the Notes pursuant to Section 3.07 hereof,
then, upon acceleration of the Notes, an equivalent premium shall also become
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and be immediately due and payable, to the extent permitted by law, anything in
this Indenture or in the Notes to the contrary notwithstanding; provided that,
if such Event of Default occurs prior to March 15, 2007, such premium (expressed
as a percentage of principal amount of the Notes) shall equal the interest rate
then borne by the Notes.
SECTION 6.03. Other Remedies.
--------------
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy, including, without limitation, foreclosure on the
Collateral, to collect the payment of principal, premium, if any, and interest
and Liquidated Damages, if any, on the Notes or to enforce the performance of
any provision of the Notes, this Indenture or the Collateral Documents.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 6.04. Waiver of Past Defaults.
-----------------------
Holders of not less than a majority in aggregate principal amount
of the then outstanding Notes by written to the Trustee may on behalf of the
Holders of all of the Notes waive any existing Default or Event of Default and
its consequences hereunder and under the Notes, the Guarantees and the
Collateral Documents, except a continuing Default or Event of Default in the
payment of the principal of, premium or interest, and Liquidated Damages, if
any, on the Notes (including in connection with an offer to purchase) or in
respect of a covenant or provision hereof which under Article 9 cannot be
modified or amended without the consent of the Holder of each outstanding Note
affected. Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
SECTION 6.05. Control by Majority.
-------------------
Holders of a majority in principal amount of the then outstanding
Notes may direct, in writing, 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 the Trustee. 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 or any cost, loss or expense and such
Holders have not agreed to indemnify the Trustee.
SECTION 6.06. Limitation on Suits.
-------------------
A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
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(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as
Trustee hereunder to pursue the remedy;
(c) such Holder or Holders offer and, if requested, provide to
the Trustee indemnity satisfactory to the Trustee against any cost,
loss, liability or expense;
(d) the Trustee does not comply with such 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 such request.
A Holder of a Note may not use this Indenture or the Collateral Documents to
prejudice the rights of another Holder of a Note or to obtain a preference or
priority over another Holder of a Note.
SECTION 6.07. 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, premium and interest on
the Note, and Liquidated Damages, if any, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder;
provided that a Holder shall not have the right to institute any such suit for
the enforcement of payment if and to the extent that the institution or
prosecution thereof or the entry of judgment therein would, under applicable
law, result in the surrender, impairment, waiver or loss of the Lien of this
Indenture and the Collateral Documents upon any of the Collateral.
SECTION 6.08. Collection Suit by Trustee.
--------------------------
If an Event of Default specified in Section 6.01(1) or (2) occurs
and is continuing, the Trustee is authorized to recover judgment in its own name
and as trustee of an express trust against the Company for the whole amount of
principal of and premium and interest and Liquidated Damages, if any, remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
--------------------------------
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company (or any
other obligor upon the Notes), its creditors or its property and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly
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to the Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To
the extent that the payment of any such compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 7.07 hereof out of the estate in any such proceeding,
shall be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other properties that the Holders may be entitled to receive in
such proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. Priorities.
----------
If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for all amounts
due under Section 7.07 hereof, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the
Trustee and the costs and expenses of collection;
Second: to Holders for amounts due and unpaid on the Notes for
principal and interest, and Liquidated Damages, if any, ratably,
without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal, premium and interest and
Liquidated Damages, if any, respectively; and
Third: to the Company 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 pursuant to this Section 6.10.
SECTION 6.11. Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder for the
enforcement of the payment of the principal of (or premium, if any) or interest
on any Note on or after the respective maturity or payment dates expressed in
such Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10%
in principal amount of the then outstanding Notes.
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ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee.
-----------------
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
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 Collateral Documents and
the Trustee need perform only those duties that are specifically set
forth in this Indenture and the Collateral Documents and no others,
and no implied covenants or obligations shall be read into this
Indenture or the Collateral Documents against the Trustee; and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture or the Collateral Documents. However, the Trustee shall
examine such certificates and opinions to determine whether or not they
conform to the requirements of this Indenture or the Collateral
Documents.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof, for any consequential
or punitive damages or in exercising any trust or power conferred upon
the Trustee under this Indenture.
(d) Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to this
Section 7.01 and Section 7.02.
(e) No provision of this Indenture or the Collateral Documents
shall require the Trustee to expend or risk its own funds or incur any
liability. The Trustee shall be under no obligation to exercise any of its
rights and powers under this Indenture or the Collateral Documents at the
request
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of any Holders, unless such Holder shall have offered to the Trustee 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 Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.02. Rights of Trustee.
-----------------
(a) In connection with the Trustee's rights and duties under this
Indenture or the Collateral Documents, the Trustee may conclusively rely upon
and shall be protected from acting or refraining from acting upon any document
or instrument 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 under this
Indenture or the Collateral Documents, it may require an Officers' Certificate
or an Opinion of Counsel or both. The Trustee shall not be liable for any action
it takes or omits to take in good faith in reliance on such Officers'
Certificate or Opinion of Counsel. The Trustee may consult with counsel and the
written advice of such counsel or any Opinion of Counsel shall be fully
authorized and protected from liability in respect of any action taken, suffered
or omitted by it hereunder or pursuant to the Collateral Documents in good faith
and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture or the Collateral
Documents.
(e) Unless otherwise specifically provided in this Indenture or
the Collateral Documents, any demand, request, direction or notice from the
Company shall be sufficient if signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture or the Collateral Documents
at the request or direction of any of the Holders unless such Holders shall have
offered to the Trustee security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction in writing.
(g) Except with respect to Section 4.01 hereof, the Trustee shall
have no duty to inquire as to the performance of the Company's covenants in
Article 4 hereof. 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 6.01(1), 6.01(2) and 4.01 or (ii) any Default or Event of
Default of which the Trustee shall have received written notification in
accordance with the terms of this Indenture or obtained actual knowledge.
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(h) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any Board Resolution, Officer's Certificate,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document, but the Trustee may, in its discretion, 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.
(i) To the extent any provisions of the Collateral Documents
conflict with or are silent with respect to the matters set forth in this
Article 7, this Article 7 shall be controlling.
(j) The rights, privileges, protections, immunities and benefits
given to the Trustee, including without limitation, its rights to be
indemnified, are extended to, and shall be enforceable by the Trustee in each of
its capacities hereunder, and to each agent, custodian and other person employed
to act hereunder.
SECTION 7.03. Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company 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 and duties. The Trustee is also subject to Sections
7.10 and 7.11 hereof.
SECTION 7.04. Trustee's Disclaimer.
--------------------
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes or
any of the Collateral Documents, it shall not be accountable for the Company's
use of the proceeds from the Notes or any money paid to the Company or upon the
Company's direction under any provision of this Indenture, 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 (including, without limitation, the Offering
Memorandum) or pursuant to this Indenture or the Collateral Documents other than
its certificate of authentication.
SECTION 7.05. Notice of Defaults.
------------------
If a Default or Event of Default occurs and is continuing and if
it is known to the Trustee, the Trustee shall mail to 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 a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders.
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SECTION 7.06. Reports by Trustee to Holders.
-----------------------------
Within 60 days after each May 15 beginning with the May 15
following the Issue Date, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders a brief report dated as of such reporting date
that complies with TIA ss. 313(a) (but if no event described in TIA ss. 313(a)
has occurred within the twelve months preceding the reporting date, no report
need be transmitted). The Trustee also shall comply with TIA ss. 313(b)(2). The
Trustee shall also transmit by mail all reports as required by TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders
shall be mailed to the Company and filed with the SEC and each stock exchange on
which the Notes are listed in accordance with TIA ss. 313(d). The Company shall
promptly notify the Trustee in writing when the Notes are listed on any stock
exchange.
SECTION 7.07. Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and the Collateral Documents
and services rendered by it hereunder and thereunder. The Trustee's compensation
shall not be limited by any law in regard to the law of compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
The Company shall indemnify the Trustee and in its other
capacities as provided herein and in the Collateral Documents and its officers,
directors, employees, agents and affiliates against any and all losses,
liabilities or expenses (including reasonable attorneys' fees) incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, the Collateral Documents and any landlord waiver or
consent, including the costs and expenses of enforcing this Indenture against
the Company (including this Section 7.07) and defending itself against any claim
(whether asserted by the Company or any Holder or any other person) or liability
in connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be
attributable to its negligence or bad faith. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder, under the Collateral Documents or under any landlord
waiver or consent. The Company shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need not
pay for any settlement made without its prior written consent, which consent
shall not be unreasonably withheld.
The obligations of the Company under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture and the termination of
any Collateral Document.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money and property held or
collected by the Trustee, except money held in trust to pay principal, premium,
if any, and interest on particular Notes. Such Lien shall survive the
satisfaction and discharge of this Indenture and the termination of any
Collateral Documents.
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When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(11) or 6.01(12) hereof occurs, the
expenses and the compensation for the services (including the fees and expenses
of its agents and counsel) are intended to constitute expenses of administration
under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2)
to the extent applicable.
SECTION 7.08. 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.
The Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Company. The Holders of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or
its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
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
Company.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company,
or the Holders of at least 10% in principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder who has been
a Holder for at least six months, fails to comply with Section 7.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers, trusts and duties of the
retiring Trustee under this Indenture. The successor Trustee shall mail a notice
of its succession to Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, provided all sums owing
to the Trustee hereunder have been paid and subject to the Lien pro-
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vided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
hereof shall continue for the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, etc.
--------------------------------
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 7.10. Eligibility; Disqualification.
-----------------------------
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trust power, that is subject to supervision or examination by federal
or state authorities and that has a combined capital and surplus of at least
$100,000,000 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 ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
SECTION 7.11. Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
SECTION 7.12. Force Majeure.
-------------
In no event shall the Trustee, in each of its capacities
hereunder or under the Collateral Documents, be liable for any failure or delay
in the performance of its obligations hereunder or thereunder because of
circumstances beyond its control , including, but not limited to, acts of God,
flood, war (whether declared or undeclared), terrorism, fire, riot, embargo and
government action, including any laws, ordinances, regulations or the like which
restrict or prohibit the providing of services or obligations contemplated by
this Indenture or the Collateral Documents.
ARTICLE 8
DISCHARGE OF INDENTURE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. Satisfaction and Discharge.
--------------------------
This Indenture shall be discharged and shall cease to be of
further effect (except as to surviving rights or registration of transfer or
exchange of Notes) as to all outstanding Notes when either:
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(a) all Notes theretofore authenticated and delivered (except
lost, stolen or destroyed Notes which have been replaced or paid and
Notes for whose payment money has theretofore been deposited in trust
or segregated and held in trust by the Company and thereafter repaid
to the Company or discharged from such trust) have been delivered to
the Trustee for cancellation; or
(b) (i) all such Notes not theretofore delivered to the Trustee
for cancellation have or will (upon the mailing of a notice or notices
deposited with the Trustee together with irrevocable instructions to
mail such notice or notices to Holders of the Notes) become due and
payable and the Company has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in the trust for the purpose
an amount of money sufficient to pay and discharge the entire
Indebtedness of the Notes not theretofore delivered to the Trustee for
cancellation, for principal, premium, if any, and accrued interest to
the date of such deposit; (ii) the Company has paid all sums payable
by it under this Indenture; and (iii) the Company has delivered
irrevocable instructions to the Trustee to apply the deposited money
toward the payment of the Notes at maturity or the Redemption Date, as
the case may be.
In addition, the Company must deliver an Officers' Certificate and an Opinion of
Counsel stating that all conditions precedent to satisfaction and discharge have
been complied with.
Notwithstanding the foregoing paragraphs, the Company's
obligations in Article 2 and in Sections 4.01, 4.02, 7.07, 7.08, 8.07 and 8.08
shall survive until the Notes are no longer outstanding. After the Notes are no
longer outstanding, the Company's obligations in Sections 7.07, 8.07 and 8.08
shall survive.
After such delivery or irrevocable deposit the Trustee upon
request shall acknowledge in writing the discharge of the Company's obligations
under the Notes, the Guarantees and this Indenture except for those surviving
obligations specified above.
SECTION 8.02 Option to Effect Legal Defeasance or Covenant Defeasance.
--------------------------------------------------------
The Company may, at the option of its Board of Directors
evidenced by a Board Resolution set forth in an Officers' Certificate, at any
time, elect to have either Section 8.03 or 8.04 hereof be applied to all
outstanding Notes upon compliance with the conditions set forth below in this
Article 8.
SECTION 8.03. Legal Defeasance and Discharge.
