==============================
WATERFORD GAMING, L.L.C.
and
WATERFORD GAMING FINANCE CORP.
Issuers,
and
FLEET NATIONAL BANK
Trustee
------------------------
INDENTURE
Dated as of November 8, 1996
------------------------------
$65,000,000
12 3/4% Senior Notes due 2003
==============================
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE............... 1
SECTION 1.1. Definitions.................................................. 1
SECTION 1.2. Incorporation by Reference of TIA............................ 16
SECTION 1.3. Rules of Construction........................................ 16
ARTICLE II
THE SECURITIES.............................. 17
SECTION 2.1. Form and Dating.............................................. 17
SECTION 2.2. Execution and Authentication................................. 17
SECTION 2.3. Registrar and Paying Agent................................... 18
SECTION 2.4. Paying Agent to Hold Assets in Trust......................... 19
SECTION 2.5. Securityholder Lists......................................... 20
SECTION 2.6. Transfer and Exchange........................................ 20
SECTION 2.7. Replacement Securities....................................... 27
SECTION 2.8. Outstanding Securities....................................... 28
SECTION 2.9. Treasury Securities.......................................... 28
SECTION 2.10. Temporary Securities......................................... 28
SECTION 2.11. Cancellation................................................. 29
SECTION 2.12. Defaulted Interest........................................... 29
ARTICLE III
REDEMPTION.............................. 30
SECTION 3.1. Right of Redemption.......................................... 30
SECTION 3.2. Notices to Trustee........................................... 32
SECTION 3.3. Selection of Securities to Be Redeemed....................... 32
SECTION 3.4. Notice of Redemption......................................... 33
SECTION 3.5. Effect of Notice of Redemption............................... 34
SECTION 3.6. Deposit of Redemption Price.................................. 34
SECTION 3.7. Securities Redeemed in Part.................................. 35
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ARTICLE IV
COVENANTS............................... 35
SECTION 4.1. Payment of Securities........................................ 35
SECTION 4.2. Maintenance of Office or Agency.............................. 36
SECTION 4.3. Limitation on Restricted Payments............................ 36
SECTION 4.4. Corporate and Limited Liability Company Existence............ 37
SECTION 4.5. Payment of Taxes and Other Claims............................ 38
SECTION 4.6. Compliance Certificate; Notice of Default.................... 38
SECTION 4.7. Reports...................................................... 38
SECTION 4.8. Limitation on Status as Investment Company................... 39
SECTION 4.9. Limitation on Transactions with Affiliates................... 39
SECTION 4.10. Limitation on Indebtedness and Disqualified Capital Stock.... 39
SECTION 4.11. Limitation on Liens.......................................... 40
SECTION 4.12. Limitation on Sale of Assets................................. 40
SECTION 4.13. Covenants with Respect to the Manager........................ 40
SECTION 4.14. Limitation on Activities of the Issuers...................... 41
SECTION 4.15. Acceptance of Remaining Excess Cash Purchase Offers
and Change of Control Offers............................... 41
SECTION 4.16. Waiver of Stay, Extension or Usury Laws...................... 42
SECTION 4.17. Limitation on Merger, Sale or Consolidation.................. 43
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES..................... 43
SECTION 5.1. Events of Default............................................ 43
SECTION 5.2. Acceleration of Maturity Date; Rescission and Annulment...... 45
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.................................................... 46
SECTION 5.4. Trustee May File Proofs of Claim............................. 47
SECTION 5.5. Trustee May Enforce Claims Without Possession of
Securities................................................. 48
SECTION 5.6. Priorities................................................... 48
SECTION 5.7. Limitation on Suits.......................................... 49
SECTION 5.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest...................................... 50
SECTION 5.9. Rights and Remedies Cumulative............................... 50
SECTION 5.10. Delay or Omission Not Waiver................................. 50
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SECTION 5.11. Control by Holders........................................... 50
SECTION 5.12. Waiver of Past Default....................................... 51
SECTION 5.13. Undertaking for Costs........................................ 52
SECTION 5.14. Restoration of Rights and Remedies........................... 52
ARTICLE VI
TRUSTEE................................ 52
SECTION 6.1. Duties of Trustee............................................ 52
SECTION 6.2. Rights of Trustee............................................ 54
SECTION 6.3. Individual Rights of Trustee................................. 55
SECTION 6.4. Trustee's Disclaimer......................................... 55
SECTION 6.5. Notice of Default............................................ 56
SECTION 6.6. Reports by Trustee to Holders................................ 56
SECTION 6.7. Compensation and Indemnity................................... 56
SECTION 6.8. Replacement of Trustee....................................... 57
SECTION 6.9. Successor Trustee by Merger, Etc............................. 58
SECTION 6.10. Eligibility; Disqualification................................ 59
SECTION 6.11. Preferential Collection of Claims Against Issuers............ 59
ARTICLE VII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE................ 59
SECTION 7.1. Option to Effect Legal Defeasance or Covenant Defeasance..... 59
SECTION 7.2. Legal Defeasance and Discharge............................... 59
SECTION 7.3. Covenant Defeasance.......................................... 60
SECTION 7.4. Conditions to Legal or Covenant Defeasance................... 60
SECTION 7.5. Deposited Cash and U.S. Government Obligations to be
Held in Trust; Other Miscellaneous Provisions.............. 62
SECTION 7.6. Repayment to the Issuers..................................... 62
SECTION 7.7. Reinstatement................................................ 63
ARTICLE VIII
AMENDMENTS, SUPPLEMENTS AND WAIVERS.................. 64
SECTION 8.1. Supplemental Indentures Without Consent of Holders........... 64
SECTION 8.2. Amendments, Supplemental Indentures and Waivers with
Consent of Holders......................................... 64
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SECTION 8.3. Compliance with TIA.......................................... 66
SECTION 8.4. Revocation and Effect of Consents............................ 66
SECTION 8.5. Notation on or Exchange of Securities........................ 67
SECTION 8.6. Trustee to Sign Amendments, Etc.............................. 67
ARTICLE IX
RIGHT TO REQUIRE REPURCHASE...................... 68
SECTION 9.1. Repurchase of Securities at Option of the Holder Upon a
Change of Control.......................................... 68
ARTICLE X
SECURITY................................ 71
SECTION 10.1. Security Interest............................................ 71
SECTION 10.2. Recording; Opinions of Counsel............................... 71
SECTION 10.3. Cash Collateral Account...................................... 72
SECTION 10.4. Certain Releases of Collateral............................... 73
SECTION 10.5. Payment of Expenses.......................................... 73
SECTION 10.6. Suits to Protect the Collateral.............................. 73
SECTION 10.7. Trustee's Duties............................................. 73
ARTICLE XI
MISCELLANEOUS............................. 74
SECTION 11.1. TIA Controls................................................. 74
SECTION 11.2. Notices...................................................... 74
SECTION 11.3. Communications by Holders with Other Holders................. 75
SECTION 11.4. Certificate and Opinion as to Conditions Precedent........... 76
SECTION 11.5. Statements Required in Certificate or Opinion................ 76
SECTION 11.6. Rules by Trustee, Paying Agent, Registrar.................... 77
SECTION 11.7. Non-Business Days............................................ 77
SECTION 11.8. Governing Law................................................ 77
SECTION 11.9. No Adverse Interpretation of Other Agreements................ 78
SECTION 11.10. No Recourse against Others................................... 78
SECTION 11.11. Successors................................................... 78
SECTION 11.12. Duplicate Originals.......................................... 78
SECTION 11.13. Severability................................................. 78
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SECTION 11.14. Table of Contents, Headings, Etc............................. 79
SIGNATURES.................................................................. 80
Exhibit A................................................................... A-1
v
INDENTURE, dated as of November 8, 1996, by and among Waterford
Gaming, L.L.C., a Delaware limited liability company ("the Company"), and
Waterford Gaming Finance Corp., a Delaware corporation ("Finance" and, together
with Gaming, the "Issuers") and Fleet National Bank, as Trustee.
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Issuers' 12
3/4% Senior Notes due 2003:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions.
"Acceleration Notice" shall have the meaning specified in Section
5.2.
"Account" means the Account as defined in the Cash Collateral and
Disbursement Account.
"Acquisition" means the purchase or other acquisition of any person
or substantially all the assets of any person by any other person, whether by
purchase, stock purchase, merger, consolidation, or other transfer, and whether
or not for consideration.
"Affiliate" means any person directly or indirectly controlling or
controlled by or under direct or indirect common control with such person. For
purposes of this definition, the term "control" means the power to direct the
management and policies of a person, directly or through one or more
intermediaries, whether through the ownership of voting securities, by contract,
or otherwise, provided, however, that with respect to ownership interests in the
Company a Beneficial Owner of 10% or more of the total voting power normally
entitled to vote in the election of directors, managers or trustees, as
applicable, shall for such purposes be deemed to constitute control.
"Affiliate Transaction" shall have the meaning specified in Section
4.9.
"Agent" means any authenticating agent, Registrar, Paying Agent or
transfer agent.
"Asset Sale" shall have the meaning specified in Section 4.12.
"Authority" means the Mohegan Tribal Gaming Authority.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar Federal,
state or foreign law for the relief of debtors.
"Beneficial Owner" or "beneficial owner" has the meaning attributed
to it in Rules l3d-3 and l3d-5 under the Exchange Act (as in effect on the Issue
Date), whether or not applicable, except that a "person" shall be deemed to have
"beneficial ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time.
"Board of Directors", "Board of Managers" or "Board" means, with
respect to any Person, the Board of Directors or Board of Managers of such
Person or any committee of the Board of Directors or Board of Managers of such
Person authorized, with respect to any particular matter, to exercise the power
of the Board of Directors or Board of Managers of such Person.
"Board Resolution" means, with respect to any Person, a duly adopted
resolution of the Board of Directors or the Board of Managers of such Person.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York, New York or
Hartford, Connecticut are authorized or obligated by law or executive order to
close.
"Buy Out Notice" has the meaning set forth in Section 4.03 of the
Partnership Agreement.
"Capital Stock" means, with respect to any corporation, any and all
shares, interests, rights to purchase (other than convertible or exchangeable
Indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.
"Capitalized Lease Obligation" means rental obligations under a
lease that are required to be capitalized for financial reporting purposes in
accordance with GAAP, and the amount of Indebtedness represented by such
obligations shall be the capitalized amount of such obligations, as determined
in accordance with GAAP.
"Cash" or "cash" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
2
"Cash Collateral and Disbursement Agreement" means the cash
collateral and disbursement agreement, dated the date hereof, among the
Disbursement Agent, the Trustee and the Company.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than six months from the date of acquisition, (iii) certificates of deposit
and eurodollar time deposits with maturities of six months or less from the date
of acquisition, bankers' acceptances with maturities not exceeding six months
and overnight bank deposits, in each case with any commercial bank having
capital and surplus in excess of $300 million, (iv) repurchase obligations with
a term of not more than seven days for underlying securities of the types
described in clauses (ii) and (iii) entered into with any financial institution
meeting the qualifications specified in clause (iii) above, (v) commercial paper
rated A-1 or the equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc. or
Standard & Poor's Ratings Group and in each case maturing within one year after
the date of acquisition and (vi) investment funds investing solely in securities
of the types described in clauses (ii) - (v) above.
"Change of Control" means any event, the result of which is that ▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇ and their Permitted Assignees cease in the aggregate to
be the Beneficial Owners of at least 40% of the total voting power in the
aggregate of the Company.
"Change of Control Offer" shall have the meaning specified in
Section 9.1.
"Change of Control Offer Period" shall have the meaning specified in
Section 9.1.
"Change of Control Purchase Date" shall have the meaning specified
in Section 9.1.
"Change of Control Purchase Price" shall have the meaning specified
in Section 9.1.
"Closing" has the meaning set forth in Section 4.03 of the
Partnership Agreement.
3
"Collateral" means the Subordinated Notes and Cash and Cash
Equivalents pledged by the Issuers pursuant to the Collateral Agreements to
secure their obligations hereunder.
"Collateral Agreements" means the Pledge Agreement and the Cash
Collateral and Disbursement Agreement.
"Commission" means the SEC.
"Company" means Waterford Gaming L.L.C.
"Company Excess Cash" means at any date of determination all cash
and Cash Equivalents held by the Company in excess of $10 million, provided,
however, if the principal amount of Securities then outstanding, together with
accrued and unpaid interest and Liquidated Damages, if any, thereon, is less
than $10 million, then the Company shall treat all cash and Cash Equivalents
held by the Company as Company Excess Cash.
"Covenant Defeasance" shall have the meaning specified in Section
7.3.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means any event or condition that is, or after notice or
passage of time or both would be, an Event of Default.
"Defaulted Interest" shall have the meaning specified in Section
2.12.
"Definitive Securities" means Securities that are in the form of the
Security attached hereto as Exhibit A that do not include the information called
for by footnotes 1 and 3 thereof.
"Depositary" means, with respect to the Securities issuable or
issued in whole or in part in global form, the person specified in Section 2.3
as the Depositary with respect to the Securities, until a successor shall have
been appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"Disbursement Agent" means Fleet National Bank, the disbursement
agent under the Cash Collateral and Disbursement Agreement.
4
"Disqualified Capital Stock" means with respect to any person,
Equity Interests of such person that, by its terms or by the terms of any
security into which it is then convertible, exercisable or exchangeable, is, or
upon the happening of an event or the passage of time would be, required to be
redeemed or repurchased (including at the option of the holder thereof) by such
person or any of its Subsidiaries, in whole or in part, on or prior to the
Stated Maturity of the Securities.
"DTC" shall have the meaning specified in Section 2.3.
"Equity Interest" of any Person means any shares, interests,
participations or other equivalents (however designated) in such Person's
equity, and shall in any event include any Capital Stock issued by, or
partnership interests in, such Person.
"Estimation Period" means the period for which a partner who is an
individual is required to estimate for federal income tax purposes his
allocation of taxable income from a calendar year partnership in connection with
determining his estimated federal income tax liability for such period.
"Event of Default" shall have the meaning specified in Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
"Exchange Securities" means the 12 3/4% Senior Notes due 2003 to be
issued pursuant to this Indenture in connection with the offer to exchange
Securities for the Initial Securities that may be made by the Issuers pursuant
to the Registration Rights Agreement.
"Finance" means Waterford Gaming Finance Corp.
"First Tranche Completion Guarantee Subordinated Notes" means the
first $15 million aggregate principal amount of Floating Rate Subordinated Notes
issued by the Authority to Sun International in connection with Sun
International's completion guarantee under the Management Agreement.
"GAAP" means United States 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
5
entity as approved by a significant segment of the accounting profession, as in
effect on the Issue Date.
"Gaming Facility Development and Construction Agreement" means the
Amended and Restated Gaming Facility Development and Construction Agreement,
dated as of September 1, 1995, by and between the Mohegan Tribe and the Manager.
"Gaming Regulatory 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, any division of
the Authority or any other agency with authority to regulate any gaming
operation (or proposed gaming operation) owned, managed or operated by the
Mohegan Tribe or the Authority.
"Global Security" means a Security that contains the paragraph
referred to in footnote 1 and the additional schedule referred to in footnote 3
to the form of Security attached hereto as Exhibit A.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.
"Hotel/Resort Facility Development and Construction Agreement" means
the Hotel/Resort Facility Development and Construction Agreement, dated as of
July 28, 1994, by and between the Mohegan Tribe and the Manager.
"Hotel/Resort Management Agreement" means the Hotel/Resort
Management Agreement, dated July 28, 1994, by and between the Mohegan Tribe and
the Manager.
"Incur" or "Incurrence" shall have the meaning specified in Section
4.10.
"Indebtedness" of any person means, without duplication, (a) all
liabilities and obligations, contingent or otherwise, of any such person, (i) in
respect of borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such person or only to a portion thereof), (ii) evidenced
by bonds, notes, debentures or similar instruments, (iii) representing the
balance deferred and unpaid of the purchase price of any property or services,
except those incurred in the ordinary course of its business that would
constitute ordinarily a trade payable to trade creditors, (iv) evidenced by
bankers' acceptances or similar instruments issued or accepted by banks, (v)
relating to any
6
Capitalized Lease Obligation, or (vi) evidenced by a letter of credit or a
reimbursement obligation of such person with respect to any letter of credit;
(b) all net obligations of such person under Interest Swap and Hedging
Obligations; (c) all liabilities and obligations of others of the kind described
in the preceding clause (a) or (b) that such person has guaranteed or that is
otherwise its legal liability or which are secured by any assets or property of
such person and all obligations to purchase, redeem or acquire any Equity
Interests; (d) any and all deferrals, renewals, extensions, refinancing and
refundings (whether direct or indirect) of, or amendments, modifications or
supplements to, any liability of the kind described in any of the preceding
clauses (a), (b) or (c), or this clause (d), whether or not between or among the
same parties; and (e) all Disqualified Capital Stock of such Person.
"Indenture" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
"Initial Purchasers" means Bear, ▇▇▇▇▇▇▇ & Co. Inc. and ▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated.
"Initial Securities" means the 12 3/4% Senior Notes due 2003, as
supplemented from time to time in accordance with the terms hereof, issued under
this Indenture on the Issue Date.
"Interest Payment Date" means the stated due date of an installment
of interest on the Securities.
"Interest Swap and Hedging Obligation" means any obligation of any
person pursuant to any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate exchange agreement,
currency exchange agreement or any other agreement or arrangement designed to
protect against fluctuations in interest rates or currency values, including,
without limitation, any arrangement whereby, directly or indirectly, such person
is entitled to receive from time to time periodic payments calculated by
applying either a fixed or floating rate of interest on a stated notional amount
in exchange for periodic payments made by such person calculated by applying a
fixed or floating rate of interest on the same notional amount.
