EXHIBIT 4.3
THE MAJESTIC STAR CASINO, LLC
THE MAJESTIC STAR CASINO CAPITAL CORP.
as issuers
and the Guarantors referred to herein
10 7/8% Senior Secured Notes due 2006
_________________________________________
INDENTURE
Dated as of June 18, 1999
_________________________________________
IBJ WHITEHALL BANK & TRUST COMPANY,
Trustee
TABLE OF CONTENTS
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ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE............................................... 1
Section 1.1. Definitions.............................................................................. 1
Section 1.2. Other Definitions........................................................................ 28
Section 1.3. Incorporation by Reference of Trust Indenture Act........................................ 29
Section 1.4. Rules of Construction.................................................................... 30
ARTICLE 2 THE NOTES................................................................................ 30
Section 2.1. Form and Dating.......................................................................... 30
Section 2.2. Execution and Authentication............................................................. 31
Section 2.3. Registrar, Paying Agent and Depositary................................................... 32
Section 2.4. Paying Agent to Hold Money in Trust...................................................... 33
Section 2.5. Holder Lists............................................................................. 33
Section 2.6. Transfer and Exchange.................................................................... 33
Section 2.7. Replacement Notes........................................................................ 38
Section 2.8. Outstanding Notes........................................................................ 39
Section 2.9. Treasury Notes........................................................................... 39
Section 2.10. Temporary Notes.......................................................................... 39
Section 2.11. Cancellation............................................................................. 40
Section 2.12. Defaulted Interest....................................................................... 40
Section 2.13. Legends.................................................................................. 41
Section 2.14. Deposit of Moneys........................................................................ 42
ARTICLE 3 REDEMPTION............................................................................... 42
Section 3.1. Notices to Trustee....................................................................... 42
Section 3.2. Selection of Notes to Be Redeemed........................................................ 42
Section 3.3. Notice of Redemption..................................................................... 43
Section 3.4. Effect of Notice of Redemption........................................................... 44
Section 3.5. Deposit of Redemption Price.............................................................. 44
Section 3.6. Notes Redeemed in Part................................................................... 45
Section 3.7. Optional Redemption...................................................................... 45
Section 3.8. Required Regulatory Redemption........................................................... 45
ARTICLE 4 COVENANTS................................................................................ 46
Section 4.1. Payment of Notes......................................................................... 46
Section 4.2. Maintenance of Office or Agency.......................................................... 46
Section 4.3. Reports.................................................................................. 47
Section 4.4. Compliance Certificate................................................................... 48
Section 4.5. Taxes.................................................................................... 49
Section 4.6. Stay, Extension and Usury Laws........................................................... 49
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Section 4.7. Limitation on Restricted Payments.................................................... 50
Section 4.8. Limitation on Restrictions on Subsidiary Dividends................................... 53
Section 4.9. Limitation on Incurrence of Indebtedness............................................. 54
Section 4.10. Limitation on Asset Sales............................................................ 56
Section 4.11. Limitation on Transactions With Affiliates........................................... 60
Section 4.12. Limitation on Liens.................................................................. 61
Section 4.13. Existence............................................................................ 62
Section 4.14. Repurchase Upon a Change of Control.................................................. 62
Section 4.15. Maintenance of Properties............................................................ 64
Section 4.16. Maintenance of Insurance............................................................. 65
Section 4.17. Restrictions on Sale and Issuance of Subsidiary Stock................................ 65
Section 4.18. Line of Business..................................................................... 65
Section 4.19. Restrictions on BHR Joint Venture.................................................... 65
Section 4.20. Restrictions on Activities of Capital................................................ 67
ARTICLE 5 SUCCESSORS........................................................................... 67
Section 5.1. When the Company May Merge, etc...................................................... 67
Section 5.2. Successor Substituted................................................................ 69
ARTICLE 6 DEFAULTS AND REMEDIES................................................................ 69
Section 6.1. Events of Default.................................................................... 69
Section 6.2. Acceleration......................................................................... 71
Section 6.3. Other Remedies....................................................................... 72
Section 6.4. Waiver of Past Defaults.............................................................. 72
Section 6.5. Control by Majority.................................................................. 73
Section 6.6. Limitation on Suits.................................................................. 73
Section 6.7. Rights of Holders to Receive Payment................................................. 74
Section 6.8. Collection Suit by Trustee........................................................... 74
Section 6.9. Trustee May File Proofs of Claim..................................................... 74
Section 6.10. Priorities........................................................................... 75
Section 6.11. Undertaking for Costs................................................................ 75
ARTICLE 7 TRUSTEE.............................................................................. 76
Section 7.1. Duties of Trustee.................................................................... 76
Section 7.2. Rights of Trustee.................................................................... 77
Section 7.3. Individual Rights of Trustee......................................................... 78
Section 7.4. Trustee's Disclaimer................................................................. 78
Section 7.5. Notice of Defaults................................................................... 79
Section 7.6. Reports by Trustee to Holders........................................................ 79
Section 7.7. Compensation and Indemnity........................................................... 80
Section 7.8. Replacement of Trustee............................................................... 81
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Section 7.9. Successor Trustee by Merger, etc......................................................... 83
Section 7.10. Eligibility; Disqualification............................................................ 83
Section 7.11. Preferential Collection of Claims Against Issuers........................................ 83
ARTICLE 8 DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE...................................... 84
Section 8.1. Discharge; Option to Effect Legal Defeasance or Covenant Defeasance...................... 84
Section 8.2. Legal Defeasance and Discharge........................................................... 84
Section 8.3. Covenant Defeasance...................................................................... 85
Section 8.4. Conditions to Legal Defeasance or Covenant Defeasance.................................... 85
Section 8.5. Deposited Cash and U.S. Government Obligations to be Held in Trust; Other Miscellaneous
Provisions............................................................................... 87
Section 8.6. Repayment to the Issuers................................................................. 87
Section 8.7. Reinstatement............................................................................ 88
ARTICLE 9 AMENDMENTS............................................................................... 89
Section 9.1. Without Consent of Holders............................................................... 89
Section 9.2. With Consent of Holders.................................................................. 90
Section 9.3. Compliance with Trust Indenture Act...................................................... 91
Section 9.4. Revocation and Effect of Consents........................................................ 91
Section 9.5. Notation on or Exchange of Notes......................................................... 92
Section 9.6. Trustee to Sign Amendments, etc.......................................................... 92
ARTICLE 10 COLLATERAL AND SECURITY AND GUARANTY..................................................... 92
Section 10.1. Collateral Documents..................................................................... 92
Section 10.2. Opinions................................................................................. 93
Section 10.3. Release of Collateral.................................................................... 94
Section 10.4. Certificates of the Issuers.............................................................. 95
Section 10.5. Authorization of Actions to be Taken by the Trustee Under the Security Documents......... 95
Section 10.6. Authorization of Receipt of Funds by the Trustee Under the Security Documents............ 96
Section 10.7. Guaranty................................................................................. 96
Section 10.8. Execution and Delivery of Guaranty....................................................... 98
Section 10.9. Limitation on Guarantor's Liability...................................................... 98
Section 10.10. Rights under the Guaranty................................................................ 99
Section 10.11. Primary Obligations...................................................................... 99
Section 10.12. Guarantee by Subsidiary.................................................................. 100
Section 10.13. Release of Guarantors.................................................................... 100
Section 10.14. Gaming Law Considerations................................................................ 101
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ARTICLE 11 MISCELLANEOUS............................................................................ 102
Section 11.1. Trust Indenture Act Controls............................................................. 102
Section 11.2. Notices.................................................................................. 102
Section 11.3. Communication by Holders with Other Holders.............................................. 104
Section 11.4. Certificate and Opinion as to Conditions Precedent....................................... 104
Section 11.5. Statements Required in Certificate or Opinion............................................ 104
Section 11.6. Rules by Trustee and Agents.............................................................. 105
Section 11.7. Legal Holidays........................................................................... 105
Section 11.8. No Recourse Against Others............................................................... 105
Section 11.9. Governing Law............................................................................ 105
Section 11.10. No Adverse Interpretation of Other Agreements............................................ 106
Section 11.11. Successors............................................................................... 107
Section 11.12. Severability............................................................................. 107
Section 11.13. Counterpart Originals.................................................................... 107
Section 11.14. Table of Contents, Headings, etc......................................................... 107
EXHIBIT A - FORM OF NOTE............................................................................. A-1
EXHIBIT B - CERTIFICATE OF TRANSFEROR................................................................ B-1
EXHIBIT C - FORM OF GUARANTY......................................................................... C-1
EXHIBIT D - FORM OF INTERCREDITOR AGREEMENT.......................................................... D-1
EXHIBIT E - FORM OF PREFERRED SHIP MORTGAGE.......................................................... E-1
EXHIBIT F - FORM OF SECURITY AGREEMENT............................................................... ▇-▇
▇▇▇▇▇▇▇ ▇ - ▇▇▇▇ ▇▇ ▇▇▇ PLEDGE AGREEMENT............................................................. ▇-▇
▇▇▇▇▇▇▇ ▇ - ▇▇▇▇ ▇▇ ▇▇▇ PLEDGE AGREEMENT............................................................. H-1
EXHIBIT I - FORM OF TRADEMARK SECURITY AGREEMENT..................................................... I-1
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INDENTURE, dated as of June 18, 1999, among The Majestic Star Casino,
LLC, an Indiana limited liability company, The Majestic Star Casino Capital
Corp., an Indiana corporation, the Guarantors (as defined) named herein and IBJ
Whitehall Bank & Trust Company, a New York banking corporation, as trustee.
The Issuers (as defined) and the Trustee (as defined) agree as follows
for the benefit of each other and for the equal and ratable benefit of the
Holders (as defined) of the Issuers 10 7/8% Senior Secured Notes due 2006.
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.1 Definitions.
----------- -----------
"Acquired Debt" means Indebtedness of a Person existing at the time
such Person is merged with or into the Company or a Restricted Subsidiary or
becomes a Restricted Subsidiary, other than Indebtedness incurred in connection
with, or in contemplation of, such Person merging with or into the Company or a
Restricted Subsidiary or becoming a Restricted Subsidiary.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
(a) the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise or (b) beneficial
ownership of 10% or more of the voting securities of such Person.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Capital Gain Tax Rate" means a rate equal to the sum of
(i) the highest marginal Federal capital gain tax rate applicable to an
individual who is a citizen of the United States plus (ii) an amount equal to
the sum of the highest marginal state and local capital gain tax rates
applicable to an individual who is a
resident of the State of New York, multiplied by a factor equal to 1 minus the
rate described in clause (i) above.
"Applicable Income Tax Rate" means a rate equal to the sum of (i) the
highest marginal Federal income tax rate applicable to an individual who is a
citizen of the United States plus (ii) an amount equal to the sum of the highest
marginal state and local income tax rates applicable to an individual who is a
resident of the State of New York, multiplied by a factor equal to 1 minus the
rate described in clause (i) above.
"Asset Sale" means any (i) transfer (as defined), other than in the
ordinary course of business, of any assets of the Company or any Restricted
Subsidiary; (ii) direct or indirect issuance or sale of any Capital Stock of
any Restricted Subsidiary (other than directors' qualifying shares), in each
case to any Person (other than the Company or a Restricted Subsidiary); or
(iii) Event of Loss. For purposes of this definition, (a) any series of
transactions that are part of a common plan shall be deemed a single Asset Sale
and (b) the term "Asset Sale" shall not include (1) any series of transactions
that have a fair market value (or result in gross proceeds) of less than $1
million, until the aggregate fair market value and gross proceeds of the
transactions excluded from the definition of Asset Sale pursuant to this clause
(b)(1) exceed $5 million, or (2) any disposition of all or substantially all of
the assets of the Company that is governed under and complies with Article 5
hereof.
"Bankruptcy Code" means the United States Bankruptcy Code, codified at
11 U.S.C. (S)101-1330, as amended.
"Bankruptcy Law" means title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"BDI" means ▇▇▇▇▇▇ Development, Inc., an Indiana corporation.
"BDI Pledge Agreement" means that certain Pledge Agreement executed by
BDI and ▇▇▇▇ Riverboat Gaming, LLC, providing for a pledge of the entire
membership interest in the Company held by each of them in favor of the Trustee,
for the ratable benefit of the Holders of the Notes, as the same may be amended
in accordance with the terms thereof and this Indenture.
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"beneficial owner" has the meaning attributed to it in Rules 13d-3 and
13d-5 under the Exchange Act (as in effect on the Issue Date), whether or not
applicable, except that a "person" shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time.
"Berthing Agreement" means the Majestic Berthing Agreement, dated as
of April 23, 1996, by and between the Company and the BHR Joint Venture.
"BHR Attributed Debt" means the product of (i) the aggregate principal
amount of all outstanding Indebtedness incurred pursuant to Section 4.19(a)(ii)
hereof times (ii) the Company's percentage interest in the BHR Joint Venture;
provided that any such Indebtedness shall cease to be BHR Attributed Debt, as of
the first date after the date such Indebtedness is so incurred on which the
Company can incur at least $1.00 of additional Indebtedness under the Interest
Coverage Ratio Test set forth in Section 4.9 hereof.
"BHR Joint Venture" means ▇▇▇▇▇▇▇▇▇▇ Harbor Riverboats, LLC, a
Delaware limited liability company, in which the Company currently owns a 50%
membership interest, and any other Flow Through Entity owned solely by the
members of the BHR Joint Venture.
"BHR Operating Agreement" means the First Amended and Restated
Operating Agreement of the BHR Joint Venture, made as of October 31, 1995, as
amended, by and between ▇▇▇▇▇ Indiana, Inc., a Delaware corporation, and the
Company.
"BHR Pledge Agreement" means that certain Pledge Agreement executed by
the Company, providing for a pledge of the Company's entire member ship
interest in the BHR Joint Venture in favor of the Trustee, for the ratable
benefit of the Holders of the Notes, as the same may be amended in accordance
with the terms thereof and this Indenture.
"Board of Directors" means the board of directors or any duly
constituted committee of any corporation or of a corporate general partner of a
partnership and any similar body empowered to direct the affairs of any other
entity.
"Business Day" means any day other than a Legal Holiday.
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"Capital" means The Majestic Star Casino Capital Corp., an Indiana
corporation and a wholly owned subsidiary of the Company, until a successor
replaces such Person in accordance with the terms of this Indenture, and
thereafter means such successor.
"Capital Lease Obligation" means, as to any Person, the obligations of
such Person under a lease that are required to be classified and accounted for
as capital lease obligations under GAAP, and the amount of such obligations at
any date shall be the capitalized amount of such obligations at such date,
determined in accordance with GAAP.
"Capital Stock" means, (i) with respect to any Person that is a
corporation, any and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock, (ii) with respect to a
limited liability company, any and all membership interests, and (iii) with
respect to any other Person, any and all partnership, joint venture or other
equity interests of such Person.
"Cash Equivalent" means (i) any evidence of Indebtedness issued or
directly and fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States of America is pledged in support thereof); (ii) time deposits
and certificates of deposit and commercial paper or bankers acceptance issued by
the parent corporation of any domestic commercial bank of recognized standing
having combined capital and surplus in excess of $250,000,000 and commercial
paper issued by others rated at least A-2 or the equivalent thereof by Standard
& Poor's Corporation or at least P-2 or the equivalent thereof by ▇▇▇▇▇'▇
Investors Service, Inc. and in each case maturing within one year after the date
of acquisition; (iii) investments in money market funds substantially all of
whose assets comprise securities of the type described in clauses (i) and (ii)
above and (iv) repurchase obligations for underlying securities of the types and
with the maturities described above.
"Casino" means a gaming establishment owned by the Company or a
Restricted Subsidiary and containing at least 500 slot machines and 10,000
square feet of space dedicated to the operation of games of chance.
"Change of Control" means
(i) any merger or consolidation of the Company with or into any Person or
any sale, transfer or other conveyance, whether direct or indirect,
of
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all or substantially all of the assets of the Company, on a
consolidated basis, in one transaction or a series of related
transactions, if, immediately after giving effect to such
transaction(s), any "person" or "group" (as such terms are used for
purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or
not applicable) (other than an Excluded Person) is or becomes the
"beneficial owner," directly or indirectly, of more than 50% of the
total voting power in the aggregate of the Voting Stock of the
transferee(s) or surviving entity or entities,
(ii) any "person" or "group" (as such terms are used for purposes of
Sections 13(d) and 14(d) of the Exchange Act, whether or not
applicable) (other than an Excluded Person) is or becomes the
"beneficial owner," directly or indirectly, of more than 50% of the
total voting power in the aggregate of the Voting Stock of the
Company,
(iii) during any period of 12 consecutive months after the Issue Date,
individuals who at the beginning of any such 12-month period
constituted the Managers of the Company (together with any new
directors whose election by such Managers or whose nomination for
election by the members of the Company was approved by a vote of a
majority of the directors then still in office who were either
directors at the beginning of such period or whose election or
nomination for election was previously so approved, including new
directors designated in or provided for in an agreement regarding the
merger, consolidation or sale, transfer or other conveyance, of all
or substantially all of the assets of the Company, if such agreement
was approved by a vote of such majority of directors) cease for any
reason to constitute a majority of the Managers of the Company then
in office,
(iv) the Company adopts a plan of liquidation,
(v) the first day on which the Company fails to own 100% of the issued
and outstanding Equity Interests of Capital, or
(vi) the first day on which (A) the Company fails to own at least 45% of
issued and outstanding Equity Interests of the BHR Joint Venture, (B)
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any Person owns a greater percentage interest than the Company in the
BHR Joint Venture or (C) any Excluded Person directly or indirectly
owns any interest in the BHR Joint Venture other than the interest
owned by the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means any assets of the Issuers or any Subsidiary
defined as "Collateral" in any of the Security Documents and assets from time to
time on which a Lien exists as security for any of the Obligations hereunder or
under the Notes, the Security Documents or the Registration Rights Agreement;
provided, that in no event shall Collateral include Excluded Assets.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the TIA, then the body performing
such duties at such time.
"Company" means The Majestic Star Casino, LLC, an Indiana limited
liability company, until a successor replaces such Person in accordance with the
terms of this Indenture, and thereafter means such successor.
"Company Order" means a written request or order signed in the name
of each of the Issuers by the Chairman, President or Senior Vice President of
each of the Company and Capital, and by the Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary of each and delivered to the Trustee.
"Consolidated Cash Flow" means, with respect to any Person (the
referent Person) for any period,
(a) consolidated income (loss) from operations of such Person and its
subsidiaries for such period, determined in accordance with GAAP,
plus
(b) to the extent such amounts are deducted in calculating such income
(loss) from operations of such Person for such period, and without
duplication (i) amortization, depreciation and other non-cash charges
(including, without limitation, amortization of goodwill, deferred
6
financing fees, and other intangibles but excluding (x) non-cash
charges incurred after the Issue Date that require an accrual of or a
reserve for cash charges for any future period and (y) normally recur
ring accruals such as reserves against accounts receivables), and
(ii) Pre-Opening Expenses;
provided, that (1) the income from operations of any Person that is not a Wholly
Owned Subsidiary of the referent Person or that is accounted for by the equity
method of accounting will be included only to the extent of the amount of
dividends or distributions paid during such period to the referent Person or a
Wholly Owned Subsidiary of the referent Person, (2) the income from operations
of any Person acquired in a pooling of interests transaction for any period
prior to the date of such acquisition will be excluded, and (3) the income from
operations of any Restricted Subsidiary will not be included to the extent that
declarations of dividends or similar distributions by that Restricted Subsidiary
are not at the time permitted, directly or indirectly, by operation of the terms
of its organizational documents or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its owners.
"Consolidated Interest Expense" means, with respect to any Person for
any period, (a) the consolidated interest expense of such Person and its
subsidiaries for such period, whether paid or accrued (including amortization
of original issue discount, noncash interest payment, and the interest component
of Capital Lease Obligations), to the extent such expense was deducted in
computing Consolidated Net Income of such Person for such period less (b)
amortization expense, write-off of deferred financing costs and any charge
related to any premium or penalty paid, in each case accrued during such period
in connection with redeeming or retiring any Indebtedness before its stated
maturity, as determined in accordance with GAAP, to the extent such expense,
cost or charge was included in the calculation made pursuant to clause (a)
above.
"Consolidated Net Income" means, with respect to any Person (the
referent Person) for any period, the aggregate of the Net Income of such Person
and its subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP; provided, that (i) the Net Income of any Person relating
to any portion of such period that such Person (a) is not a Wholly Owned
Subsidiary of the referent Person or (b) is accounted for by the equity method
of accounting will be included only to the extent of the amount of dividends or
distributions paid to the referent Person or a Wholly Owned Subsidiary of the
referent Person during such portion of
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such period, (ii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition will
be excluded, and (iii) the Net Income of any Restricted Subsidiary will not be
included to the extent that declarations of dividends or similar distributions
by that Restricted Subsidiary are not at the time permitted, directly or
indirectly, by operation of the terms of its organizational documents or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its owners.
"Consolidated Net Worth" means, with respect to any Person, the total
stockholders' (or members') equity of such Person determined on a consolidated
basis in accordance with GAAP, adjusted to exclude (to the extent included in
calculating such equity), (i) the amount of any such stockholders' (or members')
equity attributable to Disqualified Capital Stock or treasury stock of such
Person and its consolidated subsidiaries, and (ii) all upward revaluations and
other write-ups in the book value of any asset of such Person or a consolidated
subsidiary of such Person subsequent to the Issue Date, and (iii) all
Investments in subsidiaries of such Person that are not consolidated
subsidiaries and in Persons that are not subsidiaries of such Person.
"Corporate Trust Office" shall be at the address of the Trustee
specified in Section 11.2 or such other address as the Trustee may specify by
notice to the Issuers.
"Credit Facility" means (a) the credit facility, dated within 45 days
of the Issue Date (the "Original Credit Facility"), between the Company and the
Lender (and any related notes, guarantees, collateral documents, instruments and
agreements executed in connection therewith) and (b) any amendment,
modification, supplement, refunding, refinancing or replacement thereof that
(i) has terms and conditions (including with respect to applicable interest
rates and fees) customary for similar facilities extended to borrowers
comparable to the Company, and (ii) does not permit the Company to incur
Indebtedness in an aggregate principal amount at any time outstanding in excess
of $20.0 million. Any amendment, modification, supplement, refunding,
refinancing or replacement of the Credit Facility will be deemed to have terms
and conditions (including with respect to applicable interest rates and fees)
customary for similar facilities extended to borrowers comparable to the Company
if the Board of Directors of the Company, pursuant to a duly adopted resolution,
makes a good faith determination to that effect.
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"Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
"Default" means any event that is, or after notice or the passage of
time or both would be, an Event of Default.
"Definitive Notes" means Notes that are in the form of the Notes
attached hereto as Exhibit A, that do not include the information called for by
footnotes 1 and 3 thereof.
"Depositary" means the Person specified in Section 2.3 hereof as the
Depositary with respect to the Notes issuable in global form, until a successor
shall have been appointed and become such pursuant to the applicable provision
of this Indenture, and, thereafter, "Depositary" shall mean or include such
successor.
"Development Agreement" means the Development Agreement, dated March
26, 1996, by and between the Company and the City of Gary, Indiana.
"Disqualified Capital Stock" means any Equity Interest that (i) either
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable) is or upon the happening of an event would be
required to be redeemed or repurchased prior to the final stated maturity of the
Notes or is redeem able at the option of the holder thereof at any time prior
to such final stated maturity, or (ii) is convertible into or exchangeable at
the option of the issuer thereof or any other Person for debt securities.
"DTC" means The Depository Trust Company.
"Equity Holder" means (a) with respect to a corporation, each holder
of stock of such corporation, (b) with respect to a limited liability company or
similar entity, each member of such limited liability company or similar entity,
(c) with respect to a partnership, each partner of such partnership and (d) with
respect to any disregarded entity, the owner of such entity.
