Exhibit 4.1.2
================================================================================
▇▇▇▇▇ CASINO HOLDINGS, LLC
▇▇▇▇▇ CASINO FUNDING, INC.
as Issuers
AND
THE GUARANTORS
Named Herein
17-5/8% SECOND PRIORITY MORTGAGE NOTES
DUE 2010
----------
INDENTURE
DATED AS OF MARCH 25, 2003
----------
U.S. BANK NATIONAL ASSOCIATION
as Trustee
================================================================================
CROSS-REFERENCE TABLE*
TRUST INDENTURE INDENTURE
ACT SECTION SECTION
310(a)(1)........................................................ 7.10
(a)(2)........................................................ 7.10
(a)(3)........................................................ N.A.
(a)(4)........................................................ N.A.
(a)(5)........................................................ 7.10
(b)........................................................... 7.10
(c)........................................................... N.A.
311(a)........................................................... 7.11
(b)........................................................... 7.11
(c)........................................................... N.A.
312(a)........................................................... 2.05
(b)........................................................... 13.03
(c)........................................................... 13.03
313(a)........................................................... 7.06
(b)(1)........................................................ 10.03
(b)(2)........................................................ 7.06;7.07
(c)........................................................... 7.06;13.02
(d)........................................................... 7.06
314(a)........................................................... 4.03
(b)........................................................... 10.02
(c)(1)........................................................ 13.04
(c)(2)........................................................ 13.04
(c)(3)........................................................ N.A.
(d)........................................................... 10.03
(e)........................................................... 13.05
(f)........................................................... N.A.
315(a)........................................................... 7.01
(b)........................................................... 7.05;13.02
(c)........................................................... 7.01
(d)........................................................... 7.01
(e)........................................................... 6.11
316(a)(last sentence)............................................ 2.09
(a)(1)(A)..................................................... 6.05
(a)(1)(B)..................................................... 6.04
(a)(2)........................................................ N.A.
(b)........................................................... 6.07
317(a)(1)........................................................ 6.08
(a)(2)........................................................ 6.09
(b)........................................................... 2.04
318(a)........................................................... 13.01
(b)........................................................... N.A.
(c)........................................................... 13.01
N.A. means not applicable.
* This Cross Reference Table is not part of this Indenture.
TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. Definitions.................................................1
SECTION 1.02. Other Definitions..........................................35
SECTION 1.03. Incorporation by Reference of Trust Indenture Act..........37
SECTION 1.04. Rules of Construction......................................37
ARTICLE 2
THE NOTES
SECTION 2.01. Form and Dating............................................38
SECTION 2.02. Execution and Authentication...............................39
SECTION 2.03. Registrar and Paying Agent.................................39
SECTION 2.04. Paying Agent to Hold Money in Trust........................40
SECTION 2.05. Holder Lists...............................................40
SECTION 2.06. Transfer and Exchange......................................40
SECTION 2.07. Replacement Notes..........................................41
SECTION 2.08. Outstanding Notes..........................................41
SECTION 2.09. Treasury Notes.............................................41
SECTION 2.10. Temporary Notes............................................42
SECTION 2.11. Cancellation...............................................42
SECTION 2.12. Defaulted Interest.........................................42
SECTION 2.13. Deposit of Monies..........................................42
SECTION 2.14. CUSIP Number...............................................43
SECTION 2.15. Book-Entry Provisions for Global Notes.....................43
SECTION 2.16. Registration of Transfers and Exchanges....................44
SECTION 2.17. Restrictive Legends........................................48
SECTION 2.18. Issuance of PIK Notes and Additional Notes.................50
SECTION 2.19. Designation................................................50
ARTICLE 3
REDEMPTION
SECTION 3.01. Notices to Trustee.........................................50
SECTION 3.02. Selection of Notes to Be Redeemed..........................51
SECTION 3.03. Notice of Redemption.......................................51
SECTION 3.04. Effect of Notice of Redemption.............................52
SECTION 3.05. Deposit of Redemption Price................................52
SECTION 3.06. Notes Redeemed in Part.....................................52
-i-
PAGE
SECTION 3.07. Optional Redemption........................................53
SECTION 3.08. No Mandatory Redemption....................................53
SECTION 3.09. Mandatory Disposition in Accordance with Gaming Laws.......53
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Notes...........................................54
SECTION 4.02. Maintenance of Office or Agency............................55
SECTION 4.03. Reports....................................................55
SECTION 4.04. Compliance Certificate.....................................56
SECTION 4.05. Taxes......................................................57
SECTION 4.06. Stay, Extension and Usury Laws.............................57
SECTION 4.07. Limitation on Restricted Payments..........................58
SECTION 4.08. Limitation on Incurrence of Additional Indebtedness
and Disqualified Equity Interests..........................59
SECTION 4.09. Limitation on Liens........................................60
SECTION 4.10. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries.....................................60
SECTION 4.11. Limitation on Sale of Assets and Subsidiary Stock..........61
SECTION 4.12. Line of Business...........................................64
SECTION 4.13. Corporate Existence........................................64
SECTION 4.14. Repurchase of Notes at the Option
of the Holder upon a Change of Control.....................65
SECTION 4.15. Restriction on Sale and Issuance of Subsidiary Stock.......66
SECTION 4.16. Events of Loss.............................................66
SECTION 4.17. Future Guarantors..........................................69
SECTION 4.18. Maintenance of Insurance and Properties....................69
SECTION 4.19. Limitation on BHR Joint Venture............................71
SECTION 4.20. Limitation on Transactions with Affiliates.................72
SECTION 4.21. Limitation on Activities of TC Funding.....................73
SECTION 4.22. Restriction on Certain Agreements..........................73
SECTION 4.23. Limitation on Capital Expenditures.........................73
SECTION 4.24. Limitation on Status as Investment Company.................74
SECTION 4.25. Excess Cash Flow Offer.....................................74
SECTION 4.26. Maintenance of Capex Reserve Account.......................75
ARTICLE 5
SUCCESSORS
SECTION 5.01. Limitation on Merger, Sale or Consolidation................76
SECTION 5.02. Successor Corporation Substituted for the Company..........77
-ii-
PAGE
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default and Remedies.............................77
SECTION 6.02. Acceleration...............................................79
SECTION 6.03. Other Remedies.............................................79
SECTION 6.04. Waiver of Past Defaults....................................80
SECTION 6.05. Control by Majority........................................80
SECTION 6.06. Limitation on Suits........................................80
SECTION 6.07. Rights of Holders to Receive Payment.......................81
SECTION 6.08. Collection Suit by Trustee.................................81
SECTION 6.09. Trustee May File Proofs of Claim...........................81
SECTION 6.10. Priorities.................................................82
SECTION 6.11. Undertaking for Costs......................................82
ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee..........................................82
SECTION 7.02. Rights of Trustee..........................................84
SECTION 7.03. Individual Rights of Trustee...............................85
SECTION 7.04. Trustee's Disclaimer.......................................85
SECTION 7.05. Notice of Defaults.........................................85
SECTION 7.06. Reports by Trustee to Holders..............................85
SECTION 7.07. Compensation and Indemnity.................................86
SECTION 7.08. Replacement of Trustee.....................................86
SECTION 7.09. Successor Trustee by Merger, etc...........................87
SECTION 7.10. Eligibility; Disqualification..............................88
SECTION 7.11. Preferential Collection of Claims Against Company..........88
ARTICLE 8
DISCHARGE OF INDENTURE; LEGAL
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. Satisfaction and Discharge.................................88
SECTION 8.02. Option to Effect Legal Defeasance
or Covenant Defeasance.....................................89
SECTION 8.03. Legal Defeasance and Discharge.............................89
SECTION 8.04. Covenant Defeasance........................................90
SECTION 8.05. Conditions to Legal or Covenant Defeasance.................90
SECTION 8.06. Deposited Money and Government Securities to Be
Held in Trust; Other Miscellaneous Provisions..............91
SECTION 8.07. Repayment to Company.......................................92
SECTION 8.08. Reinstatement..............................................92
-iii-
PAGE
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. Without Consent of Holders.................................92
SECTION 9.02. With Consent of Holders....................................93
SECTION 9.03. Compliance with Trust Indenture Act........................94
SECTION 9.04. Revocation and Effect of Consents..........................95
SECTION 9.05. Notation on or Exchange of Notes...........................95
SECTION 9.06. Trustee to Sign Amendments, etc............................95
ARTICLE 10
COLLATERAL
SECTION 10.01. Collateral Documents; Additional Collateral; Substitute
Collateral.................................................95
SECTION 10.02. Recording, Registration and Opinions.......................98
SECTION 10.03. Release of Collateral......................................98
SECTION 10.04. Possession, Use and Release of Collateral..................99
SECTION 10.05. Specified Releases of Collateral...........................99
SECTION 10.06. Unconditional Release of Collateral
from Lien of Collateral Documents.........................102
SECTION 10.07. Form and Sufficiency of Release...........................103
SECTION 10.08. Purchaser Protected.......................................104
SECTION 10.09. Authorization of Actions to Be Taken
by the Trustee Under the Collateral Documents.............104
SECTION 10.10. Authorization of Receipt of Funds by the
Trustee Under the Collateral Documents...................105
SECTION 10.11. Powers Exercisable by Receiver or Trustee.................105
SECTION 10.12. Access Intercreditor Agreement............................105
SECTION 10.13. Certain Provisions Relating to Mortgaged Property.........106
ARTICLE 11
APPLICATION OF TRUST MONIES
SECTION 11.01. Collateral Account........................................107
SECTION 11.02. Withdrawal of Loss Proceeds...............................107
SECTION 11.03. Withdrawal of Net Asset Sale Proceeds to Fund an Asset
Sale Offer or a Residual Asset Sale Offer.................110
SECTION 11.04. Withdrawal of Trust Monies for
Investment in Replacement Assets..........................111
SECTION 11.05. Withdrawal of Capex Reserve Amount........................113
SECTION 11.06. Investment of Trust Monies................................113
SECTION 11.07. Withdrawal of Trust Monies; Retirement of Notes...........113
SECTION 11.08. Withdrawal of Trust Monies for Open Market Repurchases....114
SECTION 11.09. Disposition of Notes Retired..............................115
-iv-
PAGE
SECTION 11.10. Withdrawal of Net Loss Proceeds to Fund an Event of
Loss Offer or Residual Event of Loss Offer................115
ARTICLE 12
GUARANTEES
SECTION 12.01. Guarantees................................................116
SECTION 12.02. Execution and Delivery of Guarantees......................117
SECTION 12.03. Guarantors May Consolidate, etc., on Certain Terms........118
SECTION 12.04. Limitation of Guarantor's Liability.......................120
SECTION 12.05. Application of Certain Terms
and Provisions to the Guarantors..........................120
ARTICLE 13
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls..............................121
SECTION 13.02. Notices...................................................121
SECTION 13.03. Communication by Holders with Other Holders...............122
SECTION 13.04. Certificate and Opinion as to Conditions Precedent........122
SECTION 13.05. Statements Required in Certificate or Opinion.............123
SECTION 13.06. Rules by Trustee and Agents...............................123
SECTION 13.07. No Personal Liability of Members,
Stockholders, Officers, Directors; Non-Recourse...........123
SECTION 13.08. Governing Law.............................................123
SECTION 13.09. No Adverse Interpretation of Other Agreements.............124
SECTION 13.10. Successors................................................124
SECTION 13.11. Severability..............................................124
SECTION 13.12. Counterpart Originals.....................................124
SECTION 13.13. Table of Contents, Headings, etc..........................124
SECTION 13.14. Gaming Authorities........................................124
EXHIBITS
EXHIBIT A FORM OF NOTE AND GUARANTEE
EXHIBIT B FORM OF CERTIFICATE OF TRANSFER
EXHIBIT C FORM OF TRANSFEREE LETTER OF REPRESENTATION
EXHIBIT D FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH
REGULATION S TRANSFERS
EXHIBIT E FORM OF SECURITY AGREEMENT
EXHIBIT F-1 FORM OF MORTGAGE
EXHIBIT F-2 FORM OF LEASEHOLD MORTGAGE
EXHIBIT F-3 FORM OF SHIP MORTGAGE
EXHIBIT F-4 FORM OF PRIORITY INTERCREDITOR AGREEMENT
ANNEXES
-v-
ANNEX A TERMS OF AMENDMENT TO PRIORITY INTERCREDITOR AGREEMENT
SCHEDULES
SCHEDULE 4.20(b) RELATED TRANSACTIONS
-vi-
INDENTURE, dated as of March 25, 2003, among ▇▇▇▇▇ Casino
Holdings, LLC, a Delaware limited liability company (the "Company"), ▇▇▇▇▇
Casino Funding, Inc., a Delaware corporation ("TC Funding", and together with
the Company, the "Issuers"), the Guarantors (as defined herein) and U.S. Bank
National Association, a national banking association, as trustee (the
"Trustee").
Each party agrees as follows for the benefit of each other and
for the equal and ratable benefit of the Holders:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. Definitions.
"Accreted Value" means as of any date of determination, an amount
per $1,000 principal amount at maturity of the Notes or First Priority Notes, as
the case may be, that is equal to the sum of (a) the original issue price of
each Note or First Priority Note, as the case may be, and (b) the portion of the
excess of the principal amount at maturity of each Note or First Priority Note,
as the case may be, over such original issue price which shall have been
amortized through the end of the fiscal quarter immediately preceding such date.
"Acquired Indebtedness" means Indebtedness or Disqualified Equity
Interests of any person (a) existing at the time such person becomes a
Subsidiary of the Company, including by designation, or is merged or
consolidated into or with the Company or one of its Subsidiaries or (b) assumed
in connection with the acquisition of property from such person, in each case,
other than Indebtedness incurred in connection with, or in contemplation of,
such person becoming a Subsidiary or such acquisition, consolidation or merger.
Indebtedness shall be deemed to be incurred on the date of the related
acquisition of property from any person or the date the acquired person becomes
a Subsidiary, including by designation, or the date of such merger or
consolidation, as applicable.
"Acquisition" means the purchase or other acquisition of any
person or substantially all the property of any person by any other person,
whether by purchase, merger, consolidation or other transfer, and whether or not
for consideration.
"Additional First Priority Notes" means up to $25.0 million
aggregate principal amount of First Priority Notes issued under the First
Priority Indenture after the Issue Date.
"Additional Interest" means, at any time, all liquidated damages
then owing pursuant to the Registration Rights Agreement.
"Additional Notes" means Notes issued hereunder after the Issue
Date.
"Administrative Services Agreement" means the Second Amended and
Restated Services Agreement, dated as of January 1, 1998, by and among ▇▇▇▇▇
Casino Services, L.L.C., ▇▇▇▇▇ Plaza Associates, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ Associates,
Marina Associates and ▇▇▇▇▇ Indiana, Inc. (and any renewals or replacements
thereof or amendments thereto so long as the terms of such renewals,
replacements or amendments are not less favorable to the Holders in any material
respect taken as a whole).
"Affiliate" means, with respect to any specified person, (a) any
other person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified person or (b) any other person
that owns, directly or indirectly, 5% or more of such person's Equity Interests
or any officer or director of any such person or other person or with respect to
any natural person, any person having a relationship with such person by blood,
marriage or adoption not more remote than first cousin. For the purposes of this
definition, "control" when used with respect to any specified person means the
power to direct or cause the direction of the management and policies of such
person directly or indirectly, whether through ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"After-Acquired Property" means property acquired after the date
hereof which is required to constitute Collateral pursuant to the provisions of
this Indenture.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Asset Acquisition" means (1) an Investment by the Company or any
of its Subsidiaries in any other person pursuant to which such person shall
become a Subsidiary of the Company or any of its Subsidiaries, or shall be
merged with or into the Company or any Subsidiary of the Company or (2) the
acquisition by the Company or any Subsidiary of the Company of the property of
any person (other than a Subsidiary of the Company) that constitutes all or
substantially all of the property of such person or comprises any division or
line of business of such person or any other properties of such person other
than in the ordinary course of business.