"Investment" by any person in any other person means (without
duplication) (a) the acquisition (whether by purchase, merger, consolidation or
otherwise) by such person (whether for cash, property, services, securities or
otherwise) of Capital Stock, bonds, notes, debentures, partnership or other
ownership interests or other securities, including any options or warrants, of
such other person or any agreement to
7
make any such acquisition; (b) the making by such person of any deposit with, or
advance, loan or other extension of credit to, such other person (including the
purchase of property from another person subject to an understanding or
agreement, contingent or otherwise, to resell such property to such other
person) or any commitment to make any such advance, loan or extension (but
excluding accounts receivable or deposits arising in the ordinary course of
business); (c) the entering into by such person of any guarantee of, or other
credit support or contingent obligation with respect to, Indebtedness or other
liability of such other person; and (d) the making of any capital contribution
by such person to such other person.
"Issue Date" means the date of first issuance of the Securities
under the Indenture.
"Issuers" means each of the parties named as such in this Indenture.
"Legal Defeasance" shall have the meaning specified in Section 7.2.
"Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation or other encumbrance
upon or with respect to any property of any kind, real or personal, movable or
immovable, now owned or hereafter acquired.
"Liquidated Damages" shall mean liquidated damages payable by the
Issuers to the Holders in connection with a Registration Default.
"Management Agreement" means Amended and Restated Gaming Facility
Management Agreement, dated August 30, 1995, between the Mohegan Tribe and the
Manager.
"Manager" means Trading Cove Associates, a Connecticut general
partnership.
"Maturity Date" means, when used with respect to any Security, the
date specified on such Security as the fixed date on which the final installment
of principal of such Security is due and payable (in the absence of any
acceleration thereof pursuant to the provisions of this Indenture regarding
acceleration of Indebtedness or any Change of Control Offer).
"Mohegan Sun" means the Mohegan Sun Casino.
8
"Mohegan Tribe" means the Mohegan Tribe of Indians of Connecticut.
"Note Purchase Agreement" means the Note Purchase Agreement, dated
as of September 29, 1995, between the Authority and Sun International.
"Notice of Default" shall have the meaning specified in Section
5.1(d).
"Obligation" means any principal, premium or interest payment, or
monetary penalty, or damages, or purchase price due by any of the Issuers under
the terms of the Securities or the Indenture, including any Liquidated Damages
due pursuant to the terms of the Registration Rights Agreement.
"Offering Memorandum" means the offering memorandum, dated November
5, 1996, relating to the Securities.
"Officer" means, with respect to the Issuers, the Chief Executive
Officer, the President, any Executive or Senior Vice President, the Chief
Financial Officer, the Treasurer, the Controller or the Secretary.
"Officers' Certificate" means, with respect to the Issuers, a
certificate signed by two Officers or by an Officer and an Assistant Secretary
of both of the Issuers, and otherwise complying with the requirements of
Sections 11.4 and 11.5, and delivered to the Trustee or an Agent, as applicable.
"Omnibus Agreement" means the Omnibus Financing Agreement, dated as
of September 21, 1995, between the Manager and Sun International, as amended
through the Issue Date.
"Operative Documents" means, collectively, the Partnership
Agreement, the Omnibus Agreement, the Note Purchase Agreement, the Subordinated
Notes, the Management Agreement, the Hotel/Resort Management Agreement, the
Hotel/Resort Facility Development and Construction Agreement and the Gaming
Facility Development and Construction Agreement.
"Opinion of Counsel" means a written opinion from legal counsel who
is reasonably acceptable to the Trustee (which may include counsel to the
Trustee or the Issuers including an employee of either of the Issuers) or an
Agent, as applicable, complying with the requirements of Sections 11.4 and 11.5,
and delivered to the Trustee or an Agent, as applicable.
9
"Partnership Agreement" means the Amended and Restated Partnership
Agreement of the Manager, dated as of September 21, 1994, by and among Sun Cove
Ltd., RJH Development Corp., ▇▇▇▇▇▇ Suites, Inc., and LMW Investments, Inc, as
amended through the Issue Date.
"Paying Agent" shall have the meaning specified in Section 2.3.
"Permitted Assignee" means (i) any immediate family member of Len
and ▇▇▇▇ ▇▇▇▇▇▇, the estate of Len or ▇▇▇▇ ▇▇▇▇▇▇ and any heirs upon
distribution of such estate, and any partnership, trust or similar entity
controlled by Len or ▇▇▇▇ ▇▇▇▇▇▇ exclusively for their benefit and/or the
benefit of immediate family members and (ii) any charitable organization upon
whose board of directors or similar governing entity either Len or ▇▇▇▇ ▇▇▇▇▇▇
serves.
"Permitted Investment" means Investments in Cash Equivalents, First
Tranche Completion Guarantee Subordinated Notes not in excess of $7.5 million
original principal amount (plus accrued and unpaid interest and amounts due from
the Manager under the Omnibus Agreement), Original Subordinated Notes not in
excess of $19.2 million original principal amount (plus accrued and unpaid
interest and amounts due from the Manager under the Omnibus Agreement), and the
purchase of RJH Development Corp.'s interest in the Manager for $10.6 million.
"Permitted Lien" means any of the following:
(a) Liens imposed by governmental authorities for taxes,
assessments or other charges not yet subject to penalty or which are being
contested in good faith and by appropriate proceedings, if adequate reserves
with respect thereto are maintained on the books of the Manager or the Issuers,
as the case may be, in accordance with GAAP;
(b) statutory liens of carriers, warehousemen, mechanics,
materialmen, landlords, repairmen or other like Liens arising by operation of
law in the ordinary course of business provided that (i) the underlying
obligations are not overdue for a period of more than 30 days, or (ii) such
Liens are being contested in good faith and by appropriate proceedings and
adequate reserves with respect thereto are maintained on the books of the
Manager or the Issuers, as the case may be, in accordance with GAAP;
(c) Liens securing the performance of bids, trade contracts
(other than borrowed money), leases, statutory obligations, surety and appeal
bonds, per-
10
formance bonds and other obligations of a like nature incurred in the ordinary
course of business;
(d) easements, rights-of-way, zoning, similar restrictions and
other similar encumbrances or title defects which, singly or in the aggregate,
do not in any case materially detract from the value of the property, subject
thereto (as such property is used by the Manager or the Issuers, as the case may
be,) or interfere with the ordinary conduct of the business of the Manager or
the Issuers, as the case may be;
(e) Liens arising by operation of law in connection with
judgments, only to the extent, for an amount and for a period not resulting in
an Event of Default with respect thereto;
(f) pledges or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security legislation;
(g) leases or subleases granted to other persons in the
ordinary course of business not materially interfering with the conduct of the
business of the Manager or the Issuers, as the case may be, or materially
detracting from the value of the relative assets of the Manager or the Issuers,
as the case may be, and
(h) Liens arising from precautionary Uniform Commercial Code
financing statement filings regarding operating leases entered into by the
Manager or the Issuers, as the case may be, in the ordinary course of business.
"Permitted Quarterly Tax Distributions" means quarterly
distributions of Tax Amounts determined on the basis of the estimated taxable
income of the Company, for the related Estimation Period, as determined by the
Tax Amounts CPA in a statement filed with the Trustee; provided, however, that
(A) prior to any distributions of Tax Amounts the Company shall deliver an
Officers' Certificate stating to the effect that the Company qualifies as a
partnership or substantially similar pass-through entity for Federal income tax
purposes 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
partnership or substantially similar pass-through entity for Federal income tax
purposes for the period covered by such financial statements.
"Person" or "person" means any corporation, individual, partnership,
trust, unincorporated association, or a government or any agency or political
subdivision thereof.
11
"Pledge Agreement" means the note pledge agreement, dated the date
hereof, by and between the Company and the Trustee.
"Principal Corporate Trust Office of the Trustee" means the office
of the Trustee as set forth in Section 11.2 and such other offices as the
Trustee may designate from time to time.
"Property" or "property" means any right or interest in or to
property or assets of any kind whatsoever, whether real, personal or mixed and
whether tangible or intangible.
"Purchase Agreement" means the Purchase Agreement, dated November 5,
1996, by and among the Issuers and the Initial Purchasers.
"Qualified Capital Stock" means any Equity Interests of any Person
that is not Disqualified Capital Stock.
"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
individual 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
Company, be paid during the last five days of the immediately preceding
December).
"Record Date" means a Record Date specified in the Securities
whether or not such Record Date is a Business Day.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to Article III of
this Indenture and Paragraphs 5, 6 and 7 in the form of Security attached hereto
as Exhibit A.
"Redemption Price," when used with respect to any Security to be
redeemed, means the redemption price for such redemption pursuant to Paragraphs
5, 6 or 7 in the form of Security attached hereto as Exhibit A, which shall
include, without duplication, in each case, accrued and unpaid interest and
Liquidated Damages to the Redemption Date (subject to the provisions of Section
3.5).
"Registrar" shall have the meaning specified in Section 2.3.
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"Registration Default" has the meaning set forth in Section 4 of the
Registration Rights Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of the Issue Date, by and among the Issuers on the one hand,
and the Initial Purchasers, on the other hand, providing for certain
registration rights for the Securities.
"Remaining Excess Cash Purchase Offers" has the meaning set forth in
Section 5.21 of the Note Purchase Agreement.
"Restricted Payment" means, with respect to any person, (a) the
declaration or payment of any dividend or other distribution in respect of
Equity Interests of such person or any parent of such person (other than a
dividend by the Company on the Issue Date not to exceed $10 million), (b) any
payment on account of the purchase, redemption or other acquisition or
retirement for value of Equity Interests of such person or any Affiliate or
parent of such person, (c) any purchase, redemption, or other acquisition or
retirement for value of, any payment in respect of any amendment of the terms of
or any defeasance of, any Indebtedness, directly or indirectly, by such person
or a parent prior to the scheduled maturity, any scheduled repayment of
principal, or scheduled sinking fund payment, as the case may be, of such
Indebtedness, other than mandatory or optional redemption of the Securities or
pursuant to a Change of Control Offer or defeasance thereof as provided herein
and (d) any Investment, other than a Permitted Investment, by such person;
provided, however, that the term "Restricted Payment" does not include any
dividend, distribution or other payment on or with respect to Equity Interests
of an issuer to the extent payable solely in shares of Qualified Capital Stock
of such issuer.
"SEC" means the Securities and Exchange Commission.
"Securities" means, collectively, the Initial Securities and, when
and if issued as provided in the Registration Rights Agreement, the Exchange
Securities.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Securities Custodian" means the Registrar, as custodian with
respect to the Securities in global form, or any successor entity thereto.
"Securityholder" or "Holder" means the Person in whose name a
Security is registered on the Registrar's books.
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"Special Record Date" for payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 2.12.
"Stated Maturity," when used with respect to any Security, means
November 15, 2003.
"Subordinated Notes" means the Subordinated Notes due 2003 issued by
the Authority pursuant to the Note Purchase Agreement and the completion
guarantees under the Management Agreement.
"Subsidiary," with respect to any person, means (i) a corporation a
majority of whose Capital Stock with voting power, under ordinary circumstances,
to elect directors is at the time, directly or indirectly, owned by such person,
by such person and one or more Subsidiaries of such person or by one or more
Subsidiaries of such person, (ii) any other person (other than a corporation or
partnership) in which such person, one or more Subsidiaries of such person, or
such person and one or more Subsidiaries of such person, directly or indirectly,
at the date of determination thereof has at least majority ownership interest,
or (iii) a partnership in which such person or a Subsidiary of such person is,
at the time, a general partner and in which such person, directly or indirectly,
at the date of determination thereof has at least a majority ownership interest.
"Sun International" means Sun International Hotels Limited, a
corporation incorporated under the laws of the Commonwealth of The Bahamas,
together with its Affiliates.
"Tax Amounts" with respect to any taxable period shall not exceed an
amount equal to (A) the product of (x) the taxable income of the Company for
such period as determined by the Tax Amounts CPA and (y) the Tax Percentage
reduced by (B) to the extent not previously taken into account, any income tax
benefit attributable to the Company which could be realized (without regard to
the actual realization) by its members in the current or any prior taxable year,
or portion thereof, commencing on or after the Issue Date (including any tax
losses or tax credits), computed at the applicable Tax Percentage for the year
that such benefit is taken into account for purposes of this computation.
"Tax Amounts CPA" means a nationally recognized certified public
accounting firm.
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"Tax Percentage" means, for a particular taxable year, the highest
effective marginal combined rate of Federal and state income tax, imposed on an
individual taxpayer, as certified by the Tax Amounts CPA in a certificate filed
with the Trustee. The rate of "state income tax" to be taken into account for
purposes of determining the Tax Percentage for a particular taxable year shall
be deemed to be the higher of (A) the highest Connecticut income tax rate
imposed on individuals for such year or (B) the sum of (x) the highest Michigan
income tax rate imposed on individuals for such year and (y) the Michigan
intangibles tax rate.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.
Code ▇▇.▇▇. 77aaa-77bbbb), as in effect on the date of the execution of this
Indenture; except as otherwise provided in Section 8.3.
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 2.6 hereof.
"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 and (ii) the aggregate amount permitted to be distributed
in respect of such year as determined by reference to the Company's Internal
Revenue Service Form 1065 filed for such year. For purposes of this Agreement,
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" 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 members."
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture, and
thereafter means such successor.
"Trust Officer" means any officer within the corporate trust
administration division (or any successor group) of the Trustee or any other
officer of the Trustee customarily performing functions similar to those
performed by the Persons who at that time shall be such officers, and also
means, with respect to a particular corporate trust matter, any other officer of
the Trustee to whom such trust matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"U.S. Government Obligations" means direct non-callable obligations
of, or noncallable obligations guaranteed by, the United States of America for
the payment
15
of which obligation or guarantee the full faith and credit of the United States
of America is pledged.
SECTION 1.2. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such
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:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture securityholder" means a Holder or a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture Trustee" or "institutional Trustee" means the Trustee.
"obligor" on the indenture securities means the Issuers and any
other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them thereby.
SECTION 1.3. 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 words in the
plural include the singular;
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(5) provisions apply to successive events and transactions;
(6) "herein," "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or
other subdivision; and
(7) references to Sections or Articles means reference to such
Section or Article in this Indenture, unless stated otherwise.
ARTICLE II
THE SECURITIES
SECTION 2.1. Form and Dating.
The Securities and the Trustee's certificate of authentication, in
respect thereof, shall be substantially in the form of Exhibit A hereto, which
Exhibit is part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage or the terms hereof.
The Issuers shall approve the form of the Securities and any notation, legend or
endorsement on them. Any such notations, legends or endorsements not contained
in the form of Security attached as Exhibit A hereto shall be delivered in
writing to the Trustee. Each Security shall be dated the date of its
authentication.
The terms and provisions contained in the form of Securities shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Issuers and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
SECTION 2.2. Execution and Authentication.
Two Officers shall sign, or one Officer shall sign and one Officer
shall attest to, the Security for the Issuers by manual or facsimile signature.
The Issuers' seals shall be impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form.
If an Officer whose signature is on a Security was an Officer at the
time of such execution but no longer holds that office at the time the Trustee
authenticates the
17
Security, the Security shall be valid nevertheless and the Issuers shall
nevertheless be bound by the terms of the Securities and this Indenture.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security but
such signature shall be conclusive evidence that the Security has been
authenticated pursuant to the terms of this Indenture.
The Trustee shall authenticate or cause to be authenticated the
Initial Securities for original issue in the aggregate principal amount of up to
$65,000,000 and shall authenticate Exchange Securities for original issue in the
aggregate principal amount of up to $65,000,000, in each case upon a written
order of the Issuers in the form of an Officers' Certificate provided that such
Exchange Securities shall be issuable only upon the valid surrender for
cancellation of Initial Securities of a like aggregate principal amount. The
Officers' Certificate shall specify the amount of Securities to be authenticated
and the date on which the Securities are to be authenticated. The aggregate
principal amount of Securities outstanding at any time may not exceed
$65,000,000, except as provided in Section 2.7. Upon the written order of the
Issuers in the form of an Officers' Certificate, the Trustee shall authenticate
Securities in substitution of Securities originally issued to reflect any name
change of either of the Issuers.
The Trustee may appoint an authenticating agent acceptable to the
Issuers to authenticate Securities. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Issuers, any Affiliate of the Issuers,
or any Subsidiaries of the Issuers.
Securities shall be issuable only in fully registered form, without
coupons, in denominations of $1,000 and integral multiples thereof.
SECTION 2.3. Registrar and Paying Agent.
The Issuers shall maintain an office or agency where Securities may
be presented for registration of transfer or exchange ("Registrar") and an
office or agency of the Issuers where Securities may be presented for payment
("Paying Agent") and where notices and demands to or upon the Issuers in respect
of the Securities may be served. The Issuers may act as Registrar or Paying
Agent, except that for the purposes of Articles III, VII and IX and as otherwise
specified in this Indenture, none of the Issuers or any Affiliate of either the
Company or Finance shall act as Paying Agent. The
18
Registrar shall keep a register of the Securities and of their transfer and
exchange. The Issuers may have 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 hereby
initially appoint the Trustee as Registrar and Paying Agent, and by its
signature hereto, the Trustee hereby agrees so to act. The Issuers may at any
time change any Paying Agent or Registrar without notice to any Holder.
The Issuers shall enter into an appropriate written agency agreement
with any Agent (including the Paying Agent) not a party to this Indenture, which
agreement shall implement the provisions of this Indenture that relate to such
Agent, and shall furnish a copy of each such agreement to the Trustee. The
Issuers shall promptly notify the Trustee in writing of the name and address of
any such Agent. If the Issuers fail to maintain a Registrar or Paying Agent, the
Trustee shall act as such.