"Equity Interests" means Capital Stock or warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
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"Event of Loss" means, with respect to any property or asset, any (i)
loss, destruction or damage of such property or asset or (ii) any condemnation,
seizure or taking, by exercise of the power of eminent domain or otherwise, of
such property or asset, or confiscation or requisition of the use of such
property or asset.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the offer that may be made by the Issuers
pursuant to the Registration Rights Agreement to exchange Series B Notes for
Series A Notes.
"Excluded Assets" means (i) cash, deposit accounts and other cash
equivalents; (ii) assets securing Purchase Money Obligations or Capital Lease
Obligations permitted to be incurred under this Indenture; (iii) any agreements,
permits, licenses or the like that cannot be subject to a Lien under the
Security Documents without the consent of third parties, which consent is not
obtainable by the Company; and (iv) all Gaming Licenses; provided, that Excluded
Assets does not include the proceeds of the assets under clauses (ii); (iii) or
(iv) or of any other Collateral to the extent such proceeds do not constitute
Excluded Assets under clause (i) above; without limiting the foregoing, Excluded
Assets shall include gaming equipment subject to such Purchase Money Obligations
or Capital Lease Obligations, whether or not such gaming equipment is located
on or attached to the Majestic Star Casino Vessel.
"Excluded Person" means (i) any employee benefit plan of the Company
or any trustee or similar fiduciary holding Capital Stock of the Company for or
pursuant to the terms of any such plan, (ii) BDI, (iii) ▇▇▇▇▇▇ Management, Inc.,
so long as it is owned by ▇▇▇ ▇. ▇▇▇▇▇▇, (iv) ▇▇▇ ▇. ▇▇▇▇▇▇ or his spouse or an
entity controlled by either of them, (v) the estate of ▇▇▇ ▇. ▇▇▇▇▇▇, (vi) any
descendant of ▇▇▇ ▇. ▇▇▇▇▇▇ or the spouse of any such descendant, (vii) the
estate of any such descendant or the spouse of any such descendant, (viii) any
trust or other arrangement for the benefit of the spouse of ▇▇▇ ▇. ▇▇▇▇▇▇ or any
such descendant or the spouse of any such descendant and (ix) any charitable
organization or trust established by ▇▇▇ ▇. ▇▇▇▇▇▇.
"FF&E" means furniture, fixture and equipment acquired by the Company
or a Restricted Subsidiary in the ordinary course of business for use in the
operation of a Casino.
10
"FF&E Financing" means Purchase Money Obligations or Capital Lease
Obligations incurred solely to acquire FF&E; provided, that the principal amount
of such Indebtedness does not exceed the cost (including sales and excise taxes,
installation and delivery charges and other direct costs and expenses) of the
FF&E purchased or leased with the proceeds thereof.
"FF&E Lender" means a Person that is not an Affiliate of the Company
and is a lender under FF&E Financing.
"Flow Through Entity" means an entity that (a) for Federal income tax
purposes constitutes (i) an "S corporation" (as defined in Section 1361(a) of
the Code), (ii) a "qualified subchapter S subsidiary" (as defined in Section
1361(b)(3)(B) of the Code), (iii) a "partnership" (within the meaning of Section
7701(a)(2) of the Code) other than an "publicly traded partnership" (as defined
in Section 7704 of the Code), or (iv) a business entity that is disregarded as
an entity separate from its owner under the Code, the Treasury Regulations or
any published administrative guidance of the Internal Revenue Service (the
entities described in the immediately preceding clauses (i), (ii), (iii) and
(iv), a "Federal Flow Through Entity") and (b) for state and local jurisdictions
in respect of which Permitted Tax Distributions are being made, is subject to
treatment on a basis under applicable state or local income tax law
substantially similar to a Federal Flow Through Entity.
"gaap" means generally accepted accounting principles, as in effect
from time to time, set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as approved by
a significant segment of the accounting profession, and in the rules and
regulations of the Commission.
"GAAP" means gaap as in effect on the Issue Date.
"Gaming Authorities" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States or foreign government, any state, province or any city or
other political subdivision, whether now or hereafter existing, or any officer
or official thereof, including, without limitation, the IGC and any other agency
with authority to regulate any gaming operation (or proposed gaming operation)
owned, managed or operated by the Company or any of its Subsidiaries.
11
"Gaming Licenses" means every material license, material franchise or
other material approval or authorization required to own, lease, operate or
other wise conduct or manage riverboat, dockside or land-based gaming
activities in any state or jurisdiction in which the Company or any of its
Restricted Subsidiaries conducts business (including, without limitation, all
such licenses granted by the IGC under the Indiana Riverboat Gambling Act, and
the rules and regulations promulgated thereunder), and all applicable liquor
licenses.
"Gaming Vessel" means a water-based casino (i) that is substantially
similar in size and space to the Majestic Star Casino Vessel, (ii) with at least
the same overall qualities and amenities as the Majestic Star Casino Vessel, and
(iii) that is developed, constructed and equipped to be in compliance with all
Federal, state and local laws, including, without limitation, the requirements
of the Indiana Riverboat Gambling Act. In the event the laws of the State of
Indiana change to permit the development and operation of land-based casinos,
the term "Gaming Vessel" shall be deemed to include a land-based casino meeting
the requirements of clauses (i), (ii) and (iii) above.
"Global Note" means any Note that contains the paragraph referred to
in footnote 1 and the additional schedule referred to in footnote 3 in the form
of the Note attached hereto as Exhibit A.
"Government Securities" means (i) direct obligations of the United
States of America for the timely payment of which its full faith and credit is
pledged or (ii) obligations of a Person controlled or supervised by and acting
as an agency or instrumentality of the United States of America the timely
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act), as custodian with respect to any such Government Security
or a specific payment of principal of or interest on any such Government
Security held by such custodian for the account of the holder of such depository
receipt; provided, that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
Government Security or the specific payment of principal of or interest on the
Government Security evidenced by such depository receipt.
12
"Governmental Authority" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States or foreign government, any state, province or any city or
other political subdivision or otherwise and whether now or hereafter in
existence, or any officer or official thereof, and any maritime authority.
"Guarantor" means any Restricted Subsidiary that has executed and
delivered in accordance with this Indenture an unconditional and irrevocable
Guarantee of the Issuers' obligations under the Notes and such Person's
successors and assigns.
"guaranty" or "guarantee," used as a noun, means any guaranty (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner (including, without
limitation, letters of credit and reimbursement agreements in respect thereof),
of all or any part of any Indebtedness or other Obligation. "guarantee," used
as a verb, has a correlative meaning.
"Harbor Lease" means the Harbor Lease Agreement, dated as of June 29,
1995, by and between ▇▇▇▇▇ Indiana, Inc. and Lehigh Portland Cement Company as
assigned by ▇▇▇▇▇ Indiana, Inc. to the BHR Joint Venture pursuant to the
Assignment of Harbor Lease Agreement, dated as of October 31, 1995, by and
between ▇▇▇▇▇ Indiana, Inc. and the BHR Joint Venture.
"Hedging Obligations" means, with respect to any Person, the
Obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against
fluctuations in interest rates.
"Holder" means the Person in whose name a Note is registered in the
register of the Notes.
"IGC" means the Indiana Gaming Commission, or any successor Gaming
Authority.
"Indebtedness" of any Person means (without duplication) (i) all
liabilities and obligations, contingent or otherwise, of such Person (A) in
respect of borrowed money (regardless of whether the recourse of the lender is
to the whole of the assets of such Person or only to a portion thereof), (B)
evidenced by bonds,
13
debentures, notes or other similar instruments, (C) representing the deferred
purchase price of property or services (other than trade payables on customary
terms incurred in the ordinary course of business), (D) created or arising under
any conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (E) representing Capital Lease Obligations, (F) under
bankers' acceptance and letter of credit facilities, (G) to purchase, redeem,
retire, defease or otherwise acquire for value any Disqualified Capital Stock,
or (H) in respect of Hedging Obligations; (ii) all Indebtedness of others that
is guaranteed by such Person; and (iii) all Indebted ness of others that is
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including,
without limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness, provided, that the amount of such Indebtedness shall (to the
extent such Person has not assumed or become liable for the payment of such
Indebtedness) be the lesser of (x) the fair market value of such property at the
time of determination and (y) the amount of such Indebtedness. The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above and the maximum
liability, upon the occurrence of the contingency giving rise to the obligation,
of any contingent obligations at such date. Notwithstanding the foregoing, the
term Indebtedness shall not include obligations arising from the honoring by a
bank or other financial institution of a check, draft or similar instrument
drawn against insufficient funds in the ordinary course of business, provided,
that such obligation is extinguished within two business days of its incurrence.
The principal amount outstanding of any Indebtedness issued with original issue
discount is the accreted value of such Indebtedness.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Initial Purchaser" means ▇▇▇▇▇▇▇▇▇ & Company, Inc.
"Intercreditor Agreement" means that certain Intercreditor Agreement
among the Trustee and one or more Lenders, substantially in the form attached
hereto as Exhibit D, which may be entered into after the Issue Date in
accordance with Section 7.1(7) hereof, including any amended or supplemented
agreement or
14
any replacement or substitute agreement, in each case substantially in the form
of Exhibit D attached hereto.
"Interest Coverage Ratio" means, for any period, the ratio of (i)
Consolidated Cash Flow of the Company for such period, to (ii) Consolidated
Interest Expense of the Company for such period. In calculating Interest
Coverage Ratio for any period, pro forma effect shall be given to the
incurrence, assumption, guarantee, repayment, repurchase, redemption or
retirement by the Company or any of its Subsidiaries of any Indebtedness
subsequent to the commencement of the period for which the Interest Coverage
Ratio is being calculated, as if the same had occurred at the beginning of the
applicable period. For purposes of making the computation referred to above,
acquisitions that have been made by the Company or any of its Restricted
Subsidiaries, including all mergers and consolidations, subsequent to the
commencement of such period shall be calculated on a pro forma basis, assuming
that all such acquisitions, mergers and consolidations had occurred on the first
day of such period. Without limiting the foregoing, the financial information
of the Company with respect to any portion of such period that falls before the
Issue Date shall be adjusted to give pro forma effect to the issuance of the
Notes and the application of the proceeds therefrom as if they had occurred at
the beginning of such period.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of loans,
guarantees, advances or capital contributions (excluding (i), payroll
commission, travel and similar advances to officers and employees of such Person
made in the ordinary course of business and (ii) bona fide accounts receivable
arising from the sale of goods or services in the ordinary course of business
consistent with past practice), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, and any
other items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP.
"Issue Date" means the date upon which the Notes are first issued.
"Issuers" means Capital and the Company.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed.
15
"Lender" means a Person that is not an Affiliate of the Company and is
a lender under the Credit Facility.
"Lien" means any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind, regardless of whether filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or other
agreement to sell or give a security interest in and any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction).
"Liquidated Damages" has the meaning set out in the Registration
Rights Agreement.
"Majestic Star Casino Vessel" means the Majestic Star riverboat casino
currently operated by the Company.
"Management Agreement" means that certain Management Agreement, dated
the Issue Date, by and between the Company and BDI, pursuant to which the
Company will pay to BDI fees for acting as the Manager of the Company, which
fees, for any fiscal quarter, shall not exceed 5% of Consolidated Cash Flow for
the immediately preceding fiscal quarter.
"Managers" means (i) for so long as the Company is a limited liability
company, the Managers appointed pursuant to the Operating Agreement or (ii)
otherwise, the Board of Directors of the Company.
"Members" means the members of the Company.
"Net Income" means, with respect to any Person for any period, the net
income (loss) of such Person for such period, determined in accordance with
GAAP, reduced by the maximum amount of Permitted Tax Distributions for such
period, excluding (to the extent included in calculating such net income) (i)
any gain or loss, together with any related taxes paid or accrued on such gain
or loss, realized in connection with any Asset Sales and dispositions pursuant
to sale-leaseback transactions, and (ii) any extraordinary gain or loss,
together with any related taxes paid or accrued on such gain or loss.
16
"Net Proceeds" means the aggregate proceeds received in the form of
cash or Cash Equivalents in respect of any Asset Sale (including issuance or
other payments in an Event of Loss and payments in respect of deferred payment
obligations and any cash or Cash Equivalents received upon the sale or
disposition of any non-cash consideration received in any Asset Sale, in each
case when received), net of
(i) the reasonable and customary direct out-of-pocket costs relating to
such Asset Sale (including, without limitation, legal, accounting and
investment banking fees and sales commissions), other than any such
costs payable to an Affiliate of the Company,
(ii) taxes required to be paid by the Company, any of its Subsidiaries, or
any Equity Holder of the Company (or, in the case of any Company
Equity Holder that is a Flow Through Entity, the Upper Tier Equity
Holder of such Flow Through Entity) in connection with such Asset
Sale in the taxable year that such sale is consummated or in the
immediately succeeding taxable year, the computation of which shall
take into account the reduction in tax liability resulting from any
available operating losses and net operating loss carryovers, tax
credits and tax credit carryforwards, and similar tax attributes,
(iii) amounts required to be applied to the permanent repayment of
Indebtedness in connection with such Asset Sale, and
(iv) appropriate amounts provided as a reserve by the Company or any
Restricted Subsidiary, in accordance with GAAP, against any
liabilities associated with such Asset Sale and retained by the
Company or such Restricted Subsidiary, as the case may be, after such
Asset Sale (including, without limitation, as applicable, pension and
other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification
arising from such Asset Sale).
"Notes" means, collectively, the Series A Notes and the Series B
Notes.
17
"Obligation" means any principal, premium, interest, penalty, fee,
indemnification, reimbursement, damage and other obligation and liability
payable under the documentation governing any liability.
"Officers" means the Chairman of the Board, the President, the Chief
Operating and Financial Officer, the Treasurer, any Assistant Treasurer,
Controller, Secretary, any Assistant Secretary or any Senior Vice President of
the Issuers.
"Officers' Certificate" means a certificate signed on behalf of the
Issuers by two Officers of each of the Company and Capital, in each case, one of
whom must be the President, Chief Operating and Financial Officer, Treasurer,
Controller or a Senior Vice President.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee. Such counsel may be an employee of or
counsel to the Company, any Subsidiary of the Company or the Trustee.
"Permitted Investments" means:
(i) Investments in the Company or in any Wholly Owned Subsidiary;
(ii) Investments in Cash Equivalents;
(iii) Investments in a Person, if, as a result of such Investment, such
Person (A) becomes a Wholly Owned Subsidiary, or (B) is merged,
consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the
Company or a Wholly Owned Subsidiary;
(iv) Hedging Obligations;
(v) Investments as a result of consideration received in connection with
an Asset Sale made in compliance with Section 4.10 hereof;
(vi) Investments existing on the Issue Date;
(vii) Investments paid for solely with Capital Stock (other than
Disqualified Capital Stock) of the Company;
18
(viii) credit extensions to gaming customers in the ordinary course of
business, consistent with industry practice;
(ix) stock, obligations or securities received in settlement of debts
created in the ordinary course of business and owing to the Company
in satisfaction of judgments and
(x) loans or advances to employees of the Company and its Subsidiaries
made in the ordinary course of business in an aggregate amount not
to exceed $500,000 at any one time outstanding.
"Permitted Liens" means:
(i) Liens arising by reason of any judgment, decree or order of any
court for an amount and for a period not resulting in an Event of
Default with respect thereto, so long as such Lien is being
contested in good faith and is adequately bonded, and any
appropriate legal proceedings that may have been duly initiated for
the review of such judgment, decree or order shall not have been
finally adversely terminated or the period within which such
proceedings may be initiated shall not have expired;
(ii) security for the performance of bids, tenders, trade, contracts
(other than contracts for the payment of money) or leases, surety
bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business, consistent with
industry practice;
(iii) Liens (other than Liens arising under ERISA) for taxes, assessments
or other governmental charges not yet due or that are being
contested in good faith and by appropriate proceedings if adequate
reserves with respect thereto are maintained on the books of the
Company in accordance with gaap;
(iv) Liens of carriers, warehousemen, mechanics, landlords, material
men, repairmen or other like Liens arising by operation of law in
the ordinary course of business consistent with industry practices
(other than Liens arising under ERISA) and Liens on deposits made
to obtain the release of such Liens if (a) the underlying
obligations are not overdue for a period of more than 30 days or
(b) such Liens are
19
being contested in good faith and by appropriate proceedings and
adequate reserves with respect thereto are maintained on the books
of the Company in accordance with gaap;
(v) easements, rights of way, zoning and similar restrictions and other
similar encumbrances or title defects incurred in the ordinary
course of business, consistent with industry practices that, in the
aggregate, are not substantial in amount, and that do not in any
case materially detract from the value of the property subject
thereto (as such property is used by the Company or a Subsidiary)
or interfere with the ordinary conduct of the business of the
Company or any of its Subsidiaries; provided, that such Liens are
not incurred in connection with any borrowing of money or any
commitment to loan any money or to extend any credit;
(vi) pledges or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and
other types of social security legislation;
(vii) Liens securing Refinancing Indebtedness incurred in compliance with
this Indenture to refinance Indebtedness secured by Liens,
provided, (a) such Liens do not extend to any additional property
or assets; (b) if the Liens securing the Indebtedness being
refinanced were subordinated to or pari passu with the Liens
securing the Notes or any intercompany loan, as applicable, such
new Liens are subordinated to or pari passu with such Liens to the
same extent, and any related subordination or intercreditor
agreement is confirmed; and (c) such Liens are no more adverse to
the interests of Holders than the Liens replaced or extended
thereby;
(viii) Liens that secure Acquired Debt, provided, that such Liens do not
extend to or cover any property or assets other than those of the
Person being acquired and were not put in place in anticipation of
such acquisition;
(ix) Liens that secure Purchase Money Obligations or Capital Lease
Obligations permitted to be incurred under this Indenture; provided
that such Liens (other than Permitted Vessel Liens) do not extend
to
20
or cover any property or assets other than those being acquired or
developed;
(x) Liens securing Obligations under this Indenture, the Notes or the
Security Documents;
(xi) Liens on assets of the Company and the Subsidiaries, and the
proceeds of any or all the foregoing, securing Indebtedness
incurred pursuant to Section 4.9(a) hereof;
(xii) with respect to any vessel included in the Collateral, certain
maritime liens, including liens for crew's wages and salvage;
(xiii) leases or subleases granted in the ordinary course of business not
materially interfering with the conduct of the business of the
Company or any of the Restricted Subsidiaries;
(xiv) Liens arising from precautionary Uniform Commercial Code financing
statement filings regarding operating leases entered into by the
Company or any of its Subsidiaries in the ordinary course of
business; and
(xv) Liens on the BHR Joint Venture's rights as lessor under leases,
which Liens are to secure indebtedness of the BHR Joint Venture
incurred solely to finance the development, acquisition or
construction of the assets subject to such leases.
"Permitted Tax Distributions" in respect of the Company and each
Subsidiary that qualifies as a Flow Through Entity shall mean, with respect to
any taxable year, the sum of:
(a) the product of (i) the excess of (A) all items of taxable income or
gain (other than capital gain) allocated by the Company to Equity
Holders for such year over (B) all items of taxable deduction or
loss (other than capital loss) allocated to such Equity Holders by
the Company, for such year and (ii) the Applicable Income Tax Rate,
plus
(b) the product of (i) the net capital gain (i.e., net long-term
capital gain over net short-term capital loss), if any, allocated
by the Company to
21
Equity Holders for such year and (ii) the Applicable Capital Gain
Tax Rate, plus
(c) the product of (i) the net short-term capital gain (i.e., net
short-term capital gain in excess of net long-term capital loss),
if any, allocated by the Company to Equity Holders for such year
and (ii) the Applicable Income Tax Rate, minus
(d) the aggregate Tax Loss Benefit Amount for the Company for such
year;
provided, that in no event shall the Applicable Income Tax Rate or the
Applicable Capital Gain Tax Rate exceed the greater of (1) the highest aggregate
applicable effective marginal rate of Federal, state, and local income to which
a corporation doing business in the State of New York would be subject in the
relevant year of determination (as certified to the Trustee by a nationally
recognized tax accounting firm) plus 5%; and (2) 60%. For purposes of
calculating the amount of the Permitted Tax Distributions, the proportionate
part of the items of taxable income, gain, deduction, or loss (including capital
gain or loss) of any Subsidiary that is a Flow Through Entity shall be included
in determining the taxable income, gain, deduction, or loss (including capital
gain or loss) of the Company.
Estimated tax distributions shall be made within fifteen days
following March 31, May 31, August 31, and December 31 based upon an estimate of
the excess of (x) the tax distributions that would be payable for the period
beginning on January 1 of such year and ending on March 31, May 31, August 31,
and December 31 if such period were a taxable year (computed as provided above)
over (y) distributions attributable to all prior periods during such taxable
year.
Prior to making any estimated tax distribution, the Company shall
require each Equity Holder to agree that (a) promptly after the Company and each
Subsidiary file their respective annual tax return, (i) such Equity Holder shall
reimburse the Company to the extent the estimated tax distributions made to such
Equity Holder exceeded the actual Permitted Tax Distributions, as determined on
the basis of such tax returns filed in respect of such taxable year for that
Equity Holder and (ii) the Company shall make a further payment to such Equity
Holder to the extent such estimated tax distributions were less than the tax
distributions actually payable to such Equity Holder with respect to such
taxable year and (b) if the appropriate Federal or state taxing authority
finally determines that the amount of the
22
items of taxable income, gain, deduction, or loss (including capital gain or
loss) of the Company or any Subsidiary that is treated as a Flow Through Entity
for any taxable year or the aggregate Tax Loss Benefit Amounts carried forward
to such taxable year should be changed or adjusted, then (i) such Equity Holder
shall reimburse the Company to the extent the Permitted Tax Distributions
previously made to such Equity Holder in respect of that taxable year exceeded
the Permitted Tax Distributions with respect to such taxable year taking into
account such change or adjustment for such Equity Holder and (ii) the Company
shall make a further payment to such Equity Holder to the extent the Permitted
Tax Distributions previously paid to such Equity Holder were less than the
Permitted Tax Distributions payable to such Equity Holder with respect to such
taxable year taking into account such change or adjustment.
To the extent that any tax distribution would otherwise be made to any
Equity Holder at a time when an obligation of such Equity Holder to make a
payment to the Company pursuant to the previous paragraph remains outstanding,
the amount of any tax distribution to be made shall be reduced by the amounts
such Equity Holder is obligated to pay the Company.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof, or any other entity.
"Permitted Vessel Lien" means a Lien on the Majestic Star Casino
Vessel that secures FF&E Financing; provided that (a) the FF&E Lender agrees (i)
--------
to release such Lien upon satisfaction of such FF&E Financing, (ii) to release
such Lien upon payment (or promise of payment) to such FF&E Lender of that
portion of the proceeds of the sale of the Majestic Star Casino Vessel
attributable to the related FF&E and (iii) that such Lien is subordinate and
inferior in every respect to the Lien of the Trustee pursuant to the Preferred
Ship Mortgage on the hull and other equipment constituting the Majestic Star
Casino Vessel (other than the related FF&E) and (b) such Lien shall not have an
adverse impact on the Holders.
"Preferred Ship Mortgage" means the preferred ship mortgage on the
Majestic Star Casino Vessel, dated as of the Issue Date, by and between the
Company and the Trustee.
23
"Pre-Opening Expenses" means all costs of start-up activities that are
required to be expensed (and are not capitalized) in accordance with SOP 98-5.
"Public Equity Offering" means a bona fide underwritten public
offering of Qualified Capital Stock of the Company, pursuant to a registration
statement filed with and declared effective by the Commission in accordance with
the Securities Act.