------------------------------
Upon the Company's exercise under Section 8.02 hereof of the
option applicable to this Section 8.03, the Company and the Guarantors shall,
subject to the satisfaction of the conditions set forth in Section 8.05 hereof,
be deemed to have been discharged from their obligations with respect to all
outstanding Notes on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means that
the Company and the Guarantors shall be deemed to have paid and discharged the
entire Indebtedness represented by the outstanding Notes, which shall thereafter
be deemed to be "outstanding" only for the purposes of Section 8.06 hereof and
the other Sections of this Indenture referred to in (1) and (2) below, and to
have satisfied all their other obligations under such Notes and this Indenture
(and the Trustee, on written demand of and at the expense of the Company, shall
execute proper instruments acknowledging the same), except for the fol-
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lowing provisions which shall survive until otherwise terminated or discharged
hereunder: (1) the rights of Holders of outstanding Notes to receive solely from
the trust fund described in Section 8.05 hereof, and as more fully set forth in
such Section, payments in respect of the principal of, premium, and interest, if
any, and Liquidated Damages, if any, on such Notes when such payments are due,
(2) the Company's obligations with respect to such Notes under Article 2 and
Section 4.02 hereof, (3) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and the Company's obligations in connection therewith and
(4) this Article 8. Subject to compliance with this Article 8, the Company may
exercise its option under this Section 8.03 notwithstanding the prior exercise
of its option under Section 8.04 hereof.
SECTION 8.04. Covenant Defeasance.
-------------------
Upon the Company's exercise under Section 8.02 hereof of the
option applicable to this Section 8.04, the Company and the Guarantors shall,
subject to the satisfaction of the conditions set forth in Section 8.05 hereof,
be released from their obligations under the covenants contained in Sections
4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13 (other than clause (i) as it
pertains to the Company), 4.14, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20, 4.21, 4.22,
4.23, 4.24, 4.25 and 4.26, Article 5 hereof and Section 12.03 hereof with
respect to the outstanding Notes 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 (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes,
the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.01 hereof, but,
except as specified above, the remainder of this Indenture and such Notes shall
be unaffected thereby. In addition, upon the Company's exercise under Section
8.02 hereof of the option applicable to this Section 8.04 hereof, subject to the
satisfaction of the conditions set forth in Section 8.05 hereof, the events set
forth in Sections 6.01(3) through 6.01(10) hereof shall not constitute Events of
Default.
SECTION 8.05. Conditions to Legal or Covenant Defeasance.
------------------------------------------
The following shall be the conditions to the application of
either Section 8.03 or 8.04 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant
Defeasance:
(1) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in United States dollars,
non-callable Government Securities, or a combination thereof, in such
amounts as shall be sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay the
principal of, premium, if any, and interest and Liquidated Damages, if
any, on the outstanding Notes on the stated maturity thereof or on the
applicable Redemption Date, as the case may be, and the Company must
specify whether the Notes are being defeased to maturity or to a
particular Redemption Date;
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(2) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in
the United States reasonably acceptable to the Trustee confirming that
(a) the Company has 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 of the outstanding Notes shall not
recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and shall 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;
(3) in the case of an election under Section 8.04 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in
the United States reasonably acceptable to the Trustee confirming that
the Holders of the outstanding Notes shall not recognize income, gain
or loss for federal income tax purposes as a result of such Covenant
Defeasance and shall 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;
(4) such Legal Defeasance or Covenant Defeasance shall not result
in a breach or violation of, or constitute a default under, any
material agreement or instrument (other than this Indenture, the
Notes, the Subsidiary Guarantees and the Registration Rights
Agreement) to which the Company or any of its Subsidiaries is a party
or by which the Company or any of its Subsidiaries is bound;
(5) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that, after the 123rd day following the deposit,
the trust funds shall not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;
(6) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders over any other creditors of the
Company or with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Company; and
(7) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel (subject to customary
assumptions and exceptions), each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
SECTION 8.06. Deposited Money and Government Securities to Be Held in Trust;
Other Miscellaneous Provisions.
-------------------------------------------------------------
Subject to Section 8.07 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.06, the "Trustee") pursuant to Section 8.05 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of
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all sums due and to become due thereon in respect of principal, premium, if any,
and interest, but such money need not be segregated from other funds, except to
the extent required by law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.05 hereof or the principal
and interest received in respect thereof.
Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the written
request of the Company any money or non-callable Government Securities held by
it as provided in Section 8.05 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.05(1) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
SECTION 8.07. Repayment to Company.
--------------------
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of or premium or
interest or Liquidated Damages, if any, on any Note and remaining unclaimed for
two years after such principal, and premium, if any, Liquidated Damages, if any,
or interest has become due and payable shall be paid to the Company on its
written request or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Note shall thereafter, as a creditor, look only to
the Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may (but
shall not be obligated to) at the expense of the Company cause to be published
once, in The New York Times and The Wall Street Journal (national edition),
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such notification
or publication, any unclaimed balance of such money then remaining shall be
repaid to the Company.
SECTION 8.08. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with Section
8.03 or 8.04 hereof, as the case may be, by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.03 or 8.04 hereof until such time as the Trustee
or Paying Agent is permitted to apply all such money in accordance with Section
8.03 or 8.04 hereof, as the case may be; provided, however, that, if the Company
makes any payment of principal of, premium, if any, or interest on any Note
following the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the
money held by the Trustee or Paying Agent.
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ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. Without Consent of Holders.
---------------------------
Notwithstanding Section 9.02 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture, the Notes or the Guarantees
without the consent of any Holder to:
(a) cure any ambiguity, defect or inconsistency;
(b) provide for uncertificated Notes in addition to or in place of
certificated Notes;
(c) comply with any rules of the Depository;
(d) provide for the assumption of the Company's or any Guarantor's
obligations to the Holders in the case of a merger or consolidation or a
sale of all or substantially all of the Company's or any Guarantor's
property pursuant to Article 5 or Article 12 hereof;
(e) provide for additional Guarantors as set forth in Section 4.18 or
to provide for the release of a Guarantor pursuant to Section 12.03;
(f) make any change that would provide any additional rights or
benefits to the Holders or that does not adversely affect the rights
hereunder of any Holder; or
(g) comply with requirements of the SEC in order to effect or maintain
the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any such amended or supplemental Indenture, and
upon written receipt by the Trustee of the documents described in Section 7.02
hereof, the Trustee shall join with the Company in the execution of any amended
or supplemental Indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into such
amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.02. With Consent of Holders.
-----------------------
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture, the Guarantees, the Collateral
Documents and the Notes with the consent of the Holders of at least a majority
in aggregate principal amount of the Notes then outstanding (including consents
obtained in connection with a tender offer or exchange offer for the Notes),
and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of
Default or compliance with any provision of this Indenture, the Guarantees, the
Collateral Documents or the Notes 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
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the Notes). However, without the consent of each Holder affected, an amendment
or waiver may not (with respect to any Notes held by a non-consenting Holder):
(1) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver of this Indenture, the Notes, the
Guarantees, the Registration Rights Agreement or the Collateral Documents;
(2) reduce the principal of or change the fixed maturity of any Note
or alter the provisions with respect to the redemption of the Notes (other
than provisions relating to Sections 4.11, 4.14 and 4.16);
(3) reduce the rate of or change the time for payment of interest on
any Note;
(4) waive a Default or Event of Default in the payment of principal
of, or interest or premium or Liquidated Damages, if any, on the Notes
(except a rescission of acceleration of the Notes by the Holders of at
least a majority in aggregate principal amount of the Notes and a waiver of
the payment Default that resulted from such acceleration in accordance with
the provisions of Article 6);
(5) make any Note payable in money other than that stated in the
Notes;
(6) make any change in the provisions of this Indenture, the Notes,
the Guarantees or the Collateral Documents relating to waivers of past
Defaults or the rights of Holders to receive payments of principal of or
interest or premium or Liquidated Damages, if any, on the Notes;
(7) waive a redemption payment with respect to any Note (other than a
payment required by Sections 3.07);
(8) following an event or circumstances which may give rise to the
requirement to make an offer as required by Sections 4.11, 4.14 or 4.16 of
this Indenture, modify the provisions of such sections (or a related
definition) of this Indenture requiring the Company to make an offer to
purchase in a manner materially adverse to the Holders affected thereby; or
(9) release any Guarantor from any of its obligations under its
Guarantee or this Indenture, except as provided in Section 4.24;
(10) make any change in the preceding amendment and waiver provisions.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment or waiver,
but it shall be sufficient if such consent approves the substance thereof.
In addition to the foregoing and except as provided under
Article 11 no portion of the Collateral may be released from the Lien of the
Collateral Documents without the consent of the Holders of at least 75% in
aggregate principal amount of the then outstanding Notes.
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SECTION 9.03. Compliance with Trust Indenture Act.
------------------------------------
Every amendment or supplement to this Indenture or the Notes shall be
set forth in a amended or supplemental Indenture that complies with the TIA as
then in effect.
SECTION 9.04. Revocation and Effect of Consents.
---------------------------------
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 9.05. Notation on or Exchange of Notes.
--------------------------------
The Trustee may (but shall not be obligated to) place an appropriate
notation about an amendment, supplement or waiver on any Note thereafter
authenticated. The Company in exchange for all Notes may issue and the Trustee
upon receipt of an Authentication Order, shall authenticate new Notes that
reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. Trustee to Sign Amendments, etc.
-------------------------------
The Trustee shall sign any amended or supplemental Indenture or
Collateral Document authorized pursuant to this Article 9 if the amendment or
supplement does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. The Company may not sign an amendment or supplemental
Indenture or Collateral Document until the Board of Directors approves it. In
executing any amended or supplemental indenture, the Trustee shall be entitled
to receive indemnity reasonably satisfactory to it and to receive and (subject
to Section 7.01) shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel stating that the execution of such amended
or supplemental Indenture or Collateral Document is authorized or permitted by
this Indenture.
ARTICLE 10
COLLATERAL
SECTION 10.01. Collateral Documents; Additional Collateral; Substitute
-------------------------------------------------------
Collateral.
-----------
(a) Collateral Documents. In order to secure the due and punctual
payment of the principal or premium, if any, and interest and Liquidated
Damages, if any, on the Notes when and as the same shall be due and payable,
whether on an Interest Payment Date, at maturity, on any Asset Sale Offer
Payment Date, Excess Loss Proceeds Payment Date or Change of Control Purchase
Date, or by acceleration, redemption or otherwise, and interest on the overdue
principal of and (to the extent
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permitted by law) interest and Liquidated Damages, if any, on the Notes and the
performance of all other obligations of the Company and the Guarantors to the
Holders or the Trustee under this Indenture, the Notes, the Guarantees, and any
other documents contemplated hereby, as the case may be, the Company, the
Guarantors and the Trustee, as applicable, have simultaneously with the
execution of this Indenture entered into the Collateral Documents to create the
security interests and for related matters. The Trustee, the Company and the
Guarantors each hereby agree that the Trustee holds its interest in the
Collateral in trust for its benefit and for the benefit of the Holders pursuant
to the terms of the Collateral Documents. Each of the Company and the Guarantors
covenants and agrees that it shall execute, acknowledge and deliver to the
Trustee such further assignments, transfers, assurances or other instruments and
shall do or cause to be done all such acts and things as may be necessary or
proper to assure and confirm to the Trustee its interest in the Collateral, or
any part thereof, as from time to time constituted, and the right, title and
interest in and to the Collateral Documents so as to render the same available
for the security and benefit of this Indenture and of the Notes.