"Asset Sale" means any direct or indirect sale, conveyance,
transfer, lease or other disposition (including, without limitation, any merger,
consolidation or sale and leaseback transaction) to any person other than the
Company or a Subsidiary, in one transaction or a series of related transactions,
of:
(1) any Equity Interest of any Subsidiary (excluding minimum
issuances of directors' qualifying shares); or
(2) the property of the Company or any of its Subsidiaries
which constitutes substantially all of an operation unit or line of
business of the Company or any of its Subsidiaries; or
(3) any other property of the Company or any of its
Subsidiaries outside of the ordinary course of business;
provided that notwithstanding the foregoing, the term "Asset Sale" shall not
include:
(a) the sale, lease, conveyance, disposition or other
transfer of all or substantially all of the property of the Company
and its Subsidiaries, as permitted pursuant to Section 5.01 hereof;
-2-
(b) the sale or lease of equipment, Inventory, Receivables or
other property (including obsolete property) in the ordinary course of
business and to the extent that such sales or leases are not part of a
sale of the business in which such equipment was used or in which such
Inventory or Receivables arose;
(c) the surrender or waiver of contract rights or the
settlement, release or surrender of contract, tort or other claims of
any kind;
(d) the grant in the ordinary course of business of any
non-exclusive license of patents, trademarks, registrations therefor
and other similar intellectual property;
(e) the sale, lease, conveyance, disposition or other
transfer of any property to the Company or any other Subsidiary of the
Company that is a Guarantor; or
(f) the sale, lease, conveyance, disposition or other
transfer of any property which has become obsolete or unfit for use,
is no longer necessary in the conduct of the Company's businesses or
has a fair market value less than $100,000 as determined in good faith
by the board of directors of the Company.
"Average Life" means, as of the date of determination, with
respect to any security or instrument, the quotient obtained by dividing (i) the
sum of (a) the product of the number of years from the date of determination to
the date or dates of each successive scheduled principal (or redemption) payment
of such security or instrument and (b) the amount of each such respective
principal (or redemption) payment by (ii) the sum of all such principal (or
redemption) payments.
"Bankruptcy Code" means Title 11, U.S. Code or any similar
federal or state law for relief of debtors.
"Bankruptcy Law" means the Bankruptcy Code or any similar federal
or state law for the relief of debtors.
"Beneficial Owner" or "beneficial owner" for purposes of the
definition of Change of Control has the meaning attributed to it in Rules 13d-3
and 13d-5 under the Exchange Act (as in effect on the Issue Date), whether or
not applicable, except that a "person" shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time.
"Berthing Agreement" means the ▇▇▇▇▇ Berthing Agreement, dated as
of April 23, 1996, as amended, by and between ▇▇▇▇▇ Indiana, Inc. and BHR Joint
Venture as the same is in effect on the Issue Date (and any renewals or
replacements thereof or amendments thereto so long as (i) the terms of such
renewals, replacements or amendments are not less favorable to the Holders in
any material respect or (ii) the Berthing Agreement between BHR Joint Venture
and Majestic Star, LLC is simultaneously amended in analogous fashion).
"BHR Attributed Debt" means the product of (i) the aggregate
principal amount of all outstanding Indebtedness incurred pursuant to Section
4.19(a)(2) hereof times (ii) the Company's percentage interest in the BHR Joint
Venture; provided that any such Indebtedness shall cease to be BHR
-3-
Attributed Debt, as of the first date after the date such Indebtedness is so
incurred on which the Company can incur at least $1.00 of additional
Indebtedness under the Total Leverage Ratio test set forth in Section 4.08(a).
"BHR Joint Venture" means ▇▇▇▇▇▇▇▇▇▇ Harbor Riverboats, LLC, a
Delaware limited liability company, in which ▇▇▇▇▇ Indiana, Inc. currently owns
a 50% membership interest, and any other flow through entity owned solely by the
members of the BHR Joint Venture.
"Board of Directors" means
(1) with respect to a corporation, the board of directors of
the corporation;
(2) with respect to a partnership, the Board of Directors of
the general partner of the partnership; and
(3) with respect to any other Person, the board or committee
of such Person serving a similar function.
"Board Resolution" means a resolution duly adopted by the Board
of Directors and certified by an Officers' Certificate.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in New York, New
York are authorized or obligated by law or executive order to close.
"Capex Reserve Account" shall have the meaning given such term in
the Priority Intercreditor Agreement.
"Capex Reserve Amount" means up to $10.0 million of Consolidated
Excess Cash Flow for the fiscal year ending December 31, 2003 (without giving
effect to clause (ix) of the definition thereof) that is projected in the good
faith estimation of the Company to be used for any Marina Slot Improvements
during the fiscal year ending December 31, 2004.
"Capital Contribution" means, with respect to any person, that
amount of money or the Fair Market Value of any property (net of liabilities to
which such property is subject) irrevocably and unconditionally contributed to
such person in exchange for Qualified Equity Interests of such person.
"Capitalized Lease Obligation" of any person means any obligation
of such person or its Subsidiaries on a Consolidated basis under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP, and the amount of Indebtedness represented by such obligation shall be the
capitalized amount of such obligations as reflected on the consolidated balance
sheet of such person, as determined in accordance with GAAP.
"Cash Equivalents" means (a) any evidence of Indebtedness,
maturing not more than one year after the date of acquisition, issued by the
United States of America, or an instrumentality or agency thereof and guaranteed
fully as to principal, premium, if any, and interest by the United States
-4-
of America, (b) any certificate of deposit, maturing not more than one year
after the date of acquisition, issued by, or time deposit of, a commercial
banking institution that is a member of the Federal Reserve System and that has
combined capital and surplus and undivided profits of not less than $300.0
million, and whose debt has a rating, at the time as of which any investment
therein is made, of "P-1" (or higher) according to ▇▇▇▇▇'▇ Investors Service,
Inc. or any successor rating agency, or "A-1" (or higher) according to Standard
& Poor's Ratings Service, a division of ▇▇▇▇▇▇-▇▇▇▇, Inc., or any successor
rating agency, (c) commercial paper, maturing not more than one year after the
date of acquisition, issued by a corporation (other than an Affiliate or
Subsidiary of the Company) organized and existing under the laws of the United
States of America with a rating, at the time as of which any investment therein
is made, of "P-1" (or higher) according to ▇▇▇▇▇'▇ Investors Service, Inc. or
any successor rating agency, or "A-1" (or higher) according to Standard & Poor's
Ratings Service, a division of ▇▇▇▇▇▇-▇▇▇▇, Inc., or any successor rating agency
and (d) any money market deposit accounts issued or offered by a domestic
commercial bank having capital and surplus in excess of $300.0 million.
"Casino Properties" means, collectively, the ▇▇▇▇▇ ▇▇▇▇▇▇
Property and the ▇▇▇▇▇ Indiana Property.
"Clearstream" means Clearstream Banking, societe anonyme.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means, collectively, all of the property and assets
described in the Collateral Documents, together with all other property that is
from time to time subject to the Lien of the Collateral Documents.
"Collateral Account" means the collateral account established
pursuant to the Priority Intercreditor Agreement.
"Collateral Agent" shall mean U.S. Bank, National Association in
such capacity until a successor replaces it in accordance with the terms of the
Priority Intercreditor Agreement and thereafter means the successor serving
thereunder.
"Collateral Documents" means, collectively, the Mortgages, the
Ship Mortgages, the Security Agreement, the Priority Intercreditor Agreement,
any Access Intercreditor Agreements and all other mortgages, deeds of trust,
pledge agreements, collateral assignments, security agreements, fiduciary
transfers, debentures, fiduciary assignments or other instruments evidencing or
creating any security interests in favor of the Collateral Agent in all or any
portion of the Collateral, in each case, as amended, amended and restated,
extended, renewed, supplemented or otherwise modified from time to time, in
accordance with the terms thereof.
"Company Order" means a written request or order signed in the
name of the Company by an authorized signatory (by virtue of a power of attorney
or other similar instrument) and delivered to the Trustee.
"Consolidated EBITDA" means, with respect to any person, for any
period, the Consolidated Net Income of such person for such period (determined,
for purposes of this definition only,
-5-
without taking into effect the last sentence of the definition thereof) adjusted
to add thereto (to the extent deducted in determining Consolidated Net Income),
without duplication, the sum of
(i) Consolidated income tax expense;
(ii) Consolidated depreciation and amortization expense,
provided that Consolidated depreciation and amortization of a
Subsidiary than is a less than Wholly-Owned Subsidiary shall only be
added to the extent of the equity interest of such person in such
Subsidiary;
(iii) Consolidated Fixed Charges, less the amount of all cash
payments made by such person or any of its Subsidiaries during such
period to the extent such payments relate to non-cash charges that
were added back in determining Consolidated EBITDA for such period or
any prior period; and
(iv) Non-cash write-down and charges related to required
regulatory obligations.
"Consolidated Excess Cash Flow" means, without duplication, with
respect to any person, the aggregate for such person and its subsidiaries for
such period, of the following:
(i) Consolidated EBITDA (provided that for the purpose of
making any calculation of Consolidated Excess Cash Flow in respect of
any period in the fiscal year ending December 31, 2003, Consolidated
EBITDA shall be reduced by the amount of any payments actually made
pursuant to Section 4.07(b)(5) hereof); minus
(ii) Consolidated Interest Expense; plus (minus)
(iii) changes in net working capital and accrued long-term
liability accounts (provided that such changes shall be calculated
before giving effect to any reclassification of debt of the Issuers or
their Subsidiaries that has been repaid through the application of the
proceeds of the issuance and sale, on the Issue Date, of the Notes and
the First Priority Notes); minus
(iv) non-cash gains included in net income; minus
(v) cash payments related to required regulatory obligations;
minus
(vi) repayments of long-term debt (other than repayments of
revolving credit borrowings that may be reborrowed and repayments
financed with other long-term borrowings); minus
(vii) an amount reserved for Permitted Tax Distributions and
amounts paid in respect of income taxes; minus
(viii) aggregate cash expenditures made during such period for
property, plant or equipment as reflected in the consolidated balance
sheet of such person; minus
(ix) with respect to the fiscal year ending on December 31,
2003, the Capex Reserve Amount.
-6-
"Consolidated Fixed Charges" of any person means, for any period,
the aggregate amount (without duplication and determined in each case in
accordance with GAAP) of
(a) Consolidated Interest Expense; and
(b) the product of (x) the amount of all cash dividend
payments on any series of Preferred Stock of such person and to the
extent permitted under Section 4.10 hereof, its Subsidiaries (other
than dividends paid in Qualified Equity Interests) paid, accrued or
scheduled to be paid or accrued during such period times (y) a
fraction, the numerator of which is one and the denominator of which
is one minus the then current effective, consolidated federal, state
and local income tax rate of such person, expressed as a decimal.
"Consolidated Interest Expense" means, interest expensed or
capitalized, paid, accrued or scheduled to be paid or accrued (including, in
accordance with the following sentence, interest attributable to Capitalized
Lease Obligations) of such person and its Consolidated Subsidiaries during such
period, including (i) original issue discount and non-cash interest payments or
accruals on any Indebtedness, (ii) the interest portion of all deferred payment
obligations and (iii) all commissions, discounts and other fees and charges owed
with respect to bankers' acceptances and letter of credit financings and
currency and Interest Swap and Hedging Obligations, in each case to the extent
attributable to such period. For purposes of this definition, (x) interest on a
Capitalized Lease Obligation shall be deemed to accrue at an interest rate
reasonably determined by the Issuers to be the rate of interest implicit in such
Capitalized Lease Obligation in accordance with GAAP and (y) interest expense
attributable to any Indebtedness represented by the guarantee by such person or
a Subsidiary of such person of an obligation of another person shall be deemed
to be the interest expense attributable to the Indebtedness guaranteed.
"Consolidated Net Income" means, with respect to any person for
any period, the net income (or loss) of such person and its Consolidated
Subsidiaries (determined on a consolidated basis in accordance with GAAP) for
such period, adjusted to exclude (only to the extent included in computing such
net income (or loss) and without duplication)
(a) all gains (but not losses) which are either extraordinary
(as determined in accordance with GAAP) or are either unusual or
nonrecurring (including any gain from the sale or other disposition of
property outside the ordinary course of business or from the issuance
or sale of any capital stock), less all fees and expenses relating
thereto;
(b) the net income, if positive, of any person, other than a
Consolidated Wholly-Owned Subsidiary, in which such person or any of
its Consolidated Subsidiaries has an interest, except to the extent of
the amount of any dividends or distributions actually paid in cash to
such person or a Consolidated Wholly-Owned Subsidiary of such person
during such period, but in any case not in excess of such person's pro
rata share of such person's net income for such period; and
(c) the net income, if positive, of any of such person's
Consolidated Subsidiaries to the extent that the declaration or
payment of dividends or similar distributions is not at the time
permitted by operation of the terms of its charter or bylaws or any
other agreement,
-7-
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to such Consolidated Subsidiary.
To the extent not already reduced thereby, Consolidated Net
Income of the Company for any period shall be reduced by the aggregate amount of
all Permitted Tax Distributions made during, or distributable in respect of,
such period.
"Consolidated Net Worth" of any person at any date means, in the
case of a limited liability company, such person's members' capital and, in the
case of a corporation, the aggregate Consolidated stockholders' equity of such
person (plus amounts of equity attributable to preferred stock) and its
Consolidated Subsidiaries, as would be shown on the Consolidated balance sheet
of such person prepared in accordance with GAAP, adjusted to exclude (to the
extent included in calculating such equity):
(a) the amount of any such stockholders' equity attributable
to Disqualified Equity Interests or treasury stock of such person and
its Consolidated Subsidiaries;
(b) all upward revaluations and other write-ups in the book
value of an asset of such person or a Consolidated Subsidiary of such
person subsequent to the Issue Date; and
(c) all investments in Subsidiaries that are not Consolidated
Subsidiaries and in persons that are not Subsidiaries.
"Consolidated Subsidiary" means, for any person, each Subsidiary
of such person (whether now existing or hereafter created or acquired) the
financial statements of which are consolidated for financial statement reporting
purposes with the financial statements of such person in accordance with GAAP.
"Consolidation" means, with respect to any person, the
consolidation of the accounts of such person and each of its Subsidiaries if and
to the extent the accounts of such person and each of its Subsidiaries would
normally be consolidated with those of such person, all in accordance with GAAP
consistently applied. The term "Consolidated" shall have a similar meaning.
"Contested Collateral Lien Conditions" means the following
conditions:
(1) any proceeding instituted contesting such Lien shall
conclusively operate to stay the sale or forfeiture of any portion of
the Collateral on account of such Lien;
(2) at the option and upon request of the Collateral Agent,
the Issuers or any Guarantor, as applicable, shall maintain cash
reserves in an amount sufficient to pay and discharge such Lien and
the Collateral Agent's reasonable estimate of all interest and
penalties related thereto; and
(3) such Lien shall in all respects be subject and
subordinate in priority to the Lien and security interest created and
evidenced by the Collateral Documents, except if and to the extent
that the law or regulation creating, permitting or authorizing such
Lien provides that
-8-
such Lien is or must be superior to the Lien and security interest
created and evidenced by the Collateral Documents.
"Corporate Trust Office" shall be at the address of the Trustee
specified in Section 13.02 hereof or such other address as to which the Trustee
may give notice to the Company.
"Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
"Default" means any event which is, or after the passage of time
or the giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 2.02 hereof,
substantially in the form of Exhibit A hereto except that such Note shall not
bear the Global Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued
in whole or in part in global form, the Person specified in this Indenture as
the Depositary with respect to the Notes, until a successor shall have been
appointed and become such Depositary pursuant to the applicable provision of
this Indenture, and, thereafter, "Depositary" shall mean or include such
successor.