"Purchase Money Obligations" means Indebtedness representing, or
incurred to finance (or to Refinance Indebtedness incurred to finance), the cost
(i) of acquiring any assets and (ii) of construction or build-out of facilities
(including Purchase Money Obligations of any other Person at the time such other
Person is merged with or into or is otherwise acquired by the Issuers);
provided, that (x) the principal amount of such Indebtedness does not exceed 80%
of such cost, including construction charges, (y) any Lien securing such
Indebtedness does not extend to or cover any other asset or property other than
the asset or property being so acquired, constructed or built and (z) such
Indebtedness is (or the Indebtedness being Refinanced was) incurred, and any
Liens with respect thereto are granted, within 180 days of the acquisition or
commencement of construction or build-out of such property or asset.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Qualified Capital Stock" means, with respect to any Person, Capital
Stock of such Person other than Disqualified Capital Stock.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Issue Date, by and among the Issuers and the Initial
Purchaser as such agreement may be amended, modified or supplemented from time
to time.
"Related Business" means (a) the gaming and hotel businesses conducted
by the Company as of the Issue Date and any and all businesses that in the good
faith judgment of the Managers are materially related businesses or (b) a
business necessary to satisfy the Company's off-site development obligation
under the Development Agreement.
24
"Required Regulatory Redemption" means a redemption by the Issuers of
any Holder's Notes pursuant to, and in accordance with, any order of any
Governmental Authority with appropriate jurisdiction and authority relating to a
Gaming License, or to the extent necessary in the reasonable, good faith
judgment of the Managers of the Company to prevent the loss, failure to obtain
or material impairment or to secure the reinstatement of, any Gaming License,
where such redemption or acquisition is required because the Holder or
beneficial owner of Notes is required to be found suitable or to otherwise
qualify under any gaming laws and is not found suitable or so qualified within a
reasonable period of time.
"Responsible Officer" when used with respect to the Trustee, means any
officer within the corporate trust department of the Trustee located at the
Corporate Trust Office (or any successor group of the Trustee) or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the designated officers, and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Securities" means Notes that bear or are required to bear
the legends set forth in Exhibit A hereto.
"Restricted Subsidiary" means a Subsidiary other than an Unrestricted
Subsidiary.
"Return from Unrestricted Subsidiaries" means (a) 50% of any dividends
or distributions received by the Company or a Restricted Subsidiary from an
Unrestricted Subsidiary, to the extent that such dividends or distributions were
not otherwise included in Consolidated Net Income of the Company, plus (b) to
the extent not otherwise included in Consolidated Net Income of the Company, an
amount equal to the net reduction in Investments in Unrestricted Subsidiaries
resulting from (i) repayments of the principal of loans or advances or other
transfers of assets to the Company or any Restricted Subsidiary from
Unrestricted Subsidiaries or (ii) the sale or liquidation of any Unrestricted
Subsidiaries, plus (c) to the extent that any Unrestricted Subsidiary of the
Company is designated to be a Restricted Subsidiary, the fair market value of
the Company's Investment in such Subsidiary on the date of such designation.
25
"Rule 144A" means Rule 144A under the Securities Act, as such Rule may
be amended from time to time, or under any similar rule or regulation hereafter
adopted by the Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means that certain Security Agreement to encumber
substantially all of the assets of the Company, including the Company's interest
in the Berthing Agreement, in favor of the Trustee, for the ratable benefit of
the Holders of the Notes, as the same may be amended in accordance with the
terms thereof and this Indenture.
"Security Documents" means, collectively, the BDI Pledge Agreement,
the BHR Pledge Agreement, the Preferred Ship Mortgage, the Security Agreement,
the Trademark Security Agreement, and any other agreements, instruments,
financing statements or other documents that evidence, set forth or limit the
Lien of the Trustee in the Collateral.
"Series A Notes" means the Issuers' 10 7/8% Series A Senior Notes due
2006, as authenticated and issued under this Indenture.
"Series B Notes" means the Issuers' 10 7/8% Series B Senior Notes due
2006, as authenticated and issued under this Indenture.
"subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity (including a limited liability company) of
which more than 50% of the total voting power of shares of Voting Stock thereof
is at the time owned or controlled, directly or indirectly, by such Person or
one or more of the other subsidiaries of that Person or a combination thereof
and (ii) any partnership in which such Person or any of its subsidiaries is a
general partner.
"Subsidiary" means any subsidiary of the Company.
"Tax Loss Benefit Amount" means, with respect to any taxable year, the
amount by which the Permitted Tax Distributions would be reduced were a net
operating loss or net capital loss from a prior taxable year of the Company
ending subsequent to the Issue Date carried forward to such taxable year;
provided, that for such purpose the amount of any such net operating loss or net
capital loss shall be utilized only once and in each case shall be carried
forward to the next succeeding
26
taxable year until so utilized. For purposes of calculating the Tax Loss Benefit
Amount, the proportionate part of the items of taxable income, gain, deduction,
or loss (including capital gain or loss) of any Subsidiary that is a Flow
Through Entity for a taxable year of such Subsidiary ending subsequent to the
Issue Date shall be included in determining the amount of net operating loss or
net capital loss of the Company.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (SS) 77aaa-
77bbbb), as amended, as in effect on the date hereof until such time as this
Indenture is qualified under the TIA, and thereafter as in effect on the date on
which this Indenture is qualified under the TIA.
"Trademark Security Agreement" means that certain Trademark Security
Agreement executed by the Company to encumber the "Majestic Star Casino" service
▇▇▇▇ in favor of the Trustee, for the ratable benefit of the Holders of the
Notes, as the same may be amended in accordance with the terms thereof and this
Indenture.
"transfer" means, with respect to any asset, any direct or indirect
sale, assignment, transfer, lease, conveyance, or other disposition (including,
without limitation, by way of merger or consolidation).
"Trustee" means IBJ Whitehall Bank & Trust Company, a New York banking
corporation, until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
"Unrestricted Subsidiary" means any Subsidiary that, at or prior to
the time of determination, shall have been designated by the Managers as an
Unrestricted Subsidiary; provided, that such Subsidiary does not hold any
Indebtedness or Capital Stock of, or any Lien on any assets of, the Company or
any Restricted Subsidiary. If, at any time, any Unrestricted Subsidiary would
fail to meet the foregoing requirements as an Unrestricted Subsidiary, it
shall thereafter cease to be an Unrestricted Subsidiary for purposes of this
Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred
by a Restricted Subsidiary as of such date. The Managers may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided,
that such designation shall be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (i) such Indebtedness
is permitted under the Interest Coverage Ratio test
27
set forth in Section 4.9 hereof calculated on a pro forma basis as if such
designation had occurred at the beginning of the four-quarter reference period,
and (ii) no Default or Event of Default would be in existence following such
designation. The Company shall be deemed to make an Investment in each
Subsidiary designated as an Unrestricted Subsidiary immediately following such
designation in an amount equal to the Investment in such Subsidiary and its
subsidiaries immediately prior to such designation. Any such designation by the
Managers shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the resolution of the Managers giving effect to such
designation and an Officers' Certificate certifying that such designation
complies with the foregoing conditions and is permitted by Section 4.9 hereof.
"Upper Tier Equity Holder" means, in the case of any Flow Through
Entity the Equity Holder of which is, in turn, a Flow Through Entity, the person
that is ultimately subject to tax on a net income basis on the items of taxable
income, gain, deduction, and loss of the Company and its Subsidiaries that are
Flow Through Entities.
"U.S. Government Obligations" means direct obligations of the United
States of America, or any agency or instrumentality thereof for the payment of
which the full faith and credit of the United States of America is pledged.
"Voting Stock" means, with respect to any Person, (i) one or more
classes of the Capital Stock of such Person having general voting power to elect
at least a majority of the Board of Directors, managers or trustees of such
Person (regardless of whether at the time Capital Stock of any other class or
classes have or might have voting power by reason of the happening of any
contingency) and (ii) any Capital Stock of such Person convertible or
exchangeable without restriction at the option of the holder thereof into
Capital Stock of such Person described in clause (i) above.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years (rounded to the nearest one-
twelfth) obtained by dividing (i) the then outstanding principal amount of such
Indebtedness into (ii) the total of the product obtained by multiplying (A) the
amount of each then remaining installment, sinking fund, serial maturity or
other required payments of principal, including payment at final maturity, in
respect thereof, by (B) the number of years (calculated to the nearest one-
twelfth) that will elapse between such date and the making of such payment.
28
"Wholly Owned Subsidiary" of any Person means a subsidiary of such
Person all the Capital Stock of which (other than directors' qualifying shares)
is owned directly or indirectly by such Person; provided, that (i) with respect
to the Company, the term Wholly Owned Subsidiary shall exclude Unrestricted
Subsidiaries, and (ii) the BHR Joint Venture will be a Wholly Owned Subsidiary
of the Company so long as (a) the Company owns 90% or more of the outstanding
membership interests in the BHR Joint Venture and (b) the BHR Joint Venture is
a Restricted Subsidiary.
Section 1.2. Other Definitions.
----------- -----------------
Defined in
Term Section
---- ----------
"Affiliate Transaction"................ 4.11
"Change of Control Offer".............. 4.14
"Change of Control Payment"............ 4.14
"Change of Control Payment Date"....... 4.14
"Definitive Notes"..................... 2.1
"Event of Default"..................... 6.1
"Excess Proceeds"...................... 4.10
"Excess Proceeds Offer"................ 4.10
"Excess Proceeds Offer Period"......... 4.10
"Excess Proceeds Payment Date"......... 4.10
"Gaming Laws".......................... 10.14
"Global Notes"......................... 2.1
"Guaranty"............................. 10.7
"Hedging Obligations".................. 4.9(b)
"Paying Agent"......................... 2.3
"Purchase Amount"...................... 4.10
"Purchase Money Indebtedness".......... 4.9(b)
"Refinance"............................ 4.9(i)
"Refinancing Indebtedness"............. 4.9(i)
"Registrar"............................ 2.3
"Regulatory Redemption"................ 3.8
"Regulatory Redemption Offer Price".... 3.8
"Restricted Payments".................. 4.7
29
Section 1.3. Incorporation by Reference of Trust Indenture Act.
----------- -------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
--------------------
"indenture security holder" means a Holder of a Note;
-------------------------
"indenture to be qualified" means this Indenture;
-------------------------
"indenture trustee" or "institutional trustee" means the Trustee;
----------------- ---------------------
"obligor" on the Notes means the Issuers, the Guarantors and any successor
-------
obligor upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute, or defined by Commission rule under
the TIA have the meanings so assigned to them.
Section 1.4. Rules of Construction.
----------- ---------------------
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural include
the singular;
(5) provisions apply to successive events and transactions;
30
(6) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision, and the terms "Article," "Section," "Exhibit" and "Schedule,"
unless otherwise specified or indicated by the context in which used, mean the
corresponding Article or Section of, or the corresponding Exhibit or Schedule
to, this Indenture; and
(7) references to agreements and other instruments include subsequent
amendments, supplements and waivers to such agreements or instruments but only
to the extent not prohibited by this Indenture.
ARTICLE 2
THE NOTES
Section 2.1. Form and Dating.
----------- ---------------
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A attached hereto, the terms of which are
incorporated in and made a part of this Indenture. Each Note shall include the
Guaranty executed by each of the Guarantors in the form of Exhibit C attached
hereto, the terms of which are incorporated into and made a part of this
Indenture. The Notes may have notations, legends or endorsements required by
law, stock exchange rule, agreements to which the Issuers are subject or usage.
Each Note shall be dated the date of its authentication. The Notes shall be
issued in denominations of $1,000 and integral multiples thereof.
The Notes will be issued (i) in global form (the "Global Notes"),
------------
substantially in the form of Exhibit A attached hereto (including the text
referred to in footnotes 1 and 3 thereto) and (ii) under certain circumstances,
in definitive form (the "Definitive Notes"), substantially in the form of
----------------
Exhibit A attached hereto (excluding the text referred to in footnotes 1 and 3
thereto). Each Global Note shall represent the aggregate amount of outstanding
Notes from time to time endorsed thereon; provided, that the aggregate amount of
--------
outstanding Notes represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions. Any
endorsement of a Global Note to reflect the amount of any increase or decrease
in the amount of outstanding Notes represented thereby shall be made by the
Trustee, in accordance with instructions given by the Holder thereof as required
by Section 2.6 hereof.
31
Section 2.2. Execution and Authentication.
----------- ----------------------------
Two Officers of each of the Issuers shall sign the Notes for the
Issuers by manual or facsimile signature. If an Officer whose signature is on a
Note no longer holds that office at the time the Note is authenticated, the Note
shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature of the Trustee shall be conclusive evidence that
the Note has been authenticated under this Indenture. The form of Trustee's
certificate of authentication to be borne by the Notes shall be substantially as
set forth in Exhibit A attached hereto.
The Trustee shall, upon a Company Order, authenticate for original
issue Notes in any aggregate principal amount. The aggregate principal amount
of Notes that may be authenticated and delivered under this Indenture is
unlimited. Subject to Section 4.9 hereof, additional Notes may be issued
hereunder from time to time, without the consent of the Holders of previously
issued Notes, in an aggregate principal amount to be determined from time to
time by the Issuers; provided, that additional Notes may not be issued with
--------
original issue discount as determined under section 1271 et seq. of the Code.
-- ---
The Trustee may appoint an authenticating agent acceptable to the
Issuers to authenticate Notes. Unless limited by the terms of such appointment,
an authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authenticating by the Trustee includes
authenticating by such agent. An authenticating agent has the same rights as an
Agent to deal with the Issuers or an Affiliate of the Issuers.
The Issuers, the Trustee and any agent of the Issuers or the Trustee
may treat the Person in whose name any Note is registered as the owner of such
Note for the purpose of receiving payment of principal of and (subject to the
provisions of this Indenture and the Notes with respect to record dates)
interest on such Note and for all other purposes whatsoever, whether or not such
Note is overdue, and neither the Issuers, the Trustee nor any agent of the
Issuers or the Trustee shall be affected by notice to the contrary.
32
Section 2.3. Registrar, Paying Agent and Depositary.
----------- --------------------------------------
The Issuers shall maintain (i) an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and (ii) an
---------
office or agency where Notes may be presented for payment ("Paying Agent"). The
------------
Issuers initially appoint the Trustee as Registrar and Paying Agent. The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Issuers may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Issuers may change any
Paying Agent or Registrar without notice to any Holder. The Issuers shall
notify the Trustee of the name and address of any Agent not a party to this
Indenture. If the Issuers fail to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar, except that for purposes
of Articles Three and Eight and Sections 4.1, 4.10 and 4.14, neither the Company
nor any of its Subsidiaries shall act as Paying Agent.
The Issuers shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which shall incorporate the provisions of
the TIA. The agreement shall implement the provisions of this Indenture that
relate to such Agent.
The Issuers initially appoint DTC to act as Depositary with respect to
the Global Notes. The Trustee shall act as custodian for the Depositary with
respect to the Global Notes.
Section 2.4. Paying Agent to Hold Money in Trust.
----------- -----------------------------------
The Issuers shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent shall hold in trust for the benefit of
the Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium, if any, or interest on the Notes and shall notify the
Trustee in writing of any default by the Issuers in making any such payment.
While any such default continues, the Trustee may require a Paying Agent to pay
all money held by it to the Trustee. The Issuers at any time may require a
Paying Agent to pay all money held by it to the Trustee. Upon payment over to
the Trustee, the Paying Agent (if other than the Company or a Subsidiary of the
Company) shall have no further liability for the money delivered to the Trustee.
If the Company or a Subsidiary of the Company acts as Paying Agent (subject to
Section 2.3), it shall
33
segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent.
Section 2.5. Holder Lists.
----------- ------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA (S) 312(a). If the Trustee is
not the Registrar, the Issuers shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders,
including the aggregate principal amount of Notes held by each such Holder, and
the Issuers shall otherwise comply with TIA (S) 312(a).
Section 2.6. Transfer and Exchange.
----------- ---------------------
(a) Transfer and Exchange of Definitive Notes. When Definitive Notes
-----------------------------------------
are presented by a Holder to the Registrar with a request (1) to register the
transfer of the Definitive Notes or (2) to exchange such Definitive Notes for an
equal principal amount of Definitive Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided, that the Definitive
--------
Notes so presented (A) have been duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar duly executed by
such Holder or by his attorney, duly authorized in writing; and (B) in the case
of a Restricted Security, such request shall be accompanied by the following
additional documents:
(i) if such Restricted Security is being delivered to the Registrar
by a Holder for registration in the name of such Holder, without transfer,
a certification to that effect (in substantially the form of Exhibit B
attached hereto); or
(ii) if such Restricted Security is being transferred to a QIB in
accordance with Rule 144A or pursuant to an effective registration
statement under the Securities Act, a certification to that effect (in
substantially the form of Exhibit B attached hereto); or
34
(iii) if such Restricted Security is being transferred in reliance on
another exemption from the registration requirements of the Securities Act,
a certification to that effect (in substantially the form of Exhibit B
attached hereto) and an opinion of counsel reasonably acceptable to the
Issuers and the Registrar to the effect that such transfer is in compliance
with the Securities Act.
(b) Transfer of a Definitive Note for a Beneficial Interest in a
------------------------------------------------------------
Global Note. A Definitive Note may be exchanged for a beneficial interest in a
-----------
Global Note only upon receipt by the Trustee of a Definitive Note, duly endorsed
or accompanied by appropriate instruments of transfer, in form satisfactory to
the Trustee, together with:
(i) written instructions directing the Trustee to make an
endorsement on the appropriate Global Note to reflect an increase in the
aggregate principal amount of the Notes represented by such Global Note,
and
(ii) if such Definitive Note is a Restricted Security, a
certification (in substantially the form of Exhibit B attached hereto) and,
if applicable, a legal opinion, in each case similar to that required
pursuant to Section 2.6(a)(i)-(iii), as applicable;
in which case the Trustee shall cancel such Definitive Note and cause the
aggregate principal amount of Notes represented by the appropriate Global Note
to be increased accordingly. If no Global Note is then outstanding, the Issuers
shall issue and the Trustee shall authenticate a new Global Note in the
appropriate principal amount.
(c) Transfer and Exchange of Global Notes. The transfer and
-------------------------------------
exchange of Global Notes or beneficial interests therein shall be effected
through the Depositary in accordance with this Indenture and the procedures of
the Depositary therefor, which shall include restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
(d) Transfer of a Beneficial Interest in a Global Note for a
--------------------------------------------------------
Definitive Note. Upon receipt by the Trustee of written transfer instructions
---------------
(or such other form of instructions as is customary for the Depositary), from
the Depositary (or its nominee) on behalf of any Person having a beneficial
interest in a Global Note, the Trustee shall, in accordance with the standing
instructions and procedures existing between the Depositary and the Trustee,
cause the aggregate principal amount of
35
Global Notes to be reduced accordingly and, following such reduction, the
Issuers shall execute and the Trustee shall authenticate and deliver to the
transferee a Definitive Note in the appropriate principal amount; provided, that
in the case of a Restricted Security, such instructions shall be accompanied by
the following additional documents:
(i) if such beneficial interest is being transferred to the Person
designated by the Depositary as being the beneficial owner, a certification
to that effect (in substantially the form of Exhibit B attached hereto); or
(ii) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A or pursuant to an effective registration
statement under the Securities Act, a certification to that effect (in
substantially the form of Exhibit B attached hereto); or
(iii) if such beneficial interest is being transferred in reliance on
another exemption from the registration requirements of the Securities Act,
a certification to that effect (in substantially the form of Exhibit B
attached hereto) and an opinion of counsel reasonably acceptable to the
Issuers and to the Registrar to the effect that such transfer is in
compliance with the Securities Act.
Definitive Notes issued in exchange for a beneficial interest in a
Global Note shall be registered in such names and in such authorized
denominations as the Depositary shall instruct the Trustee.
(e) Transfer and Exchange of Global Notes. Notwithstanding any
-------------------------------------
other provision of this Indenture, the Global Note may not be transferred as a
whole except by the Depositary to a nominee of the Depositary or by a nominee of
the Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary; provided, that if:
--------
(i) the Depositary (a) notifies the Issuers that the Depositary is
unwilling or unable to continue as Depositary and a successor Depositary is
not appointed by the Issuers within 90 days after delivery of such notice,
or (b) has ceased to be a clearing agency registered under the Exchange
Act; or
36
(ii) the Issuers, at their sole discretion, notify the Trustee in
writing that they elect to cause the issuance of Definitive Notes under
this Indenture;
then the Issuers shall execute and the Trustee shall authenticate and deliver,
Definitive Notes in an aggregate principal amount equal to the aggregate
principal amount of the Global Note in exchange for such Global Note.
(f) Cancellation and/or Adjustment of Global Notes. At such time as
----------------------------------------------
all beneficial interests in the Global Note have either been exchanged for
Definitive Notes, redeemed, repurchased or cancelled, the Global Note shall be
returned to (or retained by) and cancelled by the Trustee. At any time prior to
such cancellation, if any beneficial interest in the Global Note is exchanged
for Definitive Notes, redeemed, repurchased or cancelled, the aggregate
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note by the Trustee
to reflect such reduction.
(g) General Provisions Relating to Transfers and Exchanges. To
------------------------------------------------------
permit registrations of transfers and exchanges, the Issuers shall execute and
the Trustee shall authenticate Definitive Notes and Global Notes at the
Registrar's request. All Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive Notes or Global Notes shall
be legal, valid and binding obligations of the Issuers, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Definitive
Notes or Global Notes surrendered upon such registration of transfer or
exchange.
No service charge shall be made to a Holder for any registration of
transfer or exchange, but the Issuers may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar governmental charge
payable upon exchange (without transfer to another person) pursuant to Sections
2.10, 3.7, 3.8, 4.10, 4.14 and 9.5 of this Indenture).
The Issuers shall not be required to (i) issue, register the transfer
of or exchange Notes during a period beginning at the opening of business 15
days before the day of any selection of Notes for redemption under Section 3.2
hereof and ending at the close of business on the day of selection; or (ii)
register the transfer of or exchange any Note so selected for redemption in
whole or in part, except the unredeemed portion of any Note being redeemed in
part; or (iii) register the transfer
37
of or exchange a Note between a record date and the next succeeding interest
payment date.
Prior to due presentment for the registration of a transfer of any
Note, the Trustee, any Agent and the Issuers may deem and treat the Person in
whose name any Note is registered as the absolute owner of such Note for all
purposes, and neither the Trustee, any Agent nor the Issuers shall be affected
by notice to the contrary.
(h) Exchange of Series A Notes for Series B Notes. The Series A
---------------------------------------------
Notes may be exchanged for Series B Notes pursuant to the terms of the Exchange
Offer. The Trustee and Registrar shall make the exchange as follows:
The Issuers shall present the Trustee with an Officers' Certificate
certifying the following:
(A) upon issuance of the Series B Notes, the transactions
contemplated by the Exchange Offer have been consummated; and
(B) the principal amount of Series A Notes properly tendered in the
Exchange Offer that are represented by a Global Note and the
principal amount of Series A Notes properly tendered in the
Exchange Offer that are represented by Definitive Notes; the name
of each Holder of such Definitive Notes; the principal amount
properly tendered in the Exchange Offer by each such Holder; and
the name and address to which Definitive Notes for Series B Notes
shall be registered and sent for each such Holder.
The Trustee, upon receipt of (i) such Officers' Certificate, (ii) an
Opinion of Counsel (x) to the effect that the Series B Notes have been
registered under Section 5 of the Securities Act and this Indenture has been
qualified under the TIA and (y) with respect to the matters set forth in Section
6(p) of the Registration Rights Agreement and (iii) a Company Order, shall
authenticate (A) a Global Note for Series B Notes in aggregate principal amount
equal to the aggregate principal amount of Series A Notes represented by a
Global Note indicated in such Officers' Certificate as having been properly
tendered and (B) Definitive Notes representing
38
Series B Notes registered in the names of, and in the principal amounts
indicated in such Officers' Certificate.
If the principal amount at maturity of the Global Note for the Series
B Notes is less than the principal amount at maturity of the Global Note for the
Series A Notes, the Trustee shall make an endorsement on such Global Note for
Series A Notes indicating a reduction in the principal amount at maturity
represented thereby.