The Issuers initially appoint The Depository Trust Company ("DTC")
to act as Depositary with respect to the Global Securities.
The Issuers initially appoint the Registrar to act as Securities
Custodian with respect to the Global Securities.
Upon the occurrence of an Event of Default described in Section
5.1(e) or (f), the Trustee shall, or upon the occurrence of any other Event of
Default by notice to the Issuers, the Registrar and the Paying Agent, the
Trustee may, assume the duties and obligations of the Registrar and the Paying
Agent hereunder.
The Trustee is authorized to enter into a letter of representation
with DTC in the form provided to the Trustee by the Issuers and to act in
accordance with such letter.
SECTION 2.4. Paying Agent to Hold Assets in Trust.
The Issuers shall require each Paying Agent other than the Trustee
to agree in writing that such Paying Agent shall hold in trust for the benefit
of Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, premium or Liquidated Damages, if any, or interest on, the
Securities (whether such assets have been distributed to it by the Issuers or
any other obligor on the Securities), and shall notify the Trustee in writing of
any Default in making any such payment. If either of the Issuers acts as Paying
Agent, it shall segregate such assets and hold them as a separate trust fund for
the benefit of the Holders or the Trustee. The Issuers at any time may
19
require a Paying Agent to distribute all assets held by it to the Trustee and
account for any assets disbursed and the Trustee may at any time during the
continuance of any payment Default or any Event of Default, upon written request
to a Paying Agent, require such Paying Agent to distribute all assets held by it
to the Trustee and to account for any assets distributed. Upon distribution to
the Trustee of all assets that shall have been delivered by the Issuers to the
Paying Agent, the Paying Agent (if other than either of the Issuers) shall have
no further liability for such assets.
SECTION 2.5. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is not
the Registrar, the Issuers shall furnish to the Trustee on or before the third
Business Day preceding each Interest Payment Date and at such other times as the
Trustee or any such Paying Agent may request in writing a list in such form and
as of such date as the Trustee reasonably may require of the names and addresses
of Holders and the Issuers shall otherwise comply with TIA ss. 312(a).
SECTION 2.6. Transfer and Exchange.
(a) Transfer and Exchange of Definitive Securities. When
Definitive Securities are presented to the Registrar with a request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal
principal amount of Definitive Securities of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
that the Definitive Securities surrendered for registration of transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Issuers and
the Registrar duly executed by the Holder thereof or his attorney duly
authorized in writing; and
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(ii) in the case of Definitive Securities that are
Transfer Restricted Securities, such request shall be accompanied by the
following additional information and documents, as applicable:
(A) if such Transfer Restricted Securities are
being delivered to the Registrar by a Holder for registration in the name
of such Holder, without transfer, a certification from such Holder to that
effect (in substantially the form set forth on the reverse of the
Security); or
(B) if such Transfer Restricted Security is
being transferred to a "qualified institutional buyer" (as defined in Rule
144A under the Securities Act) in accordance with Rule 144A under the
Securities Act, a certification to that effect (in substantially the form
set forth on the reverse of the Security); or
(C) if such Transfer Restricted Security is
being transferred (i) pursuant to an exemption from registration in
accordance with Rule 144 or Regulation S under the Securities Act, or (ii)
pursuant to an effective registration statement under the Securities Act,
or (iii) in reliance on another exemption from the registration
requirements of the Securities Act, a certification to that effect (in
substantially the form set forth on the reverse of the Security) and if
the Issuers or the Registrar so request, a customary opinion of counsel
reasonably acceptable to the Issuers and to the Registrar to the effect
that such transfer is in compliance with the Securities Act.
(b) Restrictions on Transfer of a Definitive Security for a
Beneficial Interest in a Global Security. A Definitive Security may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Registrar
of a Definitive Security, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Registrar, together with:
(i) if such Definitive Security is a Transfer Restricted
Security, certification, substantially in the form set forth on the
21
reverse of the Security, that such Definitive Security is being
transferred to a "qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in accordance with Rule 144A under the
Securities Act; and
(ii) whether or not such Definitive Security is a
Transfer Restricted Security, written instructions of the Holder directing
the Registrar to make, or to direct the Securities Custodian to make, an
endorsement on the Global Security to reflect an increase in the aggregate
principal amount of the Securities represented by the Global Security,
then the Registrar shall cancel such Definitive Security and cause, or direct
the Securities Custodian to cause, in accordance with the standing instructions
and procedures existing between the Depositary and the Securities Custodian, the
aggregate principal amount of Securities represented by the Global Security to
be increased accordingly. If no Global Securities are then outstanding, the
Issuers shall issue and the Trustee shall authenticate a new Global Security in
the appropriate principal amount.
(c) Transfer and Exchange of Global Securities. The transfer
and exchange of Global Securities or beneficial interests therein shall be
effected through the Depositary, in accordance with this Indenture (including
applicable restrictions on transfer set forth herein, if any) and the procedures
of the Depositary therefor which shall include restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act.
(d) Transfer of a Beneficial Interest in a Global Security for
a Definitive Security.
(i) Any Person having a beneficial interest in a Global
Security may upon request exchange such beneficial interest for a
Definitive Security. Upon receipt by the Registrar of written instructions
or such other form of instructions as is customary for the Depositary from
the Depositary or its nominee on behalf of any Person having a beneficial
interest in a Global Security and upon receipt by the Registrar of a
written order or such other form of instructions as is customary for the
Depositary or the Person designated by the Depositary as having such a
beneficial interest in a Transfer Restricted Security only, the following
additional information and documents (all of which may be submitted by
facsimile):
22
(A) if such beneficial interest is being
transferred to the Person designated by the Depositary as being the
beneficial owner, a certification from such person to that effect (in
substantially the form set forth on the reverse of the Security); or
(B) if such beneficial interest is being
transferred to a "qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in accordance with Rule 144A under the
Securities Act a certification to that effect from the transferor (in
substantially the form set forth on the reverse of the Security); or
(C) if such beneficial interest is being
transferred (i) pursuant to an exemption from registration in accordance
with Rule 144 or Regulation S under the Securities Act, or (ii) pursuant
to an effective registration statement under the Securities Act, or (iii)
in reliance on another exemption from the registration requirements of the
Securities Act, a certification to that effect from the transferee or
transferor (in substantially the form set forth on the reverse of the
Security) and if the Issuers or the Registrar so requests, a customary
opinion of counsel from the transferee or transferor reasonably acceptable
to the Issuers and to the Registrar to the effect that such transfer is in
compliance with the Securities Act;
then the Registrar or the Securities Custodian, at the direction of the Trustee,
will cause, in accordance with the standing instructions and procedures existing
between the Depositary and the Securities Custodian, the aggregate principal
amount of the Global Security to be reduced and, following such reduction, the
Issuers will execute and, upon receipt of an authentication order in the form of
an Officers' Certificate, the Trustee or the Trustee's authenticating agent will
authenticate and deliver to the transferee, a Definitive Security.
(ii) Definitive Securities issued in exchange for a
beneficial interest in a Global Security pursuant to this Section 2.6(d)
shall be registered in such names and in such authorized denominations as
the Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Registrar. The Registrar
shall deliver such
23
Definitive Securities to the persons in whose names such Securities are so
registered.
(e) Restrictions on Transfer and Exchange of Global
Securities. Notwithstanding any other provisions of this Indenture (other than
the provisions set forth in subsection (f) of this Section 2.6), a Global
Security may not be transferred as a whole except by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Authentication of Definitive Securities in Absence of
Depositary. If at any time:
(i) the Depositary for the Securities notifies the
Issuers that the Depositary is unwilling, unable or ineligible to continue
as Depositary for the Global Securities and a successor Depositary for the
Global Securities is not appointed by the Issuers within 90 days after
delivery of such notice; or
(ii) the Issuers, in their sole discretion, notify the
Trustee and the Registrar in writing that they elect to cause the issuance
of Definitive Securities under this Indenture,
then the Issuers will execute, and the Trustee, upon receipt of an Officers'
Certificate requesting the authentication and delivery of Definitive Securities,
will, or its authenticating agent will, authenticate and deliver Definitive
Securities, in an aggregate principal amount equal to the principal amount of
the Global Securities, in exchange for such Global Securities.
(g) Cancellation and/or Adjustment of Global Security. At such
time as all beneficial interests in a Global Security have either been exchanged
for Definitive Securities, redeemed, repurchased or cancelled, such Global
Security shall be returned to or retained and cancelled by the Trustee. At any
time prior to such cancellation, if any beneficial interest in a Global Security
is exchanged for Definitive Securities, redeemed, repurchased or cancelled, the
principal amount of Securities represented by such Global Security shall be
reduced and an endorsement shall be made on such Global Security, by the Trustee
or the Securities Custodian, at the direction of the Trustee, to reflect such
reduction.
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(h) Legends.
(i) Except as permitted by the following paragraph (ii), each
Security certificate evidencing the Global Securities and the Definitive
Securities (and all Securities issued in exchange therefor or substitution
thereof) shall bear a legend in substantially the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER ▇▇▇▇▇▇▇ ▇ ▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY
BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUERS THAT
(A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144
UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN
PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER
THE SECURITIES ACT, OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON
AN OPINION OF COUNSEL IF THE ISSUERS SO REQUEST), (2) TO THE ISSUERS
OR (3)
25
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE,
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global Security)
pursuant to Rule 144 under the Securities Act or an effective registration
statement under the Securities Act:
(A) in the case of any Transfer Restricted Security that is a
Definitive Security, the Registrar shall permit the Holder thereof to
exchange such transfer Restricted Security for a Definitive Security that
does not bear the legend set forth above and rescind any restriction on
the transfer of such Transfer Restricted Security, in the case of a sale
or transfer pursuant to Rule 144 under the Securities Act after delivery
of a customary opinion of counsel; and
(B) any such Transfer Restricted Security represented by a Global
Security shall not be subject to the provisions set forth in (i) above
(such sales or transfers being subject only to the provisions of Section
2.6(c) hereof); provided, however, that with respect to any request for an
exchange of a Transfer Restricted Security that is represented by a Global
Security for a Definitive Security that does not bear a legend, which
request is made in reliance upon Rule 144 under the Securities Act, the
Holder thereof shall certify in writing (to be accompanied by a customary
opinion of counsel) to the Registrar that such request is being made
pursuant to Rule 144 under the Securities Act (such certification to be
substantially in the form set forth on the reverse of the Security).
(i) Obligations with respect to Transfers and Exchanges of
Definitive Securities.
(i) To permit registrations of transfers and exchanges,
the Issuers shall execute and the Trustee or any authenticating agent of
the Trustee shall authenticate Definitive Securities and Global Securities
at the Registrar's request.
26
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Issuers may require payment
of a sum sufficient to cover any transfer tax, assessment, or similar
governmental charge payable in connection therewith (other than any such
transfer taxes, assessments, or similar governmental charge payable upon
exchanges or transfers pursuant to Section 2.2 (fourth paragraph), 2.10,
3.7, 8.5, or 9.1 (final paragraph)).
(iii) The Registrar shall not be required to register
the transfer of or exchange (a) any Definitive Security selected for
redemption in whole or in part pursuant to Article III, except the
unredeemed portion of any Definitive Security being redeemed in part, or
(b) any Security for a period beginning 15 Business Days before the
mailing of a notice of an offer to repurchase pursuant to Article IX
hereof or a notice of redemption of Securities pursuant to Article III
hereof and ending at the close of business on the day of such mailing.
(iv) Prior to due presentment for registration or
transfer of any Security, the Trustee, any Agent and the Issuers may deem
and treat the Person in whose name the Security is registered as the
absolute owner of such Security, and none of the Trustee, Agent or the
Issuers shall be affected by notice to the contrary.
SECTION 2.7. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims and submits an affidavit or other evidence,
satisfactory to the Trustee to the effect that the Security has been lost,
destroyed or wrongfully taken, the Issuers shall issue and the Trustee or any
authenticating agent of the Trustee shall authenticate a replacement Security if
the Trustee's requirements are met. If required by the Trustee or the Issuers,
such Holder must provide an indemnity bond or other indemnity, sufficient in the
judgment of the Issuers and the Trustee, to protect the Issuers, the Trustee or
any Agent from any loss which any of them may suffer if a Security is replaced.
The Issuers may require the payment of a sum sufficient to cover any transfer
tax, assessment or similar governmental charge that may be imposed in relation
to the issuance of any new Security and charge such Holder for its reasonable,
out-of-pocket expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Issuers.
27
SECTION 2.8. Outstanding Securities.
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee (including any Security represented by a
Global Security) except those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Security effected by
the Trustee hereunder and those described in this Section 2.8 as not
outstanding. A Security does not cease to be outstanding because the Issuers or
an Affiliate of either of the Issuers holds the Security, except as provided in
Section 2.9.
If a Security is replaced pursuant to Section 2.7 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section 2.7.
If on a Redemption Date or the Maturity Date the Paying Agent (other
than the Issuers or an Affiliate of either of the Issuers) holds Cash or U.S.
Government Obligations sufficient to pay all of the principal and interest and
premium, if any, due on the Securities payable on that date and payment of the
Securities called for redemption is not otherwise prohibited, then on and after
that date such Securities cease to be outstanding and interest on them ceases to
accrue.
SECTION 2.9. Treasury Securities.
In determining whether the Holders of the required principal amount
of Securities have concurred in any direction, amendment, supplement, waiver or
consent, Securities owned by the Issuers or Affiliates of either of the Issuers
shall be disregarded, except that, for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, amendment,
supplement, waiver or consent, only Securities that a Trust Officer of the
Trustee knows are so owned shall be disregarded.
SECTION 2.10. Temporary Securities.
Until permanent Securities are ready for delivery, the Issuers may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of permanent Securities but may
have variations that the Issuers reasonably and in good faith consider
appropriate for temporary Securities. Without unreasonable delay, the Issuers
shall prepare and the Trustee shall authenticate permanent Securities in
exchange for temporary Securities. Until so exchanged, the temporary
28
Securities shall in all respects be entitled to the same benefits under this
Indenture as permanent Securities authenticated and delivered hereunder.
SECTION 2.11. Cancellation.
The Issuers at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to it or them (as applicable) for registration of
transfer, exchange or payment. The Trustee or, at the direction of the Trustee,
the Registrar or the Paying Agent (other than the Issuers or an Affiliate of
either of the Issuers), and no one else shall cancel and, at the written
direction of the Issuers, shall dispose of all Securities surrendered for
transfer, exchange, payment or cancellation. Subject to Section 2.7, the Issuers
may not issue new Securities to replace Securities that have been paid or
delivered to the Trustee for cancellation. No Securities shall be authenticated
in lieu of or in exchange for any Securities cancelled as provided in this
Section 2.11, except as expressly permitted in the form of Securities and as
permitted by this Indenture.
SECTION 2.12. Defaulted Interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date plus, to the extent
lawful, any interest payable on the defaulted interest (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered holder on the
relevant Record Date, and such Defaulted Interest may be paid by the Issuers, at
their election in each case, as provided in clause (1) or (2) below:
(1) The Issuers may elect to make payment of any Defaulted
Interest to the persons in whose names the Securities (or their respective
predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Issuers shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security and the date of the proposed payment, and at the same
time the Issuers shall deposit with the Trustee an amount of Cash equal to
the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such Cash when
deposited to be held in trust for the benefit of the persons entitled to
such Defaulted Interest as provided in this clause (1). Thereupon the
Trustee shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10 days
prior to the date of the proposed payment and not
29
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Issuers of such
Special Record Date and, in the name and at the expense of the Issuers,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first-class postage
prepaid, to each Holder at his address as it appears in the Security
register not less than 10 days prior to such Special Record Date. Notice
of the proposed payment of such Defaulted Interest and the Special Record
Date therefor having been mailed as aforesaid, such Defaulted Interest
shall be paid to the persons in whose names the Securities (or their
respective predecessor Securities) are registered on such Special Record
Date and shall no longer be payable pursuant to the following clause (2).
(2) The Issuers may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Issuers to the Trustee of the proposed payment pursuant to this clause,
such manner shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
ARTICLE III
REDEMPTION
SECTION 3.1. Right of Redemption.
Redemption of Securities, as permitted by any provision of this
Indenture, shall be made in accordance with such provision and this Article III.
The Issuers shall be required to make a mandatory redemption on each May and
November 15, commencing November 15, 1997, of Securities in the largest
principal amount that is an integral multiple of $1,000, that may be redeemed
using 100% of Company Excess Cash as of the preceding September 30 and March 31,
respectively, at the Redemption Prices specified in the form of Security
attached as Exhibit A set forth therein in Paragraph 5 thereof, including
accrued and unpaid interest and Liquidated Damages, if any, to the Redemption
Date (subject to the right of Holders of record on a Record Date to receive
30
interest due on an Interest Payment Date that is on or prior to such Redemption
Date, and subject to the provisions set forth in Section 3.5).
In the event that either the Company or Sun International shall
deliver an election to either buy or sell the other party's interest in the
Manager pursuant to a Buy-Out Notice or be deemed to have delivered an election
to sell such interest and such election to buy or sell is consummated, the
Issuers shall be required to make a mandatory redemption of all the Securities
then outstanding, at the Redemption Prices specified in the form of Security
attached as Exhibit A set forth in paragraph 5 thereof. Such redemption shall be
made on a date no more than 35 days after the date of the Closing.
Except as provided in the two preceding paragraphs of this Section
3.1, the Issuers will not have the right to redeem any Securities prior to
November 15, 1999. The Securities will be redeemable for cash at the option of
the Issuers, in whole or in part, at any time on or after November 15, 1999,
with Company Excess Cash as of the date notice is given at the Redemption Prices
specified in the form of Security attached as Exhibit A set forth in Paragraph 6
thereof (subject to the right of Holders of record on a Record Date to receive
interest and Liquidated Damages, if any, due on an Interest Payment Date that is
on or prior to such Redemption Date) together with accrued and unpaid interest
and Liquidated Damages, if any, thereon to the Redemption Date and subject to
the provisions set forth in Section 3.5.
