EXECUTION COPY
================================================================================
--------------------------------------------------------------------------------
VENETIAN CASINO RESORT, LLC
LAS VEGAS SANDS, INC.
as Issuers
MALL INTERMEDIATE HOLDING COMPANY, LLC
GRAND CANAL SHOPS MALL CONSTRUCTION, LLC
LIDO INTERMEDIATE HOLDING COMPANY, LLC
as Mortgage Note Guarantors
$425,000,000
12 1/4% Mortgage Notes due 2004
-----------------
INDENTURE
Dated as of November 14, 1997
-----------------
-----------------
FIRST TRUST NATIONAL ASSOCIATION
as Mortgage Note Trustee
-----------------
--------------------------------------------------------------------------------
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.............................................................. 1
Section 1.02. Other Definitions........................................................ 29
Section 1.03. Incorporation by Reference of Trust Indenture Act........................ 29
Section 1.04. Rules of Construction.................................................... 30
ARTICLE 2
THE MORTGAGE NOTES
Section 2.01. Form and Dating.......................................................... 30
Section 2.02. Execution and Authentication............................................. 32
Section 2.03. Registrar and Paying Agent............................................... 32
Section 2.04. Paying Agent to Hold Money in Trust...................................... 32
Section 2.05. Holder Lists............................................................. 33
Section 2.06. Transfer and Exchange.................................................... 33
Section 2.07. Replacement Mortgage Notes............................................... 44
Section 2.08. Outstanding Mortgage Notes............................................... 44
Section 2.09. Treasury Notes........................................................... 44
Section 2.10. Temporary Notes.......................................................... 45
Section 2.11. Cancellation............................................................. 45
Section 2.12. Defaulted Interest....................................................... 45
ARTICLE 3
OFFERS TO PURCHASE OR REDEMPTION
Section 3.01. Notices to Mortgage Note Trustee......................................... 45
Section 3.02. Selection of Mortgage Notes to Be Purchased or Redeemed.................. 46
Section 3.03. Notice of Redemption..................................................... 46
Section 3.04. Effect of Notice of Redemption........................................... 47
Section 3.05. Deposit of Purchase or Redemption Price.................................. 47
Section 3.06. Mortgage Notes Purchased or Redeemed in Part............................. 48
Section 3.07. Optional Redemption...................................................... 48
Section 3.08. Redemption Pursuant to Gaming Law........................................ 49
Section 3.09. Mandatory Redemption..................................................... 49
Section 3.10. Repurchase Offers........................................................ 49
ARTICLE 4
COVENANTS
Section 4.01. Payment of Mortgage Notes................................................ 51
Section 4.02. Maintenance of Office or Agency.......................................... 51
Section 4.03. Reports.................................................................. 52
Section 4.04. Compliance Certificate................................................... 52
Section 4.05. Taxes.................................................................... 53
Section 4.06. Stay, Extension and Usury Laws........................................... 53
i
Page
----
Section 4.07. Restricted Payments...................................................... 54
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries........... 57
Section 4.09. Limitations on Incurrence of Indebtedness and Issuance of
Disqualified Stock....................................................... 58
Section 4.10. Asset Sales.............................................................. 61
Section 4.11. Event of Loss............................................................ 62
Section 4.12. Transactions with Affiliates............................................. 63
Section 4.13. Liens.................................................................... 64
Section 4.14. Line of Business......................................................... 65
Section 4.15. Corporate Existence...................................................... 65
Section 4.16. Offer to Repurchase Upon Change of Control............................... 65
Section 4.17. Designation of Unrestricted Subsidiary................................... 65
Section 4.18. Designation of Special Subsidiary........................................ 66
Section 4.19. Gaming Licenses.......................................................... 67
Section 4.20. Construction............................................................. 67
Section 4.21. Maintenance of Insurance and Amendment of the Cooperation Agreement...... 67
Section 4.22. Limitation on Status as Investment Company............................... 67
Section 4.23. Collateral Documents..................................................... 67
Section 4.24. Further Assurances....................................................... 68
Section 4.25. Restrictions on Leasing and Dedication of Property....................... 68
Section 4.26. Mortgage Note Guaranties................................................. 69
Section 4.27. Special Subsidiary Restricted Payments................................... 70
Section 4.28. Ownership of Unrestricted Subsidiaries and Special Subsidiaries.......... 70
Section 4.29. Limitation on Phase II Construction...................................... 70
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets................................. 71
Section 5.02. Successor Corporation Substituted........................................ 72
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default........................................................ 72
Section 6.02. Acceleration............................................................. 74
Section 6.03. Other Remedies........................................................... 75
Section 6.04. Waiver of Past Defaults.................................................. 75
Section 6.05. Control by Majority...................................................... 76
Section 6.06. Limitation on Suits...................................................... 76
Section 6.07. Rights of Holders of Mortgage Notes to Receive Payment................... 76
Section 6.08. Collection Suit by Mortgage Note Trustee................................. 77
Section 6.09. Mortgage Note Trustee May File Proofs of Claim........................... 77
Section 6.10. Priorities............................................................... 77
Section 6.11. Undertaking for Costs.................................................... 78
Section 6.12. Management of Casinos.................................................... 78
ii
Page
----
ARTICLE 7
MORTGAGE NOTE TRUSTEE
Section 7.01. Duties of Mortgage Note Trustee.......................................... 78
Section 7.02. Rights of Mortgage Note Trustee.......................................... 79
Section 7.03. Individual Rights of Mortgage Note Trustee............................... 80
Section 7.04. Mortgage Note Trustee's Disclaimer....................................... 80
Section 7.05. Notice of Defaults....................................................... 81
Section 7.06. Reports by Mortgage Note Trustee to Holders of the Mortgage Notes........ 81
Section 7.07. Compensation and Indemnity............................................... 82
Section 7.08. Replacement of Mortgage Note Trustee..................................... 82
Section 7.09. Successor Mortgage Note Trustee by Merger, etc........................... 84
Section 7.10. Eligibility; Disqualification............................................ 84
Section 7.11. Preferential Collection of Claims Against Company........................ 84
Section 7.12. Authorization of Trustee to Take Other Actions........................... 84
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance................. 85
Section 8.02. Legal Defeasance and Discharge........................................... 85
Section 8.03. Covenant Defeasance...................................................... 86
Section 8.04. Conditions to Legal or Covenant Defeasance............................... 86
Section 8.05. Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions................................................. 87
Section 8.06. Repayment to the Issuers................................................. 88
Section 8.07. Reinstatement............................................................ 88
Section 8.08. Note Collateral.......................................................... 88
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Mortgage Notes............................. 89
Section 9.02. With Consent of Holders of Mortgage Notes................................ 90
Section 9.03. Compliance with Trust Indenture Act...................................... 91
Section 9.04. Revocation and Effect of Consents........................................ 91
Section 9.05. Notation on or Exchange of Mortgage Notes................................ 91
Section 9.06. Mortgage Note Trustee to Sign Amendments, etc............................ 92
ARTICLE 10
COLLATERAL AND SECURITY
Section 10.01. Security................................................................. 92
Section 10.02. Recording and Opinions................................................... 93
Section 10.03. Release of Collateral.................................................... 94
Section 10.05. Certificates of the Issuers.............................................. 95
Section 10.06. Certificates of the Mortgage Note Trustee................................ 96
Section 10.07. Authorization of Actions to Be Taken by the Mortgage Note Trustee
Under the Collateral Documents........................................... 96
Section 10.08. Authorization of Receipt of Funds by the Mortgage Note Trustee Under the
Collateral Documents..................................................... 96
Section 10.09. Termination of Security Interest......................................... 97
iii
Page
----
Section 10.10. Cooperation of Mortgage Note Trustee..................................... 97
Section 10.11. Collateral Agent......................................................... 97
ARTICLE 11
MORTGAGE NOTE GUARANTIES
Section 11.01. Mortgage Note Guaranties................................................. 98
Section 11.02. Additional Mortgage Note Guaranties...................................... 99
Section 11.03. Limitation of Mortgage Note Guarantor's Liability........................100
Section 11.04. Mortgage Note Guarantors May Consolidate, etc., on Certain Terms.........100
Section 11.05. Releases of Mortgage Note Guaranties.....................................101
Section 11.06. "Mortgage Note Trustee" to Include Paying Agent..........................102
Section 11.07. Subordination of Subordinated Mortgage Note Guarantors...................102
ARTICLE 12
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls.............................................106
Section 12.02. Notices..................................................................106
Section 12.03. Communication by Holders of Mortgage Notes with Other Holders of Mortgage
Notes....................................................................107
Section 12.04. Certificate and Opinion as to Conditions Precedent.......................107
Section 12.05. Statements Required in Certificate or Opinion............................107
Section 12.06. Rules by Mortgage Note Trustee and Agents................................108
Section 12.07. No Personal Liability of Directors, Officers, Employees and Stockholders.108
Section 12.08. Governing Law............................................................108
Section 12.09. No Adverse Interpretation of Other Agreements............................108
Section 12.10. Successors...............................................................108
Section 12.11. Severability.............................................................109
Section 12.12. Counterpart Originals....................................................109
Section 12.13. Table of Contents, Headings, etc.........................................109
EXHIBITS
Exhibit A-1. Form of Mortgage Note
Exhibit A-2. Form of Temporary Regulation S Note
Exhibit B. Form of Certificate of Transfer
Exhibit C. Form of Certificate of Exchange
Exhibit D. Form of Certificate from Acquiring Institutional Accredited Investor
Exhibit E. Form of Notation of Mortgage Note Guaranty
Exhibit F. Form of Supplemental Indenture to be Delivered by Subsequent Mortgage Note
Guarantors
Exhibit G. Disbursement Agreement
Exhibit H. Intercreditor Agreement
Exhibit I. Mortgage Notes Indenture Deeds of Trust
Exhibit J. Mall Space Description
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)....................................................................7.10
(c)....................................................................N.A.
311 (a)....................................................................7.11
(b)....................................................................7.11
(c)....................................................................N.A.
312 (a)....................................................................2.05
(b)...................................................................12.03
(c)...................................................................12.03
313 (a)....................................................................7.06
(b)(1) ...............................................................10.03
(b)(2).................................................................7.07
(c.............................................................. 7.06;12.02
(d)....................................................................7.06
314 (a)..............................................................4.03;12.05
(b)...................................................................10.02
(c)(1)................................................................11.04
(c)(2)................................................................11.04
(c)(3).................................................................N.A.
(d).......................................................10.03,10.04,10.05
(e).............................................................10.02;12.05
(f)....................................................................N.A.
315 (a)....................................................................7.01
(b)..............................................................7.05,12.02
(c)....................................................................7.01
(d)....................................................................7.01
(e)....................................................................6.11
316 (a)(last sentence).....................................................2.09
(a)(1)(A)..............................................................6.05
(a)(1)(B)..............................................................6.04
(a)(2).................................................................N.A.
(b)....................................................................6.07
(c)....................................................................2.12
317 (a)(1).................................................................6.08
(a)(2).................................................................6.09
(b)....................................................................2.04
318 (a)...................................................................12.01
(b)....................................................................N.A.
(c)...................................................................12.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
INDENTURE dated as of November 14, 1997 among Venetian Casino Resort,
LLC, a Nevada limited liability company ("Venetian"), Las Vegas Sands, Inc., a
Nevada corporation (the "Company" and, together with Venetian, the "Issuers"),
Mall Intermediate Holding Company, LLC, a Delaware limited liability company
("Mall Intermediate Holdings"), Grand Canal Shops Mall Construction, LLC, a
Delaware limited liability company ("Mall Construction Subsidiary"), and Lido
Intermediate Holding Company, LLC, a Delaware limited liability company ("Phase
II Intermediate Holdings" and, together with Mall Intermediate Holdings, Mall
Construction Subsidiary and all future Restricted Subsidiaries (as defined
below), the "Mortgage Note Guarantors") and First Trust National Association, as
trustee (the "Mortgage Note Trustee").
The Issuers, the Mortgage Note Guarantors and the Mortgage Note Trustee
agree as follows for the benefit of each other and for the equal and ratable
benefit of the Holders of the 12 1/4% Mortgage Notes due 2004 (the "Initial
Mortgage Notes") and the 12 1/4% Mortgage Notes due 2004 (the "Exchange Mortgage
Notes" and, together with the Initial Mortgage Notes, the "Mortgage Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"144A Global Note" means a global note in the form of Exhibit A-1
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Mortgage Notes sold in reliance on Rule 144A.
"Acquired Indebtedness" means, with respect to any specified Person,
(i) Indebtedness of any other Person existing at the time such other Person
merged with or into or became a Restricted Subsidiary of such specified Person,
including Indebtedness incurred in connection with, or in contemplation of, such
other Person merging with or into or becoming a Restricted Subsidiary of such
specified Person and (ii) Indebtedness encumbering any asset acquired by such
specified Person.
"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
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided, however,
that beneficial ownership of 20% or more of the voting securities of a Person
shall be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures of
the Depositary, Euroclear and Cedel that apply to such transfer or exchange.
"Applicable Tax Percentage" means the highest aggregate effective
marginal rate of federal, state and local income tax or, when applicable,
alternative minimum tax, to which any direct or indirect
1
member or S corporation shareholder of the Issuers subject to the highest
marginal rate of tax would be subject in the relevant year of determination (as
certified to the Mortgage Note Trustee by a nationally recognized tax accounting
firm), taking into account only that member's or S corporation shareholder's
share of income and deductions attributable to its interest in the Issuers.
"Approved Equipment Funding Commitments" means, collectively, (a) the
General Electric Capital Corporation Commitment (as defined in the Disbursement
Agreement) and (b) any replacement of such commitment from an institutional or
other lender reasonably acceptable to the Bank Agent and the Mall Construction
Lender if (i) such commitment is in form and substance reasonably satisfactory
to the Bank Agent and the Mall Construction Lender; (ii) the collateral to
secure Indebtedness under such commitment does not include any Note Collateral;
and (iii) to the extent the lenders under the Bank Credit Facility deem it
appropriate in their sole discretion, the lender under such commitment executes
and delivers an intercreditor agreement in accordance with Section 7.12(c)
hereof.
"Asset Sale" means (i) the sale, conveyance, transfer or other
disposition (whether in a single transaction or a series of related
transactions) of assets or rights (including by way of a sale and leaseback) of
the Issuers or any Restricted Subsidiary (each referred to in this definition as
a "disposition") or (ii) the issuance or sale of Equity Interests of any
Restricted Subsidiary other than Venetian (whether in a single transaction or a
series of related transactions), in each case, other than (a) a disposition of
inventory or goods held in the ordinary course of business, (b) the disposition
of all or substantially all of the assets of either of the Issuers in a manner
permitted pursuant to Article 5 hereof or any disposition that constitutes a
Change of Control hereunder, (c) any disposition that is a Restricted Payment or
that is a dividend or distribution permitted under Section 4.07 hereof or any
Investment that is not prohibited thereunder or any disposition of cash or Cash
Equivalents, (d) any single disposition, or related series of dispositions, of
assets with an aggregate fair market value of less than $1.0 million, (e) any
Event of Loss, (f) any Lease Transaction or any grant of easement or Permitted
Liens, (g) any dedication permitted pursuant to Section 4.25; (h) the transfer
of the Mall Collateral to the Mall Subsidiary, (i) the transfer of the Phase II
Land to the Phase II Subsidiary, (j) a transfer of assets by the Issuers to a
Wholly Owned Restricted Subsidiary of the Issuers or by a Wholly Owned
Restricted Subsidiary of the Issuers to another Wholly Owned Restricted
Subsidiary of the Issuers, (k) an issuance of Equity Interests by a Wholly Owned
Restricted Subsidiary of the Issuers to the Issuers or another Wholly Owned
Restricted Subsidiary of the Issuers, (l) any sale, conveyance, transfer or
other disposition of property that secures Non-Recourse Financing or any
financing permitted under Section 4.09(p) that is to or on behalf of the lender
of such Non-Recourse Financing or other financing or (m) any licensing of
tradenames or trademarks in the ordinary course of business by any of the
Issuers or their Restricted Subsidiaries.
"Available Funds" shall have the meaning set forth in the Disbursement
Agreement.
"Bank Agent" means The Bank of Nova Scotia, in its capacity as
administrative agent under the Bank Credit Facility and its successors in such
capacity.
"Bank Credit Facility" means that certain Credit Agreement, dated as of
November 14, 1997, among the Company and Venetian, as borrowers, the lenders
listed therein, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P., as arranger and syndication
agent and The Bank of Nova Scotia, as administrative agent, and any extension,
refinancing, renewal, replacement, substitution or refund thereof ("Bank Credit
Facility Refinancing"); provided, however that (i) the aggregate amount of such
Bank Credit Facility Refinancing shall not exceed the principal amount of
Indebtedness so extended, refinanced, renewed, replaced, substituted or refunded
(plus the amount of reasonable expenses incurred and any premium paid in
connection therewith) and (ii) such Bank Credit Facility Refinancing
Indebtedness shall have a
2
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of the Indebtedness being extended, refinanced, renewed,
replaced, substituted or refunded.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Billboard Lease" means that certain Lease Agreement, dated as of
November 14, 1997, by and between Venetian and Mall Subsidiary relating to
certain space that will be subleased by "Billboard Live!" as amended from time
to time in accordance with the terms thereof.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of the Board of Directors of the Company.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized and reflected as a liability on
the balance sheet in accordance with GAAP.
"Capital Stock" means with respect to any Person, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock of such Person, including, without limitation, if such Person is
a partnership or limited liability company, partnership or membership interests
(whether general or limited) and any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, such partnership or limited liability company.
"Cash Equivalents" means (a) United States dollars, (b)(i) direct
obligations of the United States of America (including obligations issued or
held in book-entry form on the books of the Department of the Treasury of the
United States of America) or obligations fully guaranteed by the United States
of America, (ii) obligations, debentures, notes or other evidence of
indebtedness issued or guaranteed by any other agency or instrumentality of the
United States, (iii) interest-bearing demand or time deposits (which may be
represented by certificates of deposit) issued by banks having general
obligations rated (on the date of acquisition thereof) at least "A" by Standard
& Poor's Corporation ("S&P") or "A2" by ▇▇▇▇▇'▇ Investors Service, Inc.
("Moody's") (S&P and Moody's together with any other nationally recognized
credit rating agency if neither of such corporations is then currently rating
the pertinent obligations, a "Rating Agency") or the equivalent by another
Rating Agency, if applicable, or, if not so rated, secured at all times, in the
manner and to the extent provided by law, by collateral security in clause (i)
or (ii) of this definition, of a market value of no less than the amount of
monies so invested, (iv) commercial paper rated (on the date of acquisition
thereof) at least "A-1" or "P-1" or the equivalent by any Rating Agency issued
by any Person, (v) repurchase obligations for underlying securities of the types
described in clause (i) or (ii) above, entered into with any commercial bank or
any other financial institution having long-term unsecured debt securities rated
(on the date of acquisition thereof) at least "A" or "A2" or the equivalent by
any Rating Agency in connection with which such underlying securities are held
in trust or by a third-part custodian, (vi) guaranteed investment contracts of
any financial institution which has a long-term debt rated (on the date of
acquisition thereof) at least "A" or "A2" or the equivalent by any Rating
Agency, (vii) obligations (including both taxable and nontaxable municipal
securities) issued or guaranteed by, and any other obligations the interest on
which is excluded from income for Federal income tax purposes issued by, any
state of the United States of America or the District of Columbia or the
Commonwealth of Puerto Rico or any political subdivision, agency, authority or
instrumentality thereof, which issuer or guarantor has (A) a short-term debt
rated (on the date of
3
acquisition thereof) at least "A-1" or "P-1" or the equivalent by any Rating
Agency and (B) a long-term debt rated (on the date of acquisition thereof) at
least "A" or "A2" or the equivalent by any Rating Agency, (viii) investment
contracts of any financial institution either (A) fully secured by (1) direct
obligations of the United States, (2) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States or
(3) securities or receipts evidencing ownership interest in obligations or
specified portions thereof described in clause (1) or (2), in each case
guaranteed as full faith and credit obligations of the United States of America,
having a market value at least equal to 102% of the amount deposited thereunder,
or (B) with long-term debt rated (on the date of acquisition of such investment
contract) at least "A" or "A2" or the equivalent by any Rating Agency and
short-term debt rated (on the date of acquisition of such investment contract)
at least "A-1" or "P-1" or the equivalent by any Rating Agency, (ix) a contract
or investment agreement with a provider or guarantor (A) which provider or
guarantor is rated (on the date of acquisition of such contract or investment
agreement) at least "A" or "A2" or the equivalent by any Rating Agency (provided
that if a guarantor is party to the rating, the guaranty must be unconditional
and must be confirmed in writing prior to any assignment by the provider to
another subsidiary of such guarantor), (B) providing that monies invested shall
be payable without condition (other than notice) and without brokerage fee or
other penalty, upon not more than two Business Days' notice for application when
and as required or permitted under the Collateral Documents, and (C) stating
that such contract or agreement is unconditional, expressly disclaiming any
right of setoff and providing for immediate termination in the event of
insolvency of the provider and termination upon demand of the Disbursement Agent
if prior to Completion or (subject to the rights of creditors with prior Liens)
the Mortgage Note Trustee if after Completion (which demand shall only be made
at the direction of the Company) after any payment or other covenant default by
the provider, or (x) any debt instruments of any Person which instruments are
rated (on the date of acquisition thereof) at least "▇," "▇▇," "A-1" or "P-1" or
the equivalent by any Rating Agency; provided that in each case of clauses (i)
through (x), such investments are denominated in United States dollars and
maturing not more than 13 months from the date of acquisition thereof; (c)
investments in any money market fund which is rated (on the date of acquisition
thereof) at least "A" or "A2" or the equivalent by any Rating Agency; (d)
investments in mutual funds sponsored by any securities broker-dealer of
recognized national standing having an investment policy that requires
substantially all the invested assets of such fund to be invested in investments
described in any one or more of the foregoing clauses and having a rating of at
least "A" or "A2" or the equivalent by any Rating Agency or (e) investments in
both taxable and nontaxable (i) periodic auction reset securities which have
final maturities between one and 30 years from the date of issuance and are
repriced through a dutch auction or other similar method every 35 days or (ii)
auction preferred shares which are senior securities of leveraged closed end
municipal bond funds and are repriced pursuant to a variety of rate reset
periods, in each case having a rating (on the date of acquisition thereof) of at
least "A" or "A2" or the equivalent by any Rating Agency.
"Casino Lease" means that certain lease between the Company and
Venetian dated as of the Closing Date with respect to the operation of the
Casino for the Project, as amended, revised or modified from time to time in
accordance with the terms thereof.
"Capital Stock" means with respect to any Person, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock of such Person, including, without limitation, if such Person is
a partnership, partnership interests (whether general or limited) and any other
interest or participation that confers on a Person the right to receive a share
of the profits and losses of, or distributions of assets of, such partnership.
"Cedel" means Cedel Bank, SA.
4
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease or transfer, in one or a series of transactions, of all or
substantially all of the assets of the Issuers and their Restricted
Subsidiaries, taken as a whole (except in connection with an Event of Loss);
(ii) either of the Issuers becomes aware of (by way of a report or any other
filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written
notice or otherwise) the acquisition by any person or group (within the meaning
of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor
provision), including any group acting for the purpose of acquiring, holding or
disposing of securities within the meaning of Rule 13d-5(b)(1) under the
Exchange Act), other than the Sole Stockholder and its Related Parties, in a
single transaction or in a related series of transactions, by way of merger,
consolidation or other business combination or purchase of beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act, or any successor
provision) of 50% or more of the total voting power of the Voting Stock of the
Issuers; (iii) after an initial public offering of the common stock of the
Issuers, the consummation of any transaction or series of transactions the
result of which is that any person or group (as defined above), other than the
Sole Stockholder and its Related Parties, (1) beneficially owns more of the
voting power of the Voting Stock of the Issuers than is beneficially owned, in
the aggregate, by the Sole Stockholder and its Related Parties and (2)
beneficially owns more than 20% of the voting power of the Voting Stock of
either of the Issuers; (iv) the first day within any two-year period on which a
majority of the members of the Board of Directors of the Company are not
Continuing Directors; (v) the adoption of a plan relating to liquidation or
dissolution of either of the Issuers or any Mortgage Note Guarantor (except
liquidation of (a) Venetian into the Company and (b) any Mortgage Note Guarantor
into the Company, Venetian or another Mortgage Note Guarantor) or (vi) if any
Person other than the Sole Stockholder and Related Parties beneficially owns
more than 50% of the voting and non voting common stock of the Company.
"Code" means, the Internal Revenue Code of 1986, as amended (or any
successor statute thereto).
"Collateral Agent" means any person appointed by the Mortgage Note
Trustee as a collateral agent hereunder.
"Collateral Documents" means, collectively, the Disbursement Agreement,
the Completion Guaranty, the Mortgage Notes Indenture Leasehold Deed of Trust,
the Mortgage Notes Indenture Fee Deed of Trust, the Mortgage Notes Indenture
Mall Parcel Fee Deed of Trust, the Mortgage Notes Indenture Environmental
Indemnity or any other agreements, instruments, financing statements or other
documents that evidence, set forth or limit the Lien of the Mortgage Note
Trustee in the Note Collateral.
"Common Stock" means the Common Stock, par value $0.10 per share, of
the Company.
"Company" means Las Vegas Sands, Inc., a Nevada corporation, or any
successor thereto is permitted under this Indenture.
"Completed" or "Completion" has the meaning given to the term "Mall
Release Date" under the Disbursement Agreement.
"Completion Guaranty" means that certain Guaranty, dated as of November
14, 1997, executed by the Sole Stockholder in favor of the Bank Agent (acting on
behalf of the lenders under the Bank Credit Facility), the Mall Construction
Lender and the Mortgage Note Trustee (acting on behalf of the Holders) as
amended, revised or modified from time to time in accordance with the terms
thereof.
5
"Completion Guaranty Loan" means funds provided by the Sole Stockholder
in satisfaction of his obligations pursuant to the Completion Guaranty which are
treated by the Sole Stockholder and the Issuers as a subordinated loan to the
Issuers pursuant to the Completion Guaranty.
"Congress Center" means that certain meeting and conference center
complex of approximately 500,000 net leasable square feet more particularly
described in the Plans and Specifications.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus (a) an
amount equal to any extraordinary loss plus any net loss realized in connection
with an Asset Sale (to the extent such losses were deducted in computing
Consolidated Net Income), plus (b) provision for taxes based upon net income or
net profits of such Person and its Restricted Subsidiaries to the extent such
provision for taxes was deducted in computing Consolidated Net Income, plus (c)
Consolidated Interest Expense of such Person for such period to the extent such
expenses were deducted in computing Consolidated Net Income (not including any
gaming revenue tax), plus (d) Consolidated Depreciation and Amortization Expense
of such Person for such period to the extent such expenses were deducted in
computing Consolidated Net Income, minus (e) non-cash items increasing such
Consolidated Net Income for such period, in each case, on a consolidated basis
for such Person and its Restricted Subsidiaries and determined in accordance
with GAAP.
"Consolidated Depreciation and Amortization Expense" means with respect
to any Person for any period, the total amount of depreciation and amortization
expense and other noncash expenses (excluding any noncash expense that
represents an accrual, reserve or amortization of a cash expenditure for a past,
present or future period) of such Person and its Restricted Subsidiaries for
such period on a consolidated basis as defined in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any period, the
sum of (a) consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued, to the extent such
expense was deducted in computing Consolidated Net Income (including original
issue discount and deferred financing fees, non-cash interest payments, the
interest component of Capital Lease Obligations, and net payments (if any)
pursuant to Hedging Obligations, but excluding amortization of debt issuance
costs and deferred financing fees), (b) commissions, discounts and other fees
and charges paid or accrued with respect to letters of credit and bankers'
acceptance financing and (c) to the extent not included above, the maximum
amount of interest which would have to be paid by such Person or its Restricted
Subsidiaries under a Guaranty of Indebtedness of any other Person if such
Guaranty were called upon.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided, however, that (i) the Net Income for such period of any
Person that is not a Subsidiary or that is accounted for by the equity method of
accounting, shall be included only to the extent of the amount of dividends or
distributions paid in cash (or to the extent converted into cash) to the
referent Person or a Wholly Owned Subsidiary thereof in respect of such period,
(ii) the Net Income of any Person acquired in a pooling of interests transaction
shall not be included for any period prior to the date of such acquisition,
(iii) the Net Income for such period of any Restricted Subsidiary that is not a
Mortgage Note Guarantor shall be excluded to the extent that the declaration or
payment of dividends or similar distributions by that Restricted Subsidiary of
its Net Income is not at the date of determination permitted without any prior
governmental approval (which has not been obtained) or, directly or indirectly,
by the operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Restricted Subsidiary or its stockholders, unless such restriction with
respect to the payment of dividends or in
6
similar distributions has been legally waived, (iv) the cumulative effect of a
change in accounting principles shall be excluded and (v) no effect shall be
given to any minority or preferred interest in Venetian for purposes of
computing Consolidated Net Income.
"Consolidated Net Worth" means, with respect to any Person at any time,
the sum of the following items, as shown on the consolidated balance sheet of
such Person and its Restricted Subsidiaries as of such date (i) the common
equity of such Person and its Restricted Subsidiaries; (ii) (without
duplication), (a) the aggregate liquidation preference of Preferred Stock of
such Person and its Restricted Subsidiaries (other than Disqualified Stock), and
(b) any increase in depreciation and amortization resulting from any purchase
accounting treatment from an acquisition or related financing; (iii) less any
goodwill incurred subsequent to the Issuance Date; and (iv) less any write up of
assets (in excess of fair market value) after the Issuance Date, in each case on
a consolidated basis for such Person and its Restricted Subsidiaries, determined
in accordance with GAAP; provided, that in calculating Consolidated Net Worth,
any gain or loss from any Asset Sale shall be excluded; provided, however that
in computing "Consolidated Net Worth," no adjustment shall be made for any
minority interest in Venetian.
"Construction Consultant" means Tishman Construction Corporation of
Nevada or any other Person designated from time to time by the Bank Agent, the
Mall Construction Lender and the Mortgage Note Trustee, in their sole discretion
acting pursuant to the Intercreditor Agreement, to serve as the Construction
Consultant under the Disbursement Agreement.
"Construction Management Agreement" means that certain Construction
Management Agreement, dated as of February 15, 1997, between the Company and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Bovis, Inc., a New York corporation, as assigned by the Company
to Venetian and amended by that certain Assignment and Amendment of Construction
Management Agreement, dated as of November 14, 1997, among the Company, Venetian
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Bovis, Inc., as amended, revised or modified from time to
time in accordance with its terms.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors who (i) was a member of such Board of Directors
on the Issuance Date, (ii) was nominated for election or elected to such Board
of Directors with, or whose election to such Board of Directors was approved by,
the affirmative vote of a majority of the Continuing Directors who were members
of such Board of Directors at the time of such nomination or election or (iii)
was appointed or elected to such Board of Directors by the Sole Stockholder or a
Related Party.
"Contracts" means, collectively, the contracts entered into, from time
to time, between the Company and any contractor for performance of services or
sale of goods in connection with the design, engineering, installation or
construction of the Project.
"Cooperation Agreement" means that certain Amended and Restated
Reciprocal Easement, Use and Operating Agreement, dated as of November 14, 1997,
among the Mall Construction Subsidiary, Venetian and Interface, as amended,
revised or modified from time to time in accordance with its terms.
"Corporate Trust Office of the Mortgage Note Trustee" shall be at the
address of the Mortgage Note Trustee specified in Section 12.02 hereof or such
other address as to which the Mortgage Note Trustee may give notice to the
Issuers.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
7
"Definitive Note" means a certificated Mortgage Note registered in the
name of the Holder thereof and issued in accordance with Section 2.06 hereof, in
the form of Exhibit A-1 hereto except that such Mortgage Note shall not bear the
Global Note Legend and shall not have the "Schedule of Exchanges of Interests in
the Global Note" attached thereto.
"Depositary" means, with respect to the Mortgage Notes issuable or
issued in whole or in part in global form, the Person specified in Section 2.03
hereof as the Depositary with respect to the Mortgage Notes, and any and all
successors thereto appointed as depositary hereunder and having become such
pursuant to the applicable provision of this Indenture.
"Direct Construction Guaranty" means that certain Guaranty of
Performance and Completion, dated as of November 14, 1997, executed by Bovis,
Inc., a New York corporation, in favor of the Company, as assigned by the
Company to Venetian by that certain Assignment Agreement, dated as of November
14, 1997, by and among the Company, Venetian and Bovis, Inc., as amended,
revised or modified from time to time in accordance with its terms.
"Disbursement Agent" means The Bank of Nova Scotia, in its capacity as
the disbursement agent under the Disbursement Agreement and its successors in
such capacity.
"Disbursement Agreement" means that certain Funding Agents'
Disbursement and Administration Agreement, dated as of November 14, 1997, among
the Issuers, Mall Construction Subsidiary, the Bank Agent, the Mortgage Note
Trustee, the Mall Construction Lender, the HVAC Provider and the Disbursement
Agent, as amended, revised or modified from time to time in accordance with its
terms.
"Disqualified Stock" means any Capital Stock which, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to November
15, 2004; provided, however, that any Capital Stock which would not constitute
Disqualified Stock but for provisions thereof giving holders thereof the right
to require the Issuers to repurchase or redeem such Capital Stock upon the
occurrence of a Change of Control, and Event of Loss or an Asset Sale occurring
prior to the final maturity of the Mortgage Notes shall not constitute
Disqualified Stock if the change of control provisions, event of loss
provisions, or asset sale provisions, as the case may be, applicable to such
Capital Stock specifically provide that the Issuers will not repurchase or
redeem any such stock pursuant to such provisions prior to the Company's and
Venetian's compliance with the provisions of Sections 4.10, 4.11 and 4.16.
"Equity Contribution" means the approximately $320.3 million of
proceeds received by Venetian from the Company, Interface Holding or the Sole
Stockholder (in the form of cash or property).
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Estimation Period" means the period for which a shareholder, partner
or member, who is an individual is required to estimate for federal income tax
purposes his allocation of taxable income from a Subchapter S corporation or a
partnership for federal income tax purposes in connection with determining his
estimated federal income tax liability for such period.
8
"Euroclear" means ▇▇▇▇▇▇ Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
"Event of Loss" means, with respect to any property or asset (tangible
or intangible, real or personal), any of the following: (A) any loss,
destruction or damage of such property or asset; (B) any actual condemnation,
seizure or taking by exercise of the power of eminent domain or otherwise of
such property or asset, or confiscation of such property or asset or the
requisition of the use of such property or asset; or (C) any settlement in lieu
of clause (B) above.
"Excess Mall Proceeds" means the aggregate cash proceeds received by
Mall Subsidiary from borrowings or from debt or equity issuances in excess of
the cash amounts necessary to fund Mall Subsidiary's obligation to purchase
certain assets pursuant to the Sale and Contribution Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Mortgage Notes" means the Mortgage Notes issued in the
Exchange Offer pursuant to Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in
the Registration Rights Agreement.
"Existing Indebtedness" means (i) up to $1.5 million in aggregate
principal amount of Indebtedness (other than Capital Lease Obligations) of the
Issuers or their Restricted Subsidiaries in existence on the Issuance Date, plus
interest accruing thereon, after application of the net proceeds of sale of the
Mortgage Notes on the Issuance Date and (ii) any current or future obligations
under the HVAC Services Agreement as in effect on the Issuance Date.
"Expo Center" means the Sands Expo and Convention Center.
"Fixed Charge Coverage Ratio" means, with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person for such period. In the event that the
Company or any of its Restricted Subsidiaries incurs, assumes, guarantees or
redeems any Indebtedness (other than revolving credit borrowings) or issues
Preferred Stock subsequent to the commencement of the period for which the Fixed
Charge Coverage Ratio is being calculated but prior to the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to such incurrence, assumption, guarantee or redemption of Indebtedness and the
use of proceeds therefrom, or such issuance or redemption of Preferred Stock, as
if the same had occurred at the beginning of the applicable four-quarter period.
For purposes of making the computation referred to above, acquisitions,
dispositions and discontinued operations (as determined in accordance with GAAP)
that have been made by the Company or any of its Restricted Subsidiaries,
including all mergers, consolidations and dispositions, during the four-quarter
reference period or subsequent to such reference period and on or prior to the
Calculation Date shall be calculated on a pro forma basis assuming that all such
acquisitions, dispositions, discontinued operations, mergers, consolidations
(and the reduction of any associated fixed charge obligations resulting
therefrom) had occurred on the first day of the four-quarter reference period.
9
"Fixed Charges" means, with respect to any Person for any period, the
sum, without duplication, of (a) Consolidated Interest Expense of such Person
for such period and (b) all capitalized interest of such Person and its
Restricted Subsidiaries and (c) the product of (i) to the extent such Person is
not treated as an S corporation, a partnership or a substantially similarly
treated pass-through entity for federal income tax purposes, all dividend
payments, whether or not in cash on any series of Preferred Stock of such Person
or any of its Subsidiaries, other than dividend payments on Equity Interests
payable solely in Equity Interests or dividends paid as an increase in
liquidation preference on Preferred Stock, times (ii) a fraction, the numerator
of which is one and the denominator of which is one minus the then current
combined federal, state and local statutory income tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis and in accordance
with GAAP.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the Issuance Date. For the purposes of this
Indenture, the term "consolidated" with respect to any Person shall mean such
Person consolidated with its Restricted Subsidiaries (without giving effect to
any minority or preferred interest of Venetian) and shall not include any
Unrestricted Subsidiary or Special Subsidiary.
"Gaming 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, whether now or hereafter existing, or any officer
or official thereof, including without limitation, the Nevada Gaming Commission,
the Nevada State Gaming Control Board, the ▇▇▇▇▇ County Liquor and Gaming
Licensing Board and any other agency with authority to regulate any gaming
operation (or proposed gaming operation) owned, managed or operated by the
Issuers or any of their Subsidiaries.
"Gaming License" means every license, franchise or other authorization
required to own, lease, operate or otherwise conduct governing activities of the
Issuers or any of their Restricted Subsidiaries, including without limitation,
all such licenses granted under the Nevada Gaming Control Act, and the
regulations promulgated pursuant thereto, and other applicable federal, state,
foreign or local laws.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, in the form of
Exhibits A-1 and A-2 hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
"Global Note Legend" means the legend set forth in Section 2.06(g)(ii),
which is required to be placed on all Global Notes issued under this Indenture.