The Trustee shall deliver such Definitive Notes for Series B Notes to
the Holders thereof as indicated in such Officers' Certificate.
Section 2.7. Replacement Notes.
----------- -----------------
If any mutilated Note is surrendered to the Trustee, or the Issuers
and the Trustee receive evidence to their satisfaction of the destruction, loss
or theft of any Note, the Issuers shall issue and the Trustee shall authenticate
a replacement Note if the Trustee's requirements for replacements of Notes are
met. If required by the Trustee or the Issuers, an indemnity bond must be
supplied by the Holder that is sufficient in the judgment of the Trustee and the
Issuers to protect the Issuers, the Trustee, any Agent or any authenticating
agent from any loss that any of them may suffer if a Note is replaced. The
Issuers or the Trustee may charge for their expenses in replacing a Note.
Every replacement Note is an obligation of the Issuers and shall be
entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
Section 2.8. Outstanding Notes.
----------- -----------------
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section 2.8 as not outstanding.
If a Note is replaced pursuant to Section 2.7 hereof, the replaced
Note ceases to be outstanding unless the Trustee receives proof satisfactory to
it that the replaced Note is held by a bona fide purchaser.
39
If the principal amount of any Note is considered paid under Section
4.1 hereof, it ceases to be outstanding and interest on it ceases to accrue.
Subject to Section 2.9 hereof, a Note does not cease to be outstanding
because the Issuers or an Affiliate of the Issuers holds the Note.
Section 2.9. Treasury Notes.
------------ --------------
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Issuers or any Affiliate of the Issuers shall be considered as though not
outstanding, except that for purposes of determining whether the Trustee shall
be protected in relying on any such direction, waiver or consent, only Notes
that the Trustee knows to be so owned shall be considered as not outstanding.
Section 2.10. Temporary Notes.
------------- ---------------
Pending the preparation of definitive Notes, the Issuers (and the
Guarantors) may execute, and upon Company Order the Trustee shall authenticate
and deliver, temporary Notes that are printed, lithographed, typewritten,
mimeographed or otherwise reproduced, in any authorized denomination,
substantially of the tenor of the definitive Notes in lieu of which they are
issued and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Notes may determine, as conclusively
evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuers (and the Guarantors)
shall cause definitive Notes to be prepared without unreasonable delay. The
definitive Notes shall be printed, lithographed or engraved, or provided by any
combination thereof, or in any other manner permitted by the rules and
regulations of any principal national securities exchange, if any, on which the
Notes are listed, all as determined by the Officers executing such definitive
Notes. After the preparation of definitive Notes, the temporary Notes shall be
exchangeable for definitive Notes upon surrender of the temporary Notes at the
office or agency maintained by the Issuers for such purpose pursuant to Section
4.2 hereof, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Notes, the Issuers (and the Guarantors) shall execute, and
the Trustee shall authenticate and deliver, in exchange therefor the same
aggregate principal amount of definitive Notes of
40
authorized denominations. Until so exchanged, the temporary Notes shall in all
respects be entitled to the same benefits under this Indenture as definitive
Notes.
Section 2.11. Cancellation.
------------
The Issuers at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall retain or
destroy cancelled Notes in accordance with its normal practices (subject to the
record retention requirement of the Exchange Act) unless the Issuers direct them
to be returned to the Issuers. The Issuers may not issue new Notes to replace
Notes that have been redeemed or paid or that have been delivered to the Trustee
for cancellation. All cancelled Notes held by the Trustee shall be destroyed and
certification of their destruction delivered to the Issuers unless by a written
order, signed by one Officer of each of the Issuers, the Issuers shall direct
that cancelled Notes be returned to them.
Section 2.12. Defaulted Interest.
------------ ------------------
If the Issuers default in a payment of interest on the Notes, the
Issuers shall pay the defaulted interest in any lawful manner plus, to the
extent lawful, interest payable on the defaulted interest, to the Persons who
are Holders on a subsequent special record date, which date shall be at the
earliest practicable date but in all events at least five Business Days prior to
the payment date, in each case at the rate provided in the Notes and in Section
4.1 hereof. The Issuers shall, with the consent of the Trustee, fix or cause to
be fixed each such special record date and payment date. At least 15 days
before the special record date, the Issuers (or the Trustee, in the name of and
at the expense of the Issuers) shall mail to the Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
Section 2.13. Legends.
------------- -------
(a) Except as permitted by subsections (b) or (c) of this Section
2.13, each Note shall bear legends relating to restrictions on transfer pursuant
to the securities laws in substantially the form set forth on Exhibit A attached
hereto.
41
(b) Upon any sale or transfer of a Restricted Security (including any
Restricted Security represented by a Global Note) pursuant to Rule 144 under the
Securities Act or pursuant to an effective registration statement under the
Securities Act:
(i) in the case of any Restricted Security that is a Definitive Note,
the Registrar shall permit the Holder thereof to exchange such Restricted
Security for a Definitive Note that does not bear the legends required by
subsection (a) above; and
(ii) in the case of any Restricted Security represented by a Global
Note, such Restricted Security shall not be required to bear the legends
required by subsection (a) above, but shall continue to be subject to the
provisions of Section 2.6(c) hereof; provided, that with respect to any
--------
request for an exchange of a Restricted Security that is represented by a
Global Note for a Definitive Note that does not bear the legends required
by subsection (a) above, which request is made in reliance upon Rule 144,
the Holder thereof shall certify in writing to the Registrar that such
request is being made pursuant to Rule 144.
(c) The Issuers (and the Guarantors) shall issue and the Trustee
shall authenticate Series B Notes in exchange for Series A Notes accepted for
exchange in the Exchange Offer. The Series B Notes shall not bear the legends
required by subsection (a) above unless the Holder of such Series A Notes is
either (A) a broker-dealer who purchased such Series A Notes directly from the
Issuers to resell pursuant to Rule 144A or any other available exemption under
the Securities Act, (B) a Person participating in the distribution of the Series
A Notes or (C) a Person who is an affiliate (as defined in Rule 144A) of the
Issuers.
Section 2.14. Deposit of Moneys.
------------- -----------------
Subject to Section 3.5 hereof, prior to 10:00 a.m. on each date on
which the principal of, premium, if any, and interest on the Notes are due, the
Issuers shall deposit with the Trustee or Paying Agent in immediately available
funds, money sufficient to make cash payments, if any, due on such date in a
timely manner that permits the Trustee or the Paying Agent to remit payment to
the Holders on such date.
42
ARTICLE 3
REDEMPTION
Section 3.1. Notices to Trustee.
------------ ------------------
If the Issuers elect to redeem Notes pursuant to Section 3.7
hereof, or are required to redeem Notes pursuant to Section 3.8 hereof, the
Issuers shall furnish to the Trustee, at least 45 days but not more than 60 days
before a redemption date (except in the case of a Required Regulatory Redemption
requiring less notice), an Officers' Certificate setting forth (i) the clause of
Section 3.7 pursuant to which the redemption shall occur or if the redemption is
required by Section 3.8, (ii) the redemption date, (iii) the principal amount of
Notes to be redeemed and (iv) the redemption price.
Section 3.2. Selection of Notes to Be Redeemed.
------------ ---------------------------------
If less than all the Notes are to be redeemed pursuant to Section
3.7 or 3.8 hereof, the Trustee shall select the Notes to be redeemed in
compliance with the requirement of the principal national securities exchange,
if any, on which the Notes are listed, or, if the Notes are not so listed, pro
---
rata, by lot or by such method as the Trustee deems to be fair and reasonable.
----
The Trustee shall promptly notify the Issuers in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.3. Notice of Redemption.
------------ --------------------
At least 30 days but not more than 60 days before a redemption
date (except in the case of a Required Regulatory Redemption requiring less
notice), the Issuers shall mail a notice of redemption by first class mail to
each Holder whose Notes are to be redeemed at such Holder's registered address.
The notice shall identify the Notes to be redeemed and shall state:
(1) the redemption date;
43
(2) the redemption price;
(3) if any Note is being redeemed in part only, the portion of
the principal amount of such Note to be redeemed and that, after the
redemption date, upon cancellation of the original Note, a new Note or
Notes in principal amount equal to the unredeemed portion shall be issued;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(6) that, unless the Issuers default in making such redemption
payment, interest on Notes or portions of Notes called for redemption
ceases to accrue on and after the redemption date;
(7) the paragraph of the Notes and/or the section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
(8) the CUSIP number of the Notes to be redeemed.
At the Issuers' request, the Trustee shall give the notice of
redemption in the name of the Issuers and at the Issuers' expense; provided that
--------
the Issuers shall deliver to the Trustee, at least 45 days (unless a shorter
period is acceptable to the Trustee) prior to the redemption date, an Officers'
Certificate requesting that the Trustee give such notice and setting forth the
information to be stated in such notice as provided in the preceding paragraph.
Section 3.4. Effect of Notice of Redemption.
------------ ------------------------------
Once notice of redemption has been mailed to the Holders in
accordance with Section 3.3 herein, Notes called for redemption become due and
payable on the redemption date at the redemption price. At any time prior to the
mailing of a notice of redemption to the Holders pursuant to Section 3.3, the
Issuers may with draw, revoke or rescind any notice of redemption delivered to
the Trustee without any continuing obligation to redeem the Notes as
contemplated by such notice of redemption.
44
Section 3.5. Deposit of Redemption Price.
------------ ---------------------------
At or before 10:00 a.m. on the redemption date, the Issuers shall
deposit with the Trustee (to the extent not already held by the Trustee) or with
the Paying Agent money in immediately available funds sufficient to pay the
redemption price of and accrued interest on all Notes to be redeemed on that
date. The Trustee or the Paying Agent shall return to the Issuers any money
deposited with the Trustee or the Paying Agent by the Issuers in excess of the
amounts necessary to pay the redemption price of, and accrued interest on, all
Notes to be redeemed.
Interest on the Notes to be redeemed shall cease to accrue on the
applicable redemption date, whether or not such Notes are presented for payment,
if the Issuers make or deposit the redemption payment in accordance with this
Section 3.5. If any Note called for redemption shall not be paid upon surrender
for redemption because of the failure of the Issuers to comply with the
preceding paragraph, interest shall be paid on the unpaid principal, from the
redemption date until such principal is paid, and to the extent lawful on any
interest not paid on such unpaid principal, in each case at the rate provided in
the Notes.
Section 3.6. Notes Redeemed in Part.
------------ ----------------------
Upon surrender of a Note that is redeemed in part, the Issuers shall
issue and the Trustee shall authenticate for the Holder at the expense of the
Issuers a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.
Section 3.7. Optional Redemption.
------------ -------------------
(a) Except as set forth in Sections 3.7(b) and 3.8 hereof, the Notes
are not redeemable at the Issuers' option prior to July 1, 2003. Thereafter,
the Notes will be subject to redemption at the option of the Issuers, in whole
or in part, at the redemption prices (expressed as percentages of principal
amount) set forth below, plus accrued and unpaid interest thereon and Liquidated
Damages, if any, to the applicable date of redemption, if redeemed during the
12-month period beginning on July 1 of the years indicated below:
45
Year Percentage
---- ----------
2003 105.438%
2004 102.719%
2005 and thereafter 100.000%
(b) Notwithstanding the foregoing, at any time or from time to time
prior to July 1, 2002, the Issuers may redeem, at their option, up to 35% of the
aggregate principal amount of the Notes then outstanding at a redemption price
of 110.875% of the principal amount thereof, plus accrued and unpaid interest
thereon and Liquidated Damages, if any, through the applicable date of
redemption, with the net cash proceeds of one or more Public Equity Offerings;
provided, that (a) such redemption shall occur within 60 days of the date of
--------
closing of such Public Equity Offering and (b) at least 65% of the aggregate
principal amount of Notes issued on or after the Issue Date remains outstanding
immediately after giving effect to each such redemption.
Section 3.8. Required Regulatory Redemption
------------ ------------------------------
The Notes shall be redeemable by the Issuers, in whole or in part, at any
time upon not less than 20 Business Days nor more than 60 days notice (or such
earlier date as may be required by any Governmental Authority) at 100% of the
principal amount thereof plus accrued and unpaid interest thereon and Liquidated
Damages, if any, to the redemption date, pursuant to a Required Regulatory
Redemption. Any Required Regulatory Redemption shall be made in accordance with
the applicable provisions of Sections 3.3, 3.4 and 3.5 unless other procedures
are required by any Governmental Authority.
ARTICLE 4
COVENANTS
Section 4.1. Payment of Notes.
------------ ----------------
The Issuers shall pay the principal and premium, if any, of, and
interest on, the Notes on the dates and in the manner provided in the Notes.
Principal, premium, if any, and interest shall be considered paid on the date
due if the Paying Agent, other than the Company or a Subsidiary of the Company,
holds on or before that date money deposited by the Issuers in immediately
available funds and
46
designated for and sufficient to pay all principal, premium, if any, and
interest then due. Such Paying Agent shall return to the Issuers, no later than
three Business Days following the date of payment, any money that exceeds such
amount of principal, premium, if any, and interest then due and payable on the
Notes. The Issuers shall pay any and all amounts, including, without limitation,
Liquidated Damages, if any, on the dates and in the manner required under the
Registration Rights Agreement.
The Issuers shall pay interest (including post-petition interest) on
overdue principal at the rate equal to 1% per annum in excess of the then
applicable interest rate on the Notes to the extent lawful; it shall pay
interest (including post-petition interest) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
Section 4.2. Maintenance of Office or Agency.
------------ -------------------------------
The Issuers shall maintain an office or agency (which may be an office
of the Trustee, Registrar or co-registrar) in the Borough of Manhattan, the City
of New York where Notes may be surrendered for registration of transfer or ex
change and where notices and demands to or upon the Issuers in respect of the
Notes and this Indenture may be served. The Issuers shall give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Issuers shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee.
The Issuers may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
--------
that no such designation or rescission shall in any manner relieve the Issuers
of their obligation to maintain an office or agency for such purposes. The
Issuers shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
The Issuers hereby designate the Corporate Trust Office of the Trustee
as one such office or agency of the Issuers in accordance with Section 2.3.
Section 4.3. Reports.
------------ -------
47
(a) The Issuers shall file with the Trustee, within 15 days after the
date of filing by the Company with the Commission, copies of the reports,
information and other documents (or copies of such portions of any of the
foregoing as the Commission may by rules and regulations prescribe) that the
Company is required to file with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act. If the Company is not subject to the requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall file with the Trustee
all such reports, information and other documents as it would be required to
file if it were subject to the requirements of Section 13 or 15(d) of the
Exchange Act, within such 15-day period assuming the Company had filed such
reports, information and other documents with the Commission. From and after
the time the Issuers file a registration statement with the Commission with
respect to the Notes, the Company shall file such information with the
Commission; provided, that the Issuers shall not be in default of the provisions
of this Section 4.3 for any failure of the Company to file reports with the
Commission solely by refusal by the Commission to accept the same for filing.
The Issuers shall deliver (or cause the Trustee to deliver) copies of all
reports, information and documents required to be filed with the Trustee
pursuant to this Section 4.3 to the Holders at their addresses appearing in the
register of Notes maintained by the Registrar. The Issuers shall also comply
with the provisions of TIA (S) 314(a).
(b) If the Company is required to furnish annual, quarterly or current
reports to its members pursuant to the Exchange Act, the Issuers shall cause any
annual, quarterly, current or other financial report furnished by the Company
generally to its members to be filed with the Trustee and mailed to the Holders
at their addresses appearing in the register of Notes maintained by the
Registrar. If the Company is not required to furnish annual, quarterly or
current reports to its members pursuant to the Exchange Act, the Issuers shall
cause the financial statements of the Company and its consolidated Subsidiaries
(and similar financial statements for all unconsolidated Subsidiaries, if any),
including any notes thereto (and, with respect to annual reports, an auditors'
report by an accounting firm of established national reputation), and a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," comparable to that which would have been required to appear in
annual or quarterly reports filed under Section 13 or 15(d) of the Exchange Act
to be so filed with the Trustee and mailed to the Holders promptly, but in any
event, within 90 days after the end of each of the fiscal years of the Company
and within 45 days after the end of each of the first three quarters of each
such fiscal year.
48
(c) So long as is required for an offer or sale of the Notes to
qualify for an exemption under Rule 144A, the Issuers (and the Guarantors)
shall, upon request, provide the information required by clause (d)(4)
thereunder to each Holder and to each beneficial owner and prospective purchaser
of Notes identified by any Holder of Restricted Securities.
Section 4.4. Compliance Certificate.
------------ ----------------------
(a) The Issuers shall deliver to the Trustee, within 120 days after
the end of each fiscal year, an Officers' Certificate (provided, that two of the
--------
signatories to such Officers' Certificate shall be the principal executive
officer, principal financial officer or principal accounting officer of each of
the Issuers) stating that a review of the activities of the Issuers and the
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determine whether each has
kept, observed, performed and fulfilled their obligations under this Indenture,
and further stating, as to each such Officer signing such certificate, that each
of the Issuers and the Subsidiaries has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
or thereof (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he may have knowledge and what
action each is taking or proposes to take with respect thereto).
(b) The year-end financial statements delivered pursuant to Section
4.3 above shall be accompanied by a written statement of the independent public
accountants of the Company (which shall be a firm of established national
reputation reasonably satisfactory to the Trustee) that in making the
examination necessary for certification of such financial statements nothing has
come to their attention which would lead them to believe that either the Company
or any of its Subsidiaries has violated any provisions of this Indenture or, if
any such violation has occurred, specifying the nature and period of existence
thereof, it being under stood that such accountants shall not be liable
directly or indirectly to any Person for any failure to obtain knowledge of any
such violation.
(c) So long as any of the Notes are outstanding, the Issuers shall
deliver to the Trustee forthwith upon any Officer becoming aware of (i) any
Default or Event of Default or (ii) any event of default under any mortgage,
indenture or instrument referred to in Section 6.1(5) hereof, an Officers'
Certificate specifying
49
such Default, Event of Default or other event of default and what action the
Issuers are taking or propose to take with respect thereto.
Section 4.5. Taxes.
------------ -----
The Company shall, and shall cause its Subsidiaries to, file all tax
returns required to be filed and to pay prior to delinquency all material taxes,
assessments and governmental levies except as contested in good faith and by
appropriate proceedings and for which reserves have been established in
accordance with GAAP.
Section 4.6. Stay, Extension and Usury Laws.
------------ ------------------------------
The Issuers (and each Guarantor) covenant (to the extent that it may
lawfully do so) that neither of them shall at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay,
extension, usury or other law, wherever enacted, now or at any time hereafter in
force, that would prohibit or forgive the payment of all or any portion of the
principal of or interest on the Notes, or that may affect the covenants or the
performance of this Indenture; and each of the Issuers and each Guarantor (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it shall not, by resort to any such
law, hinder, delay or impede the execution of any power herein granted to the
Trustee but shall suffer and permit the execution of every such power as though
no such law has been enacted.
Section 4.7. Limitation on Restricted Payments.
------------ ---------------------------------
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any distribution on account of
any Equity Interests of the Company or any of its Subsidiaries or make any other
payment to any Excluded Person or Affiliate thereof (other than (A) dividends or
distributions payable in Equity Interests (other than Disqualified Capital
Stock) of the Company or (B) amounts payable to the Company or any Restricted
Subsidiary);
(ii) purchase, redeem or otherwise acquire or retire for value any Equity
Interest of the Company, any Subsidiary or any other Affiliate of the Company
(other than any such Equity Interest owned by the Company or any Restricted
Subsidiary);
50
(iii) make any principal payment on, or purchase, redeem, defease or
otherwise acquire or retire for value any Indebtedness of the Company or any
Guarantor that is subordinated in right of payment to the Notes or such
Guarantor's Guaranty thereof, as the case may be, prior to any scheduled
principal payment, sinking fund payment or other payment at the stated maturity
thereof; or
(iv) make any Restricted Investment
(all such payments and other actions set forth in clauses (i) through (iv) above
being collectively referred to as "Restricted Payments"), unless, at the time of
such Restricted Payment:
(a) no Default or Event of Default has occurred and is continuing or
would occur as a consequence thereof, and
(b) immediately after giving effect to such Restricted Payment on a pro
forma basis, the Company could incur at least $1.00 of additional Indebtedness
under the Interest Coverage Ratio test set forth in Section 4.9 hereof, and
(c) such Restricted Payment (the value of any such payment, if other than
cash, being determined in good faith by the Managers of the Company and
evidenced by a resolution set forth in an Officers' Certificate delivered to the
Trustee), together with the aggregate of all other Restricted Payments made
after the Issue Date (including Restricted Payments permitted by clauses (i) and
(ii) of the next following paragraph and excluding Restricted Payments permitted
by the other clauses therein), is less than the sum of
(1) 50% of the Consolidated Net Income of the Company for the period
(taken as one accounting period) from the beginning of the first
fiscal quarter commencing immediately after the Issue Date to
the end of the Company's most recently ended fiscal quarter for
which internal financial statements are available at the time of
such Restricted Payment (or, if such Consolidated Net Income for
such period is a deficit, 100% of such deficit), plus
(2) 100% of the aggregate net cash proceeds (or of the net cash
proceeds received upon the conversion of non-cash proceeds into
cash) received by the Company from the issuance or sale,
51
other than to a Subsidiary, of Equity Interests of the Company
(other than Disqualified Capital Stock) after the Issue Date and
on or prior to the time of such Restricted Payment, plus
(3) 100% of the aggregate net cash proceeds (or of the net cash
proceeds received upon the conversion of non-cash proceeds into
cash) received by the Company from the issuance or sale, other
than to a Subsidiary, of any convertible or exchangeable debt
security of the Company that has been converted or exchanged
into Equity Interests of the Company (other than Disqualified
Capital Stock) pursuant to the terms thereof after the Issue
Date and on or prior to the time of such Restricted Payment
(including any additional net proceeds received by the Company
upon such conversion or exchange) plus
(4) the aggregate Return from Unrestricted Subsidiaries after the
Issue Date and on or prior to the time of such Restricted
Payment.
The foregoing provisions shall not prohibit:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment
would not have been prohibited by the provisions of this Indenture;
(ii) the redemption, purchase, retirement or other acquisition of any
Equity Interests of the Company or Indebtedness of the Company or any
Restricted Subsidiary in exchange for, or out of the proceeds of, the
substantially concurrent sale (other than to a Subsidiary) of, other
Equity Interests of the Company (other than Disqualified Capital
Stock);
(iii) so long as clause (a) above is satisfied, with respect to each
taxable year that the Company qualifies as a Flow Through Entity, the
payment of Permitted Tax Distributions; provided, that (A) prior to
any payment of Permitted Tax Distributions the Company provides an
Officers' Certificate and Opinion of Counsel to the effect that the
Company and each Subsidiary in respect of which such distributions
are being made, qualify as Flow Through Entities for Federal income
52
tax purposes and for the states in respect of which such
distributions are being made and (B) at the time of such
distribution, the most recent audited financial statements of the
Company provided to the Trustee pursuant to Section 4.3 hereof,
provide that the Company and each such Subsidiary were treated as
Flow Through Entities for the period of such financial statements;
(iv) the redemption, repurchase or payoff of any Indebtedness of the
Company or a Restricted Subsidiary with proceeds of any Refinancing
Indebtedness permitted to be incurred pursuant to Section 4.9(i)
hereof;
(v) cash capital contributions, loans or advances to the BHR Joint
Venture that are used by the BHR Joint Venture to make capital
expenditures in the ordinary course of business; provided, that
concurrently with such contribution, loan or advance all other
members of the BHR Joint Venture make cash capital contributions,
loans or advances, as the case may be, on a pro rata basis, based on
each member's owner ship interest in the BHR Joint Venture;
(vi) capital contributions to the BHR Joint Venture to pay for harbor
improvements required by the Harbor Lease (or otherwise necessary
for ordinary course operations of the Majestic Star Casino Vessel)
and other improvements ancillary to such harbor improvements;
(vii) Restricted Investments in an aggregate amount not to exceed $10
million to satisfy the Company's off-site development obligation
under the Development Agreement, less any amounts paid by a third-
party on behalf of the Company; and
(viii) so long as clause (a) above is satisfied, Restricted Payments
required under the Management Agreement as in effect on the Issue
Date; provided, that the Interest Coverage Ratio for the Company's
most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on
which such payment is made would have been not less than 1.75 to
1.0, determined on a pro forma basis, as if such payment had been
made during such four-quarter period.