"Disqualified Equity Interests" means, with respect to any
person, an Equity Interest of such person that, by its terms or by the terms of
any security into which it is convertible, exercisable or exchangeable, is, or
upon the happening of an event (other than (i) the disqualification of the
holder thereof by a Gaming Authority, (ii) an event that would constitute a
Change of Control, or (iii) an event that would constitute an Asset Sale) or the
passage of time would be, required to be redeemed or repurchased (including at
the option of the holder thereof) in whole or in part on or prior to the Stated
Maturity of the Notes.
"Equity Interest" of any person means any shares, interests,
rights to purchase (other than convertible or exchangeable Indebtedness),
warrants, options, participations or other equivalents (however designated) in
such person's equity, and shall in any event include any Equity Interests issued
by, or member interests in, such person.
"Equity Offering" means (i) any public offering or private sale
of Equity Interests (other than Disqualified Equity Interests) of the Company
pursuant to which the Company receives net proceeds of at least $20.0 million or
(ii) any public offering or private sale of Equity Interests of THCR to the
extent cash proceeds thereof are contributed to the equity of the Company.
"Euroclear" means ▇▇▇▇▇▇ Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.
"Event of Loss" means, with respect to any property, any (i)
loss, destruction or damage of such property, (ii) condemnation, seizure or
taking, by exercise of the power of eminent domain or otherwise, of such
property, or confiscation or requisition of the use of such property or (iii)
settlement in lieu of (ii) above.
-9-
"Excess Cash Flow Offer" means a First Half Excess Cash Flow
Offer or a Full Fiscal Year Excess Cash Flow Offer, as the case may be.
"Excess Cash Flow Offer Amount" means the First Half Excess Cash
Flow Offer Amount or the Full Fiscal Year Excess Cash Flow Amount, as the case
may be.
"Excess Cash Flow Offer Price" means, with respect to any Note or
First Priority Note, as the case may be, as of any Excess Cash Flow Offer Date,
the sum of (i) lesser of (a) 103% of the Accreted Value of such Note or First
Priority Note, as the case may be, as of such Excess Cash Flow Offer Date and
(b) if such Note or First Priority Note, as the case may be, is then redeemable
pursuant to Section 3.07(b) hereof or Section 3.07(b) of the First Priority
Indenture, as the case may be, the redemption price of such Note or First
Priority Note, as the case may be, at such Excess Cash Flow Offer Date if such
Note or First Priority Note, as the case may be, were to be redeemed pursuant to
Section 3.07(b) hereof or Section 3.07(b) of the First Priority Indenture, as
the case may be, on such Excess Cash Flow Offer Date (it being understood that
if such Note or First Priority Note, as the case may be, were not then
redeemable pursuant to Section 3.07(b) hereof, or Section 3.07(b) of the First
Priority Indenture, as the case may be, the amount set forth in clause (a) of
this definition shall apply) and (ii) the accrued and unpaid interest on such
Note or First Priority Note, as the case may be, up to but not including such
Excess Cash Flow Offer Date.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Notes" means the Notes issued in the Exchange Offer.
"Exchange Offer" means the offer that may be made by the Issuers
pursuant to the Registration Rights Agreement to exchange the Notes for the
Exchange Notes.
"Fair Market Value" means, with respect to any property, the sale
value that would be obtained in an arm's-length transaction between an informed
and willing seller under no compulsion to sell and an informed and willing buyer
under no compulsion to buy and, with respect to any redemption of Notes pursuant
to the applicable Gaming Laws, means
(1) the last sales price regular way on the last trading day
prior to the date of determination of such value on the largest
national securities exchange (or, if said security is not listed on a
national securities exchange, on the National Market System of the
National Association of Securities Dealers, Inc. Automated Quotation
System ("NASDAQ")) on which such Notes shall have traded on such
trading day;
(2) if no such sales of such Notes occurred on such trading
day, the mean between the "bid" and "asked" prices on such national
securities exchange or as quoted on the National Market System of
NASDAQ, as the case may be, on such last trading day;
(3) if the Notes are not listed or quoted on any national
securities exchange or the National Market System of NASDAQ, the
average of the closing bid and asked prices on such day in the
over-the-counter market as reported by NASDAQ or, if bid and asked
prices for the Notes have not been reported through NASDAQ, the
average of the bid and asked prices on
-10-
such day as furnished by any New York Stock Exchange member firm
regularly making a market in the Notes, selected for such purpose by
the Company; or
(4) if none of clauses (1) through (3) are applicable, the
fair market value of such Notes as of the date of determination as
determined in such manner as shall be satisfactory to the Company,
which shall be entitled to rely for such purpose on the advice of any
firm of investment bankers or securities dealers having familiarity
with the Notes.
"FF&E Financing Agreement" means an agreement which creates a
Lien upon any after-acquired tangible personal property and/or other items
constituting operating assets which are financed, purchased or leased for the
purpose of engaging in or developing a Related Business.
"First Half Excess Cash Flow" means, with respect to any fiscal
year, the Consolidated Excess Cash Flow generated in the first two quarters of
such fiscal year.
"First Half Excess Cash Flow Offer Amount" means, for any fiscal
year, the First Half Excess Cash Flow for such fiscal year; provided that if (a)
the First Half Excess Cash Flow for such fiscal year shall be less than $1.0
million, then the First Half Excess Cash Flow shall be deemed to be zero and (b)
if such First Half Excess Cash Flow is over $5.0 million, the First Half Excess
Cash Flow Offer Amount shall be deemed to be $5.0 million.
"First Priority Guarantees" means the guarantees of the First
Priority Notes.
"First Priority Indenture" means the indenture governing the
First Priority Notes.
"First Priority Leverage Ratio" of any person on any date of
determination (the "Transaction Date") means the ratio, on a pro forma basis, of
(a) the aggregate outstanding principal amount of the First Priority Notes and
First Priority Pari Passu Indebtedness on such Transaction Date to (b) the
aggregate amount of Consolidated EBITDA of such person attributable to
continuing operations and businesses (exclusive of amounts attributable to
operations and businesses permanently discontinued or disposed of) for the
Reference Period immediately preceding the Transaction Date; provided that, for
purposes of such calculation:
(i) any Asset Sales or Asset Acquisitions (including, without
limitation, any Asset Acquisition giving rise to the need to make such
calculations as a result of such person or one of its Subsidiaries
(including any person who becomes a Subsidiary as a result of the
Asset Acquisition) incurring, assuming or otherwise being liable for
Acquired Indebtedness and also, including any Consolidated EBITDA
(including any pro forma expense and cost reductions calculated on a
basis consistent with Regulation S-X promulgated under the Exchange
Act) attributable to the properties that are the subject of the Asset
Acquisition or Asset Sale during the Reference Period) occurring
during the Reference Period or any time subsequent to the last day of
the Reference Period and on or prior to the Transaction Date, as if
such Asset Sale or Asset Acquisition (including the incurrence or
assumption of any such Acquired Indebtedness) occurred on the first
day of the Reference Period. If such person or any of its Subsidiaries
directly or indirectly guarantees Indebtedness of a third person, the
preceding sentence shall give effect to the incurrence of such
guaranteed Indebtedness as if such person
-11-
or any subsidiary of such person had directly incurred or otherwise
assumed such other Indebtedness that was so guaranteed;
(ii) transactions giving rise to the need to calculate the
First Priority Leverage Ratio shall be assumed to have occurred on the
first day of the Reference Period; and
(iii) the incurrence of any Indebtedness or issuance of any
Disqualified Equity Interests during the Reference Period or
subsequent to the Reference Period and on or prior to the Transaction
Date (and the application of the proceeds therefrom to the extent used
to refinance or retire other Indebtedness) shall be assumed to have
occurred on the first day of such Reference Period.
"First Priority Notes" means the 11 5/8% First Priority Mortgage
Notes due 2010 issued by the Issuers.
"First Priority Pari Passu Indebtedness" means any Indebtedness
(other than Additional First Priority Notes) permitted to be incurred pursuant
to clause (g) of the definition of "Permitted Indebtedness" and secured by the
Lien permitted to be incurred pursuant to clause (h) or clause (i) of the
definition of "Permitted Liens"; provided that any such First Priority Pari
Passu Indebtedness shall be on terms no less favorable in any material respect
to the Company than the First Priority Notes.
"First Priority Trustee" means the U.S. Bank National
Association, as trustee under the First Priority Indenture.
"Full Fiscal Year Excess Cash Flow" means, with respect to any
fiscal year, the sum of (a) the Consolidated Excess Cash Flow generated in such
fiscal year plus (b) with respect to the fiscal year ending December 31, 2004
only, the Unused Capex Reserve Amount, if any.
"Full Fiscal Year Excess Cash Flow Offer Amount" means, for any
fiscal year, (a) the Full Year Excess Cash Flow for such fiscal year less (b)
the First Half Excess Cash Flow Offer Amount (if any) for such fiscal year;
provided that if the Full Fiscal Year Excess Cash Flow for such fiscal year
shall be less than $1.0 million, then the Full Fiscal Year Excess Cash Flow
shall be deemed to be zero.
"Gaming Authorities" means the New Jersey Casino Control
Commission ("CCC"), the New Jersey Division of Gaming Enforcement, The Indiana
Gaming Commission or any other governmental agency which regulates gaming in a
jurisdiction in which the Company or any of its Subsidiaries conducts gaming
activities.
"Gaming Law" means any gaming laws or regulations of any
jurisdictions to which the Company or any of its Subsidiaries is or may at any
time after the Issue Date be subject.
"Gaming Licenses" means every material license, material
franchise or other material authorization required to own, lease, operate or
otherwise conduct or manage gaming in any state or jurisdiction where the
Company or its Subsidiaries conduct business, and any applicable liquor
licenses.
-12-
"Generally Accepted Accounting Principles" or "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 entity as
approved by a significant segment of the accounting profession as in effect from
time to time.
"Government Securities" means direct Obligations of, or
obligations Guaranteed by, the United States of America for the payment of which
Guarantee or obligations the full faith and credit of the United States is
pledged and which are not callable or redeemable at the option of the issuer
thereof.
"Guaranteed Debt" of any person means, without duplication, all
indebtedness of any other person referred to in the definition of Indebtedness
guaranteed directly or indirectly in any manner by such person, or in effect
guaranteed directly or indirectly by such person through an agreement:
(1) to pay or purchase such Indebtedness or to advance or
supply funds for the payment or purchase of such Indebtedness;
(2) to purchase, sell or lease (as lessee or lessor)
property, or to purchase or sell services, primarily for the purpose
of enabling the debtor to make payment of such Indebtedness or to
assure the holder of such Indebtedness against loss;
(3) to supply funds to, or in any other manner invest in, the
debtor (including any agreement to pay for property or services
without requiring that such property be received or such services be
rendered);
(4) to maintain working capital or equity capital of the
debtor, or otherwise to maintain the net worth, solvency or other
financial condition of the debtor; or
(5) otherwise to assure a creditor against loss; provided
that the term "Guaranteed Debt" shall not include endorsements for
collection or deposit, in either case in the ordinary course of
business, or indemnity obligations arising in favor of officers,
directors or employees.
"Guarantors" means each Subsidiary that executes a Guarantee in
accordance with this Indenture and their respective successors and assigns.
"Holder" means a person who at any particular time is the owner
of a Note.
"Indebtedness" means, with respect to any person, without
duplication:
(a) all liabilities and obligations, contingent and
otherwise, of such person for borrowed money or representing the
balance deferred and unpaid of the purchase price of property or
services, excluding any trade payables and other accrued current
liabilities arising in the ordinary course of business, but including,
without limitation, all obligations, contingent or otherwise, of such
person in connection with any letters of credit issued under letter of
credit facilities, acceptance facilities or other similar facilities
or in connection with any agreement
-13-
to purchase, redeem, exchange, convert or otherwise acquire for value
any Equity Interest of such person, or any warrants, rights or options
to acquire such Equity Interest, now or hereafter outstanding;
(b) all obligations of such person evidenced by bonds, notes,
debentures or other similar instruments;
(c) every obligation of such person issued as payment in
consideration of the purchase by such person or an Affiliate of such
person of the Equity Interest or all or substantially all of the
property of another person or in consideration for the merger or
consolidation with respect to which such person or an Affiliate of
such person was a party;
(d) all indebtedness created or arising under any conditional
sale or other title retention agreement with respect to property
acquired by such person (even if the rights and remedies of the seller
or lender under such agreement in the event of default are limited to
repossession or sale of such property), but excluding trade payables
and other accrued current liabilities arising in the ordinary course
of business;
(e) all obligations under Interest Swap and Hedging
Obligations of such person;
(f) all Purchase Money Obligations and Capitalized Lease
Obligations of such person;
(g) all indebtedness referred to in clauses (a) through (f)
above of other persons and all dividends of other persons the payment
of which is secured by (or for which the holder of such indebtedness
has an existing right, contingent or otherwise, to be secured by) any
Lien upon or in property (including, without limitation, accounts and
contract rights) owned by such person, even though such person has not
assumed or become liable for the payment of such indebtedness;
(h) all Guaranteed Debt of such person; and
(i) all Disqualified Equity Interests of such person (valued
at the greater of its voluntary or involuntary maximum fixed
repurchase price plus accrued and unpaid dividends).
For purposes hereof, the "maximum fixed repurchase price" of any
Disqualified Equity Interests which do not have a fixed repurchase price shall
be calculated in accordance with the terms of such Disqualified Equity Interests
as if such Disqualified Equity Interests were purchased on any date on which
Indebtedness shall be required to be determined pursuant to this Indenture, and
if such price is based upon, or measured by, the Fair Market Value of such
Disqualified Equity Interests, such Fair Market Value to be determined in good
faith by the Board of Directors of the issuer (or managing general partner of
the issuer) of such Disqualified Equity Interests.
"Indenture" means this Indenture, as amended, supplemented or
otherwise modified in accordance with the terms hereof from time to time.
-14-
"Indian Gaming" means any and all activities defined as class II
or class III gaming under the Indian Gaming Regulatory Act of 1988, PL 100-497,
U.S.C. Section 2701 et seq., as the same may, from time to time, be amended.
"Initial Notes" means $65,000,000 aggregate principal amount of
17 5/8% Second Priority Mortgage Notes due 2010 issued by the Issuers on the
Issue Date substantially in the form of Exhibit A hereto.
"Initial Purchasers" means Deutsche Bank Securities Inc., Credit
Suisse First Boston LLC, UBS Warburg LLC and ▇▇▇▇▇▇▇▇▇ & Company, Inc., as
initial purchasers of the Notes.
"Institutional Accredited Investor" means an institution that is
an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act that is not also a QIB.
"Insurance Certificate" shall mean a certificate evidencing the
insurance requirements (i) in substantially the form commonly known as "▇▇▇▇▇
27" that (A) provides that the insurance has been issued, is in full force and
effect, and conveys all the rights and privileges afforded under the insurance
policies, (B) provides an unequivocal obligation to give notice in advance to
additional interested parties of termination and notification in advance of
changes and (C) purports to convey all the privileges of the insurance policies
to the certificate holders and (ii) that otherwise complies with the
requirements with respect thereto set forth in Section 4.18.
"Intellectual Property" means "Intellectual Property Collateral"
as defined in the Security Agreement.
"Intercreditor Agreements" means the Priority Intercreditor
Agreement and any Access Intercreditor Agreements.
"Interest Payment Date" means each March 15 and September 15,
commencing September 15, 2003.
"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 changes 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.
"Inventory" shall have the meaning ascribed to such term in
Article 9 of the UCC from time to time.
"Investment" means, with respect to any person, directly or
indirectly,:
(a) any advance, loan or other extension of credit or capital
contribution to any other person (by means of any transfer of cash or
other property to others or any payment for
-15-
property or services for the account or use of others), excluding
travel and other similar advances made to officers and employees made
in the ordinary course of business;
(b) any purchase or other acquisition by such person of any
Equity Interests, bonds, notes, debentures or other securities issued
or owned by any other person; or
(c) other than guarantees of Indebtedness of the Issuers or
any Subsidiary to the extent permitted by Section 4.08, the entering
into by such person of any guarantee of, or other credit support or
contingent obligation with respect to, Indebtedness or any other
liability of any other person.