Notwithstanding any other provisions of this Indenture, if any
Gaming Regulatory Authority requires that a Holder or beneficial owner of the
Securities must be licensed, qualified or found suitable under any applicable
gaming laws in order to maintain any gaming license or franchise related to the
Mohegan Sun 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 Regulatory Authority (or such
lesser period that may be required by such Gaming Regulatory Authority) or if
such Holder or beneficial owner is not so licensed, qualified or found suitable,
the Company shall have the right, at its option:
(1) to require such Holder or beneficial owners to dispose of
such Holder's or beneficial owner's Securities within 30 days of receipt
of such finding by the applicable Gaming Regulatory Authority (or such
earlier date as may be required by the applicable Gaming Regulatory
Authority); or
(2) to call for redemption of the Securities of such Holder or
beneficial owner at a redemption price equal to (a) the lesser of the
principal amount thereof or the price at which such Holder or beneficial
owner acquired
31
the Securities, 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 Regulatory
Authority, which may be less than 30 days following the notice of
redemption if so ordered by such Gaming Regulatory Authority or (b) such
other amount as may be determined by such Gaming Regulatory Authority.
SECTION 3.2. Notices to Trustee.
If the Issuers are required, or elect, to redeem Securities pursuant
to Paragraphs 5, 6 or 7 of the Securities, they shall notify the Trustee in
writing of the Redemption Date and the principal amount of Securities to be
redeemed and whether they want the Trustee to give notice of redemption to the
Holders. Such notice to the Trustee shall describe in reasonable detail the
circumstances requiring such redemption, and the Trustee shall not otherwise be
deemed to have knowledge of such circumstances.
If the Issuers elect to reduce the principal amount of Securities to
be redeemed pursuant to Paragraphs 5, 6 or 7 of the Securities by crediting
against any such redemption Securities they have not previously delivered to the
Trustee for cancellation, they shall so notify the Trustee of the amount of the
reduction and deliver such Securities with such notice.
The Issuers shall give each notice to the Trustee provided for in
this Section 3.2 at least 30 days before the Redemption Date (unless a shorter
notice shall be satisfactory to the Trustee). Any such notice may be cancelled
at any time prior to notice of such redemption being mailed to any Holder and
shall thereby be void and of no effect.
SECTION 3.3. Selection of Securities to Be Redeemed.
If less than all of the Securities are to be redeemed pursuant to
Paragraphs 5, 6 or 7 thereof, the Trustee shall select the Securities or
portions thereof for redemption on a pro rata basis, by lot or by such other
method as the Trustee shall determine to be fair and appropriate, provided that
mandatory and optional redemptions from Company Excess Cash will be done as
nearly as possible on a pro rata basis.
The Trustee shall make the selection from the Securities outstanding
and not previously called for redemption and shall promptly notify the Issuers
in writing of the Securities selected for redemption and, in the case of any
Security selected for partial redemption, the principal amount thereof to be
redeemed. Securities in denominations
32
of $1,000 may be redeemed only in whole. The Trustee may select for redemption
portions (equal to $1,000 or any integral multiple thereof) of the principal of
Securities that have denominations larger than $1,000. Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption.
SECTION 3.4. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date,
the Issuers shall mail a notice of redemption by first class mail, postage
prepaid, to the Trustee and each Holder whose Securities are to be redeemed to
such Holder's last address as then shown on the registry books of the Registrar.
At the Issuers' request, the Trustee shall give the notice of redemption in the
Issuers' names and at the Issuers' expense. Each notice for redemption shall
identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price, including the amount of accrued and
unpaid interest and Liquidated Damage to be paid upon such redemption;
(3) the name, address and telephone number of the Paying
Agent;
(4) that Securities called for redemption must be surrendered
to the Paying Agent at the address specified in such notice to collect the
Redemption Price;
(5) that, unless the Issuers default in their obligation to
deposit Cash or U.S. Government Obligations which through the scheduled
payment of principal and interest in respect thereof in accordance with
their terms will provide Cash in an amount to fund the Redemption Price
with the Paying Agent in accordance with Section 3.6 hereof or such
redemption payment is otherwise prohibited, interest on Securities called
for redemption ceases to accrue on and after the Redemption Date and the
only remaining right of the Holders of such Securities is to receive
payment of the Redemption Price, including accrued and unpaid interest to
the Redemption Date, upon surrender to the Paying Agent of the Securities
called for redemption and to be redeemed;
(6) if any Security is being redeemed in part, the portion of
the principal amount equal to $1,000 or any integral multiple thereof, of
such Secu-
33
rity to be redeemed and that, after the Redemption Date, and upon
surrender of such Security, a new Security or Securities in aggregate
principal amount equal to the unredeemed portion thereof will be issued;
(7) if less than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of such Securities to
be redeemed and the aggregate principal amount of Securities to be
outstanding after such partial redemption;
(8) the CUSIP number of the Securities to be redeemed; and
(9) that the notice is being sent pursuant to this Section 3.4
and pursuant to the mandatory or optional redemption provisions of
Paragraphs 5, 6 or 7, as applicable, of the Securities.
SECTION 3.5. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.4,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price, including accrued and unpaid interest to the
Redemption Date. Upon surrender to the Trustee or, if the Trustee is no longer
the paying agent, to the Paying Agent, such Securities called for redemption
shall be paid at the Redemption Price, including interest and Liquidated
Damages, if any, accrued and unpaid to the Redemption Date; provided that if the
Redemption Date is on or after a regular Record Date and on or prior to the
Interest Payment Date to which such Record Date relates, the accrued interest
and Liquidated Damages, if any, shall be payable to the Holder of the redeemed
Securities registered on the relevant Record Date and no additional interest
will be payable to Holders of the redeemed Securities on the Redemption Date;
and provided, further, that if a Redemption Date is a non-Business Day, payment
shall be made on the next succeeding Business Day and no interest shall accrue
for the period from such Redemption Date to such succeeding Business Day.
SECTION 3.6. Deposit of Redemption Price.
On or prior to the Redemption Date, the Issuers shall deposit with
the Paying Agent (other than the Issuers or an Affiliate of either of the
Issuers) Cash or U.S. Government Obligations sufficient to pay the Redemption
Price of, and accrued and unpaid interest and Liquidated Damages, if any, on,
all Securities to be redeemed on such Redemption Date (other than Securities or
portions thereof called for redemption
34
on that date that have been delivered by the Issuers to the Trustee for
cancellation). The Paying Agent shall promptly return to the Issuers any Cash or
U.S. Government Obligations so deposited which is not required for that purpose
upon the written request of the Issuers.
If the Issuers comply with the preceding paragraph and the other
provisions of this Article III and payment of the Securities called for
redemption is not otherwise prohibited, interest on the Securities to be
redeemed will cease to accrue on the applicable Redemption Date, whether or not
such Securities are presented for payment. Notwithstanding anything herein to
the contrary, if any Security surrendered for redemption in the manner provided
in the Securities shall not be so paid upon surrender for redemption because of
the failure of the Issuers to comply with the preceding paragraph, interest
shall continue to accrue and be paid from the Redemption Date until such payment
is made on the unpaid principal, and, to the extent lawful, on any interest not
paid on such unpaid principal, in each case at the rate and in the manner
provided in Section 4.1 hereof and the Security.
SECTION 3.7. Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed in part, the
Issuers shall execute, and the Trustee shall authenticate and deliver to the
Holder, without service charge to the Holder, a new Security or Securities equal
in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE IV
COVENANTS
SECTION 4.1. Payment of Securities.
The Issuers shall pay the principal of and interest and premium and
Liquidated Damages, if applicable, on the Securities on the dates and in the
manner provided herein and in the Securities. An installment of principal of or
interest and premium, if applicable, on the Securities shall be considered paid
on the date it is due if the Trustee or Paying Agent (other than the Issuers or
an Affiliate of either of the Issuers) holds for the benefit of the Holders, on
or before 10:00 a.m. New York City time on that date, Cash deposited and
designated for and sufficient to pay the installment.
35
The Issuers shall pay interest on overdue principal and on overdue
installments of interest at the rate specified in the Securities compounded
semi-annually, to the extent lawful.
SECTION 4.2. Maintenance of Office or Agency.
The Issuers shall maintain in the Borough of Manhattan, The City of
New York, an office or agency where Securities may be presented or surrendered
for payment, where Securities may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Issuers in respect of the
Securities and this Indenture may be served. The Issuers shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Issuers shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the address of the Trustee set forth in Section 11.2.
The Issuers may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Issuers of their obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York, for such purposes. The Issuers shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency. The
Issuers hereby initially designate the Trustee's agency at Fleet Bank, c/o First
Chicago Trust Company, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10005,
Attention: Corporate Trust Operations as such office.
SECTION 4.3. Limitation on Restricted Payments.
The Issuers shall not, directly or indirectly, make any Restricted
Payment.
The preceding paragraph, however, will not prohibit (i) the payment
of Permitted Quarterly Tax Distributions to the members of the Company as
described below and (ii) Investments in connection with the development and/or
improvement of the Mohegan Sun or a hotel adjacent to the Mohegan Sun or the
purchase of the 5% interest of the minority partner in the Manager, provided,
however, that, after giving pro forma effect to the proposed Investment, (i) no
Default or Event of Default shall have occurred or be continuing and (ii) the
aggregate amount of all such Investments made on or after the Issue Date that
are outstanding (after giving effect to any such Investments
36
that are returned to the Company without restriction, in cash, on or prior to
the date of any such calculation) at any time does not exceed $5.0 million.
Notwithstanding the foregoing provisions of this covenant, the
Issuers will not, directly or indirectly, make any Investment in the Manager
other than a capital contribution or loan made (i) substantially concurrently
with proportionate capital contributions or loans made in cash by all other
partners of the Manager and (ii) at a time when the Manager is in compliance
(without regard to any cure periods) with the terms of Section 4.13.
For so long as the Company is a partnership or substantially similar
pass-through entity for Federal income tax purposes, the Company may make cash
distributions to its 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. If any portion of a Permitted
Quarterly Tax Distribution is not distributed during such Quarterly Payment
Period, the Permitted Quarterly Tax Distribution payable during the immediately
following Quarterly Payment Period shall be increased by such undistributed
portion.
Within 10 days following the Company's filing of Internal Revenue
Service Form 1065 for the immediately preceding taxable year, the Tax Amounts
CPA shall file with the Trustee a written statement indicating in reasonable
detail the calculation of the True-up Amount. In the case of a True-up Amount
due to the members, the Permitted Quarterly Tax Distribution payable during the
immediately following Quarterly Payment Period shall be increased by such
True-up Amount. In the case of a True-up Amount due to the Company, the
Permitted Quarterly Tax Distribution payable during the immediately following
Quarterly Payment 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
Distributions until such True-up Amount is entirely offset.
SECTION 4.4. Corporate and Limited Liability Company Existence.
Except as otherwise provided or permitted in this Indenture, Finance
and the Company shall do or cause to be done all things necessary to preserve
and keep in full force and effect their respective corporate and limited
liability company existence in accordance with the respective organizational
documents of each of them (as the same may be amended from time to time) and the
rights (charter and statutory) and corporate and limited liability company
franchises of the Issuers.
37
SECTION 4.5. Payment of Taxes and Other Claims.
The Issuers shall pay, prior to delinquency, all material taxes,
assessments, and governmental levies except (i) as contested in good faith by
appropriate proceedings and with respect to which appropriate reserves have been
taken to the extent required by GAAP or (ii) where the failure to effect such
payment is not adverse in any material respect to the Holders.
SECTION 4.6. Compliance Certificate; Notice of Default.
(a) The Issuers shall deliver to the Trustee within 120 days
after the end of their fiscal year an Officers' Certificate complying with
Section 314(a)(4) of the TIA and stating that a review of their activities
during the preceding fiscal year has been made under the supervision of the
signing Officers and stating, as to each such Officer signing such certificate,
to the best of his or her knowledge, based on such review, whether or not the
signer knows of any Event of Default or event which with notice or the passage
of time would become an Event of Default which has occurred and is continuing.
The Officers' Certificate shall also notify the Trustee should the relevant
fiscal year end on any date other than the current fiscal year end date.
(b) The Issuers shall, so long as any of the Securities are
outstanding, deliver to the Trustee, promptly upon becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Issuers are taking or propose to take with
respect thereto; provided, however, that if the Manager is notified in writing
of any default under the Management Agreement (regardless of whether or not any
due period has expired) the Company shall promptly notify the Holders directly
of such event. The Trustee shall not be deemed to have knowledge of any Default
or any Event of Default unless one of its Trust Officers receives written notice
thereof from the Issuers or any of the Holders.
SECTION 4.7. Reports.
Whether or not the Issuers are subject to the reporting requirements
of Section 13 or 15(d) of the Exchange Act, each of the Issuers shall deliver to
the Trustee, to each Holder and to prospective purchasers of Securities
identified to the Issuers by an Initial Purchaser, within 15 days after it is or
would have been (if it were subject to such reporting obligations) required to
file such with the Commission, commencing with the fiscal quarter ending
December 31, 1996, annual and quarterly financial statements substantially
equivalent to financial statements that would have been included in reports
filed with the Commission, if the Issuers were subject to the requirements of
Section 13 or
38
15(d) of the Exchange Act, including, with respect to annual information only, a
report thereon by the Issuers' certified independent public accountants as such
would be (if it were subject to such reporting obligations) required in such
reports to the Commission, and, in each case, together with a management's
discussion and analysis of financial condition and results of operations which
would be so required and, to the extent permitted by the Commission (if it were
subject to such reporting obligations), file with the Commission the annual,
quarterly and other reports which it is or would have been required to file with
the Commission.
SECTION 4.8. Limitation on Status as Investment Company.
Neither the Company nor Finance shall conduct its business in a
fashion that would cause it to be required to register as an "investment
company" (as that term is defined in the Investment Company Act of 1940, as
amended).
SECTION 4.9. Limitation on Transactions with Affiliates.
The Company shall not permit the Manager on or after the Issue Date
to enter into or suffer to exist any contract, agreement, arrangement or
transaction with any Affiliate of the Company (an "Affiliate Transaction"), or
any series of related Affiliate Transactions, other than those existing on the
Issue Date (i) unless it is determined that the terms of such Affiliate
Transaction are fair and reasonable to the Manager, and no less favorable to the
Manager, than could have been obtained in an arm's length transaction with a
non-Affiliate of the Company and, (ii) if involving consideration to either
party in excess of $500,000, unless such Affiliate Transaction (or Transactions)
is evidenced by an Officers' Certificate addressed and delivered to the Trustee
certifying that such Affiliate Transaction (or Transactions) has been approved
by a majority of the members of the Board of Directors that are disinterested in
such transaction and (iii) if involving consideration to either party in excess
of $1 million, unless in addition the Company, prior to the consummation
thereof, obtains a written favorable opinion as to the fairness of such
transaction to the Manager from a financial point of view from an independent
investment banking firm or accounting firm, in each case having a national
reputation.
SECTION 4.10. Limitation on Indebtedness and Disqualified Capital
Stock.
The Issuers shall not, directly or indirectly, create, issue,
assume, guaranty, incur, suffer to exist, become directly or indirectly liable
with respect to (including as a result of an Acquisition), or otherwise become
responsible for, contingently or otherwise (individually and collectively, to
"Incur" or, as appropriate, an "Incurrence"), any Indebtedness or any
Disqualified Capital Stock, other than the Securities.
39
SECTION 4.11. Limitation on Liens.
The Issuers shall not, directly or indirectly, create, incur or
suffer to exist any Lien upon any of their property or assets, whether now owned
or acquired, or upon any income or profits therefrom other than (i) Liens on
assets and property of the Company pursuant to the Collateral Agreements and
(ii) Permitted Liens.
SECTION 4.12. Limitation on Sale of Assets.
The Issuers shall not, in one or a series of related transactions,
convey, sell, transfer, assign or otherwise dispose of, directly or indirectly,
any of their property, business or assets having a value in excess of $1,000 (an
"Asset Sale"), except pursuant to a sale of its partnership interest in the
Manager pursuant to a Buy-Out Notice.
SECTION 4.13. Covenants with Respect to the Manager.
The Company shall not permit the Manager to:
(i) incur any Indebtedness, except for any guarantees
required by the Hotel/Resort Management Agreement with respect to
the construction of the hotel or any Investment permitted by Section
4.3 and any pro rata investment by the other partner;
(ii) directly or indirectly create, incur or suffer to
exist any Liens on any of its properties or assets;
(iii) directly or indirectly, create, assume or suffer
to exist any consensual restriction on the ability of the Manager or
any Subsidiary of the Manager to pay dividends or make other
distributions to or on behalf of, or to pay any obligation to or on
behalf of, or otherwise to transfer assets or property to or on
behalf of, or make or pay loans or advances to or on behalf of, the
Company, except, in each case, for Permitted Liens and restrictions
imposed by the Operative Documents, provided, however, that
customary provisions restricting subletting or assignment of any
lease entered into in the ordinary course of business, consistent
with industry practice shall not in and of themselves be considered
a restriction on the ability of the Manager or the applicable
Subsidiary to transfer such agreement or assets, as the case may be;
40
(iv) directly or indirectly make any Asset Sale;
(v) enter into any subcontract to delegate the duties of
the Manager under the Management Agreement other than those
described in Article IV of the Partnership Agreement;
(vi) issue any equity security in a manner that dilutes
distributions to the Company;
(vii) make payments for management services, except for
payments made in accordance with the Operative Documents; or
(viii) engage in any business other than as described in
the Partnership Agreement.