"Government Instrumentality" means any national, state or local
government (whether domestic or foreign), any political subdivision thereof or
any other governmental, quasi-governmental, judicial, public or statutory
instrumentality, authority, body, agency, bureau or entity, (including any
zoning authority, the Federal Deposit Insurance Corporation, the Comptroller of
the Currency or the Federal Reserve Board, any central bank or any comparable
authority) or any arbitrator with authority to bind a party at law.
"Government Securities" means securities that are (a) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America
10
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 of 1933, as amended), 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.
"Guaranty" means a 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.
"▇▇▇▇▇▇'▇ Road Way Agreement" means an agreement between Venetian and
▇▇▇▇▇▇'▇ Casino Resort as amended, revised, modified or restated, as
contemplated by the existing Letter of Intent, dated as of July 2, 1997, between
the parties with respect to the sharing of the common road way between the
parties and certain plans with respect to the improvements to be made thereto.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) currency exchange or interest rate swap
agreements, currency exchange or interest rate cap agreements and currency
exchange or interest rate collar agreements and (ii) other agreements or
arrangements designed to protect such Person against fluctuations in currency
exchange or interest rates.
"HVAC Provider" means Atlantic-Pacific, Las Vegas, LLC, a Delaware
limited liability company.
"HVAC Services Agreement" means, collectively (i) that certain Energy
Services Agreement, dated as of November 14, 1997, between Venetian and the HVAC
Provider, (ii) that certain Ground Lease between Venetian and the HVAC Provider,
(iii) that certain Construction Agency Agreement, dated as of November 14, 1997,
between Venetian and the HVAC Provider and (iv) that certain Energy Services
Agreement, dated as of November 14, 1997, between Mall Subsidiary and the HVAC
Provider, in each case, as amended, revised or modified from time to time in
accordance with its terms.
"Holder" means a Person in whose name a Mortgage Note is registered.
"IAI Global Note" means the global Note in the form of Exhibit A-1
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Mortgage Notes sold to Institutional Accredited
Investors.
"Indebtedness" means, with respect to any Person, (a) any indebtedness
of such Person, whether or not contingent (i) in respect of borrowed money, (ii)
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof), (iii) representing the
balance deferred and unpaid of the purchase price of any property (including
Capital Lease Obligations), except any such balance that constitutes an accrued
expense or trade payable, or (iv) representing any Hedging Obligations, if and
to the extent any of the foregoing indebtedness (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of
such Person prepared in
11
accordance with GAAP, (b) to the extent not otherwise included, any obligation
by such Person to be liable for, or to pay, as obligor, guarantor or otherwise,
on the Indebtedness of another Person (other than by endorsement of negotiable
instruments for collection in the ordinary course of business) and (c) to the
extent not otherwise included, Indebtedness of another Person secured by a Lien
on any asset owned by such Person (whether or not such Indebtedness is assumed
by such Person). For purposes of this definition, the term "Indebtedness" shall
not include any amount of the liability in respect of an operating lease that at
such time would not be required to be capitalized and reflected as a liability
on the balance sheet in accordance with GAAP. The amount of any Indebtedness
outstanding as of any date shall be (i) the accreted value thereof, in the case
of any Indebtedness with original issue discount, and (ii) the principal amount
thereof, together with any interest thereon that is more than 30 days past due,
in the case of any other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Independent Financial Advisor" means an accounting, appraisal or
investment banking firm of nationally recognized standing that is, in the
judgment of the Company's Board of Directors, (i) qualified to perform the task
for which it has been engaged and (ii) disinterested and independent with
respect to the Issuers and their Subsidiaries, each Affiliate of the Issuers,
and the Sole Stockholder and its Related Parties.
"Indirect Construction Guaranty" means that certain Guaranty of
Performance dated as of November 14, 1997 executed by The Peninsular and
Oriental Steam Navigation Company, a corporation organized under the laws of
England and Wales, in favor of the Company, as assigned by the Company to
Venetian by that certain Assignment Agreement dated as of November 14, 1997 by
and among the Company, Venetian and The Peninsular and Oriental Steam Navigation
Company, as amended, revised, modified or restated from time to time in
accordance with its terms.
"Indirect Participant" means a Person who holds a beneficial interest
in a Global Note through a Participant.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"Intercreditor Agreement" means the Intercreditor Agreement, a copy of
which is attached hereto as Exhibit H, among The Bank of Nova Scotia, as Bank
Agent acting on behalf of the other lenders pursuant to the Bank Credit
Facility, the Mortgage Note Trustee, acting on behalf of the holders of the
Mortgage Notes, the Mall Construction Lender and the Senior Subordinated Note
Trustee, acting on behalf of the holders of the Senior Subordinated Notes and
The Bank of Nova Scotia, as Intercreditor Agent, as amended, revised, modified
or restated from time to time in accordance with its terms.
"Interface" means Interface Group-Nevada, Inc., a Nevada corporation
and wholly owned indirect subsidiary of the Sole Stockholder.
"Interface Holding" means Interface Group Holding Company, Inc., a
Nevada corporation and wholly owned direct subsidiary of the Sole Stockholder.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the form of loans
(including Guaranties), advances or capital contributions (excluding commission,
travel and similar advances to officers and employees made in the ordinary
course of business), purchases or other acquisitions for consideration of
Indebtedness, Equity
12
Interests or other securities and all other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
"Issuance Date" means the closing date for the sale and original
issuance of the Mortgage Notes.
"Issuers" means the Company and Venetian, and any successor to any of
them permitted under this Indenture.
"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. 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.
"Lenders" means any of the lenders under the Bank Credit Facility, the
Mall Construction Lender and the Holders of the Mortgage Notes.
"Letter of Transmittal" means the letter of transmittal to be prepared
by the Issuers and sent to all Holders of the Mortgage Notes for use by such
Holders in connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Liquidated Damages" means all liquidated damages then owing pursuant
to Section 5 of the Registration Rights Agreement.
"Mall" means that certain enclosed retail, dining and entertainment
complex of approximately 500,000 net leasable square feet more particularly
described in the Plans and Specifications.
"Mall Collateral" means all of the Issuers, and their Subsidiaries,
right, title, and interest in and to (i) prior to the creation of the Mall I
Parcel, the leasehold estate created by the Mall Lease and, thereafter, the Mall
I Parcel; (ii) the leasehold estate created by the Billboard Lease; (iii) the
Mall and any related improvements and equipment thereto; (iv) any reserves
established by the Issuers, any of their Restricted Subsidiaries or any of their
Special Subsidiaries relating to the Mall; and (v) any and all security
agreements and an assignment of leases and rents creating a security interest in
any rents or other income derived from the Mall.
"Mall Construction Lender" means GMAC Commercial Mortgage Corporation,
a California corporation, and its permitted successors and assigns.
"Mall Construction Loan Agreement" means that certain Credit Agreement,
dated as of November 14, 1997, between the Issuers, Mall Construction Subsidiary
and Mall Construction Lender, as amended, revised or modified from time to time
in accordance with its terms.
13
"Mall Construction Loan Facility" means the credit facility described
and made available to the Issuers and Mall Construction Subsidiary pursuant to
the Mall Construction Loan Agreement and any extension, refinancing, renewal,
replacement, substitution or refunding thereof ("Mall Construction Loan Facility
Refinancing"); provided, however that (i) the aggregate amount of Indebtedness
under such Mall Construction Loan Facility Refinancing shall not exceed the
principal amount of Indebtedness so extended, refinanced, renewed, replaced,
substituted or refunded (plus the amount of reasonable expenses incurred and any
premium paid in connection therewith), (ii) such Mall Construction Loan Facility
Refinancing Indebtedness shall have a Weighted Average Life to Maturity equal to
or greater than the Weighted Average Life to Maturity of the Indebtedness being
extended, refinanced, renewed, replaced, substituted or refunded and (iii) to
the extent such Mall Construction Loan Facility Refinancing Indebtedness is not
supported by a guaranty of the Sole Stockholder on substantially similar terms
as the terms of the Sole Stockholder's guaranty of Tranche B (as defined in the
Mall Construction Loan Facility) of the Mall Construction Loan Facility, such
Mall Construction Loan Facility Refinancing Indebtedness shall contain a tranche
with a principal amount, relative payment priority and other terms which are
substantially similar to those required to be contained in the Substitute
Tranche B Loan.
"Mall Construction Subsidiary" means Grand Canal Shops Mall
Construction, LLC, a Delaware limited liability company.
"Mall Holdings" means Grand Canal Shops Mall Holding Company, LLC, a
Delaware limited liability company and a subsidiary of Mall Intermediate
Holdings.
"Mall Intermediate Holdings" means Mall Intermediate Holding Company,
LLC, a Delaware limited liability company, and a wholly owned subsidiary of
Venetian.
"Mall I Parcel" means the Mall Space subdivided from the Project Site
as a legally separate parcel and recorded with the applicable Government
Instrumentalities.
"Mall Lease" means the Lease, dated as of November 14, 1997, by and
between Venetian and Mall Construction Subsidiary pursuant to which Mall
Construction Subsidiary will lease from Venetian the Mall Space, as amended,
revised or modified from time to time in accordance with its terms.
"Mall Management Agreement" means the Mall Management Agreement, dated
as of November 14, 1997, between Forest City Enterprises and the Mall
Construction Subsidiary, as amended, revised or modified.
"Mall Manager" means Grand Canal Shops Mall MM, Inc., a wholly owned
subsidiary of the Company.
"Mall Space" means that certain space upon which the Mall will be
located as more specifically described in Exhibit J hereto.
"Mall Subsidiary" means Grand Canal Shops Mall, LLC, a Delaware limited
liability company.
"Mortgage Note Custodian" means the Mortgage Note Trustee, when serving
as custodian for the Depositary with respect to the Mortgage Notes in global
form, or any successor entity thereto.
"Mortgage Note Make-Whole Premium" means, with respect to a Mortgage
Note, an amount equal to the greater of (i) 12.25% of the outstanding principal
amount of such Mortgage Note and (ii) the excess of (a) the present value of the
remaining interest, premium and principal payments due on such
14
Mortgage Note as if such Mortgage Note were redeemed on November 15, 2001,
computed using a discount rate equal to the Treasury Rate plus 50 basis points,
over (b) the outstanding principal amount of such Mortgage Note.
"Mortgage Notes" has the meaning assigned to it in the preamble to this
Indenture.
"Mortgage Note Guaranties" means, collectively, the Secured Mortgage
Note Guaranties and the Subordinated Mortgage Note Guaranties.
"Mortgage Note Guarantors" has the meaning assigned to it in the
preamble to this Indenture, and includes any successors thereto permitted under
this Indenture.
"Mortgage Notes Indenture Environmental Indemnity" means that
Environmental Indemnity Agreement, dated as of November 14, 1997, among the
Company, Venetian and the Mortgage Note Trustee, as amended, modified or revised
in accordance with its terms.
"Mortgage Notes Indenture Fee Deed of Trust" means that certain Deed of
Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing,
dated as November 14, 1997 and made by the Company and Venetian, as trustor, to
the trustee thereunder, for the benefit of the Mortgage Note Trustee, as
beneficiary as amended, modified or revised in accordance with its terms.
"Mortgage Notes Indenture Leasehold Deed of Trust" means that certain
Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture
Filing, dated as November 14, 1997 and made by the Mall Construction Subsidiary,
as trustor, to the trustee thereunder, for the benefit of the Mortgage Note
Trustee, as beneficiary, as amended, modified or revised in accordance with its
terms.
"Mortgage Notes Indenture Mall Parcel Fee Deed of Trust" means the deed
of trust in the form of Exhibit V-4 to the Disbursement Agreement to be executed
by Mall Construction Subsidiary for the benefit of the Mortgage Note Trustee in
accordance with the Disbursement Agreement, as amended, modified or revised in
accordance with its terms.
"Mortgage Notes Proceeds Account" means that certain Mortgage Notes
Proceeds Account into which the net proceeds from the sale of the Mortgage Notes
will be deposited in accordance with the Disbursement Agreement.
"Mortgage Note Trustee" means the party named as such in the preamble
hereto until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of Preferred Stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b) the
disposition of any securities or the extinguishment of any Indebtedness of such
Person or any of its Restricted Subsidiaries, and (iii) excluding any
extraordinary gain (but not loss), together with any related provision for taxes
on such extraordinary gain (but not loss).
"Net Loss Proceeds" means the aggregate cash proceeds received by the
Issuers or any of their Restricted Subsidiaries in respect of any Event of Loss,
including, without limitation, insurance proceeds
15
from condemnation awards or damages awarded by any judgment, net of the direct
costs in recovery of such Net Loss Proceeds (including, without limitation,
legal, accounting, appraisal and insurance adjuster fees and expenses) and any
taxes paid or payable as a result thereof (including, without limitation, any
taxes paid or payable by an owner of the Issuers or any Restricted Subsidiary).
"Net Proceeds" means the aggregate cash proceeds received by the
Issuers or any of their Restricted Subsidiaries in respect of any Asset Sale,
net of the direct costs relating to such Asset Sale (including, without
limitation, legal, accounting and investment banking fees and expenses, employee
severance and termination costs, any trade payables or similar liabilities
related to the assets sold and required to be paid by the seller as a result
thereof and sales, finder's or broker's commissions), and any relocation
expenses incurred as a result thereof, taxes paid or payable as a result thereof
(including, without limitation, any taxes paid or payable by an owner of the
Issuers or any Restricted Subsidiary) (after taking into account any available
tax credits or deductions and any tax sharing arrangements), amounts required to
be applied to the repayment of Indebtedness secured by a Lien (other than the
Mortgage Notes) on the asset or assets that are the subject of such Asset Sale
or amounts permitted by the terms of such Indebtedness to be otherwise
reinvested in the Project to the extent so reinvested, all distributions and
other payments required to be made to minority interest holders in a subsidiary
or joint venture as a result of the Asset Sale and any reserve for adjustment in
respect of the sale price of such asset or assets or any liabilities associated
with the asset disposed of in such Asset Sale.
"Non-Recourse Financing" means Indebtedness incurred in connection with
the purchase or lease of personal or real property useful in the Principal
Business or to construct, develop or equip the Mall Space and (i) as to which
the lender upon default may seek recourse or payment against the Issuers or any
Restricted Subsidiary only through the return or sale of the property, equipment
or the other Specified FF&E so purchased or leased, or in the case of any
Indebtedness with respect to the Mall Space, only through foreclosure upon the
Mall Collateral and (ii) may not otherwise assert a valid claim for payment on
such Indebtedness against the Company or any Restricted Subsidiary or any other
property of the Issuers or any Restricted Subsidiary.
"Non-Recourse Indebtedness" means Indebtedness or Disqualified Stock,
as the case may be, or that portion of Indebtedness or Disqualified Stock, as
the case may be, (a) as to which neither the Issuers nor any of their Restricted
Subsidiaries (i) provides credit support pursuant to any undertaking, agreement
or instrument that would constitute Indebtedness or Disqualified Stock, as the
case may be, or (ii) is directly or indirectly liable, and (b) with respect to
Non-Recourse Indebtedness of an Unrestricted Subsidiary, no default with respect
to which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness or
Disqualified Stock, as the case may be, of the Issuers or any of their
Restricted Subsidiaries to declare a default on such other Indebtedness or
Disqualified Stock, as the case may be, or cause the payment thereof to be
accelerated or payable prior to its stated maturity.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Note Collateral" means all assets, now owned or hereafter acquired, of
the Company, Venetian or any Mortgage Note Guarantor included in the collateral
securing the Mortgage Notes under the Collateral Documents, which will initially
include all real estate, improvements and all personal property owned by the
Issuers (including (i) the Project Assets, (ii) the Mall Collateral, until the
transfer and release thereof in accordance with the Sale and Contribution
Agreement and the Disbursement Agreement), as well as a pledge of any
intercompany notes held by either of the Issuers or the Mortgage Note
Guarantors. Notwithstanding the forgoing, "Note Collateral" shall not include:
(i) the assets of the
16
Phase II Subsidiary and, after the release thereof, the Mall Collateral; (ii)
heating and air-conditioning related and other equipment owned by the HVAC
Provider, which provides thermal energy services to the Issuers pursuant to the
HVAC Services Agreement; (iii) the Specified FF&E; (iv) any assets which if
pledged, hypothecated or given as collateral security would require the Issuers
to seek approval of the Nevada Gaming Authorities of the pledge, hypothecation
or collateralization, or require the Mortgage Note Trustee or a holder or
beneficial holder of the Mortgage Notes to be licensed, qualified or found
suitable by an applicable Gaming Authority (other than any approval required for
the pledge, hypothecation or collateralization of assets in connection with the
Exchange Offer); (v) a pledge of the capital stock of the Company or Venetian or
any of the Issuers' Subsidiaries; and (vi) assets financed with Indebtedness
permitted to be incurred pursuant to clauses (g), (h) or (p) of the Section 4.09
hereof and such Indebtedness is permitted to be secured pursuant to Section 4.13
hereof.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the Offering by the Issuers of $425,000,000 in
aggregate principal amount of their 12 1/4% Mortgage Notes due 2004.
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Issuers or a Mortgage Note Guarantor, as the case may be, by two Officers (or if
a limited liability company, two Officers of the managing member of such limited
liability company) of the Issuers or a Mortgage Note Guarantor, as the case may
be, one of whom must be the principal executive officer, the principal financial
officer, the treasurer or the principal accounting officer of the Company,
Venetian (or its managing members) or a Mortgage Note Guarantor, as the case may
be, that meets the requirements set forth in this Indenture.
"Opinion of Counsel" means an opinion from legal counsel, that meets
the requirements of Section 12.05 hereof. The counsel may be an employee of or
counsel to the Issuers, any Subsidiary of the Issuers, any Mortgage Note
Guarantor or the Mortgage Note Trustee.
"Other Phase II Agreements" means any agreement entered into by the
Issuers or their Subsidiaries with a Person for construction, development and
operation of a hotel or casino on the Phase II Land (other than the Phase II
Resort).
"Outside Completion Deadline" means April 21, 1999, as the same may
from time to time be extended pursuant to the Disbursement Agreement.
"Participant" means, with respect to the Depositary, Euroclear or
Cedel, a Person who has an account with the Depositary, Euroclear or Cedel,
respectively (and, with respect to The Depository Trust Company, shall include
Euroclear and Cedel).
"Participating Broker-Dealer" has the meaning set forth in the
Registration Rights Agreement.
"Permitted Construction Loan Refinancing" means (i) the incurrence of
indebtedness and/or the issuance of Capital Stock by the Mall Subsidiary the
proceeds of which are used to purchase the Mall Collateral pursuant to the Sale
and Contribution Agreement (including, without limitation, the Tranche A
Take-out Commitment and the Tranche B Take-out Commitment) and/or (ii) the
assumption of the Mall
17
Construction Loan Facility and/or the Substitute Tranche B Loan (or any
permitted refinancing thereof) pursuant to the Sale and Contribution Agreement.
"Permitted Investments" means (a) any Investments in the Issuers, any
Mortgage Note Guarantor or in any Restricted Subsidiary that is not a Mortgage
Note Guarantor if the Investments in such Restricted Subsidiary that is not a
Mortgage Note Guarantor from the Issuers, any Mortgage Note Guarantor or any of
the other Restricted Subsidiaries aggregate less than $1.0 million; (b) any
Investments in Cash Equivalents; (c) Investments by the Issuers or any
Restricted Subsidiary of the Issuers in a Person, if as a result of such
Investment (i) such Person becomes a Mortgage Note Guarantor or (ii) such Person
is merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, one of the Issuers or
a Mortgage Note Guarantor; (d) any Restricted Investment made as a result of the
receipt of non-cash consideration from an Asset Sale that was made pursuant to
and in compliance with Section 4.10 hereof; (e) any acquisition of assets solely
in exchange for the issuance of Equity Interests (other than Disqualified Stock)
of the Issuers; (f) receivables owing to the Issuers or any Restricted
Subsidiary if created or acquired in the ordinary course of business and payable
or dischargeable in accordance with customary trade terms; provided, however,
that such trade terms may include such concessionary trade terms as the Issuers
or any such Restricted Subsidiary deems reasonable under the circumstances; (g)
payroll, travel and similar advances to cover matters that are expected at the
time of such advances ultimately to be treated as expenses for accounting
purposes and that are made in the ordinary course of business; (h) loans or
advances to employees of the Issuers or their Restricted Subsidiaries or Special
Subsidiaries (i) to fund the exercise price of options granted under the
employment agreements and the Issuers' stock option plans or agreements, in each
case, as in effect on the date of this Indenture or (ii) for any other purpose
not to exceed $2.0 million in the aggregate at any one time outstanding under
this clause (ii); (i) stock, obligations or securities received in settlement of
debts created in the ordinary course of business and owing to the Issuers and
any Restricted Subsidiary or in satisfaction of judgments; (j) other Investments
in any Person (other than in an Affiliate of the Issuers) having a fair market
value (measured on the date each such Investment was made and without giving
effect to subsequent changes in value), when taken together with all other
Investments made pursuant to this clause (j) that are at the time outstanding,
not to exceed $5.0 million; (k) Investments in any person engaged in the
Principal Business which Investment is solely in the form of Equity Interests
(other than Disqualified Stock) of the Issuers and (l) the initial designation
on the Issuance Date of (i) Phase II Subsidiary, Phase II Holdings and Phase II
Manager as Unrestricted Subsidiaries and (ii) Mall Subsidiary, Mall Holdings and
Mall Manager as Special Subsidiaries; provided that in each case, no more than
$1,000 is invested in any such Person at the time of designation.
"Permitted Liens" means (a) Liens in favor of the Issuers and their
Wholly Owned Restricted Subsidiaries; provided that if such Liens are on any
Note Collateral, that such Liens are either collaterally assigned to the
Mortgage Note Trustee or subordinate to the Lien in favor of the Mortgage Note
Trustee securing the Mortgage Notes or any Mortgage Note Guaranty; (b) Liens on
property of a Person existing at the time such Person became a Restricted
Subsidiary, is merged into or consolidated with or into, or wound up into, one
of the Issuers or any Restricted Subsidiary of the Issuers; provided, that such
Liens were in existence prior to the contemplation of such acquisition, merger
or consolidation or winding up and do not extend to any other assets other than
those of the Person acquired by, merged into or consolidated with one of the
Issuers or such Restricted Subsidiary; (c) Liens on property existing at the
time of acquisition thereof by the Issuers or any Restricted Subsidiary of the
Issuers; provided that such Liens were in existence prior to the contemplation
of such acquisition; (d) Liens to secure the performance of statutory
obligations, surety or appeal bonds, performance bonds or other obligations of a
like nature incurred in the ordinary course of business or in the construction
of the Project and which obligations are not expressly prohibited by this
Indenture; provided, however, that the Issuers have obtained a title insurance
endorsement insuring against losses arising therewith or if such Lien arises in
18
the ordinary course of business or in the construction of the Project, the
Issuers have bonded within a reasonable time after becoming aware of the
existence of such Lien; (e) Liens securing obligations in respect of this
Indenture, the Mortgage Notes and any Secured Mortgage Note Guaranty; (f)
Permitted Encumbrances, as such term is defined in the Disbursement Agreement,
and leases or other Liens, to the extent permitted pursuant to Section 4.25
hereof; (g) (1) Liens for taxes, assessments or governmental charges or claims
or (2) statutory Liens of landlords, and carriers', warehousemen's, mechanics',
suppliers', materialmen's, repairmen's or other similar Liens arising in the
ordinary course of business or in the construction of the Project, in the case
of each of (1) and (2), with respect to amounts that either (A) are not yet
delinquent or (B) are being contested in good faith by appropriate proceedings
as to which appropriate reserves or other provisions have been made in
accordance with GAAP; (h) easements, rights-of-way, navigational servitudes,
restrictions, minor defects or irregularities in title and other similar charges
or encumbrances which do not interfere in any material respect with the ordinary
conduct of business of the Issuers and their Restricted Subsidiaries; (i) after
Completion, Liens securing Indebtedness in an aggregate amount not exceeding
$25.0 million at any one time securing purchase money or lease obligations
otherwise permitted by this Indenture incurred or assumed in connection with the
acquisition, purchase or lease of real or personal property to be used in the
Principal Business of the Issuers or any of their Restricted Subsidiaries within
180 days of such incurrence or assumption; provided, that such Liens do not
extend to any Note Collateral or to any property or assets of the Issuers or any
Restricted Subsidiary other than the property or assets so purchased or leased
and, at the time of incurrence, the principal amount of such Indebtedness does
not exceed 75% of the value of the collateral securing such Indebtedness; (j) a
leasehold mortgage in favor of a party financing the lessee of space within the
Project; provided that (i) the lease affected by such leasehold mortgage is
permitted pursuant to Section 4.25 hereof, (ii) neither the Issuers nor any
Restricted Subsidiary is liable for the payment of any principal of, or interest
or premium on, such financing and (iii) the affected lease and leasehold
mortgage are expressly made subject and subordinate to the Lien of the Mortgage
Notes Indenture Leasehold Deed of Trust and the Mortgage Notes Indenture Fee
Deed of Trust, subject to the provisions of the last paragraph of Section 4.25
(k) Liens securing the Mall Construction Loan Facility and any additional
Indebtedness permitted to be incurred thereunder pursuant to clause (n)(A) of
Section 4.09 hereof; (l) Liens created or contemplated by the Cooperation
Agreement and the HVAC Services Agreement; (m) Liens on real property of the
Issuers arising pursuant to that certain ▇▇▇▇▇▇'▇ Road Way Agreement; (n) Liens
created by the Pre-development Agreement, as in effect on a date of this
Indenture; (o) Liens (1) to secure Indebtedness permitted by clauses (g), (h) or
(p) of Section 4.09 and extending only to such assets or Specified FF&E acquired
in accordance with such clauses and to any proceeds of such assets or
Indebtedness and related collateral accounts in which such proceeds are held,
and (2) to secure Indebtedness permitted by clause (d) of Section 4.09; provided
that such Liens are not materially greater in extent than the Liens securing the
Indebtedness so refinanced; (p) Liens created by the Other Phase II Agreements;
(q) Liens prior to the Lien securing the Mortgage Notes to secure all
Obligations under the Bank Credit Facility and any Guarantees thereof incurred
pursuant to clause (a) of Section 4.09 hereof and any additional Indebtedness
permitted to be incurred thereunder pursuant to clause (n)(A) of Section 4.09
hereof; (r) until Completion is achieved, Permitted Liens (as defined in the
Disbursement Agreement); (s) Liens incurred in connection with the construction
of a pedestrian bridge over or a pedestrian tunnel under Las Vegas Boulevard and
Sands Avenue; (t) Liens incurred in connection with the traffic study relating
to increased traffic on Las Vegas Boulevard as a result of the Completion of the
Project; (u) Liens incurred in connection with Hedging Obligations incurred
pursuant to clause (f) of Section 4.09 hereof; (v) licenses of patents,
trademarks and other intellectual property rights granted by the Issuers or any
Subsidiary of the Issuers in the ordinary course of business and not interfering
in any material respect with the ordinary conduct of the business of such Issuer
or such Subsidiary; (w) any judgment attachment or judgment Lien not
constituting an Event of Default; (x) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods; (y) any Lien created under the Sale
and Contribution Agreement and (z) after
19
Completion, Liens prior to the Lien securing the Mortgage Notes securing (A) up
to an aggregate of $20.0 million of Indebtedness permitted to be incurred
pursuant to clause (n)(B) of Section 4.09 hereof and (B) up to an aggregate of
$20.0 million of Indebtedness permitted to be incurred pursuant to clause (o) of
Section 4.09 hereof.
"Permitted Quarterly Tax Distributions" means quarterly distributions
of Tax Amounts determined on the basis of the estimated taxable income of the
Company or Venetian, as the case may be (in each case, including any such
taxable income attributable to such entity's ownership of interest in any other
pass-through entity for Federal income tax purposes) (except that if all or any
portion of the Completion Guaranty Loan or the Substitute Tranche B Loan is
outstanding and held by the Sole Stockholder or a Related Party and is not
paying current cash interest, then such estimated taxable income shall be
determined without giving effect to any non-cash interest payments on such loans
held by the Sole Stockholder or the Related Parties to the extent such non-cash
interest is deductible), for the related Estimation Period, as in a statement
filed with the Mortgage Note Trustee, provided; however, that (A) prior to any
distributions of Tax Amounts the Issuers shall deliver an officers' certificate
to the effect that, in the case of distributions to be made by Venetian,
Venetian qualifies as a partnership or a substantially similarly treated
pass-through entity for federal income tax purposes or that, in the case of
distributions to be made by the Company, the Company qualifies as a Subchapter S
corporation under the Code or a substantially similarly treated pass-through
entity for federal income tax purposes, as the case may be, and (B) at the time
of such distributions, the most recent audited financial statements of the
Company reflect that the Company was treated as a Subchapter S corporation under
the Code or a substantially similarly treated pass-through entity for federal
income tax purposes and Venetian was treated as a partnership or substantially
similarly treated pass-through entity for Federal income tax purposes for the
period covered by such financial statements; provided, further, that, for an
Estimation Period that includes a True-up Determination Date, (A) if the True-up
Amount is due to the members or shareholders, as the case may be, the Permitted
Quarterly Tax Distribution payable by the Company or Venetian, as the case may
be, for the Estimation Period shall be increased by such True-up Amount, and (B)
if the True-up Amount is due to the Company or Venetian, the Permitted Quarterly
Tax Distribution payable by the Company or Venetian, as the case may be, for the
Estimation Period shall be reduced by such True-up Amount and the excess, if
any, of the True-up Amount over such Permitted Quarterly Tax Distribution shall
be applied to reduce the immediately following Permitted Quarterly Tax
Distribution(s) until such True-up Amount is entirely offset. The amount of
Permitted Quarterly Tax Distribution relating to an Estimation Period including
a True-up Determination Date shall be determined by a Tax Amounts CPA, and the
amount of Permitted Quarterly Tax Distribution relating to all other Estimation
Periods shall be determined by the Company or Venetian, as the case may be.
"Person" means any individual, corporation, partnership, limited
liability company or partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, government or any agency or
political subdivision thereof or any other entity.
"Phase II Holdings" means Lido Casino Resort Holding Company, LLC, a
Delaware limited liability company and a subsidiary of Phase II Intermediate
Holdings, and any successor thereto permitted under this Indenture.
"Phase II Intermediate Holdings" means Lido Intermediate Holding
Company, LLC, a Delaware limited liability company, and a Wholly Owned
Subsidiary of the Company, and any successor thereto permitted under this
Indenture.
"Phase II Land" means that portion of the Project Site designated as
the Phase II Land in the Collateral Documents, together with all improvements
thereon and all rights appurtenant thereto.
20
"Phase II Manager" means Lido Casino Resort MM, Inc., a special purpose
Wholly Owned Subsidiary of the Company.
"Phase II Resort" means the themed hotel and casino currently
contemplated to be constructed on the Phase II Land and which will be physically
connected to the Casino Resort.
"Phase II Subsidiary" means Lido Casino Resort, LLC, a Nevada limited
liability company and, at the Issuance Date, an Unrestricted Subsidiary of the
Issuers.
"Plans and Specifications" means the plans and specifications for the
construction of the Casino Resort listed in an exhibit to the Disbursement
Agreement, as the same may be modified from time to time in accordance with the
Disbursement Agreement.
"Pre-development Agreement" means the Sands Resort Hotel & Casino
Agreement dated February 18, 1997 by and between ▇▇▇▇▇ County and the Company as
amended, revised, modified and restated.
"Preferred Stock" means any Equity Interest with preferential right of
payment of dividends or upon liquidation, dissolution, or winding up.
"Principal Business" means the casino gaming, hotel, retail and
entertainment mall and resort business and any activity or business incidental,
directly related or similar thereto (including owning interests in Subsidiaries,
operating the conference center and meeting facilities and owning and operating
a retail and entertainment mall (including the Mall prior to its transfer to the
Mall Subsidiary) and acting as a member of Venetian in the case of the Company),
or any business or activity that is a reasonable extension, development or
expansion thereof or ancillary thereto, including any hotel, entertainment,
recreation, convention, trade show, meeting, retail sales or other activity or
business designed to promote, market, support, develop, construct or enhance the
casino gaming, hotel, retail and entertainment mall and resort business operated
by the Company, Venetian and direct and indirect Restricted Subsidiaries
(including, without limitation, engaging in transactions with Affiliates and
incurring Indebtedness, providing guarantees or providing other credit support,
in each case to the extent permitted under this Indenture), owning and operating
joint ventures to supply materials or services for the construction or operation
of any resorts owned or operated by the Issuers and their Restricted
Subsidiaries and entering into casino leases or management agreements for any
casino situated on land owned by the Issuers or any of their Subsidiaries or
owned or operated by the Issuers or any Affiliate of the Issuers.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i) to be placed on all Mortgage Notes issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.
"Project" means the Venetian-themed hotel, casino, retail, meeting and
entertainment complex, with related heating, ventilation and air conditioning
and power station facilities to be developed at the Project Site, all as more
particularly described in Exhibit T-1 to the Disbursement Agreement.
"Project Architect" means collectively, TSA of Nevada, LLP, and WAT&G,
Inc. Nevada.
"Project Assets" means, with respect to the Project at any time, all of
the assets then in use related to the Project including any real estate assets,
any buildings or improvements thereon, and all equipment, furnishings and
fixtures, but excluding: (i) the Phase II Land and/or the Mall Collateral and
any improvements thereon after their transfer to the Unrestricted Subsidiary or
Special Subsidiary as
21
permitted by this Indenture; (ii) any obsolete personal property determined by
the Company's Board of Directors to be no longer useful or necessary to the
operations or support of the Project; (iii) the equipment owned by the HVAC
Provider (unless purchased by Venetian or Mall Construction Subsidiary after the
date hereof); and (iv) any equipment leased from a third party in the ordinary
course of business.
"Project Budget" means the Project Budget as in effect on the Issuance
Date and attached as an exhibit to the Disbursement Agreement, as amended,
revised or modified from time to time in accordance with the terms thereof.
"Project Documents" means the Construction Management Agreement, the
Direct Construction Guaranty, the Indirect Construction Guaranty, the Contracts,
the Approved Equipment Funding Commitments, the Cooperation Agreement, the HVAC
Services Agreement, the Mall Lease, the Sale and Contribution Agreement, the
▇▇▇▇▇▇▇▇ Agreement, the operating agreement of each of Venetian, Mall
Intermediate Holdings, Mall Holdings and Mall Subsidiary and any other document
or agreement entered into relating to the development, construction, maintenance
or operation of the Project (other than the documents relating to the Tranche A
Take-out Commitment and the Tranche B Take-out Commitment) as the same may be
amended from time to time in accordance with the terms and conditions of the
Disbursement Agreement.
"Public Equity Offering" means a bona fide underwritten sale to the
public of common equity of the Company, Venetian or a Person holding more than
50% of the common equity of the Company pursuant to a registration statement
(other than on Form S-8 or any other form relating to securities issuable under
any benefit plan of the Company) that is declared effective by the SEC and
results in gross aggregate proceeds to the Company or Venetian of at least $20.0
million.
"Quarterly Payment Period" means the period commencing on the tenth day
and ending on and including the twentieth day of each month in which federal
estimated tax payments are due (provided that payments in respect of estimated
state income taxes due in January may instead, at the option of the Issuers, be
paid during the last five days of the immediately preceding December).
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of November 14, 1997, by and among the Issuers, the Initial
Purchasers and the other parties named on the signature pages thereof, as such
agreement may be amended, modified or supplemented from time to time.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Regulation S Temporary Global Note
or Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent global Mortgage
Note in the form of Exhibit A-2 hereto bearing the Global Note Legend and the
Private Placement Legend and deposited with or on behalf of and registered in
the name of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Restricted Period.
"Regulation S Temporary Global Note" means a temporary global Mortgage
Note in the form of Exhibit A-2 hereto bearing the Private Placement Legend and
the Regulation Temporary Global Note
22
Legend set forth in Section 2.06(g)(iii) and deposited with or on behalf of and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Mortgage Notes
initially sold in reliance on Rule 903 of Regulation S.
"Redemption Triggering Event" means (i) a Public Equity Offering; or
(ii) the receipt by the Issuers or any of their Restricted Subsidiaries of
Excess Mall Proceeds.
"Related Parties" means (i) any spouse and any child, stepchild,
sibling or descendant of the Sole Stockholder, (ii) any estate of the Sole
Stockholder or any person under clause (i), (iii) any person who receives a
beneficial interest in the Company or Venetian from any estate under clause (ii)
to the extent of such interest, (iv) any executor, personal administrator or
trustee who holds such beneficial interest in the Company or Venetian for the
benefit of, or as fiduciary for, any person under clauses (i), (ii) or (iii) to
the extent of such interest, (v) any corporation, trust, or similar entity owned
or controlled by the Sole Stockholder or any person referred to in clause (i),
(ii), (iii) or (iv) or for the benefit of any person referred to in clause (i)
and (vi) the spouse or issue of one or more of the individuals described in
clause (i).
"Repurchase Offer" means an offer made by the Issuers to purchase all
or any portion of a Holder's Mortgage Notes pursuant to Sections 4.10, 4.11 or
4.16 hereof, respectively.
"Responsible Officer," when used with respect to the Mortgage Note
Trustee, means any officer within the Corporate Trust Administration of the
Mortgage Note Trustee (or any successor group of the Mortgage Note Trustee) or
any other officer of the Mortgage Note Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his knowledge of and familiarity with
the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend.
"Restricted Investment" means (i) an Investment other than a Permitted
Investment or (ii) any sale, conveyance, lease, transfer or other disposition of
assets at less than fair market value to an Unrestricted Subsidiary, provided
that the amount of such Restricted Investment under this clause (ii) shall be
such difference in value.
"Restricted Period" means the 40-day restricted period as defined in
Regulation S.
"Restricted Subsidiary" means, at any time, any direct or indirect
Subsidiary of the Issuers that is not then an Unrestricted Subsidiary or a
Special Subsidiary; provided, however, that upon the occurrence of any
Unrestricted Subsidiary or Special Subsidiary ceasing to be an Unrestricted
Subsidiary or Special Subsidiary, such Subsidiary shall be included in the
definition of "Restricted Subsidiary."