(b) Additional Collateral. As soon as practicable following with the
---------------------
acquisition by the Company or ny Subsidiary of any property of the type which
constitutes Collateral, to the extent not prohibited by Gaming Authorities or
applicable Gaming Laws:
(i) the Company or the applicable Guarantor, as the case may be, and
the Trustee shall enter into such amendments or supplements to the
Collateral Documents or such additional Mortgages (in each case in
registrable or recordable form) and other Collateral Documents, in each
case in accordance with the terms thereof and subject to any exclusions
relating to a particular item of Collateral, and the Company shall cause
such amendments, supplements, mortgages and other Collateral Documents to
be filed and recorded in all such governmental offices as shall be
necessary in order to grant and create a valid first priority Lien on and
security interest in such After-Acquired Property in favor of the Trustee
(subject to no Liens except Permitted Liens), the Company shall cause
appropriate financing statements to be filed in such governmental offices
as shall be reasonably necessary in order to perfect any security interest
in such After-Acquired Property as to which a security interest may, under
the UCC of the applicable jurisdiction, be perfected by the filing of a
financing statement and, if any such After-Acquired Property consists of
stock certificates, promissory notes or other property as to which, under
the relevant UCC, a security interest may be perfected by possession or
control, deliver such certificates, promissory notes and other property
(together with stock powers or assignments duly endorsed in blank), or
deliver issuer acknowledgments and control agreements relating to such
property in accordance with the provisions of the applicable Collateral
Documents to the Trustee;
(ii) [Reserved]
(iii) in the case of additional Collateral which constitutes Real
Property having a Fair Market Value in excess of $1.0 million, the Company
or the applicable Guarantor, as the case may be, shall also deliver to the
Trustee the following:
(A) a title insurance policy or an endorsement to an existing title
insurance policy, in the American Land Title Insurance Loan Policy
Extended Coverage form, or its equivalent, and in an amount at least
equal to the purchase price thereof (or, if such property was not
purchased or such purchase price cannot be determined by the Company,
the Fair Market Value thereof), in favor of the Trustee insuring that
the Lien of the Collat
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eral Documents or any additional Collateral Documents constitutes a
valid and perfected Lien, subject to no Liens except Permitted Liens,
on such Real Property in an aggregate amount equal to the purchase
price or the Fair Market Value, as applicable, of the Real Property
and containing such endorsements and other assurances of the type
reasonably acceptable to the Trustee, together with an Officers'
Certificate stating that any Liens on such Real Property are Liens
expressly permitted by this Indenture and the applicable Collateral
Documents;
(B) any Opinion of Counsel required pursuant to Section 10.02(b)
below;
(C) a Survey with respect to such Real Property;
(D) a policy or certificate of insurance as required by any Mortgage
relating to such Real Property, which policy or certificate shall
bear mortgagee endorsements of the character required by Section
10.02 of this Indenture;
(E) evidence of payment or a closing statement indicating payments
to be made by the applicable Guarantor of all title premiums,
recording charges, transfer taxes and other costs and expenses
including reasonable legal fees and disbursements of counsel
for the Trustee (and any local counsel) that may be incurred
to validly and effectively subject such Real Property to the
Lien of any applicable Collateral Document to perfect such
Lien;
(F) copies of all Leases;
(G) an Officers' Certificate of the Company stating that there has
been issued and is in effect a valid and proper certificate of
occupancy or local or foreign equivalent, if required by the
local or foreign codes or ordinances for the use then being
made of such Real Property and that there is not outstanding
any citation, violation or similar notice indicating that such
Real Property contains conditions which are not in compliance
with local or foreign codes or ordinances relating to building
or fire safety or structural soundness which materially
impairs the ability of the Real Property in question to be
used for its intended purpose; and
(H) such consents, approvals, amendments, supplements, estoppels,
tenant subordination agreements or other instruments as shall
be necessary in order for the owner or holder of the fee
interest or leasehold interest to grant the Lien contemplated
by the Mortgage with respect to such Real Property; provided,
that the Company shall only be required to use commercially
reasonable effort to obtain the items in this clause (H); and
(iv) the Company shall deliver to the Trustee an Opinion of Counsel
and an Officers' Certificate to the effect that the documents that have
been or are therewith delivered to the Trustee pursuant to this Section
10.01(b) (including any amendments, supplements, mortgages or other
Collateral Documents referred to in paragraph (i) above) conform to the
requirements of this Indenture.
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SECTION 10.02. Recording, Registration and Opinions.
------------------------------------
(a) The Company and the Guarantors shall take or cause to be taken all
action required to perfect, maintain, preserve and protect the Lien on and
security interest in the Collateral granted by the Collateral Documents (subject
only to Permitted Liens), including without limitation, the filing of financing
statements, continuation statements, Mortgages and any instruments of further
assurance, in such manner and in such places as may be required by law fully to
preserve and protect the rights of the Holders and the Trustee under this
Indenture and the Collateral Documents to all property comprising the
Collateral. The Company and the Guarantors shall from time to time promptly pay
all financing, continuation statement and mortgage recording, registration
and/or filing fees, charges and taxes relating to this Indenture and the
Collateral Documents, any amendments thereto and any other instruments of
further assurance required hereunder or pursuant to the Collateral Documents.
The Trustee shall have no obligation to, nor shall it be responsible for any
failure to, so register, file or record.
(b) The Company shall furnish to the Trustee, promptly after the
execution and delivery of this Indenture, Opinion(s) of Counsel required by TIA
ss. 314(b)(1).
(c) The Company shall furnish to the Trustee on the anniversary of the
Issue Date in each year, beginning with 2003, an Opinion of Counsel, dated as of
such date, which complies with TIA ss. 314(b)(2), either (i)(x) stating that, in
the opinion of such counsel, such action has been taken with respect to the
recordings, registrations, filings, re-recordings, re-registrations and
refilings of this Indenture and all supplemental indentures, financing
statements, continuation statements and other instruments of further assurance
as are necessary to maintain the perfected Liens of the Collateral Documents
under the UCC or the applicable law in those items of Collateral that can be
perfected by the filing, recordings or registrations and reciting with respect
to such Liens on and security interests in the Collateral the details of such
action or referring to prior Opinions of Counsel in which such details are
given, and (y) stating that, based on relevant laws as in effect on the date of
such Opinion of Counsel, all financing statements, continuation statements,
Mortgage and other documents have been executed and filed that are necessary, as
of such date and during the succeeding 12 months, fully to maintain the
perfection of the security interests of the Holders and the Trustee hereunder
and under the Collateral Documents with respect to the Collateral; provided that
if there is a required filing of a continuation statement or other instrument
within such 12 month period and such continuation statement or other instrument
is not effective if filed at the time of the opinion, such opinion may so state
and in that case the Company shall cause a continuation statement or other
instrument to be timely filed so as to maintain such Liens and security
interests and shall provide a further Opinion of Counsel to the effect of this
clause (i) upon the filing of the relevant continuation statement or other
instrument; or (ii) stating that, in the opinion of such counsel, no such action
is necessary to maintain such Liens or security interests.
SECTION 10.03. Release of Collateral.
---------------------
(a) The Trustee shall not at any time release Collateral from the Liens
created by this Indenture and the Collateral Documents unless such release is in
accordance with the provisions of this Indenture and the Collateral Documents.
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(b) Anything herein to the contrary notwithstanding, at any time when
an Event of Default shall have occurred and be continuing, no release of
Collateral pursuant to the provisions of this Indenture or the Collateral
Documents shall be effective as against the Holders.
(c) The release of any Collateral from the Lien of the Collateral
Documents shall not be deemed to impair the security under this Indenture in
contravention of the provisions hereof if and to the extent the Collateral is
released pursuant to this Indenture and the Collateral Documents. To the extent
applicable, the Company shall comply with ss. 313(b)(1) and TIA ss. 314(d)
relating to the release of property from the Lien of the Collateral Documents
and relating to the substitution therefor of any property to be subjected to the
Lien of the Collateral Documents. Any certificate or opinion required by TIA ss.
314(d) may be made by an Officer of the Company, except in cases where TIA ss.
314(d) requires that such certificate or opinion be made by an independent
person, which person shall be an independent engineer, appraiser or other expert
selected by the Company.
SECTION 10.04. Possession and Use of Collateral.
--------------------------------
Subject to and in accordance with the provisions of this Indenture and
the Collateral Documents, so long as the Trustee has not exercised rights or
remedies with respect to the Collateral in connection with an Event of Default
that has occurred and is continuing, the Company and the Guarantors shall have
the right to remain in possession and retain exclusive control of and to
exercise all rights with respect to the Collateral (other than Trust Monies held
by the Trustee, other monies or Government Securities deposited pursuant to
Article 8, and other than as set forth in the Collateral Documents and this
Indenture), to freely, operate, manage, develop, lease, use, consume and enjoy
the Collateral (other than Trust Monies held by the Trustee, other monies and
Government Securities deposited pursuant to Article 8 and other than as set
forth in the Collateral Documents and this Indenture), to alter or repair any
Collateral so long as such alterations and repairs do not impair the Lien of the
Collateral Documents thereon, and otherwise comply with Section 10.06 hereof,
and to collect, receive, use, invest and dispose of the reversions, remainders,
interest, rents, lease payments, issues, profits, revenues, proceeds and other
income thereof.
SECTION 10.05. Specified Releases of Collateral.
--------------------------------
(a) Satisfaction and Discharge; Defeasance. The Company and the Guarantors shall
---------------------------------------
be entitled to obtain a full release of all of the Collateral from the Liens of
this Indenture and of the Collateral Documents upon payment in full of all
principal, premium, if any, interest and Liquidated Damages, if any, on the
Notes and of all obligations for the payment of money due and owing to the
Trustee or the Holders, or upon compliance with the conditions precedent set
forth in Article 8 for Legal Defeasance or Covenant Defeasance. Upon the release
of any Guarantor form its obligations under this Indenture and its Guarantee
pursuant to Section 12.03 hereof, such Guarantors shall be entitled to obtain
the release of all of its Collateral from the Liens of this Indenture and of the
Collateral Documents. Upon delivery by the Company to the Trustee of an
Officers' Certificate and an Opinion of Counsel, each to the effect that such
conditions precedent have been complied with (and which may be the same
Officers' Certificate and Opinion of Counsel required by Article 8), together
with such documentation, if any, as may be required by the Trustee or the TIA
(including, without limitation, TIA ss. 314(d)) prior to the release of such
Collateral, the Trustee shall forthwith take all necessary action (at the
written request of and the expense of the Company) to release and reconvey to
the Company and the applicable Guarantors without recourse all of the
Collateral, and shall deliver such Col
l
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lateral in its possession to the Company and the applicable Guarantors
including, without limitation, the execution and delivery of releases and
satisfactions wherever required.
(b) Dispositions of Collateral in Connection with Asset Sales. The
----------------------------------------------------------
Company and each of the Guarantors, as the case may be, shall be entitled to
obtain a release of, and the Trustee shall release from the Lien of this
Indenture and the Collateral Documents, items of Collateral (other than Trust
Monies, excluding Trust Monies constituting Net Proceeds from an Asset Sale,
which Trust Monies are subject to release from the Lien of the Collateral
Documents as provided under Article 11) (the "Released Collateral") subject to
an Asset Sale upon compliance with the conditions precedent that the Company
shall have delivered to the Trustee the following:
(i) An Officer's Certificate from the Company requesting release of
Released Collateral (a "Company Notice"), such Company Notice (A)
specifically describing the proposed Released Collateral, (B) specifying
the Fair Market Value of such Released Collateral on a date within 60 days
of the Company Notice (the "Valuation Date"), (C) stating that the
consideration to be received is at least equal to the Fair Market Value of
the Released Collateral and such consideration to be received shall be made
Collateral subject to the Collateral Documents, (D) stating that the
release of such Released Collateral shall not impair the value of the
remaining Collateral, taken as a whole, or interfere with or impede the
Trustee's ability to realize the value of the remaining Collateral and
shall not impair the maintenance and operation of the remaining Collateral,
(E) confirming the sale of, or an agreement to sell, such Released
Collateral is a bona fide sale to a person that is not an Affiliate of the
Company or, in the event that such sale is to a person that is an Affiliate
of the Company, confirming that such sale is being made in accordance with
Section 4.23 and (F) certifying that such Asset Sale complies with the
terms and conditions of this Indenture, including, without limitation,
Section 4.11 hereof;
(ii) An Officers' Certificate certifying that (A) such sale covers
only the Released Collateral or such other property subject to such sale or
disposition, (B) all Net Proceeds, if any, from the sale of any of the
Released Collateral shall be deposited in the Collateral Account, and all
Net Proceeds from the sale of any of the Released Collateral, if any, have
been or will be applied pursuant to Section 4.11, (C) there is not, and
shall not be, a Default or Event of Default in effect or continuing on the
date thereof, the Valuation Date or the date of such Asset Sale, (D) the
release of the Released Collateral shall not result in a Default or Event
of Default hereunder and (E) all conditions precedent in this Indenture and
the Collateral Documents to such release have been complied with;
(iii) The Net Proceeds and other property received as consideration
from the Asset Sale shall be delivered to the Trustee, together with such
instruments of conveyance, assignment and transfer, if any, as may be
necessary to subject to the Lien of this Indenture and the Collateral
Documents all the right, title and interest of the Company and the
Guarantors in and to such property;
(iv) All documentation required by the TIA (including, without
limitation, TIA ss. 314(d)), if any, prior to the release of Collateral by
the Trustee, and, in the event there is to be a substitution of property
for the Collateral subject to the Asset Sale, all documentation required by
the TIA to effect the substitution of such new Collateral and to subject
such new
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Collateral to the Lien of the relevant Collateral Documents, and all documents
required by Section 10.01 hereof;
(v) An Opinion of Counsel stating that all conditions precedent herein
and under any of the Collateral Documents relating to the release of such
Collateral have been complied with; and
(vi) If the Collateral to be released is (i) only a portion of a
discrete parcel of Real Property, an Opinion of Counsel or date-down title
endorsement confirming that after such release, the Lien of the applicable
Mortgage continues unimpaired as a first priority perfected Lien upon the
remaining Mortgaged Property subject only to those Liens permitted by the
applicable Mortgage; and (ii) Mortgaged Property having a fair value in
excess of $500,000, the Company shall have delivered to the Trustee a
Survey depicting the Real Property to be released.