53
Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.7 were computed, which calculations
may be based upon the Company's latest available financial statements.
Section 4.8. Limitation on Restrictions on Subsidiary Dividends.
------------ --------------------------------------------------
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(i) pay dividends or make any other distributions to the Company or any
of its Restricted Subsidiaries (a) on such Restricted Subsidiary's
Capital Stock or (b) with respect to any other interest or
participation in, or measured by, such Restricted Subsidiary's
profits, or
(ii) pay any Indebtedness owed to the Company or any of its Restricted
Subsidiaries, or
(iii) make loans or advances to the Company or any of its Restricted
Subsidiaries, or
(iv) transfer any of its assets to the Company or any of its Restricted
Subsidiaries,
except, with respect to clauses (i) through (iv) above, for such encumbrances or
restrictions existing under or by reason of:
(1) any Credit Facility containing dividend or other payment restrictions
that are not more restrictive than those contained in the documents
governing the Original Credit Facility;
(2) this Indenture, the Security Documents and the Notes;
(3) applicable law;
54
(4) Acquired Debt; provided, that such encumbrances and restrictions are
not applicable to any Person, or the properties or assets of any
Person, other than the Person, or the property or assets of the
Person, so acquired;
(5) customary non-assignment and net worth provisions of any contract,
lease or license entered into in the ordinary course of business;
(6) customary restrictions on the transfer of assets subject to a
Permitted Lien imposed by the holder of such Lien; and
(7) the agreements governing permitted Refinancing Indebtedness;
provided, that such restrictions contained in any agreement governing
such Refinancing Indebtedness are no more restrictive than those
contained in any agreements governing the Indebtedness being
refinanced.
Section 4.9. Limitation on Incurrence of Indebtedness.
----------- ----------------------------------------
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, (i) create, incur, issue, assume,
guaranty or otherwise become directly or indirectly liable with respect to,
contingently or otherwise (collectively, "incur"), any Indebtedness (including,
without limitation, Acquired Debt) or (ii) issue any Disqualified Capital Stock;
provided, that the Company may incur Indebtedness (including, without
limitation, Acquired Debt) and issue shares of Disqualified Capital Stock (and a
Restricted Subsidiary may incur Acquired Debt) if (x) no Default or Event of
Default shall have occurred and be continuing at the time of, or would occur
after giving effect on a pro forma basis to such incurrence or issuance, and (y)
the Interest Coverage Ratio for the Company's most recently ended four full
fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
or such Disqualified Capital Stock is issued would have been not less than 2.0
to 1.0, determined on a pro forma basis (including a pro forma application of
the net proceeds therefrom), as if the additional Indebtedness had been
incurred, or the Disqualified Capital Stock had been issued, as the case may be,
at the beginning of such four-quarter period; provided, that in the case of
Indebtedness (other than Indebtedness outstanding under the Credit Facility,
Purchase Money Obligations, Capital Lease Obligations or Acquired Debt), the
Weighted Average Life to Maturity
55
and final stated maturity of such Indebtedness is equal to or greater than the
Weighted Average Life to Maturity and final stated maturity of the Notes.
Notwithstanding the foregoing, the foregoing limitations will not
prohibit the incurrence of:
(a) Indebtedness under the Credit Facility in an aggregate principal
amount not to exceed, at any time, the excess of (x) $20 million less
the aggregate amount of repayments of indebtedness contemplated by
Section 4.10(iii) hereof (the "Permitted Amount") over (y) the
aggregate principal amount of BHR Attributed Debt then outstanding;
(b) Purchase Money Obligations in an aggregate principal amount not to
exceed, at any time, the product of (i) $2.5 million times (ii) the
number of Casinos owned and operated solely by the Company and its
Restricted Subsidiaries on the date of such incurrence;
(c) FF&E Financing in an aggregate principal amount not to exceed, at any
time, the sum of (i) the principal amount of FF&E Financing
outstanding on the Issue Date and (ii) the product of (x) $5.0 million
times (y) the number of Casinos owned and operated solely by the
Company and its Restricted Subsidiaries on the date of such
incurrence;
(d) performance bonds, appeal bonds, surety bonds, insurance obligations
or bonds and other similar bonds or obligations (including Obligations
under letters of credit) incurred in the ordinary course of business;
(e) Hedging Obligations incurred to fix the interest rate on any variable
rate Indebtedness otherwise permitted by this Indenture; provided,
that the notional principal amount of each such Hedging Obligation
does not exceed the principal amount of the Indebtedness to which such
Hedging Obligation relates;
(f) Indebtedness outstanding on the Issue Date, including the Notes
outstanding on the Issue Date;
(g) Indebtedness incurred by the Company in an aggregate principal amount
not to exceed, at any time, $3 million;
56
(h) any Guaranty of the Notes; and
(i) Indebtedness issued in exchange for, or the proceeds of which are
contemporaneously used to extend, refinance, renew, replace, or
refund (collectively, "Refinance"), Indebtedness incurred pursuant to
the Interest Coverage Ratio test set forth in the immediately
preceding paragraph, clause (f) above or this clause (i) (the
"Refinancing Indebtedness"); provided, that (i) the principal amount
of such Refinancing Indebtedness does not exceed the principal amount
of Indebtedness so Refinanced (including any required premiums and
out-of-pocket expenses reasonably incurred in connection therewith),
(ii) the Refinancing Indebtedness has a final scheduled maturity
that equals or exceeds the final stated maturity, and a Weighted
Average Life to Maturity that is equal to or greater than the
Weighted Average Life to Maturity, of the Indebtedness being
Refinanced and (iii) the Refinancing Indebtedness ranks, in right of
payment, no more favorable to the Notes than the Indebtedness being
Refinanced.
Section 4.10. Limitation on Asset Sales.
------------ -------------------------
The Company shall not, and shall not permit any Restricted Subsidiary
to, make any Asset Sale unless
(i) the Company or such Restricted Subsidiary receives consideration at
the time of such Asset Sale not less than the fair market value of
the assets subject to such Asset Sale;
(ii) at least 75% of the consideration for such Asset Sale is in the form
of cash or Cash Equivalents or liabilities of the Company or any
Restricted Subsidiary (other than liabilities that are by their
terms subordinated to the Notes) that are assumed by the transferee
of such assets (provided, that following such Asset Sale there is no
further recourse to the Company or its Restricted Subsidiaries with
respect to such liabilities); and
(iii) within 270 days of such Asset Sale, the Net Proceeds thereof are (A)
invested in assets related to the business of the Company or its
Re stricted Subsidiaries (which, in the case of an Asset Sale of the
Majestic Star Casino Vessel or any replacement Gaming Vessel (a
57
"Replacement Vessel"), must be a Gaming Vessel having a fair market
value, as determined by an independent appraisal, at least equal to
the fair market value of the Majestic Star Casino Vessel or such
Replacement Vessel immediately preceding such Asset Sale), (B)
applied to repay Indebtedness under Purchase Money Obligations
incurred in connection with the asset so sold, (C) applied to repay
Indebtedness under the Credit Facility and permanently reduce the
commitment thereunder in the amount of the Indebtedness so repaid or
(D) to the extent not used as provided in clauses (A), (B), or (C)
applied to make an offer to purchase Notes as described below (an
"Excess Proceeds Offer"); provided, that the Company will not be
required to make an Excess Proceeds Offer until the amount of Excess
Proceeds is greater than $5,000,000.
The foregoing provisions in (i) or (ii) above shall not apply to an
Event of Loss.
Pending the final application of any Net Proceeds, the Company may
temporarily reduce Indebtedness under the Credit Facility or temporarily invest
such Net Proceeds in Cash Equivalents.
Net Proceeds not invested or applied as set forth in the preceding
clauses (A), (B) or (C) constitute "Excess Proceeds." If the Company elects, or
becomes obligated to make an Excess Proceeds Offer, the Issuers shall offer to
purchase Notes having an aggregate principal amount equal to the Excess Proceeds
(the "Purchase Amount"), at a purchase price equal to 100% of the aggregate
principal amount thereof, plus accrued and unpaid interest thereon and
Liquidated Damages, if any, to the purchase date. The Issuers must commence such
Excess Proceeds Offer not later than 30 days after the expiration of the 270 day
period following the Asset Sale that produced such Excess Proceeds. If the
aggregate purchase price for the Notes tendered pursuant to the Excess Proceeds
Offer is less than the Excess Proceeds, the Company and its Restricted
Subsidiaries may use the portion of the Excess Proceeds remaining after payment
of such purchase price for general corporate purposes.
Each Excess Proceeds Offer shall remain open for a period of 20
Business Days and no longer, unless a longer period is required by law (the
"Excess Proceeds Offer Period"). Promptly after the termination of the Excess
----------------------------
Proceeds Offer Period (the "Excess Proceeds Payment Date"), the Issuers shall
----------------------------
purchase and
58
mail or deliver payment for the Purchase Amount for the Notes or portions
thereof tendered, pro rata or by such other method as may be required by law,
--------
or, if less than the Purchase Amount has been tendered, all Notes tendered
pursuant to the Excess Proceeds Offer. The principal amount of Notes to be
purchased pursuant to an Excess Proceeds Offer may be reduced by the principal
amount of Notes acquired by the Issuers through purchase or redemption (other
than pursuant to a Change of Control Offer) subsequent to the date of the Asset
Sale and surrendered to the Trustee for cancellation.
Each Excess Proceeds Offer shall be conducted in compliance with all
applicable laws, including without limitation, Regulation 14E of the Exchange
Act and the rules thereunder and all other applicable Federal and state
securities laws. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Section 4.10, the Issuers shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.10 by virtue
thereof. The Company shall not, and shall not permit any of its Subsidiaries
to, create or suffer to exist or become effective any restriction that would
impair the ability of the Issuers to make an Excess Proceeds Offer upon an Asset
Sale or, if such Excess Proceeds Offer is made, to pay for the Notes tendered
for purchase.
The Issuers shall, no later than 30 days following the expiration of
the 12-month period following the Asset Sale that produced Excess Proceeds,
commence the Excess Proceeds Offer by mailing to the Trustee and each Holder, at
such Holder's last registered address, a notice, which shall govern the terms of
the Excess Proceeds Offer, and shall state:
(1) that the Excess Proceeds Offer is being made pursuant to this
Section 4.10, the principal amount of Notes which shall be accepted for
payment and that all Notes validly tendered shall be accepted for payment
on a pro rata basis;
--- ----
(2) the purchase price and the date of purchase;
(3) that any Notes not tendered or accepted for payment pursuant
to the Excess Proceeds Offer shall continue to accrue interest;
(4) that, unless the Issuers default in the payment of the
purchase price with respect to any Notes tendered, Notes accepted for
59
payment pursuant to the Excess Proceeds Offer shall cease to accrue
interest after the Excess Proceeds Payment Date;
(5) that Holders electing to have Notes purchased pursuant to an
Excess Proceeds Offer shall be required to surrender their Notes, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Note completed, to the Issuers prior to the close of business on the third
Business Day immediately preceding the Excess Proceeds Payment Date;
(6) that Holders shall be entitled to withdraw their election if
the Issuers receive, not later than the close of business on the second
Business Day preceding the Excess Proceeds Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of Notes the Holder delivered for purchase and a statement
that such Holder is withdrawing his election to have such Notes purchased;
(7) that Holders whose Notes are purchased only in part shall be
issued Notes representing the unpurchased portion of the Notes surrendered;
provided that each Note purchased and each new Note issued shall be in
--------
principal amount of $1,000 or whole multiples thereof; and
(8) the instructions that Holders must follow in order to tender
their Notes.
On or before the Excess Proceeds Payment Date, the Issuers shall (i)
accept for payment on a pro rata basis the Notes or portions thereof tendered
--- ----
pursuant to the Excess Proceeds Offer, (ii) deposit with the Paying Agent money
sufficient to pay the purchase price of all Notes or portions thereof so
accepted and (iii) deliver to the Trustee the Notes so accepted, together with
an Officers' Certificate stating that the Notes or portions thereof tendered to
the Issuers are accepted for payment. The Paying Agent shall promptly mail to
each Holder of Notes so accepted payment in an amount equal to the purchase
price of such Notes, and the Trustee shall promptly authenticate and mail to
such Holders new Notes equal in principal amount to any unpurchased portion of
the Notes surrendered.
The Issuers shall make a public announcement of the results of the
Excess Proceeds Offer as soon as practicable after the Excess Proceeds Payment
Date. For the purposes of this Section 4.10, the Trustee shall act as the
Paying Agent.
60
Section 4.11. Limitation on Transactions With Affiliates.
------------ ------------------------------------------
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into any contract, agreement, understanding,
loan, advance or guaranty with, or for the benefit of, any Affiliate (each of
the foregoing, an "Affiliate Transaction"), except for:
(i) Affiliate Transactions that, together with all related Affiliate
Transactions, have an aggregate value of not more than $2,000,000;
provided, that (i) such transactions are conducted in good faith and
on terms that are no less favorable to the Company or the relevant
Restricted Subsidiary than those that would have been obtained in a
comparable transaction at such time by the Company or such Restricted
Subsidiary on an arm's-length basis from a Person that is not an
Affiliate of the Company or such Restricted Subsidiary and (ii) prior
to entering into such transaction the Company shall have delivered to
the Trustee an Officers' Certificate certifying to such effect;
(ii) Affiliate Transactions that, together with all related Affiliate
Transactions, have an aggregate value of not more than $5,000,000;
pro vided, that (i) a majority of the disinterested Managers
determine that such transactions are conducted in good faith and on
terms that are no less favorable to the Company or the relevant
Restricted Subsidiary than those that would have been obtained in a
comparable transaction at such time by the Company or such Restricted
Subsidiary on an arm's-length basis from a Person that is not an
Affiliate of the Company or such Restricted Subsidiary and (ii)
prior to entering into such transaction the Company shall have
delivered to the Trustee an Officers' Certificate certifying to such
effect; or
(iii) Affiliate Transactions for which the Company delivers to the Trustee
an opinion as to the fairness to the Company or such Restricted
Subsidiary from a financial point of view issued by an accounting,
appraisal or investment banking firm of national standing.
61
Notwithstanding the foregoing, the following shall be deemed not to
be Affiliate Transactions:
(a) Restricted Payments permitted by Section 4.7 hereof;
(b) payments pursuant to the Berthing Agreement;
(c) the non-exclusive licensing of any service ▇▇▇▇ of the Company to
an Affiliate or Affiliates of the Company; and
(d) transactions between or among the Company and any Wholly Owned
Subsidiary of the Company.
Section 4.12. Limitation on Liens.
------------- -------------------
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume or suffer to exist
any Lien on any asset (including, without limitation, all real, tangible or
intangible property) of the Company or any Restricted Subsidiary, whether now
owned or hereafter acquired, or on any income or profits therefrom, or assign or
convey any right to receive income therefrom, except Permitted Liens.
Section 4.13. Existence.
------------- ----------
Subject to Article 5 of this Indenture, the Issuers shall do or
cause to be done all things necessary to preserve and keep in full force and
effect (i) their respective limited liability company and corporate existence,
and corporate, partnership or other existence of each of the Subsidiaries, in
accordance with their respective organizational documents (as the same may be
amended from time to time) and (ii) their (and the Subsidiaries') rights
(charter and statutory), licenses (including gaming and related licenses) and
franchises; provided, that the Issuers shall not be required to preserve any
such right, license or franchise, or the corporate, partnership or other
existence of any Subsidiary, if the Board of Directors on behalf of the Company
shall determine in good faith that the preservation thereof is no longer
desirable in the conduct of the business of the Issuers and the Company's
Subsidiaries taken as a whole and that the loss thereof is not adverse in any
material respect to the Holders.
Section 4.14. Repurchase Upon a Change of Control.
------------- ------------------------------------
62
Upon the occurrence of a Change of Control, the Issuers shall offer to
repurchase all of the Notes then outstanding (the "Change of Control Offer") at
a purchase price equal to 101% of the aggregate principal amount thereof, plus
accrued and unpaid interest thereon and Liquidated Damages, if any, to the date
of repurchase (the "Change of Control Payment").
The Change of Control Offer shall be made in compliance with all
applicable laws, including without limitation, Regulation 14E of the Exchange
Act and the rules thereunder and all other applicable Federal and state
securities laws. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Section 4.14, the Issuers shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.14 by virtue
thereof.
Within 30 days following any Change of Control, the Issuers shall
commence the Change of Control Offer by mailing to the Trustee and each Holder a
notice, which shall govern the terms of the Change of Control Offer, and shall
state that:
(i) the Change of Control Offer is being made pursuant to this
Section 4.14 and that all Notes tendered will be accepted for payment,
(ii) the purchase price and the purchase date, which shall be a
Business Day no earlier than 30 days nor later than 45 days from the date
such notice is mailed (the "Change of Control Payment Date"),
------------------------------
(iii) that any Note not tendered for payment pursuant to the
Change of Control Offer shall continue to accrue interest,
(iv) that, unless the Issuers default in the payment of the
Change of Control Payment, all Notes accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest on the Change of
Control Payment Date,
(v) that any Holder electing to have Notes purchased pursuant
to a Change of Control Offer shall be required to surrender such Notes,
with the form entitled "Option of Holder to Elect Purchase" on the reverse
of the Notes completed, to the Paying Agent at the address specified in the
notice
63
prior to the close of business on the third Business Day preceding
the Change of Control Payment Date,
(vi) that any Holder shall be entitled to withdraw such
election if the Paying Agent receives, not later than the close of business
on the second Business Day preceding the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the name of
the Holder, the principal amount of Notes such Holder delivered for
purchase, and a statement that such Holder is withdrawing his election to
have such Notes purchased,
(vii) that a Holder whose Notes are being purchased only in part
shall be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered, which unpurchased portion must be equal
to $1,000 in principal amount or an integral multiple thereof,
(viii) the instructions that Holders must follow in order to
tender their Notes, and
(ix) the circumstances and relevant facts regarding such Change
of Control.
On the Change of Control Payment Date, the Issuers shall, to the
extent lawful, (i) accept for payment the Notes or portions thereof tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent an
amount equal to the Change of Control Payment in respect of all Notes or
portions thereof so tendered and not withdrawn, and (iii) deliver or cause to be
delivered to the Trustee the Notes so accepted, together with an Officers'
Certificate stating that the Notes or portions thereof tendered to the Issuers
are accepted for payment. The Paying Agent shall promptly mail to each Holder
of Notes so accepted payment in an amount equal to the purchase price for such
Notes, and the Trustee shall authenticate and mail (or cause to be transferred
by book entry) to each Holder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any; provided, that each such
new Note will be in the principal amount of $1,000 or an integral multiple
thereof.
The Issuers shall make a public announcement of the results of the
Change of Control Offer on or as soon as practicable after the Change of Control
64
Payment Date. For the purposes of this Section 4.14, the Trustee shall act as
the Paying Agent.
The Issuers shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 4.14 and purchases all Notes validly
tendered and not withdrawn under such Change of Control Offer.
Section 4.15. Maintenance of Properties.
------------- -------------------------
The Company shall, and shall cause each of its Subsidiaries to,
maintain their properties and assets in normal working order and condition as on
the date of this Indenture (reasonable wear and tear excepted) and make all
necessary repairs, renewals, replacements, additions, betterments and
improvements thereto, as shall be reasonably necessary for the proper conduct of
the business of the Issuers and the Subsidiaries taken as a whole; provided,
--------
that nothing herein shall prevent the Issuers or any of the Subsidiaries from
discontinuing any maintenance of any such properties if the Company determines
that such discontinuance is desirable in the conduct of the business of the
Issuers and the Subsidiaries taken as a whole.
Section 4.16. Maintenance of Insurance.
------------- ------------------------
The Company shall, and shall cause each of its Subsidiaries to,
maintain liability, casualty and other insurance (including self-insurance
consistent with prior practice) with responsible insurance companies in such
amounts and against such risks as is in accordance with customary industry
practice in the general areas in which the Issuers and the Subsidiaries operate.
Section 4.17. Restrictions on Sale and Issuance of Subsidiary Stock.
------------- -----------------------------------------------------
The Company shall not sell, and shall not permit any Restricted
Subsidiary to issue or sell, any Equity Interests (other than directors'
qualifying shares) of any Restricted Subsidiary to any Person other than the
Company or a Wholly Owned Subsidiary of the Company; provided, that the Company
and its Restricted Subsidiaries may sell all (but not less than all) of the
Capital Stock of a Restricted Subsidiary owned by the Company and its Restricted
Subsidiaries if the Net Proceeds from such Asset Sale are used in accordance
with the terms of Section 4.10 hereof.
65
Section 4.18. Line of Business.
------------- ----------------
The Company shall not, and shall not permit any of its Restricted
Subsidiaries or the BHR Joint Venture to, directly or indirectly engage to any
substantial extent in any line or lines of business activity other than a
Related Business.
Section 4.19. Restrictions on BHR Joint Venture.
------------ ---------------------------------
The Company shall not permit the BHR Joint Venture to, directly or
indirectly:
(a) incur any Indebtedness or issue any Disqualified Capital Stock;
provided that the BHR Joint Venture may incur:
(i) Indebtedness if immediately after giving effect to such
incurrence on a pro forma basis, the Company could incur at
least $1.00 of additional Indebtedness under the Interest
Coverage Ratio Test set forth in Section 4.9 hereof;
(ii) Indebtedness; provided, that after giving effect to the
incur rence of such Indebtedness, the aggregate principal
amount of BHR Attributed Debt does not exceed the Permitted
Amount less the aggregate principal amount of Indebtedness
then outstanding under Section 4.9(a) hereof; and
(iii) Indebtedness incurred to Refinance any Indebtedness incurred
pursuant to clause (i) above or Indebtedness of the BHR
Joint Venture outstanding on the Issue Date;
(b) create, incur, assume or suffer to exist any Lien on any asset of
the BHR Joint Venture, or on any income or profits therefrom, or
assign or convey any right to receive income therefrom, except
Permitted Liens;
(c) declare or pay any dividend or make any distribution on account of
any Equity Interests of the BHR Joint Venture, unless such
66
distributions are made on a pro rata basis to all members of the
BHR Joint Venture, based on each member's ownership interest
therein;
(d) purchase, redeem or otherwise acquire or retire for value any
Equity Interest of the BHR Joint Venture (other than any such
Equity Interest owned by the Company or any Restricted
Subsidiary); or
(e) transfer, other than in the ordinary course of business, any
assets of the BHR Joint Venture, unless:
(i) the BHR Joint Venture receives consideration at the time of
such transfer not less than the fair market value of the
assets subject to such transfer;
(ii) at least 75% of the consideration for such transfer is in
the form of cash or Cash Equivalents or liabilities of the
BHR Joint Venture that are assumed by the transferee of
such assets (provided, that following such transfer there
is no further recourse to the BHR Joint Venture with
respect to such liabilities); and
(iii) within 270 days of such transfer, the net proceeds thereof
are (A) invested in assets related to the business of the
BHR Joint Venture, (B) applied to permanently repay
Indebtedness of the BHR Joint Venture, or (C) distributed
to the members of the BHR Joint Venture in accordance with
paragraph (c) above.
Section 4.20. Restrictions on Activities of Capital.
------------ -------------------------------------
Capital shall not hold any assets, become liable for any
obligations or engage in any business activities; provided, that Capital may be
a co-obligor of the Notes pursuant to the terms of this Indenture and as
contemplated by the Purchase Agreement, dated as of June 15, 1999, by and among
the Issuers and the Initial Purchaser, and, as necessary, may engage in any
activities directly related or necessary in connection therewith.