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
23
"Sale and Contribution Agreement" means that certain Sale and
Contribution Agreement among the Venetian, Mall Construction Subsidiary and Mall
Subsidiary, as such agreement may be amended, modified or renewed from time to
time in accordance with its terms.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Secured Mortgage Note Guaranties" means the unconditional guaranties
of the Mortgage Notes on a senior, secured basis by the Mall Construction
Subsidiary and any future Restricted Subsidiary of the Issuers.
"Senior Subordinated Notes" means the $97.5 million in aggregate
principal amount of the Issuers 14 1/4% Senior Subordinated Notes due 2005, and
any series of senior subordinated notes issued in exchange for such Senior
Subordinated Notes pursuant to the Exchange Offer contemplated by the
Registration Rights Agreement.
"Senior Subordinated Note Guarantors" means Phase II Intermediate
Holdings, Mall Intermediate Holdings, Mall Construction Subsidiary and all
future Restricted Subsidiaries of the Issuers.
"Senior Subordinated Note Indenture" means that certain Indenture,
dated as of November 14, 1997, by and among the Issuers, the Senior Subordinated
Note Guarantors and the Senior Subordinated Note Trustee, as amended or
supplemented from time to time.
"Senior Subordinated Note Trustee" means First Union National Bank, in
its capacity as trustee.
"Services Agreement" means that Amended and Restated Services
Agreement, dated as of November 14, 1997, by and among the Company, Interface,
Interface Group Holding Company, Inc., a Nevada corporation, and the parties
stated on the signature page thereto, as amended from time to time in accordance
with its terms.
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary which would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Act, as such Regulation is in effect on the Issuance
Date.
"Sole Stockholder" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
"Sole Stockholder Intercreditor Agreement" means the Intercreditor
Agreement, among the Sole Stockholder, the Company, Venetian, Mall Construction
Subsidiary, The Bank of Nova Scotia, as Bank Agent acting on behalf of the other
lenders pursuant to the Bank Credit Facility, the Mortgage Note Trustee, acting
on behalf of the holders of the Mortgage Notes, the Mall Construction Lender,
the Senior Subordinated Note Trustee, acting on behalf of the holders of the
Senior Subordinated Notes, as amended, revised, modified or restated from time
to time in accordance with its terms.
"Special Subsidiary" means the Mall Subsidiary, Mall Holdings, Mall
Manager and any other Subsidiary so designated by the Board of Directors of the
Company in accordance with the terms of this Indenture.
24
"Special Subsidiary Permitted Investments" means with respect to any
Special Subsidiary (a) any Investments in a Wholly Owned Subsidiary of such
Special Subsidiary engaged in a Special Subsidiary Principal Business; (b) any
Investments in Cash Equivalents; (c) receivables owing to such Special
Subsidiary or any Wholly Owned Subsidiary of such Special Subsidiary if created
or acquired in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms; provided, however, that such trade terms
may include such concessionary trade terms as the Special Subsidiary deems
reasonable under the circumstances; (d) payroll, travel and similar advances to
cover matters that are expected at the time of such advances ultimately to be
treated as expenses for accounting purposes and that are made in the ordinary
course of business; (e) loans or advances to employees made in the ordinary
course of business of the Special Subsidiary; (f) stock, obligations or
securities received in settlement of debts created in the ordinary course of
business and owing to Special Subsidiary or a Subsidiary or in satisfaction of
judgments and (g) other Investments in any Person (other than an Affiliate of
the Special Subsidiary) having a fair market value (measured on the date of each
such Investment was made and without giving effect to subsequent changes in
value), when taken together with all other investments made pursuant to this
clause (g) that are at the time outstanding, not to exceed $5.0 million.
"Special Subsidiary Principal Business" means business limited to the
following: (i) to acquire, hold, own, manage, market and operate a retail,
restaurant and entertainment complex known as the Grand Canal Shops Mall (the
"Property"), located at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, (ii)
to engage in the retail, restaurant and entertainment business at the Property
and any activity and business incidental, directly related or similar thereto,
and (iii) to engage in any business or activity that is a reasonable extension,
development or expansion thereof or ancillary thereto including any retail,
restaurant, entertainment or other activity or business designed to promote,
market, support, develop, construct or enhance the retail, restaurant and
entertainment business operated by the Mall Subsidiary (including, without
limitation, owning and operating joint ventures to supply materials or services
for the construction or operation of the Property, engaging in transactions with
Affiliates to the extent permitted under this Indenture, and incurring
Indebtedness, providing guarantees or providing other credit support). Special
Subsidiary Principal Business does not mean any of the foregoing to the extent
engaged in on the Phase II Land.
"Special Subsidiary Restricted Investment" means (i) an Investment by a
Special Subsidiary or a Subsidiary of a Special Subsidiary other than a Special
Subsidiary Permitted Investment or (ii) any Investment by a Special Subsidiary
or a Subsidiary of a Special Subsidiary in the equity of the Issuers or any of
the Issuers' Restricted Subsidiaries.
"Specified FF&E" means any furniture, fixtures, equipment and other
personal property financed or refinanced with the proceeds from the incurrence
of Indebtedness pursuant to clauses (g), (h) or (p) of Section 4.09 hereof,
including (i) each and every item or unit of equipment acquired with proceeds
thereof, (ii) each and every item or unit of equipment acquired in substitution
or replacement thereof, (iii) all parts, components and other items pertaining
to such collateral, (iv) all documents (including without limitation all
warehouse receipts, dock receipts, bills of lading and the like), (v) all
licenses (other than gaming licenses), warranties, guaranties, service contracts
and related rights and interests covering all or any portion of such collateral,
(vi) to the extent not otherwise included, all proceeds (including insurance
proceeds) of any of the foregoing and all accessions to, substitutions and
replacements for, and the rents, profits and products of, each of the foregoing,
and (vii) so long as Indebtedness under the Bank Credit Facility is outstanding,
such other collateral reasonably determined by the lenders under the Bank Credit
Facility to be collateral for Indebtedness incurred in connection with the
purchase of Specified FF&E so long as the Lien securing Indebtedness incurred
under the Bank Credit Facility does not extend to such collateral.
25
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subordinated Indebtedness" means any Indebtedness of the Issuers or
any of their Restricted Subsidiaries which is expressly by its terms
subordinated in right of payment to the Mortgage Notes or any Mortgage Note
Guaranty.
"Subordinated Mortgage Note Guaranties" means the unconditional
guaranties of the Mortgage Notes on a subordinated, unsecured basis by Mall
Intermediate Holdings and Phase II Intermediate Holdings.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association, or other business entity (other than a partnership) of which more
than 50% of the total voting power of shares of Capital Stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time of determination 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 of
which more than 50% of the partnership's capital accounts, distribution rights
or general or limited partnership interests are owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person or a combination thereof.
"Substitute Tranche B Loan" means amounts drawn upon under the
guarantee of the Sole Stockholder of the Tranche B loan of the Mall Construction
Loan Facility, which amounts, when drawn upon may be treated as a subordinated
loan to the Issuers from the Sole Stockholder and Mall Subsidiary.
"Supplier Joint Venture" means any Person that supplies or provides
materials or services to the Issuers or the Construction Manager or any
contractor in the Project and in which the Issuers or one of their Restricted
Subsidiaries have Investments.
"Tax Amount" means, with respect to a Estimation Period or a taxable
year, as the case may be, an amount equal to (A) the product of (x) the taxable
income (including all separately stated items of income) of the Company or
Venetian, as the case may be, for such Estimation Period or a taxable year, as
the case may be, and (y) the Applicable Tax Percentage reduced by (B) to the
extent not previously taken into account, any income tax benefit attributable to
the Company or Venetian, as the case may be, which could be utilized (without
regard to the actual utilization) by its members or shareholders, as the case
may be, in the current or any prior taxable year, or portion thereof, commencing
on or after the Issuance Date (including any tax losses or tax credits),
computed at the Applicable Tax Percentage of the year that such benefit is taken
into account for purposes of this computation; provided, however, that, the
computation of Tax Amount shall also take into account (C) the deductibility of
state and local taxes for federal income tax purposes, and (D) any difference in
the Applicable Tax Percentage resulting from the nature of taxable income (such
as capital gain as opposed to ordinary income).
"Tax Amounts CPA" means a nationally recognized certified public
accounting firm.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ▇▇.▇▇.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
26
"Tranche A Take-out Commitment" means the commitment of ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Company, to enter into and make a loan in an aggregate of up to $105.0
million thereunder under the Permitted Mall Construction Refinancing or any
other commitment to make such a loan that replaces the commitment of ▇▇▇▇▇▇▇
Sachs Mortgage Company in accordance with the Tri-Party Agreement.
"Tranche B Take-out Commitment" means the commitment of the Sole
Stockholder to enter into and fund a loan to Mall Subsidiary in an aggregate of
up to $35.0 million under the Permitted Mall Construction Refinancing or any
other commitment to make such a loan that replaces the commitment of the Sole
Stockholder in accordance with the Tri-Party Agreement.
"▇▇▇▇▇▇▇▇ Agreement" means that certain Time and Materials Agreement
Between Owner and Contractor, dated as of February 10, 1997, by and between the
Company and ▇▇▇▇▇▇▇▇ Industries of Phoenix, Inc., an Arizona corporation, as
amended, modified or revised from time to time in accordance with its terms.
"Treasury Rate" means the yield to maturity at the time of the
computation of the United States Treasury securities with a constant maturity
(as compiled by and published in the most recent Federal Reserve Statistical
Release H.15(519), which has become publicly available at least two Business
Days prior to the date fixed for prepayment (or, if such Statistical Release is
no longer published, any publicly available source of similar market data) most
nearly equal to the then remaining average life to November 15, 2001; provided,
however, that if the average life of such Mortgage Note is not equal to the
constant maturity of the United States Treasury security for which weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the average life of such Mortgage Notes is less than one
year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year shall be used.
"Tri-Party Agreement" means the agreement between Venetian, the
Company, the Sole Stockholder, the Mall Construction Subsidiary, the Mall
Subsidiary, the Mall Construction Lender and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company (or
any successor provider of the Tranche A Take-out Commitment), as amended or
replaced from time to time in accordance with its terms.
"True-up Amount" means, in respect of a particular taxable year, an
amount determined by the Tax Amounts CPA equal to the difference between (i) the
aggregate Permitted Quarterly Tax Distributions actually distributed in respect
of such taxable year, without taking into account any adjustment to such
Permitted Quarterly Tax Distributions made with respect to any other taxable
year (including any adjustment to take into account a True-up Amount for the
immediately preceding taxable year) and (ii) the Tax Amount permitted to be
distributed in respect of such year as determined by reference to the Company's
Internal Revenue Service Form 1120-S or Venetian's IRS Form 1065 filed for such
year; provided, however, that if there is an audit or other adjustment with
respect to a return filed by the Company or Venetian (including a filing of an
amended return), upon a final determination or resolution of such audit or other
adjustment, the Tax Amounts CPA shall redetermine the True- up Amount for the
relevant taxable year. The amount equal to the excess, if any, of the amount
described in clause (i) above over the amount described in clause (ii) above
shall be referred to as the "True-up Amount due to the Company" or the "True-up
Amount due to Venetian," as the case may be, and the excess, if any, of the
amount described in clause (ii) over the amount described in clause (i) shall be
referred to as the "True-up Amount due to the shareholders or members."
"True-up Determination Date" means the date on which the Tax Amounts
CPA delivers a statement to the Mortgage Note Trustee indicating the True-up
Amount; provided, however, that the
27
True-up Determination Date shall not be later than 30 days after the occurrence
of an event requiring the determination of the True-up Amount (including, the
filing of the federal and state tax returns or the final determination or
resolution of an audit or other adjustment, as the case may be).
"Unrestricted Subsidiary" means (i) each of Phase II Holdings, Phase II
Manager and Phase II Subsidiary; and (ii) any entity that would have been a
Restricted Subsidiary of the Issuers but for its designation as an "Unrestricted
Subsidiary" in accordance with the provisions of this Indenture and any
Subsidiary of such entity, so long as it remains an Unrestricted Subsidiary in
accordance with the terms of this Indenture.
"Unrestricted Global Note" means a permanent global Mortgage Note in
the form of Exhibit A-1 attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Mortgage Notes that do not bear the
Private Placement Legend.
"Unrestricted Definitive Note" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"Venetian" means, Venetian Casino Resort, LLC, a Nevada limited
liability company.
"Voting Stock" means, with respect to any Person that is a corporation,
any class or series of capital stock of such Person that is ordinarily entitled
to vote in the election of directors thereof at a meeting of stockholders called
for such purpose, without the occurrence of any additional event or contingency
and with respect to any other Person that is a limited liability company,
membership to manage the operations or business of the limited liability
company.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness or Disqualified Stock, as the case may be, at any date, the number
of years (calculated to the nearest one-twelfth) obtained by dividing (a) the
sum of the products obtained by multiplying (x) 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 (y)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (b) the then outstanding
principal amount or liquidation preference, as applicable, of such Indebtedness
or Disqualified Stock, as the case may be.
"Wholly Owned Restricted Subsidiary" is any Wholly Owned Subsidiary
that is a Restricted Subsidiary.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person and one
or more Wholly Owned Subsidiaries of such Person.
"Working Capital Facility" means the credit facility pursuant to any
agreement or agreements providing for the making of loans or advances on a
revolving basis, the issuance of letters of credit and/or the creation of
bankers' acceptances to fund the Issuers' or any of their Restricted
Subsidiaries' general corporate requirements and any amendment, supplement,
extension, modification, renewal, replacement
28
or refinancing from time to time, including any agreement to renew, extend,
refinance or replace all or any portion of such facility.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
---- ----------
"Affiliate Transaction".....................................................4.12
"Asset Sale Offer"..........................................................4.10
"Authentication Order"......................................................2.02
"Benefitted Party".........................................................11.01
"Change of Control Offer"...................................................4.16
"Change of Control Payment".................................................4.16
"Change of Control Payment Date"............................................4.16
"Covenant Defeasance".......................................................8.03
"Custodian".................................................................6.01
"DTC".......................................................................2.03
"Employee Stock Buybacks"...................................................4.07
"Event of Default"..........................................................6.01
"Event of Loss Offer".......................................................4.11
"Excess Loss Proceeds"......................................................4.11
"Excess Proceeds"...........................................................4.10
"incur".....................................................................4.09
"Lease Transaction".........................................................4.25
"Legal Defeasance" .........................................................8.02
"Offer Amount"..............................................................3.10
"Offer Period"..............................................................3.10
"Paying Agent"..............................................................2.03
"Payment Blockage Notice"...............................................11.07(c)
"Payment Default"...........................................................6.01
"Permitted Junior Securities"...........................................11.07(e)
"Purchase Date".............................................................3.10
"Refinancing Indebtedness"..................................................4.09
"Registrar".................................................................2.03
"Repurchase Offer"..........................................................3.10
"Restricted Payments".......................................................4.07
"Senior Debt of Mortgage Note Guarantors"...............................11.07(e)
"Special Subsidiary Restricted Payments"....................................4.27
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Mortgage Notes and the Mortgage Note
Guaranties;
"indenture security Holder" means a Holder of a Mortgage Note;
29
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Mortgage Note
Trustee;
"obligor" on the Mortgage Notes means each of the Issuers, the Mortgage
Note Guarantors, if any, and any successor obligor upon the Mortgage Notes or
any Mortgage Note Guaranty, as the case may be.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions;
(6) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement of successor sections or rules
adopted by the SEC from time to time;
(7) the term "redeem" and the correlative terms "redemption" and
"redeemed" shall not include any Repurchase Offer; and
(8) the term "consolidated" when used in the context of the Issuers and
their Restricted Subsidiaries shall exclude all assets, liabilities, revenue, or
expenses of Unrestricted Subsidiaries and Special Subsidiaries.
ARTICLE 2
THE MORTGAGE NOTES
SECTION 2.01. FORM AND DATING.
(a) General. The Mortgage Notes and the Mortgage Note Trustee's
certificate of authentication shall be substantially in the form of Exhibit A-1
or A-2 attached hereto. The Mortgage Notes may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each Mortgage Note
shall be dated the date of its authentication. The Mortgage Notes shall be in
denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Mortgage Notes shall
constitute, and are hereby expressly made, a part of this Indenture and the
Issuers, the Mortgage Note Guarantors and the Mortgage
30
Note Trustee, by their execution and delivery of this Indenture, expressly agree
to such terms and provisions and to be bound thereby. However, to the extent any
provision of any Mortgage Note conflicts with the express provisions of this
Indenture, the provisions of this Indenture shall govern and be controlling.
(b) Global Notes. Mortgage Notes issued in global form shall be
substantially in the form of Exhibits A-1 or A-2 attached hereto (including the
Global Note Legend thereon and the "Schedule of Exchanges of Interests in the
Global Note" attached thereto). Mortgage Notes issued in definitive form shall
be substantially in the form of Exhibit A-1 attached hereto (but without the
Global Note Legend thereon and without the "Schedule of Exchanges of Interests
in the Global Note" attached thereto). Each Global Note shall represent such of
the outstanding Mortgage Notes as shall be specified therein and each shall
provide that it shall represent the aggregate principal amount of outstanding
Mortgage Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Mortgage Notes represented thereby may from time
to time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the aggregate principal amount of outstanding Mortgage
Notes represented thereby shall be made by the Mortgage Note Trustee or the
Mortgage Note Custodian, at the direction of the Mortgage Note Trustee, in
accordance with instructions given by the Holder thereof as required by Section
2.06 hereof.
(c) Temporary Global Notes. Mortgage Notes offered and sold in reliance
on Regulation S shall be issued initially in the form of the Regulation S
Temporary Global Note, which shall be deposited on behalf of the purchasers of
the Mortgage Notes represented thereby with the Mortgage Note Trustee, at its
New York office, as custodian for the Depositary, and registered in the name of
the Depositary or the nominee of the Depositary for the accounts of designated
agents holding on behalf of Euroclear or Cedel Bank, duly executed by the
Issuers and authenticated by the Mortgage Note Trustee as hereinafter provided.
The Restricted Period shall be terminated upon the receipt by the Mortgage Note
Trustee of (i) a written certificate from the Depositary, together with copies
of certificates from Euroclear and Cedel Bank certifying that they have received
certification of non-United States beneficial ownership of 100% of the aggregate
principal amount of the Regulation S Temporary Global Note (except to the extent
of any beneficial owners thereof who acquired an interest therein during the
Restricted Period pursuant to another exemption from registration under the
Securities Act and who will take delivery of a beneficial ownership interest in
a 144A Global Note or an IAI Global Note bearing a Private Placement Legend, all
as contemplated by Section 2.06(a)(ii) hereof), and (ii) an Officers'
Certificate from the Issuers. Following the termination of the Restricted
Period, beneficial interests in the Regulation S Temporary Global Note shall be
exchanged for beneficial interests in Regulation S Permanent Global Notes
pursuant to the Applicable Procedures. Simultaneously with the authentication of
Regulation S Permanent Global Notes, the Mortgage Note Trustee shall cancel the
Regulation S Temporary Global Note. The aggregate principal amount of the
Regulation S Temporary Global Note and the Regulation S Permanent Global Notes
may from time to time be increased or decreased by adjustments made on the
records of the Mortgage Note Trustee and the Depositary or its nominee, as the
case may be, in connection with transfers of interest as hereinafter provided.
(d) Euroclear and Cedel Procedures Applicable. The provisions of the
"Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank"
and "Customer Handbook" of Cedel Bank shall be applicable to transfers of
beneficial interests in the Regulation S Temporary Global Note and the
Regulation S Permanent Global Notes that are held by Participants through
Euroclear or Cedel Bank.
31
SECTION 2.02. EXECUTION AND AUTHENTICATION.
One Officer of each Issuer shall sign the Mortgage Notes for the
Issuers by manual or facsimile signature. Each Issuer's seal shall be reproduced
on the Mortgage Notes and may be in facsimile form.
If an Officer whose signature is on a Mortgage Note no longer holds
that office at the time a Mortgage Note is authenticated, the Mortgage Note
shall nevertheless be valid.
A Mortgage Note shall not be valid until authenticated by the manual
signature of the Mortgage Note Trustee. The signature shall be conclusive
evidence that the Mortgage Note has been authenticated under this Indenture.
The Mortgage Note Trustee shall, upon a written order of the Issuers
signed by an Officer of each Issuer (an "Authentication Order"), authenticate
Mortgage Notes for original issue up to the aggregate principal amount stated in
paragraph 4 of the Mortgage Notes.
The Mortgage Note Trustee may appoint an authenticating agent
acceptable to the Issuers to authenticate Mortgage Notes. An authenticating
agent may authenticate Mortgage Notes whenever the Mortgage Note Trustee may do
so. Each reference in this Indenture to authentication by the Mortgage Note
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with Holders or an Affiliate of the Issuers.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Issuers shall maintain an office or agency where Mortgage Notes may
be presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Mortgage Notes may be presented for payment ("Paying
Agent"). The Registrar shall keep a register of the Mortgage 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 Mortgage Note Trustee in writing of the name and
address of any Agent not a party to this Indenture. If the Issuers fail to
appoint or maintain another entity as Registrar or Paying Agent, the Mortgage
Note Trustee shall act as such. The Issuers or any of their Subsidiaries may act
as Paying Agent or Registrar.
The Issuers initially appoint The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Issuers initially appoint the Mortgage Note Trustee to act as the
Registrar and Paying Agent and to act as Mortgage Note Custodian with respect to
the Global Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Issuers shall require each Paying Agent other than the Mortgage
Note Trustee to agree in writing that the Paying Agent will hold in trust for
the benefit of Holders or the Mortgage Note Trustee all money held by the Paying
Agent for the payment of principal, premium or Liquidated Damages, if any, or
interest on the Mortgage Notes, and will notify the Mortgage Note Trustee of any
default by the Issuers in making any such payment. While any such default
continues, the Mortgage Note Trustee may require a Paying Agent to pay all money
held by it to the Mortgage Note Trustee. The Issuers at any time may require a
Paying Agent to pay all money held by it to the Mortgage Note Trustee. Upon
32
payment over to the Mortgage Note Trustee, the Paying Agent (if other than the
Issuers or a Subsidiary) shall have no further liability for the money. If the
Issuers or a Subsidiary acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Issuers, the Mortgage Note Trustee shall serve as Paying Agent for the Mortgage
Notes.
SECTION 2.05. HOLDER LISTS.
The Mortgage Note Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA ss. 312(a). If the
Mortgage Note Trustee is not the Registrar, the Issuers shall furnish to the
Mortgage Note Trustee at least seven Business Days before each interest payment
date and at such other times as the Mortgage Note Trustee may request in
writing, a list in such form and as of such date as the Mortgage Note Trustee
may reasonably require of the names and addresses of the Holders of Mortgage
Notes and the Issuers shall otherwise comply with TIA ss. 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Issuers for Definitive Notes if (i) the Issuers deliver to the Mortgage Note
Trustee notice from the Depositary that it is unwilling or unable to continue to
act as Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Issuers within 120 days after the date of such notice from the Depositary or
(ii) the Issuers in their sole discretion determine that the Global Notes (in
whole but not in part) should be exchanged for Definitive Notes and deliver a
written notice to such effect to the Mortgage Note Trustee; provided that in no
event shall the Regulation S Temporary Global Note be exchanged by the Issuers
for Definitive Notes prior to (x) the expiration of the Restricted Period and
(y) the receipt by the Registrar of any certificates required pursuant to Rule
903(c)(3)(ii)(B) under the Securities Act. Upon the occurrence of either of the
preceding events in (i) or (ii) above, Definitive Notes shall be issued in such
names as the Depositary shall instruct the Mortgage Note Trustee. Global Notes
also may be exchanged or replaced, in whole or in part, as provided in Sections
2.07 and 2.10 hereof. Every Mortgage Note authenticated and delivered in
exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to
this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and
delivered in the form of, and shall be, a Global Note. A Global Note may not be
exchanged for another Mortgage Note other than as provided in this Section
2.06(a). However, beneficial interests in a Global Note may be transferred and
exchanged as provided in Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes.
The transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes shall be subject to restrictions on transfer comparable to those
set forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also shall require compliance with
either subparagraph (i) or (ii) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a
33
beneficial interest in the same Restricted Global Note in accordance with
the transfer restrictions set forth in the Private Placement Legend;
provided, however, that prior to the expiration of the Restricted Period,
transfers of beneficial interests in the Temporary Regulation S Global Note
may not be made to a U.S. Person or for the account or benefit of a U.S.
Person (other than an Initial Purchaser). Beneficial interests in any
Unrestricted Global Note may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note. No written orders or instructions shall be required to be delivered
to the Registrar to effect the transfers described in this Section
2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.06(b)(i) above, the transferor
of such beneficial interest must deliver to the Registrar either (A) (1) a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial interest in
another Global Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given in accordance with the
Applicable Procedures containing information regarding the Participant's
account to be credited with such increase or (B) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to cause
to be issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given by the
Depositary to the Registrar containing information regarding the Person in
whose name such Definitive Note shall be registered to effect the transfer
or exchange referred to in (1) above; provided that in no event shall
Definitive Notes be issued upon the transfer or exchange of beneficial
interests in the Regulation S Temporary Global Note prior to (x) the
expiration of the Restricted Period and (y) the receipt by the Registrar of
any certificates required pursuant to Rule 903 under the Securities Act.
Upon consummation of an Exchange Offer by the Issuers in accordance with
Section 2.06(f) hereof, the requirements of this Section 2.06(b)(ii) shall
be deemed to have been satisfied upon receipt by the Registrar of the
instructions contained in the Letter of Transmittal delivered by the Holder
of such beneficial interests in the Restricted Global Notes. Upon
satisfaction of all of the requirements for transfer or exchange of
beneficial interests in Global Notes contained in this Indenture and the
Mortgage Notes or otherwise applicable under the Securities Act, the
Mortgage Note Trustee shall adjust the principal amount of the relevant
Global Note(s) pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Temporary Global Note or the
Regulation S Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications and certificates and Opinion of Counsel required by item
(3) thereof, if applicable.
34
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in an Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the
holder of the beneficial interest to be transferred, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
Exchange Mortgage Notes or (3) a Person who is an affiliate (as defined
in Rule 144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
beneficial interest in an Unrestricted Global Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (1)(a) thereof; or
(2) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person
who shall take delivery thereof in the form of a beneficial interest in
an Unrestricted Global Note, a certificate from such holder in the form
of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or
(D) above at a time when an Unrestricted Global Note has not yet been
issued, the Issuers shall issue and, upon receipt of an Authentication
Order in accordance with Section 2.02 hereof, the Mortgage Note Trustee
shall authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the aggregate principal amount of beneficial
interests transferred pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the
form of, a beneficial interest in a Restricted Global Note.
35
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(i) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Restricted
Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note, a certificate from such holder in the form
of Exhibit C hereto, including the certifications in item (2)(a)
thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the certifications
in item (1) thereof;
(C) if such beneficial interest is being transferred to a Non-U.S.
Person in an offshore transaction in accordance with Rule 903 or Rule
904 under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to an
exemption from the registration requirements of the Securities Act in
accordance with Rule 144 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in
item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those listed
in subparagraphs (B) through (D) above, a certificate to the effect set
forth in Exhibit B hereto, including the certifications, certificates
and Opinion of Counsel required by item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred to the Issuers
or any of its Subsidiaries, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(b) thereof;
or
(G) if such beneficial interest is being transferred pursuant to an
effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
the Mortgage Note Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to Section
2.06(h) hereof, and the Issuers shall execute and the Mortgage Note Trustee
shall authenticate and deliver to the Person designated in the instructions
a Definitive Note in the appropriate principal amount. Any Definitive Note
issued in exchange for a beneficial interest in a Restricted Global Note
pursuant to this Section 2.06(c) shall be registered in such name or names
and in such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions from
the Depositary and the Participant or Indirect Participant. The Mortgage
Note Trustee shall deliver such Definitive Notes to the Persons in whose
names such Mortgage Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.06(c)(i)
36
shall bear the Private Placement Legend and shall be subject to all
restrictions on transfer contained therein.
Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a beneficial
interest in the Regulation S Temporary Global Note may not be exchanged for
a Definitive Note or transferred to a Person who takes delivery thereof in
the form of a Definitive Note prior to (x) the expiration of the Restricted
Period and (y) the receipt by the Registrar of any certificates required
pursuant to Rule 903(c)(3)(ii)(B) under the Securities Act, except in the
case of a transfer pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 903 or Rule 904.
(ii) Beneficial Interests in Restricted Global Notes to Unrestricted
Definitive Notes. A holder of a beneficial interest in a Restricted Global
Note may exchange such beneficial interest for an Unrestricted Definitive
Note or may transfer such beneficial interest to a Person who takes
delivery thereof in the form of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the
holder of such beneficial interest, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a Person
who is an affiliate (as defined in Rule 144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Definitive Note that does not bear the Private Placement Legend, a
certificate from such holder in the form of Exhibit C hereto, including
the certifications in item (1)(b) thereof; or
(2) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person
who shall take delivery thereof in the form of a Definitive Note that
does not bear the Private Placement Legend, a certificate from such
holder in the form of Exhibit B hereto, including the certifications in
item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(iii) Beneficial Interests in Unrestricted Global Notes to Unrestricted
Definitive Notes. If any holder of a beneficial interest in an Unrestricted
Global Note proposes to exchange such beneficial interest for a Definitive
Note or to transfer such beneficial interest to a Person who takes delivery
thereof in the form of a Definitive Note, then, upon satisfaction of the
conditions set forth in Section 2.06(b)(ii) hereof, the Mortgage Note
Trustee shall cause the aggregate principal amount of the
37
applicable Global Note to be reduced accordingly pursuant to Section
2.06(h) hereof, and the Issuers shall execute and the Mortgage Note Trustee
shall authenticate and deliver to the Person designated in the instructions
a Definitive Note in the appropriate principal amount. Any Definitive Note
issued in exchange for a beneficial interest pursuant to this Section
2.06(c)(iii) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The Mortgage Note
Trustee shall deliver such Definitive Notes to the Persons in whose names
such Mortgage Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.06(c)(iii)
shall not bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(i) Restricted Definitive Notes to Beneficial Interests in Restricted
Global Notes. If any Holder of a Restricted Definitive Note proposes to
exchange such Mortgage Note for a beneficial interest in a Restricted
Global Note or to transfer such Restricted Definitive Notes to a Person who
takes delivery thereof in the form of a beneficial interest in a Restricted
Global Note, then, upon receipt by the Registrar of the following
documentation:
(A) if the Holder of such Restricted Definitive Note proposes to
exchange such Mortgage Note for a beneficial interest in a Restricted
Global Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2)
thereof;
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those listed
in subparagraphs (B) through (D) above, a certificate to the effect set
forth in Exhibit B hereto, including the certifications, certificates
and Opinion of Counsel required by item (3) thereof, if applicable;
(F) if such Restricted Definitive Note is being transferred to the
Issuers or any of their Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(b)
thereof; or
(G) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(c) thereof,
38
the Mortgage Note Trustee shall cancel the Restricted Definitive Note,
increase or cause to be increased the aggregate principal amount of, in the
case of clause (A) above, the appropriate Restricted Global Note, in the
case of clause (B) above, the 144A Global Note, in the case of clause (C)
above, the Regulation S Global Note, and in all other cases, the IAI Global
Note.
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Mortgage Note for a beneficial interest in an Unrestricted
Global Note or transfer such Restricted Definitive Note to a Person who
takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the
Holder, in the case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal that it is
not (1) a broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as defined
in Rule 144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to
exchange such Mortgage Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item (1)(c) thereof;
or
(2) if the Holder of such Definitive Notes proposes to
transfer such Mortgage Notes to a Person who shall take delivery
thereof in the form of a beneficial interest in the Unrestricted Global
Note, a certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(ii), the Mortgage Note Trustee shall cancel the Definitive
Notes and increase or cause to be increased the aggregate principal amount
of the Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Mortgage Note for a beneficial interest in an Unrestricted
Global Note or transfer such Definitive Notes to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note at any time. Upon receipt of a request for such an exchange or
transfer, the Mortgage Note Trustee shall cancel the applicable
Unrestricted Definitive Note and increase or cause to be increased the
aggregate principal amount of one of the Unrestricted Global Notes.
39
If any such exchange or transfer from a Definitive Note to a beneficial
interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above
at a time when an Unrestricted Global Note has not yet been issued, the Issuers
shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Mortgage Note Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(i) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Note may be transferred to and registered in the name
of Persons who take delivery thereof in the form of a Restricted Definitive
Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (1)
thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule 904,
then the transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof; and
(C) if the transfer will be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive Notes. Any
Restricted Definitive Note may be exchanged by the Holder thereof for an
Unrestricted Definitive Note or transferred to a Person or Persons who take
delivery thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the
Holder, in the case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal that it is
not (1) a broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as defined
in Rule 144) of the Issuers;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
40
(1) if the Holder of such Restricted Definitive Notes proposes
to exchange such Mortgage Notes for an Unrestricted Definitive Note, a
certificate from such Holder in the form of Exhibit C hereto, including
the certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive Notes proposes
to transfer such Mortgage Notes to a Person who shall take delivery
thereof in the form of an Unrestricted Definitive Note, a certificate
from such Holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Issuers to the effect that such exchange or transfer
is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A
Holder of Unrestricted Definitive Notes may transfer such Mortgage Notes to
a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request to register such a transfer, the
Registrar shall register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Issuers shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02, the
Mortgage Note Trustee shall authenticate (i) one or more Unrestricted Global
Notes in an aggregate principal amount equal to the principal amount of the
beneficial interests in the Restricted Global Notes tendered for acceptance by
Persons that certify in the applicable Letters of Transmittal that (x) they are
not broker-dealers, (y) they are not participating in a distribution of the
Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of the
Issuers, and accepted for exchange in the Exchange Offer and (ii) Definitive
Notes in an aggregate principal amount equal to the principal amount of the
Restricted Definitive Notes accepted for exchange in the Exchange Offer.
Concurrently with the issuance of such Mortgage Notes, the Mortgage Note Trustee
shall cause the aggregate principal amount of the applicable Restricted Global
Notes to be reduced accordingly, and the Issuers shall execute and the Mortgage
Note Trustee shall authenticate and deliver to the Persons designated by the
Holders of Definitive Notes so accepted Definitive Notes in the appropriate
principal amount.
(g) Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global Note
and each Definitive Note (and all Notes issued in exchange therefor or
substitution thereof) shall bear the legend in substantially the
following form:
"THE MORTGAGE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A
41
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (2) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE
903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) TO AN
INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE SECURITIES ACT, (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT (INCLUDING RULE 144 THEREUNDER (IF AVAILABLE)),
(5) TO LAS VEGAS SANDS, INC. OR VENETIAN CASINO RESORT, LLC, OR (6)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
AND (B) IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF THE STATES OF THE
UNITED STATES AND OTHER JURISDICTIONS."
(B) Notwithstanding the foregoing, any Global Note or Definitive
Note issued pursuant to subparagraphs (b)(iv), (c)(ii), (c)(iii),
(d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2.06 (and
all Mortgage Notes issued in exchange therefor or substitution thereof)
shall not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS MORTGAGE NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF
THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER
ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS
HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II)
THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO
SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED
TO THE MORTGAGE NOTE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF
THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS."
(iii) Regulation S Temporary Global Note Legend. The Regulation S
Temporary Global Note shall bear a legend in substantially the following
form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES, ARE
AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR
THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE
ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
cancelled in whole and not in part, each such Global Note shall be returned to
or retained and cancelled by the Mortgage Note Trustee in accordance with
Section 2.11 hereof. At any time prior to such cancellation, if any beneficial
interest in a Global Note is exchanged for or transferred to a Person who will
take delivery thereof in the form of a beneficial interest in another
42
Global Note or for Definitive Notes, the principal amount of Notes represented
by such Global Note shall be reduced accordingly and an endorsement shall be
made on such Global Note by the Mortgage Note Trustee or by the Depositary at
the direction of the Mortgage Note Trustee to reflect such reduction; and if the
beneficial interest is being exchanged for or transferred to a Person who will
take delivery thereof in the form of a beneficial interest in another Global
Note, such other Global Note shall be increased accordingly and an endorsement
shall be made on such Global Note by the Mortgage Note Trustee or by the
Depositary at the direction of the Mortgage Note Trustee to reflect such
increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Issuers
shall execute and the Mortgage Note Trustee shall authenticate Global Notes
and Definitive Notes upon the Issuers' order or at the Registrar's request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Issuers may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.06, 3.09, 4.10, 4.11, 4.16 and 9.05 hereof).
(iii) The Registrar shall not be required to register the transfer of
or exchange any Mortgage Note selected for redemption in whole or in part,
except the unredeemed portion of any Mortgage Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any registration
of transfer or exchange of Global Notes or Definitive Notes shall be the
valid obligations of the Issuers, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Global Notes or Definitive
Notes surrendered upon such registration of transfer or exchange.
(v) The Issuers shall not be required (A) to issue, to register the
transfer of or to exchange any Mortgage Notes during a period beginning at
the opening of business 15 days before the day of any selection of Notes
for redemption under Section 3.02 hereof and ending at the close of
business on the day of selection, (B) to register the transfer of or to
exchange any Mortgage Note so selected for redemption in whole or in part,
except the unredeemed portion of any Mortgage Note being redeemed in part
or (C) to register the transfer of or to exchange a Mortgage Note between a
record date and the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer of any
Mortgage Note, the Mortgage Note Trustee, any Agent and the Issuers may
deem and treat the Person in whose name any Mortgage Note is registered as
the absolute owner of such Mortgage Note for the purpose of receiving
payment of principal of and interest on such Mortgage Notes and for all
other purposes, and none of the Mortgage Note Trustee, any Agent or the
Issuers shall be affected by notice to the contrary.
(vii) The Mortgage Note Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a registration of transfer or exchange may be submitted by
facsimile.
43
SECTION 2.07. REPLACEMENT MORTGAGE NOTES.
If any mutilated Mortgage Note is surrendered to the Mortgage Note
Trustee or the Issuers and the Mortgage Note Trustee receives evidence to its
satisfaction of the destruction, loss or theft of any Mortgage Note, the Issuers
shall issue and the Mortgage Note Trustee, upon receipt of an Authentication
Order, shall authenticate a replacement Note if the Mortgage Note Trustee's
requirements are met. If required by the Mortgage Note Trustee or the Issuers,
an indemnity bond must be supplied by the Holder that is sufficient in the
judgment of the Mortgage Note Trustee and the Issuers to protect the Issuers,
the Mortgage Note Trustee, any Agent and any authenticating agent from any loss
that any of them may suffer if a Mortgage Note is replaced. The Issuers may
charge for their expenses in replacing a Mortgage Note.