Upon compliance by the Company with the conditions precedent set forth
above, the Trustee shall cause to be released and reconveyed to the Company or
the applicable Guarantor the Released Collateral without recourse by executing a
release in the form provided by the Company or the applicable Guarantor and
reasonably acceptable to the Trustee.
(c) Release of Collateral in Connection with Events of Loss. The
--------------------------------------------------------
Company and the Guarantors, as the case may be, shall be entitled to obtain a
release of, and the Trustee shall release from the Lien of this Indenture and
the Collateral Documents, items of Collateral (other than Trust Monies,
excluding Trust Monies constituting Net Loss Proceeds from an Event of Loss,
which Trust Monies are subject to release from the Lien of the Collateral
Documents as provided under Article 11) subject to an Event of Loss, upon
compliance with the conditions precedent that the Company shall have delivered
to the Trustee the following:
(i) an Officers' Certificate of the Company certifying that (A) such
Collateral is the subject of an Event of Loss and the amount of the Net
Loss Proceeds, and (B) all conditions precedent to such release have been
complied with;
(ii) the Net Loss Proceeds to be held as Trust Monies subject to the
disposition thereof pursuant to Article 11;
(iii) all documentation required by the TIA (including, without
limitation, TIA ss. 314(d)), if any, prior to the release of Collateral by
the Trustee; and
(iv) an Opinion of Counsel substantially to the effect:
(1) if applicable, that such property has been taken by eminent
domain, or has been sold pursuant to the exercise of a right vested in
a governmental authority to purchase, or to designate a purchaser or
order a sale of, such property in lieu of the exercise of the right of
condemnation or eminent domain;
(2) in the case of a taking by eminent domain, that the award for
the property so taken has become final and that an appeal from such
award is not advisable in the interests of the Company or the Holders,
which opinion as to factual ma
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ters may rely on a certificate of an officer of the Company or a
Guarantor, as applicable; and
(3) that the instrument or instruments and the award or payment
of such Taking which have been or are therewith delivered to and
deposited with the Trustee conform to the requirements of this
Indenture and the applicable Collateral Documents and that, upon the
basis of such application, the Trustee is permitted by the terms
hereof and of the Collateral Documents to execute and deliver the
release requested, and that all conditions precedent herein and in the
Collateral Documents provided for relating to such release have been
complied with.
In any proceedings for the taking of any part of the Collateral, the
Trustee may be represented by counsel acceptable to the Trustee.
Upon compliance by the Company with the conditions precedent set forth
above, the Trustee shall cause to be released and reconveyed to the Company or
the applicable Guarantor without recourse the aforementioned items of Collateral
which are the subject of such Event of Loss by executing a release in the form
provided by the Company or the applicable Guarantor acceptable to the Trustee.
SECTION 10.06. Unconditional Release of Collateral From Lien of Indenture and
--------------------------------------------------------------
Collateral Documents.
---------------------
Notwithstanding the provisions of Section 10.05 and subject to Sections
10.07 and 13.01 below, so long as no Default or Event of Default shall have
occurred and be continuing or would result therefrom, the Company or any
Guarantors may, release from the Lien of this Indenture and the Collateral
Documents (and upon the request of the Company, the Trustee shall confirm in
writing any such release) item of Collateral without any prior consent by the
Trustee, to conduct ordinary activities with respect to the Collateral,
including:
(i) selling or otherwise disposing of, in any transaction or
series of related transactions of any property that may be defective
or may have become worn out, defective or obsolete or is not used or
useful in the operation of the Company or any Guarantor and which has
an aggregate Fair Market Value of $100,000 or less except for such
property that is sold or otherwise disposed of in connection with the
Energy Arrangement which may be sold without regard to a maximum
aggregate amount;
(ii) selling or otherwise disposing of, in any transaction or
series of related transactions, any property (including the Warehouse
Assets) subject to the Lien of the Collateral Documents which has
become worn out or obsolete and which is replaced by property of
substantially equivalent or greater value which becomes subject to the
Lien of the Collateral Documents as After-Acquired Property;
(iii) subject to the provisions of the Collateral Documents,
abandoning, terminating, canceling, releasing or making alterations in
or substitutions of any leases or contracts subject to the Lien of the
Indenture or any of the Collateral Documents;
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(iv) surrendering or modifying any franchise, license or permit
subject to the Lien of this Indenture or any of the Collateral
Documents which it may own or under which it may be operating; alter,
repair, replace, change the location or position of and add to its
structures, machinery, systems, equipment, fixtures and appurtenances;
(v) demolishing, dismantling, tearing down, scrapping or
abandoning any Collateral if, as conclusively determined (absent
manifest error) by the Board of Directors of the Company in its good
faith opinion, such demolition, dismantling, tearing down, scrapping
or abandonment is in the best interest of the Company;
(vi) granting a non-exclusive license of any Intellectual
Property; or
(vii) abandoning any Intellectual Property that the Company or
the relevant Guarantor, in its reasonable business judgment, concludes
is obsolete and no longer used in the conduct of the business of the
Company or the relevant Guarantor.
SECTION 10.07. Form and Sufficiency of Release.
-------------------------------
In the event that the Company or any Guarantor has sold, exchanged, or
otherwise disposed of or proposes to sell, exchange or otherwise dispose of any
portion of the Collateral that under the provisions of Section 10.05 or 10.06
may be sold, exchanged or otherwise disposed of by the Company or any Guarantor,
and the Company or such Guarantor requests the Trustee to furnish a written
disclaimer, release or quitclaim of any interest in such property under this
Indenture, the applicable Guarantee and the Collateral Documents, upon being
satisfied that the Company or such Guarantor is selling, exchanging or otherwise
disposing of the Collateral in accordance with the provisions of Section 10.05
or 10.06 (which, in the case of Section 10.06, shall include receipt of (i) an
Officers' Certificate by the Company or such Guarantor reciting the sale,
exchange or other disposition made or proposed to be made and describing in
reasonable detail the property affected thereby, and stating that such property
is property which by the provisions of Section 10.06 may be sold, exchanged or
otherwise disposed of or dealt with by the Company or such Guarantor without any
release or consent of the Trustee and (ii) an Opinion of Counsel (which may, as
to factual matters, rely upon such Officer's Certificate) stating that the sale,
exchange or other disposition made or proposed to be made was duly taken by the
Company or such Guarantor in conformity with a designated subsection of Section
10.06 and that the execution and form of such written disclaimer, release or
quit-claim is appropriate under this Section 10.07), the Trustee shall execute,
acknowledge and deliver to the Company or such Guarantor such an instrument in
the form provided by the Company, and providing for release without recourse,
promptly after satisfaction of the conditions set forth herein for delivery of
any such release and shall take such other action as the Company or such
Guarantor may reasonably request in writing and as necessary to effect such
release. Notwithstanding the preceding sentence, all purchasers and grantees of
any property or rights purporting to be released shall be entitled to rely upon
any release executed by the Trustee hereunder as sufficient for the purpose of
this Indenture and as constituting a good and valid release of the property
therein described from the Lien of this Indenture and of the Collateral
Documents.
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SECTION 10.08. Purchaser Protected.
-------------------
No purchaser or grantee of any property or rights purporting to be
released shall be bound to ascertain the authority of the Trustee to execute the
release or to inquire as to the existence of any conditions herein prescribed
for the exercise of such authority.
SECTION 10.09. Authorization of Actions to Be Taken by the Trustee Under the
-------------------------------------------------------------
Collateral Documents.
---------------------
Subject to the provisions of the Collateral Documents:
(a) the Trustee may, in its sole discretion and without the
consent of the Holders, take all actions it deems necessary or
appropriate in order to (i) enforce any of the terms of the Collateral
Documents and (ii) collect and receive any and all amounts payable in
respect of the obligations of the Company and the Guarantors hereunder
and under the Collateral Documents; and
(b) the Trustee shall have power to institute and to maintain
such suits and proceedings as it may deem expedient to prevent any
impairment of the Collateral by any act that may be unlawful or in
violation of the Collateral Documents or this Indenture, and such
suits and proceedings as the Trustee may deem expedient to preserve or
protect its interests and the interests of the Holders in the
Collateral (including the power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any
legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or
compliance with, such enactment, rule or order would impair the
security interest thereunder or be prejudicial to the interests of the
Holders or of the Trustee).
(c) In connection with any Indebtedness of the Company or its
Subsidiaries incurred in compliance with this Indenture, the Trustee
shall have the authority to enter into customary intercreditor
agreements with respect to the Notes and the Guarantees.
SECTION 10.10. Authorization of Receipt of Funds by the Trustee Under the
----------------------------------------------------------
Collateral Documents.
---------------------
The Trustee is authorized to receive any funds for the benefit of
Holders distributed under the Collateral Documents, to apply such funds as
provided in this Indenture and the Collateral Documents, and to make further
distributions of such funds to the Holders in accordance with the provisions of
Article 11 and the other provisions of this Indenture.
SECTION 10.11. Powers Exercisable by Receiver or Trustee.
-----------------------------------------
In case the Collateral shall be in the possession of a receiver or
trustee, lawfully appointed, the powers conferred in this Article 10 upon the
Company or any Guarantor, as applicable, with respect to the release, sale or
other disposition of such property may be exercised by such receiver or trustee,
and an instrument signed by such receiver or trustee shall be deemed the
equivalent of any similar instrument of the Company or any Guarantor, as
applicable, or of any officer or officers thereof required by the provisions of
this Article 10.
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ARTICLE 11
APPLICATION OF TRUST MONIES
SECTION 11.01. Collateral Account and Construction Disbursement Account.
--------------------------------------------------------
(a) On the Issue Date there shall be established and, at all times
hereafter until this Indenture shall have terminated, there shall be maintained
with the Trustee the Collateral Account. The Collateral Account shall be
established and maintained by the Trustee at its Corporate Trust Office. Except
as provided in paragraph (b) of this Section 11.01, all Trust Monies which are
received by the Trustee shall be deposited in the Collateral Account and
thereafter shall be held by and under the sole dominion and control of the
Trustee for its benefit and for the benefit of the Holders as a part of the
Collateral and, upon any entry upon or sale or other disposition of the
Collateral or any part thereof pursuant to any of the Collateral Documents, said
Trust Monies shall be applied in accordance with Section 6.10; but prior to any
such entry, sale or other disposition, all or any part of the Trust Monies held
by the Trustee may be withdrawn, and shall be released, paid or applied by the
Trustee in accordance with the terms of this Article.
(b) On the Issue Date there shall be established and, at all times
hereafter until the Disbursement Agreement shall have terminated, there shall be
maintained with the Trustee the Construction Disbursement Account. The
Construction Disbursement Account shall be established and maintained by the
Trustee at its Corporate Trust Office. All monies which are received by the
Trustee for deposit in the Construction Disbursement Account shall be deposited
in such Account and thereafter shall be held by and under the sole dominion and
control of the Trustee for its benefit and for the benefit of the Holders as a
part of the Collateral and, upon any entry upon or sale or other disposition of
the Collateral or any part thereof pursuant to any of the Collateral Documents,
said monies shall be applied in accordance with Section 6.10; but prior to any
such entry, sale or other disposition, all or any part of the monies held by the
Trustee in the Construction Disbursement Account may be withdrawn, and shall be
released, paid or applied by the Trustee in accordance with the terms of the
Disbursement Agreement.
(c) So long as no Event of Default shall have occurred and be
continuing, the Company shall be entitled, upon written request to the Trustee,
to obtain a release of all interest or dividends accrued, earned or paid on
funds including Cash Equivalents in the Construction Disbursement Account.
SECTION 11.02. Withdrawal of Net Loss Proceeds.