"Issue Date" means March 25, 2003, the date of first issuance of
the Notes under this Indenture.
"Legal Requirements" means all applicable laws, statutes, codes,
acts, ordinances, orders, judgments, decrees, injunctions, rules, regulations,
permits, licenses, authorizations, directions and requirements of all
governments, departments, commissions, boards, courts, authorities, agencies,
officials and officers of governments, federal, state and municipal.
"Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), security interest, hypothecation or other encumbrance of any kind
(whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction) upon or with respect to any property of any
kind, real or personal, movable or immovable, now owned or hereafter acquired by
an Issuer or Guarantor.
"Limited Liability Company Agreement" means the Limited Liability
Company Agreement of the Company, to be dated on or prior to the Issue Date, as
amended from time to time in accordance with its terms.
"Marina Associates" means ▇▇▇▇▇ ▇▇▇▇▇▇ Associates, L.P.
"Marina Slot Improvements" means all improvements, accessions,
alterations, replacements and repairs to the existing, or all development or
construction of new, gaming, hotel, entertainment, parking or retail facilities
or related amenities at the ▇▇▇▇▇ ▇▇▇▇▇▇ Property.
"Members" means each of THCR Holdings or any additional or
substitute members admitted under the Limited Liability Company Agreement so
long as (i) each is a member under the Limited Liability Company Agreement,
unless removed as a member in accordance with the Limited Liability Company
Agreement, and (ii) no Default or Event of Default occurs as a result thereof.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or any successor
thereto.
"Mortgage" means each a fee and leasehold mortgage or leasehold
mortgage, as applicable, substantially in the form of Exhibit F-1 or F-2,
attached hereto (including such changes to
-16-
such form as may be necessary or desirable to conform to applicable local laws
or customs regarding property in the jurisdiction where such instrument is to be
recorded) as the same may be amended, amended and restated, extended, renewed,
supplemented or otherwise modified from time to time in accordance with the
terms hereof and thereof.
"Mortgaged Property" means each Real Property encumbered by a
Mortgage.
"Net Asset Sale Proceeds" means the aggregate cash proceeds
received by the Company or any of its Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees and expenses, and sales and
brokerage commissions) and any relocation expenses incurred as a result thereof,
taxes paid or payable by the Company or any of its Subsidiaries as a result
thereof (after taking into account any available tax credits or deductions and
any tax sharing arrangements), amounts required to be applied to the repayment
of Indebtedness (other than the Notes, the First Priority Notes, the Guarantees
or the First Priority Guarantees) secured by a Lien (provided that in the case
of any Asset Sale involving Collateral, such Lien constitutes a Permitted Lien
that is permitted to be prior to the Lien granted to the Collateral Agent
pursuant to the Collateral Documents) on the property that was the subject of
such Asset Sale and any reserve for indemnifications or any reserve for
adjustment in respect of the sale price of such property established in
accordance with GAAP.
"Net Cash Proceeds" of an issuance of Indebtedness or Equity
Interests means the cash proceeds of such issuance, net of attorneys' fees,
accountants' fees, brokerage, consultant, underwriting and other fees and
expenses actually incurred in connection with such issuance, sale, conversion or
exchange and net of any taxes paid or payable as a result thereof by the entity
making such sale.
"Net Loss Proceeds" means the aggregate cash proceeds received by
the Company or any of its Subsidiaries in respect of any Event of Loss,
including, without limitation, insurance proceeds from condemnation awards or
damages awarded by any judgment, net of the direct costs in recovery of such Net
Loss Proceeds (including, without limitation, legal, accounting, appraisal and
insurance adjuster fees and any relocation expenses incurred as a result
thereof), amounts required to be applied to the repayment of Indebtedness
secured by a Lien (provided that in case of any Event of Loss involving
Collateral, such Lien constitutes a Permitted Lien that is permitted to be prior
to the Liens granted to the Collateral Agent pursuant to the Collateral
Documents) on the property that was the subject of such Event of Loss, and any
taxes attributable to such Event of Loss paid or payable as a result thereof.
"Note Custodian" means the Trustee, as custodian with respect to
the Global Notes, or any successor entity thereto.
"Note Registrar" means the Trustee, as security registrar,
together with any successor of the Trustee, in such capacity.
-17-
"Notes" means the Initial Notes, any Additional Notes and,
following the Exchange Offer, any Exchange Notes or Private Exchange Notes
issued in accordance with the terms of the Registration Rights Agreement.
"Obligation" means any principal, premium or interest payment, or
Additional Interest, or monetary penalty, or damages, due by the Issuers or the
Guarantors under the terms of the Notes or this Indenture.
"Offering" means the offering of the Notes by the Issuers on the
Issue Date.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of
the Company or any Subsidiary by two Officers of the Company or such Subsidiary,
as applicable, one of whom must be the principal executive officer, the
principal financial officer, the treasurer or the principal accounting officer
of the Company or such Subsidiary, as applicable, that meets the requirements of
Section 13.05 hereof.
"Open Market Repurchase Account" means an account established by
the Company with the Collateral Agent as a sub-account of the Collateral Account
and funded, to the extent required, pursuant to the First Priority Indenture.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee that meets the requirements of Section
13.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Parking Lease" means the Parking Lease, dated as of June 19,
2000, by and between ▇▇▇▇▇▇▇▇▇▇ Harbor Parking Associates, LLC, as lessor, and
▇▇▇▇▇ Indiana, Inc., as lessee, as the same is in effect on the Issue Date (and
any renewals or replacements thereof or amendments thereto so long as the terms
of such renewals, replacements or amendments are not less favorable to the
Holders in any material respect).
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to The Depository Trust Company,
shall include Euroclear and Clearstream).
"Pay-in-Kind Interest" has the meaning assigned to such term in
Section 1 of the Notes.
"Permit" means any license (including, without limitation, all
Gaming Licenses), franchise, authorization, statement of compliance, certificate
of operation, certificate of occupancy and permit required for the lawful
ownership, occupancy, operation and use of all or a material portion of either
of the Casino Properties, whether held by Marina Associates, ▇▇▇▇▇ Indiana, Inc.
or any other person (which may be temporary or permanent) (including, without
limitation, those required for the
-18-
use of either of the Casino Properties as a licensed casino facility), in
accordance with all applicable Legal Requirements.
"Permitted Business" means the gaming business and other
businesses necessary for, incident to, connected with, arising out of, or
developed or operated to permit or facilitate the conduct or pursuit of the
gaming business (including developing and operating lodging facilities,
restaurants, sports or entertainment facilities, transportation services or
other related activities or enterprises and any additions or improvements
thereto) and potential opportunities in the gaming business, including, without
limitation, Indian Gaming.
"Permitted Holder" means ▇▇▇▇▇ and the spouse and descendants of
▇▇▇▇▇ (including any related grantor trusts controlled by, and established and
maintained for the sole benefit of, ▇▇▇▇▇ or such spouse or descendants), and
the estate of any of the foregoing, but no other person.
"Permitted Indebtedness" means the following:
(a) Indebtedness of the Company to any Guarantor that is a
Wholly-Owned Subsidiary, and any Guarantor that is a Wholly-Owned
Subsidiary to any other Guarantor that is a Wholly-Owned Subsidiary or
to the Company; provided that, in the case of Indebtedness of the
Company, such obligations shall be unsecured and expressly
subordinated in right of payment to the Company's Obligations pursuant
to the Notes, and that the date of any event that causes such
Guarantor to no longer be a Wholly-Owned Subsidiary shall be an
Incurrence Date;
(b) Indebtedness of the Company and the Guarantors existing
on the Issue Date (other than any Indebtedness repaid with the
proceeds of the offering of the Notes and the First Priority Notes);
(c) (i) Indebtedness of the Company, TC Funding and the
Guarantors in an aggregate principal amount not to exceed $65.0
million evidenced by the Notes and the Guarantees thereof and
represented by this Indenture and (ii) Indebtedness of the Company, TC
Funding and the Guarantors in aggregate principal amount not to exceed
$425.0 million evidenced by the First Priority Notes and the First
Priority Guarantees and represented by the First Priority Indenture;
(d) Indebtedness of the Company and the Guarantors
represented by Interest Swap and Hedging Obligations;
(e) Indebtedness of the Company and the Guarantors
represented by Purchase Money Obligations relating to after-acquired
gaming or related equipment (or other after-acquired property) of the
Company and the Guarantors not to exceed $5.0 million in aggregate
principal amount outstanding at any time pursuant to this clause (e);
(f) Indebtedness of the Company and the Guarantors
represented by FF&E Financing Agreements and/or Capitalized Lease
Obligations relating to after-acquired property of (or, in the case of
Capitalized Lease Obligations, leased by) the Company and the
Guarantors
-19-
not to exceed $25.0 million in aggregate principal amount outstanding
at any time pursuant to this clause (f);
(g) Indebtedness of the Company and the Guarantors consisting
of First Priority Pari Passu Indebtedness and/or Additional First
Priority Notes in an aggregate amount outstanding at any time pursuant
to this clause (g) of up to $25.0 million incurred for the purpose of
financing all or any part of the costs of any Marina Slot Improvements
or Replacement Riverboat, so long as the aggregate principal amount of
such Indebtedness does not exceed 80% of the projected Fair Market
Value of such Marina Slot Improvements or Replacement Riverboat as
determined in the good faith judgment of the Company; provided that
(1) no more than $10.0 million of such Indebtedness may be used for
Marina Slot Improvements, (2) on the Incurrence Date of any such
Indebtedness, the First Priority Leverage Ratio is less than or equal
to 4.0 to 1.0 and (3) the aggregate principal amount of Indebtedness
pursuant to this clause (g) plus the aggregate principal amount of any
Additional First Priority Notes shall not exceed $25.0 million.
(h) Refinancing Indebtedness; and
(i) Indebtedness under Additional Notes (and Guarantees
thereof) issued to pay interest on the Notes (and Additional Notes) in
accordance with the terms of this Indenture as in effect on the Issue
Date.
"Permitted Investment" means
(a) Investments in any of the Notes or First Priority Notes
otherwise in compliance with this Indenture;
(b) Investments in cash or Cash Equivalents;
(c) intercompany notes to the extent permitted under clause
(a) of the definition of "Permitted Indebtedness";
(d) loans, advances or investments existing on the Issue
Date;
(e) loans or advances to officers and employees of the
Company or any Subsidiary in an aggregate amount not exceeding
$500,000 at any one time outstanding;
(f) Interest Swap and Hedging Obligations permitted to be
incurred under clause (d) of the definition of "Permitted
Indebtedness";
(g) Investments received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, suppliers and
customers, in each case arising in the ordinary course of business;
(h) Investments consisting of (x) Receivables created or
acquired in the ordinary course of business and payable or
dischargeable in accordance with customary terms, (y)
-20-
endorsements of negotiable instruments for collection in the ordinary
course of business, and (z) lease, utility and other similar deposits
in the ordinary course of business;
(i) Investments required to be made in order to comply with
the rules, regulations and requirements of Gaming Authorities and/or
Gaming Laws, including, but not limited to, Investments made by Marina
Associates in connection with its annual investment alternative tax
obligation;
(j) any Investment in any Wholly-Owned Subsidiary or any
entity that upon consummation of such Investment will become a
Wholly-Owned Subsidiary, other than an Unrestricted Subsidiary;
(k) Investments made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.11;
(l) Investments made pursuant to the Berthing Agreement, the
Parking Lease and the ▇▇▇▇▇ 29 Management Agreement;
(m) Investments in Permitted Businesses not to exceed $2.0
million in any fiscal year;
(n) any Investment consisting of the extension of gaming
credit to customers consistent with industry practice in the ordinary
course of business; and
(o) other Investments that do not exceed $2.5 million at any
time outstanding.