Every replacement Mortgage Note is an additional obligation of the
Issuers and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Mortgage Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING MORTGAGE NOTES.
The Mortgage Notes outstanding at any time are all the Mortgage Notes
authenticated by the Mortgage Note Trustee except for (i) those cancelled by it,
(ii) those delivered to it for cancellation, (iii) those reductions in the
interest in a Global Note effected by the Mortgage Note Trustee in accordance
with the provisions hereof, and (iv) those described in this Section as not
outstanding. Except as set forth in Section 2.09 hereof, a Mortgage Note does
not cease to be outstanding because the Issuer or an Affiliate of the Issuer
holds the Mortgage Note; however, Notes held by the Issuers or a Subsidiary of
the Issuers shall not be deemed to be outstanding for purposes of Section
3.07(b) hereof.
If a Mortgage Note is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Mortgage Note Trustee receives proof
satisfactory to it that the replaced Mortgage Note is held by a bona fide
purchaser.
If the principal amount of any Mortgage Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Issuers, a Subsidiary or an
Affiliate of any of the foregoing) holds, on a redemption date or maturity date,
money sufficient to pay Mortgage Notes payable on that date, then on and after
that date such Mortgage Notes shall be deemed to be no longer outstanding and
shall cease to accrue interest.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Mortgage Notes have concurred in any direction, waiver or consent, Mortgage
Notes owned by the Issuers, or by any Person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Issuers,
shall be considered as though not outstanding, except that for the purposes of
determining whether the Mortgage Note Trustee shall be protected in relying on
any such direction, waiver or consent, only Mortgage Notes that the Mortgage
Note Trustee knows are so owned shall be so disregarded.
44
SECTION 2.10. TEMPORARY NOTES.
Until certificates representing Mortgage Notes are ready for delivery,
the Issuers may prepare and the Mortgage Note Trustee, upon receipt of an
Authentication Order, shall authenticate temporary Mortgage Notes. Temporary
Mortgage Notes shall be substantially in the form of certificated Mortgage Notes
but may have variations that the Issuers consider appropriate for temporary
Mortgage Notes and as shall be reasonably acceptable to the Mortgage Note
Trustee. Without unreasonable delay, the Issuers shall prepare and the Mortgage
Note Trustee shall authenticate definitive Mortgage Notes in exchange for
temporary Mortgage Notes.
Holders of temporary Mortgage Notes shall be entitled to all of the
benefits of this Indenture.
SECTION 2.11. CANCELLATION.
The Issuers at any time may deliver Mortgage Notes to the Mortgage Note
Trustee for cancellation. The Registrar and Paying Agent shall forward to the
Mortgage Note Trustee any Mortgage Notes surrendered to them for registration of
transfer, exchange or payment. The Mortgage Note Trustee and no one else shall
cancel all Mortgage Notes surrendered for registration of transfer, exchange,
payment, replacement or cancellation and shall destroy cancelled Mortgage Notes
(subject to the record retention requirement of the Exchange Act). Certification
of the destruction of all cancelled Mortgage Notes shall be delivered to the
Issuers. The Issuers may not issue new Mortgage Notes to replace Mortgage Notes
that they have paid or that have been delivered to the Mortgage Note Trustee for
cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Issuers default in a payment of interest on the Mortgage Notes,
they shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Mortgage Notes and in Section 4.01 hereof. The Issuers shall notify the
Mortgage Note Trustee in writing of the amount of defaulted interest proposed to
be paid on each Mortgage Note and the date of the proposed payment. The Issuers
shall fix or cause to be fixed each such special record date and payment date;
provided that no such special record date shall be less than 10 days prior to
the related payment date for such defaulted interest. At least 15 days before
the special record date, the Issuers (or, upon the written request of the
Issuers, the Mortgage Note Trustee in the name and at the expense of the
Issuers) shall mail or cause to be mailed to Holders a notice that states the
special record date, the related payment date and the amount of such interest to
be paid.
ARTICLE 3
OFFERS TO PURCHASE OR REDEMPTION
SECTION 3.01. NOTICES TO MORTGAGE NOTE TRUSTEE.
If the Issuers elect to redeem Mortgage Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, they shall furnish to the Mortgage
Note Trustee, at least 45 days (or such shorter period as may be acceptable to
the Mortgage Note Trustee) but not more than 60 days before a redemption date,
an Officers' Certificate setting forth (i) the Section of this Indenture
pursuant to which
45
the redemption shall occur, (ii) the redemption date, (iii) the principal amount
of Mortgage Notes to be redeemed and (iv) the redemption price.
If the Issuers are required to make an offer to purchase Mortgage Notes
pursuant to the provisions of Section 4.10, 4.11 or 4.16 they shall furnish to
the Mortgage Note Trustee, at least 45 days (or such shorter period as may be
acceptable to the Mortgage Note Trustee) but not more than 60 days before the
scheduled purchase date, an Officers' Certificate setting forth (i) the Section
of this Indenture pursuant to which the offer to purchase shall occur, (ii) the
offer's terms, (iii) the purchase price, (iv) the principal amount of the
Mortgage Notes to be purchased, and (v) further setting forth a statement to the
effect that (a) one of the Issuers or one of their Restricted Subsidiaries has
made an Asset Sale and there are Excess Proceeds aggregating more than $10.0
million, (b) the Issuers or one of their Restricted Subsidiaries has suffered an
Event of Loss and there are Excess Loss Proceeds aggregating more than $10.0
million or (c) a Change of Control has occurred, as applicable.
SECTION 3.02. SELECTION OF MORTGAGE NOTES TO BE PURCHASED OR REDEEMED.
If less than all of the Mortgage Notes are to be purchased in an Asset
Sale Offer or Event of Loss Offer, or redeemed at any time, the Mortgage Note
Trustee shall select the Mortgage Notes to be purchased or redeemed among the
Holders of the Mortgage Notes in compliance with the requirements of the
principal national securities exchange, if any, on which the Mortgage Notes are
listed or, if the Mortgage Notes are not so listed, on a pro rata basis, by lot
or in accordance with any other method the Mortgage Note Trustee considers fair
and appropriate (and in such manner as complies with applicable law). In the
event of partial purchase or partial redemption in the manner provided above,
the particular Mortgage Notes to be purchased or redeemed shall be selected,
unless otherwise provided herein, not less than 30 nor more than 60 days prior
to the purchase or redemption date by the Mortgage Note Trustee from the
outstanding Mortgage Notes not previously purchased or called for redemption. In
the event that less than all of the Mortgage Notes properly tendered in an Asset
Sale Offer or Event of Loss Offer are to be purchased, the particular Mortgage
Notes to be purchased shall be selected promptly upon the expiration of such
Asset Sale Offer or Event of Loss Offer.
The Mortgage Note Trustee shall promptly notify the Issuers in writing
of the Mortgage Notes selected for purchase or redemption and, in the case of
any Mortgage Note selected for partial purchase or redemption, the principal
amount thereof to be purchased or redeemed. Mortgage Notes and portions of
Mortgage Notes selected shall be in amounts of $1,000 or whole multiples of
$1,000; except that if all of the Mortgage Notes of a Holder are to be purchased
or redeemed, the entire outstanding amount of Mortgage Notes held by such
Holder, even if not a multiple of $1,000, shall be purchased or redeemed. Except
as provided in the preceding sentence, provisions of this Indenture that apply
to Mortgage Notes purchased or called for redemption also apply to portions of
Mortgage Notes purchased or called for redemption.
In the event the Issuers are required to make an Asset Sale Offer or an
Event of Loss Offer pursuant to Section 4.10 or 4.11 hereof, respectively, and
the amount of Excess Proceeds or Excess Loss Proceeds, as the case may be, to be
applied to such purchase would result in the purchase of a principal amount of
Mortgage Notes which is not evenly divisible by $1,000, the Mortgage Note
Trustee shall promptly refund to the Issuers the amount of Excess Proceeds or
Excess Loss Proceeds, as the case may be, that is not necessary to purchase the
immediately lesser principal amount of Mortgage Notes that is so divisible.
46
SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.10 hereof, at least 30 days but
not more than 60 days before a redemption date, the Issuers shall mail or cause
to be mailed, by first class mail, a notice of redemption to each Holder whose
Mortgage Notes are to be redeemed at its registered address.
The notice shall identify the Mortgage Notes to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Mortgage Note is being redeemed in part, the portion of the
principal amount of such Mortgage Note to be redeemed and that, after the
redemption date upon surrender of such Mortgage Note, a new Mortgage Note
or Mortgage Notes in principal amount equal to the unredeemed portion shall
be issued upon cancellation of the original Mortgage Note;
(d) the name and address of the Paying Agent;
(e) that Mortgage Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(f) that, unless the Issuers defaults in making such redemption
payment, interest on Mortgage Notes called for redemption ceases to accrue
on and after the redemption date;
(g) the paragraph of the Mortgage Notes and/or Section of this
Indenture pursuant to which the Mortgage Notes called for redemption are
being redeemed; and
(h) that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the Mortgage
Notes.
At the Issuers' request, the Mortgage Note Trustee shall give the
notice of redemption in the Issuers' name and at its expense; provided, however,
that the Issuers shall have delivered to the Mortgage Note Trustee, at least 45
days (or such shorter period as may be acceptable to the Mortgage Note Trustee)
than 60 days prior to the redemption date, an Officers' Certificate requesting
that the Mortgage Note Trustee give such notice and setting forth the
information to be stated in such notice as provided in the preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Mortgage Notes called for redemption become irrevocably due and payable
on the redemption date at the redemption price. A notice of redemption may not
be conditional.
SECTION 3.05. DEPOSIT OF PURCHASE OR REDEMPTION PRICE.
On or prior to any purchase date with respect to an offer to purchase
the Mortgage Notes required hereunder or any redemption date, the Issuers shall
deposit with the Mortgage Note Trustee or with the Paying Agent money sufficient
to pay the purchase or redemption price of, and accrued and unpaid interest and
Liquidated Damages, if any, on all Mortgage Notes to be purchased or redeemed on
that date. The Mortgage Note Trustee or the Paying Agent shall promptly return
to the Issuers any money deposited with the Mortgage Note Trustee or the Paying
Agent by the Issuers in excess of the
47
amounts necessary to pay the purchase or redemption price of, and accrued and
unpaid interest and Liquidated Damages, if any, on, all Mortgage Notes to be
purchased or redeemed.
If the Issuers comply with the provisions of the preceding paragraph,
on and after the purchase or redemption date, interest shall cease to accrue on
the Mortgage Notes or the portions of Mortgage Notes purchased or called for
redemption. If a Mortgage Note is purchased or redeemed on or after an interest
record date but on or prior to the related interest payment date, then any
accrued and unpaid interest and Liquidated Damages shall be paid to the Person
in whose name such Mortgage Note was registered at the close of business on such
record date. If any Mortgage Note tendered for purchase or called for redemption
shall not be so paid upon surrender for such tender or redemption because of the
failure of the Issuers to comply with the preceding paragraph, interest shall be
paid on the unpaid principal, from the purchase or 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 Mortgage Notes and in
Section 4.01 hereof.
SECTION 3.06. MORTGAGE NOTES PURCHASED OR REDEEMED IN PART.
Upon surrender of a Mortgage Note that is purchased or redeemed in
part, the Issuers shall issue and, upon the Issuers' written request, the
Mortgage Note Trustee shall authenticate for the Holder at the expense of the
Issuers a new Mortgage Note equal in principal amount to the unpurchased or
unredeemed portion of the Mortgage Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) On or after November 15, 2001, the Mortgage Notes shall be
redeemable at the option of the Issuers, in whole or in part, upon not less than
30 nor more than 60 days' notice, at the redemption prices (expressed as
percentages of principal amount) set forth below, plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to the applicable redemption
date, if redeemed during the twelve-month period beginning on November 15 of the
years indicated below:
Percentage
of Principal
Year Amount
---- ------
2001................................................ 106.125%
2002................................................ 103.063%
2003 and thereafter................................. 100.000%
(b) On or prior to November 15, 2000, the Issuers may on any one or
more occasions redeem up to 35% of the aggregate principal amount of Mortgage
Notes originally issued at a redemption price of 112.25% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
thereon, to the redemption date, with the proceeds from one or more Redemption
Triggering Events; provided that at least 65% of the aggregate principal amount
of Mortgage Notes originally issued remain outstanding immediately after the
occurrence of such redemption; and provided, further, that (i) such redemption
shall occur within 60 days of the date of such Redemption Triggering Event and
(ii) Mortgage Notes held by the Issuers and not cancelled will not be deemed to
be outstanding for purposes of calculating the aggregate principal amount of
Mortgage Notes outstanding after the occurrence of such redemption.
48
(c) At any time prior to November 15, 2001, the Issuers may, at their
option, redeem the Mortgage Notes, in whole or in part, at a redemption price
equal to 100% of the principal amount thereof plus the applicable Mortgage Note
Make-Whole Premium, plus, to the extent not included in the Mortgage Note
Make-Whole Premium, accrued and unpaid interest and Liquidated Damages, if any,
to the date of redemption.
(d) Any redemption pursuant to this Section 3.07 shall be made pursuant
to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. REDEMPTION PURSUANT TO GAMING LAW.
(a) Notwithstanding any other provisions of this Article 3, if any
Gaming Authority requires that a Holder or beneficial owner of the Mortgage
Notes must be licensed, qualified or found suitable under any applicable gaming
laws in order to maintain any gaming license or franchise of the Issuers or any
Restricted Subsidiary under any applicable gaming laws, and the Holder or
beneficial owner fails to apply for a license, qualification or finding of
suitability within 30 days after being requested to do so by such Gaming
Authority (or such lesser period that may be required by such Gaming Authority)
or if such Holder or beneficial owner is not so licensed, qualified or found
suitable, the Issuers shall have the right, at their option, (i) to require such
Holder or beneficial owner to dispose of such Holder's or beneficial owner's
Mortgage Notes within 30 days of receipt of such finding by the applicable
Gaming Authority (or such earlier date as may be required by the applicable
Gaming Authority) or (ii) to call for redemption of the Mortgage Notes of such
Holder or beneficial owner at a redemption price equal to the lesser of the
principal amount thereof or the price at which such Holder or beneficial owner
acquired the Mortgage Notes, together with, in either case, accrued and unpaid
interest and Liquidated Damages, if any, to the earlier of the date of
redemption or, the date of the finding of unsuitability by such Gaming
Authority, which may be less than 30 days following the notice of redemption if
so ordered by such Gaming Authority.
(b) In connection with any redemption pursuant to this Section 3.08, and
except as may be required by a Gaming Authority, the Issuers shall be required
to comply with Sections 3.01 through 3.06 hereof.
(c) The Issuers shall not be required to pay or reimburse any Holder or
beneficial owner of Mortgage Notes who is required to apply for any such
license, qualification or finding of suitability for the costs of the licensure
or investigation for such qualification or finding of suitability. Such expenses
shall be the obligation of such Holder or beneficial owner.
SECTION 3.09. MANDATORY REDEMPTION.
The Issuers shall not be required to make mandatory redemption or
sinking fund payments prior to maturity with respect to the Mortgage Notes.
SECTION 3.10. REPURCHASE OFFERS.
In the event that, pursuant to Section 4.10, 4.11 or 4.16 hereof, the
Issuers shall be required to commence an offer to all Holders to purchase
Mortgage Notes (a "Repurchase Offer"), it shall follow the procedures specified
below.
The Repurchase Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Offer Period"). No later than five
Business Days after the termination of the Offer Period (the
49
"Purchase Date"), the Issuers shall purchase at the Purchase Price (as
determined in accordance with Section 4.10, 4.11 or 4.16 hereof, as the case may
be) the principal amount of Mortgage Notes required to be purchased pursuant to
Section 4.10, 4.11 or 4.16 hereof, as the case may be (the "Offer Amount"), or,
if less than the Offer Amount has been tendered, all Mortgage Notes tendered in
response to the Repurchase Offer. Payment for any Mortgage Notes so purchased
shall be made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest and
Liquidated Damages, if any, shall be paid to the Person in whose name a Mortgage
Note is registered at the close of business on such record date, and no
additional interest shall be payable to Holders who tender Mortgage Notes
pursuant to the Repurchase Offer.
Upon the commencement of a Repurchase Offer, the Issuers shall send, by
first class mail, a notice to the Mortgage Note Trustee and each of the Holders.
The notice shall contain all instructions and materials necessary to enable such
Holders to tender Mortgage Notes pursuant to the Repurchase Offer. The
Repurchase Offer shall be made to all Holders. The notice, which shall govern
the terms of the Repurchase Offer, shall state:
(a) that the Repurchase Offer is being made pursuant to this
Section 3.10 and Section 4.10, 4.11 or 4.16 hereof, as the case may be, and
the length of time the Repurchase Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Mortgage Note not tendered or accepted for payment
shall continue to accrue interest and Liquidated Damages, if any;
(d) that, unless the Issuers default in making such payment, any
Mortgage Note accepted for payment pursuant to the Repurchase Offer shall
cease to accrue interest and Liquidated Damages, if any, after the Purchase
Date;
(e) that Holders electing to have a Mortgage Note purchased
pursuant to any Repurchase Offer shall be required to surrender the
Mortgage Note, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Mortgage Note completed, to the Issuers, a
depositary, if appointed by the Issuers, or a Paying Agent at the address
specified in the notice at least three Business Days before the Purchase
Date;
(f) that Holders shall be entitled to withdraw their election if
the Issuers, the depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Mortgage Note the Holder delivered for
purchase and a statement that such Holder is withdrawing his election to
have such Mortgage Note purchased; and
(g) that, if the aggregate principal amount of Mortgage Notes
surrendered by Holders exceeds the Offer Amount, the Mortgage Notes shall
be selected for purchase pursuant to the terms of Section 3.02 hereof, and
that Holders whose Mortgage Notes were purchased only in part shall be
issued new Mortgage Notes equal in principal amount to the unpurchased
portion of the Mortgage Notes surrendered.
50
On or before the Purchase Date, the Issuers shall, to the extent
lawful, accept for payment, pursuant to the terms of Section 3.02 hereof, the
Offer Amount of Mortgage Notes or portions thereof tendered pursuant to the
Repurchase Offer, or if less than the Offer Amount has been tendered, all
Mortgage Notes tendered, and shall deliver to the Mortgage Note Trustee an
Officers' Certificate stating that such Mortgage Notes or portions thereof were
accepted for payment by the Issuers in accordance with the terms of this Section
3.10. The Issuers, the Depository or the Paying Agent, as the case may be, shall
promptly (but in any case not later than five days after the Purchase Date) mail
or deliver to each tendering Holder an amount equal to the purchase price of the
Mortgage Notes tendered by such Holder and accepted by the Issuers for purchase,
and the Issuers shall promptly issue a new Mortgage Note, and the Mortgage Note
Trustee, upon written request from the Issuers shall authenticate and mail or
deliver such new Mortgage Note to such Holder, in a principal amount equal to
any unpurchased portion of the Mortgage Note surrendered. Any Mortgage Note not
so accepted shall be promptly mailed or delivered by the Issuers to the Holder
thereof. The Issuers shall publicly announce the results of the Repurchase Offer
on the Purchase Date.
The Issuers shall comply with the requirements of Rule 14e-1 under the
Exchange Act, and any other securities laws and regulations thereunder to the
extent such laws or regulations are applicable in connection with the repurchase
of the Mortgage Notes pursuant to a Repurchase Offer.
Other than as specifically provided in this Section 3.10, any purchase
pursuant to this Section 3.10 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof to the extent applicable.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF MORTGAGE NOTES.
The Issuers shall pay or cause to be paid the principal of, premium, if
any, and interest on the Mortgage Notes on the dates and in the manner provided
in the Mortgage Notes. Principal, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent, if other than the Issuers
or a Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on the due date,
money deposited by the Issuers in immediately available funds and designated for
and sufficient to pay all principal, premium, if any, and interest then due. The
Issuers shall pay all Liquidated Damages, if any, in the same manner on the
dates and in the amounts set forth in the Registration Rights Agreement.
The Issuers shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Mortgage
Notes to the extent lawful; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest (without regard to any applicable grace period) at the same rate to the
extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Issuers shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Mortgage Note Trustee
or an affiliate of the Mortgage Note Trustee, Registrar or co-registrar) where
Mortgage Notes may be surrendered for registration of transfer or for exchange
and where notices and demands to or upon the Issuers or the Mortgage Note
Guarantors
51
in respect of the Mortgage Notes and this Indenture may be served. The Issuers
shall give prompt written notice to the Mortgage Note 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 Mortgage Note Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Mortgage Note Trustee.
The Issuers may also from time to time designate one or more other
offices or agencies where the Mortgage Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Issuers of their obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York for such purposes. The Issuers shall
give prompt written notice to the Mortgage Note 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 Mortgage
Note Trustee as one such office or agency of the Issuers in accordance with
Section 2.03.
SECTION 4.03. REPORTS.
The Company shall file with the Mortgage Note Trustee and provide
Holders of Mortgage Notes, within 15 days after it files them with the SEC,
copies of its annual report and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the SEC may by rule or
regulation prescribe) which the Company is required to file with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act. Notwithstanding that the
Company may not be required to remain subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and
quarterly basis on forms provided for such annual and quarterly reporting
pursuant to rules and regulations promulgated by the SEC, the Company shall
continue to file with the SEC and provide the Mortgage Note Trustee and each
Holder with, without cost to each Holder, (a) within 90 days after the end of
each fiscal year, annual reports on Form 10-K (or any successor form) containing
the information required to be contained therein (or required in such successor
form); (b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year, reports on Form 10-Q (or any successor form); and
(c) promptly from time to time after the occurrence of an event required to be
therein reported, such other reports on Form 8-K (or any successor form)
containing the information required to be contained therein (or required in any
successor form); provided, however, that the Company shall not be so obligated
to file such reports with the SEC if the SEC does not permit such filings.
Notwithstanding the foregoing, if any Person that, directly or indirectly, owns
more than 50% of the common equity of the Company is subject to the periodic
reporting and the informational requirements of the Exchange Act, the Company
shall not be required to file the reports specified in the preceding sentence so
long as it provides annual and quarterly financial statements of the Company
(which will include summarized financial information concerning Venetian) to the
Holders of the Mortgage Notes. The Company shall in all cases, without cost to
each recipient, provide copies of such information to the Holders of the
Mortgage Notes and, if it is not permitted to file such reports with the SEC,
shall make available such information to prospective purchasers and to
securities analysts and broker-dealers upon their request. In addition, the
Company shall, for so long as any Mortgage Notes remain outstanding, furnish to
the Holders of Mortgage Notes and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act. Notwithstanding anything to the
contrary herein, the Trustee shall have no duty to review such document for
purposes of determining compliance with any provisions of this Indenture.
52
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Issuers shall deliver to the Mortgage Note Trustee, within 90
days after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Issuers and their Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers of the Issuers with a view to determining whether the Issuers and each
obligor on the Mortgage Notes and this Indenture is in compliance with this
Indenture and each Collateral Document and further stating, as to each such
Officer signing such certificate, that to the best of his or her knowledge the
Issuers and each such obligor is in compliance with each and every covenant
contained in this Indenture and each Collateral Document and is not in default
in the performance or observance of any of the terms, provisions and conditions
of this Indenture or any Collateral Document (or, if a Default or Event of
Default shall exist, describing all such Defaults or Events of Default of which
he or she may have knowledge and what action the Issuers or such obligor, as the
case may be, is taking or proposes to take with respect thereto) and that to the
best of his or her knowledge no event has occurred that remains in existence by
reason of which payments on account of the principal of or interest, if any, on
the Mortgage Notes is prohibited or if such event exists, a description of the
event and what action the Issuers or such obligor, as the case may be, is taking
or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Issuers' independent public accountants (who shall be a
firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Issuers are in
violation of any provisions of Article 4 or Article 5 hereof or, if any such
violation exists, specifying the nature and period of existence thereof, it
being understood that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of any such
violation.
(c) The Issuers shall, so long as any of the Mortgage Notes are
outstanding, deliver to the Mortgage Note Trustee, within five Business Days
upon any Officer becoming aware of any Default or Event of Default or any event
of default under any document, instrument or agreement representing Indebtedness
of the Issuers, an Officers' Certificate specifying such Default, Event of
Default or event of default and what action the Issuers are taking or propose to
take with respect thereto.
(d) Immediately upon Completion, the Issuers shall deliver promptly to
the Mortgage Note Trustee an Officers' Certificate which shall state that (i)
Completion has been achieved and (ii) the date on which Completion was achieved.
SECTION 4.05. TAXES.
The Issuers shall pay, and shall cause each of their Restricted
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment would not
have any material adverse effect on the Holders of the Mortgage Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
Each of the Issuers and the Mortgage Note Guarantors covenants (to the
extent that it may lawfully do so) that it shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law wherever enacted, now or at any time hereafter
in force, that may affect the covenants or the performance of this Indenture;
and each of the
53
Issuers and the Mortgage Note Guarantors (to the extent that it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it shall not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the Mortgage Note Trustee, but
shall suffer and permit the execution of every such power as though no such law
has been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Issuers will not, and will not permit any of their Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any distribution on account of either of the Issuers' or any of their Restricted
Subsidiaries' Equity Interests (including, without limitation, any payment in
connection with any merger or consolidation involving either of the Issuers) or
to the direct or indirect holders of either of the Issuers' Equity Interests in
their capacity as such (other than (1) dividends or distributions by the Issuers
payable in Equity Interests (other than Disqualified Stock) of the Issuers (or
accretions thereon); or (2) dividends or distributions paid to the Issuers or a
Wholly Owned Restricted Subsidiary of the Issuers); (ii) purchase, redeem or
otherwise acquire or retire for value (including, without limitation, in
connection with any merger or consolidation involving either of the Issuers) any
Equity Interests of the Issuers or any of its Restricted Subsidiaries, or any
other Affiliate of the Issuers (other than any such Equity Interests owned by
the Issuers or any Wholly Owned Restricted Subsidiary of the Issuers); (iii)
make any payment on or with respect to or purchase, redeem, defease or otherwise
acquire or retire for value any Subordinated Indebtedness of the Issuers or any
of their Restricted Subsidiaries (other than, in each case, scheduled interest
and principal payments with respect to any such Subordinated Indebtedness); (iv)
make any payment in respect of repayment or reimbursement of amounts advanced
under any obligation under the Completion Guaranty; or (v) make any Restricted
Investment (all such payments and other actions set forth in clauses (i) through
(v) above being collectively referred to as "Restricted Payments"), unless, at
the time of such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) the Issuers would, after giving pro forma effect to such Restricted
Payment as if such Restricted Payment had been made at the beginning of the
applicable four-quarter period, have been permitted to incur at least $1.00 of
additional Indebtedness pursuant to the first paragraph of Section 4.09 hereof;
and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Issuers and their Restricted Subsidiaries
after the Issuance Date (excluding Restricted Payments permitted by clauses
(ii), (iii), (v), (vi), (vii), (viii), (ix) (but only to the extent necessary
under clause (ix) to pay the fees and expenses of any lenders or agents under
the Tranche A Take-out Commitment), (x), (xiii), (xiv), (xv), (xvii) and (xviii)
of the next succeeding paragraph and including the other Restricted Payments
permitted by the next paragraph), is less than the sum of (X) 50% of (1) the
Consolidated Net Income of the Company for the period (taken as one accounting
period) from the first day after the Project is Completed to the end of the
Company's most recently ended fiscal quarter for which internal financial
statements are available (or, in the case such Consolidated Net Income for such
period is a deficit, minus 100% of such deficit) less (2) the amount paid or to
be paid in respect of such period pursuant to clause (v) of the next following
paragraph to shareholders or members other than the Issuers, plus (Y) without
duplication, 100% of the aggregate net cash proceeds received by the Issuers
since the Issuance Date from capital contributions or the issue or sale of
Equity Interests (other than Disqualified Stock) or debt securities of the
Issuers that have been converted into or exchanged for such Equity Interests of
the Issuers (other than Equity Interests or such debt securities of the Issuers
sold to a Restricted Subsidiary of the Issuers and other than Disqualified Stock
or debt securities that have been
54
converted into or exchanged for Disqualified Stock), plus (Z) to the extent not
otherwise included in the Company's Consolidated Net Income, 100% of the cash
dividends or distributions or the amount of the cash principal and interest
payments received since the Issuance Date by the Issuers or any Restricted
Subsidiary from any Unrestricted Subsidiary or Special Subsidiary or in respect
of any Restricted Investment (other than dividends or distributions to pay
obligations of or with respect to such Unrestricted Subsidiary or Special
Subsidiary such as income taxes) until the entire amount of the Investment in
such Unrestricted Subsidiary or Special Subsidiary has been received or the
entire amount of such Restricted Investment has been returned, as the case may
be, and 50% of such amounts thereafter. In the event that the Issuers convert an
Unrestricted Subsidiary or Special Subsidiary to a Restricted Subsidiary, the
Issuers may add back to this clause (c) the aggregate amount of any Investment
in such Subsidiary that was a Restricted Payment at the time of such Investment.
The foregoing provisions will not prohibit (i) the payment of any
dividend within 60 days after the date of declaration thereof, if at the date of
declaration such payment would have complied with the provisions of this
Indenture; (ii) (a) an Investment in Phase II Subsidiary, Phase II Manager,
Phase II Holdings or any Special Subsidiary or (b) the redemption, repurchase,
retirement or other acquisition of any Equity Interests of the Issuers or any
Restricted Subsidiary, in each case, in exchange for, or out of the proceeds of,
the substantially concurrent sale or issuance (other than to a Restricted
Subsidiary of the Issuers) of Equity Interests of the Issuers (other than any
Disqualified Stock); provided that the amount of any net cash proceeds from the
sale of such Equity Interests shall be excluded from clause (c)(Y) of the
preceding paragraph; (iii) the defeasance, redemption, repurchase, retirement or
other acquisition of any Subordinated Indebtedness of the Issuers or any
Restricted Subsidiary in exchange for, or out of the proceeds of, the
substantially concurrent sale or issuance (other than to a Restricted Subsidiary
of the Issuers) of Subordinated Indebtedness (other than any Subordinated
Indebtedness issued in respect of the Completion Guaranty) of the Issuers or
such Restricted Subsidiary or Equity Interests of the Issuers (other than
Disqualified Stock); provided, however, that (1) the principal amount of such
Subordinated Indebtedness incurred pursuant to this clause (iii) shall not
exceed the principal amount of the Subordinated Indebtedness so redeemed,
repurchased, retired or otherwise acquired (plus the amount of reasonable
expenses incurred and any premium paid in connection therewith), (2) such
Subordinated Indebtedness shall have a Weighted Average Life to Maturity equal
to or greater than the Weighted Average Life to Maturity of the Subordinated
Indebtedness being redeemed, repurchased, retired or otherwise acquired, (3)
such Subordinated Indebtedness shall be subordinate in right of payment to the
Mortgage Notes and any Mortgage Note Guaranty on terms at least as favorable to
the Holders of the Mortgage Notes or the Mortgage Note Guaranties as those
contained in the documentation governing the Subordinated Indebtedness being
redeemed, repurchased, retired or otherwise acquired and (4) the net cash
proceeds from the sale of any Equity Interests issued pursuant to this clause
(iii) shall be excluded from clause (c)(Y) of the preceding paragraph; (iv) any
redemption or purchase by the Issuers or any Restricted Subsidiary of Equity
Interests or Subordinated Indebtedness of either of the Issuers required by a
Gaming Authority in order to preserve a material Gaming License; provided, that
so long as such efforts do not jeopardize any material Gaming License, the
Issuers or such Restricted Subsidiary shall have diligently tried to find a
third-party purchaser for such Equity Interests or Subordinated Indebtedness and
no third-party purchaser acceptable to the applicable Gaming Authority was
willing to purchase such Equity Interests or Subordinated Indebtedness within a
time period acceptable to such Gaming Authority; (v) (a) for so long as the
Company is a corporation under Subchapter S of the Code or a substantially
similarly treated pass-through entity or Venetian is a limited liability company
that is treated as a partnership or a substantially similarly treated
pass-through entity, in each case, for Federal income tax purposes (as evidenced
by an opinion of counsel at least annually), the Issuers may each make cash
distributions to their shareholders or members, during each Quarterly Payment
Period, in an aggregate amount not to exceed the Permitted Quarterly Tax
Distribution in respect of the related Estimation Period, and if any portion of
the Permitted Quarterly Tax Distribution is not distributed during such
Quarterly
55
Payment Period, the Permitted Quarterly Tax Distribution payable during the
immediately following four quarter period shall be increased by such
undistributed portion and (b) distributions by non-Wholly Owned Subsidiaries of
either of the Issuers or any Restricted Subsidiary of the Issuers but only to
the extent required to pay any tax liability of such non-Wholly Owned
Subsidiary; (vi) the transfer of the Mall Collateral to the Mall Subsidiary in
accordance with the Sale and Contribution Agreement and the Disbursement
Agreement and the transfer of 1% managing members interests in Mall Subsidiary
and Mall Holdings to Mall Manager; (vii) the transfer of the Phase II Land to
the Phase II Subsidiary and the transfer of 1% managing members interests in
Phase II Subsidiary and Phase II Holdings to Phase II Manager; (viii)
Investments by the Issuers in Supplier Joint Ventures in an amount not to exceed
$10.0 million in the aggregate; (ix) Investments in any Special Subsidiary in an
amount not to exceed $2.0 million in the aggregate (plus amounts necessary to
fund the fees and expenses of the lenders or agents under the Tranche A Take-out
Commitment), excluding for purposes of this clause (ix) the value of any
Restricted Payments under clauses (ii), (vii) or (xiv); (x) intercompany
payments, including without limitation, debt repayments, between or among the
Issuers and their Wholly Owned Restricted Subsidiaries; (xi) the repurchase of
shares of, or options to purchase, common stock of either of the Issuers from
employees, former employees, directors or former directors of either of the
Issuers (or permitted transferees of such individuals), pursuant to the terms of
the agreements (including employment agreements) or plans (or amendments
thereto), in each case, as in effect on the date of this Indenture and as
approved by the board of directors of the Company under which such individuals
purchase or sell, or are granted the option to purchase or sell, shares of such
common stock (the "Employee Stock Buybacks"); (xii) following an initial Public
Equity Offering, dividends or common stock buybacks in an aggregate amount in
any calendar year not to exceed 6% of the aggregate Net Proceeds received by
either of the Issuers in connection with such initial Public Equity Offering and
any subsequent Public Equity Offering; (xiii) repurchases of Capital Stock of
either of the Issuers deemed to occur upon exercise of stock options if such
Capital Stock represents a portion of the exercise price of such options; (xiv)
cash contributions to a Special Subsidiary which are funded through a
contribution (that does not constitute Disqualified Stock) by the Sole
Stockholder or any of his Affiliates to either of the Issuers and any related
Investment in any Special Subsidiary by either of the Issuers or any Restricted
Subsidiary; provided that the amount of such contributions shall be excluded
from clause (c)(Y) of the proceeding paragraph; (xv) contributions of cash, real
property or other property to the Phase II Subsidiary, Phase II Holdings or
Phase II Manager by the Sole Stockholder or any of his Affiliates through a
contribution (that does not constitute Disqualified Stock) to either of the
Issuers and any related Investment in the Phase II Subsidiary, Phase II Holdings
or Phase II Manager by either of the Issuers or any Restricted Subsidiary;
provided that the amount of such contributions shall be excluded from clause
(c)(Y) of the proceeding paragraph; (xvi) the payment of any Change of Control
Payment (as defined in the Senior Subordinated Note Indenture) and/or the
application of the Excess Proceeds (as defined in the Senior Subordinated Note
Indenture) from any Asset Sale Offer (as defined in the Senior Subordinated Note
Indenture), in each case, to redeem or repurchase Senior Subordinated Notes in
accordance with Section 3.10 of the Senior Subordinated Note Indenture; (xvii)
on the Final Completion Date (as defined in the Disbursement Agreement),
payments on the Completion Guaranty Loan from amounts which are returned to Mall
Construction Subsidiary from funds in the Mall Retainage/Punchlist Account (as
defined in the Disbursement Agreement) in accordance with the Mall Escrow
Agreement (as defined in the Disbursement Agreement); provided that such
payments shall not be greater than all amounts previously deposited into the
Mall Retainage/Punchlist Account from the Guaranty Deposit Account (as defined
in the Disbursement Agreement); (xviii) (a) the repayment of all or a portion of
the Completion Guaranty Loan with Available Funds to the extent permitted by the
terms of the Disbursement Agreement and the Completion Guaranty or, after
Completion, with funds received by the Company as a result of judgments or
settlements of claims under the Project Documents (including insurance policies
and the Construction Management Contract) and (xix) the repayment of the
Substitute Tranche B Loan with the proceeds of the Permitted Construction Loan
Refinancing or the assumption of the Substitute Tranche B Loan by the
56
Mall Subsidiary; provided, that at the time of, and after giving effect to, any
Restricted Payment permitted under clauses (ii) (b) (to the extent that any
Equity Interests are redeemed, retired or acquired from the cash proceeds from
the sale or issuance of Equity Interests), (iii) (to the extent that any
Subordinated Indebtedness is defeased, redeemed, retired, repurchased or
otherwise acquired from the cash proceeds from the sale or issuance of other
Subordinated Indebtedness or Equity Interests), (viii), (ix), (xii), and (xvii),
no Default or Event of Default shall have occurred and be continuing or would
occur as a consequence thereof.
For purposes of determining the amount of Restricted Investments
outstanding at any time, all Restricted Investments shall be valued at their
fair market value at the time made (as determined in good faith by the Company's
Board of Directors), and no adjustments will be made for subsequent changes in
fair market value.