-------------------------------
To the extent that any Trust Monies consist of Net Loss Proceeds, such
Trust Monies may be withdrawn by the Company and shall be paid by the Trustee
upon a request in the form of an Officers' Certificate delivered to the Trustee
to reimburse the Company or the applicable Guarantor for expenditures made, or
to pay costs incurred, by the Company or such Guarantor in connection with the
repair, rebuilding or replacement of or substitution for the Collateral
destroyed, damaged or taken, upon receipt by the Trustee of the following:
(a) An Officers' Certificate, dated not more then 30 days prior
to the date of the application for the withdrawal and payment of such
Trust Monies setting forth:
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(i) that expenditures have been made, or costs incurred by
the Company or such Guarantor, as the case may be, in a specified
amount in connection with certain repairs, rebuildings and
replacements of or substitution for the Collateral, which shall
be briefly described, and stating the Fair Market Value thereof
to the Company or such Guarantor at the date of the acquisition
thereof by the Company or such Guarantor;
(ii) that no part of such expenditures or costs that are the
subject of such withdrawal request has been or is being made the
basis for the withdrawal of any Trust Monies in any previous or
then pending application pursuant to this Section 11.02;
(iii) that no part of such expenditures or costs that are
the subject of such withdrawal request has been paid out of the
proceeds of insurance upon any part of the Collateral not
required to be paid to the Trustee under the Collateral
Documents;
(iv) that there is no outstanding Indebtedness, other than
costs for which payment is being requested and retainage, known
to the Company, after due inquiry, for the purchase price or
construction of such repairs, rebuildings or replacements, or for
labor, wages, materials or supplies in connection with the making
thereof, which, if unpaid, might become the subject of a
vendor's, mechanic's, laborer's, materialman's, statutory or
other similar Lien upon any such repairs, rebuildings or
replacement, which Lien might, in the opinion of the signers of
such Officers' Certificate, materially impair the security
afforded by such repairs, rebuildings or replacements;
(v) that the Company or such Guarantor has, or will have
following the payment to the Company of the requested withdrawal
Trust Monies, title to such repairs, rebuildings and replacements
that is substantially similar to its title to the property
destroyed, damaged or taken and that any Liens upon such repairs,
rebuildings and replacements or substitutions are expressly
permitted by this Indenture and the applicable Collateral
Documents;
(vi)that no Default or Event of Default shall have occurred
and be continuing; and
(vii)that all conditions precedent herein provided for
relating to such withdrawal and payment have been complied with;
(b) All documentation required under the TIA (including, without
limitation, TIAss. 314(d));
(c) (i) In case any part of such repairs, rebuildings or replacements
or substitutions constitutes Real Property:
(A) with respect to any such repairs, rebuildings or replacements or
substitutions that are not encompassed within or are not erected upon
Mortgaged Property, an instrument or instruments in recordable form
sufficient for the Lien of any applicable Mortgage to cover such
repairs, rebuildings or replacements or substitutions which, if such
repairs, rebuildings or replacements or substitutions include
leasehold or easement interests, shall include normal and customary
provisions with respect thereto and evidence of the filing of all such
documents as may be necessary to perfect such Liens;
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(B) in the event such repairs, rebuildings or replacements or
substitutions have a Fair Market Value in excess of $500,000, a policy
of title insurance (or a commitment to issue title insurance) insuring
that the Lien of any applicable Mortgage constitutes a valid and
perfected mortgage Lien on such repairs, rebuildings or replacements
to the extent that such repairs, rebuildings or replacements extend
beyond the exterior configuration of any improvement (subject to no
Liens other than Permitted Liens) in an aggregate amount equal to the
Fair Market Value of such repairs, rebuildings or replacements or
other investments, together with such endorsements and other opinions
as are contemplated by Section 10.01(b), or with respect to any such
repairs, rebuildings or replacements that are encompassed within or
are erected upon Real Property subject to the Lien of a Mortgage, an
endorsement to the title insurance policy issued pursuant to Section
10.01(b) regarding the affected Real Property confirming that such
repairs, rebuildings or replacements are encumbered by the Lien of the
applicable Mortgage (subject to no Liens other than Permitted Liens);
(C) in the event such repairs, rebuildings or replacements or
substitutions have a Fair Market Value in excess of $500,000 and
affect the exterior configuration of an improvement, a Survey with
respect thereto; and
(D) evidence of payment or a closing statement indicating payments to be
made by the Company or the applicable Guarantor of all title insurance
premiums, recording charges, and/or transfer taxes, if any, and other
costs and expenses, including reasonable legal fees and disbursements
of counsel for the Trustee (and any local counsel), that may be
incurred to validly and effectively subject such repairs, rebuildings
or replacements to the Lien of any applicable Collateral Document to
perfect such Lien; and
(ii) in case any part of such repairs, rebuildings or replacements or
substitutions constitutes personal property interests:
(A) if necessary, an instrument sufficient for the Lien of any applicable
Collateral Document to cover such repairs, rebuildings or
replacements; and
(B) evidence of payment or a closing statement indicating payments to be
made by the Company or the applicable Guarantor of all filing fees,
recording charges and/or transfer taxes, if any, and other costs and
expenses, including reasonable legal fees and disbursements of counsel
for the Trustee (and any local counsel), that may be incurred to
validly and effectively subject such repairs, rebuildings or
replacements to the Lien of any Collateral Document; and
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(d) An Opinion of Counsel substantially stating that the instruments
that have been or are therewith delivered to the Trustee conform to the
requirements of this Indenture and the other Collateral Documents, and
that, upon the basis thereof and the accompanying documents specified in
this Section 11.02, all conditions precedent herein provided for relating
to such withdrawal and payment have been complied with, and the Trust
Monies whose withdrawal is then requested may be paid over under this
Section 11.02.
Upon compliance with the foregoing provisions of this Section 11.02 and Section
11.01, the Trustee shall, upon receipt of a Company written request, pay an
amount of Net Loss Proceeds constituting Trust Monies equal to the amount of the
expenditures or costs stated in the Officers' Certificate required by clause (i)
of paragraph (a) of this Section 11.02, or the Fair Market Value to the Company
or the applicable Guarantor of such repairs, rebuildings and replacements or
substitutions stated in such Officers' Certificate (or in an independent
appraiser's or independent financial advisor's certificate, if required by the
TIA), whichever is less.
SECTION 11.03. Withdrawal of Net Proceeds to Fund an Asset Sale Offer
------------------------------------------------------
and Net Loss Proceeds to Fund a Event of Loss Offer.
----------------------------------------------------
(a) To the extent that any Trust Monies consist of Net Proceeds
received by the Trustee pursuant to the provisions of Section 4.11 hereof and an
Asset Sale Offer has been made in accordance therewith, such Trust Monies may be
withdrawn by the Company and shall be paid by the Trustee to the Paying Agent
for application in accordance with Section 4.11 upon a Company Notice to the
Trustee and upon receipt by the Trustee of the following:
(i) An Officers' Certificate, dated not more than three days prior to
the Asset Sale Purchase Date stating:
(A) that no Default or Event of Default shall have occurred and be
continuing;
(B) (x) that such Trust Monies constitute Net Proceeds, (y) that pursuant
to and in accordance with Section 4.11, the Company has made an Asset
Sale Offer and (z) the amount of Excess Proceeds to be applied to the
repurchase of the Notes pursuant to the Asset Sale Offer;
(C) the Asset Sale Purchase Date; and
(D) if necessary, an instrument sufficient for the Lien of any applicable
Collateral Document to cover such repairs, rebuildings or
replacements; and
(ii) All documentation, if any, required under TIAss. 314(d).
(iii) Upon compliance with the foregoing provisions of this Section
11.03, the Trustee shall apply the Trust Monies as directed and specified
by such Company Notice, subject to Section 4.11(a).
(b) To the extent that any Trust Monies consist of Net Loss Proceeds
received by the Trustee pursuant to the provisions of Section 4.16 hereof and an
Event of Loss Offer has been made in accordance therewith, such Trust Monies may
be withdrawn by the Company and shall be paid by the
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Trustee to the Paying Agent for application in accordance with Section 4.16 upon
a written notice to the Trustee and upon receipt by the Trustee of the
following:
(i) An Officers' Certificate, dated not more than three days
prior to the Excess Loss Proceeds Payment Date stating:
(A) that no Default or Event of Default shall have occurred and be
continuing;
(B) (x) that such Trust Monies constitute Net Loss Proceeds, (y) that
pursuant to and in accordance with Section 4.16, the Company has
made an Event of Loss Offer and (z) the amount of Excess Loss
Proceeds to be applied to the repurchase of the Notes pursuant to
the Event of Loss Offer;
(C) the Excess Loss Proceeds Payment Date; and
(D) if necessary, an instrument sufficient for the Lien of any
applicable Collateral Document to cover such repairs, rebuildings
or replacements; and
(ii) All documentation, if any, required under TIAss. 314(d).
(iii) Upon compliance with the foregoing provisions of this
Section 11.03(b), the Trustee shall apply the Trust Monies as directed
and specified by such Company Notice, subject to Section 4.16.
SECTION 11.04. Withdrawal of Trust Monies for Investment in Replacement Assets.
---------------------------------------------------------------
In the event the Company intends to reinvest Net Proceeds of an Asset
Sale in Replacement Assets (the "Released Trust Monies"), such Net Proceeds
constituting Trust Monies may be withdrawn by the Company and shall be paid by
the Trustee to the Company upon a Company Notice to the Trustee and upon receipt
by the Trustee of the following:
(a) a notice signed by the Company which shall (i) refer to this
Section 11.04, (ii) contain all documents referred to below, (iii)
describe with particularity the Released Trust Monies and (iv)
describe with particularity the Replacement Assets to be invested in
with respect to the Released Trust Monies;
(b) An Officers' Certificate certifying that (i) such Trust
Monies constitute Net Proceeds, (ii) the release of the Released Trust
Monies complies with the terms and conditions of this Indenture, (iii)
there is no Default or Event of Default (both before and after
investing in the Replacement Asset) in effect or continuing on the
date thereof, (iv) the release of the Released Trust Monies shall not
result in a Default or Event of Default hereunder and (v) all
conditions precedent herein to such release have been complied with;
(c) All documentation required under the TIA (including, without
limitation, TIAss. 314(d));
(d) If the Replacement Asset proposed for investment is Real
Property, the Company or the appropriate Guarantor shall also deliver
to the Trustee:
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(i) an instrument or instruments in recordable form
sufficient for the Lien of any applicable Mortgage to cover such
Real Property which, if the Real Property is a leasehold or
easement interest, shall include normal and customary provisions
with respect thereto;
(ii) a policy of title insurance (or a commitment to issue
title insurance) insuring that the Lien of any applicable
Mortgage constitutes a valid and perfected mortgage Lien on such
Real Property (subject to no Liens other than Permitted Liens) in
an aggregate amount equal to the Fair Market Value of the Real
Property, together with an Officers' Certificate stating that any
specific exceptions to such title insurance are Permitted Liens,
together with such endorsements and other opinions as are
contemplated by Section 10.02(b);
(iii) in the event the Fair Market Value of the Real
Property is in excess of $500,000, a Survey with respect thereto;
and
(iv) evidence of payment or a closing statement indicating
payments to be made by the Company or the appropriate Guarantor
of all title premiums, recording charges, and/or transfer taxes,
if any, and other costs and expenses, including reasonable legal
fees and disbursements of counsel for the Trustee (and any local
counsel), that may be incurred to validly and effectively subject
the Real Property to the Lien of any applicable Collateral
Document to perfect such Lien;
(e) If the Replacement Asset is a personal property interest, the
Company or the appropriate Guarantor shall deliver to the Trustee:
(i) financing statements and other instruments in form
sufficient to perfect the Lien of any applicable Collateral
Document on such personal property interest; and
(ii) evidence of payment or a closing statement indicating
payments to be made by the Company or the appropriate Guarantor
of all filing fees, recording charges and/or transfer taxes, if
any, and other costs and expenses, including reasonable legal
fees and disbursements of counsel for the Trustee (and any local
counsel), that may be incurred to validly and effectively subject
the Replacement Asset to the Lien of any Collateral Document; and
(f) An Opinion of Counsel stating that the documents that have
been or are therewith delivered to the Trustee in connection with an
investment in Replacement Assets conform to the requirements of this
Indenture and that all conditions precedent herein provided for
relating to such application of Trust Monies have been complied with.
Upon compliance with the foregoing provisions, the Trustee shall apply
the Released Trust Monies as directed and specified by the Company in writing.
SECTION 11.05. Investment of Trust Monies.