"Permitted Liens" means
(a) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due and payable or delinquent and Liens for
taxes, assessments or governmental charges or levies, which (i) are
being contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with GAAP, which
proceedings (or orders entered in connection with such proceedings)
have the effect of preventing the forfeiture or sale of the property
subject to any such Lien, or (ii) in the case of any such charge or
claim which has or may become a Lien against any of the Collateral,
such Lien and the contest thereof shall satisfy the Contested
Collateral Lien Conditions;
(b) Liens in respect of property of the Issuers or any
Subsidiary imposed by law, which were incurred in the ordinary course
of business and do not secure Indebtedness for borrowed money, such as
carriers', warehousemen's, materialmen's, landlords' and mechanics'
Liens, maritime Liens and other similar Liens arising in the ordinary
course of business, and (i) which do not in the aggregate materially
detract from the value of the property of the Issuers and their
Subsidiaries, taken as a whole, and do not materially impair the use
thereof in the operation of the business of the Issuers and their
Subsidiaries, taken as a whole, (ii) which do not continue for a
period in excess of 30 days after the claims giving rise to such Liens
become due and payable unless such claims and/or Liens are being
contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with
-21-
GAAP, which proceedings (or orders entered in connection with such
proceedings) have the effect of preventing the forfeiture or sale of
the property subject to any such Lien, and (iii) in the case of any
such Lien which has or may become a Lien against any of the
Collateral, such Lien and the contest thereof shall satisfy the
Contested Collateral Lien Conditions;
(c) Liens on property of the Issuers or any Subsidiary
existing on the date hereof;
(d) easements, rights-of-way, restrictions (including zoning
restrictions), covenants, encroachments, protrusions and other similar
charges or encumbrances, and minor title deficiencies on or with
respect to any real property, in each case whether now or hereafter in
existence, not (i) securing Indebtedness, (ii) individually or in the
aggregate materially impairing the value or marketability of such real
property and (iii) individually or in the aggregate materially
interfering with the conduct of the business of the Issuers or any
Subsidiary at such real property;
(e) Liens arising out of judgments or awards not resulting in
a Default and in respect of which the Issuers or any Subsidiary shall
in good faith be prosecuting an appeal or proceedings for review in
respect of which there shall be secured a subsisting stay of execution
pending such appeal or proceedings; provided that the aggregate amount
of all such judgments or awards (and any cash and the fair market
value of any property subject to such Liens) does not exceed $20.0
million at any time outstanding;
(f) Liens (other than any Lien imposed by the United States
Employee Retirement Income Securities Act of 1974, as amended) (i)
imposed by law or deposits made in connection therewith in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security or public
utility obligations, (ii) incurred in the ordinary course of business
to secure the performance of tenders, statutory obligations (other
than excise taxes), surety, stay, customs and appeal bonds, statutory
bonds, bids, leases, government contracts, trade contracts,
performance and return of money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money) or (iii)
arising by virtue of deposits made in the ordinary course of business
to secure liability for premiums to insurance carriers; provided that
(x) with respect to clauses (i), (ii) and (iii) hereof, such Liens are
set amounts not yet due and payable or delinquent or, to the extent
such amounts are so due and payable, such amounts are being contested
in good faith by appropriate proceedings for which adequate reserves
have been established in accordance with GAAP, which proceedings for
orders entered in connection with such proceedings have the effect of
preventing the forfeiture or sale of the property subject to any such
Lien, (y) to the extent such Liens are not imposed by law, such Liens
shall in no event encumber any property other than cash and Cash
Equivalents and (z) in the case of any such Lien against any of the
Collateral, such Lien and the contest thereof shall satisfy the
Contested Collateral Lien Conditions; provided, further, that the
aggregate amount of deposits at any time pursuant to clause (ii) and
clause (iii) shall not exceed $10.0 million in the aggregate;
(g) Leases, subleases, licenses, occupancy or concession
agreements with respect to the properties of the Issuers or any
Subsidiary or their respective Subsidiaries, in each case entered into
in the ordinary course of the Issuers' or any Subsidiary's business,
so long as such
-22-
leases, subleases, licenses occupancy or concession agreements are
subordinate in all respects to the Liens granted and evidenced by the
Collateral Documents and do not, individually or in the aggregate, (i)
interfere in any material respect with the ordinary conduct of the
business of the Issuers or any Subsidiary and (ii) materially impair
the use (for its intended purposes) or the value of the property
subject thereto;
(h) first priority Liens on the Collateral securing the
Indebtedness described in clause (g) of the definition of "Permitted
Indebtedness" and incurred for the purpose of financing all or any
part of the costs of any Marina Slot Improvements; provided that the
Representative of such Indebtedness secured by such first priority
Liens shall have entered into an amendment to the Priority
Intercreditor Agreement which amendment shall be on the terms set
forth on Annex A hereto;
(i) first priority Liens on the ▇▇▇▇▇ Indiana Property
securing the Indebtedness described in clause (g) of the definition of
"Permitted Indebtedness" and incurred for the purpose of financing all
or any part of the costs of a Replacement Riverboat; provided that the
Representative of such Indebtedness secured by such first priority
Liens shall have entered into an amendment to the Priority
Intercreditor Agreement which amendment shall be on the terms set
forth on Annex A hereto;
(j) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into
by the Issuers or any Subsidiary in the ordinary course of business in
accordance with the past practices of the Issuers or any Subsidiary;
(k) Liens arising pursuant to FF&E Financing Agreements,
Purchase Money Obligations or Capital Lease Obligations securing the
Indebtedness described in clauses (e) and (f) of the definition of
"Permitted Indebtedness"; provided that (i) the Indebtedness secured
by any such Lien (including refinancings thereof) does not exceed 100%
of the cost of the property being acquired, leased or financed at the
time of the incurrence of such Indebtedness and (ii) any such Liens
attach only to the property being financed pursuant to such FF&E
Financing Agreements, Purchase Money Obligations or Capital Lease
Obligations and do not encumber any other property of the Company or
any Subsidiary (it being understood that all Indebtedness to a single
lender shall be considered to be a single Purchase Money Obligation,
whether drawn at one time or from time to time);
(l) bankers' Liens, rights of setoff and other similar Liens
existing solely with respect to cash and Cash Equivalents on deposit
in one or more accounts maintained by the Issuers or any Subsidiary,
in each case granted in the ordinary course of business in favor of
the bank or banks with which such accounts are maintained, securing
amounts owing to such bank with respect to cash management and
operating account arrangements, including those involving pooled
accounts and netting arrangements; provided that in no case shall any
such Liens secure (either directly or indirectly) the repayment of any
Indebtedness;
(m) Liens on property of a person existing at the time such
person is acquired or merged with or into or consolidated with the
Issuers or any Subsidiary (and not created in anticipation or
contemplation thereof) in accordance with the provisions of this
Indenture;
-23-
provided that such Liens were in existence prior to the contemplation
of the merger or consolidation and do not extend to property not
subject to such Liens at the time of acquisition (other than
improvements thereon) and are no more favorable to the lienholders
than the existing Lien;
(n) Liens securing obligations under this Indenture, the
Notes, the Additional Notes, the First Priority Notes, the Additional
First Priority Notes, the Guarantees, the First Priority Guarantees
and the Collateral Documents (and any Liens securing obligations
incurred pursuant to a refinancing of all, but not less than all, of
the then outstanding Notes and Additional Notes) pursuant to and in
accordance with clause (h) of the definition of Permitted
Indebtedness, so long as any such Liens are, when taken as a whole, no
less favorable to the Holders of First Priority Notes than the Liens
securing the obligations under this Indenture, the Notes and the
Guarantees on the Issue Date); provided that any such Liens with
respect to any Additional Notes shall only be permitted to the extent
(x) such Additional Notes shall have been issued in compliance with
clause (i) of Permitted Indebtedness or (y) that on the Incurrence
Date of the Indebtedness secured by such Liens, the Total Leverage
Ratio of the Company, after giving effect on a pro forma basis to such
incurrence of such Additional Notes, would be 5.0 to 1.0 or less;
(o) Liens securing Acquired Indebtedness (and any Refinancing
Indebtedness which refinances such Acquired Indebtedness) incurred in
accordance with Section 4.08; provided that (i) such Liens secured the
Acquired Indebtedness at the time of and prior to the incurrence of
such Acquired Indebtedness by the Issuers or a Subsidiary and were not
granted in connection with, or in anticipation of the incurrence of
such Acquired Indebtedness by the Issuers or a Subsidiary and (ii)
such Liens do not extend to or cover any property of the Issuers or of
any of the Subsidiaries other than the property that secured the
Acquired Indebtedness prior to the time such Indebtedness became
Acquired Indebtedness of the Issuers or a Subsidiary;
(p) licenses of the patents, patent applications, trademarks,
trademark applications, service marks, service ▇▇▇▇ applications,
trade names, copyrights, trade secrets, know-how and processes,
granted by the Issuers or any Subsidiary in the ordinary course of
business and not interfering in any material respect with the ordinary
conduct of the business of the Issuers or any Subsidiary;
(q) Liens arising under applicable Gaming Laws, provided that
no such Lien constitutes a Lien securing repayment of Indebtedness;
(r) Liens in favor of the Issuers or any Guarantor; provided
that such Liens are subject to the Liens of the Collateral Documents;
(s) Liens on all right, title and interest of the Company and
the Guarantors in and to any and all (i) Receivables, Inventory and
commercial tort claims, (ii) cash, Cash Equivalents, securities and
deposit accounts (except as expressly provided to be part of the
Collateral) and (iii) proceeds and products of any and all of the
foregoing property in clauses (i) and
-24-
(ii) of this clause(s), including, without limitation, proceeds of
insurance, condemnation awards, tax refunds and other similar property
or claims with respect thereto; and
(t) Liens on after-acquired property (other than any Marina
Slot Improvements or any Replacement Riverboat) securing Indebtedness
(other than Permitted Indebtedness) permitted to be incurred pursuant
to Section 4.08; provided that (i) the Indebtedness secured by any
such Lien (including refinancings thereof) does not exceed 100% of the
cost of the property being acquired or leased at the time of the
incurrence of such Indebtedness, (ii) any such Liens attach only to
the property being financed pursuant to such Indebtedness and do not
encumber any other property of the Company or any Subsidiary and (iii)
if necessary, the Representative of such Indebtedness secured by such
Liens shall have entered into an Access Intercreditor Agreement which
shall be in form and substance reasonably acceptable to the Trustee;
provided, however, that (except as set forth in clauses (c) (solely in respect
of Equity Interests in the BHR Joint Venture and ▇▇▇▇▇▇▇▇▇▇ Harbor Parking
Associates, LLC), (h), (i), (m), (n) and (q) above) no Liens shall be permitted
to exist, directly or indirectly, on any Equity Interests, intercompany notes or
other securities constituting Collateral.
"Permitted Tax Distributions" means for each tax year that the
Company qualifies as a limited liability company or substantially similar
pass-through entity under the Code or any similar provision of state or local
law, distributions of Tax Amounts in respect of the jurisdictions in which the
Company so qualifies as a limited liability company or substantially similar
pass-through entity; provided that (A) prior to any Permitted Tax Distribution a
knowledgeable and duly authorized officer of the Company shall certify, and
counsel reasonably acceptable to the Trustee shall opine, that the Company
qualifies as a limited liability company or substantially similar pass-through
entity for federal income tax purposes and under similar laws of the states in
respect of which such distributions are being made and (B) at the time of such
distributions, the most recent audited financial statements of the Company
provide that the Company was treated as a limited liability company for federal
income tax purposes for the period of such financial statements. Distributions
of Tax Amounts may be made between the tenth and twentieth day of each January
(provided that payments in respect of estimated state or local taxes due in
January may instead, at the option of the Company, be paid during the last five
days of the immediately preceding December), April, June and September, based
upon the minimum estimated tax payments in respect of Tax Amounts which would
then be due and payable, and during the tenth through twentieth day of April or
within ten days of the reconciliation described in the immediately succeeding
sentence, with respect to any additional tax payments owing in respect of the
prior fiscal year. Within 60 days of the Company's filing of the Internal
Revenue Service Form 1065 for the applicable tax year, a reconciliation shall be
made of the Permitted Tax Distributions actually paid versus the amount
permitted to be paid as Permitted Tax Distributions based upon the final results
of the applicable tax year. In addition, prior to any Permitted Tax
Distributions, each Member shall have entered into a binding agreement promptly
to reimburse the Company for any positive difference between the distributed
amount and the Tax Amount as finally determined; provided, however, that if the
Members of the Company do not promptly reimburse the Company for any positive
difference between the distributed amount and the Tax Amount, then the Permitted
Tax Distributions during the year in which such reimbursement should have been
made shall be reduced by the unreimbursed amount until the Permitted Tax
Distributions for such year are zero and, thereafter, Permitted Tax
-25-
Distributions shall be reduced in the succeeding years until the unreimbursed
amount not used to reduce Permitted Tax Distributions is zero.
"person" means any individual, corporation, partnership, limited
or general liability company, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"PIK Notes" shall have the meaning assigned to such term in
Section 1 of the Notes.
"Pledgor" means each of the Company and the Subsidiaries party to
any of the Collateral Documents executed on the date hereof and each other party
that becomes a pledgor, mortgagor, transferor or assignor under any Collateral
Document.
"Priority Intercreditor Agreement" means the priority
intercreditor agreement dated as of the Issue Date, by and among the Collateral
Agent, the Trustee and the First Priority Trustee substantially in the form of
Exhibit F-4 attached hereto as amended from time to time.
"Private Exchange" means the offer that may be made by the
Company and TC Funding pursuant to the Registration Rights Agreement to exchange
the Notes for Private Exchange Notes.
"Private Exchange Notes" means the Notes issued in the Private
Exchange.
"property" means any right, title or interest in or to property
or assets of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible.
"Prudent Operator" has the meaning set forth in the applicable
Collateral Document.
"Purchase Money Obligations" of any person means any obligations
of such person to any seller or any other person incurred or assumed to finance
the purchase, or the cost of construction or improvement, of real or personal
property to be used in the business of such person or any of its Subsidiaries in
an amount that is not more than 100% of the cost, or Fair Market Value, as
appropriate, of such property, and incurred within 90 days after the date of
such acquisition (excluding accounts payable to trade creditors incurred in the
ordinary course of business).
"QIB" or "Qualified Institutional Buyer" shall have the meaning
ascribed to "qualified institutional buyer" in Rule 144A promulgated under the
Securities Act.
"Qualified Equity Interests" means any Equity Interest of the
Company that is not Disqualified Equity Interests.
"Qualified Exchange" means (a) any repurchase, redemption or
other acquisition or retirement of any shares of any class of Equity Interests
of the Company on or after the Issue Date in exchange for (including any such
exchange pursuant to the exercise of a conversion right or privilege in
connection with which cash is paid in lieu of the issuance of fractional shares,
interests or scrip), or out of the Net Cash Proceeds of a substantially
concurrent issuance and sale (other than to a Subsidiary of the Company) of,
Qualified Equity Interests of the Company; or (b) the redemption, repayment,
defeasance, repurchase or other acquisition or retirement for value of any
Indebtedness of, or
-26-
guaranteed by, the Company on or after the Issue Date in exchange for, or out of
the Net Cash Proceeds of a substantially concurrent issuance and sale of,
Qualified Equity Interests of the Company.
"Real Property" means any interest in any real property or any
portion thereof whether owned in fee or leased or otherwise owned.
"Receivables" shall include all receivables arising out of the
sale or lease of Inventory or the provision of services in the ordinary course
of the Issuers' or any Guarantor's business, including all casino receivables
(markers, instruments, notes and checks) both undeposited and returned, hotel
receivables, credit card receivables, interest receivable and progressive
jackpot receivables (wide area progressives or multiple casinos linked
progressives).
"Record Date" for interest payable on any Interest Payment Date
(except a date for payment of default interest) means the March 1 or September 1
(whether or not a Business Day), as the case may be, immediately preceding such
Interest Payment Date.
"Redemption Date" when used with respect to any Note to be
redeemed means the date fixed for such redemption pursuant to this Indenture.
"Reference Period" with regard to any person means the four full
fiscal quarters (or such lesser period during which such person has been in
existence) ended immediately preceding any date upon which any determination is
to be made pursuant to the terms of the Notes or this Indenture.
"Refinancing Indebtedness" means Indebtedness or Disqualified
Equity Interests issued in exchange for, or the net proceeds from the issuance
and sale of which are used substantially concurrently to repay, redeem, defease,
refund, refinance, discharge or otherwise retire for value, in whole or in part,
or constituting an amendment, modification or supplement to, or a deferral or
renewal of (collectively, a "Refinancing"), any Indebtedness or Disqualified
Equity Interests that was permitted to be incurred under Section 4.08 (other
than Indebtedness described in clauses (a), (d), (e), (f) and (g) of the
definition of "Permitted Indebtedness") in each case a principal amount or, in
the case of Disqualified Equity Interests, liquidation preference, not to exceed
(after deduction of reasonable and customary fees and expenses incurred in
connection with the Refinancing) the lesser of
(i) the principal amount or, in the case of Disqualified
Equity Interests, liquidation preference of the Indebtedness or
Disqualified Equity Interests so refinanced (plus the amount of
required premium, if any, and reasonable expenses incurred in
connection therewith); and
(ii) if such Indebtedness being refinanced was issued with an
original issue discount, the accreted value thereof (as determined in
accordance with GAAP) at the time of such Refinancing (plus the amount
of required premium, if any, and reasonable expenses incurred in
connection therewith); provided that
(A) such Refinancing Indebtedness of any Subsidiary
shall only be used to refinance outstanding Indebtedness or
Disqualified Equity Interests of such Subsidiary;
-27-
(B) Refinancing Indebtedness shall (x) not have an
Average Life shorter than the Indebtedness or Disqualified Equity
Interests to be so refinanced at the time of such Refinancing and
(y) in all respects, be no less subordinated or junior, if
applicable, to the rights of Holders of the Notes than was the
Indebtedness or Disqualified Equity Interests to be so
refinanced;
(C) such Refinancing Indebtedness shall be secured
only by the property (if any) securing the Indebtedness to be so
refinanced; and
(D) such Refinancing Indebtedness shall have no
installment of principal (or redemption payment) scheduled to
come due earlier than the scheduled maturity of the corresponding
installment of principal of the Indebtedness or Disqualified
Equity Interests to be so refinanced which was scheduled to come
due prior to the Stated Maturity.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Issue Date, by and among the Company, TC Funding, the
Guarantors and the Initial Purchasers, as such agreement may be amended,
modified or supplemented from time to time relating to, among other things, a
registered exchange offer relating to the Notes and any similar registration
rights agreement entered into in connection with the issuance of any Additional
Notes.
"Regulation S" means Regulation S promulgated under the
Securities Act.
"Related Business" means the business conducted (or proposed to
be conducted) by Marina Associates or ▇▇▇▇▇ Indiana, Inc. as of the Issue Date
and any and all businesses that in the good faith judgment of the Board of
Directors of the Company are related businesses in Atlantic City, New Jersey or
Gary, Indiana or are related to the Permitted Business.
"Replacement Riverboat" means the replacement, in any manner, of
the Riverboat existing on the Issue Date including, without limitation, any
replacement of such Riverboat with a riverboat, vessel, barge or improvement on
real property, whether such riverboat, vessel, barge or improvement is acquired
or constructed and whether or not such riverboat, vessel, barge or improvement
is temporarily or permanently moored or affixed to any real property.
"Representative" means any agent on behalf of any lender,
creditor or group of creditors or lenders constituting the holders of the First
Priority Pari Passu Indebtedness or other Indebtedness permitted to be incurred
under Section 4.08, including Permitted Indebtedness.
"Required Regulatory Redemption" means a redemption by the
Issuers of any Holder's Notes pursuant to, and in accordance with, any order of
any Governmental Authority with appropriate jurisdiction and authority relating
to a Gaming License, or to the extent necessary in the reasonable, good faith
judgment of the Issuers to prevent the loss, failure to obtain or material
impairment or to secure the reinstatement of, any material Gaming License, where
such redemption or acquisition is required because the Holder or beneficial
owner of such Note is required to be found suitable or to otherwise qualify
under any gaming laws and is not found suitable or so qualified within a
reasonable period of time.