ARTICLE 5
SUCCESSORS
67
Section 5.1. When the Company May Merge, etc.
------------ --------------------------------
Neither Issuer shall consolidate or merge with or into (regardless
of whether such Issuer is the surviving corporation), or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its properties
or assets (determined on a consolidated basis for the Company and its Restricted
Subsidiaries) in one or more related transactions to, any other Person, unless:
(i) such Issuer is the surviving Person or the Person formed by or
surviving any such consolidation or merger (if other than such
Issuer) or to which such sale, assignment, transfer, lease,
conveyance or other disposition has been made is a corporation
organized and existing under the laws of the United States of
America, any state thereof or the District of Columbia;
(ii) the Person formed by or surviving any such consolidation or merger
(if other than such Issuer) or the Person to which such sale,
assignment, transfer, lease, conveyance or other disposition has
been made assumes all the Obligations of such Issuer, pursuant to
a supplemental indenture and in a form reasonably satisfactory to
the Trustee, under the Notes, this Indenture, the Security
Documents and the Registration Rights Agreement;
(iii) immediately after giving effect to such transaction on a pro forma
basis, no Default or Event of Default exists;
(iv) such transaction would not result in the loss or suspension or
material impairment of any Gaming License unless a comparable
replacement Gaming License is effective prior to or simultaneously
with such loss, suspension or material impairment; and
(v) such Issuer, or any Person formed by or surviving any such
consolidation or merger, or to which such sale, assignment,
transfer, lease, conveyance or other disposition has been made,
(A) has Consolidated Net Worth (immediately after the transaction
but prior to any purchase accounting adjustments resulting from
the transaction) equal to or greater than the Consolidated Net
Worth of such Issuer immediately preceding the transaction and (B)
will be
68
permitted, at the time of such transaction and after giving pro
forma effect thereto as if such transaction had occurred at the
beginning of the applicable four-quarter period, to incur at least
$1.00 of additional Indebtedness pursuant to the Interest Coverage
Ratio test set forth in Section 4.9 hereof.
The Issuers shall deliver to the Trustee prior to the consummation
of any proposed transaction an Officers' Certificate to the foregoing effect, an
Opinion of Counsel, stating that all conditions precedent to the proposed
transaction provided for in this Indenture have been complied with and a written
statement from a firm of independent public accountants of established national
reputation reasonably satisfactory to the Trustee stating that the proposed
transaction complies with clause (v).
For purposes of this Section 5.1, the transfer of all or
substantially all of the properties and assets of one or more Subsidiaries of
the Company, which properties and assets, if held by the Company instead of such
Subsidiaries, would constitute all or substantially all of the properties and
assets of the Company on a consolidated basis, shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Company.
Section 5.2. Successor Substituted.
----------- ---------------------
In the event of any transaction (other than a lease) contemplated
by Section 5.1 hereof in which neither of the Issuers is the surviving Person,
the successor formed by such consolidation or into or with which the applicable
Issuer is merged or to which such transfer is made, or formed by such
reorganization, as the case may be, shall succeed to, and be substituted for,
and may exercise every right and power of, such Issuer, and such Issuer shall be
discharged from its Obligations under this Indenture, the Notes, the Security
Documents and the Registration Rights Agreement with the same effect as if such
successor Person had been named as such Issuer herein or therein. The Trustee
shall have the right to require any such Person to ensure, by executing and
delivering appropriate instruments and Opinions of Counsel, that the Trustee
continues to hold a first priority Lien on all Collateral for the benefit of the
Holders.
ARTICLE 6
DEFAULTS AND REMEDIES
69
Section 6.1. Events of Default.
------------ -----------------
Each of the following is an "Event of Default":
----------------
(1) The Issuers default in the payment of interest on any Note when the
same becomes due and payable and the Default continues for a period of
30 days;
(2) The Issuers default in the payment of principal (or premium, if any)
on any Note when the same becomes due and payable at maturity, upon
redemption, by acceleration, or otherwise:;
(3) the Issuers default in the performance of or breaches the provisions
of Sections 4.10 or 4.14 or Article 5 hereof;
(4) the Issuers or any Guarantor fails to comply with any of its other
agreements or covenants in, or provisions of, the Notes or this Inden
ture and the Default continues for 60 days after written notice
thereof has been given to the Issuers by the Trustee or to the Issuers
and the Trustee by the Holders of at least 25% in aggregate principal
amount of the then outstanding Notes, such notice to state that it is
a "Notice of Default";
(5) default under (after giving effect to any applicable grace periods or
any extension of any maturity date) any mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the
Issuers or any Restricted Subsidiary (or the payment of which is
guaranteed by the Issuers or any Restricted Subsidiary), whether such
Indebtedness or guaranty now exists or is created after the Issue
Date, if (A) either (1) such default results from the failure to pay
principal of or interest on such Indebtedness or (2) as a result of
such default the maturity of such Indebtedness has been accelerated,
and (B) the principal amount of such Indebtedness, together with the
principal amount of any other such Indebtedness with respect to which
such a payment default (after the expiration of any applicable grace
period or any extension of the maturity date) has occurred, or the
maturity of which has been so accelerated, exceeds $5,000,000 in the
aggregate;
70
(6) a final non-appealable judgment or judgments for the payment of money
(other than judgments as to which a reputable insurance company has
accepted full liability) is or are entered by a court or courts of
competent jurisdiction against the Issuers or any Subsidiary of the
Company and such judgment or judgments remain undischarged, unbonded
or unstayed for a period of 60 days after entry, provided that the
aggregate of all such judgments exceeds $5,000,000;
(7) intentionally omitted;
(8) the cessation of substantially all gaming operations of the Issuers
for more than 60 days, except as a result of an Event of Loss,
(9) any revocation, suspension, expiration (without previous or concur
rent renewal) or loss of any Gaming License for more than 60 days;
(10) any failure to comply with any material agreement or covenant in, or
material provision of, any Security Document;
(11) either of the Issuers or any Guarantor, 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,
(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) admits in writing its inability to pay debts as the same become
due; and
(12) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
71
(a) is for relief against either of the Issuers or any Guarantor in
an involuntary case,
(b) appoints a Custodian of either of the Issuers or any Guarantor or
for all or substantially all of their property, or
(c) orders the liquidation of either of the Issuers or any Guarantor,
and such order or decree remains unstayed and in effect for 60 days.
The Issuers shall, upon becoming aware of any Default or Event of
Default, deliver to the Trustee a statement specifying such Default or Event of
Default and what action the Issuers are taking or propose to take with respect
thereto.
Section 6.2. Acceleration.
------------ ------------
Subject to the terms of the Intercreditor Agreement, if an Event of
Default (other than an Event of Default specified in clauses (11) and (12) of
Section 6.1) occurs and is continuing, the Trustee by written notice to the
Issuers, or the Holders of at least 25% in principal amount of the then
outstanding Notes by written notice to the Issuers and the Trustee, may declare
the unpaid principal of and any accrued interest on all the Notes to be due and
payable. Upon such declaration the principal and interest shall be due and
payable immediately. If an Event of Default specified in clause (11) or (12) of
Section 6.1 with respect to the Issuers occurs, all outstanding Notes shall ipso
----
facto become and be immediately due and payable without any declaration or other
-----
act on the part of the Trustee or any Holder.
Section 6.3. Other Remedies.
------------ --------------
If an Event of Default occurs and is continuing, subject to the terms
of the Intercreditor Agreement, the Trustee may pursue any available remedy
(under this Indenture or otherwise) to collect the payment of principal or
interest on the Notes to enforce the performance of any provision of the Notes,
this Indenture or the Security Documents.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver
72
of or acquiescence in the Event of Default. All remedies are cumulative to the
extent permitted by law.
Section 6.4. Waiver of Past Defaults.
------------ -----------------------
Holders of a majority of the aggregate principal amount of the then
outstanding Notes by written notice to the Trustee may on behalf of the Holders
of all of the Notes (a) waive any existing Default or Event of Default and its
consequences under this Indenture except a continuing Default or Event of
Default in the payment of the principal of, or interest on, any Note or a
Default or an Event of Default with respect to any covenant or provision which
cannot be modified or amended without the consent of the Holder of each
outstanding Note affected, and/or (b) rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal or
interest that has become due solely because of the acceleration) have been cured
or waived. Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 6.5. Control by Majority.
------------ -------------------
The Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
it. However, the Trustee may refuse to follow any direction that conflicts with
law or this Indenture, that the Trustee determines may be unduly prejudicial to
the rights of other Holders, or that may involve the Trustee in personal
liability.
Section 6.6. Limitation on Suits.
------------ -------------------
A Holder may pursue a remedy with respect to this Indenture or the
Notes only if:
(a) the Holder gives to the Trustee written notice of a continuing
Event of Default;
73
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability
or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another Holder or
to obtain a preference or priority over another Holder.
Section 6.7. Rights of Holders to Receive Payment.
------------ ------------------------------------
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal and interest on the Note,
on or after the respective due dates expressed in the Note, or to bring suit for
the enforcement of any such payment on or after such respective dates, shall not
be impaired or affected without the consent of the Holder.
Section 6.8. Collection Suit by Trustee.
------------ --------------------------
If an Event of Default specified in Section 6.1(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 Issuers for the whole amount of
principal and interest remaining unpaid on the Notes and interest on overdue
principal (and premium, if any) and, to the extent lawful, interest on overdue
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
Section 6.9. Trustee May File Proofs of Claim.
------------ --------------------------------
74
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Issuers (or any
other obligor under the Notes), their creditors or their property and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments
to the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.7 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 7.7 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 of the Notes
may be entitled to receive in such proceeding whether in liquidation or under
any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
Section 6.10. Priorities.
------------- ----------
Subject to the terms of the Intercreditor Agreement, if the
Trustee collects any money pursuant to this Article, it shall pay out the money
in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.7, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal and
interest, respectively;
75
Third: without duplication, to Holders for any other Obligations
owing to the Holders under the Notes or this Indenture; and
Fourth: to the Issuers or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders.
Section 6.11. Undertaking for Costs.
------------- ---------------------
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.6, or a suit by Holders of more than 10% in principal
amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
Section 7.1. Duties of Trustee.
------------ -----------------
(1) If an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of his or her own affairs.
(2) Except during the continuance of an Event of
Default:
(a) The duties of the Trustee shall be determined
solely by the express provisions of this Indenture, and the Trustee need
perform only those duties that are specifically set forth in this Indenture
and the Security Documents, and no others, and no implied covenants or
obligations shall be read into this Indenture against the Trustee.
76
(b) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture and the
Security Documents. However, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the requirements
of this Indenture and the Security Documents.
(3) 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:
(a) This paragraph does not limit the effect of paragraph (2) of
this Section.
(b) 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.
(c) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5.
(4) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(1), (2) and (3) of this Section.
(5) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee may refuse to
perform any duty or exercise any right or power unless it receives security and
indemnity satisfactory to it against any loss, liability or expense.
(6) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Issuers.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
(7) The Trustee is hereby authorized and directed to enter into the
Intercreditor Agreement upon execution thereof by the other parties thereto.
77
(8) If the Issuers shall enter into any FF&E Financing secured by a
Permitted Vessel Lien, the Trustee is hereby authorized, at the Company's
request, to enter into an intercreditor agreement with the related FF&E Lender,
provided, that (a) such agreement contains the agreements required under clause
(a) of the definition of Permitted Vessel Lien, (b) the rights of the Trustee
and the Holders hereunder and under the Security Documents are not adversely
affected thereby in any respect, and (c) the Holders are not otherwise adversely
affected thereby.
Section 7.2. Rights of Trustee.
------------ -----------------
(1) The Trustee may conclusively rely upon any document believed by
it to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(2) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(3) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(4) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers conferred upon it by this Indenture.
(5) Unless otherwise specifically provided in this Indenture or the
Security Documents, any demand, request, direction or notice from the Issuers
shall be sufficient if signed by an Officer of each of the Issuers, on behalf of
the Issuers.
(6) Except with respect to Section 4.1, the Trustee shall have no
duty to inquire as to the performance of the Issuers' covenants in Article 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
78
6.1(1), 6.1(2) and 4.1, or (ii) any Default or Event of Default of which the
Trustee shall have received written notification or obtained actual knowledge.
Section 7.3. Individual Rights of Trustee.
------------ ----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Issuers or an
Affiliate of the Issuers with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee is
subject to Sections 7.10 and 7.11.
Section 7.4. Trustee's Disclaimer.
------------ --------------------
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture, the Security Documents or the
Notes or as to the adequacy of the security for the Notes, it shall not be
accountable for the Issuers' use of the proceeds from the Notes or any money
paid to the Issuers or upon the Issuers' direction under any provision hereof,
it shall not be responsible for the use or application of any money received by
any Paying Agent other than the Trustee and it shall not be responsible for any
statement or recital herein or any statement in the Notes or any other document
in connection with the sale of the Notes or pursuant to this Indenture other
than its certificate of authentication.
Section 7.5. Notice of Defaults.
------------ ------------------
If a Default or Event of Default occurs and is continuing and if the
Trustee has knowledge thereof (within the meaning of Section 7.2(6)), the
Trustee shall mail to the Holders a notice of the Default or Event of Default
within 90 days after it occurs.
Section 7.6. Reports by Trustee to Holders.
------------ -----------------------------
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, the Trustee shall mail to the Holders a brief report
dated as of such reporting date that complies with TIA (S) 313(a) (but if no
event described in TIA (S) 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA (S) 313(b). The Trustee shall also transmit by mail all
reports as required by TIA (S) 313(c).
79
Commencing at the time this Indenture is qualified under the TIA, a
copy of each report at the time of its mailing to the Holders shall be filed
with the Commission and each stock exchange on which the Notes are listed. The
Issuers shall promptly notify the Trustee when the Notes are listed on any stock
exchange.
At the express direction of the Company and at the Company's expense,
the Trustee will provide any Gaming Authority with:
(i) copies of all notices, reports and other written communications
that the Trustee gives to Holders;
(ii) a list of all of the Holders promptly after the original
issuance of the Notes and periodically thereafter if the Company
so directs;
(iii) notice of any Default or Event of Default under this Indenture,
any acceleration of the Indebtedness evidenced hereby, the
institution of any legal actions or proceedings before any court
or governmental authority in respect of a Default or Event of
Default hereunder;
(iv) notice of the removal or resignation of the Trustee within five
Business Days of the effectiveness thereof;
(v) notice of any transfer or assignment of rights under this Inden-
ture known to the Trustee within five Business Days thereof; and
(vi) a copy of any amendment to the Notes or this Indenture within
five Business Days of the effectiveness thereof.
To the extent requested by the Company and at the Company's expense,
the Trustee shall cooperate with any Gaming Authority in order to provide such
Gaming Authority with the information and documentation requested and as
otherwise required by applicable law.
80
Section 7.7. Compensation and Indemnity.
------------ --------------------------
The Issuers shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuers shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel, except such disbursements, advances and expenses as may be
attributable to its negligence or bad faith.
Except as set forth below, the Issuers shall indemnify the Trustee and
its officers, directors, agents and employees against any and all losses,
liabilities or expenses incurred by it without negligence or bad faith on its
part arising out of or in connection with the acceptance or administration of
its duties under this Indenture and the Security Documents, including the costs
and expenses of enforcing this Indenture or the Security Documents against the
Issuers and defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder. The
Trustee shall notify the Issuers promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Issuers shall not relieve the
Issuers of their obligations hereunder. The Issuers shall defend the claim and
the Trustee shall cooperate in the defense. In the event that a conflict of
interest or conflicting defenses would arise in connection with the
representation of the Issuers and the Trustee by the same counsel, the Trustee
may have separate counsel and the Issuers shall pay the reasonable fees and
expenses of such counsel. The Issuers need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld.
The obligations of the Issuers under this Section 7.7 shall survive
the satisfaction and discharge of this Indenture.
The Issuers need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through its own negligence or bad
faith.
To secure the Issuers' payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal of (and
premium, if any) and
81
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(11) or (12) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 7.8. Replacement of Trustee.
------------ ----------------------
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.8.
The Trustee may resign at any time and be discharged from the trust
hereby created by so notifying the Issuers. The Holders of a majority in
principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Issuers. The Issuers may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property;
(d) the Trustee becomes incapable of acting; or
(e) the Trustee is found unsuitable or unqualified by any Gaming
Authority.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Issuers shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Issuers.
82
If any Gaming Authority requires the Trustee to be approved, licensed
or qualified and the Trustee fails or declines to do so, such approval, license
or qualification shall be obtained upon the request of, and at the expense of,
the Company, unless the Trustee declines to do so, in which case the Trustee
shall be replaced in accordance with this Section 7.8, or, if the Trustee's
relationship with the Company may, in the Company's discretion, jeopardize any
material Gaming License or franchise or right or approval granted thereto, the
Trustee shall resign, and, in addition, the Trustee may, at its option, resign
if the Trustee in its sole discretion determines not to be so approved, licensed
or qualified.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuers or the
Holders of at least 10% in principal amount of the then outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee after written request by any Holder who has been a
Holder for at least six months fails to comply with Section 7.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appoint-
ment to the retiring Trustee and to the Issuers. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to the
Holders. The retiring Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee, provided that all sums owing to the Trustee
--------
hereunder have been paid and subject to the Lien provided for in Section 7.7.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the
Issuers' obligations under Section 7.7 hereof shall continue for the benefit of
the retiring Trustee, and the Issuers shall pay to any such replaced or removed
Trustee all amounts owed under Section 7.7 upon such replacement or removal.
Section 7.9. Successor Trustee by Merger, etc.
------------ ---------------------------------
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation or
banking association, the successor corporation without any further act shall be
the successor Trustee.
83
Section 7.10. Eligibility; Disqualification.
------------- -----------------------------
There shall at all times be a Trustee hereunder that shall (a) be a
corporation organized and doing business under the laws of the United States of
America or of any state thereof or of the District of Columbia authorized under
such laws to exercise corporate trustee power, (b) be subject to supervision or
examination by Federal or state or the District of Columbia authority, and (c)
have a combined capital and surplus of at least $100,000,000 as set forth in its
most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
require ments of TIA (S)(S) 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee is
subject to TIA (S) 310(b); provided, however, that there shall be excluded from
-------- -------
the operations of TIA (S) 310(b)(1) any indenture or indentures under which
other securities, or certificates of interest or participation in other
securities, of the Issuers are outstanding, if the requirements for such
exclusion set forth in TIA (S) 310(b)(1) are met.
Section 7.11. Preferential Collection of Claims Against Issuers.
------------- -------------------------------------------------
The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein. The
provisions of TIA (S) 311 shall apply to the Issuers, as obligors on the Notes.
ARTICLE 8
DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.1. Discharge; Option to Effect Legal Defeasance or Covenant
------------ --------------------------------------------------------
Defeasance.
----------
This Indenture shall cease to be of further effect (except that the
Issuers' and the Guarantors' obligations under Section 7.7 and the Trustee's and
the Paying Agent's obligations under Sections 8.6 and 8.7 shall survive) when
all outstanding Notes theretofore authenticated and issued have been delivered
(other than destroyed, lost or stolen Notes that have been replaced or paid) to
the Trustee for cancellation and the Issuers or the Guarantors have paid all
sums payable hereunder. In addition, the Issuers may elect at any time to have
Section 8.2 or
84
Section 8.3, at the Issuers' option, of this Indenture applied to all
outstanding Notes upon compliance with the conditions set forth below in this
Article 8.
Section 8.2. Legal Defeasance and Discharge.
------------ ------------------------------
Upon the Issuers' exercise under Section 8.1 hereof of the option
applicable to this Section 8.2, except as set forth below, the Issuers and the
Guarantors shall be deemed to have been discharged from their respective
obligations with respect to all outstanding Notes on the date the conditions set
forth below are satisfied (hereinafter, "Legal Defeasance"). Following such
Legal Defeasance, (a) the Issuers shall be deemed to have paid and discharged
the entire indebtedness outstanding hereunder, and this Indenture shall cease to
be of further effect as to all outstanding Notes and Guarantees, and (b) the
Issuers and the Guarantors shall be deemed to have satisfied all other of their
respective obligations under the Notes, the Guaranty and this Indenture (and the
Trustee, on demand of and at the expense of the Issuers, shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder:
(i) the rights of Holders to receive payments in respect of the
principal of, premium, if any, and interest (and Liquidated Damages, if
any) on such Notes when such payments are due from the trust described in
Section 8.5;
(ii) the Issuers' obligations under Sections 2.4, 2.6, 2.7,
2.10, 4.2, 8.5, 8.6 and 8.7 hereof; and
(iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Issuers' and the Guarantors' obligations in
connection therewith.
Subject to compliance with the provisions of this Article 8, the Company may
exercise its option under this Section 8.2 notwithstanding the prior exercise of
its option under Section 8.3 hereof.
Section 8.3. Covenant Defeasance.
------------ -------------------
Upon the Issuers' exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, the Issuers and the Guarantors shall be released
from
85
their respective obligations under the covenants contained in Sections 4.3, 4.4,
4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20 and
Article V hereof on and after the date the conditions set forth below are
satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall thereafter
be deemed not "outstanding" for the purposes of any direction, waiver, consent
or declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder. Following such Covenant Defeasance, (a)
neither the Issuers nor any Guarantor need comply with, and none of them shall
have any liability in respect of, any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document, but, except as
specified above, the remainder of this Indenture, the Notes and the Guaranty
shall be unaffected thereby, and (b) Sections 6.1(3) through 6.1(10) hereof
shall not constitute Events of Default with respect to the Notes.
Section 8.4. Conditions to Legal Defeasance or Covenant Defeasance.
------------ -----------------------------------------------------
The following shall be the conditions to the application of either
Section 8.2 or 8.3 hereof to the outstanding Notes:
(i) the Issuers shall irrevocably have deposited or caused to be deposited
with the Trustee, in trust, for the benefit of the Holders, cash in
U.S. dollars, non-callable Government Securities, or a combination
thereof, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay
the principal of, premium, if any, and interest on the outstanding
Notes on the stated maturity or on the applicable redemption date, as
the case may be, and the Issuers shall specify whether the Notes are
being defeased to maturity or to a particular redemption date;
(ii) in the case of Legal Defeasance, the Issuers shall have delivered to
the Trustee an Opinion of Counsel confirming that (A) the Issuers have
received from, or there has been published by, the Internal Revenue
Service a ruling or (B) since the Issue Date, there has been a change
in the applicable Federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm that,
the Holders will not recognize income, gain or loss for Federal income
tax purposes as a result of such Legal Defeasance and will be subject
86
to Federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such Legal Defeasance
had not occurred;
(iii) in the case of Covenant Defeasance, the Issuers shall have delivered
to the Trustee an Opinion of Counsel confirming that the Holders will
not recognize income, gain or loss for Federal income tax purposes as
a result of such Covenant Defeasance and will be subject to Federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not
occurred;
(iv) no Default or Event of Default shall have occurred and be continuing
on the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit);
(v) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under any material
agreement or instrument (other than this Indenture) to which the
Issuers or any of the Subsidiaries is a party or by which the Issuers
or any of the Subsidiaries is bound;
(vi) the Issuers shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Issuers with
the intent of preferring the Holders over the other creditors of the
Issuers with the intent of defeating, hindering, delaying or
defrauding creditors of the Issuers or others; and
(vii) the Issuers shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating, subject to
certain factual assumptions and bankruptcy and insolvency exceptions,
that all conditions precedent provided for in this Indenture relating
to the Legal Defeasance or the Covenant Defeasance have been complied
with.
Section 8.5. Deposited Cash and U.S. Government Obligations to be Held in
------------ ------------------------------------------------------------
Trust; Other Miscellaneous Provisions.