--------------------------
So long as no Default or Event of Default shall have occurred and be
continuing, all or any part of any Trust Monies held by the Trustee shall from
time to time be invested or reinvested by
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the Trustee in any Cash Equivalents pursuant to a Company request in the form of
an Officers' Certificate, which shall specify the Cash Equivalents in which such
Trust Monies shall be invested and shall certify that such investments
constitute Cash Equivalents and the Trustee shall sell any such Cash Equivalent
only upon receipt of such a Company request specifying the particular Cash
Equivalent to be sold. So long as no Default or Event of Default has occurred
and is continuing, any interest or dividends accrued, earned or paid on such
Cash Equivalents (in excess of any accrued interest or dividends paid at the
time of purchase) that may be received by the Trustee shall be forthwith paid to
the Company. Such Cash Equivalents shall be held by the Trustee as a part of the
Collateral, subject to the same provisions hereof as the cash used by it to
purchase such Cash Equivalents.
The Trustee shall not be liable or responsible for any loss resulting
from such investments or sales except only for its own grossly negligent action,
its own grossly negligent failure to act or its own willful misconduct in
complying with this Section 11.05.
SECTION 11.06. Use of Trust Monies; Retirement of Notes.
----------------------------------------
The Trustee shall apply Trust Monies not required to be applied to fund
an Asset Sale Offer or Event of Loss Offer or required to be held pending
application to the acquisition of Replacement Assets from time to time to the
payment of the principal of, premium, and interest and Liquidated Damages on,
any Notes, on any Interest Payment Date, Redemption Date or the Maturity Date or
to the redemption thereof or the purchase thereof upon tender or in the open
market or at private sale or upon any exchange or in any one or more of such
ways, including, without limitation, pursuant to a Change of Control Offer, as
the Company shall request in writing, upon receipt by the Trustee of the
following:
(a) Board Resolutions of the Company directing the application
pursuant to this Section 11.06 of a specified amount of Trust Monies
and, (i) in case any such monies are to be applied to payment,
designating the Notes so to be paid and, in case any such monies are
to be applied to the purchase of Notes, prescribing the method of
purchase, the price or prices to be paid and the maximum aggregate
principal amount of Notes to be purchased and any other provisions of
this Indenture governing such purchase and (ii) if any cash or Cash
Equivalents are deposited with the Trustee for any such application,
specifying the amount thereof;
(b) an Officers' Certificate, dated not more than three days
prior to the date of the relevant application stating
(i) that no Default or Event of Default exists unless such
Default or Event of Default would be cured thereby; and
(ii) that all conditions precedent and covenants herein
provided for relating to such application of Trust Monies have
been complied with; and
(c) an Opinion of Counsel stating all conditions precedent herein
provided for relating to such application of Trust Monies have been
complied with.
Upon compliance with the foregoing provisions of this Section, the
Trustee shall apply Trust Monies as directed and specified by such Board
Resolution.
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A Board Resolution expressed to be irrevocable directing the
application of Trust Monies under this Section 11.06 to the payment of the
principal of, premium, interest and Liquidated Damages, if any, on the Notes
shall for all purposes of this Indenture be deemed the equivalent of the deposit
of money with the Trustee in trust for such purpose. Such Trust Monies and any
cash deposited with the Trustee pursuant to paragraph (a)(ii) of this Section
11.06 shall not, after compliance with the foregoing provisions of this Section,
be deemed to be part of the Collateral or Trust Monies.
SECTION 11.07. Disposition of Notes Retired.
----------------------------
All Notes received by the Trustee and for whose purchase Trust Monies
are applied under Section 11.06, if not otherwise canceled, shall be promptly
delivered to the Trustee for cancellation and destruction in accordance with the
Trustee's customary procedures.
ARTICLE 12
GUARANTEES
SECTION 12.01. Guarantees.
----------
Subject to the provisions of this Article 12, each Guarantor, jointly
and severally with each other Guarantor, hereby fully and unconditionally
Guarantees to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, that: (a) the principal of,
and premium and interest and Liquidated Damages, if any, on the Notes shall be
duly and punctually paid in full when due, whether at maturity, by acceleration
or otherwise, and interest on overdue principal, and premium, if any, and (to
the extent permitted by law) interest on any interest, if any, on the Notes and
all other obligations of the Company to the Holders or the Trustee hereunder or
under the Notes or under the Collateral Documents (including fees, expenses or
other obligations) shall be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and (b) in case of any extension
of time of payment or renewal of any Notes or any of such other obligations, the
same shall be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise (collectively, the "Guarantee Obligations"). Failing payment when
due of any Guarantee Obligation or failing performance of any other obligation
of the Company to the Holders, for whatever reason, each Guarantor shall be
obligated to pay, or to perform or to cause the performance of, the same
immediately. An Event of Default under this Indenture or the Notes shall
constitute an event of default under this Guarantee, and shall entitle the
Trustee or the Holders to accelerate the Guarantee Obligations of each Guarantor
hereunder in the same manner and to the same extent as the Company Obligations.
Each Guarantor hereby agrees that its Guarantee Obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder with respect to any thereof, the entry of any
judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a Guarantor. Each Guarantor hereby waives and relinquishes: (a) any
right to require the Trustee, the Holders or the Company (each, a "Benefited
Party") to proceed against the Company, the Subsidiaries or any other person or
to proceed against or exhaust any security held by a Benefited Party at any time
or to pursue any other remedy in any secured party's power before proceeding
against such Guarantor; (b) any defense that may arise by reason of the
incapacity, lack of authority, death or disability of any other person or
persons or the
-103-
failure of a Benefited Party to file or enforce a claim against the estate (in
administration, bankruptcy or any other proceeding) of any other person or
persons; (c) demand, protest and notice of any kind (except as expressly
required by this Indenture), including but not limited to notice of the
existence, creation or incurring of any new or additional Indebtedness or
obligation or of any action or non-action on the part of the Guarantors, the
Company, the Subsidiaries, any Benefited Party, any creditor of the Guarantors,
the Company or the Subsidiaries or on the part of any other person whomsoever in
connection with any obligations the performance of which are hereby guaranteed;
(d) any defense based upon an election of remedies by a Benefited Party,
including but not limited to an election to proceed against the Guarantors for
reimbursement; (e) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor in
other respects more burdensome than that of the principal; (f) any defense
arising because of a Benefited Party's election in any proceeding instituted
under the Bankruptcy Law of the application of Section 1111(b)(2) of the
Bankruptcy Code; and (g) any defense based on any borrowing or grant of a
security interest under Section 364 of the Bankruptcy Code. The Guarantors
hereby covenant that the Guarantees shall not be discharged except by payment in
full of all Guarantee Obligations, including the principal, premium, if any, and
interest on the Notes and all other costs provided for under this Indenture, the
Collateral Documents or as provided in Section 8.01.
If any Holder or the Trustee is required by any court or otherwise to
return to either the Company or the Guarantors, or any trustee or similar
official acting in relation to either the Company or the Guarantors, any amount
paid by the Company or the Guarantors to the Trustee or such Holder, the
Guarantees, to the extent theretofore discharged, shall be reinstated in full
force and effect. Each of the Guarantors agrees that it shall not be entitled to
any right of subrogation in relation to the Holders in respect of any Guarantee
Obligations hereby until payment in full of all such obligations. Each Guarantor
agrees that, as between it, on the one hand, and the Holders and the Trustee, on
the other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 6 hereof for the purposes hereof,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Guarantee Obligations, and (y) in the event of
any acceleration of such obligations as provided in Article 6 hereof, such
Guarantee Obligations (whether or not due and payable) shall forthwith become
due and payable by such Guarantor for the purpose of the Guarantee.
SECTION 12.02. Execution and Delivery of Guarantees.
------------------------------------
To evidence the Guarantees set forth in Section 12.01 hereof, each of
the Guarantors agrees that a notation of the Guarantees substantially in the
form included in Exhibit A hereto shall be endorsed on each Note authenticated
and delivered by the Trustee and that this Indenture shall be executed on behalf
of the Guarantors by the President or one of the Vice Presidents of the
Guarantors.
Each of the Guarantors agree that the Guarantees set forth in this
Article 12 shall remain in full force and effect and apply to all the Notes
notwithstanding any failure to endorse on each Note a notation of the
Guarantees.
If an Officer whose facsimile signature is on a Note no longer holds
that office at the time the Trustee authenticates the Note on which the
Guarantees are endorsed, the Guarantees shall be valid nevertheless.
-104-
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantees set forth in
this Indenture on behalf of the Guarantors.
SECTION 12.03. Guarantors May Consolidate, etc., on Certain Terms.
--------------------------------------------------
(a) Subject to the provisions of clause (b) below, no Guarantor shall,
directly or indirectly, consolidate or merge with or into (whether or not such
Guarantor is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties in one
or more related transactions, to another person, unless:
(1) the person formed by or surviving any such consolidation or merger
(if other than such Guarantor) (the "Surviving Guarantor Entity") or the
Guarantor, as the case may be, assumes all the obligations of the Guarantor
under its Guarantee, this Indenture, the Registration Rights Agreement and
the Collateral Documents pursuant to a Supplemental Indenture and other
agreements in form and substance reasonably satisfactory to the Trustee;
(2) immediately after giving effect to such transaction, no Default or
Event of Default exists;
(3) the Company shall, on the date of such transaction after giving
pro forma effect thereto and any related financing transactions as if the
same had occurred at the beginning of the applicable four-quarter period,
be permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test set forth in Section 4.08(a);
(4) the transaction would not result in the loss, suspension or
material impairment of any material Gaming License;
(5) the Surviving Guarantor Entity or the Guarantor, as the case may
be, causes such amendments, supplements or other instruments to be filed
and recorded in such jurisdictions as may be required by applicable law to
preserve and protect the Lien of the Collateral Documents on the Collateral
owned by or transferred to the Surviving Guarantor Entity, together with
such financing statements as may be required to perfect any security
interests in such Collateral which may be perfected by the filing of a
financing statement under the UCC of the relevant states;
(6) the Collateral owned by or transferred to the Surviving Guarantor
Entity shall:
(i)continue to constitute Collateral under this Indenture and the
Collateral Documents,
(ii)be subject to the Lien in favor of the Trustee for the
benefit of the Holders, and
(iii)not be subject to any Lien other than Permitted Liens; and
(7) the property of the person which is merged or consolidated with or
into the Surviving Guarantor Entity, to the extent that they are property
of the types which would constitute Collateral under the Collateral
Documents, shall be treated as After-Acquired Property and the Surviving
Guarantor Entity shall take such action as may be reasonably necessary to
-105-
cause such property to be made subject to the Lien of the Collateral Documents
in the manner and to the extent required in this Indenture;
provided that the provisions of clauses (1) and (3) above shall not apply to the
merger of two or more Guarantors with and into each other or the merger of any
Guarantor into the Company.
The Trustee, subject to the provisions of Section 12.04 hereof, shall
be entitled to receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any such consolidation, merger, sale or conveyance, and
any such assumption of Guarantee Obligations, comply with the provisions of this
Section 12.03. Such Officers' Certificate and Opinion of Counsel shall comply
with the provisions of Section 12.05.
(b) Except to the extent such transaction would not be allowed by this
Article 12, in the event of:
(x) a sale or other disposition of all or substantially all of the
property of any Guarantor, by way of merger, consolidation or otherwise; or
(y) a sale or other disposition of all of the Equity Interests of any
Guarantor, in each case to a person which is not the Company or a
Subsidiary or an Affiliate of the Company;
then such Guarantor (in the event of a sale or other disposition, by way of such
a merger, consolidation or otherwise, of all of the Equity Interests of such
Guarantor) or the person acquiring the property (in the event of a sale or other
disposition of all or substantially all of the property of such Guarantor) shall
be released and relieved of any obligations under its Guarantee, this Indenture
and the Collateral Documents; provided that:
(1) the Net Proceeds of such sale or other disposition are applied in
accordance with the provisions described in Section 4.11; and
(2) all obligations of such Guarantor under all of its guarantees of,
and under all of its pledges of property or other Liens which secure,
Indebtedness of the Company or any of its Subsidiaries, shall also
terminate.
SECTION 12.04. Limitation of Guarantor's Liability.
-----------------------------------
Each Guarantor, and by its acceptance hereof each Holder, hereby
confirms that it is the intention of all such parties that the Guarantee by such
Guarantor pursuant to its Guarantee not constitute a fraudulent transfer or
conveyance for purposes of any Bankruptcy Law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar federal or state law. To
effectuate the foregoing intention, the Holders and such Guarantor hereby
irrevocably agree that the Guarantee Obligations of such Guarantor under this
Article 12 shall be limited to the maximum amount as shall, after giving effect
to all other contingent and fixed liabilities of such Guarantor and after giving
effect to any collections from or payments made by or on behalf of any other
Guarantor in respect of the Guarantee Obligations of such other Guarantor under
this Article 12, result in the Guarantee Obligations of such Guarantor under the
Guarantee of such Guarantor not constituting a fraudulent transfer or
conveyance.