In addition, the Company shall not agree, and shall not permit the
Manager to agree, to terminate, amend or waive any provision of an Operative
Document in a manner adverse to the economic interest of the Holders without the
consent of holders of a majority of the principal amount of the Securities
outstanding, provided, however, that this sentence will not apply to the terms
of the Hotel/Resort Management Agreement or the Hotel/Resort Facility
Development and Construction Agreement.
SECTION 4.14. Limitation on Activities of the Issuers.
The Issuers will not conduct any business (including having any
Subsidiary, other than Finance in the case of the Company) whatsoever, other
than to (i) own and act upon the Collateral, in the case of the Company, and the
Securities and (ii) comply with their respective rights and obligations under
the Partnership Agreement, this Indenture, the Registration Rights Agreement,
the Securities, the Management Agreement, the Omnibus Agreement, the Purchase
Agreement and the Collateral Agreements and take action arising under such
agreements or related or incidental thereto.
SECTION 4.15. Acceptance of Remaining Excess Cash Purchase Offers
and Change of Control Offers.
The Company shall accept Remaining Excess Cash Purchase Offers or
any other offer to purchase Subordinated Notes made by the Authority other than
a Change of Control Offer (as defined in the Note Purchase Agreement) as made as
follows. The Company shall accept any such offer, if accepted by Sun
International. If less than all the Subordinated Notes owned by Sun
International are to be tendered, the Company shall tender
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that principal amount of the Subordinated Notes, rounded to the nearest multiple
of $1,000, owned by the Company (with the First Tranche Completion Guarantee
Subordinated Notes to be tendered first) that bears the same proportion to the
total principal amount of Subordinated Notes owned by the Company that the
principal amount of Subordinated Notes to be tendered by Sun International and
its Affiliates bears to the total principal amount of Subordinated Notes owned
by Sun International and its Affiliates. In the event that the total amount
available for a Remaining Excess Cash Purchase Offer or other offer is less than
the total amount needed to purchase the Subordinated Notes to be tendered by the
Company and Sun International and its Affiliates pursuant to the above formula,
the Company shall reduce the amount of Subordinated Notes to be tendered pro
rata, assuming Sun International and its Affiliates likewise reduce their amount
of Subordinated Notes to be so tendered, in each case rounded to the nearest
multiple of $1,000, such that the total amount of Subordinated Notes to be
tendered can be purchased in such offer.
Notwithstanding the foregoing, in the event that either (i) Sun
International fails to notify the Company of its intention to tender into such
offer prior to the time at which tenders are due and has not as of such time
tendered into such offer or (ii) the total amount of cash or Cash Equivalents
held by the Company as of the date tenders are due is less than $5 million, the
Company shall tender into such offer all Subordinated Notes then held by it.
SECTION 4.16. Waiver of Stay, Extension or Usury Laws.
Each of the Issuers covenants (to the extent that it may lawfully do
so) that it will not at any time voluntarily insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law which would prohibit or forgive the
Issuers from paying all or any portion of the principal of, premium of, or
interest on the Securities as contemplated herein, wherever enacted, now or at
any time hereafter in force; and (to the extent that it may lawfully do so) each
of the Issuers hereby expressly waives all benefit or advantage of any such law,
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee relating to any such law, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
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SECTION 4.17. Limitation on Merger, Sale or Consolidation.
Neither of the Issuers shall, directly or indirectly, consolidate
with or merge with or into another person or sell, lease, convey or transfer all
or substantially all of their respective assets (computed on a consolidated
basis), whether in a single transaction or a series of related transactions, to
another Person or group of affiliated Persons or adopt a plan of liquidation.
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
SECTION 5.1. Events of Default.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be caused voluntarily or involuntarily or effected, without limitation, by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) the failure by the Issuers to pay any installment of
interest or Liquidated Damages, if any, on the Securities as and when the same
becomes due and payable and the continuance of any such failure for 30 days;
(b) the failure by the Issuers to pay all or any part of the
principal, or premium, if any, on the Securities when and as the same becomes
due and payable at maturity, redemption, by acceleration or otherwise,
including, without limitation, payment of the Change of Control Purchase Price
or on a mandatory redemption, or otherwise;
(c) the failure by the Issuers to observe or perform the terms
of the covenant set forth in Section 4.17 of this Indenture;
(d) the failure by either of the Issuers to observe or perform
any other covenant or agreement contained in the Securities or this Indenture
(other than a default in the performance of any covenant or agreement which is
specifically dealt with elsewhere in this Section 5.1) and the continuance of
such failure for a period of 30 days after written notice (a "Notice of
Default") is given to the Issuers by the Trustee or to the Issuers and the
Trustee by the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding, specifying such Default and requiring that it be
remedied;
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(e) a decree, judgment, or order by a court of competent
jurisdiction shall have been entered adjudicating either or both of the Issuers
as bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization of either or both of the Issuers under any bankruptcy or similar
law, and such decree or order shall have continued undischarged and unstayed for
a period of 60 consecutive days; or a decree or order of a court of competent
jurisdiction, judgment appointing a receiver, liquidator, trustee, or assignee
in bankruptcy or insolvency for either or both of the Issuers or any substantial
part of the property of any such Person, or for the winding up or liquidation of
the affairs of any such Person, shall have been entered, and such decree,
judgment, or order shall have remained in force undischarged and unstayed for a
period of 60 days;
(f) either or both of the Issuers shall institute proceedings
to be adjudicated a voluntary bankrupt, or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a petition or answer or consent
seeking reorganization under any bankruptcy or similar law or similar statute,
or shall consent to the filing of any such petition, or shall consent to the
appointment of a Custodian, receiver, liquidator, trustee, or assignee in
bankruptcy or insolvency of it or any substantial part of its assets or
property, or shall make a general assignment for the benefit of creditors, or
shall admit in writing its inability to pay its debts as they become due, or
take any corporate action in furtherance of or to facilitate, conditionally or
otherwise, any of the foregoing;
(g) final unsatisfied judgments not covered by insurance
aggregating in excess of $2.0 million, at any one time rendered against either
or both of the Issuers and not stayed, bonded or discharged within 60 days;
(h) any default in the performance or breach of the terms of
an Operative Document by the Manager or by the Company with respect to the
Partnership Agreement, extending past any applicable cure period, that would
result in material damages to either the Company or the Manager;
(i) the failure by the Company to observe or perform any
material covenant set forth in a Collateral Agreement, subject to applicable
cure periods; or
(j) an Event of Default under the 13 1/2% Senior Secured Notes
Due 2002 of the Authority resulting in an acceleration of the maturity thereof.
Notwithstanding the 30-day period and notice requirement contained
in Section 5.1(d) above, (i) with respect to a default under Article IX, the
30-day period referred to in Section 5.1(d) shall be deemed to have begun as of
the date notice of a Change of Control Offer is required to be sent to the
Holders in the event that the Issuers have not complied
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with the provisions of Section 9.1, and the Trustee or Holders of at least 25%
in principal amount of the outstanding Securities thereafter give the Notice of
Default referred to in Section 5.1(d) in respect of such compliance to the
Issuers and, if applicable, the Trustee; provided, however, that if the breach
or default is a result of a default in the payment when due of the Change of
Control Purchase Price on the Change of Control Payment Date, such default shall
be deemed, for purposes of this Section 5.1, to arise on the Change of Control
Payment Date.
SECTION 5.2. Acceleration of Maturity Date; Rescission and
Annulment.
If an Event of Default occurs and is continuing (other than an Event
of Default specified in clauses (e) and (f) of Section 5.1, relating to either
or both of the Issuers) then in every such case, unless the principal of all of
the Securities shall have already become due and payable, either the Trustee or
the Holders of 25% in aggregate principal amount of the Securities then
outstanding, by notice in writing to the Company (and to the Trustee if given by
Holders) (an "Acceleration Notice"), may declare all principal and accrued
interest and Liquidated Damages, if any, thereon to be due and payable
immediately. If an Event of Default specified in clauses (e) and (f), of Section
5.1, relating to either or both of the Issuers occurs, all principal and accrued
interest and Liquidated Damages, if any, thereon will be immediately due and
payable on all outstanding Securities without any declaration or other act on
the part of Trustee or the Holders.
At any time after such a declaration of acceleration has been made
and before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter provided in this Article V, the Holders of not
less than a majority in aggregate principal amount of then outstanding
Securities, by written notice to the Issuers and the Trustee, may rescind, on
behalf of all Holders, any such declaration of acceleration if:
(1) the Issuers have paid or deposited with the Trustee Cash
sufficient to pay
(A) all overdue interest on all Securities,
(B) the principal of (and premium and Liquidated
Damages, if any, applicable to) any Securities which would become
due other than by reason of such declaration of acceleration, and
interest thereon at the rate borne by the Securities,
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(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate borne by the
Securities,
(D) all sums paid or advanced by the Trustee
hereunder and the compensation, expenses, disbursements and advances
of the Trustee and its agents and counsel, and any other amounts due
the Trustee under Section 6.7, and
(2) all Events of Default, other than the non-payment of the
principal of, premium, if any, and interest on Securities which have
become due solely by such declaration of acceleration, have been cured or
waived as provided in Section 5.12, including, if applicable, any Event of
Default relating to the covenants contained in Section 9.1.
Notwithstanding the previous sentence of this Section 5.2, no waiver shall be
effective against any Holder for any Event of Default or event which with notice
or lapse of time or both would be an Event of Default with respect to (i) any
covenant or provision which cannot be modified or amended without the consent of
the Holder of each outstanding Security affected thereby, unless all such
affected Holders agree, in writing, to waive such Event of Default or other
event and (ii) any provision requiring supermajority approval to amend, unless
such default has been waived by such a supermajority. No such waiver shall cure
or waive any subsequent default or impair any right consequent thereon.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Issuers covenant that if an Event of Default in payment of
principal, premium, or interest or Liquidated Damages, if any, specified in
clauses (a) or (b) of Section 5.1 occurs and is continuing, the Issuers shall,
upon demand of the Trustee, pay to it, for the benefit of the Holders of such
Securities, the whole amount then due and payable on such Securities for
principal, premium and Liquidated Damages (if any) and interest, and, to the
extent that payment of such interest shall be legally enforceable, interest on
any overdue principal (and premium and Liquidated Damages, if any) and on any
overdue interest, at the rate borne by the Securities, and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including compensation to, and expenses, disbursements and advances
of the Trustee and its agents and counsel and all other amounts due the Trustee
under Section 6.7.
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If the Issuers fail to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust in favor of the
Holders, may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final decree and
may enforce the same against the Issuers or any other obligor upon the
Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Issuers or any other obligor
upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 5.4. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Issuers or any other obligor upon the
Securities or the property of the Issuers or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Issuers for the payment of overdue principal and premium and Liquidated
Damages, if any, or interest) shall be entitled and empowered, by intervention
in such proceeding or otherwise to take any and all actions under the TIA,
including
(1) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest and Liquidated Damages owing
and unpaid in respect of the Securities and to file such other papers or
documents as may be necessary or advisable in order to have the claims of
the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee and its agent and
counsel and all other amounts due the Trustee under Section 6.7) and of
the Holders allowed in such judicial proceeding, and
(2) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such
47
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee and its agents and counsel, and any other amounts due
the Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment, or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 5.5. Trustee May Enforce Claims Without Possession of
Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust in favor of the Holders, and any
recovery of judgment shall, after provision for the payment of compensation to,
and expenses, disbursements and advances of the Trustee, its agents and counsel
and all other amounts due the Trustee under Section 6.7, be for the ratable
benefit of the Holders of the Securities in respect of which such judgment has
been recovered.
SECTION 5.6. Priorities.
Any money collected by the Trustee pursuant to this Article V shall,
subject to Article XII, be applied in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such money on account
of principal, premium and Liquidated Damages (if any) or interest, upon
presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant to
Section 6.7;
SECOND: To the Holders in payment of the amounts then due and unpaid
for principal of, premium and Liquidated Damages (if any) and interest on, the
Securities in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal, premium and Liquidated
Damages (if any) and interest, respectively; and
48
THIRD: To the Issuers or such other Person as may be lawfully
entitled thereto, the remainder, if any.
The Trustee may, but shall not be obligated to, fix a record date
and payment date for any payment to the Holders under this Section 5.6.
SECTION 5.7. Limitation on Suits.
No Holder of any Security shall have any right to order or direct
the Trustee to institute any proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless
(A) such Holder has previously given written
notice to the Trustee of a continuing Event of Default;
(B) the Holders of not less than 25% in aggregate
principal amount of then outstanding Securities shall have made
written request to the Trustee to institute proceedings in respect
of such Event of Default in its own name as Trustee hereunder;
(C) such Holder or Holders have offered to the
Trustee reasonable security or indemnity against the costs, expenses
and liabilities to be incurred or reasonably probable to be incurred
in compliance with such request;
(D) the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to institute
any such proceeding; and
(E) no direction inconsistent with such written
request has been given to the Trustee during such 60-day period by
the Holders of a majority in aggregate principal amount of the
outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatsoever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority
49
or preference over any other Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all the Holders.
SECTION 5.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest.
Notwithstanding any other provision of this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of, and premium (if any) and interest on, such
Security on the respective dates such payments are due as expressed in such
Security (in the case of redemption, the Redemption Price on the applicable
Redemption Date) and to institute suit for the enforcement of any such payment
after such respective dates, and such rights shall not be impaired without the
consent of such Holder.
SECTION 5.9. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 2.7, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.10. Delay or Omission Not Waiver.
No delay or omission by the Trustee or by any Holder of any Security
to exercise any right or remedy arising upon any Event of Default shall impair
the exercise of any such right or remedy or constitute a waiver of any such
Event of Default. Every right and remedy given by this Article V or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 5.11. Control by Holders.
The Holder or Holders of a majority in aggregate principal amount of
then outstanding Securities shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred upon the Trustee, provided, that
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(1) such direction shall not be in conflict with any rule of
law or with this Indenture or involve the Trustee in personal liability,
(2) the Trustee shall not determine that the action so
directed would be unjustly prejudicial to the Holders not taking part in
such direction, and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 5.12. Waiver of Past Default.
Subject to Section 5.8, prior to the declaration of acceleration of
the maturity of the Securities, the Holder or Holders of not less than a
majority in aggregate principal amount of the Securities then outstanding may,
on behalf of all Holders, waive any past default hereunder and its consequences,
except a default
(A) in the payment of the principal of, premium,
if any, or interest and Liquidated Damages, if any, on, any Security
as specified in clauses (a) and (b) of Section 5.1 and not yet
cured;
(B) in respect of a covenant or provision hereof
which, under Article VIII, cannot be modified or amended without the
consent of the Holder of each outstanding Security affected; or
(C) in respect of any provision hereof which,
under Article VIII, cannot be modified, amended or waived without
the consent of the Holders of 662/3% of the aggregate principal
amount of the Securities at the time outstanding; provided, that any
such waiver may be effected with the consent of the Holders of
662/3% of the aggregate principal amount of the Securities then
outstanding.
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 the exercise of any right arising therefrom.
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SECTION 5.13. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted to be taken by it
as Trustee, any court may in its discretion require the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 5.13 shall not apply to any suit instituted
by the Issuers, to any suit instituted by the Trustee, to any suit instituted by
any Holder, or group of Holders, holding in the aggregate more than 10% in
aggregate principal amount of the outstanding Securities, or to any suit
instituted by any Holder for enforcement of the payment of principal of, or
premium (if any) or interest on, any Security on or after the respective
maturity dates expressed in such Security (including, in the case of redemption,
on or after the Redemption Date).
SECTION 5.14. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Issuers, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
ARTICLE VI
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this
Indenture and covenants and agrees to perform the same, as herein expressed,
subject to the terms hereof.
SECTION 6.1. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same
52
degree of care and skill in their exercise as a prudent Person would exercise or
use under the circumstances in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no others, and no covenants
or obligations shall be implied in or read into this Indenture or the
Collateral Agreements which are adverse to the Trustee, and
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, in the case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to the Trustee,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b)
of this Section 6.1,
(2) The Trustee shall not be liable for any error of judgment
made in good faith by it, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts, and
(3) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 5.11.
(d) No provision of this Indenture or any Collateral Agreement
shall require the Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or to take
or omit to take any action under this Indenture or any Collateral Agreement or
at the request, order or direction of the Holders or in the exercise of any of
its rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
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(e) Every provision of this Indenture or any Collateral
Agreement that in any way relates to the Trustee is subject to paragraphs (a),
(b), (c), (d) and (f) of this Section 6.1.
(f) The Trustee shall not be liable for interest on any assets
received by it except as the Trustee may agree in writing with the Issuers.
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.
SECTION 6.2. Rights of Trustee.
Subject to Section 6.1:
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
consult with counsel and may require an Officers' Certificate or an Opinion of
Counsel, which shall conform to Sections 11.4 and 11.5. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such certificate or advice of counsel.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers conferred upon it by this Indenture or any Collateral
Agreement, nor for any action permitted to be taken or omitted hereunder by any
Agent.
(e) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit.
(f) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture or any Collateral
Agreement at the request, order or direction of any of the Holders, pursuant to
the provisions of this Indenture or any Collateral Agreement, unless such
Holders shall have offered to the Trustee reasonable
54
security or indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby.
(g) Unless otherwise specifically provided for in this
Indenture, any demand, request, direction or notice from the Issuers shall be
sufficient if signed by an Officer of each of the Issuers.
(h) The Trustee shall have no duty to inquire as to the
performance of the Issuers' covenants in Article IV hereof or any Collateral
Agreement or as to the performance by any Agent of its duties hereunder or
thereunder. In addition, the Trustee shall not be deemed to have knowledge of
any Default or Event of Default except any Default or Event of Default of which
the Trustee shall have received written notification or with respect to which a
Trust Officer shall have actual knowledge.