-------------------------------------
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Subject to Section 8.6 hereof, all cash and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 8.5, the
"Paying Agent") pursuant to Section 8.4 hereof in respect of the outstanding
Notes shall be held in trust and applied by the Paying Agent, in accordance with
the provisions of such Notes and this Indenture, to the payment, either directly
or through any other Paying Agent as the Trustee may determine, to the Holders
of such Notes of all sums due and to become due thereon in respect of principal,
premium, if any, and interest (and Liquidated Damages, if any).
The Issuers shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 8.4 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of outstanding Notes.
Section 8.6. Repayment to the Issuers.
------------ ------------------------
(a) The Trustee or the Paying Agent shall deliver or pay to the
Issuers from time to time upon the request of the Issuers any cash or U.S.
Government Obligations held by it as provided in Section 8.4 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 8.4(a) hereof), are in excess of the
amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
(b) Any cash and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee or any Paying Agent, or then held by the
Issuers, in trust for the payment of the principal of, premium, if any, or
interest (and Liquidated Damages, if any) on any Note and remaining unclaimed
for two years after such principal, and premium, if any, or interest has become
due and payable shall be paid to the Issuers on their request; and the Holder of
such Note shall thereafter look only to the Issuers for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money
shall thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, shall at the expense of the
Issuers cause to be published once, in the New York Times and The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which
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shall not be less than 30 days from the date of such notification or
publication, any unclaimed balance of such money then remaining will be repaid
to the Issuers.
Section 8.7. Reinstatement.
------------ -------------
If the Trustee or Paying Agent is unable to apply any cash or U.S.
Government Obligations in accordance with Section 8.2 or 8.3 hereof, as the case
may be, of this Indenture by reason of any order or judgment of any court or
govern mental authority enjoining, restraining or otherwise prohibiting such
application, or if any event occurs at any time in the period ending on the 91st
day after the date of deposit pursuant to Section 8.2 or 8.3 hereof which event
would constitute an Event of Default under Section 6.1 (11) or (12) had Legal
Defeasance or Covenant Defeasance, as the case may be, not occurred, then the
Issuers' and the Guarantors' obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.2 or 8.3 hereof until such time as the Trustee or Paying Agent is
permitted to apply such money in accordance with Section 8.2 or 8.3 hereof, as
the case may be; provided, however, that, if the Issuers make any payment of
principal of, premium, if any, or interest (and Liquidated Damages, if any) on
any Note following the reinstatement of its obligations, the Issuers shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the cash or U.S. Government Obligations held by the Trustee or Paying
Agent.
ARTICLE 9
AMENDMENTS
Section 9.1. Without Consent of Holders.
------------ --------------------------
The Issuers, the Guarantors and the Trustee may amend or supplement
this Indenture, the Notes and the Security Documents, without the consent of any
Holder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(3) to comply with Article 5 and Section 10.12 hereof;
89
(4) to make any change that would provide any additional rights
or benefits to the Holders of the Notes or that does not adversely affect
the legal rights hereunder or thereunder of any Holder;
(5) to comply with requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA; or
(6) to release any Guarantee of the Notes permitted to be
released under Section 10.7 hereof.
Upon the request of the Issuers, accompanied by a resolution of the
Board of Directors of each of the Issuers authorizing the execution of any such
supplemental indenture or amendment, and upon receipt by the Trustee of the
documents described in Section 9.6 hereof required or requested by the Trustee,
the Trustee shall join with the Issuers in the execution of any supplemental
indenture or amendment authorized or permitted by the terms of this Indenture
and shall make any further appropriate agreements and stipulations which may be
therein contained, but the Trustee shall not be obligated to enter into such
supplemental indenture or amendment that affects its own rights, duties or
immunities under this Indenture or otherwise.
Section 9.2. With Consent of Holders.
------------ -----------------------
(a) Subject to Sections 6.4 and 6.7 hereof, the Issuers and the Trustee,
as applicable, may amend, or waive any provision of, this Indenture or the
Notes, with the written consent of the Holders of at least a majority of the
principal amount of the then outstanding Notes (including consents obtained in
connection with a tender offer or exchange offer for Notes).
(b) Upon the request of the Issuers, accompanied by a resolution of the
Board of Directors of each of the Issuers authorizing the execution of any such
supplemental indenture or amendment, and upon filing with the Trustee of
evidence satisfactory to the Trustee of the consent of the Holders as aforesaid,
and upon receipt by the Trustee of the documents described in Section 9.6
hereof, the Trustee shall join with the Issuers in the execution of such
supplemental indenture or amendment unless such supplemental indenture or
amendment affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such supplemental indenture.
90
(c) It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed supplemental indenture or
amendment, but it shall be sufficient if such consent approves the substance
thereof.
(d) After a supplemental indenture or amendment under this Section
becomes effective, the Issuers shall mail to the Holders of each Note affected
thereby a notice briefly describing the amendment or waiver. Any failure of the
Issuers to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture, amendment
or waiver.
(e) Notwithstanding any other provision hereof, without the consent of
each Holder affected, an amendment or waiver under this Section may not (with
respect to any Notes held by a non-consenting Holder):
(i) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(ii) reduce the principal of, or the premium (including, without
limitation, redemption premium) on, or change the fixed maturity of,
any Note; alter the provisions with respect to the payment on
redemption of the Notes; or alter the price at which repurchases of
the Notes may be made pursuant to Section 4.10 or 4.14 hereof;
(iii) reduce the rate of or change the time for payment of interest on any
Note;
(iv) waive a Default or Event of Default in the payment of principal of
or premium, if any, or interest on the Notes (except a rescission of
acceleration if the Holder rescinds such acceleration pursuant to
Section 6.2 hereof);
(v) make any Note payable in money other than that stated in the Notes;
(vi) make any change in Section 6.4 or 6.7 hereof or in this Section 9.2;
(vii) waive a redemption payment with respect to any Note; or
(viii) adversely affect the contractual ranking of the Notes or Guarantees.
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Section 9.3. Compliance with Trust Indenture Act.
------------ -----------------------------------
If, at the time of an amendment to this Indenture or the Notes, this
Indenture shall be qualified under the TIA, every amendment to this Indenture or
the Notes shall be set forth in a supplemental indenture that complies with the
TIA as then in effect.
Section 9.4. Revocation and Effect of Consents.
------------ ---------------------------------
Until a supplemental indenture, an amendment or waiver becomes
effective, a consent to it by a Holder of a Note is a continuing consent by the
Holder and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. A supplemental indenture, amendment or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
The Issuers may fix a record date for determining which Holders must
consent to such supplemental indenture, amendment or waiver. If the Issuers
fixes a record date, the record date shall be fixed at (i) the later of 30 days
prior to the first solicitation of such consent or the date of the most recent
list of Holders furnished to the Trustee prior to such solicitation pursuant to
Section 2.5, or (ii) such other date as the Issuers shall designate.
Section 9.5. Notation on or Exchange of Notes.
------------ --------------------------------
The Trustee may place an appropriate notation about a supplemental
indenture, amendment or waiver on any Note thereafter authenticated. The Issuers
in exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment or waiver.
Section 9.6. Trustee to Sign Amendments, etc.
------------ --------------------------------
The Trustee shall sign any amendment or supplemental indenture
authorized pursuant to this Article 9 if the amendment does not adversely affect
the rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing or refusing to sign such
amendment or supplemental
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indenture, the Trustee shall be entitled to receive, if requested, an indemnity
reason ably satisfactory to it and to receive and, subject to Section 7.1, shall
be fully protected in relying upon, an Officers' Certificate and an Opinion of
Counsel as conclusive evidence that such amendment or supplemental indenture is
authorized or permitted by this Indenture, that it is not inconsistent herewith,
and that it shall be valid and binding upon the Issuers in accordance with its
terms. The Issuers may not sign an amendment or supplemental indenture until the
Board of Directors of each of the Issuers approves it.
ARTICLE 10
COLLATERAL AND SECURITY AND GUARANTY
Section 10.1. Collateral Documents.
------------- --------------------
The due and punctual payment of the principal and premium, if any, of,
and interest on, the Notes when and as the same shall be due and payable,
whether on an interest payment date, at maturity, by acceleration, repurchase,
redemption or otherwise, interest on the overdue principal of and interest (to
the extent permitted by law), if any, on the Notes and performance of all other
Obligations under this Indenture, the Notes, the Security Documents and the
Registration Rights Agreement, shall be secured as provided in the Security
Documents.
The Issuers shall, and shall cause each of the Restricted Subsidiaries
to, do or cause to be done all such acts and things as may be necessary or
proper, or as may be required by the provisions of the Security Documents, to
assure and confirm to the Trustee the security interest in the Collateral
contemplated hereby and by the Security Documents, as from time to time
constituted, so as to render the same available for the security and benefit of
this Indenture and of the Notes secured hereby, according to the intent and
purposes herein and therein expressed. The Issuers shall, and shall cause each
of the Restricted Subsidiaries to, take, upon request of the Trustee, any and
all actions required to cause the Security Documents to create and maintain, as
security for the Obligations under this Indenture, the Notes, the Security
Documents and the Registration Rights Agreement, valid and enforceable,
perfected (except as expressly provided herein or therein) Liens in and on all
the Collateral, in favor of the Trustee, superior to and prior to the rights of
all third Persons, and subject to no other Liens, other than as provided herein
and therein; provided, that the Trustee's Lien securing the Collateral may be
subordinated
93
pursuant to the terms of the Intercreditor Agreement to a Lien securing
Indebtedness outstanding pursuant to Section 4.9(a) hereof, but only to the
extent provided in the Intercreditor Agreement.
Section 10.2. Opinions.
------------ --------
The Issuers shall furnish to the Trustee within three months
after each anniversary of the Issue Date, an Opinion of Counsel, dated as of
such date, stating either that (i) in the opinion of such counsel, all action
has been taken with respect to the recording, registering, filing, re-recording,
re-registering and refiling of all supplemental indentures, financing
statements, continuation statements or other instruments of further assurance as
is necessary to maintain the Liens of the Security Documents and reciting the
details of such action, subject to customary assumptions and exclusions or (ii)
in the opinion of such Counsel, no such action is necessary to maintain such
Liens, which Opinion of Counsel also shall state what actions it then believes
are necessary to maintain the effectiveness of such liens during the next year,
subject to customary assumptions and exclusions.
Section 10.3. Release of Collateral.
------------ ---------------------
(a) Collateral shall be released from the Liens created by the
Security Documents from time to time at the sole cost and expense of the
Issuers:
(i) upon payment in full of the Notes and all other Obligations
under this Indenture, the Notes, the Security Documents and the
Registration Rights Agreement then due and owing,
(ii) unless an Event of Default shall have occurred and be
continuing, upon the (A) sale or other disposition of such Collateral
pursuant to an Asset Sale made in accordance with Section 4.10 hereof, (B)
sale or other disposition of such Collateral meeting the conditions of
(b)(1) of the definition of Asset Sale, or (C) transfer or exchange of such
Collateral in the ordinary course of business,
(iii) upon the written consent of the Holders of at least a
majority of the aggregate principal amount of the then outstanding Notes
(including consents obtained in connection with a tender offer or exchange
offer for Notes),
94
(iv) as required pursuant to the terms of the Intercreditor
Agreement,
or
(v) upon a Legal Defeasance or Covenant Defeasance;
provided, that the Trustee shall not release any Lien on any Collateral unless
--------
and until it shall have received an Officers' Certificate certifying that all
conditions precedent hereunder have been met and such other documents required
by Section 10.4 hereof. Upon compliance with the above provisions, the Trustee
shall execute, deliver or acknowledge any necessary or proper instruments of
termination, satisfaction or release to evidence the release of any Collateral
permitted to be released pursuant to this Indenture or the Security Documents.
(b) The release of any Collateral from the terms of the Security
Documents shall not be deemed to impair the security under this Indenture in
contravention of the provisions hereof and of the Security Documents if and to
the extent the Collateral is released pursuant to the terms of this Indenture
and the Security Documents.
Section 10.4. Certificates of the Issuers.
------------ ---------------------------
The Issuers shall furnish to the Trustee, prior to each proposed
release of Collateral, all documents required by TIA (S) 314(d). The Trustee
may, to the extent permitted by Sections 7.1 and 7.2 hereof, accept as
conclusive evidence of compliance with the foregoing provisions the appropriate
statements contained in such instruments. Any certificate or opinion required
by TIA (S) 314(d) may be made by an Officer of each of the Issuers, except in
cases where TIA (S) 314(d) requires that such certificate or opinion be made by
an independent engineer, appraiser or other expert within the meaning of TIA (S)
314(d).
Section 10.5. Authorization of Actions to be Taken by the Trustee Under the
------------ -------------------------------------------------------------
Security Documents.
-------------------
Subject to the terms of the Intercreditor Agreement, the Trustee
may, in its sole discretion and without the consent of the Holders, on behalf of
the Holders, take all actions it deems necessary or appropriate in order to (a)
enforce any of the terms of the Security Documents and (b) collect and receive
any and all amounts payable in respect of the Obligations of the Issuers and the
Guarantors hereunder and under the Notes, the Security Documents and the
Registration Rights
95
Agreement. Subject to the terms of the Intercreditor Agreement, the Trustee
shall have the power to institute and to maintain such suits and proceedings as
it may deem expedient to prevent any impairment of the Collateral by any acts
that may be unlawful or in violation of the Security Documents or this
Indenture, and such suits and proceedings as the Trustee may deem expedient to
preserve or protect its interest and the interests of the Holders in the
Collateral (including power to institute and maintain suits or proceedings to
restrain the enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment, rule or order
would impair the security interest hereunder or be prejudicial to the interests
of the Holders or the Trustee).
Section 10.6. Authorization of Receipt of Funds by the Trustee Under the
------------ ----------------------------------------------------------
Security Documents.
------------------
The Trustee is authorized to receive any funds for the benefit of
the Holders distributed under the Security Documents, and to make further
distributions of such funds to the Holders according to the provisions of this
Indenture and the Security Documents.
Section 10.7. Guaranty.
------------ --------
For good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, subject to Section 10.9 hereof, each Guarantor,
jointly and severally, hereby unconditionally guarantees (such guarantees,
together with further guarantees granted from time to time pursuant to Section
10.12, being the "Guaranty") to each Holder and the Trustee irrespective of the
validity or enforceability of this Indenture, the Notes, the Security Documents,
the Registration Rights Agreement or the Obligations of the Issuers hereunder or
thereunder: (i) the due and punctual payment of the principal and premium, if
any, of, and interest on, the Notes (including, without limitation, interest
after the filing of a petition initiating any proceedings referred to in clause
(11) or (12) of Section 6.1 hereof), whether at maturity or on an interest
payment date, by acceleration, call for redemption or otherwise; (ii) the due
and punctual payment of interest on the overdue principal and premium, if any,
of, and interest on, the Notes, if lawful; (iii) the due and punctual payment
and performance of all other Obligations of the Issuers under the Notes, this
Indenture, the Security Documents and the Registration Rights Agreement, all in
accordance with the terms set forth herein and in the Notes, the Security
Documents and the Registration Rights Agreement; and (iv) in case of any
96
extension of time of payment or renewal of any Notes or any of such other
Obligations hereunder or under the Notes, the Security Documents or the
Registration Rights Agreement, the due and punctual payment or performance
thereof in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise.
Failing payment when due by the Issuers of any amount so guaranteed
for whatever reason, the Guarantors shall be jointly and severally obligated to
pay the same immediately.
Each Guarantor hereby agrees that (i) its obligations hereunder shall
be unconditional, irrespective of the validity, regularity or enforceability of
the Notes, this Indenture, the Security Documents, the Registration Rights
Agreement or the Obligations of the Issuers hereunder or thereunder, the absence
of any action to enforce the same, any waiver or consent by any Holder with
respect to any provisions hereof or thereof, any releases of Collateral, any
amendment of this Indenture, the Notes or Security Documents, any delays in
obtaining or realizing upon or failures to obtain or realize upon Collateral,
the recovery of any judgment against either of the Issuers or any of the
Subsidiaries, any action to enforce the same, or any other circumstance that
might otherwise constitute a legal or equitable discharge or defense of a
guarantor and (ii) this Guaranty will not be discharged except by complete
performance of the Obligations of the Issuers under the Notes, this Indenture,
the Security Documents and the Registration Rights Agreement.
Each Guarantor hereby agrees that it shall not be entitled to and
irrevocably waives (i) diligence, presentment, demand of payment, filing of
claim with a court in the event of insolvency or bankruptcy of either of the
Issuers, any Guarantor, any other Subsidiary or any other obligor under the
Notes, any right to require a proceeding first against the applicable Issuer,
any Guarantor, any other Subsidiary or any other obligor under this Indenture,
the Notes or the Security Documents, protest, notice and all demands whatsoever,
(ii) any right of subrogation, reimbursement, exoneration, contribution or
indemnification in respect of any Obligations guaranteed hereby and (iii) any
claim or other rights that it may now or hereafter acquire against the Issuers
or any of the Subsidiaries that arise from the existence or performance of its
Obligations under this Guaranty, including, without limitation, any right to
participate in any claim or remedy of a Holder against the Issuers or any of the
Subsidiaries or any Collateral that a Holder now has or hereafter acquires,
whether or not such claim, remedy or right arises in equity or under contract,
statute or common law, by any payment made hereunder or otherwise, and
97
including, without limitation, the right to take or receive from the Issuers or
any of the Subsidiaries, directly or indirectly, in cash or other property, by
setoff or in any other manner, payment or security on account of such claim or
other rights.
If any Holder or the Trustee is required by any court or
otherwise to return to the Issuers, any Guarantor, any other Subsidiary of the
Issuers or any other obligor under this Indenture, the Notes or the Security
Documents, trustee, liquidator, or other similar official, any amount paid by
the Issuers, any Guarantor, any other Subsidiary of the Issuers or any other
obligor under this Indenture, the Notes or the Security Documents to the Trustee
or such Holder, this Guaranty, to the extent theretofore discharged, shall be
reinstated in full force and effect.
Each Guarantor agrees that, as between the Guarantors, on the one
hand, and the Holders and the Trustee, on the other hand, (i) the maturity of
the Obligations guaranteed hereby may be accelerated as provided in Section 6.2
for the purposes of this Guaranty, notwithstanding any stay, injunction or other
prohibition preventing such acceleration as to the Issuers of the Obligations
guaranteed hereby, and (ii) in the event of any declaration of acceleration of
those Obligations as provided in Section 6.2, those Obligations (whether or not
due and payable) will forthwith become due and payable by each of the Guarantors
for the purpose of this Guaranty.
Section 10.8. Execution and Delivery of Guaranty.
------------ ----------------------------------
To evidence the Guaranty set forth in Section 10.7, the Issuers
and each Guarantor hereby agrees that (a) a notation of such Guaranty
substantially as set forth on Exhibit C hereto shall be endorsed on each Note
authenticated and delivered by the Trustee, (b) such endorsement shall be
executed on behalf of each Guarantor by its Chairman of the Board, President,
Chief Financial Officer, Chief Operating Officer, Treasurer, Secretary or any
Vice President and (c) a counterpart signature page to this Indenture shall be
executed on behalf of each Guarantor by its Chairman of the Board, President or
one of its Vice Presidents and attested to by another officer acknowledging such
Guarantor's agreement to be bound by the provisions hereof and thereof.
Each Guarantor hereby agrees that its Guaranty set forth in
Section 10.7 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Guaranty.
98
If an officer whose signature is on this Indenture no longer
holds that office at the time the Trustee authenticates the Notes on which a
Guaranty is endorsed, the Guaranty shall nevertheless be valid.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guaranty set forth in
this Indenture on behalf of the Guarantor.
Section 10.9. Limitation on 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 Guaranty not constitute a fraudulent transfer or
conveyance for purposes of any Federal or state law. To effectuate the
foregoing intention, the Holders and the Guarantors hereby irrevocably agree
that the Obligations of each Guarantor under its Guaranty shall be limited to
the maximum amount as will, after giving effect to all other contingent and
fixed liabilities of such Guarantor and to any collections from or payments made
by or on behalf of any other Guarantor in respect of the Obligations of such
other Guarantor under its Guaranty, result in the Obligations of such
Guarantor under the Guaranty not constituting a fraudulent conveyance or
fraudulent transfer under Federal or state law or render a Guarantor insolvent.
Section 10.10. Rights under the Guaranty.
------------- -------------------------
(a) No payment by any Guarantor pursuant to the provisions
hereof shall entitle such Guarantor to any payment out of any Collateral or give
rise to any claim of the Guarantors against the Trustee or any Holder.
(b) Each Guarantor waives notice of the issuance, sale and
purchase of the Notes and notice from the Trustee or the Holders from time to
time of any of the Notes of their acceptance and reliance on this Guaranty.
(c) No set-off, counterclaim, reduction or diminution of any
obligation or any defense of any kind or nature (other than performance by the
Guarantors of their obligations hereunder) that any Guarantor may have or assert
against the Trustee or any Holder shall be available hereunder to such
Guarantor.
99
(d) Each Guarantor shall pay all costs, expenses and fees,
including all reasonable attorneys' fees, that may be incurred by the Trustee in
enforcing or attempting to enforce the Guaranty or protecting the rights of the
Trustee or the Holder, if any, in accordance with this Indenture.
Section 10.11. Primary Obligations.
------------- -------------------
The Obligations of each Guarantor hereunder shall constitute a
guaranty of payment and not of collection. Each Guarantor agrees that it is
directly liable to each Holder hereunder, that the Obligations of each Guarantor
hereunder are independent of the Obligations of the Issuers or any other
Guarantor, and that a separate action may be brought against each Guarantor,
whether such action is brought against the Issuers or any other Guarantor or
whether the Issuers or any other Guarantor is joined in such action. Each
Guarantor agrees that its liability hereunder shall be immediate and shall not
be contingent upon the exercise or enforcement by the Trustee or the Holders of
whatever remedies they may have against the Issuers or any other Guarantor, or
the enforcement of any lien or realization upon any security Trustee may at any
time possess. Each Guarantor agrees that any release that may be given by the
Trustee or the Holders to the Issuers or any other Guarantor shall not release
such Guarantor.
Section 10.12. Guarantee by Subsidiary.
------------- -----------------------
The Company shall cause (i) each Restricted Subsidiary that is
formed or acquired after the date hereof and (ii) each Subsidiary that becomes a
Restricted Subsidiary after the date hereof, in each case concurrently
therewith, to (i) become a Guarantor hereunder and execute and deliver to the
Trustee a Guaranty in the form of Exhibit C attached hereto and a supplemental
indenture in form reasonably satisfactory to the Trustee pursuant to which such
Restricted Subsidiary shall unconditionally guarantee all of the Issuers'
Obligations as set forth in Section 10.7 of this Indenture; and (ii) execute a
Security Agreement (substantially in the form of the Security Agreement entered
into on the Issue Date) and other Security Documents necessary or reasonably
requested by the Trustee to grant the Trustee a valid, enforceable, perfected
Lien on the Collateral described therein, subject only to Liens permitted under
Section 4.12; and (iii) cause such Restricted Subsidiary to deliver to the
Trustee an Opinion of Counsel, in form reasonably satisfactory to the Trustee,
that (i) such Security Agreement, supplemental indenture and Guaranty have been
duly authorized, executed and delivered by such Restricted Subsidiary and (ii)
such Security Agreement, this Indenture and such Guaranty constitute a legal,
valid,
100
binding and enforceable obligation of such Restricted Subsidiary, subject to
customary assumptions and exceptions, including for bankruptcy, fraudulent
transfer and equitable principles.
Each Note issued after the date of execution by any Guarantor of
a Guaranty shall be endorsed with a form of Guaranty that has been executed by
such Guarantor. However, the failure of any Note to have endorsed thereon a
Guaranty executed by such Guarantor shall not affect the validity or
enforceability of such Guaranty against such Guarantor.
Section 10.13. Release of Guarantors.