-106-
SECTION 12.05. Application of Certain Terms and Provisions to the Guarantors.
-------------------------------------------------------------
(a) For purposes of any provision of this Indenture which provides for
the delivery by any Guarantor of an Officers' Certificate and/or an Opinion of
Counsel, the definitions of such terms in Section 1.01 shall apply to such
Guarantor as if references therein to the Company were references to such
Guarantor.
(b) Any request, direction, order or demand which by any provision of
this Indenture is to be made by any Guarantor, shall be sufficient if evidenced
as described in Section 13.02 as if references therein to the Company were
references to such Guarantor.
(c) Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the Holders to
or on any Guarantor may be given or served as described in Section 13.02 as if
references therein to the Company were references to such Guarantor.
(d) Upon any demand, request or application by any Guarantor to the
Trustee to take any action under this Indenture, such Guarantor shall furnish to
the Trustee such certificates and opinions as are required in Section 13.04
hereof as if all references therein to the Company were references to such
Subsidiary Guarantor.
ARTICLE 13
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls.
----------------------------
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by TIA ss. 318(c), the imposed duties shall
control.
SECTION 13.02. Notices.
-------
Any notice or communication by the Company or the Trustee to the other
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 other's address:
If to the Company:
Resorts International Hotel and Casino, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇'▇▇▇▇▇
Telephone No.:(▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.:(▇▇▇) ▇▇▇-▇▇▇▇
-107-
and a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Trustee:
Bankers Trust Company
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust and Agency Services
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five (5) calendar days after mailing if sent by registered or
certified mail, postage prepaid (except that a notice of change of address shall
not be deemed to have been given until actually received by the addressee); when
answered back, if telexed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
person described in TIA ss. 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 13.03. Communication by Holders with Other Holders.
-------------------------------------------
Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
-108-
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 13.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 13.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
SECTION 13.05. Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA ss.
314(e) and 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 or she has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been satisfied; and
(d) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been satisfied.
SECTION 13.06. Rules by Trustee and Agents.
---------------------------
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 13.07. No Personal Liability of Directors, Officers, Employees, Member,
----------------------------------------------------------------
Partner, Incorporator and Stockholders.
---------------------------------------
No past, present or future director, officer, employee, member,
partner, incorporator or stockholder of the Company or any of its Subsidiaries,
as such, shall have any liability for any obligations of the Company under the
Notes, the Guarantees, this Indenture, the Registration Rights Agreement or the
Collateral Documents 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 issuance of the Notes.
-109-
SECTION 13.08. Governing Law.
-------------
THIS INDENTURE, THE NOTES AND THE GUARANTEES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES AND THE
GUARANTEES.
SECTION 13.09. No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 13.10. Successors.
----------
All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
SECTION 13.11. 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 13.12. Counterpart Originals.
---------------------
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 13.13. Table of Contents, Headings, etc.
--------------------------------
The Table of Contents, Cross Reference Table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
SECTION 13.14. Gaming Authorities.
------------------
Nothing in this Indenture shall require the Trustee to take any action
contrary to the New Jersey Casino Control Act or any other Gaming Law or the
rules, regulations or determinations promulgated by any Gaming Authority.
[Signatures on following pages]
-110-
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
ISSUER:
RESORTS INTERNATIONAL HOTEL AND
CASINO, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
---------------------------------------------------
Name: ▇▇▇▇▇▇ ▇'▇▇▇▇▇
Title: Vice President
GUARANTORS:
RESORTS INTERNATIONAL HOTEL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇'▇▇▇▇▇
Title: Vice President and Secretary
NEW PIER OPERATING COMPANY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇'▇▇▇▇▇
Title: Vice President and Secretary
TRUSTEE:
BANKERS TRUST COMPANY, as Trustee
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
EXHIBIT A
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS NOTE IS NOT EXCHANGEABLE
FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS
NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO
THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, AND TRANSFERS OF INTERESTS IN THIS GLOBAL NOTE SHALL BE LIMITED
TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.16
OF THE INDENTURE.
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE
903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) TO AN
INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, (4) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES.
A-1
(Face of Note)
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, AND THE REGULATIONS THEREUNDER, THIS SECURITY IS BEING
ISSUED WITH ORIGINAL ISSUE DISCOUNT; FOR EACH $1,000 PRINCIPAL AMOUNT OF THIS
NOTE, (1) THE ISSUE PRICE IS $976.86; (2) THE AMOUNT OF ORIGINAL ISSUE DISCOUNT
IS $13.14; (3) THE ISSUE DATE IS MARCH 22, 2002; AND (4) THE YIELD TO MATURITY
(COMPOUNDED SEMI-ANNUALLY) IS 12%.
CUSIP No: [ ]
11 1/2% First Mortgage Notes due 2009
No. [ ] $
RESORTS INTERNATIONAL HOTEL AND CASINO, INC.
promises to pay to [ ] or registered assigns,
the principal sum of Dollars on September 15, 2009.
Interest Payment Dates: March 15 and September 15, commencing September 15, 2002
Record Dates: March 1 and September 1
Dated:
RESORTS INTERNATIONAL HOTEL AND
CASINO, INC.
By: _______________________________________
Name:
Title:
A-2
Certificate of Authentication:
This is one of the Global Notes referred to in the within-mentioned Indenture:
BANKERS TRUST COMPANY, as Trustee
By: _________________________________
Authorized Signatory
Dated:
A-3
(Back of Note)
11 1/2 % First Mortgage Notes due 2009
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. Interest. Resorts International Hotel and Casino, Inc., a Delaware
---------
corporation (the "Company"), promises to pay interest on the principal amount of
this Note at 11 1/2 % per annum. The Company shall pay interest and Liquidated
Damages, if any, semi-annually on March 15 and September 15 of each year, or if
any such day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Notes shall accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of issuance of this Note. The Company shall pay interest
(including Accrued Bankruptcy Interest in any proceeding under any Bankruptcy
Law) on overdue principal and premium, if any, from time to time on demand at a
rate that is 2% per annum in excess of the rate then in effect; it shall pay
interest (including Accrued Bankruptcy Interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest shall be computed on the basis of a
360-day year of twelve 30-day months.
2. Method of Payment. The Company shall pay interest on the Notes
------------------
(except defaulted interest) and Liquidated Damages to the persons who are
registered Holders at the close of business on the March 1 or September 1 next
preceding the Interest Payment Date, even if such Notes are canceled after such
Record Date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture (as defined below) with respect to defaulted
interest. The Notes shall be payable as to principal, premium, interest and
Liquidated Damages, if any, at the office or agency of the Company maintained
for such purpose within or without the City and State of New York, or, at the
option of the Company, payment of interest and Liquidated Damages may be made by
check mailed to the Holders at their addresses set forth in the register of
Holders, and provided that payment by wire transfer of immediately available
funds shall be required with respect to principal of and interest, premium and
Liquidated Damages on all Global Notes and all other Notes the Holders of more
than $1,000 in aggregate principal amount of Notes which shall have provided
wire transfer instructions to the Company or the Paying Agent. Such payment
shall be in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts.
3. Paying Agent and Registrar. Initially, Bankers Trust Company, the
---------------------------
Trustee under the Indenture, shall act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company or any of its Subsidiaries may act in any such capacity.
4. Indenture. The Company issued the Notes under an Indenture dated as
----------
of March 22, 2002 ("Indenture") among the Company, the Guarantors 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, as
amended (15 U.S. Code ▇▇.▇▇. 77aaa-77bbbb). The Notes are subject to all such
terms, and Holders are referred to the Indenture and such Act for a statement of
such terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling.
A-4
The obligations under the Indenture, the Disbursement Agreement, the
Notes and the Guarantees thereof are secured by the Collateral described in the
Collateral Documents, subject to the provisions of such documents. Holders are
referred to the Collateral Documents for a statement of such terms.
5. Optional Redemption. On or after March 15, 2007, the Company may
--------------------
redeem all or a part of the Notes upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the applicable Redemption Date, if redeemed during the 12-month
period beginning on March 15 of the years indicated below:
Year Percentage
---- ----------
2007 106.0%
2008 103.0%
2009 100.0%
In addition, at any time on or prior to March 15, 2005, the Company may
on one occasion redeem up to 35% of the aggregate principal amount of Notes
issued under the Indenture at a redemption price of 111.5% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
to the Redemption Date, with the net cash proceeds of any Equity Offering which
results in gross proceeds to the Company of at least $20.0 million; provided
that:
(1) at least 65% of the aggregate principal amount of Notes
issued under the Indenture remains outstanding immediately after the
occurrence of such redemption (excluding from the amount of Notes
included in such 65% Notes held by the Company and its Subsidiaries);
and
(2) the redemption must occur within 60 days after the date of
the closing of such Equity Offering.
Except pursuant to the preceding paragraph and paragraph 7 below, the
Notes shall not be redeemable at the Company's option prior to March 15, 2007.
6. Mandatory Redemption. The Company shall not be required to make
---------------------
mandatory redemption payments with respect to the Notes.
7. Mandatory Disposition in Accordance with Gaming Laws. If any Gaming
-----------------------------------------------------
Authority requires that a Holder or beneficial owner of Notes be licensed,
qualified or found suitable under any applicable Gaming Law and such Holder or
beneficial owner (i) fails to apply for a license, qualification or a finding of
suitability within 30 days (or such lesser period as may be required by the
applicable Gaming Authority) after being requested to do so by the Gaming
Authority or (ii) is denied such license or qualification or not found suitable,
the Company shall have the right, at its option, (1) to require any such Holder
or beneficial owner to dispose of its Notes within 30 days (or such earlier date
as may be required by the applicable Gaming Authority) of the occurrence of the
event described in clause (i) or (ii) above or (2) to redeem the Notes of such
Holder or beneficial owner at a redemption price equal to the lesser of (x) the
principal amount thereof, together with accrued and unpaid interest and
Liquidated Damages, if any, to the date of the denial of license or
qualification or of the
A-5
finding of unsuitability by such Gaming Authority, (y) the price at which such
Holder or beneficial owner acquired the Notes, together with accrued and unpaid
interest and Liquidated Damages, if any, to the date of the denial of license or
qualification or of the finding of unsuitability by such Gaming Authority and
(z) the Fair Market Value of such Notes. The Company shall notify the Trustee in
writing of any redemption pursuant to Section 3.09 of the Indenture as soon as
practicable.
Immediately upon a determination by a Gaming Authority that a Holder or
beneficial owner of the Notes will not be licensed, qualified or found suitable,
the Holder or beneficial owner will, to the extent required by applicable law,
have no further rights (i) to receive any interest or dividends with respect to
the Notes; or (ii) to exercise, directly or through any trustee or nominee, any
right conferred by the Notes; or (iii) receive any remuneration in any form for
services rendered or otherwise.
The Holder or beneficial owner that is required to apply for a license,
qualification or a finding of suitability shall pay all fees and costs of
applying for and obtaining the license, qualification or finding of suitability
and of any investigation by the applicable Gaming Authorities. Neither the
Company nor any Subsidiary shall be liable therefor.
8. Change of Control Offer. Upon the occurrence of a Change of Control,
------------------------
the Company shall offer to repurchase all or any part (equal to $1,000 or an
integral multiple thereof) of such Holder's Notes pursuant to the offer
described below at an offer price in cash equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest and Liquidated Damages
thereon to the date of purchase. Within 30 days following any Change of Control,
the Company shall mail a notice to each Holder describing the transaction or
transactions that constitute the Change of Control and offering to repurchase
Notes pursuant to the procedures required by the Indenture and described in such
notice. The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control.
9. 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
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 Business Days
before a selection of Notes to be redeemed.
10. Persons Deemed Owners. The registered holder of a Note may be
----------------------
treated as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain exceptions,
---------------------------------
the Indenture, the Guarantees or the Notes may be amended or supplemented with
the consent of the Holders of at least a majority in principal amount of the
then outstanding Notes, and any existing Default or noncompliance with any
provision of the Indenture or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes. Without
the consent of any Holder of a
A-6
Note, the Indenture, the Guarantees or the Notes may be amended or supplemented,
among other things, to cure any ambiguity, defect or inconsistency, to provide
for uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders in case of a
merger or consolidation, to make any change that would provide any additional
rights or benefits to the Holders or that does not adversely affect the legal
rights under the Indenture of any such Holder, or to comply with the
requirements of the SEC in order to effect or maintain the qualification of the
Indenture under the TIA.