(i) Whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate.
SECTION 6.3. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Issuers, any of
their Subsidiaries, or their respective Affiliates with the same rights it would
have if it were not Trustee. Any Agent may do the same with like rights.
However, the Trustee must comply with Sections 6.10 and 6.11.
SECTION 6.4. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy
of this Indenture or any Collateral Agreement or the Securities or as to the
validity or perfection of any security interest or lien created thereby and it
shall not be accountable for the Issuers' use of the proceeds from the
Securities, and it shall not be responsible for any statement in the Securities,
other than the Trustee's certificate of authentication (if executed by the
Trustee), or the use or application of any funds received by a Paying Agent
other than the Trustee.
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SECTION 6.5. Notice of Default.
If a Default or an Event of Default occurs and is continuing and if
it is known to the Trustee, the Trustee shall mail to each Securityholder notice
of the uncured Default or Event of Default within 90 days after such Default or
Event of Default occurs. Except in the case of a Default or an Event of Default
in payment of principal (or premium, if any) of, or interest or Liquidated
Damages on any Security (including the payment of the Change of Control Purchase
Price on the Change of Control Purchase Date or the payment of the Redemption
Price on the Redemption Date), the Trustee may withhold the notice if and so
long as a Trust Officer in good faith determines that withholding the notice is
in the interest of the Securityholders.
SECTION 6.6. Reports by Trustee to Holders.
Within 60 days after each January 31, beginning with January 31,
1997, the Trustee shall, if required by law, mail to each Securityholder a brief
report dated as of such January 31 that complies with TIA ss. 313(a). The
Trustee also shall comply with TIA ▇▇.▇▇. 313(b) and 313(c).
The Issuers shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or automatic quotation system.
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Issuers and filed with the SEC and each stock exchange,
if any, on which the Securities are listed.
SECTION 6.7. Compensation and Indemnity.
The Issuers jointly and severally agree to pay to the Trustee from
time to time reasonable compensation for its services. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Issuers shall reimburse the Trustee upon request for all
reasonable disbursements, expenses and advances incurred or made by it in
accordance with this Indenture. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents, accountants,
experts and counsel.
The Issuers jointly and severally agree to indemnify the Trustee (in
its capacity as Trustee) and each of its officers, directors, attorneys-in-fact
and agents for, and hold it and each of them harmless against, any claim,
demand, expense (including but not limited to reasonable compensation,
disbursements and expenses of the Trustee's agents and
56
counsel), loss or liability incurred by it without negligence or bad faith on
the part of the Trustee, arising out of or in connection with the administration
of this trust and its rights or duties hereunder including the reasonable costs
and expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder. The
Trustee shall notify the Issuers promptly of any claim asserted against the
Trustee for which it may seek indemnity. The Issuers shall defend the claim and
the Trustee shall provide reasonable cooperation at the Issuers' expense in the
defense. The Trustee may have separate counsel and the Issuers shall pay the
reasonable fees and expenses of such counsel. The Issuers need not pay for any
settlement made without their written consent, which consent shall not be
unreasonably withheld. The Issuers need not reimburse any expense or indemnify
against any loss or liability to the extent incurred by the Trustee through its
negligence, bad faith or willful misconduct.
To secure the Issuers' payment obligations in this Section 6.7, the
Trustee shall have a lien prior to the Securities on all assets held or
collected by the Trustee, in its capacity as Trustee, except assets held in
trust to pay principal and premium, if any, of or interest or Liquidated Damages
on particular Securities.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 5.1(e) or (f) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Issuers' obligations under this Section 6.7 and any lien arising
hereunder shall survive the resignation or removal of the Trustee, the discharge
of the Issuers' obligations pursuant to Article VII of this Indenture and any
rejection or termination of this Indenture under any Bankruptcy Law.
SECTION 6.8. Replacement of Trustee.
The Trustee may resign by so notifying the Issuers in writing, to
become effective upon the appointment of a successor trustee. The Holder or
Holders of a majority in aggregate principal amount of the outstanding
Securities may remove the Trustee by so notifying the Issuers and the Trustee in
writing and may appoint a successor trustee with the Issuers' consent. The
Issuers may remove the Trustee if:
(a) the Trustee fails to comply with Section 6.10;
(b) the Trustee is adjudged bankrupt or insolvent;
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(c) a receiver, Custodian, or other public officer takes
charge of the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Issuers shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holder or
Holders of a majority in aggregate principal amount of the Securities may
appoint a successor Trustee to replace the successor Trustee appointed by the
Issuers.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. Immediately after that
and provided that all sums owing to the retiring Trustee provided for in Section
6.7 have been paid, the retiring Trustee shall transfer all property held by it
as trustee to the successor Trustee, subject to the lien provided in Section
6.7, the resignation or removal of the retiring Trustee shall become effective,
and the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuers or the
Holder or Holders of at least 10% in aggregate principal amount of the
outstanding Securities may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 6.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
6.8, the Issuers' obligations under Section 6.7 shall continue for the benefit
of the retiring Trustee.
SECTION 6.9. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee.
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SECTION 6.10. Eligibility; Disqualification.
The Trustee shall at all times satisfy the requirements of TIA ss.
310(a)(1), (2) and (5). The Trustee (together with its corporate parent) shall
have a combined capital and surplus of at least $25,000,000 as set forth in its
most recent published annual report of condition. The Trustee shall comply with
TIA ss. 310(b).
SECTION 6.11. Preferential Collection of Claims Against Issuers.
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
ARTICLE VII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 7.1. Option to Effect Legal Defeasance or Covenant
Defeasance.
The Issuers may, at their option and at any time, elect to have
Section 7.2 or Section 7.3 applied to all outstanding Securities upon compliance
with the conditions set forth below in this Article VII.
SECTION 7.2. Legal Defeasance and Discharge.
Upon the Issuers' exercise under Section 7.1 of the option
applicable to this Section 7.2, the Issuers shall be deemed to have been
discharged from their respective obligations with respect to all outstanding
Securities on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, such Legal Defeasance means
that the Issuers shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Securities, which shall thereafter
be deemed to be "outstanding" only for the purposes of Section 7.5 and the other
Sections of this Indenture referred to in (a) and (b) below, the Collateral
shall have been released from the Liens in favor of the Securities and the
Issuers shall be deemed to have satisfied all their other obligations under such
Securities and this Indenture (and the Trustee, on demand of and at the expense
of the Issuers, shall execute proper instruments acknowledging the same), except
for the following which shall survive until otherwise terminated or discharged
hereunder: (a) rights of Holders to receive payments in respect of the principal
of, premium, if any, and interest and Liquidated Damages, if any, on such
Securities when such payments are due from the
59
trust funds described below; (b) the Issuers' obligations with respect to such
Securities concerning issuing temporary Securities, registration of Securities,
mutilated, destroyed, lost or stolen Securities, and the maintenance of an
office or agency for payment and money for security payments held in trust; (c)
the rights, powers, trust, duties, and immunities of the Trustee, and the
Issuers' obligations in connection therewith; and (d) this Article VII. Upon
Legal Defeasance as provided herein, the Trustee shall promptly execute and
deliver to the Issuers any documents reasonably requested by the Issuers to
evidence or effect the foregoing. Subject to compliance with this Article VII,
the Issuers may exercise their option under this Section 7.2 notwithstanding the
prior exercise of their option under Section 7.3 with respect to the Securities.
SECTION 7.3. Covenant Defeasance.
Upon the Issuers' exercise under Section 7.1 of the option
applicable to this Section 7.3, the Issuers shall be released from their
respective obligations under the covenants contained in Sections 4.3, 4.5, 4.6,
4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17 and Article IX
with respect to the outstanding Securities on and after the date the conditions
set forth below are satisfied (hereinafter, "Covenant Defeasance"), and the
Securities 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. For this
purpose, such Covenant Defeasance means that, with respect to the outstanding
Securities, the Issuers need not 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 Section 5.1(d) shall not
apply to any such covenant), but, except as specified above, the remainder of
this Indenture and such Securities shall be unaffected thereby. In addition,
upon the Issuers' exercise under Section 7.1 of the option applicable to this
Section 7.3, the Collateral shall be released from the Liens in favor of the
Securities and Sections 5.1(c), (e), (f), (g), (h), (i) and (j) shall not
constitute Events of Default.
SECTION 7.4. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 7.2 or Section 7.3 to the outstanding Securities:
(a) The Issuers shall irrevocably have deposited or caused to
be deposited with the Trustee (or another trustee satisfactory to the Trustee
satisfying the requirements of Section 6.10 who shall agree to comply with the
provisions of this Article VII
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applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities, (a) Cash in an amount, or (b)
U.S. Government Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment, Cash in an amount, or (c)
a combination thereof, in such amounts, as in each case will be sufficient, in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to pay
and discharge and which shall be applied by the Paying Agent (or other
qualifying trustee) to pay and discharge the principal of, premium and
Liquidated Damages, if any, and interest on the outstanding Securities on the
stated maturity or on the applicable optional redemption date, as the case may
be, of such principal or installment of principal, premium and Liquidated
Damages, if any, or interest on the Securities; provided that the Paying Agent
shall have been irrevocably instructed to apply such Cash and the proceeds of
such U.S. Government Obligations to said payments with respect to the
Securities. The Paying Agent shall promptly advise the Trustee in writing of any
Cash or Securities deposited pursuant to this Section 7.4;
(b) In the case of an election under Section 7.2, the Issuers
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (i) the Issuers have
received from, or there has been published by, the Internal Revenue Service a
ruling or (ii) since the date hereof, there has been a change in the applicable
Federal income tax law, in either case to the effect that, and based thereon
such opinion shall confirm that, the Holders of the outstanding Securities will
not recognize income, gain or loss for Federal income tax purposes as a result
of such Legal Defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Legal Defeasance had not occurred;
(c) In the case of an election under Section 7.3, the Issuers
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Securities will not recognize income, gain or loss for Federal
income tax purposes as a result of such Covenant Defeasance and will be subject
to Federal income tax in the same amount, 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 on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such deposit) or,
insofar as Section 5.1(e) or Section 5.1(f) is concerned, at any time in the
period ending on the 91st day after the date of deposit
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or such earlier time as, in the Opinion of Counsel, such deposit is not voidable
as a preference under applicable bankruptcy law;
(e) Such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under any other
material agreement (other than this Indenture) or instrument to which either
Issuer is a party or by which either are bound;
(f) In the case of an election under either Section 7.2 or
7.3, the Issuers shall have delivered to the Trustee an Officers' Certificate
stating that the deposit made by the Issuers pursuant to its election under
Section 7.2 or 7.3 was not made by the Issuers with the intent of preferring the
Holders of such Securities over any other creditors of the Issuers or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Issuers or others; and
(g) The Issuers shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that the
conditions precedent provided for in, in the case of the Officer's Certificate,
clauses (a) through (f), and, in the case of the Opinion of Counsel, clauses (a)
(with respect to the validity and perfection of the security interest), (b), (c)
and (e) of this Section 7.4 have been complied with.
SECTION 7.5. Deposited Cash and U.S. Government Obligations to be
Held in Trust; Other Miscellaneous Provisions.
Subject to Section 7.6, all Cash and U.S. Government Obligations
(including the proceeds thereof) deposited with the Paying Agent (or other
qualifying trustee, collectively for purposes of this Section 7.5, the "Paying
Agent") pursuant to Section 7.4 in respect of the outstanding Securities shall
be held in trust and applied by the Paying Agent, in accordance with the
provisions of such Securities and this Indenture, to the payment, either
directly or through any other Paying Agent as the Trustee may determine, to the
Holders of such Securities of all sums due and to become due thereon in respect
of principal, premium and Liquidated Damages, if any, and interest, but such
money need not be segregated from other funds except to the extent required by
law.
SECTION 7.6. Repayment to the Issuers.
Anything in this Article VII to the contrary notwithstanding, the
Trustee or the Paying Agent, as applicable, shall deliver or pay to the Company
from time to time upon the request of the Issuers any Cash or U.S. Government
Obligations held by it as provided in Section 7.4 hereof which in the opinion of
a nationally recognized firm of independent
62
public accountants expressed in a written certification thereof delivered to the
Trustee (which may be the opinion delivered under Section 7.4(a) hereof), are in
excess of the amount thereof that would then be required to be deposited to
effect an equivalent Legal Defeasance or Covenant Defeasance.
Any Cash and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of, premium, if any, or
interest on any Security and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall,
subject to the requirements of applicable law, be paid to the Company on its
request; and the Holder of such Security shall thereafter look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in the
New York Times and The Wall Street Journal (national edition), notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 7.7. Reinstatement.
If the Trustee or Paying Agent is unable to apply any Cash or U.S.
Government Obligations in accordance with Section 7.2 or 7.3, as the case may
be, by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
Issuers' obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Section 7.2 or 7.3
until such time as the Trustee or Paying Agent is permitted to apply such money
in accordance with Section 7.2 and 7.3, as the case may be; provided, however,
that, if the Issuers make any payment of principal of, premium and Liquidated
Damages, if any, or interest on any Security following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the Cash and U.S. Government
Obligations held by the Trustee or Paying Agent.
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ARTICLE VIII
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 8.1. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holder, the Issuers, when authorized by
Board Resolutions, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto or amendments to the Collateral
Agreements, in form satisfactory to the Trustee, for any of the following
purposes:
(1) to cure any ambiguity, defect, or inconsistency, or make
any other provisions with respect to matters or questions arising under
this Indenture or the Collateral Agreements which shall not be
inconsistent with the provisions of either this Indenture or the
Collateral Agreements, provided such action pursuant to this clause shall
not adversely affect the interests of the Holders;
(2) to add to the covenants of the Issuers for the benefit of
the Holders, to provide additional collateral or to surrender any right or
power herein conferred upon the Issuers ;
(3) to comply with the TIA; or
(4) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities.
SECTION 8.2. Amendments, Supplemental Indentures and Waivers with
Consent of Holders.
Subject to Section 5.8, with the consent of the Holders of not less
than a majority in aggregate principal amount of then outstanding Securities, by
written act of said Holders delivered to the Issuers and the Trustee, the
Issuers, when authorized by Board Resolutions, and the Trustee may amend or
supplement this Indenture or the Securities or enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
the Securities or of modifying in any manner the rights of the Holders under
this Indenture or the Securities. Subject to Section 5.8, the Holder or Holders
of not less than a majority in aggregate principal amount of then outstanding
Securities may waive compliance by the Issuers with any provision of this
Indenture or the Securities. Notwithstanding any of the above, however, no such
amendment, supplemental indenture or waiver shall
64
without the consent of the Holders of not less than 66-2/3% of the aggregate
principal amount of Securities at the time outstanding alter the terms or
provisions of Section 9.1 in a manner adverse to the Holders; and no such
amendment, supplemental indenture or waiver shall, without the consent of the
Holder of each outstanding Security affected thereby:
(1) reduce the percentage of principal amount of Securities
whose Holders must consent to an amendment, supplement or waiver of any
provision of this Indenture or the Securities;
(2) reduce the rate or extend the time for payment of interest
and Liquidated Damages on (other than a rescission of acceleration of the
Notes by the Holders of at least a majority in aggregate principal amount
of such Notes and a waiver of the payment default arising from such
acceleration) any Security;
(3) reduce the principal or premium amount of any Security, or
reduce the Change of Control Purchase Price or the Redemption Price;
(4) change the Stated Maturity;
(5) alter the redemption provisions of Article III in a manner
adverse to any Holder;
(6) make any changes in the provisions concerning waivers of
Defaults or Events of Default by Holders of the Securities or the rights
of Holders to recover the principal or premium of, interest on, or
redemption payments with respect to, any Security, including without
limitation any changes in Section 5.8, 5.12 or this third sentence of this
Section 8.2, except to increase any required percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each outstanding Security affected
thereby;
(7) make the principal of, or the interest or premium or
Liquidated Damages, if any, on any Security payable with anything or in
any manner other than as provided for in this Indenture (including
changing the place of payment where, or the coin or currency in which, any
Security or any premium or the interest thereon is payable) and the
Securities as in effect on the date hereof;
(8) cause the Securities to become subordinate in right of
payment of other Indebtedness; or
65
(9) modify any of the provisions of Article X or the
Collateral Agreements in a manner adverse to the holders.
It shall not be necessary for the consent of the Holders under this
Section 8.2 to approve the particular form of any proposed amendment, supplement
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 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 supplemental indenture or waiver.
After an amendment, supplement or waiver under this Section 8.2 or
Section 8.4 becomes effective, it shall bind each Holder.
In connection with any amendment, supplement or waiver under this
Article VIII, the Issuers may, but shall not be obligated to, offer to any
Holder who consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or waiver.
SECTION 8.3. Compliance with TIA.
Every amendment, waiver or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 8.4. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to his Security or portion of his Security by written notice to
the Issuers or the Person designated by the Issuers as the Person to whom
consents should be sent if such revocation is received by the Issuers or such
Person before the date on which the Trustee receives an Officers' Certificate
certifying that the Holders of the requisite principal amount of Securities have
consented (and not theretofore revoked such consent) to the amendment,
supplement or waiver.
66
The Issuers may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Company notwithstanding the provisions of the TIA. If a record date is fixed,
then notwithstanding the last sentence of the immediately preceding paragraph,
those Persons who were Holders at such record date, and only those Persons (or
their duly designated proxies), shall be entitled to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date. No such consent shall be valid or effective for more than 90 days
after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in any of clauses
(1) through (9) of Section 8.2, in which case, the amendment, supplement or
waiver shall bind only each Holder of a Security who has consented to it and
every subsequent Holder of a Security or portion of a Security that evidences
the same debt as the consenting Holder's Security; provided, that any such
waiver shall not impair or affect the right of any other Holder to receive
payment of principal and premium of and interest on a Security, on or after the
respective dates set for such amounts to become due and payable expressed in
such Security, or to bring suit for the enforcement of any such payment on or
after such respective dates.