------------- ---------------------
If all of the Capital Stock of any Guarantor is sold to a Person
(other than the Issuers or any of the Restricted Subsidiaries) and the Net
Proceeds from such Asset Sale are used in accordance with Section 4.10, then
such Guarantor will be released and discharged from all of its obligations under
its Guaranty of the Notes and this Indenture.
Section 10.14. Gaming Law Considerations.
------------- -------------------------
(a) The Trustee acknowledges, understands and agrees that the
rules and regulations of the IGC (together with the Indiana Riverboat Gambling
Act, the "Gaming Laws") may impose certain licensing or transaction approval
requirements prior to the exercise of the rights and remedies granted to it
under this Indenture with respect to the Collateral subject to the Gaming Laws.
(b) If any consent under the Gaming Laws is required in
connection with the taking of any of the actions which may be taken by the
Trustee in the exercise of its rights hereunder, then the Issuers agree to use
their reasonable best efforts to secure such consent and to cooperate with the
Trustee in obtaining any such consent. Upon the occurrence and during the
continuation of any Event of Default, the Issuers shall promptly execute and/or
cause the execution of all applications, certificates, instruments and other
documents and papers that the Trustee may be required to file in order to obtain
any necessary approvals under the Gaming Laws, and if the Issuers fail or refuse
to execute such documents, the Trustee or the clerk of the court with
jurisdiction may execute such documents on behalf of the Issuers.
101
(c) Notwithstanding any other provision of this Indenture to the
contrary, nothing in this Indenture shall (i) effect any transfer of any
ownership interest (within the meaning of 68 Indiana Administrative Code 5) in
the Company or (ii) effect any transfer, sale, purchase, lease or hypothecation
of, or any borrowing or loaning of money against, or any establishment of any
voting trust agreement or other similar agreement with respect to (all within
the meaning of Indiana Code 4-33-4-21), any certificate of suitability or any
owner's license heretofore or hereafter issued to any person, including the
Company, under any of the Gaming Laws, including Indiana Code 4-33.
ARTICLE 11
MISCELLANEOUS
Section 11.1. Trust Indenture Act Controls.
------------ ----------------------------
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA (S) 318(c), the imposed duties shall control.
Section 11.2. Notices.
------------ -------
Any notice or communication by the Issuers or the Trustee to the
others is duly given if in writing and delivered in Person or mailed by first-
class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' addresses:
If to the Issuers:
c/o The Majestic Star Casino, LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇▇ Companies, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PLLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ ▇'▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Trustee:
IBJ Whitehall Bank & Trust Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
The Issuers or the Trustee by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; upon receipt, if deposited in the mail, postage prepaid;
when answered back, if telexed; when receipt acknowledged, if telecopied; and
the next Business Day after timely delivery to the courier, if sent by overnight
air courier guaranteeing next day delivery. All notices and communications to
the Trustee shall be deemed to have been duly given only if actually received by
the Trustee.
Any notice or communication to a Holder shall be mailed by first-class
mail, certified or registered, return receipt requested, to his address shown on
the register kept by the Registrar. Failure to mail a notice or communication
to a Holder or any defect in it shall not affect its sufficiency with respect to
other Holders.
If a notice communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
103
If the Issuers mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
Section 11.3. Communication by Holders with Other Holders.
------------ -------------------------------------------
Holders may communicate pursuant to TIA (S) 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Issuers, the Trustee, the Registrar and any other person shall have the
protection of TIA (S) 312(c).
Section 11.4. Certificate and Opinion as to Conditions Precedent.
------------ --------------------------------------------------
Upon any request or application by the Issuers to the Trustee to
take any action under this Indenture, the Issuers shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 11.5) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 11.5) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been complied with.
Section 11.5. Statements Required in Certificate or Opinion.
------------ ---------------------------------------------
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA (S) 314(a)(4)) shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
104
(c) a statement that, in the opinion of such Person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with,
provided that with respect to matters of fact, an Opinion of Counsel may rely
--------
upon an Officers' Certificate or a certificate of a public official.
Section 11.6. Rules by Trustee and Agents.
------------ ---------------------------
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
Section 11.7. Legal Holidays.
------------ --------------
If a payment date is a Legal Holiday at a place of payment,
payment may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
Section 11.8. No Recourse Against Others.
------------ --------------------------
No director, member, manager, officer, employee, incorporator,
stockholder or controlling person of the Issuers or any Guarantor, as such,
shall have any liability for any obligations of the Issuers or any Guarantor
under the Notes, this Indenture, the Security Documents or the Registration
Rights Agreement or for any claim based on, in respect of, or by reason of such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release shall be part of the
consideration for the issuance of the Notes and the Guaranty. Notwithstanding
the foregoing, nothing in this provision shall be construed as a waiver or
release of any claims under the Federal securities laws.
Section 11.9. Governing Law.
------------ -------------
THIS AGREEMENT SHALL BE CONSTRUED, INTERPRETED AND THE RIGHTS OF
THE PARTIES DETERMINED IN ACCORDANCE
105
WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND
PERFORMED WITHIN THE STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION, SECTIONS
5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL
PRACTICE LAWS AND RULES 327(b). THE ISSUERS HEREBY IRREVOCABLY SUBMIT TO THE
JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID
COURTS. THE ISSUERS IRREVOCABLY WAIVE, TO THE FULLEST EXTENT IT MAY EFFECTIVELY
DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE ISSUERS
IRREVOCABLY CONSENT, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO THE ISSUERS AT THEIR ADDRESS SET FORTH
HEREIN, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF ANY PURCHASER TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST THE ISSUERS IN ANY OTHER JURISDICTION.
Section 11.10. No Adverse Interpretation of Other Agreements.
------------- ---------------------------------------------
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Issuers or any of the Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
Section 11.11. Successors.
------------- ----------
106
All agreements of the Issuers and any Guarantors in this
Indenture and the Notes shall bind their respective successors. All agreements
of the Trustee in this Indenture shall bind its successor.
Section 11.12. Severability.
------------- ------------
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 11.13. Counterpart Originals.
------------- ---------------------
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
Section 11.14. Table of Contents, Headings, etc.
------------- --------------------------------
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
(Signature pages follow.)
107
INDENTURE
---------
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Indenture as of the date first written above.
THE MAJESTIC STAR CASINO, LLC
By: ▇▇▇▇▇▇ Development, Inc.
Attest: By: _____________________________
Name:
Title:
________________________
Name:
Title:
THE MAJESTIC STAR CASINO CAPITAL CORP.
Attest: By: _____________________________
Name:
Title:
________________________
Name:
Title:
S-1
IBJ WHITEHALL BANK & TRUST COMPANY,
as Trustee
Attest:
By: ______________________________
Name:
Title:
______________________
Name:
Title:
S-2
EXHIBIT A
(Face of Security)
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST
COMPANY (THE "DEPOSITARY") TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DEPOSITARY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR
SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.]/1/
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION
OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH NOTE, PRIOR TO THE DATE WHICH IS TWO YEARS (OR SUCH
SHORTER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(k) AS PERMITTING
RESALES BY NON-AFFILIATES OF RESTRICTED SECURITIES WITHOUT RESTRICTION) AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
ISSUERS OR ANY AFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS NOTE (OR ANY
PREDECESSOR OF SUCH NOTE) ONLY (A) TO THE ISSUERS, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT THAT IS PURCHASING THE NOTE FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE ISSUERS' AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING ON THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE.
-------------------------
/1/ This paragraph should be included only if the Note is issued in global
form.
A-1
THE MAJESTIC STAR CASINO, LLC
THE MAJESTIC STAR CASINO CAPITAL CORP.
10 7/8% SENIOR SECURED NOTE
DUE 2006
No. $___________
CUSIP NO.
The Majestic Star Casino, LLC, an Indiana limited liability company
(the "Company"), and The Majestic Star Casino Capital Corp., an Indiana
corporation ("Capital" and, together with the Company, the "Issuers"), as
obligors, for value received promises to pay to ______________ or registered
assigns, the principal sum of [ ] Dollars on July 1, 2006.
Interest Payment Dates: July 1 and January 1 and on the maturity date. Record
Dates: June 15 and December 15 (whether or not a Business Day).
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
A-2
IN WITNESS WHEREOF, the Issuers have caused this Note to be signed
manually or by facsimile by their duly authorized officers.
Dated:
THE MAJESTIC STAR CASINO, LLC
By: ▇▇▇▇▇▇ Development, Inc.
By: ___________________________________________________
Name:
Title:
By: ___________________________________________________
Name:
Title:
THE MAJESTIC STAR CASINO CAPITAL CORP.
By: ___________________________________________________
Name:
Title:
By: ___________________________________________________
Name:
Title:
Trustee's Certificate of Authentication:
This is one of the Notes referred to
in the within-mentioned Indenture:
IBJ Whitehall Bank & Trust Company, as Trustee
By:______________________________
Authorized Signatory
A-3
(Back of Security)
10 7/8% SENIOR SECURED NOTE
DUE 2006
1. Interest. The Majestic Star Casino, LLC, an Indiana limited
--------
liability company (the "Company"), and The Majestic Star Casino Capital Corp.,
an Indiana corporation ("Capital" and, together with the Company, the
"Issuers"), as obligors, promise to pay interest on the principal amount of this
Note at the rate and in the manner specified below.
The Issuers shall pay, in cash, interest on the principal amount of
this Note, at the rate of 10 7/8% per annum. The Issuers shall pay interest
semi-annually on July 1 and January 1 of each year, and on the maturity date,
commencing on January 2000, or if any such day is not a Business Day, on the
next succeeding Business Day (each an "Interest Payment Date").
Interest shall be computed on the basis of a 360-day year consisting
of twelve 30-day months. Interest shall accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the Issue
Date. To the extent lawful, the Issuers shall pay interest on overdue principal
at the rate of 1% per annum in excess of the then applicable interest rate on
the Notes; the Issuers shall pay interest on overdue installments of interest
(without regard to any applicable grace periods) at the same rate to the extent
lawful.
2. Method of Payment. The Issuers shall pay interest on the Notes
-----------------
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the record date next preceding the Interest Payment
Date, even if such Notes are cancelled after such record date and on or before
such Interest Payment Date. The Holder must surrender this Note to a Paying
Agent to collect principal payments. The Issuers shall pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. The Issuers may pay principal
and interest by check to a Holder's registered address.
3. Paying Agent and Registrar. Initially, the Trustee shall act as
--------------------------
Paying Agent and Registrar. The Issuers may change any Paying Agent, Registrar
or co-registrar without notice to any Holder. Subject to certain exceptions,
the Company or any of its Subsidiaries may act in any such capacity.
4. Indenture. The Issuers issued the Notes under an Indenture dated
---------
as of June 18, 1999 (the "Indenture") among the Issuers, the Guarantors named
therein and the Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (the "TIA") (15 U.S. Code (S)(S) 77aaa-77bbbb) as in
effect on the date of the Indenture until such time as the Indenture is
qualified under the TIA and thereafter as in effect on the date the Indenture is
so qualified. The Notes are subject to all such terms, and Holders are referred
to the Indenture and the TIA for a statement of such terms. The terms of the
Indenture shall govern any inconsistencies between the Indenture and the Notes.
Terms not otherwise defined herein shall have the meanings assigned in the
Indenture. The aggregate principal amount of Notes that may be authenticated
and delivered under the Indenture is unlimited.
5. Optional Redemption. Except as set forth in Sections 3.7(b) and
-------------------
3.8 of the Indenture, the Notes are not redeemable at the Issuers' option prior
to July 1, 2003. Thereafter, the Notes shall be subject to redemption at the
option of the Issuers, in whole or in part, at the redemption prices (expressed
as percentages of principal amount) set forth below plus accrued and unpaid
interest thereon and Liquidated Damages, if any, to the applicable date of
redemption, if redeemed during the 12-month period beginning on July 1 of the
years indicated below:
A-4
Year Percentage
---- ----------
2003............................. 105.438%
2004............................. 102.719%
2005 and thereafter.............. 100.000%
Notwithstanding the foregoing, at any time or from time to time prior
to July 1, 2002, the Issuers may redeem, at their option, up to 35% of the
aggregate principal amount of the Notes then outstanding at a redemption price
of 110.875% of the principal amount thereof, plus accrued and unpaid interest
thereon and Liquidated Damages, if any, through the applicable date of
redemption, with the net cash proceeds of one or more Public Equity Offerings;
provided, that (a) such redemption shall occur within 60 days of the date of
--------
closing of such Public Equity Offering and (b) at least 65% of the aggregate
principal amount of Notes issued on or after the Issue Date remains outstanding
immediately after giving effect to each such redemption.
6. Mandatory Redemption. There shall be no mandatory redemption of
--------------------
the Notes (other than a Required Regulatory Redemption).
7. Denominations, Transfer, Exchange. The Notes are in registered
---------------------------------
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Issuers may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar and the Issuers need not exchange
or register the transfer (i) of any Note or portion of a Note selected for
redemption or (ii) of any Notes for a period of 15 days before a selection of
Notes to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.
8. Persons Deemed Owners. The registered Holder of a Note may be
---------------------
treated as its owner for all purposes, subject to the provisions of the
Indenture with respect to the record dates for the payment of interest.
9. Amendments and Waivers. Subject to certain exceptions, the
----------------------
Indenture or the Notes may be amended with the written consent of the Holders of
at least a majority in principal amount of the then outstanding Notes (including
consents obtained in connection with a tender offer or exchange offer for
Notes), and any existing Default or Event of Default (except certain payment
defaults) may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes (including consents obtained in
connection with a tender offer or exchange offer for Notes). Without the consent
of any Holders, the Indenture, the Notes and the Security Documents, may be
amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for assumption of the Issuers' obligations to the Holders in the case of
a merger or consolidation, to provide for uncertificated Notes in addition to or
in place of certificated Notes, to make any change that would provide any
additional rights or benefits to the Holders of the Notes, or that does not
adversely affect the legal rights hereunder or under the Indenture or the
Security Documents of any Holder, to release any Guarantee of the Notes
permitted to be released under the terms of the Indenture or to comply with
requirements of the Commission in order to effect or maintain the qualification
of the Indenture under the TIA.
10. Defaults and Remedies. If an Event of Default occurs and is
---------------------
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare by written notice to the Issuers and the
Trustee all the Notes to be due and payable immediately, except that in the case
of an Event of Default arising from certain events of bankruptcy or insolvency,
all outstanding Notes become due and payable immediately without further action
or notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may require security and indemnity
satisfactory to it before it enforces the Indenture or the Notes. Subject to
certain limitations, Holders of a majority in principal amount of the then
A-5
outstanding Notes may direct the Trustee in its exercise of any trust or power.
The Issuers must furnish an annual compliance certificate to the Trustee.
11. Trustee Dealings with Issuers. The Trustee under the Indenture,
-----------------------------
in its individual or any other capacity, may make loans to, accept deposits
from, and perform services for the Issuers or their Affiliates, and may
otherwise deal with the Issuers or their Affiliates, as if it were not Trustee.
12. No Recourse Against Others. No director, member, manager,
--------------------------
officer, employee, incorporator, stockholder or controlling person of the
Issuers or any Guarantor, as such, shall have any liability for any obligations
of the Issuers or any Guarantor under the Notes, the Indenture, the Security
Documents or the Registration Rights Agreement or for any claim based on, in
respect of, or by reason of such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Notes and the Guarantees.
Notwithstanding the foregoing, nothing in this provision shall be construed as a
waiver or release of any claims under the Federal securities laws.
13. Authentication. This Note shall not be valid until authenticated
--------------
by the manual signature of the Trustee or an authenticating agent.
14. Abbreviations. Customary abbreviations may be used in the name
-------------
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
15. CUSIP Numbers. Pursuant to a recommendation promulgated by the
-------------
Committee on Uniform Security Identification Procedures, the Issuers have caused
CUSIP numbers to be printed on the Notes and has directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
16. Governing Law. This Note and the Indenture shall be construed,
-------------
interpreted and the rights of the parties determined in accordance with the laws
of the State of New York, including, without limitation, Sections 5-1401 and 5-
1402 of the New York General Obligations Law and New York Civil Practice Laws
and Rules 327(b).
[17. Holders' Compliance with Registration Rights Agreement. Each
------------------------------------------------------
Holder of a Note, by his acceptance thereof, acknowledges and agrees to the
provisions of the Registration Rights Agreement, dated as of June 18, 1999,
among the Issuers and the parties named on the signature page thereof (the
"Registration Rights Agreement"), including but not limited to the obligations
of the Holders with respect to a registration and the indemnification of the
Issuers and the Purchasers (as defined therein) to the extent provided
therein.]/2/
The Issuers shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to: The Majestic Star Casino, LLC, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇, Attention: Chief Operating and Financial
Officer.
------------------------
/2/ This paragraph should only be included in the Series A Notes.
A-6
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint______________________________
agent to transfer this Note on the books of the Issuers. The agent may
substitute another to act for him.
________________________________________________________________________________
Date:____________________
Your Signature:____________________
(Sign exactly as your name appears
on the face of this Note)
Your Tax ID Number:____________________
Signature Guarantee*
_______________________
* NOTICE: The signature must be guaranteed by an institution which is a
member of one of the following recognized signature guarantee
programs:
(1) The Securities Transfer Agent Medallian Program (STAMP);
(2) The New York Stock Exchange Medallian Program (MSP);
(3) The Stock Exchange Medallian Program (SEMP).
A-7
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Note purchased by the
Issuers pursuant to Section 4.10 or Section 4.14 of the Indenture, as the case
may be, state the amount you elect to have purchased (if all, write "ALL"):
$______________
Date:__________________________
Your Signature:_________________________
(Sign exactly as your name appears
on the face of this Note)
Your Tax ID Number:____________________
Signature Guarantee*
__________________________
* NOTICE: The signature must be guaranteed by an institution which is a
member of one of the following recognized signature guarantee
programs:
(1) The Securities Transfer Agent Medallian Program (STAMP);
(2) The New York Stock Exchange Medallian Program (MSP);
(3) The Stock Exchange Medallian Program (SEMP).
A-8
SCHEDULE OF EXCHANGES OF DEFINITIVE NOTES /3/
The following exchanges of a part of this Global Note for Definitive Notes
have been made:
Principal Amount
Amount of decrease Amount of increase of this Global Note Signature of
in Principal Amount in Principal Amount following such authorized officer
Date of Exchange of this Global Note of this Global Note decrease (or increase) of Trustee
-------------------------------------------------------------------------------------------------------------
______________________
/3/ This Schedule should be included only if the Note is issued in global form.
A-9
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF NOTES
Re: [Series A] [Series B] % Senior Secured Notes due 2006 (the "Notes") of
The Majestic Star Casino, LLC and The Majestic Star Casino Capital Corp.
This Certificate relates to $______ principal amount of Notes held in * [_]
book-entry or * [_] definitive form by _______________________ (the
"Transferor").
The Transferor, by written order, has requested the Trustee:
[_] to deliver in exchange for its beneficial interest in the Global Note held
by the depositary, a Note or Notes in definitive, registered form of
authorized denominations and an aggregate principal amount equal to its
beneficial interest in such Global Note (or the portion thereof indicated
above); or
[_] to exchange or register the transfer of a Note or Notes. In connection
with such request and in respect of each such Note, the Transferor does
hereby certify that Transferor is familiar with the Indenture relating to
the above captioned Notes and, the transfer of this Note does not require
registration under the Securities Act of 1933, as amended (the "Securities
Act") because such Note:
[_] is being acquired for the Transferor's own account, without transfer;
[_] is being transferred pursuant to an effective registration statement;
[_] is being transferred to a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act), in reliance on such Rule 144A;
[_] is being transferred pursuant to an exemption from registration in
accordance with Rule 904 under the Securities Act;**
[_] is being transferred pursuant to Rule 144 under the Securities Act;** or
[_] is being transferred pursuant to another exemption from the registration
requirements of the Securities Act (explain: ______________________________
_______________________________________________________________________).**
___________________________
[INSERT NAME OF TRANSFEROR]
By:_______________________________
Date:_____________________
* Check applicable box.
** If this box is checked, this certificate must be accompanied by an
opinion of counsel to the effect that such transfer is in compliance
with the Securities Act.
B-1
EXHIBIT C
FORM OF GUARANTY
GUARANTY
For good and valuable consideration received from the Issuers by the
undersigned (hereinafter referred to as the "Guarantors," which term includes
any successor or additional Guarantors), the receipt and sufficiency of which is
hereby acknowledged, subject to Section 10.9 of the Indenture, each Guarantor,
jointly and severally, hereby unconditionally guarantees, irrespective of the
validity or enforceability of the Indenture, the Notes, the Security Documents,
the Registration Rights Agreement or the Obligations thereunder, (a) the due and
punctual payment of the principal and premium, if any, of and interest on the
Notes (including, without limitation, interest after the filing of a petition
initiating any proceedings referred to in Sections 6.1(11) or (12) of the
Indenture), whether at maturity or on an interest payment date, by acceleration,
call for redemption or otherwise, (b) the due and punctual payment of interest
on the overdue principal and premium, if any, of and interest, if any, on the
Notes, if lawful, (c) the due and punctual payment and performance of all other
Obligations under such documents, all in accordance with the terms set forth in
the Indenture, the Notes, the Security Documents and the Registration Rights
Agreement, and (d) in case of any extension of time of payment or renewal of any
Notes or any of such other Obligations thereunder or under the Indenture, the
Security Documents or the Registration Rights Agreement, the due and punctual
payment or performance thereof in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
No director, member, manager, officer, employee, incorporator,
stockholder or controlling person of the Guarantor, as such, shall have any
liability under this Guaranty for any obligations of the Guarantor under the
Notes, the Indenture, the Security Documents or the Registration Rights
Agreement or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of the Notes by accepting a Note
waives and releases all such liability.
GUARANTOR:
By: __________________________________
Name:
Title:
▇-▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇-▇
EXHIBIT E
FORM OF PREFERRED SHIP MORTGAGE
E-1
EXHIBIT F
FORM OF SECURITY AGREEMENT
F-1
EXHIBIT G
FORM OF BDI PLEDGE AGREEMENT
G-1
EXHIBIT H
FORM OF BHR PLEDGE AGREEMENT
H-1
EXHIBIT I
FORM OF TRADEMARK SECURITY AGREEMENT
I-2
CROSS-REFERENCE TABLE*Trust Indenture
Act Section Indenture Section
--------------- -----------------
310(a)(1)............................................................................... 7.10
(a)(2)............................................................................... 7.10
(a)(3)............................................................................... N.A.
(a)(4)............................................................................... N.A.
(a)(5)............................................................................... 7.10
(b).................................................................................. 7.8; 7.10
(c).................................................................................. N.A.
311(a).................................................................................. 7.11
(b).................................................................................. 7.11
(c).................................................................................. N.A.
312(a).................................................................................. 2.5
(b).................................................................................. 11.3
(c).................................................................................. 11.3
313(a).................................................................................. 7.6
(b)(1)............................................................................... 7.6
(b)(2)............................................................................... 7.6
(c).................................................................................. 7.6
(d).................................................................................. 7.6
314(a).................................................................................. 4.3; 4.4
(b).................................................................................. N.A
(c)(1)............................................................................... 11.4
(c)(2)............................................................................... 11.4
(c)(3)............................................................................... N.A.
(d).................................................................................. N.A.
(e).................................................................................. 11.5
(f).................................................................................. N.A.
315(a).................................................................................. 7.1(2)
(b).................................................................................. 7.5
(c).................................................................................. 7.1(1)
(d).................................................................................. 7.1(3)
(e).................................................................................. 6.11
316(a)(last sentence)................................................................... 2.9
(a)(1)(A)............................................................................ 6.5
(a)(1)(B)............................................................................ 6.4
(a)(2)............................................................................... N.A.
(b).................................................................................. 9.2
(c).................................................................................. 9.4
317(a)(1)............................................................................... 6.8
(a)(2)............................................................................... 6.9
(b).................................................................................. 2.4
318(a).................................................................................. 11.1
(b).................................................................................. N.A.
(c).................................................................................. 11.1
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.