Not later than the date of filing any quarterly or annual report, the
Issuers shall deliver to the Mortgage Note Trustee an Officers' Certificate
stating that each Restricted Payment made in the prior fiscal quarter was
permitted and setting forth the basis upon which the calculations required by
this Section 4.07 were computed, which calculations may be based upon the
Issuers' latest available financial statements.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Issuers shall not, and shall not permit any of their Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or consensual restriction
on the ability of any such Restricted Subsidiary (other than Venetian) to (a)
(i) pay dividends or make any other distributions to the Issuers or any of their
Restricted Subsidiaries (A) on their Capital Stock or (B) with respect to any
other interest or participation in, or measured by, its profits, or (ii) pay any
Indebtedness owed to the Issuers or any of their Restricted Subsidiaries (other
than in respect of the subordination of such Indebtedness to the Mortgage Notes,
the Mortgage Note Guaranties or any other Indebtedness incurred pursuant to the
terms of this Indenture, as the case may be), (b) make loans or advances to the
Issuers or any of their Restricted Subsidiaries or (c) sell, lease, or transfer
any of their properties or assets to the Issuers or any of their Restricted
Subsidiaries, except (in each case) for such encumbrances or restrictions
existing under or by reason of (1) contractual encumbrances or restrictions in
effect on the Issuance Date, (2) the Bank Credit Facility (and any related
security agreements), this Indenture, the Mortgage Notes, the Mall Construction
Loan Facility (and any related security agreements), any Mortgage Note
Guaranties, the Collateral Documents, indebtedness incurred pursuant to clause
(g), (h), (j), (l), (n) or (o) of Section 4.09 hereof and any related security
agreements, (3) the Senior Subordinated Note Indenture, the Senior Subordinated
Notes and the Senior Subordinated Note Guaranties, (4) any instrument governing
Indebtedness or Capital Stock of a Person acquired by the Company or any
Restricted Subsidiary as in effect at the time of such acquisition (except to
the extent such Indebtedness was incurred in connection with or in contemplation
of such acquisition), which encumbrance or restriction is 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, provided that the Consolidated
Cash Flow of such Person is not taken into account in determining whether such
acquisition was permitted by the terms of this Indenture, (5) by reason of
customary non-assignment provisions in leases entered into in the ordinary
course of business and consistent with past practices and any leases permitted
by Section 4.25, (6) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions of the nature discussed in
clause (c) above on the property so acquired, (6) applicable law or any
applicable rule or order of any Gaming Authority, (7) Permitted Liens, (8)
customary restrictions imposed by asset sale or stock purchase agreements
relating to the sale of assets or stock by the Issuers or any Restricted
Subsidiary, or (9) any encumbrances or restrictions
57
imposed by any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings of the contracts,
instruments or obligations referred to in clauses (1) through (8) above,
provided, that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings are, in the
good faith judgment of the Company's Board of Directors, no more restrictive
with respect to such dividend and other payment restrictions than those
contained in the dividend or other payment restrictions prior to such amendment,
modification, restatement, renewal, increase, supplement, refunding, replacement
or refinancing.
SECTION 4.09. LIMITATIONS ON INCURRENCE OF INDEBTEDNESS AND
ISSUANCE OF DISQUALIFIED STOCK.
The Issuers shall not, and shall not permit any of their Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable with respect to (collectively,
"incur" and correlatively, an "incurrence" of) any Indebtedness (including
Acquired Indebtedness) or any shares of Disqualified Stock; provided, however,
that the Issuers and their Restricted Subsidiaries may incur Indebtedness or
issue shares of Disqualified Stock if (i) the Project is Completed and (ii) the
Fixed Charge Coverage Ratio for the Company's most recently ended four full
fiscal quarters for which internal financial statements are available
immediately preceding the date of such incurrence would have been at least 2.0
to 1.0 determined on a pro forma basis (including a pro forma application of the
net proceeds therefrom), as if the additional Indebtedness had been incurred or
the Disqualified Stock had been issued, as the case may be, and application of
proceeds had occurred at the beginning of such four-quarter period.
The foregoing limitations will not apply to:
(a) the incurrence by the Issuers or any of their Restricted
Subsidiaries of Indebtedness under the Bank Credit Facility in an aggregate
principal amount not to exceed at any one time $170.0 million, less (i) the
aggregate amount of all principal repayments and mandatory prepayments (other
than repayments made under a revolving loan facility prior to maturity or in
connection with a refinancing permitted under this Indenture) actually made from
time to time after the date of this Indenture with respect to such Indebtedness,
and (ii) permanent reductions resulting from the application of Asset Sale or
Event of Loss proceeds;
(b) the incurrence by the Issuers or any of their Restricted
Subsidiaries of any Existing Indebtedness;
(c) the incurrence by the Issuers or any of their Restricted
Subsidiaries of Indebtedness represented by the Mortgage Notes, the Mortgage
Note Guaranties, the Senior Subordinated Notes, the Senior Subordinated Note
Guaranties and obligations arising under the Collateral Documents to the extent
that such obligations would constitute Indebtedness;
(d) the incurrence by the Issuers or any of their Restricted
Subsidiaries of Indebtedness (the "Refinancing Indebtedness") issued in exchange
for, or the proceeds of which are used to extend, refinance, renew, replace,
substitute or refund Indebtedness referred to in the first paragraph of this
covenant or in clauses (b), (c), this clause (d), (g), (h), (j) or (l);
provided, however, that (1) the principal amount of such Refinancing
Indebtedness shall not exceed the principal amount of Indebtedness (or, in the
case of Indebtedness with original issue discount, the accreted value of such
Indebtedness) so extended, refinanced, renewed, replaced, substituted or
refunded (plus the amount of reasonable expenses incurred and any premium paid
in connection therewith), (2) if the Indebtedness being extended, refinanced,
renewed, replaced, substituted or refunded is subordinate in right of payment to
the Mortgage Notes, such Refinancing Indebtedness shall be subordinate in right
and priority of payment to the
58
Mortgage Notes and any Mortgage Note Guaranty on terms at least as favorable to
the Holders of Mortgage Notes and the Mortgage Note Guaranties as those
contained in the documentation governing any subordinated Indebtedness being
extended, refinanced, renewed, replaced, substituted or refunded, and (3) the
Refinancing Indebtedness shall have a Weighted Average Life to Maturity equal to
or greater than the Weighted Average Life to Maturity of the Indebtedness being
extended, refinanced, renewed, replaced, substituted or refunded;
(e) intercompany Indebtedness between or among the Issuers, any
Mortgage Note Guarantor and any Wholly Owned Restricted Subsidiary of the
Issuers; provided, however, the obligations to pay principal, interest or other
amounts under such intercompany Indebtedness is subordinated to the payment in
full of the Mortgage Notes and any Mortgage Note Guaranties;
(f) Hedging Obligations that are incurred (1) for the purpose of fixing
or hedging interest rate risk with respect to any floating rate Indebtedness
that is permitted by the terms of this Indenture to be outstanding or (2) for
the purpose of fixing or hedging currency exchange rate risk with respect to any
currency exchanges;
(g) the incurrence by the Issuers or any of their Restricted
Subsidiaries of Indebtedness (which may include Capital Lease Obligations or
purchase money obligations), incurred for the purpose of financing all or any
part of the purchase or lease of personal property or equipment, including the
Specified FF&E, used in the business of the Issuers or such Restricted
Subsidiary, in an aggregate principal amount pursuant to this clause (g)
(including any refinancings thereof pursuant to clause (d) above) not to exceed
$100.0 million (plus accrued interest thereon and the amount of reasonable
expenses incurred and premium paid in connection with any refinancing pursuant
to clause (d) above) outstanding at any time;
(h) the incurrence by the Issuers or any of their Restricted
Subsidiaries of Non-Recourse Financing used to finance the purchase or lease of
personal or real property used in the business of the Issuers or such Restricted
Subsidiary; provided, that (i) such Non-Recourse Financing represents at least
75% of the purchase price of such personal or real property; (ii) the
Indebtedness incurred pursuant to this clause (h) (including any refinancings
thereof pursuant to clause (d) above) shall not exceed $50.0 million (plus the
amount of reasonable expenses incurred and premium paid in connection with any
refinancing pursuant to clause (d) above) outstanding at any time; and (iii) no
such Indebtedness may be incurred pursuant to this clause (h) unless the Project
is Completed and the Company shall have generated at least $10.0 million of
Consolidated Cash Flow in one fiscal quarter;
(i) to the extent that such incurrence does not result in the
incurrence by the Issuers or any of their Restricted Subsidiaries of any
obligation for the payment of borrowed money of others, Indebtedness incurred
solely in respect of performance bonds, completion guarantees, standby letters
of credit or bankers' acceptances; provided, that such Indebtedness was incurred
in the ordinary course of business of the Issuers or any of their Restricted
Subsidiaries and in an aggregate principal amount outstanding under this clause
(i) at any one time of less than $20.0 million;
(j) the incurrence by the Issuers or any of their Restricted
Subsidiaries of Subordinated Indebtedness to the Sole Stockholder pursuant to an
advance under the Completion Guaranty in an aggregate amount not to exceed $25.0
million plus accrued interest thereon; provided that such Subordinated
Indebtedness has a Weighted Average Life to Maturity greater than the Senior
Subordinated Notes and is by its terms subordinated to the Mortgage Notes and
the Senior Subordinated Notes;
59
(k) the incurrence by the Issuers of up to $140.0 million of
Indebtedness represented by the Mall Construction Loan Facility;
(l) the incurrence by the Issuers of Indebtedness represented by the
Substitute Tranche B Loan plus accrued interest thereon; provided that such
Indebtedness has a Weighted Average Life to Maturity at least one day later than
the Senior Subordinated Notes and is by its terms subordinated to the Mortgage
Notes;
(m) the incurrence by the Issuers of unsecured Indebtedness
(subordinated in right of payment to the Senior Subordinated Notes) issued in
connection with the Employee Stock Buybacks permitted under clause (xi) of
Section 4.07 hereof;
(n) the incurrence by the Issuers or any Restricted Subsidiary of
(A)(i) at any time prior to Completion, additional Indebtedness under clause (a)
or (k) in an aggregate amount not to exceed $20.0 million, plus (ii) after a
default under the Disbursement Agreement and at any time prior to Completion,
additional Indebtedness under clause (a) or (k) in an aggregate amount not to
exceed $30.0 million (provided that Indebtedness incurred pursuant to this
clause (n)(A)(ii) is matched, dollar for dollar, by additional equity
investments by the Sole Stockholder or an Affiliate of the Sole Stockholder), in
the case of each of clause (A)(i) and (A)(ii), incurred in accordance with the
Intercreditor Agreement and (B) after Completion, additional Indebtedness in an
aggregate amount at any time outstanding not to exceed $25.0 million (less any
amounts incurred pursuant to clause (n)(A) above that remain outstanding after
Completion);
(o) after Completion, the incurrence by the Issuers or any of their
Restricted Subsidiaries of Indebtedness under any Working Capital Facility in an
aggregate amount at any time outstanding not to exceed $20.0 million;
(p) the incurrence by the Issuers of Indebtedness incurred for the
purpose of financing all or any part of the purchase or lease of gaming
equipment to be used in connection with the casino located at the casino resort
to be owned by Phase II Subsidiary or any casino operated pursuant to an Other
Phase II Agreement in an aggregate amount at any time outstanding not to exceed
$10.0 million; provided, that upon default under such Indebtedness, the lender
under such Indebtedness may seek recourse or payment against the Issuers only
through the return or sale of the property or equipment so purchased or leased
and may not otherwise assert a valid claim for payment on such Indebtedness
against the Issuers or any other property of the Issuers; and
(q) the guaranty by the Issuers or any Restricted Subsidiary of
Indebtedness of the Issuers or a Restricted Subsidiary that was permitted to be
incurred by another provision of this covenant.
The Issuers shall not permit any of their Unrestricted Subsidiaries or
Special Subsidiaries to incur any Indebtedness (including Acquired Indebtedness)
or issue any shares of Disqualified Stock, other than Non-Recourse Indebtedness;
provided, however, that if any such Unrestricted Subsidiary or Special
Subsidiary ceases to remain an Unrestricted Subsidiary or Special Subsidiary,
such event shall be deemed to constitute the incurrence of the Indebtedness in
such Subsidiary by a Restricted Subsidiary.
For purposes of determining compliance with this Section 4.09, in the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Indebtedness permitted in clauses (a) through (q) above or is
entitled to be incurred pursuant to the first paragraph of this Section 4.09,
the Issuers shall, in their sole discretion, classify such item of Indebtedness
in any manner that complies with this Section 4.09 and such item of Indebtedness
will be treated as having been incurred pursuant to only
60
such clause or clauses or pursuant to the first paragraph hereof. Accrual of
interest, the accretion of accreted value or principal and the payment of
interest in the form of additional Indebtedness will not be deemed to be an
incurrence of Indebtedness for purposes of this Section 4.09.
SECTION 4.10. ASSET SALES.
The Issuers shall not, and shall not permit any of their Restricted
Subsidiaries to, consummate an Asset Sale, unless (w) no Default or Event of
Default exists or is continuing immediately prior to or after giving effect to
such Asset Sale, (x) the Issuers, or their Restricted Subsidiaries, as the case
may be, receive consideration at the time of such Asset Sale at least equal to
the fair market value (as determined by the Board of Directors and set forth in
an Officers' Certificate delivered to the Mortgage Note Trustee) of the assets
sold or otherwise disposed of and (y) at least 85% of the consideration therefor
received by either of the Issuers or any Restricted Subsidiary, as the case may
be, is in the form of cash or Cash Equivalents; provided, however, that the
amount of (A) any liabilities (as shown on such Issuers', or such Restricted
Subsidiary's, as the case may be, most recent balance sheet or in the notes
thereto) of the Issuers, or such Restricted Subsidiary, as the case may be
(other than liabilities that are by their terms expressly subordinated to the
Mortgage Notes or any Mortgage Note Guaranty), that are assumed by the
transferee of any such assets and (B) any notes or other obligations received by
the Issuers, or any Restricted Subsidiary, as the case may be, from such
transferee that are converted by the Issuers, or such Restricted Subsidiary, as
the case may be, into cash (to the extent of the cash received) within 20
Business Days following the closing of such Asset Sale, shall be deemed to be
cash only for purposes of satisfying clause (y) of this Section 4.10 and for no
other purpose.
Within 180 days after any such Issuer's or any Restricted Subsidiary's
receipt of the Net Proceeds of any Asset Sale, any such Issuer or such
Restricted Subsidiary may apply the Net Proceeds from such Asset Sale (i) to
permanently reduce Indebtedness under the Bank Credit Facility or other
Indebtedness that is not Subordinated Indebtedness, (ii) in an investment in any
one or more business, capital expenditure or other tangible asset of the Issuers
or any Restricted Subsidiary, in each case, engaged, used or useful in the
Principal Business, or (iii) for working capital purposes in an aggregate amount
not to exceed $20.0 million, in each case, with no concurrent obligation to make
an offer to purchase any Mortgage Notes. Pending the final application of any
such Net Proceeds, such Issuer or such Restricted Subsidiary may temporarily
reduce Indebtedness under the Bank Credit Facility or another revolving credit
facility, if any, or otherwise invest such Net Proceeds in Cash Equivalents
which shall be pledged to the Mortgage Note Trustee or an agent thereof
(including an agent under the Bank Credit Facility) as security for the holders
of Mortgage Notes with the same relative priority with respect to the other
secured creditors as the priority of the Liens securing the asset that is the
subject of the Asset Sale, except (i) such Cash Equivalents shall be pledged to
the Disbursement Agent as security for the Lenders prior to Completion and (ii)
such Cash Equivalents need not be pledged to the Mortgage Note Trustee or an
agent thereof (including an agent under the Bank Credit Facility) to the extent
that the assets subject to such Asset Sale were not subject to Liens securing
the Note Collateral prior to such Asset Sale. Any Net Proceeds from the Asset
Sale that are not invested or used to repay Indebtedness or as working capital
within 180 days of receipt as provided in the first sentence of this paragraph
shall be deemed to constitute "Excess Proceeds." When the aggregate amount of
Excess Proceeds exceeds $10.0 million, the Issuers shall, subject to any
repayment obligations owed to the lenders under the Bank Credit Facility and the
Mall Construction Lender, make an offer to all Holders of Mortgage Notes (an
"Asset Sale Offer") to purchase the maximum principal amount of Mortgage Notes,
that is an integral multiple of $1,000, that may be purchased out of the Excess
Proceeds at an offer price in cash in an amount equal to 101% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
to the date fixed for the closing of such offer, in accordance with the
procedures set forth in Section 3.10 hereof. To the extent that the aggregate
amount of Mortgage Notes tendered pursuant to an Asset
61
Sale Offer is less than the applicable Excess Proceeds, the Issuers may use any
remaining Excess Proceeds for general corporate purposes or to offer to redeem
Senior Subordinated Notes pursuant to the provisions of Section 3.10 of the
Senior Subordinated Note Indenture. If the aggregate amount of Mortgage Notes
surrendered by Holders thereof exceeds the amount of Excess Proceed, the
Mortgage Note Trustee shall select the Mortgage Notes to be purchased in
accordance with Section 3.02 and 3.03 hereof. Upon completion of any such Asset
Sale Offer, the amount of Excess Proceeds shall be deemed reset at zero.
The Issuers or such Restricted Subsidiary shall grant (i) to the
lenders under the Bank Credit Facility a first priority lien and (ii) to the
Mortgage Note Trustee, on behalf of the holders of the Mortgage Notes, a second
priority lien, in each case, on any properties or assets acquired with the Net
Proceeds of any such Asset Sale to the extent that the assets subject to such
Asset Sale were subject to Liens securing the Note Collateral prior to such
Asset Sale. To the extent that any assets subject to an Asset Sale were subject
to Liens securing the Mall Collateral prior to such Asset Sale, the Issuers or
such Restricted Subsidiary shall grant (i) to the Mall Construction Lender a
first priority lien, (ii) to the lenders under the Bank Credit Facility a second
priority lien and (iii) to the Mortgage Note Trustee, on behalf of the Holders
of the Mortgage Notes, a third priority lien, in each case, on any property or
assets acquired with the Net Proceeds of any such Asset Sale.
SECTION 4.11. EVENT OF LOSS.
Upon the occurrence of any Event of Loss with respect to Note
Collateral with a fair market value (or replacement cost, if greater) in excess
of $1.5 million, the Issuers or the affected Restricted Subsidiary, as the case
may be, may apply the Net Loss Proceeds from such Event of Loss to (X) the
rebuilding, repair, replacement or construction of improvements to the Project,
with no concurrent obligation to make any purchase of any Mortgage Notes;
provided that (A) if such Event of Loss occurs prior to Completion, the Issuers
ability to apply such Net Loss Proceeds to rebuild, repair, replace or construct
improvements to the Project shall be subject to the terms of the Disbursement
Agreement and (B) if such Event of Loss occurs on or after Completion, the
Issuers deliver to the Mortgage Note Trustee within 90 days of such Event of
Loss (i) a written opinion from a reputable architect that the Project can be
rebuilt, repaired, replaced, or constructed and Completed within one year of
delivery of such opinion (or if later, the Outside Completion Date)
substantially in the condition prior to such Event of Loss and (ii) an Officers'
Certificate certifying that the Issuers have available from Net Loss Proceeds,
cash on hand or available borrowings under Indebtedness permitted to be incurred
pursuant to Section 4.09 hereof to complete such rebuilding, repair, replacement
or construction, (Y) permanently reduce Indebtedness or commitments under the
Bank Credit Facility or other Indebtedness that is not Subordinated Indebtedness
or (Z) for working capital purposes in an aggregate amount not to exceed $20.0
million, in each case, with no concurrent obligation to make an offer to
purchase Mortgage Notes. Pending the final application of any such Net Loss
Proceeds, the Issuers or the applicable Restricted Subsidiary, as the case may
be, may temporarily reduce Indebtedness under the Bank Credit Facility or
another revolving credit facility, if any, or otherwise invest such Net Loss
Proceeds in Cash Equivalents which shall be pledged to the Mortgage Note Trustee
or an agent thereof (including the agent under the Bank Credit Facility) as
security for the Holders of Mortgage Notes with the same relative priority with
respect to the other secured creditors as the priority of the Liens securing the
asset that is the subject of the Event of Loss, except (i) such Cash Equivalents
shall be pledged to the Disbursement Agent as security for the lenders prior to
Completion and (ii) after Completion, such Cash Equivalents need not be pledged
to the Mortgage Note Trustee or an agent thereof (including the agent under the
Bank Credit Facility) to the extent that the assets subject to such Event of
Loss were not subject to Liens securing the Note Collateral prior to such Event
of Loss. Any Net Loss Proceeds from an Event of Loss that are not reinvested or
62
used to repay Indebtedness or as working capital as provide in the first
sentence of this paragraph will be deemed to constitute "Excess Loss Proceeds."
When the aggregate amount of Excess Loss Proceeds exceeds $10.0 million, the
Issuers shall, subject to any repayment obligations owed to the lenders under
the Bank Credit Facility and Mall Construction Lender, make an offer to all
holders of Mortgage Notes (an "Event of Loss Offer") to purchase the maximum
principal amount of Mortgage Notes, that is an integral multiple of $1,000, that
may be purchased out of the Excess Loss Proceeds at an offer price in cash in an
amount equal to 100% of the principal amount thereof, plus accrued and unpaid
interest and Liquidated Damages, if any, to the date fixed for the closing of
such offer, in accordance with the procedures set forth in Section 3.10 hereof.
To the extent that the aggregate amount of Mortgage Notes tendered pursuant to
an Event of Loss Offer is less than the applicable Excess Loss Proceeds, the
Issuers may use any remaining Excess Loss Proceeds for general corporate
purposes or to offer to redeem Senior Subordinated Notes pursuant to Section
3.10 of the Senior Subordinated Note Indenture. If the aggregate principal
amount of Mortgage Notes surrendered by Holders thereof exceeds the amount of
Excess Loss Proceeds, the Mortgage Note Trustee shall select the Mortgage Notes
to be purchased in accordance with Sections 3.02 and 3.03 hereof. Upon
completion of any such Event of Loss Offer, the amount of Excess Loss Proceeds
shall be reset at zero.
The Issuers or such Restricted Subsidiary shall grant (i) to the
lenders under the Bank Credit Facility a first priority lien and (ii) to the
Mortgage Note Trustee, on behalf of the holders of the Mortgage Notes, a second
priority Lien, in each case, on any properties or assets rebuilt, repaired or
constructed with such Net Loss Proceeds to, the extent that the assets subject
to the Event of Loss were subject to Liens securing the Note Collateral prior to
such Event of Loss. If the Event of Loss occurred prior to Completion, then to
the extent that any assets subject to an Event of Loss were subject to liens
securing the Mall Collateral prior to such Event of Loss, this Indenture will
also require the Issuers or the applicable Restricted Subsidiary to grant (i) to
the Mall Construction Lender a first priority lien, (ii) to the lenders under
the Bank Credit Facility a second priority lien and (iii) to the Mortgage Note
Trustee, on behalf of the Holders of the Mortgage Notes, a third priority Lien,
in each case on any property or assets rebuilt, repaired or constructed with the
Net Loss Proceeds of any such Event of Loss.
SECTION 4.12. TRANSACTIONS WITH AFFILIATES.
The Issuers shall not, and shall not permit any of their Restricted
Subsidiaries or Special Subsidiaries to, 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"), unless (a) such Affiliate Transaction is on terms
that are no less favorable to the Company or the relevant Restricted Subsidiary
or Special Subsidiary than those that would have been obtained in a comparable
transaction by the Company or such Restricted Subsidiary or Special Subsidiary
with an unrelated Person and (b) the Company delivers to the Mortgage Note
Trustee (i) with respect to any Affiliate Transaction involving aggregate
payments in excess of (A) $500,000, an Officers' Certificate certifying that
such Affiliate Transaction complies with clause (a) above, or (B) $1.0 million,
a resolution adopted by a majority of the disinterested non-employee directors
of the Board of Directors approving such Affiliate Transaction and set forth in
an Officers' Certificate certifying that such Affiliate Transaction complies
with clause (a) above and (ii) with respect to any Affiliate Transaction that is
a loan transaction involving a principal amount in excess of $10.0 million or
any other type of Affiliate Transaction involving aggregate payments in excess
of $10.0 million, an opinion as to the fairness to the Company or such
Restricted Subsidiary or Special Subsidiary from a financial point of view
issued by an Independent Financial Advisor. The foregoing provisions shall not
apply to the following: (f) rental payments from Mall Subsidiary to Venetian
under the Billboard Lease, as in effect on the date of this Indenture; (g) the
lease agreement relating to a restaurant to be operated by ▇▇▇▇▇▇▇▇ ▇▇▇▇ and
currently contemplated to
63
be known as "Oba Chine" on terms that are no less favorable to the Company or
the relevant Restricted Subsidiary or Special Subsidiary than those that would
have been obtained with an unrelated Person; (h) the Services Agreement, as in
effect on the date of this Indenture; (i) the Other Phase II Agreements on terms
that are no less favorable to the Company or the relevant Restricted Subsidiary
or Special Subsidiary than those that would have been obtained with an unrelated
Person; (j) purchases of materials or services from a Joint Venture Supplier by
the Issuers or any of their Restricted Subsidiaries or Special Subsidiaries in
the ordinary course of business on arm's length terms; (k) any employment,
indemnification, noncompetition or confidentiality agreement entered into by
either of the Issuers or any of their Restricted Subsidiaries or Special
Subsidiaries with their employees or directors in the ordinary course of
business (other than an employment agreement with the Sole Stockholder); (l)
loans or advances to employees of the Issuers or their Restricted Subsidiaries
or Special Subsidiaries (i) to fund the exercise price of options granted under
employment agreements or the Issuers' stock option plans, in each case, as in
effect on the date of this Indenture or (ii) for any other purpose not to exceed
$2.0 million in the aggregate outstanding at any one time under this clause
(ii); (m) the payment of reasonable fees to directors of the Issuers and their
Restricted Subsidiaries and Special Subsidiaries who are not employees of the
Issuers or their Restricted Subsidiaries or Special Subsidiaries; (n) the grant
of stock options or similar rights to employees and directors of either of the
Issuers pursuant to agreements or plans approved by the Board of Directors of
the Company or the managing member of Venetian and any repurchases of stock
options of the Issuers from such employees to the extent provided for in such
plans or agreements or permitted under clause (xi) of Section 4.07 hereof; (o)
transactions between or among the Issuers and/or any of their Restricted
Subsidiaries or transactions between or among the Special Subsidiaries and/or
any Wholly-Owned Subsidiary of Special Subsidiaries; (p) with respect to the
Issuers and any Restricted Subsidiary, Restricted Payments permitted under
Section 4.07 hereof and with respect to any Special Subsidiary, Special
Subsidiary Restricted Payments permitted under Section 4.27; (q) purchases of
Equity Interests of the Issuers (other than Disqualified Stock) by any
stockholder or member of the Issuers (or an Affiliate of a stockholder or member
of the Issuers); (r) the Completion Guaranty and related Completion Guaranty
Loan; (s) the transactions contemplated by the Cooperation Agreement, the Mall
Lease, the Sale and Contribution Agreement and the HVAC Services Agreement, in
each case, as in effect on the date hereof; (t) the use of the Congress Center
by an Affiliate of the Issuers; provided that Venetian receives fair market
value for the use of such property, as determined in the reasonable discretion
of the Board of Directors of the Company; (u) the transactions contemplated in
Offering Circular relating to the Offering under the caption "Certain
Transactions--Temporary Lease," "--Retirement Plan" and "--Airplane Expenses";
(v) transactions relating to the Permitted Construction Loan Refinancing,
including the Tranche B Take-out Commitment and the guaranty by the Sole
Stockholder of the loan to be made under the Tranche A Take-out Commitment; (w)
transactions relating to the guaranty of Tranche B Loan of the Mall Construction
Loan Facility by the Sole Stockholder, including the making of the Substitute
Tranche B Loan; (x) the transfer of the Phase II Land to the Phase II Subsidiary
and, upon Completion and in accordance with the Sale and Construction Agreement,
the transfer of the Mall Collateral to the Mall Subsidiary; and (y) the Company
or Venetian may enter into and perform their obligations under a gaming
operations lease or management agreement with Phase II Subsidiary relating to
the casino to be operated in the casino resort owned by the Phase II Subsidiary
on terms substantially similar to those of the Casino Lease except that (i) the
rent payable to the Phase II Subsidiary under such lease shall be equal to all
revenue derived from such casino minus the sum of (1) the operating costs
related to such casino (including an allocated portion (based on gaming revenue)
of the Company's or Venetian's, as the case may be, administrative costs related
to its gaming operations) and (2) the lesser of $250,000 or 1.0% of such
casino's operating income (or zero if there is an operating loss) (determined in
accordance with generally accepted accounting principles), (ii) the Company or
Venetian, as the case may be, may agree that they shall operate the casino in
the resort owned by the Phase II Subsidiary and the Casino in the Project in
substantially similar manners and (iii) the Company
64
or Venetian, as the case may be, may agree to have common gaming and
surveillance operations in such casinos (based on equal allocations of revenues
and operating costs).
SECTION 4.13. LIENS.
The Issuers shall not, and shall not permit any of their Restricted
Subsidiaries to, directly or indirectly create, incur, assume or suffer to exist
any Lien on any asset owned as of the Issuance Date or thereafter acquired by
the Issuers or any such Restricted Subsidiary, or any income or profits
therefrom, or assign or convey any right to receive income therefrom, except, in
each case, Permitted Liens.
SECTION 4.14. LINE OF BUSINESS.
For so long as any Mortgage Notes are outstanding, the Issuers shall
not, and shall not permit any of their Restricted Subsidiaries or Special
Subsidiaries to, engage in any business or activity other than, (i) with respect
to the Issuers and their Restricted Subsidiaries, the Principal Business, and
(ii) with respect to any Special Subsidiary, the Special Subsidiary Principal
Business, except, in each case, to such extent as would not be material to (a)
the Issuers and their Subsidiaries taken as a whole or (b) the Special
Subsidiary, respectively.
SECTION 4.15. CORPORATE EXISTENCE.
Subject to Article 5 and Article 11 hereof, as the case may be, each of
the Issuers and each of the Mortgage Note Guarantors shall do or cause to be
done all things necessary to preserve and keep in full force and effect (i) its
corporate or limited liability company existence, and the corporate, limited
liability company, partnership or other existence of each of its Subsidiaries,
in accordance with the respective organizational documents (as the same may be
amended from time to time) of the Issuers, any such Mortgage Note Guarantor or
any such Subsidiary and (ii) the material rights (charter and statutory),
licenses and franchises of the Issuers, the Mortgage Note Guarantors and their
respective Subsidiaries; provided, however, that the Issuers and the Mortgage
Note Guarantors shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any of their
respective Subsidiaries, if the Board of Directors of the Company shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Issuers, the Mortgage Note Guarantors and their
Subsidiaries, taken as a whole, and that the loss thereof would not have a
material adverse effect on the Holders of the Mortgage Notes.
SECTION 4.16. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
Upon the occurrence of a Change of Control, the Issuers shall make an
offer to each Holder of Mortgage Notes to purchase all or any part (equal to
$1,000 or an integral multiple thereof) of the Mortgage Notes pursuant to the
offer described below (the "Change of Control Offer") at a price in cash (the
"Change of Control Payment") equal to 101% of the aggregate principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages, if any, to the
date of purchase. Such Change of Control Offer shall be made in accordance with
the procedures set forth in Article 3 hereof. The Issuers shall commence such
Change of Control Offer by mailing the notice set forth in Section 3.10 hereof
to Holders of Mortgage Notes.
65
SECTION 4.17. DESIGNATION OF UNRESTRICTED SUBSIDIARY
The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary; provided, that: (i) at the time of
designation, the Investment by either of the Issuers and any of their Restricted
Subsidiaries in such Subsidiary (other than Permitted Investments) shall be
deemed a Restricted Investment (to the extent not previously included as a
Restricted Investment) made on the date of such designation in the amount of the
fair market value of such Investment as determined in good faith by the Board of
Directors and, in the case of Investments in excess of $5.0 million, supported
by a fairness opinion issued by an accounting, appraisal or investment banking
firm of national standing, (ii) since the Issuance Date, such Unrestricted
Subsidiary has not acquired any assets from the Issuers or any Restricted
Subsidiary other than as permitted by the provisions of this Indenture,
including Sections 4.07 and 4.10 hereof; (iii) at the time of designation, no
Default or Event of Default has occurred and is continuing or results
immediately after such designation or as a result of any Restricted Investment
made in such Subsidiary at the time of such designation; (iv) at the time of
designation, such Subsidiary has no Indebtedness other than Non-Recourse
Indebtedness of such Subsidiary; (v) such Subsidiary does not own any Equity
Interests in a Restricted Subsidiary; and (vi) such Subsidiary does not own or
operate or possess any material license, franchise or right used in connection
with the ownership or operation of any part of the Project Assets of the Project
or any material portion of the Project Assets of the Project.
A Subsidiary shall cease to be an Unrestricted Subsidiary and shall
become a Restricted Subsidiary if either (i) at any time while it is a
Subsidiary of the Issuers (1) such Subsidiary acquires any assets from the
Issuers or any Restricted Subsidiary other than as permitted by this Indenture,
including Sections 4.07 and 4.10 hereof; (2) such Subsidiary has any
Indebtedness other than Non-Recourse Indebtedness of such Subsidiary; (3) such
Subsidiary owns any Equity Interests in a Restricted Subsidiary of the Issuers;
or (4) such Subsidiary owns or operates or possesses any material license,
franchise or right used in connection with the ownership or operation of any
part of the Project Assets of the Project or (ii) the Board of Directors of the
Company designates such Unrestricted Subsidiary to be a Restricted Subsidiary
and no Default or Event of Default occurs or is continuing immediately after
such designation.
As of the Issuance Date, each of Phase II Subsidiary, Phase II Manager
and Phase II Holdings is designated an Unrestricted Subsidiary. Any future
designation by the Board of Directors of the Company shall be evidenced to the
Mortgage Note Trustee by filing with the Mortgage Note Trustee a certified copy
of the resolutions of the Board of Directors of the Company giving effect to
such designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions.
After the transfer of the Phase II Land to the Phase II Subsidiary, the
Phase II Land shall not be sold, leased or transferred to an Affiliate of the
Issuers other than an Issuer, any Restricted Subsidiary or any Unrestricted
Subsidiary that is a Subsidiary of Phase II Intermediate Holdings and which
Person the Sole Stockholder does not own any Equity Interest, directly or
indirectly, except through the Issuers.
SECTION 4.18. DESIGNATION OF SPECIAL SUBSIDIARY
The Board of Directors of the Company may designate any Restricted
Subsidiary to be any Restricted Subsidiary to be a Special Subsidiary; provided,
that: (i) at the time of designation, the Investment by either of the Issuers
and any of their Restricted Subsidiaries in such Subsidiary (other than
Permitted Investments) shall be deemed a Restricted Investment (to the extent
not previously included as a Restricted Investment) made on the date of such
designation in the amount of the fair market value of such Investment as
determined in good faith by the Board of Directors of the Company and, in the
case
66
of Investments in excess of $5.0 million, supported by a fairness opinion issued
by an accounting, appraisal or investment banking firm of national standing;
(ii) since the Issuance Date, such Special Subsidiary has not acquired any
assets from the Issuers or any Restricted Subsidiary other than as permitted by
the Indenture, including Sections 4.07 and 4.10 hereof; (iii) at the time of
designation, no Default or Event of Default has occurred and is continuing or
results immediately after such designation or as a result of any Restricted
Investment made in such Subsidiary at the time of such designation; (iv) at the
time of designation, such Subsidiary has no Indebtedness other than Non-Recourse
Indebtedness of such Subsidiary; (v) such Subsidiary does not own any Equity
Interests in a Restricted Subsidiary; and (vi) such Subsidiary does not own or
operate or possess any material license, franchise or right used in connection
with the ownership or operation of any part of the Project Assets of the Project
or any material portion of the Project Assets of the Project.
A Subsidiary shall cease to be a Special Subsidiary and shall become a
Restricted Subsidiary if either (i) at any time while it is a Subsidiary of the
Issuers (1) such Subsidiary acquires any assets from the Issuers or any
Restricted Subsidiary other than as permitted by the provisions of this
Indenture, including Section 4.07 and 4.10 hereof; (2) such Subsidiary has any
Indebtedness other than Non-Recourse Indebtedness of such Subsidiary; (3) such
Subsidiary owns any Equity Interests in a Restricted Subsidiary of the Issuers;
or (4) such Subsidiary owns or operates or possesses any material license,
franchise or right used in connection with the ownership or operation of any
part of the Project Assets of the Project or (ii) the Issuers designate such
Special Subsidiary to be a Restricted Subsidiary and no Default or Event of
Default occurs or is continuing immediately after such designation.
As of the Issuance Date, each of Mall Subsidiary, Mall Manager and Mall
Holdings is designated a Special Subsidiary. Any future designation by the Board
of Directors shall be evidenced to the Mortgage Note Trustee by filing with the
Mortgage Note Trustee a certified copy of the resolution of the Board of
Directors of the Company giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions.
SECTION 4.19. GAMING LICENSES.
The Issuers shall use their best efforts to obtain and retain in full
force and effect at all times all Gaming Licenses necessary for the operation of
the Project.
SECTION 4.20. CONSTRUCTION.
The Issuers shall cause construction of the Project, including the
furnishing, fixturing and equipping thereof, to be prosecuted with diligence and
continuity in a good and workerlike manner substantially in accordance with the
Plans and Specifications within the Project Budget.
SECTION 4.21. MAINTENANCE OF INSURANCE AND AMENDMENT OF THE COOPERATION
AGREEMENT.
Until the Mortgage Notes have been paid in full, the Issuers shall, and
shall cause their Restricted Subsidiaries to, maintain the specified levels of
insurance set forth in the Cooperation Agreement (whether or not the Cooperation
Agreement is then in force). The Issuers shall not amend, waive or modify
Articles X and XI of the Cooperation Agreement.
67
SECTION 4.22. LIMITATION ON STATUS AS INVESTMENT COMPANY.
None of the Issuers and their Restricted Subsidiaries shall become an
Investment Company subject to registration as an "investment company" (as that
term is defined in the Investment Company Act of 1940, as amended).
SECTION 4.23. COLLATERAL DOCUMENTS.