-28-
"Responsible Officer," when used with respect to the Trustee,
means any officer within the Corporate Trust Administration of the Trustee (or
any successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Definitive Note" means one or more Definitive Notes
bearing the Private Placement Legend.
"Restricted Global Note" means one or more Global Notes bearing
the Private Placement Legend.
"Restricted Investment" means, in one or a series of related
transactions, any Investment other than Permitted Investments.
"Restricted Notes" means Restricted Definitive Notes and
Restricted Global Notes.
"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
Subsidiary or parent of such person;
(b) any payment on account of the purchase, redemption or
other acquisition or retirement for value of Equity Interests of such
person or any Subsidiary or parent of such person;
(c) any purchase, redemption or other acquisition or
retirement for value or any payment in respect of any amendment of the
terms of or any defeasance of any Subordinated Indebtedness of, or
guaranteed by, such person, any parent of such person or any
Subsidiary prior to the scheduled maturity, any scheduled repayment of
principal, or scheduled sinking fund payment, as the case may be, of
such Subordinated Indebtedness (including any payment in respect of
any amendment of the terms of any such Subordinated Indebtedness,
which amendment is sought in connection with any such acquisition of
such Subordinated Indebtedness or seeks to shorten any such due date);
(d) in connection with the designation of a person as an
Unrestricted Subsidiary, a Restricted Payment shall be deemed to exist
in the amount provided in the definition of Unrestricted Subsidiary
contained herein; and
(e) any Restricted Investment by such person;
provided that the term "Restricted Payment" does not include (i) 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 Equity Interests of
such Issuer; or (ii) any dividend, distribution or other payment to the Company
or to any of its Subsidiaries or any Guarantor.
-29-
"Riverboat" means the gaming vessel "▇▇▇▇▇ Casino", official
number 1039617, and fixtures and equipment located thereon that is docked at
▇▇▇▇▇▇▇▇▇▇ Harbor, Gary, Indiana or any Replacement Riverboat.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"S&P" means Standard & Poor's Ratings Services or any successor
thereto.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means each security agreement substantially
in the form of Exhibit E attached hereto, as the same may be amended, amended
and restated, extended, renewed, supplemented or otherwise modified from time to
time in accordance with the terms hereof and thereof.
"Ship Mortgage" means each ship mortgage substantially in the
form of Exhibit F-3 attached hereto, as the same may be amended, amended and
restated, extended, renewed, supplemented or otherwise modified from time to
time in accordance with the terms hereof and thereof.
"Significant Subsidiary" shall have the meaning provided under
Regulation S-X of the Securities Act, as in effect on the Issue Date.
"Stated Maturity," when used with respect to any Note, means
September 15, 2010 and when used with respect to any other Indebtedness means
the dates specified in such other Indebtedness as the fixed date on which the
principal of such Indebtedness is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Issuers or
any Guarantor that is subordinated in right of payment to the Notes or any
Guarantees, respectively.
"Subsidiary" of any person means:
(i) a corporation a majority of whose Voting Stock 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) 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 have a majority ownership interest;
or
(iii) a partnership or limited liability company in which such
person or a Subsidiary of such person is, at the time, general partner
or a managing member and has a majority ownership interest.
-30-
Notwithstanding the foregoing, no Unrestricted Subsidiary shall
be considered a Subsidiary of the Company or any of its other Subsidiaries for
purposes of the Notes and this Indenture. Unless the context otherwise requires,
all references herein to "Subsidiaries" shall be to the direct and indirect to
Subsidiaries of the Company for purposes of the Notes and this Indenture.
"Survey" means a survey of any parcel of Real Property (and all
improvements thereon)
(1) prepared by a surveyor or engineer licensed to perform
surveys in the state or province in which such Real Property is
located;
(2) dated (or redated) not earlier than six months prior to
the date of delivery thereof (unless there shall have occurred within
six months prior to such date of delivery any exterior construction on
the site of such Real Property, in which event such survey shall be
dated (or redated) after the completion of such construction or if
such construction shall not have been completed as of such date of
delivery, not earlier than 20 days prior to such date of delivery);
(3) certified by the surveyor in a manner reasonably
acceptable to the title company providing title insurance in respect
of the Liens granted under the Mortgages; and
(4) complying in all respects with the minimum detail
requirements of the American Land Title Association, or local or
foreign equivalent, as such requirements are in effect on the date of
preparation of such survey, or that is otherwise reasonably acceptable
to the Trustee (giving consideration to the applicable transaction).
"Tax" or "Taxes" means (i) all federal, state, local or foreign
taxes, charges, fees, imposts, levies or other assessments, including, without
limitation, all net income, alternative minimum, gross receipts, capital, sales,
use, ad valorem, value added, transfer, franchise, profits, inventory, capital
stock, license, withholding, payroll, employment, social security, unemployment,
excise, severance, stamp, occupation, property and estimated taxes, customs
duties, fees, assessments and charges of any kind whatsoever, (ii) all interest,
penalties, fines, additions to tax or other additional amounts imposed by any
taxing authority in connection with any item described in clause (i) and (iii)
all transferee, successor, joint and several or contractual liability
(including, without limitation, liability pursuant to Treas. Reg. Section
1.1502-6 (or any similar state, local or foreign provision)) in respect of any
items described in clause (i) or (ii).
"Tax Amounts" with respect to any year means an amount no greater
than (a) the higher of (i) the product of (A) the taxable income of the Company
(computed as if the Company were an individual taxpayer) for such year as
determined in good faith by the Board of Directors of the Company and (B) the
Tax Percentage and (ii) the product of (A) the alternative minimum taxable
income attributable to the Company (computed as if the Company were an
individual taxpayer) for such year as determined in good faith by the Board of
Directors of the Company and (B) 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
-31-
(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. Any part of the Tax Amount not distributed in respect of a tax
period for which it is calculated shall be available for distribution in
subsequent tax periods.
"Tax Percentage" means the highest aggregate effective marginal
rate of federal, state and local income tax or, when applicable, alternative
minimum tax, to which any Member of the Company would be subject in the relevant
year of determination (as certified to the Trustee by a nationally recognized
tax accounting firm); provided that in no event shall the Tax Percentage be
greater than the sum of (x) the highest aggregate effective marginal rate of
federal, state, and local income tax or, when applicable, alternative minimum
tax, to which the Company would have been subject if it were a C corporation,
for federal income tax purposes, and (y) 5 percentage points. If any Member or
Upper Tier Owner of the Company is an S corporation, limited liability company
or similar pass-through entity for federal income tax purposes, the Tax
Percentage shall be computed based upon the tax rates applicable to the
shareholder or member of such Member or Upper Tier Owner, as the case may be.
"Tax Return" means all returns, declarations, reports, estimates,
information returns and statements required to be filed in respect of any Taxes.
"THCR" means ▇▇▇▇▇ Hotels & Casino Resorts, Inc., a Delaware
corporation.
"THCR Holdings" means ▇▇▇▇▇ Hotels & Casino Resorts Holdings,
L.P., a Delaware limited partnership.
"Total Indebtedness" means all Indebtedness other than
Indebtedness within the meaning of clause (d) of the definition of the term
"Indebtedness."
"Total Leverage Ratio" of any person on any Transaction Date
means the ratio, on a pro forma basis, of (a) the aggregate outstanding
principal amount of the Total Indebtedness on such Transaction Date to (b) the
aggregate amount of Consolidated EBITDA of such person attributable to
continuing operations and businesses (exclusive of amounts attributable to
operations and businesses permanently discontinued or disposed of) for the
Reference Period immediately preceding the Transaction Date; provided that, for
purposes of such calculation:
(i) any Asset Sales or Asset Acquisitions (including, without
limitation, any Asset Acquisition giving rise to the need to make such
calculations as a result of such person or one of its Subsidiaries
(including any person who becomes a Subsidiary as a result of the
Asset Acquisition) incurring, assuming or otherwise being liable for
Acquired Indebtedness and also, including any Consolidated EBITDA
(including any pro forma expense and cost reductions calculated on a
basis consistent with Regulation S-X promulgated under the Exchange
Act) attributable to the properties that are the subject of the Asset
Acquisition or Asset Sale during the Reference Period) occurring
during the Reference Period or any time subsequent to the last day of
the Reference Period and on or prior to the Transaction Date, as if
such Asset Sale or Asset Acquisition (including the incurrence or
assumption of any such Acquired Indebtedness) occurred on the first
day of the Reference Period. Further, if such person or any of
-32-
its Subsidiaries directly or indirectly guarantees Indebtedness of a
third person, the preceding sentence shall give effect to the
incurrence of such guaranteed Indebtedness as if such person or any
subsidiary of such person had directly incurred or otherwise assumed
such other Indebtedness that was so guaranteed;
(ii) transactions giving rise to the need to calculate the
Total Leverage Ratio shall be assumed to have occurred on the first
day of the Reference Period; and
(iii) the incurrence of any Indebtedness or issuance of any
Disqualified Equity Interests during the Reference Period or
subsequent to the Reference Period and on or prior to the Transaction
Date (and the application of the proceeds therefrom to the extent used
to refinance or retire other Indebtedness) shall be assumed to have
occurred on the first day of such Reference Period.
"▇▇▇▇▇", used alone, means ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
"▇▇▇▇▇ Indiana Property" means, collectively, the Riverboat and
hotel complex currently known as the "▇▇▇▇▇ Casino Hotel" in Gary, Indiana and
ancillary structures and facilities located on the premises and all furniture,
fixtures and equipment at any time contained therein and all Equity Interests in
any joint ventures related thereto (to the extent owned or leased by ▇▇▇▇▇
Indiana, Inc.).
"▇▇▇▇▇ ▇▇▇▇▇▇ Property" means, collectively, the casino and hotel
complex currently known as the "▇▇▇▇▇ ▇▇▇▇▇▇" in Atlantic City, New Jersey and
ancillary structures and facilities located on the premises and all furniture,
fixtures and equipment at any time contained therein.
"▇▇▇▇▇ 29 Casino" means, collectively, the casino complex
currently known as the "▇▇▇▇▇ 29 Casino" in Coachella, California and any
related ancillary structures and facilities existing on the Issue Date or
thereafter.
"▇▇▇▇▇ 29 Management Agreement" means the Amended and Restated
Gaming Facility Management Agreement dated as of March 28, 2002 between The
Twenty-Nine Palms Band of Luiseno Mission Indians of California, Twenty-Nine
Palms Enterprises Corporation and ▇▇▇▇▇ 29 Services, as in effect on the Issue
Date (and any renewals or replacements thereof or amendments thereto so long as
the terms of such renewals, replacements or amendments are not less favorable to
the Holders in any material respect taken as a whole).
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of
1939, as amended.
"Trust Monies" means all cash and Cash Equivalents received by
the Trustee or the Collateral Agent:
(a) upon the release of Collateral from the Lien of this
Indenture or the Collateral Documents, including all Net Asset Sale
Proceeds and Net Loss Proceeds;
(b) pursuant to the Collateral Documents;
-33-
(c) as proceeds of any sale or other disposition of all or
any part of the Collateral by or on behalf of the Trustee or any
collection, recovery, receipt, appropriation or other realization of
or from all or any part of the Collateral pursuant to this Indenture
or any of the Collateral Documents or otherwise; or
(d) for application as provided in the relevant provisions of
this Indenture or any Collateral Document or which disposition is not
otherwise specifically provided for in this Indenture or in any
Collateral Document;
provided, however, that Trust Monies shall in no event include any property
deposited with the Trustee for any redemption, legal defeasance or covenant
defeasance of Notes, for the satisfaction and discharge of this Indenture or to
pay the purchase price of Notes pursuant to a Change of Control Offer, a
Residual Asset Sale Offer, a Residual Event of Loss Offer or an Excess Cash Flow
Offer.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"UCC" means the Uniform Commercial Code as in effect on the date
hereof and as it may hereafter be in effect from time to time in the relevant
states.
"Unrestricted Definitive Note" means one or more Definitive Notes
that do not bear and are not required to bear the Private Placement Legend.
"Unrestricted Global Note" means a permanent Global Note that
does not bear the Private Placement Legend.
"Unrestricted Notes" means Unrestricted Global Notes and
Unrestricted Definitive Notes.
"Unrestricted Subsidiary" means any Subsidiary of the Company
that, at the time of determination, shall be an Unrestricted Subsidiary (as
designated by the Company, as provided below); provided that such Subsidiary
does not and shall not engage, to any substantial extent, in any line or lines
of business activity other than a Related Business. The Company may designate
any person (other than Marina Associates, ▇▇▇▇▇ Indiana, Inc., TC Funding and
any direct or indirect holder of Equity Interest therein) to be an Unrestricted
Subsidiary if:
(a) no Default or Event of Default is existing or shall occur
as a consequence thereof;
(b) either (x) such Subsidiary, at the time of designation
thereof, has no property, (y) such Subsidiary is designated an
"Unrestricted Subsidiary" at the time of Acquisition by the Company,
in the case of Subsidiaries acquired after the Issue Date or (z)
immediately after giving effect to such designation, on a pro forma
basis, the Company could incur at least $1.00 of additional
Indebtedness under the Total Leverage Ratio test set forth in Section
4.08(a); and
-34-
(c) such Subsidiary does not own any Equity Interests in, or
own or hold any Lien on any property of, the Company or any other
Subsidiary (excluding other Unrestricted Subsidiaries).
Any such designation also constitutes a Restricted Payment (to
the extent such amount is in excess of $0.00) in an amount equal to the sum of
(x) the net assets of such Subsidiary at the time of the designation, unless in
the case of this clause (x) the designation is made pursuant to clause (b)(y) of
the first sentence of this definition, in which case the amount of consideration
paid by the Company and its Subsidiaries to effect such Acquisition (excluding
Qualified Equity Interests of THCR issued in connection therewith) shall be the
amount for purposes of this clause (x), and (y) the maximum amount of Guaranteed
Debt of the Company and its Subsidiaries in respect of the designated Subsidiary
which is to be outstanding immediately after such designation, in each case for
purposes of Section 4.07. Subject to the foregoing, the Company may designate
any Unrestricted Subsidiary to be a Subsidiary; provided that (i) no Default or
Event of Default is existing or shall occur as a consequence thereof and (ii)
immediately after giving effect to such designation, on a pro forma basis, the
Company could incur at least $1.00 of Indebtedness under the Total Leverage
Ratio test set forth in Section 4.08(a). Each such designation shall be
evidenced by filing with the Trustee a certified copy of the resolution giving
effect to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing conditions.
"Upper Tier Owner" means (i) if a Member is an S corporation,
limited liability company or similar pass-through entity for federal income tax
purposes, any shareholder or member of such Member and (ii) if any such
shareholder or member referred to in clause (i) above is an S corporation,
limited liability company or similar pass-through entity for federal income tax
purposes, any shareholder or member of such person.
"Voting Stock" with respect to any person means all classes of
Equity Interests of such person then outstanding and normally entitled to vote
in elections of directors or similar governing body of such person.
"Wholly-Owned Subsidiary" means a Subsidiary all the Equity
Interests of which are owned by the Company or another Wholly-Owned Subsidiary
of the Company (other than in the case of a Subsidiary that is incorporated in a
jurisdiction other than a State in the United States or the District of
Columbia, directors' qualifying shares or an immaterial amount of shares
required to be owned by other persons pursuant to applicable law).
SECTION 1.02. Other Definitions.