SECTION 8.5. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee or require the Holder to put an appropriate notation on the
Security. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Issuers or
the Trustee so determine, the Issuers in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms. Any failure to make the appropriate notation or to issue a new Security
shall not affect the validity of such amendment, supplement or waiver.
SECTION 8.6. Trustee to Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article VIII; provided, that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article VIII is
authorized or permitted by this Indenture.
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ARTICLE IX
RIGHT TO REQUIRE REPURCHASE
SECTION 9.1. Repurchase of Securities at Option of the Holder Upon a
Change of Control.
(a) In the event that a Change of Control occurs, each Holder
shall have the right, at such Holder's option, pursuant to an irrevocable and
unconditional offer by the Company or Finance (the "Change of Control Offer")
subject to the terms and conditions of this Indenture, to require the Issuers to
repurchase all or any part of such Holder's Securities (provided, that the
principal amount of such Securities at maturity must be $1,000 or an integral
multiple thereof) on a date selected by the Issuers that is no later than 35
Business Days after the occurrence of such Change of Control (the "Change of
Control Purchase Date"), at a cash price (the "Change of Control Purchase
Price") equal to 101% of the principal amount thereof, plus (subject to the
right of Holders of record on a Record Date to receive interest due on an
Interest Payment Date that is on or prior to such repurchase date and subject to
clause (b)(4) below) accrued and unpaid interest and Liquidated Damages, if any,
to the Change of Control Purchase Date.
(b) In the event of a Change of Control, the Company or
Finance shall be required to commence an offer to purchase Securities (a "Change
of Control Offer") as follows:
(1) the Change of Control Offer shall commence within 10
Business Days following the occurrence of the Change of Control;
(2) the Change of Control Offer shall remain open for not less
than 20 Business Days following its commencement (the "Change of Control
Offer Period");
(3) upon the expiration of the Change of Control Offer Period,
the Issuers shall purchase all of the properly tendered Securities at the
Change of Control Purchase Price, plus accrued and unpaid interest
thereon;
(4) if the Change of Control Purchase Date is on or after a
Record Date and on or before the related interest payment date, any
accrued interest will be paid to the Person in whose name a Security is
registered at the close of business on
68
such Record Date, and no additional interest will be payable to
Securityholders who tender Securities pursuant to the Change of Control
Offer;
(5) the Issuers shall provide the Trustee and the Paying Agent
with written notice of the Change of Control Offer at least three Business
Days before the commencement of any Change of Control Offer; and
(6) on or before the commencement of any Change of Control
Offer, the Company, Finance or the Registrar (upon the request and at the
expense of the Issuers) shall send, by first-class mail, a notice to each
of the Securityholders, which (to the extent consistent with this
Indenture) shall govern the terms of the Change of Control Offer and shall
state:
(i) that the Change of Control Offer is being made
pursuant to such notice and this Section 9.1 and that all
Securities, or portions thereof, tendered will be accepted for
payment;
(ii) the Change of Control Purchase Price (including the
amount of accrued and unpaid interest, subject to clause (b)(4)
above) and the Change of Control Purchase Date;
(iii) that any Security, or portion thereof, not
tendered or accepted for payment will continue to accrue interest;
(iv) that, unless the Company defaults in depositing
Cash with the Paying Agent in accordance with the last paragraph of
this Article IX or such payment is prevented, any Security, or
portion thereof, accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of
Control Purchase Date;
(v) that Holders electing to have a Security, or portion
thereof, purchased pursuant to a Change of Control Offer will be
required to surrender the Security, with the form entitled "Option
of Holder to Elect Purchase" on the reverse of the Security
completed, to the Paying Agent (which may not for purposes of this
Section 9.1, notwithstanding anything in this Indenture to the
contrary, be either of the Issuers or any Affiliate of the Issuers)
at the address specified in the notice prior to the expiration of
the Change of Control Offer;
69
(vi) that Holders will be entitled to withdraw their
election, in whole or in part, if the Paying Agent (which may not
for purposes of this Section 9.1, notwithstanding anything in this
Indenture to the contrary, be either of the Issuers or any Affiliate
of the Issuers) receives, up to the close of business on the Change
of Control Purchase Date, a telegram, telex, facsimile transmission
or letter setting forth the name of the Holder, the principal amount
of the Securities the Holder is withdrawing and a statement that
such Holder is withdrawing his election to have such principal
amount of Securities purchased; and
(vii) a brief description of the events resulting in
such Change of Control.
The Issuers agree that any such Change of Control Offer shall be
made in compliance with all applicable Federal and state laws, rules and
regulations, including, if applicable, Regulation 14E under the Exchange Act and
the rules thereunder and all other applicable Federal and state securities laws,
and any provisions of this Indenture which conflict with such laws shall be
deemed to be superseded by the provisions of such laws.
On or before the Change of Control Purchase Date, the Issuers shall
(i) accept for payment Securities or portions thereof properly tendered pursuant
to the Change of Control Offer, (ii) deposit with the Paying Agent Cash
sufficient to pay the Change of Control Purchase Price (together with accrued
and unpaid interest and Liquidated Damages, if any) of all Securities or
portions thereof so tendered and (iii) deliver to the Trustee Securities so
accepted together with an Officers' Certificate listing the Securities or
portions thereof being purchased. The Paying Agent promptly shall mail to
Holders of Securities so accepted payment in an amount equal to the Change of
Control Purchase Price (together with accrued and unpaid interest and Liquidated
Damages, if any) for such Securities, and the Trustee or its authenticating
agent shall promptly authenticate and mail or deliver to such Holders a new
Security equal in principal amount to any unpurchased portion of the Security
surrendered; provided, however, that each such new Security will be in a
principal amount of $1,000 or an integral multiple thereof. Any Securities 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 Change of
Control Offer on or as soon as practicable after the Change of Control Purchase
Date.
70
ARTICLE X
SECURITY
SECTION 10.1. Security Interest.
(a) In order to secure the prompt and complete payment and
performance in full of the Issuers' obligations hereunder, the Company, the
Trustee and the Disbursement Agent, as applicable, have entered into this
Indenture and the Collateral Agreements required to be entered into on the Issue
Date. Each Holder, by accepting a Security, agrees to all of the terms and
provisions of this Indenture and the Collateral Agreements, and the Trustee
agrees to all of the terms and provisions of this Indenture and the Collateral
Agreements, as this Indenture and the Collateral Agreements may be amended from
time to time pursuant to the provisions thereof and hereof.
(b) The Collateral as now or hereafter constituted shall be
held for the equal and ratable benefit of the Holders without preference,
priority or distinction of any thereof over any other by reason of difference in
time of issuance, sale or otherwise, as the only security for the Issuers'
obligations hereunder.
(c) The provisions of TIA ss. 314(d), and provisions of TIA
ss. 314(c)(3) to the extent applicable by specific reference in this Article X,
are hereby incorporated by reference herein as if set forth in their entirety.
SECTION 10.2. Recording; Opinions of Counsel.
(a) Each of the Issuers represents that it has caused to be
executed and delivered, filed and recorded and covenants that it will promptly
cause to be executed and delivered, file and recorded, all instruments and
documents, and has done and will do or will cause to be done all such acts and
other things, at the Issuers' expense, as are necessary to effect and maintain
valid and perfected security interests in the Collateral. Each of the Issuers
shall, as promptly as practicable, cause to be executed and delivered, filed and
recorded all instruments and do all acts and other things as may be required by
law to perfect, maintain and protect the security interests under the Collateral
Agreements and herein.
(b) The Issuers shall furnish to the Trustee, concurrently
with the execution and delivery of this Indenture and the Collateral Agreements
and promptly after the execution and delivery of any amendment thereto or any
other instrument of further assurance, an Opinion(s) of Counsel stating that, in
the opinion of such counsel, subject to
71
customary exclusions and exceptions reasonably acceptable to the Trustee, either
(i) this Indenture, the Collateral Agreements, any such amendment and all other
instruments of further assurance have been properly recorded, registered and
filed and all such other action has been taken to the extent necessary to make
effective valid security interests and to perfect the securities interests
intended to be created by this Indenture and the Collateral Agreements, and
reciting the details of such action, or (ii) no such action is necessary to make
effective and maintain in full force and effect the validity and perfection of
the security interests under the Collateral Agreements and hereunder.
(c) The Issuers shall furnish to the Trustee, on or prior to
November 1 of each year commencing in 1997, an Opinion(s) of Counsel, dated as
of such date, stating that, in the opinion of such counsel, subject to customary
exclusions and exceptions reasonably acceptable to the Trustee, either (A) all
such action has been taken with respect to the recording, registering, filing,
rerecording and refiling of this Indenture, all supplemental indentures, the
Collateral Agreements, financing statements, continuation statements and all
other instruments of further assurance as is necessary to maintain the validity
and perfection of security interests under the Collateral Agreements and
hereunder in full force and effect and reciting the details of such action, and
stating that all financing statements and continuation statements have been
executed and filed and such other actions taken that are necessary fully to
preserve and protect the rights of the Holders and the Trustee hereunder and
under the Collateral Agreements, or (B) no such action is necessary to maintain
in full force and effect the validity and perfection of the security interests
under the Collateral Agreements and hereunder.
SECTION 10.3. Cash Collateral Account.
The Company shall establish and maintain with Disbursement Agent
pursuant to the terms of the Cash Collateral and Disbursement Agreement a cash
collateral account (the "Account") which shall hold, among other assets, a
portion of the proceeds of the sale of the Securities (net of underwriting
discounts and commissions) as provided for therein. The Company shall grant a
valid, perfected and exclusive security interest in favor of the Trustee for the
equal and ratable benefit of the Holders in the Account without preference,
priority, or distinction of any thereof over any other thereof by reason of
difference in time of issuance, sale or otherwise, as security for the prompt
and complete performance and payment in full of the Issuers' obligations
hereunder. The funds from time to time on deposit in the Account may be
disbursed from such account only for the purposes and in the manner provided for
in the Cash Collateral and Disbursement Agreement. All cash and other property
received by the Company or Finance after the Issue Date shall be turned over to
the Disbursement Agent for deposit in the Account.
72
SECTION 10.4. Certain Releases of Collateral.
Subject to applicable law, the release of any Collateral from Liens
created by the Collateral Agreements or the release of, in whole or in part, the
Liens created by the Collateral Agreements, will not be deemed to impair the
Collateral Agreements in contravention of the provisions of this Indenture if
and to the extent the Collateral or Liens are released pursuant to, and in
accordance with, the applicable Collateral Documents or pursuant to, and in
accordance with, the terms hereof. To the extent applicable, without limitation,
the Issuers and each other obligor, if any, on the Securities shall cause TIA
ss. 314(d), relating to the release of property or securities from the Liens of
the Collateral Agreements, to be complied with. Any certificate or opinion
required by TIA ss. 314(d) may be made by two Officers, except in cases in which
TIA ss. 314(d) requires that such certificate or opinion be made by an
independent person.
SECTION 10.5. Payment of Expenses.
On demand of the Trustee, the Issuers forthwith shall pay or
satisfactorily provide for all reasonable expenditures incurred by the Trustee
under this Article X, including the reasonable fees and expenses of counsel and
all such sums shall be a Lien upon the Collateral and shall be secured thereby
and permitted hereby.
SECTION 10.6. Suits to Protect the Collateral.
Subject to Section 10.1 of this Indenture and to the provisions of
the Collateral Agreements, the Trustee shall have power to institute and to
maintain such suits and proceedings as it may deem expedient to prevent any
impairment of the Collateral by any acts which may be unlawful or in violation
of the Collateral Agreements or this Indenture, 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 or if the enforcement of, or compliance
with, such enactment, rule or order would impair the security interests in
contravention of this Indenture or be prejudicial to the interests of the
Holders or of the Trustee. The Trustee shall give notice to the Issuers promptly
following the institution of any such suit or proceeding.
SECTION 10.7. Trustee's Duties.
The powers and duties conferred upon the Trustee by this Article X
are solely to protect the security interests and shall not impose any duty upon
the Trustee to exercise any such powers and duties, except as expressly provided
in this Indenture or the TIA. The
73
Trustee shall be under no duty to the Issuers or any Holder whatsoever to make
or give any presentment, demand for performance, notice of nonperformance,
protest, notice of protest, notice of dishonor, or other notice or demand in
connection with any Collateral, or to take any steps necessary to preserve any
rights against prior parties except as expressly provided in this Indenture. The
Trustee shall not be liable to the Issuers or any Holder for failure to collect
or realize upon any or all of the Collateral, or for any delay in so doing, nor
shall the Trustee be under any duty to the Issuers or any Holder to take action
whatsoever with regard thereto. The Trustee shall have no duty to the Issuers or
any Holder to comply with any recording, filing, or other legal requirements
necessary to establish or maintain the validity, priority or enforceability of
the security interests in, or the Trustee's rights in or to, any of the
Collateral.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts
with the duties imposed by operation of the TIA, the imposed duties, upon
qualification of this Indenture under the TIA, shall control.
SECTION 11.2. Notices.
Any notices or other communications to the Issuers, Paying Agent,
Registrar, Securities Custodian, transfer agent or the Trustee required or
permitted hereunder shall be in writing, and shall be sufficiently given if made
by hand delivery, by telex, by telecopier or registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:
if to the Issuers:
Waterford Gaming, L.L.C.
Waterford Gaming Finance Corp.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
74
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Trustee:
Fleet National Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Any party by notice to each other party may designate additional or
different addresses as shall be furnished in writing by such party. Any notice
or communication to any party shall be deemed to have been given or made as of
the date so delivered, if personally delivered; when answered back, if telexed;
when receipt is acknowledged, if telecopied; and five Business Days after
mailing if sent by registered or certified mail, postage prepaid (except that a
notice of change of address shall not be deemed to have been given until
actually received by the addressee).
Any notice or communication mailed to a Securityholder shall be
mailed to him or her by first-class mail or other equivalent means at his or her
address as it appears on the registration books of the Registrar and shall be
sufficiently given to him or her if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 11.3. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Issuers, the Trustee, the Registrar and any other Person shall
have the protection of TIA ss. 312(c).
75
SECTION 11.4. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by either or both of the Issuers to
the Trustee to take any action under this Indenture, such Person shall furnish
to the Trustee:
(1) an Officers' Certificate (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been met; and
(2) an Opinion of Counsel (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of such counsel,
all such conditions precedent have been met;
provided, however, that in the case of any such request or application as to
which the furnishing of particular documents is specifically required by any
provision of this Indenture, no additional certificate or opinion need be
furnished under this Section 11.4.
SECTION 11.5. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(2) 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;
(3) a statement that, in the opinion of such Person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been met; and
(4) a statement as to whether or not, in the opinion of each
such Person, such condition or covenant has been met; provided, however,
76
that with respect to matters of fact an Opinion of Counsel may rely on an
Officers' Certificate or certificates of public officials.
SECTION 11.6. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a meeting
of Securityholders. The Paying Agent or Registrar may make reasonable rules for
its functions.
SECTION 11.7. Non-Business Days.
If a payment date is not a Business Day at such place, payment may
be made at such place on the next succeeding day that is a Business Day, and no
interest shall accrue for the intervening period.
SECTION 11.8. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE ISSUERS HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS INDENTURE AND THE SECURITIES, AND IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
JURISDICTION OF THE AFORESAID COURTS. EACH OF THE ISSUERS IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY
AND ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE
VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY
CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
THE TRUSTEE OR ANY SECURITY-HOLDER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY
77
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE ISSUERS IN
ANY OTHER JURISDICTION.
SECTION 11.9. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Issuers. Any such indenture, loan or debt agreement may
not be used to interpret this Indenture.
SECTION 11.10. No Recourse against Others.
No direct or indirect stockholder, member, employee, officer,
manager or director, as such, past, present or future of the Issuers or any
successor entity, shall have any personal liability in respect of the
obligations of the Issuers under the Securities, this Indenture or the
Collateral Agreements by reason of his, her or its status as such stockholder,
member, employee, officer, manager or director. Each Securityholder by accepting
a Security waives and releases all such liability. Such waiver and release are
part of the consideration for the issuance of the Securities.
SECTION 11.11. Successors.
All agreements of the Issuers in this Indenture and the Securities
shall bind their respective successors. All agreements of the Trustee in this
Indenture shall bind its successor.
SECTION 11.12. Duplicate Originals.
All parties may sign any number of copies or counterparts of this
Indenture. Each signed copy or counterpart shall be an original, but all of them
together shall represent the same agreement.
SECTION 11.13. Severability.
In case any one or more of the provisions in this Indenture or in
the Securities shall be held invalid, illegal or unenforceable, in any respect
for any reason, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
78
SECTION 11.14. Table of Contents, Headings, Etc.
The Table of Contents and headings of the Articles and the Sections
of this Indenture have been inserted for convenience of reference only, are not
to be considered a part hereof and shall in no way modify or restrict any of the
terms or provisions hereof.
79
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
WATERFORD GAMING, L..L.C.
By: /s/ ▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
WATERFORD GAMING FINANCE CORP.
By: /s/ ▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
FLEET NATIONAL BANK, as Trustee,
Registrar, Paying Agent and Securities
Custodian
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
Title: Vice President
80
Exhibit A
WATERFORD GAMING, L.L.C.
WATERFORD GAMING FINANCE CORP.