None of the Issuers or any of their Restricted Subsidiaries shall
amend, waive or modify, or take or refrain from taking any action that has the
effect of amending, waiving or modifying, any provision of the Collateral
Documents to the extent that such amendment, waiver, modification or action
could have an adverse effect on the rights of the Mortgage Note Trustee or the
Holders of the Mortgage Notes; provided, that: (i) the Note Collateral may be
released or modified as expressly provided in this Indenture and in the
Collateral Documents, the Intercreditor Agreement and the Sole Stockholder
Intercreditor Agreement; (ii) any Mortgage Note Guaranty may be released as
expressly provided in this Indenture and in the Collateral Documents; (iii) the
Project Budget may be amended as expressly provided in the Disbursement
Agreement; and (iv) this Indenture and any of the Collateral Documents may be
otherwise amended, waived or modified as set forth under Article 9 hereof.
SECTION 4.24. FURTHER ASSURANCES.
The Issuers shall (and shall cause each of their Restricted
Subsidiaries to) do, execute, acknowledge, deliver, record, re-record, file,
re-file, register and re-register, any and all such further acts, deeds,
conveyances, security agreements, mortgages, assignments, estoppel certificates,
financing statements and continuations thereof, termination statements, notices
of assignment, transfers, certificates, assurances and other instruments as may
reasonably be required from time to time in order (i) to carry out more
effectively the express purposes of the Collateral Documents, (ii) to subject to
the Liens created by any of the Collateral Documents any of the properties,
rights or interests required to be encumbered thereby and contemplated thereby,
(iii) to perfect and maintain the validity, effectiveness and priority of any of
the Collateral Documents and the Liens intended to be created thereby and
contemplated thereby, and (iv) to better assure, convey, grant, assign,
transfer, preserve, protect and confirm to the Mortgage Note Trustee any of the
rights granted or now or hereafter intended by the parties thereto to be granted
to the Mortgage Note Trustee or under any other instrument executed in
connection therewith or granted to the Issuers under the Collateral Documents or
under any other instrument executed in connection therewith.
SECTION 4.25. RESTRICTIONS ON LEASING AND DEDICATION OF PROPERTY.
The Issuers shall not, and shall not permit any of their Restricted
Subsidiaries to, lease, sublease, or grant a license, concession or other
agreement to occupy, manage or use any real or personal Project Assets owned or
leased by the Issuers or any Restricted Subsidiary (each, a "Lease
Transaction"), other than the following Lease Transactions:
(a) the Issuers or any Restricted Subsidiary may enter into a Lease
Transaction with respect to any space on or within the Project with any Person
(other than an Unrestricted Subsidiary); provided that (i) such Lease
Transaction will not materially interfere with, impair or detract from the
operations of any of the Project Assets and will, in the reasonable judgement of
the Issuers, enhance the value and operations of the Project and (ii) such Lease
Transaction is at a fair market rent (in light of other similar or comparable
prevailing commercial transactions) and contains such other terms such that the
Lease Transaction, taken as a whole, is commercially reasonable and fair to the
Issuers or such Restricted
68
Subsidiary in light of prevailing or comparable transactions in other casinos,
hotels, attractions or shopping venues comparable to the Project;
(b) the Issuers or any Restricted Subsidiary may enter into a Lease
Transaction with any Unrestricted Subsidiary or Special Subsidiary with respect
to (i) the Mall Space and (ii) the Phase II Land;
(c) the Issuers may enter into Lease Transactions with any Wholly Owned
Restricted Subsidiary of the Issuers, including the lease of the Casino by the
Company from Venetian and the Billboard Lease;
(d) the Issuers or any Restricted Subsidiary may enter into a
management or operating agreement with respect to any Project Asset, including
any hotel (other than any Project Asset or space used for any casino or gaming
operations) with any Person (other than an Unrestricted Subsidiary); provided
that (i) the manager or operator has experience in managing or operating similar
operations and (ii) such management or operating agreement is on commercially
reasonable and fair terms to the Issuers or such Restricted Subsidiary (in
either case, in the reasonable judgment of the Issuers);
(e) the Issuers may dedicate space for the purpose of constructing (i)
a mass transit system, (ii) a pedestrian bridge over or pedestrian tunnel under
Las Vegas Boulevard and Sands Avenue or similar structures to facilitate
pedestrian or traffic flow, and (iii) a right turn lane or other roadway
dedication at or near the Project; provided that, in each case, such dedication
does not materially impair the use or operations of the Project;
(f) the Mall Management Agreement and any Lease Transaction where the
interest created is a Permitted Lien;
(g) to the extent permitted under Section 4.12, any use or lease
agreement between Interface and Venetian relating to the Congress Center; and
(h) Venetian may enter into the HVAC Services Agreement.
Notwithstanding the foregoing, the Issuers shall not enter into any
Lease Transaction: (1) if, except in the case of clause (h), at the time of such
proposed Lease Transaction, a Default or Event of Default has occurred and is
continuing or would occur immediately after entering into such Lease Transaction
(or immediately after any extension or renewal of such Lease Transaction made at
the option of the Issuers or any Restricted Subsidiary); (2) no gaming or casino
operations may be conducted on any Project Asset that is the subject of such
Lease Transaction other than by the Issuers, a Restricted Subsidiary or pursuant
to any Other Phase II Agreements; and (3) no Lease Transaction may provide that
the Issuers or any Restricted Subsidiary may subordinate its fee or leasehold
interest to any lessee or any party providing financing to any lessee.
The Mortgage Note Trustee shall at the request of the Issuers or any
Restricted Subsidiary enter into a commercially customary leasehold
non-disturbance and attornment agreement with the lessee under any Lease
Transaction permitted under the covenant described above. Such agreement, among
other things, shall provide that if the interests of the Issuers (or in the case
of a Lease Transaction being entered by a Restricted Subsidiary, the interests
of the Restricted Subsidiary) in the Project Assets subject to the Lease
Transaction are acquired by the Mortgage Note Trustee (on behalf of the holders
of the Mortgage Notes), whether by purchase and sale, foreclosure, or deed in
lieu of foreclosure or in any other way, or by a successor to the Mortgage Note
Trustee, including without limitation a purchaser at a foreclosure sale, then
(A) the interests of the lessee in the Project Assets subject to the Lease
Transaction shall
69
continue in full force and effect and shall not be terminated or disturbed,
except in accordance with the lease documentation applicable to the Lease
Transaction, and (B) the lessee in the Lease Transaction shall attorn to and be
bound to the Mortgage Note Trustee (on behalf of the Holders), its successors
and assigns under all terms, covenants and conditions of the lease documentation
applicable to the Lease Transaction. Such agreement shall also contain such
other provisions that are commercially customary and that will not materially
and adversely affect the Lien granted by any of the Mortgage Note Indenture Fee
Deed of Trust, the Mortgage Note Indenture Leasehold Deed of Trust or the
Mortgage Note Indenture Mall Parcel Fee Deed of Trust, in each case, as
certified to the Mortgage Note Trustee by an Officer of the Company.
SECTION 4.26. MORTGAGE NOTE GUARANTIES.
The Issuers shall, and shall cause each of their Restricted
Subsidiaries, to comply with Section 11.02 hereof.
SECTION 4.27. SPECIAL SUBSIDIARY RESTRICTED PAYMENTS.
Any Special Subsidiary shall not and shall not permit any of its
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any distribution on account of its Equity Interests (including, without
limitation, any payment in connection with any merger or consolidation involving
such Special Subsidiary or its Subsidiaries) (other than (1) dividends or
distributions paid or made pro rata to all holders of Equity Interests of such
Special Subsidiary or its Subsidiaries; (2) dividends or distributions by such
Special Subsidiary payable in Equity Interests (other than Disqualified Stock)
of such Special Subsidiary (or accretions thereon); or (3) dividends or
distributions paid to such Special Subsidiary or a Wholly Owned Subsidiary of
such Special Subsidiary by a Subsidiary of such Special Subsidiary); (ii)
purchase, redeem or otherwise acquire or retire for value (including, without
limitation, in connection with any merger or consolidation involving any Special
Subsidiary or its Subsidiaries) any Equity Interests of any Special Subsidiary
or any Subsidiary of any Special Subsidiary; or (iii) make any Special
Subsidiary Restricted Investment (all such payments and other actions set forth
in clauses (i) through (iii) above being collectively referred to as "Special
Subsidiary Restricted Payments").
The foregoing provisions will not prohibit (i) the redemption,
repurchase, retirement or other acquisition of any Equity Interests of any
Special Subsidiary in exchange for, or out of the proceeds of, the substantially
concurrent sale or issuance (other than to the Issuers or any Restricted
Subsidiary of the Issuers) of Equity Interests of such Special Subsidiary and
(ii) the payment to or declaration or payment of any distribution or dividend to
the Issuers and any of their Restricted Subsidiaries or the redemption,
repurchase, retirement or other acquisition of any Equity Interests of any
Special Subsidiary held by the Issuers or any Wholly Owned Restricted
Subsidiary.
For purposes of determining the amount of Special Subsidiary Restricted
Investments outstanding at any time, all Special Subsidiary Restricted
Investments will be valued at their fair market value at the time made (as
determined in good faith by the Company's Board of Directors), and no
adjustments will be made for subsequent changes in fair market value.
After the transfer of the Mall Collateral to the Mall Subsidiary, the
assets comprising the Mall Collateral may not be sold, leased or transferred to
an Affiliate of the Issuers other than an Issuer, any Restricted Subsidiary or
any Special Subsidiary that is a Subsidiary of Mall Intermediate Holdings and
which the Sole Stockholder does not own any Equity Interests, directly or
indirectly, except through the Issuers.
70
SECTION 4.28. OWNERSHIP OF UNRESTRICTED SUBSIDIARIES AND SPECIAL
SUBSIDIARIES.
At all times from the Issuance Date until all of the Capital Stock of
the Phase II Subsidiary or the Mall Subsidiary is sold or otherwise disposed of
to any Person other than an Affiliate of the Issuers, one of the Issuers will
directly or indirectly own (i) at least a majority of the issued and outstanding
Capital Stock of Phase II Subsidiary (which is an Unrestricted Subsidiary) and
(ii) at least 80% of the issued and outstanding Capital Stock of Mall Subsidiary
(which is a Special Subsidiary); provided that the Sole Stockholder or any of
his Affiliates (other than the Issuers or any of their Wholly-Owned Restricted
Subsidiaries) will not purchase or otherwise acquire, directly or indirectly,
any of the Capital Stock of the Phase II Subsidiary, Mall Subsidiary or any of
their respective Subsidiaries.
SECTION 4.29. LIMITATION ON PHASE II CONSTRUCTION.
The Issuers shall not, and shall not permit any of their Subsidiaries
(including Unrestricted Subsidiaries and Special Subsidiaries), at any time
prior to receipt by the Issuers or any such Subsidiary of a temporary
certificate of occupancy from ▇▇▇▇▇ County, Nevada with respect to the Project
(as defined on the Issuance Date) (a) to construct, develop or improve the Phase
II Land or any building on the Phase II Land (including any excavation or site
work and excluding the proposed Phase II parking garage), (b) enter into any
contract or agreement for such construction, development or improvement, or for
any materials, supplies or labor necessary in connection with such construction
development or improvement (other than a contract or agreement that is
conditional upon satisfaction of the above condition), or (c) incur any
Indebtedness the proceeds of which are expected to be used for the construction,
development or improvement of the Phase II Land or any building on the Phase II
Land, except (i) any construction, development or improvement on the Phase II
Land or any temporary building on the Phase II Land in connection with the
Project in accordance with the Plans and Specifications and included in the
Project Budget; and (ii) any design, architectural, engineering or development
work not involving actual construction on the Phase II Land.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
Neither of the Issuers shall consolidate or merge with or into or wind
up into (whether or not such entity is the surviving corporation), or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its properties or assets in one or more related transactions to, any Person
unless (i) the Company or Venetian, as the case may be, is the surviving Person
or the Person formed by or surviving any such consolidation or merger (if other
than the Company or Venetian) or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made is a Person
organized or existing under the laws of the United States, any state thereof,
the District of Columbia, or any territory thereof; (ii) the Person formed by or
surviving any such consolidation or merger (if other than the Company or
Venetian) or the Person to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made assumes all the obligations
of the Issuers under this Indenture and the Collateral Documents pursuant to a
supplemental indenture or other documents or instruments in form reasonably
satisfactory to the Mortgage Note Trustee under the Mortgage Notes and this
Indenture; (iii) immediately after such transaction no Default or Event of
Default exists; (iv) such transaction will not result in the loss or suspension
or material impairment of any material Gaming License; (v) the Company or
Venetian or any Person formed by or surviving any such consolidation or
71
merger, or to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made (A) shall have 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 the Company or Venetian immediately preceding the
transaction and (B) shall, at the time of such transaction and after giving pro
forma effect thereto as if such transaction had occurred at the beginning of the
applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in the first paragraph of Section 4.09 hereof; and (vi) such transactions
would not require any Holder of Mortgage Notes (other than any Person acquiring
the Company or Venetian or their assets or any Affiliate thereof) to obtain a
gaming license or be qualified under the laws of any applicable gaming
jurisdiction; provided that such Holder would not have been required to obtain a
gaming license or be qualified under the laws of any applicable gaming
jurisdiction in the absence of such transactions. Notwithstanding the foregoing,
the Issuers may consolidate or merge with or wind up into each other without
meeting the requirements set forth in clause (v) above.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Issuers in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which one of the Issuers is merged
or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" or
"Venetian", as the case may be, shall refer instead to the successor corporation
and not to the Company or Venetian, as the case may be), and may exercise every
right and power of an Issuer under this Indenture with the same effect as if
such successor Person had been named as an Issuer herein; provided, however,
that the surviving entity or acquiring corporation shall (i) assume all of the
obligations of the acquired Person incurred under this Indenture, the Mortgage
Notes, and, if applicable, the Collateral Documents, (ii) acquire and own and
operate, directly or through Wholly Owned Subsidiaries, all or substantially all
of the properties and assets then constituting the assets of the Company or
Venetian, as the case may be, or any of their Subsidiaries, as the case may be,
(iii) have been issued, or have a consolidated Subsidiary which has been issued,
Gaming Licenses to operate the acquired casino operations and entities
substantially in the manner and scope operated prior to such transaction, which
Gaming Licenses are in full force and effect, and (iv) be in compliance fully
with Section 5.01 hereof and (v) the Issuers have delivered to the Mortgage Note
Trustee an Officers' Certificate and Opinion of Counsel, subject to customary
assumptions and exclusions, stating that the proposed transaction complies with
this Indenture; provided further, however, that the predecessor Person shall not
be relieved from the obligation to pay the principal of and interest on the
Mortgage Notes except in the case of a sale of all of one of the Issuers' assets
that meets the requirements of Section 5.01 hereof.
72
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Issuers or any Mortgage Note Guarantor defaults in payment
when due and payable, upon redemption or otherwise, of principal or
premium, if any, on the Mortgage Notes or under any Mortgage Note
Guaranty;
(b) one of the Issuers or any Mortgage Note Guarantor defaults for
30 days or more in the payment when due of interest on, or Liquidated
Damages, if any, with respect to the Mortgage Notes or under any
Mortgage Note Guaranty;
(c) failure by the Issuers or any Mortgage Note Guarantor to offer
to purchase or to purchase the Mortgage Notes, in each case, when
required under an offer made pursuant Section 3.10 hereof;
(d) failure by (i) the Issuers or any Mortgage Note Guarantor to
comply with Sections 4.07 or 4.09 hereof or (ii) any Special Subsidiary
to comply with Section 4.27;
(e) failure by any of the Issuers or any Mortgage Note Guarantor
for 45 days after receipt of written notice from the Mortgage Note
Trustee to comply with any of their other agreements under this
Indenture, the Collateral Documents, the Mortgage Notes or the Mortgage
Note Guaranties; provided, however, that any such failure with respect
to any Collateral Documents will not be deemed to have occurred for
purposes of the foregoing, and notice thereof shall not be deemed to
have been delivered, until the delivery of notice and the expiration of
all available grace periods provided for in the applicable Collateral
Documents;
(f) default under any mortgage, indenture or instrument under which
there is issued or by which there is secured or evidenced any
Indebtedness for money borrowed by any of the Issuers, any of their
Restricted Subsidiaries or any Special Subsidiary or the payment of
which is guaranteed by the Issuers, any of their Restricted
Subsidiaries or any Special Subsidiary, whether such Indebtedness or
Guaranty now exists or is created after the Issuance Date, which
default (a) in the case of any of the Issuers or any of their
Restricted Subsidiaries only, is caused by a failure to pay when due at
final maturity (giving effect to any grace period or waiver related
thereto) the principal of such Indebtedness (a "Payment Default") or
(b) results in the acceleration of such Indebtedness prior to its
express maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness under which a Payment Default then exists or with respect
to which the maturity thereof has been so accelerated or which has not
been paid at maturity, aggregates $10 million or more;
(g) failure by any of the Issuers or any of their Restricted
Subsidiaries to pay final judgments aggregating in excess of $10
million, which final judgments remain unpaid, undischarged and unstayed
for a period of more than 60 days;
73
(h) the repudiation by any of the Issuers or any of their
Subsidiaries of their obligations under, or any judgment or decree by a
court or governmental agency of competent jurisdiction declaring the
unenforceability of, any Mortgage Note Guaranty or any of the
Collateral Documents for any reason that, in each case, would
materially and adversely impair the benefits to the Mortgage Note
Trustee or the holders of the Mortgage Notes thereunder;
(i) any of the Issuers, any Special Subsidiary or any Mortgage Note
Guarantor that is a Significant Subsidiary or any group of Mortgage
Note Guarantors that would together constitute a Significant Subsidiary
of any Issuer pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it
in an involuntary case,
(iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally is not paying, or shall admit in writing its
inability to pay, its debts as they become due and, in each case, a
period of 30 days shall have elapsed; or
(j) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against any of the Issuers or a Mortgage
Note Guarantor that is a Significant Subsidiary or any group of
Mortgage Note Guarantors that would together constitute a
Significant Subsidiary of any Issuer in an involuntary case;
(ii) appoints a Custodian of any of the Issuers or a Mortgage
Note Guarantor that is a Significant Subsidiary or any group of
Mortgage Note Guarantors that would together constitute a
Significant Subsidiary of the Issuers or for all or substantially
all of the property of any of the Issuers or a Mortgage Note
Guarantor that is a Significant Subsidiary or any group Issuers of
Mortgage Note Guarantors that would together constitute a
Significant Subsidiary of any Issuer; or
(iii) orders the liquidation of any Issuer or a Mortgage Note
Guarantor that is a Significant Subsidiary of any Issuers or any
group of Mortgage Note Guarantors that would together constitute a
Significant Subsidiary of any Issuer;
and the order or decree remains unstayed and in effect for 60
consecutive days;
(k) after the Project becomes Completed, revocation, termination,
suspension or other cessation of effectiveness of any Gaming License,
which results in the cessation or suspension of gaming operations for a
period of more than 90 consecutive days at the Project;
(l) the Project is not Completed by the Outside Completion Deadline
and continues to be not Completed; or
74
(m) failure by Interface to comply with its obligations under the
Cooperation Agreement with respect to a change of control of Interface
or a sale, transfer or other disposition by Interface of its interest
in the Expo Center or the incurrence by Interface of Indebtedness.
The term "Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
SECTION 6.02. ACCELERATION.
(a) Subject to the provisions of clause (b) of this Section 6.02, if
any Event of Default (other than an Event of Default specified in clause (i) or
(j) of Section 6.01 hereof with respect to the Issuers or any Mortgage Note
Guarantor that is a Significant Subsidiary or any group of Mortgage Note
Guarantors that would together constitute a Significant Subsidiary), occurs and
is continuing, the Mortgage Note Trustee or the Holders of at least 25% in
principal amount of the then outstanding Mortgage Notes may declare the
principal, premium and Liquidated Damages, if any, interest and any other
monetary obligations on all of the Mortgage Notes to be due and payable
immediately. Notwithstanding the foregoing, if an Event of Default specified in
clause (i) or (j) of Section 6.01 hereof occurs with respect to the Issuers or
any Mortgage Note Guarantor that is a Significant Subsidiary or any group of
Mortgage Note Guarantors that would together constitute a Significant Subsidiary
of the Issuers, the principal, premium and Liquidated Damages, if any, interest
any other monetary obligations on all of the outstanding Mortgage Notes shall be
due and payable immediately without further action or notice. The Holders of a
majority in aggregate principal amount of the then outstanding Mortgage Notes by
written notice to the Mortgage Note Trustee may on behalf of all of the Holders
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, interest or premium or Liquidated Damages that
has become due solely because of the acceleration) have been cured or waived.
Notwithstanding the foregoing, the Mortgage Note Trustee shall have no
obligation to accelerate the Mortgage Notes if in the best judgment of the
Mortgage Note Trustee acceleration is not in the best interest of the Holders of
the Mortgage Notes.
If an Event of Default occurs by reason of any willful action (or
inaction) taken (or not taken) by or on behalf of the Issuers with the intention
of avoiding payment of the premium that the Issuers would have had to pay if the
Issuers then had elected to redeem the Mortgage Notes pursuant to Section 3.07
hereof, then, upon acceleration of the Mortgage Notes, an equivalent premium
shall also become and be immediately due and payable, to the extent permitted by
law, anything in this Indenture or in the Mortgage Notes to the contrary
notwithstanding.
(b) The provisions of the TIA shall govern this Mortgage Note Indenture
whether or not this Mortgage Note Indenture is qualified under the TIA. Subject
to the mandatory provisions of the TIA, the rights of the Mortgage Note Trustee
and the Holders to accelerate obligations under the Mortgage Notes, rescind such
acceleration, or to exercise rights and remedies under the Collateral Documents
or to enforce the terms of this Indenture shall be limited as provided in the
terms of the Intercreditor Agreement. To the extent permissible under the TIA,
the terms of the Intercreditor Agreement or the Sole Stockholder Intercreditor
Agreement shall not be interpreted as impairing or affecting, in violation of
Section 316(b) of the TIA, the right of any Holder to receive payment of
principal of and interest on the Mortgage Notes on or after the respective due
dates expressed in the Mortgage Notes or to institute suit for the enforcement
of any such payment on or after such respective dates.
75
SECTION 6.03. OTHER REMEDIES.
Subject to the terms of the Intercreditor Agreement, if an Event of
Default occurs and is continuing, the Mortgage Note Trustee may pursue any
available remedy to collect the payment of principal, premium and Liquidated
Damages, if any, and interest on the Mortgage Notes or to enforce the
performance of any provision of the Mortgage Notes or this Indenture.
The Mortgage Note Trustee may maintain a proceeding even if it does not
possess any of the Mortgage Notes or does not produce any of them in the
proceeding. A delay or omission by the Mortgage Note Trustee or any Holder of a
Mortgage Note in exercising any right or remedy accruing upon an Event of
Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. All remedies are cumulative to the extent
permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of
the then outstanding Mortgage Notes by notice to the Mortgage Note Trustee may
on behalf of the Holders of all of the Mortgage Notes waive an existing Default
or Event of Default and its consequences hereunder, except a continuing Default
or Event of Default in the payment of the principal of, premium and Liquidated
Damages, if any, or interest on, the Mortgage Notes (including in connection
with an offer to purchase) (provided, however, that the Holders of a majority in
aggregate principal amount of the then outstanding Mortgage Notes may rescind an
acceleration and its consequences, including any related payment default that
resulted from such acceleration). Upon any such waiver, such Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been cured for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Subject to the terms of the Intercreditor Agreement, Holders of a
majority in principal amount of the then outstanding Mortgage Notes may direct
the time, method and place of conducting any proceeding for exercising any
remedy available to the Mortgage Note Trustee or exercising any trust or power
conferred on it, including the exercise of any remedy under the Collateral
Documents or the Intercreditor Agreement. However, the Mortgage Note Trustee may
refuse to follow any direction that conflicts with law, this Indenture or the
Intercreditor Agreement that the Mortgage Note Trustee determines may be unduly
prejudicial to the rights of other Holders of Mortgage Notes or that may involve
the Mortgage Note Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Mortgage Note may pursue a remedy with respect to this
Indenture or the Mortgage Notes (except as provided in Section 6.07) only if:
(a) the Holder of a Mortgage Note gives to the Mortgage Note Trustee
written notice of a continuing Event of Default or the Mortgage Note
Trustee receives such notice from the Issuers;
(b) the Holders of at least 25% in principal amount of the then
outstanding Mortgage Notes make a written request to the Mortgage Note
Trustee to pursue the remedy;
(c) such Holder of a Mortgage Note or Holders of Mortgage Notes offer
and, if requested, provide to the Mortgage Note Trustee indemnity
satisfactory to the Mortgage Note Trustee against any loss, liability or
expense;
76
(d) the Mortgage Note 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 Mortgage Notes do not give the Mortgage Note
Trustee a direction inconsistent with the request; provided, however, that
such provision does not effect the right of a Holder to ▇▇▇ for enforcement
of any overdue payment thereon.
A Holder of a Mortgage Note may not use this Indenture to prejudice the rights
of another Holder of a Mortgage Note or to obtain a preference or priority over
another Holder of a Mortgage Note or to take any action in violation of the
provisions of the Intercreditor Agreement.
SECTION 6.07. RIGHTS OF HOLDERS OF MORTGAGE NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, but subject to
the provisions of the Intercreditor Agreement the right of any Holder of a
Mortgage Note to receive payment of principal, premium and Liquidated Damages,
if any, and interest on the Mortgage Note, on or after the respective due dates
expressed in the Mortgage 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 such Holder, except the right of any Holder to institute
suit for the enforcement of any such payment is hereby limited or denied if and
to the extent that the institution or prosecution thereof or the entry of
judgement therein would, under applicable law, result in the surrender,
impairment, waiver or loss of the lien in favor of the Mortgage Note Trustee
securing the Note Collateral.
SECTION 6.08. COLLECTION SUIT BY MORTGAGE NOTE TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) occurs and
is continuing, subject to the terms of the Intercreditor Agreement, the Mortgage
Note Trustee is authorized to recover judgment in its own name and as trustee of
an express trust against the Issuers or any Mortgage Note Guarantor for the
whole amount of principal of, premium and Liquidated Damages, if any, and
interest remaining unpaid on the Mortgage Notes and interest on overdue
principal and, to the extent lawful, interest and such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Mortgage
Note Trustee, its agents and counsel.
SECTION 6.09. MORTGAGE NOTE TRUSTEE MAY FILE PROOFS OF CLAIM.
Subject to Section 6.02(b) hereof and the terms of the Intercreditor
Agreement, the Mortgage Note 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 Mortgage Note Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Mortgage Note Trustee,
its agents and counsel) and the Holders of the Mortgage Notes allowed in any
judicial proceedings relative to the Issuers (or any other obligor upon the
Mortgage Notes, including the Mortgage Note Guarantors), its creditors or its
property and shall be entitled and empowered to collect, receive and distribute
any money or other property payable or deliverable on any such claims and any
custodian in any such judicial proceeding is hereby authorized by each Holder to
make such payments to the Mortgage Note Trustee, and in the event that the
Mortgage Note Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Mortgage Note Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Mortgage
Note Trustee, its agents and counsel, and any other amounts due the Mortgage
Note Trustee under Section 7.07 hereof. To the extent
77
that the payment of any such compensation, expenses, disbursements and advances
of the Mortgage Note Trustee, its agents and counsel, and any other amounts due
the Mortgage Note Trustee under Section 7.07 hereof out of the estate in any
such proceeding, shall be denied for any reason, payment of the same shall be
secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Mortgage Note 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 Mortgage Notes or the rights of any
Holder, or to authorize the Mortgage Note Trustee to vote in respect of the
claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Mortgage Note Trustee collects any money pursuant to this
Article, it shall, subject to the terms of the Intercreditor Agreement, pay out
the money in the following order:
First: to the Mortgage Note Trustee, its agents and attorneys for
amounts due under Section 7.07 hereof, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the Mortgage Note
Trustee and the costs and expenses of collection;
Second: to Holders of Mortgage Notes for amounts due and unpaid on the
Mortgage Notes for principal, premium and Liquidated Damages, if any, and
interest ratably, without preference or priority of any kind, according to the
amounts due and payable on the Mortgage Notes for principal, premium and
Liquidated Damages, if any, and interest, respectively; and
Third: to the Issuers or to such party as a court of competent
jurisdiction shall direct.
The Mortgage Note Trustee may fix a record date and payment date for
any payment to Holders of Mortgage Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Mortgage Note Trustee for any action taken
or omitted by it as a Mortgage Note Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Mortgage Note Trustee, a suit by a Holder of a Mortgage Note pursuant to Section
6.07 hereof, or a suit by Holders of more than 10% in principal amount of the
then outstanding Mortgage Notes.
SECTION 6.12. MANAGEMENT OF CASINOS.
Notwithstanding any provision of this Article 6 to the contrary,
following an Event of Default which permits the taking of possession of the
Project by the Mortgage Note Trustee or the appointment of a receiver of either
the Note Collateral or any part thereof pursuant to the Mortgage Notes Indenture
Fee Deed of Trust, the Mortgage Notes Indenture Leasehold Deed of Trust or the
Mortgage Notes Indenture Mall Parcel Fee Deed of Trust or after such taking of
possession of such appointment, the Mortgage Note Trustee or any such receiver
shall be authorized, in addition to the rights and powers of the Mortgage Note
Trustee and such receiver set forth elsewhere in this Indenture and the
Collateral
78
Documents, to retain one or more experienced operators of casinos to manage the
casino located at the Project on behalf of the Holders of Mortgage Notes;
provided, however, that any such operator shall have all necessary legal
qualifications, including all Gaming Licenses to manage the casino located at
the Project.
ARTICLE 7
MORTGAGE NOTE TRUSTEE
SECTION 7.01. DUTIES OF MORTGAGE NOTE TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Mortgage
Note Trustee shall exercise such of the rights and powers vested in it by this
Indenture and the Collateral Documents, and use the same degree of care and
skill in its exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Mortgage Note Trustee shall be determined solely
by the express provisions of this Indenture, the Collateral Documents and
the Intercreditor Agreement and the Mortgage Note Trustee need perform only
those duties that are specifically set forth in this Indenture, the
Collateral Documents and the Intercreditor Agreement and no others, and no
implied covenants or obligations shall be read into this Indenture against
the Mortgage Note Trustee; and
(ii) in the absence of bad faith on its part, the Mortgage Note 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 Mortgage Note Trustee and conforming in all
material respects to the requirements of this Indenture, the Collateral
Documents and the Intercreditor Agreement. However, the Mortgage Note
Trustee shall examine the certificates and opinions to determine whether or
not they conform in all material respects to the requirements of this
Indenture and the Collateral Documents.
(c) The Mortgage Note Trustee may not be relieved from liabilities for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph (c) does not limit the effect of paragraph (b) of
this Section;
(ii) the Mortgage Note Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is proved
that the Mortgage Note Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Mortgage Note Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Mortgage Note Trustee is subject
to paragraphs (a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Mortgage Note
Trustee to expend or risk its own funds or incur any liability. The Mortgage
Note Trustee shall be under no obligation to exercise
79
any of its rights and powers under this Indenture before or following the
occurrence of any Event of Default at the request of any Holders, unless such
Holder shall have offered to the Mortgage Note Trustee security and indemnity
satisfactory to it against any loss, liability or expense.
(f) The Mortgage Note Trustee shall not be liable for interest on any
money received by it except as the Mortgage Note Trustee may agree in writing
with the Issuers or the Mortgage Note Guarantors. Money held in trust by the
Mortgage Note Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.02. RIGHTS OF MORTGAGE NOTE TRUSTEE.
(a) The Mortgage Note 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 Mortgage Note Trustee need not investigate any fact or matter stated
in the document.
(b) Before the Mortgage Note Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel or both. The
Mortgage Note 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 Mortgage Note Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection from liability in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.
(c) The Mortgage Note Trustee may act through its attorneys and agents
and shall not be responsible for the misconduct or negligence of any agent
appointed with due care.
(d) The Mortgage Note Trustee shall not be liable for any action it
takes or omits to take in good faith that it believes to be authorized or within
the rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Issuers or any Mortgage Note
Guarantor shall be sufficient if signed by an Officer of the Issuers or such
Mortgage Note Guarantor.
(f) The Mortgage Note Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders unless such Holders shall have requested such
action in accordance with this Indenture and have offered to the Mortgage Note
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
(g) Except with respect to Section 4.01 hereof, the Mortgage Note
Trustee shall have no duty to inquire as to the performance of the Issuers'
covenants in Article Four hereof. In addition, the Mortgage Note Trustee shall
not be deemed to have knowledge of any Default or Event of Default except (i)
any Event of Default occurring pursuant to Section 6.01(a) or 6.01(b) or (ii)
any Default of Event of Default of which the Mortgage Note Trustee shall have
received written notification or obtained actual knowledge.
SECTION 7.03. INDIVIDUAL RIGHTS OF MORTGAGE NOTE TRUSTEE.
The Mortgage Note Trustee in its individual or any other capacity may
become the owner or pledgee of Mortgage Notes and may otherwise deal with the
Issuers and the Mortgage Note Guarantors
80
with the same rights it would have if it were not Mortgage Note Trustee.
However, in the event that the Mortgage Note Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with like
rights and duties. The Mortgage Note Trustee is also subject to Sections 7.10
and 7.11 hereof.
SECTION 7.04. MORTGAGE NOTE TRUSTEE'S DISCLAIMER.
The Mortgage Note Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture, the Collateral
Documents, the Intercreditor Agreement, the Sole Stockholder Intercreditor
Agreement, the Mortgage Notes or any Mortgage Note Guaranty, it shall not be
accountable for the Issuers' use of the proceeds from the Mortgage Notes or any
money paid to the Issuers or upon the Issuers' direction under any provision of
this Indenture or the Collateral Documents, it shall not be responsible for the
use or application of any money received by any Paying Agent other than the
Mortgage Note Trustee, and it shall not be responsible for any statement or
recital herein or any statement in the Mortgage Notes or any other document in
connection with the sale of the Mortgage Notes or pursuant to this Indenture
other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Mortgage Note Trustee, the Mortgage Note Trustee shall mail to
Holders of Mortgage Notes a notice of the Default or Event of Default within 90
days after it occurs. Except in the case of a Default or Event of Default in
payment of principal of, premium and Liquidated Damages, if any, or interest on
any Mortgage Note, the Mortgage Note Trustee may withhold the notice if and so
long as the Mortgage Note Trustee in good faith determines that withholding the
notice is in the interests of the Holders of the Mortgage Notes.
SECTION 7.06. REPORTS BY MORTGAGE NOTE TRUSTEE TO HOLDERS OF
THE MORTGAGE NOTES.
Within 60 days of each May 15th beginning with the May 15th following
the date of this Indenture, and for so long as Mortgage Notes remain
outstanding, the Mortgage Note Trustee shall mail to the Holders of the Mortgage
Notes a brief report dated as of such reporting date that complies with TIA ss.
313(a) (but if no event described in TIA ss. 313(a) has occurred within the
twelve months preceding the reporting date, no report need be transmitted). The
Mortgage Note Trustee also shall comply with TIA ss. 313(b)(2). The Mortgage
Note Trustee shall also transmit by mail all reports as required by TIA ss.
313(c).
A copy of each report at the time of its mailing to the Holders of
Mortgage Notes shall be mailed to the Issuers and filed with the SEC and each
stock exchange on which the Mortgage Notes are listed in accordance with TIA ss.
313(d). The Issuers shall promptly notify the Mortgage Note Trustee when the
Mortgage Notes are listed on any stock exchange.
At the expense of the Issuers, the Mortgage Note Trustee or, if the
Mortgage Note Trustee is not the Registrar, the Registrar, shall report the
names of record holders of the Mortgage Notes to any Gaming Authority when
requested to do so by the Issuers.
At the express direction of the Issuers and at the Issuers' expense,
the Mortgage Note Trustee will provide any Gaming Authority with:
(i) copies of all notices, reports and other written communications
which the Mortgage Note Trustee gives to Holders;
81
(ii) a list of all of the Holders promptly after the original issuance
of the Mortgage Notes and periodically thereafter if the Issuers
so direct;
(iii) notice of any 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 Mortgage Note Trustee
within five Business Days of the effectiveness thereof;
(v) notice of any transfer or assignment of rights under this
Indenture or the Mortgage Note Guaranties known to the Mortgage
Note Trustee within five Business Days thereof; and
(vi) a copy of any amendment to the Mortgage Notes or this Indenture
within five Business Days of the effectiveness thereof.
To the extent requested by the Issuers and at the Issuers' expense, the
Mortgage Note 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.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Issuers and the Mortgage Note Guarantors shall pay to the Mortgage
Note Trustee from time to time reasonable compensation for its acceptance of
this Indenture and services hereunder in accordance with a written schedule
provided by the Mortgage Note Trustee to the Issuers. The Mortgage Note
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuers and the Mortgage Note Guarantors shall
reimburse the Mortgage Note 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 Mortgage Note Trustee's agents
and counsel.
The Issuers and the Mortgage Note Guarantors shall indemnify the
Mortgage Note Trustee against any and all losses, liabilities or expenses
incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and
expenses of enforcing this Indenture against the Issuers (including this Section
7.07) and defending itself against any claim (whether asserted by the Issuers or
any Holder or any other person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent any
such loss, liability or expense may be attributable to its negligence, willful
misconduct or bad faith. The Mortgage Note Trustee shall notify the Issuers
promptly of any claim for which it may seek indemnity. Failure by the Mortgage
Note Trustee to so notify the Issuers shall not relieve the Issuers or any
Mortgage Note Guarantor of its obligations hereunder. The Issuers shall defend
the claim and the Mortgage Note Trustee shall cooperate in the defense. To the
extent there exists a conflict or potential conflict of interest, the Mortgage
Note Trustee may have separate counsel and the Issuers and the Mortgage Note
Guarantors shall pay the reasonable fees and expenses of such counsel. Neither
the Issuers nor any Mortgage Note Guarantor need pay for any settlement made
without its consent, which consent shall not be unreasonably withheld.
The obligations of the Issuers and the Mortgage Note Guarantors under
this Section 7.07 shall survive the satisfaction and discharge of this
Indenture.
82
When the Mortgage Note Trustee incurs expenses or renders services
after an Event of Default specified in Section 6.01(i) or (j) hereof occurs, the
expenses and the compensation for the services (including the reasonable fees
and expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.
The Mortgage Note Trustee shall comply with the provisions of TIA ss.
313(b)(2) to the extent applicable.
SECTION 7.08. REPLACEMENT OF MORTGAGE NOTE TRUSTEE.