Defined in
Term Section
---- ----------
"Access Intercreditor Agreement"............. 10.12
"Agent Members".............................. 2.15
"Asset Sale Offer"........................... 4.11
"Asset Sale Offer Amount".................... 4.11
"Asset Sale Offer Period".................... 4.11
-35-
Defined in
Term Section
---- ----------
"Asset Sale Purchase Date"................... 4.11
"Authentication Order"....................... 2.02
"Benefited Party"............................ 12.01
"Change of Control".......................... 4.14
"Change of Control Offer".................... 4.14
"Change of Control Offer Period"............. 4.14
"Change of Control Purchase Date"............ 4.14
"Change of Control Purchase Price"........... 4.14
"Covenant Defeasance"........................ 8.04
"Event of Default"........................... 6.01
"Event of Loss Offer"........................ 4.16
"Event of Loss Offer Amount"................. 4.16
"Event of Loss Offer Period"................. 4.16
"Event of Loss Purchase Date"................ 4.16
"Excess Cash Flow Offer Date"................ 4.25
"Excess Cash Flow Offer Notice".............. 4.25
"Excess Loss Proceeds"....................... 4.16
"Excess Loss Proceeds Payment Date".......... 4.16
"Excess Proceeds"............................ 4.11
"First Half Excess Cash Flow Offer".......... 4.25
"Full Fiscal Year Excess Cash Flow Offer".... 4.25
"Global Notes"............................... 2.01
"Global Note Legend"......................... 2.17
"Guarantee".................................. 12.01
"Guarantee Obligations"...................... 12.01
"incur"...................................... 4.08
"Incurrence Date"............................ 4.08
"Interest Rate Test Date".................... 4.01
"Issuers' Obligations"....................... 4.01
"Investment Company Act"..................... 4.24
"Legal Defeasance"........................... 8.03
"Material Excess Proceeds"................... 4.11
"Ordinary Excess Proceeds"................... 4.11
"Paying Agent"............................... 2.03
"Payment Default"............................ 6.01
"Private Placement Legend"................... 2.17
"Registrar".................................. 2.03
"Regulation S Global Note"................... 2.01
"Released Collateral"........................ 10.05
"Released Trust Monies"...................... 11.04
"Replacement Assets"......................... 4.11
"Required Filing Date"....................... 4.03
"Required Regulatory Redemption"............. 3.09
-36-
Defined in
Term Section
---- ----------
"Resale Restriction Termination Date"........ 2.16
"Residual Asset Sale Offer".................. 4.11
"Residual Event of Loss Offer"............... 4.16
"Residual Excess Loss Proceeds".............. 4.16
"Residual Excess Proceeds"................... 4.11
"Residual Material Excess Proceeds".......... 4.11
"Residual Ordinary Excess Proceeds".......... 4.11
"Rule 144A Global Note"...................... 2.01
"Subject Property"........................... 4.16
"Surviving Entity"........................... 5.01
"Surviving Guarantor Entity"................. 12.03
"Transaction Date"........................... 1.01
"Unused Capex Reserve Amount"................ 11.05
"Valuation Date"............................. 10.05
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
and
"obligor" on the Notes means the Company and any successor
obligor upon the Notes.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them.
SECTION 1.04. Rules of Construction.
Unless the context otherwise requires,
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
-37-
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) provisions apply to successive events and transactions;
(6) references to sections of or rules under the Securities
Act shall be deemed to include substitute, replacement or successor
sections or rules adopted by the SEC from time to time; and
(7) reference to "subject to the terms of the Intercreditor
Agreements" or words of similar meaning shall have effect if the
Intercreditor Agreement is then in effect.
ARTICLE 2
THE NOTES
SECTION 2.01. Form and Dating.
(a) General. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange
rules or usage. Each Note shall be dated the date of its authentication. Other
than PIK Notes, which may be in any denomination that is a whole dollar amount,
the Notes shall be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute,
and are hereby expressly made, a part of this Indenture and the Issuers, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.
(b) Global Notes. The Notes shall be issued initially in the
form of two or more permanent global Notes (the "Global Notes"). Notes offered
and sold (i) in reliance on Rule 144A shall be issued initially in the form of
one or more permanent Global Notes in registered form, substantially in the form
set forth in Exhibit A (the "Rule 144A Global Note") and (ii) in offshore
transactions in reliance on Regulation S shall be issued initially in the form
of one or more permanent global Notes in registered form, substantially in the
form set forth in Exhibit A (the "Regulation S Global Note"). Global Notes shall
be substantially in the form of Exhibit A attached hereto (including the Global
Note Legend). Definitive Notes shall be substantially in the form of Exhibit A
attached hereto (but without the Global Note Legend). Each Global Note shall
represent such of the outstanding Notes as shall be specified therein and each
shall provide that it shall represent the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Notes represented
-38-
thereby shall be made by the Trustee or the Note Custodian, at the direction of
the Trustee, in accordance with instructions given by the Holder thereof as
required by Section 2.06 hereof.
(c) Euroclear and Clearstream Procedures Applicable. The
provisions of the "Operating Procedures of the Euroclear System" and "Terms and
Conditions Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream" and "Customer Handbook" of Clearstream shall be applicable to
transfers of beneficial interests in the Regulation S Global Notes that are held
by Participants through Euroclear or Clearstream.
SECTION 2.02. Execution and Authentication.
One Officer shall sign the Notes for each of the Issuers by
manual or facsimile signature. If an Officer whose signature is on a Note no
longer holds that office at the time a Note is authenticated, the Note shall
nevertheless be valid. A Note shall not be valid until authenticated by the
manual or facsimile signature of the Trustee. The signature shall be conclusive
evidence that the Note has been authenticated under this Indenture. The Trustee
shall, upon a written order of the Company signed by an Officer (an
"Authentication Order"), authenticate (a) Notes for original issue up to the
aggregate principal amount of $65,000,000 and (b) on each Interest Payment Date,
any PIK Notes required to be issued pursuant to Section 1 of the Notes. Subject
to compliance with Section 4.08 and Section 4.09, the Trustee may from time to
time authenticate Additional Notes for issuance upon receipt of an
Authentication Order in the aggregate principal amount specified in such
Authentication Order. In addition, upon receipt of an Authentication Order, the
Trustee shall authenticate an additional series of Notes in an aggregate
principal amount not to exceed the principal amount of the then outstanding
Notes for issuance in exchange for all Notes previously issued pursuant to an
Exchange Offer registered under the Securities Act or pursuant to a Private
Exchange. The Trustee may appoint an authenticating agent acceptable to the
Issuers to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Issuers.
SECTION 2.03. Registrar and Paying Agent.
The Issuers shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Issuers may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Issuers may change any
Paying Agent or Registrar without notice to any Holder. The Issuers shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Issuers fail to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar. The Issuers initially
appoint The Depository Trust Company to act as Depositary with respect to the
Global Notes. The Issuers initially appoint the Trustee to act as the Registrar
and Paying Agent.
-39-
SECTION 2.04. Paying Agent to Hold Money in Trust.
The Issuers shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal, premium or Additional Interest, if any, or interest on the
Notes, and shall notify the Trustee of any default by the Issuers in making any
such payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Issuers at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Issuers or a
Subsidiary) shall have no further liability for the money. If the Issuers or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Issuers, the
Trustee shall serve as Paying Agent for the Notes.
SECTION 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Issuers shall furnish to the Trustee at least seven
Business Days before each Interest Payment Date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders and the
Issuers shall otherwise comply with TIA Section 312(a).
SECTION 2.06. Transfer and Exchange.
Subject to the provisions of Sections 2.15 and 2.16, when Notes
are presented to the Registrar or a co-Registrar with a request to register the
transfer of such Notes or to exchange such Notes for an equal principal amount
of Notes of other authorized denominations of the same series, the Registrar or
co-Registrar shall register the transfer or make the exchange as requested if
its requirements for such transaction are met; provided, however, that the Notes
presented or surrendered for registration of transfer or exchange shall be duly
endorsed or accompanied by a written instrument of transfer in form satisfactory
to the Issuers and the Registrar or co-Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing. To permit registrations of
transfer and exchanges, the Issuers shall execute and the Trustee shall
authenticate Notes at the Registrar's or co-Registrar's request. No service
charge shall be made for any registration of transfer or exchange, but the
Issuers may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge in connection therewith payable by the transferor of
such Notes (other than any such transfer taxes or similar governmental charge
payable upon exchanges or transfers pursuant to Sections 2.10, 3.06, 4.11, 4.14,
4.16, 4.25 or 8.07, in which event the Issuers shall be responsible for the
payment of such taxes).
The Issuers shall not be required to register the transfer of or
exchange of any Note (i) during a period beginning at the opening of 15 Business
Days before the mailing of a notice of redemption of Notes and ending at the
close of business on the day of such mailing and (ii) selected for redemption in
whole or in part pursuant to Article 3, except the unredeemed portion of any
Note being redeemed in part.
-40-
Any Holder of a Global Note shall, by acceptance of such Global
Note, agree that transfers of beneficial interests in such Global Notes may be
effected only through a book entry system maintained by the Holder of such
Global Note (or its agent), and that ownership of a beneficial interest in the
Note shall be required to be reflected in a book entry.
SECTION 2.07. Replacement Notes.
If a mutilated Note is surrendered to the Trustee or if the
Holder presents evidence to the satisfaction of the Issuers and the Trustee that
the Note has been lost, destroyed or wrongfully taken, the Issuers shall issue
and the Trustee shall authenticate a replacement Note. An indemnity bond may be
required by the Issuers or the Trustee that is 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 Note is replaced. In every case of
destruction, loss or theft, the applicant shall also furnish to the Issuers and
to the Trustee evidence to their satisfaction of the destruction, loss or the
theft of such Note and the ownership thereof. Each of the Issuers and the
Trustee may charge for its expenses in replacing a Note. In the event any such
mutilated, lost, destroyed or wrongfully taken Note has become due and payable,
the Issuers in their discretion may pay such Note instead of issuing a new Note
in replacement thereof. The provisions of this Section 2.07 are exclusive and
shall preclude (to the extent lawful) all other rights and remedies with respect
to replacement or payment of mutilated, lost, destroyed or wrongfully taken
Notes.
Every replacement Note is an additional Obligation of the
Issuers.
SECTION 2.08. Outstanding Notes.
Notes outstanding at any time are all Notes authenticated by the
Trustee except for those cancelled by it, those delivered to it for
cancellation, and those described in this Section 2.08 as not outstanding.
If a Note is replaced pursuant to Section 2.07 (other than a
mutilated Note surrendered for replacement), it ceases to be outstanding until
the Issuers and the Trustee receive proof satisfactory to each of them that the
replaced Note is held by a protected purchaser. A mutilated Note ceases to be
outstanding upon surrender of such Note and replacement thereof pursuant to
Section 2.07.
If on a Redemption Date or the Stated Maturity, the Paying Agent
holds U.S. legal tender sufficient to pay all of the principal and interest due
on the Notes payable on that date and is not prohibited from paying such money
to the Holders thereof pursuant to the terms of this Indenture, then on and
after that date such Notes cease to be outstanding and interest on them ceases
to accrue.
SECTION 2.09. Treasury Notes.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver, consent or notice,
Notes owned by the Issuers or any of their Affiliates shall be considered as
though they are not outstanding, except that for the purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Notes which a Responsible Officer actually knows are so owned
shall be so considered. The Issuers
-41-
shall notify the Trustee, in writing, when it or any of its Affiliates
repurchases or otherwise acquires Notes, of the aggregate principal amount of
such Notes so repurchased or otherwise acquired.
SECTION 2.10. Temporary Notes.
Until definitive Notes are ready for delivery, the Issuers may
prepare and the Trustee shall authenticate temporary Notes upon receipt of a
written order of the Issuers in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of temporary Notes to be
authenticated and the date on which the temporary Notes are to be authenticated.
Temporary Notes shall be substantially in the form of Definitive Notes but may
have variations that the Issuers consider appropriate for temporary Notes.
Without unreasonable delay, the Issuers shall prepare and the Trustee shall
authenticate upon receipt of an Authentication Order pursuant to Section 2.02
Definitive Notes in exchange for temporary Notes.
SECTION 2.11. Cancellation.
The Issuers at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee, or at the direction of the Trustee, the Registrar or the Paying
Agent, and no one else, shall cancel and, at the written direction of the
Issuers, dispose of and deliver evidence of such disposal of all Notes
surrendered for registration of transfer, exchange, payment or cancellation.
Subject to Section 2.07, the Issuers may not issue new Notes to replace Notes
that it has paid or delivered to the Trustee for cancellation. If the Issuers
shall acquire any of the Notes, such acquisition shall not operate as a
redemption or satisfaction of the Indebtedness represented by such Notes unless
and until the same are surrendered to the Trustee for cancellation pursuant to
this Section 2.11.
SECTION 2.12. Defaulted Interest.
If the Issuers default in a payment of interest on the Notes,
they shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest to the Persons who are Holders on a subsequent
special Record Date, which date shall be the fifteenth day next preceding the
date fixed by the Issuers for the payment of defaulted interest or the next
succeeding Business Day if such date is not a Business Day. At least 15 days
before the subsequent special Record Date, the Issuers shall mail to each
Holder, as of a recent date selected by the Issuers, with a copy to the Trustee,
a notice that states the subsequent special Record Date, the payment date and
the amount of defaulted interest, and interest payable on such defaulted
interest, if any, to be paid.
Notwithstanding the foregoing, any interest which is paid prior
to the expiration of the 30-day period set forth in Section 6.01(1) shall be
paid to Holders as of the Record Date for the Interest Payment Date for which
interest has not been paid.
SECTION 2.13. Deposit of Monies.
Prior to 10:00 a.m., New York City time, on each Interest Payment
Date, Redemption Date, Change of Control Purchase Date and Stated Maturity, the
Company shall have deposited with the Paying Agent in immediately available
funds U.S. legal tender sufficient to make payments, if any,
-42-
due on such Interest Payment Date, Redemption Date, Change of Control Purchase
Date or Stated Maturity, as the case may be, in a timely manner which permits
the Trustee to remit payment to the Holders on such Interest Payment Date,
Redemption Date, Change of Control Purchase Date or Stated Maturity, as the case
may be. The principal and interest on Global Notes shall be payable to the
Depositary or its nominee, as the case may be, as the sole registered owner and
the sole Holder of the Global Notes represented thereby. The principal and
interest on Notes in certificated form shall be payable at the office of the
Paying Agent.
SECTION 2.14. CUSIP Number.
The Issuers in issuing the Notes may use one or more "CUSIP"
numbers, and if so, the Trustee shall use such CUSIP numbers in notices of
redemption or exchange as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP numbers printed in the notice or on the Notes, and that
reliance may be placed only on the other identification numbers printed on the
Notes. The Issuers shall promptly notify the Trustee of any change in the CUSIP
number.
SECTION 2.15. Book-Entry Provisions for Global Notes.
(a) The Global Notes initially shall (i) be registered in the
name of the Depositary or the nominee of such Depositary, (ii) be delivered to
the Trustee as custodian for such Depositary and (iii) bear legends as set forth
in Section 2.17.
Members of, or Participants in, the Depositary ("Agent Members")
shall have no rights under this Indenture with respect to any Global Note held
on their behalf by the Depositary or under the Global Note, and the Depositary
may be treated by the Company, the Trustee and any Agent of the Company or the
Trustee as the absolute owner of the Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any Agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or impair, as between the Depositary and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder.
(b) Interests of beneficial owners in the Global Notes may be
transferred or exchanged for Definitive Notes in accordance with the rules and
procedures of the Depositary and the provisions of Section 2.16. In addition,
Definitive Notes shall be transferred to all beneficial owners in exchange for
their beneficial interests in Global Notes if (i) the Depositary (x) notifies
the Company that it is unwilling or unable to continue as Depositary for any
Global Note or (y) has ceased to be a clearing company registered under the
Exchange Act and, in each case, a successor depositary is not appointed by the
Company within 90 days of such notice or (ii) a Default or an Event of Default
has occurred and is continuing and the Registrar has received a written request
from the Depositary to issue Definitive Notes.