12 3/4% SENIOR NOTE DUE 2003
CUSIP: ___________________
No. $____________
Waterford Gaming, L.L.C., a Delaware limited liability company (the
"Company"), and Waterford Gaming Finance Corp., a Delaware corporation
("Finance" and together with the Company, the "Issuers"), for value received,
hereby promise to pay to , or registered assigns, the principal sum of Dollars,
on __________, 2003.
Interest Payment Dates: May 15 and November 15 commencing May 15,
1997.
Record Dates: May 1 and November 1.
Reference is made to the further provisions of this Security on the
reverse side, which will, for all purposes, have the same effect as if set forth
at this place.
A-1
IN WITNESS WHEREOF, the Issuers have caused this Instrument to be
duly executed under their corporate seal.
Dated: November __, 1996
WATERFORD GAMING, L.L.C.
[Seal]
By: _________________________________________
Name:
Title:
Attest: _________________
Secretary
WATERFORD GAMING FINANCE CORP.
[Seal]
By: _________________________________________
Name:
Title:
Attest: _________________
Secretary
A-2
FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the within-mentioned
Indenture.
FLEET NATIONAL BANK
as Trustee and
Authenticating Agent
By: ______________________________
Authorized Signatory
A-3
WATERFORD GAMING, L.L.C.
WATERFORD GAMING FINANCE CORP.
12 3/4% Senior Note due 2003
Unless and until it is exchanged in whole or in part for Securities
in definitive form, this Security may not be transferred except as a whole by
the Depositary to a nominee of the Depositary or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary or by the Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) ("▇▇▇"),
to the Issuers or their agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.(1)
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER ▇▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF THE ISSUERS THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c)
----------
(1) This paragraph should only be added if the Security is issued in global
form.
▇-▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, OR (d) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUERS SO
REQUEST), (2) TO THE ISSUERS OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY
OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.(2)
1. Interest.
Waterford Gaming, L.L.C., a Delaware limited liability company (the
"Company"), and Waterford Gaming Finance Corp., a Delaware corporation
("Finance" and together with the Company, the "Issuers"), promise to pay
interest on the principal amount of this Security at the rate of 12 3/4% per
annum from November 8, 1996 until maturity. To the extent it is lawful, the
Issuers promise to pay interest on any interest payment due but unpaid on such
principal amount at a rate of 12 3/4% per annum compounded semi-annually.
The Issuers will pay interest semi-annually on May 15 and November
15 of each year or, if any such day is not a Business Day, on the next
succeeding Business Day (each, an "Interest Payment Date"), commencing May 15,
1997. Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid on the Securities, from
the date of issuance. Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months.
2. Method of Payment.
The Issuers shall pay interest on the Securities (except defaulted
interest) to the Persons who are the registered Holders at the close of business
on the May 1 or November 1 immediately preceding the Interest Payment Date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. Except as provided below, the Issuers shall pay principal and interest
in such coin or currency of the United States of
----------
(2) This paragraph should be included only for the Transfer Restricted
Securities.
A-5
America as at the time of payment shall be legal tender for payment of public
and private debts ("Cash"). The Securities will be payable as to principal,
premium and Liquidated Damages, if any, and interest, and the Securities may be
presented for registration of transfer or exchange, at the office or agency of
the Issuers maintained for such purpose within or without the Borough of
Manhattan, the City and State of New York or, at the option of the Issuers,
payment of interest may be made by check mailed to the Holders at their
addresses set forth in the register of Holders, and provided that payment by
wire transfer of immediately available funds will be required with respect to
principal, premium and Liquidated Damages, if any, and interest on all Global
Securities and all other Securities the Holders of which shall have provided
wire transfer instructions to an account within the United States to the Issuers
or the Paying Agent. Until otherwise designated by the Issuers, the Issuers'
office or agency will be the corporate trust office of the Trustee presently
located at the Trustee's agency at CTOPTO6D, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Operations, and the Issuer's
office or agency in The Borough of Manhattan and City and State of New York will
be Fleet Bank, c/o First Chicago Trust Company, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ 10005, Attention: Corporate Trust Operations.
3. Paying Agent and Registrar.
Initially, Fleet National Bank (the "Trustee," which term includes
any successor Trustee under the Indenture) will act as Paying Agent and
Registrar. The Issuers may change any Paying Agent, Registrar or co-Registrar
without notice to the Holders. The Issuers may, subject to certain exceptions,
act as Paying Agent, Registrar or co-Registrar.
4. Indenture.
The Issuers issued the Securities under an Indenture, dated as of
November 8, 1996 (the "Indenture"), among the Issuers and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act, as in effect on the date of the Indenture. The Securities are
subject to all such terms, and Holders of Securities are referred to the
Indenture and said Act for a statement of them. The Securities are senior
secured, joint and several general obligations of the Issuers limited in
aggregate principal amount to $65,000,000.
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5. Mandatory Redemption with Excess Cash Flow or Upon Exercise of Buy/Sell
Option.
The Issuers will be required to make a mandatory redemption on each
November 15 and May 15, commencing November 15, 1997, of Securities in the
largest principal amount that is an integral multiple of $1,000, that may be
redeemed using 100% of Company Excess Cash as of the preceding September 30 and
March 31, respectively, at the following redemption prices (expressed as
percentage of principal amount) if redeemed during the 12-month period
commencing May 15 of the years indicated below, in each case (subject to the
right of Holders of record on a Record Date to receive interest and Liquidated
Damages, if any, due on an Interest Payment Date that is on or prior to such
Redemption Date) together with accrued and unpaid interest and Liquidated
Damages, if any, thereon to the Redemption Date:
Year Percentage
---- ----------
1997................................................... 112.750%
1998................................................... 110.625%
1999................................................... 108.500%
2000................................................... 106.375%
2001................................................... 104.250%
2002................................................... 102.125%
2003................................................... 100.000%
In the event that either the Company or Sun International shall deliver an
election to either buy or sell the other party's interest in the Manager
pursuant to a Buy-Out Notice or be deemed to have delivered an election to sell
such interest and such election to buy or sell is consummated, the Issuers will
be required to make a mandatory redemption of all the Securities then
outstanding, at the redemption prices described above. Such redemption shall be
made on a date no more than 35 days after the date of the Closing under the
option.
6. Optional Redemption.
Except as provided above, the Issuers will not have the right to
redeem any Securities prior to November 15, 1999. The Securities will be
redeemable for cash at the option of the Issuers, in whole or in part, at any
time on or after November 15, 1999, with Company Excess Cash as of the date
notice is given at the following redemption prices (expressed as percentages of
the principal amount) if redeemed during the 12-month period commencing May 15
of the years indicated below, in each case (subject to the right
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of Holders of record on a Record Date to receive interest and Liquidated
Damages, if any, due on an Interest Payment Date that is on or prior to such
Optional Redemption Date) together with accrued and unpaid interest and
Liquidated Damages, if any, thereon to the Optional Redemption Date:
Year Percentage
---- ----------
1999................................................... 108.500%
2000................................................... 106.375%
2001................................................... 104.250%
2002................................................... 102.125%
2003................................................... 100.000%
7. Regulatory Redemption.
Notwithstanding any other provisions of the Indenture and this
Security, if any Gaming Regulatory Authority requires that a Holder or
beneficial owner of the Securities must be licensed, qualified or found suitable
under any applicable gaming laws in order to maintain any gaming license or
franchise related to the Mohegan Sun 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 Regulatory Authority (or such lesser period that may be required by such
Gaming Regulatory Authority) or if such Holder or beneficial owner is not so
licensed, qualified or found suitable, the Company shall have the right, at its
option:
(1) to require such Holder or beneficial owners to dispose of such
Holder's or beneficial owner's Securities within 30 days of receipt of
such finding by the applicable Gaming Regulatory Authority (or such
earlier date as may be required by the applicable Gaming Regulatory
Authority); or
(2) to call for redemption of the Securities of such Holder or
beneficial owner at a redemption price equal to (a) the lesser of the
principal amount thereof or the price at which such Holder or beneficial
owner acquired the Securities, 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
Regulatory Authority, which may be less than 30 days following the notice
of redemption if so ordered by such Gaming Regulatory Authority or (b)
such other amount as may be determined by such Gaming Regulatory
Authority.
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In connection with any such redemption, and except as may be
required by a Gaming Regulatory Authority, the Company shall comply with the
procedures contained in the Indenture for redemptions of the Securities. Under
the Indenture, the Company is not required to pay or reimburse any Holder of the
Securities or beneficial owner of Securities 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 will, therefore, be the obligation of such Holder or beneficial
owner.
8. Procedures for Redemption.
In the case of a partial redemption, the Trustee shall select the
Securities or portions thereof for redemption on a pro rata basis, by lot or in
such other manner it deems appropriate and fair; provided, however, that
mandatory and optional redemptions from Excess Cash Flow will be done as nearly
as practicable on a pro rata basis. The Securities may be redeemed in part in
multiples of $1,000 only.
Notice of any redemption will be sent by first class mail, at least
30 days and not more than 60 days prior to the date fixed for redemption to the
Holder of each Security to be redeemed at such Holder's last address as then
shown upon the registry books of the Registrar.
Any notice which relates to a Security to be redeemed in part only
must state the portion of the principal amount equal to the unredeemed portion
thereof and must state that on and after the date of redemption, upon surrender
of such Security, a new Security or Securities in a principal amount equal to
the unredeemed portion thereof will be issued. On and after the date of
redemption, interest and Liquidated Damages, if any, will cease to accrue on the
Securities or portions thereof called for redemption, unless the Issuers default
in the payment thereof.
9. Denominations; Transfer; Exchange.
The Securities are in fully registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder may register
the transfer of Securities in accordance with the Indenture. No service charge
will be made for any registration of transfer or exchange of the Securities, but
the Issuers may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes or other governmental
charge payable in connection therewith. The Registrar need not register the
transfer of or exchange any Securities selected for redemption.
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10. Persons Deemed Owners.
The registered Holder of a Security may be treated as the owner of
it for all purposes.
11. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee and the Paying Agent(s) will pay the money back to
the Issuers at their written request. After that, all liability of the Trustee
and any such Paying Agent(s) with respect to such money shall cease.
12. Discharge Prior to Redemption or Maturity.
Except as set forth in the Indenture, if the Issuers irrevocably
deposit with the Trustee, in trust, for the benefit of the Holders, Cash, U.S.
Government Obligations or a combination thereof, in such amounts as will be
sufficient in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, and Liquidated Damages, if any,
and interest on the Securities to redemption or maturity and comply with the
other provisions of the Indenture relating thereto, the Issuers will be
discharged from certain provisions of the Indenture and the Securities
(including the restrictive covenants described in paragraph 14 below, but
excluding their obligation to pay the principal of and interest on the
Securities).
13. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may
be amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities then outstanding, and
any existing Default or Event of Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Securities then outstanding. Without notice to or consent of any
Holder, the parties thereto may under certain circumstances amend or supplement
the Indenture or the Securities to, among other things, cure any ambiguity,
defect or inconsistency, or make any other change that does not adversely affect
the rights of any Holder of a Security.
14. Restrictive Covenants and Excess Cash Purchase Offers.
The Indenture imposes certain limitations on the ability of the
Issuers to, among other things, incur additional Indebtedness and Disqualified
Capital Stock, pay
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dividends or make certain other restricted payments, enter into certain
transactions with Affiliates, incur Liens, sell assets, merge or consolidate
with any other Person or transfer (by lease, assignment or otherwise)
substantially all of the properties and assets of the Issuers. The limitations
are subject to a number of important qualifications and exceptions. The Issuers
must periodically report to the Trustee on compliance with such limitations.
In addition, the Indenture requires the Company to accept Remaining
Excess Cash Purchase Offers or any other offer to purchase Subordinated Notes,
subject to certain qualifications, exceptions and requirements.
15. Repurchase at Option of Holder.
If there is a Change of Control, the Issuers shall be required to
offer to purchase on the Change of Control Purchase Date all outstanding
Securities at a purchase price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest, if any, to the Change of Control Purchase
Date. Holders of Securities will receive a Change of Control Offer from the
Issuers prior to any related Change of Control Purchase Date and may elect to
have such Securities purchased by completing the form entitled "Option of Holder
to Elect Purchase" appearing below.
16. Security for the Securities.
The obligations of the Issuers with respect to the Securities are
secured on an exclusive basis by a pledge of the Collateral. The Company has
entered into the Collateral Agreements that provide for the pledge of the
Collateral to the Trustee for the benefit of the Holders of the Securities. Such
pledge secures the payment and performance when due of all of the obligations of
the Issuers under the Indenture and the Securities.
Following an Event of Default, the Trustee, on behalf of the Holders
of the Securities, in addition to any rights or remedies available to it under
the Indenture, may take such action as it deems advisable to protect and enforce
its rights in the Collateral, including the institution of foreclosure
proceedings.
17. Defaults and Remedies.
If an Event of Default occurs and is continuing (other than an Event
of Default relating to certain events of bankruptcy, insolvency or
reorganization), then in every such case, unless the principal of all of the
Securities shall have already become due
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and payable, either the Trustee or the Holders of 25% in aggregate principal
amount of Securities then outstanding may declare all the Securities to be due
and payable in the manner and with the effect provided in the Indenture. Holders
of Securities may not enforce the Indenture or the Securities except as provided
in the Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture, the Collateral Agreements or the Securities. Subject to
certain limitations, Holders of a majority in aggregate principal amount of the
Securities then outstanding may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders of Securities notice of any
continuing Default or Event of Default (except a Default in payment of principal
or interest), if it determines that withholding notice is in their interest.
18. Trustee or Agent Dealings with Issuers.
The Trustee and each Agent under the Indenture, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Issuers or their Affiliates, and may otherwise deal with the
Issuers or their Affiliates as if it were not the Trustee and such Agent.
19. No Recourse Against Others.
No direct or indirect stockholder, member, employee, officer,
manager or director, as such, past, present or future, of the Issuers or any
successor entity shall have any personal liability in respect of the obligations
of the Issuers under the Securities or the Indenture by reason of his or its
status as such stockholder, member, employee, officer, manager or director. Each
Holder of a Security by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Securities.
20. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on the other side of this
Security.
21. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
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22. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Issuers will cause CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
23. Additional Rights of Holders of Securities.
The Issuers will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to:
Waterford Gaming, L.L.C.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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ASSIGNMENT
I or we assign this Security to
___________________________________________________________
__________________________________
___________________________
__________________________________________________________
(Print or type name, address and zip code of assignee)
Please insert Social Security or other identifying number of
assignee
__________________________
and irrevocably appoint __________ agent to transfer this Security on the books
of the Company. The agent may substitute another to act for him.
Dated: __________ Signed: ______________________________
__________________________________________________________
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee**
----------
** NOTICE: The Signature must be guaranteed by an Institution which is a
member of one of the following recognized Signature Guaranty Programs: (i)
The Securities Transfer Agent Medallion Program (Stamp); (ii) The New York
Stock Exchange Medallion Program (MSP); (iii) The Stock Exchange Medallion
Program (SEMP); or (iv) in such other guarantee program acceptable to the
Trustee.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Issuers
pursuant to Article IX of the Indenture, check the box: |_|
If you want to elect to have only part of this Security purchased by
the Issuers pursuant to Article IX of the Indenture, as the case may be, state
the amount you want to be purchased: $________
Date: ________________ Signature: ________________________
(Sign exactly as your name
appears on the other side of
this Security)
Signature Guarantee**
----------
** NOTICE: The Signature must be guaranteed by an Institution which is a
member of one of the following recognized Signature Guaranty Programs: (i)
The Securities Transfer Agent Medallion Program (Stamp); (ii) The New York
Stock Exchange Medallion Program (MSP); (iii) The Stock Exchange Medallion
Program (SEMP); or (iv) in such other guarantee program acceptable to the
Trustee.
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SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES(3)
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global authorized officer of
Date of Principal Amount Principal Amount Security following Trustee or
Exchange of this Global of this Global such decrease (or Securities
Security Security increase) Custodian
-------------------------------------------------------------------------------------------------------
----------
(3) This schedule should only be added if the Security is issued in global
form.
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CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF
SECURITIES
Re: 12 3/4% SENIOR NOTES DUE 2003 OF WATERFORD GAMING, L.L.C. AND WATERFORD
GAMING FINANCE CORP.
This Certificate relates to $______ principal amount of Securities held in
(check applicable box) _____ book-entry or ______ definitive form by _____ (the
"Transferor").
The Transferor (check applicable box):
|_| has requested the Registrar by written order to deliver in exchange
for its beneficial interest in the Global Security held by the Depositary a
Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial interest
in such Global Security (or the portion thereof indicated above); or
|_| has requested the Registrar by written order to exchange or register
the transfer of a Security or Securities.
In connection with such request and in respect of each such
Security, the Transferor does hereby certify that Transferor is familiar with
the Indenture relating to the above-captioned Securities and as provided in
Section 2.6 of such Indenture, the transfer of this Security does not require
registration under the Securities Act (as defined below) because (check
applicable box):
|_| Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.6(a)(ii)(A) or Section
2.6(d)(i)(A) of the Indenture).
|_| Such Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act")) in reliance on Rule 144A (in satisfaction of Section
2.6(a)(ii)(B) or Section 2.6(d)(i)(B) of the Indenture) or pursuant to an
effective registration statement under the Securities Act (in satisfaction of
Section 2.6(a)(ii)(C) or Section 2.6(d)(i)(C) of the Indenture).
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|_| Such Security is being transferred in accordance with Rule 144 under
the Securities Act, or pursuant to an exemption from registration in accordance
with Regulation S under the Securities Act (in satisfaction of Section
2.6(a)(ii)(C) or Section 2.6(d)(i)(C) of the Indenture).
___________________________________________
[INSERT NAME OF TRANSFEROR]
By: _______________________________________
Date: ______________________
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