A resignation or removal of the Mortgage Note Trustee and appointment
of a successor Mortgage Note Trustee shall become effective only upon the
successor Mortgage Note Trustee's acceptance of appointment and taking of office
as provided in this Section.
The Mortgage Note Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Issuers. The
Holders of Mortgage Notes of a majority in principal amount of the then
outstanding Mortgage Notes may remove the Mortgage Note Trustee by so notifying
the Mortgage Note Trustee and the Issuers in writing. The Issuers may remove the
Mortgage Note Trustee if:
(a) the Mortgage Note Trustee fails to comply with Section 7.10 hereof;
(b) the Mortgage Note Trustee is adjudged a bankrupt or an insolvent or
an order for relief is entered with respect to the Mortgage Note Trustee
under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Mortgage Note
Trustee or its property; or
(d) the Mortgage Note Trustee becomes incapable of acting.
If the Mortgage Note Trustee resigns or is removed or if a vacancy
exists in the office of Mortgage Note Trustee for any reason, the Issuers shall
promptly appoint a successor Mortgage Note Trustee. For up to one year after the
successor Mortgage Note Trustee takes office, the Holders of a majority in
principal amount of the then outstanding Mortgage Notes may by written action
appoint a successor Mortgage Note Trustee to replace the successor Mortgage Note
Trustee appointed by the Issuers.
If any Gaming Authority requires a Mortgage Note Trustee to be
approved, licensed or qualified and the Mortgage Note 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 Issuers unless the Mortgage Note Trustee
declines to do so, or, if the Mortgage Note Trustee's relationship with either
the Issuers or the Mortgage Note Guarantors may, in the Issuers' discretion,
jeopardize any material gaming license or franchise or right or approval granted
thereto, the Mortgage Note Trustee shall resign, and, in addition, the Mortgage
Note Trustee may at its option resign if the Mortgage Note Trustee in its sole
discretion determines not to be so approved, licensed or qualified.
If a successor Mortgage Note Trustee does not take office within 60
days after the retiring Mortgage Note Trustee resigns or is removed, the
retiring Mortgage Note Trustee, the Issuers, any Mortgage Note Guarantor or the
Holders of Mortgage Notes of at least 10% in principal amount of the
83
then outstanding Mortgage Notes may petition any court of competent jurisdiction
for the appointment of a successor Mortgage Note Trustee.
If the Mortgage Note Trustee, after written request by any Holder of a
Mortgage Note who has been a Holder of a Mortgage Note for at least six months,
fails to comply with Section 7.10, such Holder of a Mortgage Note may petition
any court of competent jurisdiction for the removal of the Mortgage Note Trustee
and the appointment of a successor Mortgage Note Trustee.
A successor Mortgage Note Trustee shall deliver a written acceptance of
its appointment to the retiring Mortgage Note Trustee and to the Issuers.
Thereupon, the resignation or removal of the retiring Mortgage Note Trustee
shall become effective, and the successor Mortgage Note Trustee shall have all
the rights, powers and duties of the Mortgage Note Trustee under this Indenture.
The successor Mortgage Note Trustee shall mail a notice of its succession to
Holders of the Mortgage Notes. The retiring Mortgage Note Trustee shall promptly
transfer all property held by it as Mortgage Note Trustee to the successor
Mortgage Note Trustee, provided all sums owing to the Mortgage Note Trustee
hereunder have been paid and subject to the Lien provided for in Section 7.07
hereof. Notwithstanding replacement of the Mortgage Note Trustee pursuant to
this Section 7.08, the Issuers' and the Mortgage Note Guarantors' obligations
under Section 7.07 hereof shall continue for the benefit of the retiring
Mortgage Note Trustee.
SECTION 7.09. SUCCESSOR MORTGAGE NOTE TRUSTEE BY MERGER, ETC.
If the Mortgage Note Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Mortgage Note Trustee; provided such corporation shall be otherwise
eligible and qualified under this Article.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Mortgage Note Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of at
least $50 million as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Mortgage Note Trustee who satisfies
the requirements of TIA ss. 310(a)(1), (2) and (5). The Mortgage Note Trustee is
subject to TIA ss. 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Mortgage Note Trustee is subject to TIA ss. 311(a), excluding any
creditor relationship listed in TIA ss. 311(b). A Mortgage Note Trustee who has
resigned or been removed shall be subject to TIA ss. 311(a) to the extent
indicated therein.
84
SECTION 7.12. AUTHORIZATION OF TRUSTEE TO TAKE OTHER ACTIONS.
(a) The Mortgage Note Trustee is hereby authorized to enter into and
take any actions or deliver such consents required by or requested under each of
the Collateral Documents, the Intercreditor Agreement, the Sole Stockholder
Intercreditor Agreement, the Disbursement Agreement and such other documents as
directed by the Holders of a majority of outstanding aggregate principal amount
of the Mortgage Notes. If at any time any action by or the consent of the
Mortgage Note Trustee is required under any of the Collateral Documents, the
Intercreditor Agreement, the Sole Stockholder Intercreditor Agreement, the
Disbursement Agreement or any other document entered into by the Mortgage Note
Trustee at the direction of a majority of the Holders of outstanding aggregate
principal amount of the Mortgage Notes, such action or consent shall be taken or
given by the Mortgage Note Trustee upon the consent to such action by the
Holders of a majority of outstanding aggregate principal amount of the Mortgage
Notes.
(b) Under any refinancing or replacement of the Bank Credit Facility or
the Mall Construction Loan Facility with a lender that does not become a party
to the Intercreditor Agreement or the Sole Stockholder Intercreditor Agreement,
the Mortgage Note Trustee shall enter into an intercreditor agreement with such
lender, at such lender's request, with terms that are substantially as favorable
to the Mortgage Note Trustee or the Holders of Mortgage Notes as those contained
in the Intercreditor Agreement or the Sole Stockholder Intercreditor Agreement,
as applicable. The Mortgage Note Trustee shall also enter into such amendments
or supplements to the Intercreditor Agreement and the Sole Stockholder
Intercreditor Agreement to provide for additional parties to be bound by and
subject to the benefits of the terms thereof.
(c) The Mortgage Note Trustee shall enter into an intercreditor
agreement upon the request of the Issuers with respect to any financing for any
Specified FF&E; provided that the Issuers deliver an Officers' Certificate that
such financing (i) will not violate this Indenture, (ii) the terms of such
intercreditor agreement will not violate this Indenture or any of the Collateral
Documents, (iii) any Liens incurred in connection with such financing extend
only to such Specified FF&E and such other assets as permitted clause (o) of the
definition of Permitted Liens included herein, and (iv) if any Indebtedness
under the Bank Credit Facility is outstanding, the interests of the lenders
under the Bank Credit Facility and the Mortgage Notes are treated on a
substantially equivalent or pari passu basis as compared to such equipment
lender, except (1) the lenders under the Bank Credit Facility may be treated
differently compared to the Holders of the Mortgage Notes with respect to
deposits thereunder or (2) if such provisions would be consistent with the
description of such arrangements in the Offering Circular dated November 6, 1997
relating to the Mortgage Notes, the lenders under the Bank Credit Facility may
be treated differently compared to the Holders of the Mortgage Notes with
respect to the return of funds representing deposits on the Lien position on
collateral securing the Bank Credit Facility and the Mortgage Notes.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Issuers may, at the option of the Board of Directors of the Company
evidenced by a resolution set forth in an Officers' Certificate delivered to the
Mortgage Note Trustee, at any time, elect to have either Section 8.02 or 8.03
hereof be applied to all outstanding Mortgage Notes upon compliance with the
conditions set forth below in this Article Eight.
85
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Issuers' exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Issuers and the Mortgage Note Guarantors
shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be deemed to have been discharged from their respective obligations with
respect to all outstanding Mortgage Notes and any Mortgage Note Guaranties on
the date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Issuers shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Mortgage Notes and cured all existing Events of Default, which
Mortgage Notes shall thereafter be deemed to be "outstanding" only for the
purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Mortgage Notes, the Collateral Documents and this
Indenture (and the Mortgage Note Trustee, on demand of and at the expense of the
Issuers, shall execute proper instruments acknowledging the same), except for
the following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of outstanding Mortgage Notes to
receive solely from the trust fund described in Section 8.04 hereof, and as more
fully set forth in such Section, payments in respect of the principal of,
premium and Liquidated Damages, if any, and interest on such Mortgage Notes when
such payments are due, (b) the Issuers' and the Mortgage Note Guarantors'
obligations with respect to such Mortgage Notes under Article 2 and Section 4.02
hereof, (c) the rights, powers, trusts, duties and immunities of the Mortgage
Note Trustee hereunder and the Issuers' and the Mortgage Note Guarantors'
obligations in connection therewith and (d) this Article Eight. Subject to
compliance with this Article Eight, the Issuers may exercise their option under
this Section 8.02 notwithstanding the prior exercise of its option under Section
8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Issuers' exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Issuers and the Mortgage Note Guarantors
shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be released from their obligations under the covenants contained in
Sections 4.03, 4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16,
4.17, 4.18, 4.19, 4.20, 4.21, 4.22, 4.23, 4.25, 4.26, 4.27, 4.28 and 4.29 and
Articles 5, 10 and 11 hereof with respect to the outstanding Mortgage Notes and
Mortgage Note Guaranties on and after the date the conditions set forth below
are satisfied (hereinafter, "Covenant Defeasance"), and the Mortgage Notes shall
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Mortgage Notes shall not be deemed outstanding for accounting purposes). For
this purpose, Covenant Defeasance means that, with respect to the outstanding
Mortgage Notes, the Issuers and the Mortgage Note Guarantors may omit to comply
with and shall have no liability in respect of any term, condition or limitation
set forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Mortgage Notes and Mortgage Note Guaranties shall be
unaffected thereby. In addition, upon the Issuers' exercise under Section 8.01
hereof of the option applicable to this Section 8.03 hereof, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(c) through 6.01(g) and 6.01(k) through 6.01(m) hereof shall not constitute
Events of Default.
86
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Mortgage Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Issuers must irrevocably deposit with the Mortgage
Note Trustee, in trust, for the benefit of the Holders, cash in United
States dollars, non-callable Government Securities, or a combination
thereof, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants as
evidenced by a certificate delivered to the Mortgage Note Trustee, to
pay the principal of, premium and Liquidated Damages, if any, and
interest on the outstanding Mortgage Notes on the stated maturity date
or on an applicable redemption date, as the case may be, of such
principal of, premium and Liquidated Damages, if any, or interest on
the outstanding Mortgage Notes;
(b) in the case of an election under Section 8.02 hereof, the
Issuers shall have delivered to the Mortgage Note Trustee an Opinion of
Counsel in the United States reasonably acceptable to the Mortgage Note
Trustee confirming that, subject to customary assumptions and
exclusions, (A) the Issuers have received from, or there has been
published by, the United States Internal Revenue Service a ruling or
(B) since the Issuance 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 in the United States shall confirm
that, subject to customary assumptions and exclusions, the Holders of
the outstanding Mortgage Notes will not recognize income, gain or loss
for U.S. federal income tax purposes as a result of such Legal
Defeasance and will be subject to U.S. federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the
Issuers shall have delivered to the Mortgage Note Trustee an Opinion of
Counsel in the United States reasonably acceptable to the Mortgage Note
Trustee confirming that, subject to customary assumptions and
exclusions, the Holders of the outstanding Mortgage Notes will not
recognize income, gain or loss for U.S. federal income tax purposes as
a result of such Covenant Defeasance and will be subject to U.S.
federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Covenant Defeasance had
not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing pursuant to Section 6.01(a), 6.01(b), 6.01(i) or 6.01(j)
hereof on the date of such deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, any
material agreement or instrument (other than this Indenture) to which
the Issuers or any of their Subsidiaries is a party or by which the
Issuers or any of their Subsidiaries is bound;
(f) the Issuers shall have delivered to the Mortgage Note
Trustee an Opinion of Counsel in the United States to the effect that,
as of the date of such opinion and subject to customary assumptions and
exclusions, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally under any applicable United
States, state law and that the Mortgage Note Trustee has
87
a perfected security interest in such trust for the ratable benefit of
the Holders of Mortgage Notes;
(g) the Issuers shall have delivered to the Mortgage Note
Trustee an Officers' Certificate stating that the deposit was not made
by the Issuers with the intent of defeating, hindering, delaying or
defrauding any creditors of the Issuers or others; and
(h) the Issuers shall have delivered to the Mortgage Note
Trustee an Officers' Certificate and an Opinion of Counsel in the
United States, which Opinion of Counsel may be subject to customary
assumptions and exclusions, each stating that all conditions precedent
provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Mortgage Note
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.05, the "Mortgage Note Trustee") pursuant to Section 8.04 hereof in respect of
the outstanding Mortgage Notes shall be held in trust and applied by the
Mortgage Note Trustee, in accordance with the provisions of such Mortgage Notes
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Issuers acting as Paying Agent) as the Mortgage Note Trustee may
determine, to the Holders of such Mortgage Notes of all sums due and to become
due thereon in respect of principal, premium and Liquidated Damages, if any, and
interest but such money need not be segregated from other funds except to the
extent required by law.
The Issuers and the Mortgage Note Guarantors shall pay and indemnify
the Mortgage Note Trustee against any tax, fee or other charge imposed on or
assessed against the cash or non-callable Government Securities deposited
pursuant to Section 8.04 hereof or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the outstanding Mortgage Notes.
Anything in this Article Eight to the contrary notwithstanding, the
Mortgage Note Trustee shall deliver or pay to the Issuers from time to time upon
the request of the Issuers any money or non-callable Government Securities held
by it as provided in Section 8.04 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Mortgage Note Trustee (which may be the
opinion delivered under Section 8.04(a) hereof), are in excess of the amount
thereof that would then be required to be deposited to effect an equivalent
Legal Defeasance or Covenant Defeasance.
SECTION 8.06. REPAYMENT TO THE ISSUERS.
Any money deposited with the Mortgage Note Trustee or any Paying Agent,
or then held by the Issuers, in trust for the payment of the principal of,
premium and Liquidated Damages, if any, or interest on any Mortgage Note and
remaining unclaimed for two years after such principal, premium and Liquidated
Damages, if any, or interest has become due and payable shall be paid to the
Issuers on its request or (if then held by the Issuers) shall be discharged from
such trust; and the Holder of such Mortgage Note shall thereafter, as a secured
creditor, look only to the Issuers for payment thereof, and all liability of the
Mortgage Note Trustee or such Paying Agent with respect to such trust money, and
all liability of the Issuers as trustee thereof, shall thereupon cease;
provided, however, that the Mortgage
88
Note Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Issuers cause to be published once, in the
New York Times and The Wall Street Journal (national edition), notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Issuers.
SECTION 8.07. REINSTATEMENT.
If the Mortgage Note Trustee or Paying Agent is unable to apply any
United States dollars or non-callable Government Securities in accordance with
Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Issuers' and the Mortgage Note
Guarantors' obligations under this Indenture and the Mortgage Notes and Mortgage
Note Guaranties shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Mortgage
Note Trustee or Paying Agent is permitted to apply all such money in accordance
with Section 8.02 or 8.03 hereof, as the case may be; provided, however, that,
if the Issuers and the Mortgage Note Guarantors make any payment of principal
of, premium and Liquidated Damages, if any, or interest on any Mortgage Note
following the reinstatement of its obligations, the Issuers and the Mortgage
Note Guarantors shall be subrogated to the rights of the Holders of such
Mortgage Notes to receive such payment from the money held by the Mortgage Note
Trustee or Paying Agent.
SECTION 8.08. NOTE COLLATERAL.
Upon the Issuers' exercise under Section 8.01 hereof of the option
applicable to either Section 8.02 or 8.03, the Note Collateral, except the funds
in the trust fund described in Section 8.04 hereof, shall be released pursuant
to Section 10.03 hereof.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF MORTGAGE NOTES.
Notwithstanding Section 9.02 of this Indenture, the Issuers, the
Mortgage Note Guarantors and the Mortgage Note Trustee may amend or supplement
this Indenture, the Mortgage Notes, the Mortgage Note Guaranties, the
Intercreditor Agreement, the Sole Stockholder Intercreditor Agreement or the
Collateral Documents without the consent of any Holder of a Mortgage Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Article 5 or Article 11 hereof;
(c) to provide for uncertificated Mortgage Notes in addition to or in
place of certificated Mortgage Notes;
(d) to provide for the assumption of the Issuers' or the Mortgage Note
Guarantors' obligations to the Holders of the Mortgage Notes in the case of
a merger or consolidation pursuant to Articles 5 or 11 hereof, as the case
may be;
89
(e) to make any change that would provide any additional rights or
benefits to the Holders of the Mortgage Notes (including providing for
additional Mortgage Note Guaranties pursuant to Section 11.02 hereof) or
that does not adversely affect the legal rights hereunder, under the
Collateral Documents, the Intercreditor Agreement or the Sole Stockholder
Intercreditor Agreement of any Holder of a Mortgage Note;
(f) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA; or
(g) to enter into additional or supplemental Collateral Documents.
Upon the request of the Issuers accompanied by a resolution of the
Board of Directors of the Issuers and the Mortgage Note Guarantors (or their
managing members) authorizing the execution of any such amended or supplemental
Indenture, Mortgage Notes, Mortgage Note Guaranties or Collateral Documents, and
upon receipt by the Mortgage Note Trustee of the documents described in Section
7.02 hereof, the Mortgage Note Trustee shall join with the Issuers and the
Mortgage Note Guarantors in the execution of any amended or supplemental
Indenture, Mortgage Notes, Mortgage Note Guaranties or Collateral Documents
authorized or permitted by the terms of this Indenture, but the Mortgage Note
Trustee shall not be obligated to enter into such amended or supplemental
Indenture, Mortgage Notes, Mortgage Note Guaranties or Collateral Documents that
affects its own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF MORTGAGE NOTES.
Except as provided below in this Section 9.02 or elsewhere in this
Indenture, the Issuers and the Mortgage Note Trustee may amend or supplement
this Indenture, the Mortgage Notes, the Mortgage Note Guaranties, the Collateral
Documents, the Intercreditor Agreement or the Sole Stockholder Intercreditor
Agreement with the consent of the Holders of at least a majority in principal
amount of the Mortgage Notes then outstanding (including consents obtained in
connection with a tender offer or exchange offer for the Mortgage Notes), and,
subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of
Default (other than a Default or Event of Default in the payment of the
principal of, premium and Liquidated Damages, if any, or interest on the
Mortgage Notes, except a payment default resulting from an acceleration that has
been rescinded) or compliance with any provision of this Indenture or the
Mortgage Notes, the Mortgage Note Guaranties, the Collateral Documents, the
Intercreditor Agreement or the Sole Stockholder Intercreditor Agreement may be
waived with the consent of the Holders of a majority in principal amount of the
then outstanding Mortgage Notes (including consents obtained in connection with
a tender offer or exchange offer for the Mortgage Notes).
Upon the request of the Issuers accompanied by a resolution of the
Board of Directors of the Company and the Mortgage Note Guarantors authorizing
the execution of any such amended or supplemental Indenture, Mortgage Notes,
Mortgage Note Guaranties, Collateral Documents, the Intercreditor Agreement or
the Sole Stockholder Intercreditor Agreement, and upon the filing with the
Mortgage Note Trustee of evidence reasonably satisfactory to the Mortgage Note
Trustee of the consent of the Holders of Mortgage Notes as aforesaid, and upon
receipt by the Mortgage Note Trustee of the documents described in Section 7.02
hereof, the Mortgage Note Trustee shall join with the Issuers and the Mortgage
Note Guarantors in the execution of such amended or supplemental Indenture,
Mortgage Notes, Mortgage Note Guaranties, Collateral Documents, Intercreditor
Agreement or Sole Stockholder Intercreditor Agreement, unless such amended or
supplemental Indenture, Mortgage Notes, Mortgage Note Guaranties, Collateral
Documents or Intercreditor Agreement affects the Mortgage Note Trustee's own
rights, duties or immunities under this Indenture, the Mortgage Notes, the
Mortgage Note Guaranties, the Collateral
90
Documents, the Intercreditor Agreement, the Sole Stockholder Intercreditor
Agreement or otherwise, in which case the Mortgage Note Trustee may in its
discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture, Mortgage Notes, Mortgage Note Guaranties, Collateral
Documents Intercreditor Agreement or Sole Stockholder Intercreditor Agreement.
It shall not be necessary for the consent of the Holders of Mortgage
Notes under this Section 9.02 to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Issuers shall mail to the Holders of Mortgage Notes affected
thereby a notice briefly describing the amendment, supplement 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 amended or
supplemental Indenture, Mortgage Notes, Mortgage Note Guaranties, Collateral
Documents Intercreditor Agreement or Sole Stockholder Intercreditor Agreement or
waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in
aggregate principal amount of the Mortgage Notes then outstanding may waive
compliance in a particular instance with any provision of this Indenture, the
Mortgage Notes, the Mortgage Note Guaranties, the Collateral Documents, the
Intercreditor Agreement or the Sole Stockholder Intercreditor Agreement.
However, without the consent of each Holder affected, an amendment or waiver may
not (with respect to any Mortgage Notes held by a non-consenting Holder):
(a) reduce the principal amount of Mortgage Notes whose Holders
must consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any
Mortgage Note or alter or waive any of the provisions with respect to
the optional or mandatory redemption provisions of the Mortgage Notes
(provided, however, that the term "redemption" does not apply to any
provision with respect to any Repurchase Offer);
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Mortgage Note;
(d) waive a Default or Event of Default in the payment of principal
of or premium and Liquidated Damages, if any, or interest on the
Mortgage Notes (except a rescission of acceleration of the Mortgage
Notes by the Holders of at least a majority in aggregate principal
amount of the then outstanding Mortgage Notes and a waiver of the
payment default that resulted from such acceleration);
(e) make any Mortgage Note payable in money other than that stated
in the Mortgage Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Mortgage Notes to
receive payments of principal of or premium and Liquidated Damages, if
any, or interest on the Mortgage Notes;
(g) release all or substantially all of the Note Collateral from
the Lien of this Indenture and the Collateral Documents; or
(h) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions.
91
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture, the Mortgage Notes,
the Mortgage Note Guaranties and the Collateral Documents shall be set forth in
a amended or supplemental Indenture or Collateral Document that complies with
the TIA as then in effect, if applicable. This Indenture shall be construed to
comply in every respect with the TIA.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Mortgage Note is a continuing consent by the Holder of a
Mortgage Note and every subsequent Holder of a Mortgage Note or portion of a
Mortgage Note that evidences the same debt as the consenting Holder's Mortgage
Note, even if notation of the consent is not made on any Mortgage Note. However,
any such Holder of a Mortgage Note or subsequent Holder of a Mortgage Note may
revoke the consent as to its Mortgage Note if the Mortgage Note Trustee receives
written notice of revocation before the date the waiver, supplement or amendment
becomes effective. An amendment, supplement or waiver becomes effective in
accordance with its terms and thereafter binds every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF MORTGAGE NOTES.
The Mortgage Note Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Mortgage Note thereafter authenticated.
The Issuers in exchange for all Mortgage Notes may issue and the Mortgage Note
Trustee shall authenticate new Mortgage Notes (accompanied by a notation of the
Mortgage Note Guaranties duly endorsed by the Mortgage Note Guarantors) that
reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Mortgage Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
SECTION 9.06. MORTGAGE NOTE TRUSTEE TO SIGN AMENDMENTS, ETC.
The Mortgage Note Trustee shall sign any amended or supplemental
indenture, Mortgage Note, Mortgage Note Guaranty or Collateral Document, if
necessary, authorized pursuant to this Article Nine if the amendment or
supplement does not adversely affect the rights, duties, liabilities or
immunities of the Mortgage Note Trustee. The Issuers or any Mortgage Note
Guarantor may not sign an amendment or supplemental Indenture, Mortgage Note,
Mortgage Note Guaranty or Collateral Document until the Board of Directors
approves it. In executing any amended or supplemental indenture, Mortgage Note,
Mortgage Note Guaranty or Collateral Document, if necessary, the Mortgage Note
Trustee shall be entitled to receive and (subject to Section 7.01) shall be
fully protected in relying upon, an Officer's Certificate and an Opinion of
Counsel, which Opinion of Counsel may be subject to customary assumptions and
exclusions, stating that the execution of such amended or supplemental
indenture, Mortgage Note, Mortgage Note Guaranty or Collateral Document is
authorized or permitted by this Indenture.
92
ARTICLE 10
COLLATERAL AND SECURITY
SECTION 10.01. SECURITY.
The due and punctual payment of the principal of, premium and
Liquidated Damages, if any, and interest on the Mortgage Notes when and as the
same shall be due and payable, whether on an interest payment date, at maturity,
by acceleration, repurchase, redemption or otherwise, and interest on the
overdue principal of, premium and Liquidated Damages, if any, and interest on
the Mortgage Notes and performance of all other obligations of the Issuers and
the Mortgage Note Guarantors to the Holders of Mortgage Notes or the Mortgage
Note Trustee under this Indenture, the Mortgage Notes and the Mortgage Note
Guaranties, according to the terms hereunder or thereunder, shall be secured by
the Note Collateral, as provided in the Collateral Documents which the Issuers
and the Mortgage Note Guarantors have entered into simultaneously with the
execution of this Indenture for the benefit of the Holders of Mortgage Notes.
Each Holder of Mortgage Notes, by its acceptance thereof, consents and agrees to
the terms of the Collateral Documents, the Intercreditor Agreement (including,
without limitation, the provisions providing for foreclosure and release of Note
Collateral as well as any additional intercreditor arrangements entered into by
the Mortgage Note Trustee pursuant to Section 7.12 hereof) and the Sole
Stockholder Intercreditor Agreement as the same may be in effect or may be
amended from time to time in accordance with its terms and authorizes and
directs the Mortgage Note Trustee to enter into the Collateral Documents, the
Intercreditor Agreement and the Sole Stockholder Intercreditor Agreement and to
perform its obligations and exercise its rights thereunder in accordance
therewith. The Issuers and the Mortgage Note Guarantors shall deliver to the
Mortgage Note Trustee copies of all documents executed pursuant to this
Indenture, the Collateral Documents, the Intercreditor Agreement and the Sole
Stockholder Intercreditor Agreement and shall do or cause to be done all such
acts and things as may be necessary or proper, or as may be required by the
provisions of the Collateral Documents, the Intercreditor Agreement and/or the
Sole Stockholder Intercreditor Agreement to assure and confirm to the Mortgage
Note Trustee the security interest in the Note Collateral contemplated hereby,
by the Collateral Documents, the Intercreditor Agreement and the Sole
Stockholder Intercreditor Agreement or any part thereof, as from time to time
constituted, so as to render the same available for the security and benefit of
this Indenture and of the Mortgage Notes and the Mortgage Note Guaranties
secured hereby, according to the intent and purposes herein and therein
expressed. The Issuers shall take, or shall cause its Restricted Subsidiaries to
take, upon request of the Mortgage Note Trustee, any and all actions reasonably
required to cause the Collateral Documents, the Intercreditor Agreement and/or
the Sole Stockholder Intercreditor Agreement to create and maintain, as security
for the obligations of the Issuers hereunder, a valid and enforceable perfected
Lien on the Note Collateral, subject to Permitted Liens.
SECTION 10.02. RECORDING AND OPINIONS.
The Issuers and the Mortgage Note Guarantors will cause the applicable
Collateral Documents, including this Indenture Fee Deed of Trust, the Mortgage
Note Indenture Leasehold Deed of Trust, and the Mortgage Notes Indenture Mall
Parcel Fee Deed of Trust and any financing statements, all amendments or
supplements to each of the foregoing and any other similar security documents as
necessary, to be registered, recorded and filed and/or re-recorded, re-filed and
renewed in such manner and in such place or places, if any, as may be required
by law or reasonably requested by the Mortgage Note Trustee in order fully to
preserve and protect the Lien securing the obligations under the Mortgage Notes
and the Mortgage Note Guaranties pursuant to the Collateral Documents, the
Intercreditor Agreement and the Sole Stockholder Intercreditor Agreement.
93
The Issuers, the Mortgage Note Guarantors and any other obligor shall
furnish to the Mortgage Note Trustee:
(a) promptly after the execution and delivery of this Indenture, and
promptly after the execution and delivery of any other instrument of further
assurance or amendment, an Opinion of Counsel in the United States either (i)
stating that, subject to customary assumptions and exclusions, in the opinion of
such counsel, this Indenture, this Indenture Fee Deed of Trust, the Mortgage
Note Indenture Leasehold Deed of Trust, and the Mortgage Notes Indenture Mall
Parcel Fee Deed of Trust and other applicable Collateral Documents and all other
instruments of further assurance or amendment have been properly recorded,
registered and filed to the extent necessary to make effective the Lien intended
to be created by such Collateral Documents and reciting the details of such
action or referring to prior Opinions of Counsel in which such details are given
or (ii) stating that, subject to customary assumptions and exclusions, in the
opinion of such counsel, no such action is necessary to make any other Lien
created under any of the Collateral Documents effective as intended by such
Collateral Documents; and
(b) within 30 days after January 1, in each year beginning with the
year 1998, an Opinion of Counsel, dated as of such date, either (i) stating
that, subject to customary assumptions and exclusions, in the opinion of such
counsel, such action has been taken with respect to the recording, registering,
filing, re-recording, re-registering and re-filing of this Indenture and all
supplemental indentures, financing statements, continuation statements or other
instruments of further assurance as is necessary to maintain the Lien of this
Indenture and the Collateral Documents until the next Opinion of Counsel is
required to be rendered pursuant to this paragraph and reciting the details of
such action or referring to prior Opinions of Counsel in which such details are
given or (ii) stating that, subject to customary assumptions and exclusions, in
the opinion of such counsel, no such action is necessary to maintain such Lien,
until the next Opinion of Counsel is required to be rendered pursuant to this
paragraph.
(c) The Issuers shall furnish to the Mortgage Note Trustee the
certificates or opinions, as the case may be, required by TIA Section 314(d).
Such certificates or opinions will be subject to the terms of TIA Section
314(e).
SECTION 10.03. RELEASE OF COLLATERAL.
(a) Subject to subsections (b), (c) and (d) of this Section 10.03, Note
Collateral may be released from the Lien and security interest created by this
Indenture and the Collateral Documents at any time or from time to time upon the
request of the Issuers pursuant to an Officers' Certificate certifying that all
terms for release and conditions precedent hereunder and under any applicable
Collateral Document have been met and specifying (i) the identity of the Note
Collateral to be released and (ii) the provision of this Indenture which
authorizes such release. The Mortgage Note Trustee shall release (at the sole
cost and expense of the Issuers) (i) all Note Collateral that is contributed,
sold, leased, conveyed, transferred or otherwise disposed of (including, without
limitation, any Note Collateral that does not constitute Project Assets and that
is contributed, sold, leased, conveyed, transferred or otherwise disposed of to
an Unrestricted Subsidiary, but excluding any such contribution, sale, lease,
conveyance, transfer or other distribution to the Issuers or a Restricted
Subsidiary); provided, such contribution, sale, lease, conveyance, transfer or
other distribution is or will be in accordance with the provisions of this
Indenture, including, without limitation, the requirement that the net proceeds
from such contribution, sale, lease, conveyance, transfer or other distribution
are or will be applied in accordance with this Indenture and that no Default or
Event of Default has occurred and is continuing or would occur immediately
following such release; (ii) Note Collateral that is condemned, seized or taken
by the power of eminent domain or otherwise confiscated pursuant to an Event of
Loss; provided that the Net Loss Proceeds, if any, from such Event of Loss are
or will be applied in accordance with Section 4.11 hereof and that no Default or
94
Event of Default has occurred and is continuing or would occur immediately
following such release; (iii) Note Collateral which may be released with the
consent of Holders pursuant to Article 9 hereof; (iv) all Note Collateral
(except as provided in Article 8 hereof and, in particular, the funds in the
trust fund described in Section 8.04 hereof) upon discharge or defeasance of
this Indenture in accordance with Article 8 hereof; (v) all Note Collateral upon
the payment in full of all obligations of the Issuers with respect to the
Mortgage Notes; (vi) Note Collateral of a Guarantor whose Mortgage Note Guaranty
is released pursuant to Section 11.06 hereof; (vii) Note Collateral that is
expressly required to be released by any Collateral Document, the Intercreditor
Agreement or the Sole Stockholder Intercreditor Agreement; (viii) all Mall
Collateral upon the transfer of the Mall Collateral to the Mall Subsidiary in
accordance with the Sale and Contribution Agreement; (ix) the Phase II Land upon
the contribution of the Phase II Land to the Phase II Subsidiary; and (x) after
termination of all of the Sole Stockholder's Obligations under the Completion
Guaranty, the assets securing such Obligations, to the extent any such assets
remain. Upon receipt of such Officers' Certificate the Mortgage Note Trustee
shall execute, deliver or acknowledge any necessary or proper instruments of
termination, satisfaction or release to evidence the release of any Note
Collateral permitted to be released pursuant to this Indenture or the Collateral
Documents. The Trustee is hereby authorized and shall, from time to time upon
request of the Issuers, execute and deliver UCC-3 termination statements and
such other documents evidencing release of (i) Note Collateral available for
release pursuant to clauses (i) through (x) above, and (ii) any Specified FF&E
or deposits or advances used for the purpose of acquiring Specified FF&E;
provided that in the case of each of clause (i) and (ii), such request by the
Issuers is accompanied by an Officers' Certificate of the Issuers certifying
that any assets being so released are not subject to Liens in favor of the
lenders under the Bank Credit Facility.
(b) Except pursuant to Section 10.03(a), no Note Collateral shall be
released from the Lien and security interest created by the Collateral Documents
pursuant to the provisions of the Collateral Documents unless there shall have
been delivered to the Mortgage Note Trustee the certificate required by this
Section 10.03.
(c) The Mortgage Note Trustee may release Note Collateral from the Lien
and security interest created by this Indenture and the Collateral Documents
upon the sale or disposition of Note Collateral pursuant to the Mortgage Note
Trustee's powers, rights and duties with respect to remedies provided under any
of the Collateral Documents.
(d) The release of any Note Collateral from the terms of this Indenture
and the Collateral Documents shall not be deemed to impair the security under
this Indenture in contravention of the provisions hereof if and to the extent
the Note Collateral is released pursuant to the terms hereof. To the extent
applicable, the Issuers shall cause TIA ss. 313(b), relating to reports, and TIA
ss. 314(d), relating to the release of property or securities from the Lien and
security interest of the Collateral Documents and relating to the substitution
therefor of any property or securities to be subjected to the Lien and security
interest of the Collateral Documents to be complied with. Any certificate or
opinion required by TIA ss. 314(d) may be made by an Officer of the Issuers
except in cases where TIA ss. 314(d) requires that such certificate or opinion
be made by an independent Person, which Person shall be an independent engineer,
appraiser or other expert selected or approved by the Mortgage Note Trustee in
the exercise of reasonable care.
SECTION 10.04. PROTECTION OF THE TRUST ESTATE.
Subject to the terms of the Intercreditor Agreement and the Collateral
Documents, upon prior written notice to the Issuers and the Mortgage Note
Guarantors, the Mortgage Note Trustee shall have the power (i) to institute and
maintain such suits and proceedings as it may deem expedient, to prevent
95
any impairment of the Note Collateral under any of the Collateral Documents and
in the profits, rents, revenues and other income arising therefrom, including
the power to institute and maintain suits or proceedings to restrain the
enforcement of or compliance with any legislative or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid if
the enforcement of, or compliance with, such enactment, rule or order would
impair any Note Collateral or be prejudicial to the interests of the Holders of
Mortgage Notes or the Mortgage Note Trustee, to the extent permitted thereunder;
and (ii) to enforce the obligations of the Issuers, the Mortgage Note Guarantors
or any Restricted Subsidiary under this Indenture or the Collateral Documents.
Upon receipt of notice that a Restricted Subsidiary or a Guarantor is not in
compliance with any of the requirements of the Mortgage Note Deed of Trust, the
Mortgage Note Trustee may, but shall have no obligation to purchase, at the
Issuers' expense, such insurance coverage necessary to comply with the
appropriate section of the mortgage.
SECTION 10.05. CERTIFICATES OF THE ISSUERS.
The Issuers shall furnish to the Mortgage Note Trustee, prior to each
proposed release of Note Collateral pursuant to the Collateral Documents (i) all
documents required by TIA ss.314(d) and (ii) an Opinion of Counsel in the United
States, which may be rendered by internal counsel to the Issuers, to the effect
that, subject to customary assumptions and exclusions, such accompanying
documents constitute all documents required by TIA ss.314(d). The Mortgage Note
Trustee may, to the extent permitted by Sections 7.01 and 7.02 hereof, accept as
conclusive evidence of compliance with the foregoing provisions the appropriate
statements contained in such documents and such Opinion of Counsel.
SECTION 10.06. CERTIFICATES OF THE MORTGAGE NOTE TRUSTEE.
In the event that the Issuers wish to release Note Collateral in
accordance with the Collateral Documents and have delivered the certificates and
documents required by the Collateral Documents and Sections 10.03 and 10.04
hereof, the Mortgage Note Trustee shall determine whether it has received all
documentation required by TIA ss.314(d) in connection with such release and,
based on such determination and the Opinion of Counsel delivered pursuant to
Section 10.05(ii), shall deliver a certificate to the Mortgage Note Trustee
setting forth such determination.
SECTION 10.07. AUTHORIZATION OF ACTIONS TO BE TAKEN BY THE MORTGAGE NOTE
TRUSTEE UNDER THE COLLATERAL DOCUMENTS.
Subject to the provisions of Section 7.01, 7.02 and 7.12 hereof and the
Intercreditor Agreement, the Mortgage Note Trustee may, in its sole discretion
and without the consent of the Holders of Mortgage Notes, on behalf of the
Holders of Mortgage Notes, take all actions it deems necessary or appropriate in
order to (a) enforce any of the terms of the Collateral Documents, the
Intercreditor Agreement, the Sole Stockholder Intercreditor Agreement and (b)
collect and receive any and all amounts payable in respect of the Obligations of
the Issuers hereunder, including but not limited to the appointment and approval
of collateral agents, any actions of consents required to be taken under the
Intercreditor Agreement, the Sole Stockholder Intercreditor Agreement or the
Disbursement Agreement and the appointment and approval of an insurance trustee.