12. Defaults and Remedies. Events of Default are set forth in the
----------------------
Indenture. If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable. Notwithstanding the foregoing, in
the case of an Event of Default arising from certain events of bankruptcy or
insolvency, all outstanding Notes will become due and payable without further
action or notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. 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 Trustee may withhold from Holders notice of
any continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Notes then outstanding by notice to the Trustee may on
behalf of the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing Default or
Event of Default in the payment of interest on, or the principal of, the Notes.
The Company is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture and the Collateral Documents, and the Company is
required upon becoming aware of any Default or Event of Default, to deliver to
the Trustee a statement specifying such Default or Event of Default.
13. Ranking and Security. The Notes shall be senior secured obligations
---------------------
of the Company and shall effectively rank senior to all of the Company's
existing and future unsecured Indebtedness to the extent of the Collateral
granted by the Company.
The Company's Obligations under the Notes shall be unconditionally
guaranteed on a senior basis, jointly and severally, by each of the Guarantors.
The Guarantees shall be senior secured obligations of the Guarantors and shall
effectively rank senior to all of the Guarantors' existing and future unsecured
Indebtedness to the extent of the Collateral granted by such Guarantors.
Pursuant to the Collateral Documents, the Notes and the
Guarantees shall be secured by a first priority Lien (subject to certain
exceptions described therein) on the Collateral.
14. Trustee Dealings with Company. The Trustee, in its individual or
------------------------------
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
15. No Recourse Against Others. A past, present or future director,
---------------------------
officer, employee, incorporator member, partner or stockholder, of the Company
and each Subsidiary, as such, shall not have any liability for any obligations
of the Company under the Notes, the Guarantees or the Indenture 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.
A-7
16. Authentication. This Note shall not be valid until authenticated by
---------------
the manual or facsimile signature of the Trustee or an authenticating agent.
17. 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).
18. Additional Rights of Holders of Notes. In addition to the rights
--------------------------------------
provided to Holders under the Indenture, Holders of Notes shall have all the
rights set forth in the Registration Rights Agreement dated as of the Issue
Date, among the Company and the Initial Purchasers.
19. CUSIP Numbers. Pursuant to a recommendation promulgated by the
--------------
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may 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.
The Company shall furnish to any Holder upon written request and
without charge a copy of this Indenture, the Collateral Documents and/or the
Registration Rights Agreement. Requests may be made to:
Resorts International Hotel and Casino, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇'▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
A-8
GUARANTEE
The Guarantors listed below (hereinafter referred to as the
"Guarantors," which term includes any successors or assigns under the Indenture
and any additional Guarantors), have irrevocably and unconditionally guaranteed
the Guarantee Obligations, which include that: (a) the principal of, and premium
and interest and Liquidated Damages, if any, on the 11 1/2 First Mortgage Notes
due 2009 (the "Notes") of Resorts International Hotel and Casino, Inc. (the
"Company"), shall be duly and punctually paid in full when due, whether at
maturity, by acceleration or otherwise, and interest on overdue principal, and
premium, if any, and (to the extent permitted by law) interest on any interest,
if any, on the Notes and all other obligations of the Company to the Holders or
the Trustee hereunder or under the Notes or under the Collateral Documents
(including fees, expenses or other) shall be promptly paid in full or performed,
all in accordance with the terms hereof and thereof; and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, the same shall be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise.
The obligations of each Guarantor to the Holders and to the Trustee
pursuant to this Guarantee and the Indenture are expressly set forth in Article
12 of the Indenture and reference is hereby made to such Indenture for the
precise terms of this Guarantee. The obligations are secured by a pledge of the
Collateral pursuant to Articles 10 and 11 of the Indenture and the Collateral
Documents.
No past, present or future director, officer, employee, incorporator,
member, partner or stockholder of each Guarantor shall have any liability under
this Guarantee by reason of his or its status as such and each Holder of Notes
by accepting a Note waivers and releases all such liability. This waiver and
release are part of the consideration for the issuance of the Notes.
Except as set forth in the Indenture, this is a continuing Guarantee
and shall remain in full force and effect and shall be binding upon each
Guarantor and its successors and assigns until full and final payment of all of
the Company's Obligations under the Notes and the Indenture and shall inure to
the benefit of the successors and assigns of the Trustee and the Holders, and,
in the event of any transfer or assignment of rights by any Holder or the
Trustee, the rights and privileges herein conferred upon that party shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof. This is a Guarantee of payment and
not of collectibility.
This Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Note upon which this Guarantee is noted
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
The obligations of each Guarantor under its Guarantee shall be limited
to the extent necessary to insure that it does not constitute a fraudulent
conveyance under applicable law.
THE TERMS OF ARTICLE 12 OF THE INDENTURE ARE INCORPORATED HEREIN BY
REFERENCE.
Capitalized terms used herein have the same meanings given in this
Indenture unless otherwise indicated.
A-9
Dated as of March 22, 2002
GUARANTORS:
RESORTS INTERNATIONAL HOTEL, INC.
By:
------------------------------------------------
Name:
Title:
NEW PIER OPERATING COMPANY, INC.
By:
------------------------------------------------
Name:
Title:
A-10
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
-----------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:______________________
Your Signature:
------------------------------------------------------
(Sign exactly as your name appears on
the face of this Note)
Signature Guarantee.
A-11
Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.11, 4.14 or 4.16 of the Indenture, check the box below:
[__] Error! Switch argument not specified. Section 4.11
[__] Error! Switch argument not specified. Section 4.14
[__] Error! Switch argument not specified. Section 4.16
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.11, 4.14 or 4.16 of the Indenture, state the
amount you elect to have purchased: $___________
Date: Your Signature:
------------------- ----------------------------------
(Sign exactly as your name appears on the Note)
Tax Identification No.:
-----------------------
Signature Guarantee:
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor program
reasonably acceptable to the Trustee)
A-12
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Certificated Note, or exchanges of a part of
another Global Note or Certificated Note for an interest in this Global Note,
have been made:
Principal Amount of Signature of
Amount of decrease in Amount of increase in this Global authorized officer of
Principal Amount of Principal Amount of following such decrease Trustee or Note
Date of Exchange this Global Note this Global Note (or increase) Custodian
---------------- ---------------- ---------------- ------------- ---------
A-13
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Re: Resorts International Hotel and Casino, Inc. (the "Company")
11 1/2 % First Mortgage Notes due 2009 (the "Notes")
----------------------------------------------------
This Certificate relates to $_______ principal amount of Notes held in
the form of* ___ a beneficial interest in a Global Note or* _______ Certificated
Notes by ______ (the "Transferor").
The Transferor:
[__] has requested by written order that the Registrar deliver in
exchange for its beneficial interest in the Global Note held by the Depository a
Certificated Note or Certificated Notes in definitive, registered form of
authorized denominations and an aggregate number equal to its beneficial
interest in such Global Note (or the portion thereof indicated above); or
[__] has requested by written order that the Registrar exchange or
register the transfer of a Certificated Note or Certificated Notes.
In connection with such request and in respect of each such Note, the
Transferor does hereby certify that the Transferor is familiar with the
Indenture relating to the above captioned Notes and the restrictions on
transfers thereof as provided in Section 2.16 of such Indenture, and that the
transfer of the Notes 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 (in satisfaction of Section 2.16 of the Indenture).
[__] Such Note is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act), in reliance on Rule
144A.
[__] Such Note is being transferred to an institutional "accredited
investor" (within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule
501 under the Securities Act) which delivers a certificate to the Trustee in the
form of Exhibit C to the Indenture.
[__] Such Note is being transferred in reliance on Regulation S under
the Securities Act and a transfer certificate for Regulation S transfers in the
form of Exhibit D to the Indenture accompanies this certification. [An Opinion
of Counsel to the effect that such transfer does not require registration under
the Securities Act accompanies this certification.]
[__] Such Note is being transferred in reliance on Rule 144 under the
Securities Act. [An Opinion of Counsel to the effect that such transfer does not
require registration under the Securities Act accompanies this certification.]
B-1
[__] Such Note is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Securities Act other
than Rule 144A or Rule 144 under the Securities Act to a person other than an
institutional "accredited investor." [An Opinion of Counsel to the effect that
such transfer does not require registration under the Securities Act accompanies
this certification.]
-------------------------------------------
[INSERT NAME OF TRANSFEROR]
By:
--------------------------------------
[Authorized Signatory]
Date:
-----------------------------------
*Check applicable box.
B-2
EXHIBIT C
Form of Transferee Letter of Representation
-------------------------------------------
Bankers Trust Company
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust and Agency Services
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $________
principal amount of the 11 1/2% First Mortgage Notes due 2009 of Resorts
International Hotel and Casino, Inc. (the "Company"), and any guarantee thereof
(the "Notes"). Upon transfer, the Notes would be registered in the name of the
new beneficial owner as follows:
Name:
-----------------------------------------------------
Address:
--------------------------------------------------
Taxpayer ID Number:
---------------------------------------
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933 (the "Securities
Act")) purchasing Notes for our own account or for the account of such an
institutional "accredited investor" and we are acquiring the Notes not with a
view to, or for offer or sale in connection with, any distribution in violation
of the Securities Act. We have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risk of our
investment in the Notes and we invest in or purchase securities similar to the
Notes in the normal course of our business. We and any accounts for which we are
acting are each able to bear the economic risk of our or its investment.
2. We acknowledge that we have had access to such financial and other
information, and have been afforded the opportunity to ask such questions of
representatives of the Company and receive answers thereto, as we deem
necessary.
3. We understand that the Notes have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing Notes that we shall not prior to the date
(the "Resale Restriction Termination Date") that is two years after the later of
the original issuance of the Notes and the last date on which the Company or any
affiliate of the Company was the owner of such Notes (or any predecessor
thereto) offer, sell or otherwise transfer such Notes except (a) to the Company
or any subsidiary of the Company, (b) inside the United States to a "qualified
institutional buyer" in compliance with Rule 144A under the Securities Act (c)
inside the United States to an "institutional accredited investor" as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act that, prior to such
transfer, furnishes (or has furnished on its behalf by a U.S.
C-1
broker-dealer) to the Trustee a signed letter substantially in the form of this
letter (d) outside the United States in an offshore transaction in compliance
with Rule 904 under the Securities Act (e) pursuant to any other available
exemption from the registration requirements of the Securities Act or (f)
pursuant to an effective registration statement under the Securities Act. We
acknowledge that the Company and the Trustee reserve the right prior to any
offer, sale or other transfer prior to the Resale Restriction Termination Date
of the applicable Notes pursuant to clause (c) or (e) above to require the
delivery of an Opinion of Counsel, certification and/or other information
satisfactory to the Company and the Trustee.
We understand that the Trustee shall not be required to accept for
registration of transfer any Notes acquired by us, except upon presentation of
evidence satisfactory to the Company and the Trustee that the foregoing
restrictions on transfer have been complied with. We further understand that any
Notes purchased by us shall be in the form of definitive physical certificates
and that such certificates shall bear a legend reflecting the substance of
paragraph 3 of this letter. We further agree to provide to any person acquiring
any of the Notes from us a notice advising such person that transfers of such
Notes are restricted as stated herein and that certificates representing such
Notes shall bear a legend to that effect.
We represent that the Company and the Trustee and others are entitled
to rely upon the truth and accuracy of our acknowledgments, representations and
agreements set forth herein, and we agree to notify you promptly in writing if
any of our acknowledgments, representations or agreements herein cease to be
accurate and complete. You are also irrevocably authorized to produce this
letter or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.
We represent to you that we have full power to make the foregoing
acknowledgments, representations and agreements on our own behalf and on behalf
of any investor account for which we are acting as fiduciary agent.
As used herein, the terms "offshore transaction," "United States" and
"U.S. Person" have the respective meanings given to them in Regulation S under
the Securities Act.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
Dated: TRANSFEREE:
---------------
By:
---------------------------------
C-2
EXHIBIT D
Form of Certificate To Be
Delivered in Connection
with Regulation S Transfers
---------------, ----
Bankers Trust Company
Bankers Trust Company
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust and Agency Services
Re: Resorts International Hotel and Casino, Inc.'s
11 1/2 % First Mortgage Notes due 2009 (the "Notes")
----------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $__________ aggregate principal
amount of the Notes, we confirm that such sale has been effected pursuant to and
in accordance with Regulation S under the Securities Act of 1933, as amended
(the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting
on our behalf reasonably believed that the transferee was outside the
United States, or (b) the transaction was executed in, on or through
the facilities of a designated off-shore securities market and neither
we nor any person acting on our behalf knows that the transaction has
been prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(a) or Rule
904(a) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Defined terms used herein without
definition have the respective meanings provided in Regulation S.
D-1
Very truly yours,
[Name of Transferor]
By:
------------------------------------------------
D-2