The Mortgage Note Trustee shall have power to institute and maintain such suits
and proceedings as it may deem expedient to prevent any impairment of the Note
Collateral by any acts that may be unlawful or in violation of the Collateral
Documents or this Indenture, and such suits and proceedings as the Mortgage Note
Trustee may deem expedient to preserve or protect its interests and the
interests of the Holders of Mortgage Notes in the Note 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
96
unconstitutional or otherwise invalid if the enforcement of, or compliance with,
such enactment, rule or order would impair the security interest hereunder or be
prejudicial to the interests of the Holders of Mortgage Notes or of the Mortgage
Note Trustee).
SECTION 10.08. AUTHORIZATION OF RECEIPT OF FUNDS BY THE MORTGAGE NOTE TRUSTEE
UNDER THE COLLATERAL DOCUMENTS.
Upon an Event of Default and so long as such Event of Default
continues, the Mortgage Note Trustee may, subject to the terms of the
Intercreditor Agreement, exercise in respect of the Note Collateral, in addition
to the other rights and remedies provided for herein, in the Note Collateral
Documents or otherwise available to it, all of the rights and remedies of a
secured party under the Uniform Commercial Code or other applicable law, and the
Mortgage Note Trustee may also upon obtaining possession of the Note Collateral
as set forth herein, without notice to the Issuers, except as specified below,
sell the Note Collateral or any part thereof in one or more parcels at public or
private sale, at any exchange, broker's board or at any of the Mortgage Note
Trustee's offices or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Mortgage Note Trustee may deem commercially
reasonable. The Issuers acknowledge and agree that any such private sale may
result in prices and other terms less favorable to the seller than if such a
sale were a public sale. The Issuers agree that, to the extent notice of sale
shall be required by law, at least 10 days' notice to the Issuers of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Mortgage Note Trustee shall
not be obligated to make any sale regardless of notice of sale having been
given. The Mortgage Note Trustee may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned.
Any cash that is Note Collateral held by the Mortgage Note Trustee and
all cash proceeds received by the Mortgage Note Trustee in respect of any sale
of, collection from, or other realization upon all or any part of the Note
Collateral shall be applied (unless otherwise provided for in the Note
Collateral Documents and after payment of any and all amounts payable to the
Mortgage Note Trustee pursuant to the Indenture), as the Mortgage Note Trustee
shall determine or as the Holders of the Mortgage Notes shall direct pursuant to
Section 6.05 hereof, (i) against the obligations for the ratable benefit of the
Holders of the Mortgage Notes, (ii) to maintain, repair or otherwise protect the
Note Collateral or (iii) to take such other action to protect the other rights
of the Holders of the Mortgage Notes or to take any other appropriate action or
remedy for the benefit of the Holders of the Mortgage Notes. Any surplus of such
cash or cash proceeds held by the Mortgage Note Trustee and remaining after
payment in full of all the obligations shall be paid over to the Issuers or to
whomsoever may be lawfully entitled to receive such surplus or as a court of
competent jurisdiction may direct.
SECTION 10.09. TERMINATION OF SECURITY INTEREST.
Upon the payment in full of all Obligations of the Issuers under this
Indenture and the Mortgage Notes, the Mortgage Note Trustee shall (at the
request of the Issuers accompanied by (i) an Officers' Certificate of the
Issuers to the Mortgage Note Trustee stating that such Obligations have been
paid in full, and (ii) instructions from the Issuers to the Mortgage Note
Trustee to release the Liens pursuant to this Indenture and the Collateral
Documents) release the Liens securing the Note Collateral.
SECTION 10.10. COOPERATION OF MORTGAGE NOTE TRUSTEE.
In the event the Issuers or any Mortgage Note Guarantor pledge or grant
a security interest in additional Note Collateral, the Mortgage Note Trustee
shall cooperate with the Issuers or such Mortgage
97
Note Guarantor in reasonably and promptly agreeing to the form of, and executing
as required, any instruments or documents necessary to make effective the
security interest in the Note Collateral to be so substituted or pledged. To the
extent practicable, the terms of any security agreement or other instrument or
document necessitated by any such substitution or pledge shall be comparable to
the provisions of the existing Collateral Documents. Subject to, and in
accordance with the requirements of this Article 10 and the terms of the
Collateral Documents, in the event that the Issuers or any Mortgage Note
Guarantor engages in any transaction pursuant to Section 10.03, the Mortgage
Note Trustee shall cooperate with the Issuers or such Mortgage Note Guarantor in
order to facilitate such transaction in accordance with any reasonable time
schedule proposed by the Issuers, including by delivering and releasing the Note
Collateral in a prompt and reasonable manner.
SECTION 10.11. COLLATERAL AGENT.
The Mortgage Note Trustee may, from time to time, appoint one or more
Collateral Agents hereunder. Each of such Collateral Agents may be delegated any
one or more of the duties or rights of the Mortgage Note Trustee hereunder or
under the Collateral Documents or Intercreditor Agreement or which are specified
in any Collateral Documents or Intercreditor Agreement, including without
limitation, the right to hold any Note Collateral in the name of, registered to,
or in the physical possession of, such Collateral Agent, for the rateable
benefit of the Holders of the Mortgage Notes. Each such Collateral Agent shall
have such rights and duties as may be specified in an agreement between the
Mortgage Note Trustee and such Collateral Agent. The Mortgage Note Trustee and
any Collateral Agent shall be authorized hereunder to give any acknowledgment
reasonably requested by any party under the Intercreditor Agreement to confirm
the rights and obligations of the parties under the Intercreditor Agreement.
ARTICLE 11
MORTGAGE NOTE GUARANTIES
SECTION 11.01. MORTGAGE NOTE GUARANTIES.
The Mortgage Notes are hereby unconditionally guaranteed (i) on a
senior, secured basis by the Secured Mortgage Guarantors and (ii) on a
subordinated, unsecured basis by each of the Subordinated Mortgage Note
Guarantors. The Mortgage Note Guarantors hereby guarantee to each Holder of a
Mortgage Note authenticated and delivered by the Mortgage Note Trustee
irrespective of the validity or enforceability of this Indenture, the Mortgage
Notes or the obligations of the Issuers under this Indenture, the Mortgage Notes
or the Collateral Documents, that: (i) the principal of, premium and Liquidated
Damages, if any, and interest on the Mortgage Notes will be paid in full when
due, whether at the maturity or interest payment or mandatory redemption date,
by acceleration, call for redemption or otherwise, and interest on the overdue
principal and interest, if any, of the Mortgage Notes and all other obligations
of the Issuers to the Holders or the Mortgage Note Trustee under this Indenture
or the Mortgage Notes will be promptly paid in full or performed, all in
accordance with the terms of this Indenture and the Mortgage Notes; and (ii) in
case of any extension of time of payment or renewal of any Mortgage Notes or any
of such other obligations, they will be paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration, prepayment, declaration, demand or otherwise. Failing
payment when due of any amount so guaranteed for whatever reason, each Mortgage
Note Guarantor will be obligated to pay the same whether or not such failure to
pay has become an Event of Default which could cause acceleration pursuant to
98
Section 6.02 hereof. Each Mortgage Note Guarantor agrees that this is a
guarantee of payment not a guarantee of collection.
Each Mortgage Note Guarantor hereby agrees that its obligations with
regard to this Mortgage Note Guaranty shall be joint and several, unconditional,
irrespective of the validity or enforceability of the Mortgage Notes or the
obligations of the Issuers under this Indenture, the absence of any action to
enforce the same, the recovery of any judgment against the Issuers or any other
obligor with respect to this Indenture, the Mortgage Notes or the Obligations of
the Issuers under this Indenture or the Mortgage Notes, any action to enforce
the same or any other circumstances (other than complete performance) which
might otherwise constitute a legal or equitable discharge or defense of a
Mortgage Note Guarantor. Each Mortgage Note Guarantor further, to the extent
permitted by law, waives and relinquishes all claims, rights and remedies
accorded by applicable law to guarantors and agrees not to assert or take
advantage of any such claims, rights or remedies, including but not limited to:
(a) any right to require any of the Mortgage Note Trustee, the Holders or the
Issuers (each a "Benefitted Party"), as a condition of payment or performance by
such Mortgage Note Guarantor, to (i) proceed against the Issuers, any other
guarantor (including any other Mortgage Note Guarantor) of the Obligations under
the Mortgage Note Guaranties or any other Person, (ii) proceed against or
exhaust any security held from the Issuers, any such other guarantor or any
other Person, (iii) proceed against or have resort to any balance of any deposit
account or credit on the books of any Benefitted Party in favor of the Issuers
or any other Person, or (iv) pursue any other remedy in the power of any
Benefitted Party whatsoever; (b) any defense arising by reason of the
incapacity, lack of authority or any disability or other defense of the Issuers
including any defense based on or arising out of the lack of validity or the
unenforceability of the Obligations under the Mortgage Note Guaranties or any
agreement or instrument relating thereto or by reason of the cessation of the
liability of the Issuers from any cause other than payment in full of the
Obligations under the Mortgage Note Guaranties; (c) any defense based upon any
statute or rule of law which provides that the obligation of a surety must be
neither larger in amount nor in other respects more burdensome than that of the
principal; (d) any defense based upon any Benefitted Party's errors or omissions
in the administration of the Obligations under the Mortgage Note Guaranties,
except behavior which amounts to bad faith; (e) (i) any principles or provisions
of law, statutory or otherwise, which are or might be in conflict with the terms
of the Mortgage Note Guaranties and any legal or equitable discharge of such
Mortgage Note Guarantor's obligations hereunder, (ii) the benefit of any statute
of limitations affecting such Mortgage Note Guarantor's liability hereunder or
the enforcement hereof, (iii) any rights to set-offs, recoupments and
counterclaims, and (iv) promptness, diligence and any requirement that any
Benefitted Party protect, secure, perfect or insure any security interest or
lien or any property subject thereto; (f) notices, demands, presentments,
protests, notices of protest, notices of dishonor and notices of any action or
inaction, including acceptance of the Mortgage Note Guaranties, notices of
default under the Mortgage Notes or any agreement or instrument related thereto,
notices of any renewal, extension or modification of the Obligations under the
Mortgage Note Guaranties or any agreement related thereto, and notices of any
extension of credit to the Issuers and any right to consent to any thereof; (g)
to the extent permitted under Section 40.495 of the Nevada Revised Statutes, the
benefits of the "One Action" rule under Section 40.430 of the Nevada Revised
Statutes and (h) any defenses or benefits that may be derived from or afforded
by law which limit the liability of or exonerate guarantors or sureties, or
which may conflict with the terms of the Mortgage Note Guaranties. Each Mortgage
Note Guarantor hereby covenants that its Mortgage Note Guaranty will not be
discharged except by complete performance of the obligations contained in its
Mortgage Note Guaranty and this Indenture.
If any Holder or the Mortgage Note Trustee is required by any court or
otherwise to return to either the Issuers or any Mortgage Note Guarantor, or any
custodian, trustee, or similar official acting in relation to either the Issuers
or such Mortgage Note Guarantor, any amount paid by the Issuers or such Mortgage
Note Guarantor to the Mortgage Note Trustee or such Holder, the applicable
Mortgage Note
99
Guaranty, to the extent theretofore discharged, shall be reinstated in full
force and effect. Each Mortgage Note Guarantor agrees that it will not be
entitled to any right of subrogation in relation to the Holders in respect of
any obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby.
Each Mortgage Note Guarantor further agrees that, as between such
Mortgage Note Guarantor, on the one hand, and the Holders and the Mortgage Note
Trustee, on the other hand, (i) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Section 6.02 hereof for the purposes of
this Mortgage Note Guaranty, notwithstanding any stay, injunction or other
prohibition preventing such acceleration as to the Issuers or any other obligor
on the Mortgage Notes of the obligations guaranteed hereby, and (ii) in the
event of any declaration of acceleration of those obligations as provided in
Section 6.02 hereof, those obligations (whether or not due and payable) will
forthwith become due and payable by such Mortgage Note Guarantor for the purpose
of this Mortgage Note Guaranty.
SECTION 11.02. ADDITIONAL MORTGAGE NOTE GUARANTIES.
If (a) the Issuers or any Restricted Subsidiary transfers or causes to
be transferred, in one or a series of related transactions (other than a
transaction or series of related transactions constituting a Restricted Payment
permitted pursuant to the provisions of Section 4.07 hereof), property or assets
having a fair market value exceeding $1.0 million to any Restricted Subsidiary
of the Issuers (other than a Mortgage Note Guarantor), (b) any Restricted
Subsidiary that is not a Mortgage Note Guarantor shall have a net worth, annual
revenues or net income in excess of $1.0 million (including by reason of
acquisition, consolidation or merger) or shall own any material license,
franchise or right used in the operation of any of the Project Assets of the
Project or (c) an Unrestricted Subsidiary or Special Subsidiary ceases to be an
Unrestricted Subsidiary pursuant to the terms of this Indenture or is designated
by the Board of Directors of the Company to be a Restricted Subsidiary pursuant
to the terms of this Indenture and, in each case such Restricted Subsidiary
shall have a net worth, annual revenues or net income in excess of $1.0 million
(including by reason of acquisition, consolidation or merger) or shall own any
material license, franchise or right used in the operation of any of the Project
Assets of the Project, the Issuers shall cause such Restricted Subsidiary to (i)
execute and deliver to the Mortgage Note Trustee a supplemental indenture and,
in the case of any Secured Mortgage Note Guarantor, supplemental Collateral
Documents in form reasonably satisfactory to the Mortgage Note Trustee pursuant
to which such Restricted Subsidiary shall, in the case of a Secured Mortgage
Note Guarantor, unconditionally guarantee, on a secured basis, all of the
Issuers' obligations under the Mortgage Notes, this Indenture and the Collateral
Documents on the terms set forth in this Indenture and (ii) deliver to the
Mortgage Note Trustee an opinion of counsel that, subject to customary
assumptions and exclusions, such supplemental indenture and supplemental
Collateral Documents have been duly executed and delivered by such Restricted
Subsidiary. Any Mortgage Note Guaranty executed and delivered in accordance with
this Section 11.02, to the extent given by a Secured Mortgage Note Guarantor,
shall be secured by a Lien or charge on all Note Collateral of such Secured
Mortgage Note Guarantor. Any such Mortgage Note Guaranty shall be released if
the Issuers or its Restricted Subsidiaries cease to own any Equity Interests in
such Restricted Subsidiary or if such Restricted Subsidiary becomes an
Unrestricted Subsidiary in accordance with the terms of this Indenture.
SECTION 11.03. LIMITATION OF MORTGAGE NOTE GUARANTOR'S LIABILITY.
Each Mortgage Note Guarantor and by its acceptance hereof, each
beneficiary hereof, hereby confirm that it is its intention that the Mortgage
Note Guaranty by such Mortgage Note Guarantor not constitute a fraudulent
transfer or conveyance for purposes of the Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
federal or state law to the extent applicable to any Mortgage Note Guaranties.
To effectuate the foregoing intention, each such
100
person hereby irrevocably agrees that the obligation of such Mortgage Note
Guarantor under its Mortgage Note Guaranty under this Article 11 shall be
limited to the maximum amount as will, after giving effect to such maximum
amount and all other (contingent or otherwise) liabilities of such Mortgage Note
Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Mortgage Note Guarantor in respect of the obligations of
such other Mortgage Note Guarantor under this Article 11, result in the
obligations of such Mortgage Note Guarantor in respect of such maximum amount
not constituting a fraudulent conveyance. Each beneficiary under the Mortgage
Note Guaranties, by accepting the benefits hereof, confirms its intention that,
in the event of a bankruptcy, reorganization or other similar proceeding of the
Issuers or any Mortgage Note Guarantor in which concurrent claims are made upon
such Mortgage Note Guarantor hereunder, to the extent such claims will not be
fully satisfied, each such claimant with a valid claim against the Issuers shall
be entitled to a ratable share of all payments by such Mortgage Note Guarantor
in respect of such concurrent claims.
SECTION 11.04. MORTGAGE NOTE GUARANTORS MAY CONSOLIDATE, ETC.,
ON CERTAIN TERMS.
(a) No Mortgage Note Guarantor shall consolidate with or merge with or
into (whether or not such Mortgage Note Guarantor is the surviving Person),
another Person whether or not it is affiliated with such Mortgage Note
Guarantor unless (i) subject to the provisions of the following paragraph
and Section 11.05, the Person formed by or surviving any such consolidation
or merger (if other than such Mortgage Note Guarantor) assumes all the
obligations of such Mortgage Note Guarantor pursuant to a supplemental
indenture and supplemental Collateral Documents in a form reasonably
satisfactory to the Mortgage Note Trustee pursuant to which such Person
shall unconditionally guarantee, on senior secured basis, all of such
Mortgage Note Guarantor's obligations under such Mortgage Note Guarantor's
Mortgage Note Guaranty, this Indenture and the Collateral Documents on the
terms set forth in this Indenture and the Collateral Documents on the terms
set forth in the Indenture, (ii) immediately after giving effect to such
transaction, no Default or Event of Default exists, (iii) such transaction
will not result in the loss or suspension or material impairment of any
material gaming license; (iv) such Mortgage Note Guarantor, or any Person
formed by or surviving any such consolidation or merger, (A) shall have
Consolidated Net Worth (immediately after giving effect to such
transaction), equal to or greater than the Consolidated Net Worth of such
Mortgage Note Guarantor immediately preceding the transaction and (B) will
be permitted by virtue of the Issuers' pro forma Fixed Charge Coverage
Ratio to incur, immediately after giving effect to such transaction, at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 4.09 hereof; and (v) such
transactions would not require any Holder of Mortgage Notes (other than any
Person acquiring the Company or Venetian or their assets or any Affiliate
thereof) to obtain a gaming license or be qualified under the laws of any
applicable gaming jurisdiction, provided that such Holder would not have
been required to obtain a gaming license or be qualified under the laws of
any applicable gaming jurisdiction in the absence of such transactions. In
case of any such consolidation, merger, sale or conveyance and upon the
assumption by the successor corporation, by supplemental indenture,
executed and delivered to the Mortgage Note Trustee and reasonably
satisfactory in form to the Mortgage Note Trustee, of the Mortgage Note
Guaranty in this Indenture and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to be
performed by the Mortgage Note Guarantor, such successor corporation shall
succeed to and be substituted for the Mortgage Note Guarantor with the same
effect as if it had been named herein as a Mortgage Note Guarantor.
101
Notwithstanding the foregoing, (A) a Mortgage Note Guarantor may
consolidate with or merge with or into, or sell or otherwise dispose of all or
substantially all of its assets to, the Issuers, provided, that the surviving
corporation (if other than the Issuers) shall expressly assume by supplemental
indenture complying with the requirements of this Indenture, the due and
punctual payment of the principal of, premium and Liquidated Damages, if any,
and interest on all of the Mortgage Notes, and the due and punctual performance
and observance of all the covenants and conditions of this Indenture to be
performed by the Issuers and (B) a Mortgage Note Guarantor may consolidate with
or merge with or into, or sell or otherwise dispose of all or substantially all
of its assets to, any other Mortgage Note Guarantor.
SECTION 11.05. RELEASES OF MORTGAGE NOTE GUARANTIES.
Upon (i) a sale or other disposition of all or substantially all of the
assets of any Mortgage Note Guarantor, by way of merger, consolidation or
otherwise, (ii) a Restricted Subsidiary becoming an Unrestricted Subsidiary
pursuant to the terms of this Indenture or (iii) a sale or other disposition of
all of the capital stock of any Mortgage Note Guarantor, then such Mortgage Note
Guarantor (in the event of a sale or other disposition, by way of such a merger,
consolidation or otherwise, of all of the capital stock of such Mortgage Note
Guarantor or the Restricted Subsidiary becomes an Unrestricted Subsidiary
pursuant to the terms of this Indenture) or the corporation acquiring the
property (in the event of a sale or other disposition of all or substantially
all of the assets of such Mortgage Note Guarantor) shall be released and
relieved of its obligations under its Mortgage Note Guaranty; provided that (i)
immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing or would occur as a consequence
thereof and (ii) the Net Proceeds of such sale or other disposition are applied
in accordance with Section 4.10 hereof and the Collateral Documents.
SECTION 11.06. "MORTGAGE NOTE TRUSTEE" TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Mortgage Note
Trustee shall have been appointed by the Issuers and be then acting hereunder,
the term "Mortgage Note Trustee" as used in this Article 11 shall in such case
(unless the context shall otherwise require) be construed as extending to and
including such Paying Agent within its meaning as fully and for all intents and
purposes as if such Paying Agent were named in this Article 11 in place of the
Mortgage Note Trustee.
SECTION 11.07. SUBORDINATION OF SUBORDINATED MORTGAGE NOTE GUARANTORS.
(a) The Subordinated Mortgage Note Guarantors agree, and each Holder of
Mortgage Notes agrees, that the Indebtedness represented by the Subordinated
Mortgage Note Guaranties is subordinated in right of payment, to the extent set
forth in this Section 11.07 to the prior payment in full of all Senior Debt (as
defined below) of the Subordinated Mortgage Note Guarantors, whether outstanding
on the date hereof or thereafter incurred. Such subordination is for the benefit
of and enforceable by the holders of such Senior Debt of the Subordinated
Mortgage Note Guarantors. Nothing contained in this Section 11.07 shall be
construed as any agreement or understanding by the Issuer or by any secured
Mortgage Note Guarantor that any Indebtedness represented by the Mortgage Notes
or any secured Mortgage Notes Guaranty is subordinated to the prior payment of
any other Indebtedness and it is expressly understood and agreed that the
Obligations under the Mortgage Notes and the Secured Mortgage Note Guaranty are
not in any manner subordinated (other than effectively by priority of Lien on
the Note Collateral) to any other Indebtedness.
(b) As used in the foregoing, "Senior Debt" of the Subordinated
Mortgage Note Guarantors means (i) the guaranties by the Subordinated Mortgage
Note Guarantors of all Indebtedness outstanding under Bank Credit Facility and
all Hedging Obligations with respect thereto, (ii) with respect to Mall
102
Intermediate Holdings only, the guaranty by Mall Intermediate Holdings of all
Indebtedness outstanding under the Mall Construction Loan Facility and all
Hedging Obligation with respect thereto, (iii) any other Indebtedness permitted
to be incurred by the Subordinated Mortgage Note Guarantors under the terms of
this Indenture, unless the instrument under which such Indebtedness is incurred
expressly provides that it is on a parity with or subordinated in right of
payment to the Subordinated Mortgage Note Guaranties and (iv) all obligations
with respect to the foregoing. Also, as used in the foregoing, "Permitted Junior
Securities" means Equity Interests in the Subordinated Mortgage Note Guarantors
or debt securities of Subordinated Mortgage Note Guarantors that are
subordinated to all Senior Debt (and any debt securities issued in exchange for
Senior Debt) to substantially the same extent as, or to a greater extent than,
the Subordinated Mortgage Note Guaranties are subordinated to Senior Debt of the
Subordinated Mortgage Guarantors pursuant to this Indenture.
(c) Upon any distribution to creditors of the Subordinated Mortgage
Note Guarantors in a liquidation or dissolution of the Subordinated Mortgage
Note Guarantors in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Subordinated Mortgage Note Guarantors or
their property, an assignment for the benefit of creditors or any marshalling of
the Subordinated Mortgage Note Guarantors' assets and liabilities, the holders
of Senior Debt of the Subordinated Mortgage Note Guarantors will be entitled to
receive payment in full in cash of all Obligations due in respect of such Senior
Debt of the Subordinated Mortgage Note Guarantors (including interest after the
commencement of any such proceeding at the rate specified in the applicable
Senior Debt of the Subordinated Mortgage Note Guarantors, whether or not
allowed) before the Holders of Subordinated Mortgage Note Guaranties will be
entitled to receive any payment with respect to the Subordinated Mortgage Note
Guaranties from any asset of a Subordinated Mortgage Note Guarantor, and until
all Obligations with respect to Senior Debt of the Subordinated Mortgage Note
Guarantors are paid in full, any distribution to which the holders of
Subordinated Mortgage Note Guaranties would be entitled from any assets of a
Subordinated Mortgage Note Guarantor shall be made to the holders of Senior Debt
of the Subordinated Mortgage Note Guarantors (except that Holders of
Subordinated Mortgage Note Guaranties may receive Permitted Junior Securities
and payments made by a trust established pursuant to Article 8 hereof).
(d) The Subordinated Mortgage Note Guarantors shall not make any
payment upon or in respect of the Subordinated Mortgage Note Guaranties (except
in Permitted Junior Securities or from a trust established pursuant to Article 8
hereof) if (i) a default in the payment of the principal of, premium, if any, or
interest on Senior Debt of the Subordinated Mortgage Note Guarantors occurs and
is continuing beyond any applicable period of grace or (ii) any other default
occurs and is continuing with respect to Senior Debt of the Subordinated
Mortgage Note Guarantors that permits holders of the Senior Debt of the
Subordinated Mortgage Note Guarantors as to which such default relates to
accelerate its maturity and the Mortgage Note Trustee receives a notice of such
default (a "Payment Blockage Notice") from the Subordinated Mortgage Note
Guarantors or the holders of any Senior Debt of the Subordinated Mortgage Note
Guarantors; provided, however, that, except to the extent provided below in this
Section 11.07(d), the foregoing provisions shall not restrict the Issuers from
making payments of principal, premium or interest on or with respect to the
Mortgage Notes (including without limitation, by redemption, repurchase or other
acquisition). Payments on the Subordinated Mortgage Note Guaranties may and
shall be resumed (a) in the case of a payment default, upon the date on which
such default is cured or waived and (b) in case of a nonpayment default, the
earlier of the date on which such nonpayment default is cured or waived or 179
days after the date on which the applicable Payment Blockage Notice is received,
unless the maturity of any Senior Debt of the Subordinated Mortgage Note
Guarantors has been accelerated. No new period of payment blockage may be
commenced unless and until (i) 360 days have elapsed since the effectiveness of
the immediately prior Payment Blockage Notice and (ii) all scheduled payments of
principal, premium, if any, and interest on the Subordinated Mortgage Note that
have come due have
103
been paid in full in cash. No nonpayment default that existed or was continuing
on the date of delivery of any Payment Blockage Notice to the Mortgage Note
Trustee shall be, or be made, the basis for a subsequent Payment Blockage Notice
unless such default shall have been waived for a period of not less than 180
days.
(e) The Subordinated Mortgage Note Guarantors shall promptly notify
holders of Senior Debt of the Subordinated Mortgage Note Guarantors if payment
of the Mortgage Notes is accelerated because of an Event of Default.
(f) If payment of the Subordinated Mortgage Note Guaranties is
accelerated because of an Event of Default, the Subordinated Mortgage Note
Guarantors shall promptly notify holders of Senior Debt of the Subordinated
Mortgage Note Guarantors of the acceleration.
(g) In the event that the Mortgage Note Trustee or any Holder of
Subordinated Mortgage Note Guaranties receives any payment of any Obligations
with respect to the Subordinated Mortgage Note Guaranties at a time when the
Mortgage Note Trustee or such Holder, as applicable, has actual knowledge that
such payment is prohibited by this Section 11.07 hereof, such payment shall be
held by the Mortgage Note Trustee or such Holder, in trust for the benefit of,
and shall be paid forthwith over and delivered, upon written request, to, the
holders of Senior Debt of the Subordinated Mortgage Note Guarantors as their
interests may appear or their representative under the indenture or other
agreement (if any) pursuant to which Senior Debt of the Subordinated Mortgage
Note Guarantors may have been issued, as their respective interests may appear,
for application to the payment of all Obligations with respect to Senior Debt of
the Subordinated Mortgage Note Guarantors remaining unpaid to the extent
necessary to pay such Obligations in full in accordance with their terms, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Debt of the Subordinated Mortgage Note Guarantors.
(h) With respect to the holders of Senior Debt of the Subordinated
Mortgage Note Guarantors, the Mortgage Note Trustee undertakes to perform only
such obligations on the part of the Mortgage Note Trustee as are specifically
set forth in this Section 11.07, and no implied covenants or obligations with
respect to the holders of Senior Debt shall be read into this Mortgage Note
Indenture against the Mortgage Note Trustee. The Mortgage Note Trustee shall not
be deemed to owe any fiduciary duty to the holders of Senior Debt of the
Subordinated Mortgage Note Guarantors, and shall not be liable to any such
holders if the Mortgage Note Trustee shall pay over or distribute to or on
behalf of Holders or the Subordinated Mortgage Note Guarantors or any other
Person money or assets to which any holders of Senior Debt of the Subordinated
Mortgage Note Guarantors shall be entitled by virtue of this Section 11.07,
except if such payment is made as a result of the willful misconduct or gross
negligence of the Mortgage Note Trustee.
(i) The Subordinated Mortgage Note Guarantors shall promptly notify the
Mortgage Note Trustee and the Paying Agent of any facts known to the
Subordinated Mortgage Note Guarantors that would cause a payment of any
Obligations with respect to the Subordinated Mortgage Note Guaranties to violate
this Section 11.07, but failure to give such notice shall not affect the
subordination of the Subordinated Mortgage Note Guaranties to the Senior Debt of
the Subordinated Mortgage Note Guarantors as provided in this Section 11.07.
(j) After all Senior Debt of the Subordinated Mortgage Note Guarantors
is paid in full and until the Subordinated Mortgage Note Guaranties are paid in
full, Holders of Subordinated Mortgage Note Guaranties shall be subrogated
(equally and ratably with all other Indebtedness pari passu with the
Subordinated Mortgage Note Guaranties) to the rights of holders of Senior Debt
of the Subordinated
104
Mortgage Note Guarantors to receive distributions applicable to Senior Debt of
the Subordinated Mortgage Note Guarantors to the extent that distributions
otherwise payable to the Holders of Subordinated Mortgage Note Guaranties have
been applied to the payment of Senior Debt of the Subordinated Mortgage Note
Guarantors. A distribution made under this Section 11.07 to holders of Senior
Debt of the Subordinated Mortgage Note Guarantors that otherwise would have been
made to Holders of Subordinated Mortgage Note Guaranties is not, as between the
Subordinated Mortgage Note Guarantors and Holders, a payment by the Subordinated
Mortgage Note Guarantors on the Subordinated Mortgage Note Guaranties.
(k) This Section 11.07 defines the relative rights of Holders of Notes
and holders of Senior Debt of the Subordinated Mortgage Note Guarantors. Nothing
in this Indenture shall:
(1) impair, as between the Subordinated Mortgage Note Guarantors and
Holders of Subordinated Mortgage Note Guaranties, the obligation of the
Subordinated Mortgage Note Guarantors, which is absolute and unconditional,
to pay principal of and interest on the Subordinated Mortgage Note
Guaranties in accordance with their terms;
(2) affect the relative rights of Holders of Subordinated Mortgage Note
Guaranties and creditors of the Subordinated Mortgage Note Guarantors other
than their rights in relation to holders of Senior Debt of the Subordinated
Mortgage Note Guarantors; or
(3) prevent the Mortgage Note Trustee or any Holder of Notes from
exercising its available remedies upon a Default or Event of Default,
subject to the rights of holders and owners of Senior Debt of the
Subordinated Mortgage Note Guarantors to receive distributions and payments
otherwise payable to Holders of Subordinated Mortgage Note Guaranties.
If the Subordinated Mortgage Note Guarantors fails because of this
Section 11.07 to pay principal of or interest on a Note on the due date, the
failure is still a Default or Event of Default.
No right of any holder of Senior Debt of the Subordinated Mortgage Note
Guarantors to enforce the subordination of the Indebtedness evidenced by the
Subordinated Mortgage Note Guaranties shall be impaired by any act or failure to
act by the Subordinated Mortgage Note Guarantors or any Holder or by the failure
of the Subordinated Mortgage Note Guarantors or any Holder to comply with this
Indenture.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt of the Subordinated Mortgage Note Guarantors, the distribution may
be made and the notice given to their Representative.
Upon any payment or distribution of assets of the Subordinated Mortgage
Note Guarantors referred to in this Section 11.07, the Mortgage Note Trustee and
the Holders of Subordinated Mortgage Note Guaranties shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent or
other Person making any distribution to the Mortgage Note Trustee or to the
Holders of Subordinated Mortgage Note Guaranties for the purpose of ascertaining
the Persons entitled to participate in such distribution, the holders of the
Senior Debt of the Subordinated Mortgage Note Guarantors and other Indebtedness
of the Subordinated Mortgage Note Guarantors, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Section 11.07.
105
(l) Notwithstanding the provisions of this Section 11.07 or any other
provision of this Indenture, the Mortgage Note Trustee shall not be charged with
knowledge of the existence of any facts that would prohibit the making of any
payment or distribution by the Mortgage Note Trustee, and the Mortgage Note
Trustee and the Paying Agent may continue to make payments on the Subordinated
Mortgage Note Guaranties, unless the Mortgage Note Trustee shall have received
at its Corporate Trust Office at least five Business Days prior to the date of
such payment written notice of facts that would cause the payment of any
Obligations with respect to the Subordinated Mortgage Note Guaranties to violate
this Section 11.07. Only the Subordinated Mortgage Note Guarantors or the
Issuers may give the notice. Nothing in this Section 11.07 shall impair the
claims of, or payments to, the Mortgage Note Trustee under or pursuant to
Section 7.07 hereof.
The Mortgage Note Trustee in its individual or any other capacity may
hold Senior Debt of the Subordinated Mortgage Note Guarantors with the same
rights it would have if it were not Mortgage Note Trustee. Any Agent may do the
same with like rights.
(m) Each Holder of Subordinated Mortgage Note Guaranties, by the
Holder's acceptance thereof, authorizes and directs the Mortgage Note Trustee on
such Holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Section 11.07, and appoints the
Mortgage Note Trustee to act as such Holder's attorney-in-fact for any and all
such purposes. If the Mortgage Note Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 6.09 hereof at least 30 days before the expiration of the time to file
such claim, the Bank Agent is hereby authorized to file an appropriate claim for
and on behalf of the Holders of the Subordinated Mortgage Note Guaranties.
(n) The provisions of this Section 11.07 shall not be amended or
modified without the written consent of the holders of all Senior Debt of the
Subordinated Mortgage Note Guarantors.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA ss.318(c), the imposed duties shall control.
SECTION 12.02. NOTICES.
Any notice or communication by the Issuers, any Mortgage Note Guarantor
or the Mortgage Note Trustee to the others is duly given if in writing and
delivered in Person or mailed by first class mail (registered or certified,
return receipt requested), telex, telecopier or overnight air courier
guaranteeing next day delivery, to the others' address:
106
If to the Issuers or the Mortgage Note Guarantors:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
With a copy to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
If to the Mortgage Note Trustee:
First Trust National Association
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Department
If to the Mortgage Note Trustee for purposes of Section 4.02 hereof:
First Trust New York
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
The Issuers, the Mortgage Note Guarantors or the Mortgage Note Trustee,
by notice to the others may designate additional or different addresses for
subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA ss. 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
107
If the Issuers or a Mortgage Note Guarantor mails a notice or
communication to Holders, it shall mail a copy to the Mortgage Note Trustee and
each Agent at the same time.
SECTION 12.03. COMMUNICATION BY HOLDERS OF MORTGAGE NOTES WITH OTHER
HOLDERS OF MORTGAGE NOTES.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Mortgage Notes. The
Issuers, the Mortgage Note Guarantors, the Mortgage Note Trustee and the
Registrar shall have the protection of TIA ss. 312(c).
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Issuers or the Mortgage Note
Guarantors to the Mortgage Note Trustee to take any action under this Indenture,
the Issuers or the Mortgage Note Guarantors shall furnish to the Mortgage Note
Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Mortgage Note Trustee (which shall include the
statements set forth in Section 12.05 hereof) stating that, in the opinion
of the signers, all conditions precedent and covenants, if any, provided
for in this Indenture relating to the proposed action have been satisfied;
and
(b) an Opinion of Counsel in form and substance reasonably satisfactory
to the Mortgage Note Trustee (which shall include the statements set forth
in Section 12.05 hereof) stating that, subject to customary assumptions and
exclusions, in the opinion of such counsel, all such conditions precedent
and covenants have been satisfied.
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA ss.
314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
SECTION 12.06. RULES BY MORTGAGE NOTE TRUSTEE AND AGENTS.
The Mortgage Note 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.
108
SECTION 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES
AND STOCKHOLDERS.
No officer, employee, incorporator or stockholder of the Issuers or the
Mortgage Note Guarantors, as such, shall have any liability for any obligations
of the Issuers or the Mortgage Note Guarantors under the Mortgage Notes, any
Mortgage Note Guaranties, this Indenture or the Collateral Documents, as
applicable, or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Mortgage Note and the
Mortgage Note Guaranties waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Mortgage Notes.
SECTION 12.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE MORTGAGE NOTES AND THE MORTGAGE NOTE GUARANTIES,
EXCEPT AS OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF NEVADA LAW, INCLUDING
THE GAMING CONTROL ACT AND THE REGULATIONS PROMULGATED THEREUNDER.
SECTION 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Issuers or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 12.10. SUCCESSORS.
All agreements of the Issuers and the Mortgage Note Guarantors in this
Indenture, the Mortgage Notes and the Mortgage Note Guaranties, as applicable,
shall bind their respective successors. All agreements of the Mortgage Note
Trustee in this Indenture shall bind its successors.
SECTION 12.11. SEVERABILITY.
In case any provision in this Indenture, in the Mortgage Notes or in
the Mortgage Note Guaranties 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 12.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
109
SIGNATURES
Dated as of November 14, 1997 LAS VEGAS SANDS, INC.
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
VENETIAN CASINO RESORT, LLC
By: Las Vegas Sands, Inc.
--------------------------------------
As Managing Member
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
MALL INTERMEDIATE HOLDING COMPANY, LLC
By: Venetian Casino Resort, LLC
--------------------------------------
As Sole Member
By: Las Vegas Sands, Inc.
---------------------------------
As Managing Member
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
GRAND CANAL SHOPS MALL CONSTRUCTION, LLC
By: Venetian Casino Resort, LLC
--------------------------------------
As Sole Member
By: Las Vegas Sands, Inc.
---------------------------------
As Managing Member
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
LIDO INTERMEDIATE HOLDING COMPANY, LLC
By: Venetian Casino Resort, LLC
-------------------------------------
As Managing Member
By: Las Vegas Sands, Inc.
---------------------------------
As Managing Member
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
Dated as of November 14, 1997 FIRST TRUST NATIONAL ASSOCIATION
as Mortgage Note Trustee
By: /s/ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Vice President