(c) In connection with the transfer of Global Notes as an
entirety to beneficial owners pursuant to paragraph (b), the Global Notes shall
be deemed to be surrendered to the Trustee for cancellation, and the Company
shall execute, and the Trustee shall, upon receipt of an Authentication Order,
authenticate and deliver, to each beneficial owner identified by the Depositary
in writing in
-43-
exchange for its beneficial interest in the Global Notes, an equal aggregate
principal amount of Definitive Notes of authorized denominations.
(d) Any Definitive Note constituting a Restricted Note
delivered in exchange for an interest in a Global Note pursuant to paragraph (b)
or (c) shall, except as otherwise provided by Section 2.16, bear the Private
Placement Legend.
(e) The Holder of any Global Note may grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.
SECTION 2.16. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Definitive Notes. When
Definitive Notes are presented to the Registrar or co-Registrar with a request:
(i) to register the transfer of the Definitive Notes; or
(ii) to exchange such Definitive Notes for an equal principal
amount of Definitive Notes of other authorized denominations,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if the requirements under this Indenture as set forth in this
Section 2.16 for such transactions are met; provided, however, that the
Definitive Notes presented or surrendered for registration of transfer or
exchange:
(I) shall be duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Registrar or
co-Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing; and
(II) in the case of Definitive Notes the offer and sale of
which have not been registered under the Securities Act and are
presented for transfer or exchange prior to (x) the date which is two
years after the later of the date of original issue and the last date
on which the Company or any Affiliate of the Company was the owner of
such Note or any predecessor thereto and (y) such later date, if any,
as may be required by any subsequent change in applicable law (the
"Resale Restriction Termination Date"), such Definitive Notes shall be
accompanied, in the sole discretion of the Company, by the following
additional information and documents, as applicable:
(A) if such Definitive Note is being delivered to the
Registrar or co-Registrar by a Holder for registration in the
name of such Holder, without transfer, a certification to that
effect (substantially in the form of Exhibit B hereto); or
(B) if such Definitive Note is being transferred to a
Qualified Institutional Buyer in accordance with Rule 144A, a
certification to that effect (substantially in the form of
Exhibit B hereto); or
-44-
(C) if such Definitive Note is being transferred in
reliance on Regulation S, delivery of a certification to that
effect (substantially in the form of Exhibit B hereto) and a
transferor certificate for Regulation S transfers substantially
in the form of Exhibit D hereto; or
(D) if such Definitive Note is being transferred to an
Institutional Accredited Investor, delivery of certification to
that effect (substantially in the form of Exhibit B hereto),
certificates of the transferee in substantially the form of
Exhibit C and, at the option of the Company, an Opinion of
Counsel reasonably satisfactory to the Company to the effect that
such transfer is in compliance with the Securities Act; or
(E) if such Definitive Note is being transferred in
reliance on Rule 144 under the Securities Act, delivery of a
certification to that effect substantially in the form of Exhibit
B hereto and, at the option of the Company, an Opinion of Counsel
reasonably satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(F) if such Definitive Note is being transferred in
reliance on another exemption from the registration requirements
of the Securities Act, a certification to that effect
(substantially in the form of Exhibit B hereto) and, at the
option of the Company, an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such transfer is
in compliance with the Securities Act.
(b) Restrictions on Transfer of a Definitive Note for a
Beneficial Interest in a Global Note. A Definitive Note may not be exchanged for
a beneficial interest in a Global Note except upon satisfaction of the
requirements set forth below. Upon receipt by the Registrar or co-Registrar of a
Definitive Note, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Registrar or co-Registrar, together with:
(A) in the case of Definitive Notes the offer and sale of
which have not been registered under the Securities Act and which are
presented for transfer prior to the Resale Restriction Termination
Date, certification, substantially in the form of Exhibit B hereto,
that such Definitive Note is being transferred (I) to a Qualified
Institutional Buyer or (II) in an offshore transaction in reliance on
Regulation S (and, in the case of this clause II, the Company shall
have received a transferor certificate for Regulation S transfers
substantially in the form of Exhibit D hereto and, at the option of
the Company, an Opinion of Counsel reasonably satisfactory to the
Company to the effect that such transaction is in compliance with the
Securities Act); and
(B) written instructions from the Holder thereof directing
the Registrar or co-Registrar to make, or to direct the Depositary to
make, an endorsement on the applicable Global Note to reflect an
increase in the aggregate amount of the Notes represented by the
Global Note,
then the Registrar or co-Registrar shall cancel such Definitive Note and cause,
or direct the Depositary to cause, in accordance with the standing instructions
and procedures existing between the Depositary
-45-
and the Registrar or co-Registrar, the principal amount of Notes represented by
the applicable Global Note to be increased accordingly. If no Global Note
representing Notes held by Qualified Institutional Buyers or Persons acquiring
Notes in offshore transactions in reliance on Regulation S, as the case may be,
is then outstanding, the Company shall issue and the Trustee shall, upon receipt
of an Authentication Order in accordance with Section 2.02, authenticate such a
Global Note in the appropriate principal amount.
(c) Transfer and Exchange of Global Notes. The transfer and
exchange of Global Notes or beneficial interests therein shall be effected
through the Depositary in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depositary
therefor. Upon receipt by the Registrar or co-Registrar of written instructions,
or such other instruction as is customary for the Depositary, from the
Depositary or its nominee, requesting the registration of transfer of an
interest in a Rule 144A Global Note or Regulation S Global Note, as the case may
be, to another type of Global Note, together with the applicable Global Notes
(or, if the applicable type of Global Note required to represent the interest as
requested to be transferred is not then outstanding, only the Global Note
representing the interest being transferred), the Registrar or Co-Registrar
shall cancel such Global Notes (or Global Note) and the Company shall issue and
the Trustee shall, upon receipt of an Authentication Order in accordance with
Section 2.02, authenticate new Global Notes of the types so cancelled (or the
type so cancelled and applicable type required to represent the interest as
requested to be transferred) reflecting the applicable increase and decrease of
the principal amount of Notes represented by such types of Global Notes, giving
effect to such transfer. If the applicable type of Global Note required to
represent the interest as requested to be transferred is not outstanding at the
time of such request, the Company shall issue and the Trustee shall, upon
written instructions from the Company in accordance with Section 2.02,
authenticate a new Global Note of such type in principal amount equal to the
principal amount of the interest requested to be transferred.
(d) Transfer of a Beneficial Interest in a Global Note for a
Definitive Note. (i) Any Person having a beneficial interest in a Global Note
may upon request exchange such beneficial interest for a Definitive Note. Upon
receipt by the Registrar or co-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
Note and upon receipt by the Trustee 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 containing registration
instructions and, in the case of any such transfer or exchange of a beneficial
interest in Notes the offer and sale of which have not been registered under the
Securities Act and which Notes are presented for transfer or exchange prior to
the Resale Restriction Termination Date, the following additional information
and documents:
(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 (substantially in the
form of Exhibit B hereto); or
(B) if such beneficial interest is being transferred to a
Qualified Institutional Buyer in accordance with Rule l44A, a
certification to that effect (substantially in the form of Exhibit B
hereto); or
-46-
(C) if such beneficial interest is being transferred in
reliance on Regulation S, delivery of a certification to that effect
(substantially in the form of Exhibit B hereto) and a transferor
certificate for Regulation S transfers substantially in the form of
Exhibit D hereto; or
(D) if such beneficial interest is being transferred to an
Institutional Accredited Investor, delivery of certification
(substantially in the form of Exhibit B hereto), a certificate of the
transferee in substantially the form of Exhibit C and, at the option
of the Company, an Opinion of Counsel reasonably satisfactory to the
Company to the effect that such transfer is in compliance with the
Securities Act; or
(E) if such beneficial interest is being transferred in
reliance on Rule 144 under the Securities Act, delivery of a
certification to that effect (substantially in the form of Exhibit B
hereto) and, at the option of the Company, an Opinion of Counsel
reasonably satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(F) if such beneficial interest is being transferred in
reliance on another exemption from the registration requirements of
the Securities Act, a certification to that effect (substantially in
the form of Exhibit B hereto) and, at the option of the Company, an
Opinion of Counsel reasonably satisfactory to the Company to the
effect that such transfer is in compliance with the Securities Act,
then the Registrar or co-Registrar shall cause, in accordance with the standing
instructions and procedures existing between the Depositary and the Registrar or
co-Registrar, the aggregate principal amount of the applicable Global Note to be
reduced and, following such reduction, the Company shall execute and, upon
receipt of an Authentication Order in accordance with Section 2.02, the Trustee
shall authenticate and deliver to the transferee a Definitive Note in the
appropriate principal amount.
(ii) Definitive Notes issued in exchange for a beneficial
interest in a Global Note pursuant to this Section 2.16(d) shall be registered
in such names and in such authorized denominations as the Depositary, pursuant
to instructions from its direct or indirect Participants or otherwise, shall
instruct the Registrar or co-Registrar in writing. The Registrar or co-Registrar
shall deliver such Definitive Notes to the Persons in whose names such
Definitive Notes are so registered.
(e) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provisions of this Indenture, a Global Note may not be
transferred as a whole except by the 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) Private Placement Legend. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Registrar or
co-Registrar shall deliver Notes that do not bear the Private Placement Legend.
Upon the transfer, exchange or replacement of Notes bearing the Private
Placement Legend, the Registrar or co-Registrar shall deliver only Notes that
bear the Private Placement Legend unless, and the Trustee is hereby authorized
to deliver Notes without the Private Placement Legend if (i) the Resale
Restriction Termination Date shall have occurred, (ii) there
-47-
is delivered to the Trustee an Opinion of Counsel reasonably satisfactory to the
Company and the Trustee to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with the
provisions of the Securities Act or (iii) such Note has been sold pursuant to an
effective registration statement under the Securities Act.
(g) General. By its acceptance of any Note bearing the
Private Placement Legend, each Holder of such a Note acknowledges the
restrictions on transfer of such Note set forth in this Indenture and in the
Private Placement Legend and agrees that it shall transfer such Note only as
provided in this Indenture.
The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Note (including any transfers between or among Agent Members or
beneficial owners of interest in any Global Note) other than to require delivery
of such certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by the terms of, this
Indenture, and to examine the same to determine substantial compliance as to
form with the express requirements hereof.
The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 2.15 or this Section
2.16. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Registrar.
SECTION 2.17. Restrictive Legends.
Each Global Note and Definitive Note that constitutes a
Restricted Note shall bear the following legend (the "Private Placement Legend")
on the face thereof until the Resale Restriction Termination Date, unless
otherwise agreed to by the Company and the Holder thereof:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER
THE SECURITIES ACT, OR (C) IT IS AN ACCREDITED INVESTOR (AS DEFINED IN
RULE 501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES ACT) (AN
"ACCREDITED INVESTOR"), (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS
AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUERS OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S.
BROKER-
-48-
DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED
FROM THE TRUSTEE FOR THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO THE EXEMPTION FROM THE
REGISTRATION PROVIDED BY RULE 144A UNDER THE SECURITIES ACT (IF
AVAILABLE), (F) 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), OR (G) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3)
AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER
THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS
AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE
TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Each Global Note shall also bear the following legend (the
"Global Note Legend"):
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY. THIS NOTE IS
NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A
TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, AND TRANSFERS OF INTERESTS IN THIS GLOBAL NOTE
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN SECTION 2.16 OF THE INDENTURE.
-49-
SECTION 2.18. Issuance of PIK Notes and Additional Notes.
The Company shall from time to time issue PIK Notes under this
Indenture to Holders of Notes as Pay-in-Kind Interest as required by Section 1
of the Notes. In addition, subject to compliance with Sections 4.08 and 4.09
hereof, the Company shall be entitled to issue Additional Notes under this
Indenture that shall have identical terms to the Initial Notes, other than with
respect to the date of issuance, issue price and amount of interest payable on
the first Interest Payment Date applicable thereto (and, if such Additional
Notes shall be issued in the form of Restricted Notes, other than with respect
to transfer restrictions, a Registration Rights Agreement and Additional
Interest with respect thereto). The Initial Notes and any Additional Notes
(including PIK Notes) shall be treated as a single class for all purposes under
this Indenture.
With respect to any Additional Notes (but not any PIK Notes), the
Company shall set forth in or pursuant to a resolution of its Board of Directors
and in a Company Order, a copy of each of which shall be delivered to the
Trustee, the following information:
(1) the aggregate principal amount of such Additional Notes
to be authenticated and delivered pursuant to this Indenture;
(2) the issue price, the issue date, the CUSIP number of such
Additional Notes, the first Interest Payment Date and the amount of
interest payable on such first Interest Payment Date applicable
thereto and the date from which interest shall accrue; and
(3) whether such Additional Notes shall be Restricted Notes
or shall be Unrestricted Notes.
SECTION 2.19. Designation.
Any Additional Notes issued under this Indenture will rank pari
passu in right of payment with the Initial Notes.
ARTICLE 3
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 30 days (unless a shorter period is acceptable to the Trustee) but not
more than 60 days before a Redemption Date, an Officers' Certificate setting
forth (i) the clause of this Indenture pursuant to which the redemption shall
occur, (ii) the Redemption Date, (iii) the principal amount of Notes to be
redeemed, (iv) the amount of any interest (including any Additional Interest)
and (v) the redemption price.
-50-
In the event of a Required Regulatory Redemption, the Company
shall notify the Trustee as soon as practicable but in any event before notice
of the Required Regulatory Redemption is to be mailed to any Holder (unless a
shorter notice shall be satisfactory to the Trustee).
SECTION 3.02. Selection of Notes to Be Redeemed.
In the event of a redemption of less than all of the Notes issued
pursuant to this Indenture (other than a Required Regulatory Redemption), Notes
will be chosen for redemption by the Trustee as provided in this Indenture, but,
in general, pro rata or by lot. On and after the redemption date, interest
ceases to accrue on such Notes or portions thereof called for redemption unless
the Issuers default in the payment thereof. If a Note is redeemed subsequent to
an interest record date but on or prior to the related interest payment date,
then any accrued interest (and Additional Interest, if any) will be paid to the
person in whose name such Note is registered at the close of business on such
record date; provided that (x) no Notes of $1,000 or less will be redeemed in
part and (y) if a partial redemption is made with the proceeds of an Equity
Offering, Event of Loss, Asset Sale or Excess Cash Flow Offer the Trustee will
select the Notes only on a pro rata basis or as nearly a pro rata basis as is
practicable (subject to DTC procedures) unless such method is otherwise
prohibited.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption
Date (other than in connection with a Required Regulatory Redemption), the
Company shall mail or cause to be mailed, by first class mail, an unconditional
notice of redemption to each Holder (or the affected Holder in the case of a
Required Regulatory Redemption) whose Notes are to be redeemed at its registered
address. In the event of a Required Regulatory Redemption, notice of redemption
shall be given in accordance with Section 3.09.
The notice shall identify the Notes to be redeemed and shall
state
(a) the Redemption Date;
(b) the redemption price and the amount of interest
(including Additional Interest), if any;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
Redemption Date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption ceases to
accrue on and after the Redemption Date;
-51-
(g) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
Redemption Date (or 5 days prior to the date of any Required Regulatory
Redemption, in the case of a Required Regulatory Redemption), an Officers'
Certificate requesting that the Trustee give such notice and setting forth the
information to be stated in such notice as provided in the preceding paragraph.
SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section
3.03 hereof, Notes called for redemption become irrevocably due and payable on
the Redemption Date at the redemption price. A notice of redemption may not be
conditional.
SECTION 3.05. Deposit of Redemption Price.
On or prior to the Redemption Date, the Company shall deposit
with the Trustee or with the Paying Agent immediately available funds sufficient
to pay the redemption price of and accrued interest on all Notes to be redeemed
on that date. The Trustee or the Paying Agent shall promptly return to the
Company any money deposited with the Trustee or the Paying Agent by the Company
in excess of the amounts necessary to pay the redemption price of, and accrued
interest on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the Redemption Date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest Record Date but on or prior to the related Interest
Payment Date, then any accrued and unpaid interest shall be paid to the Person
in whose name such Note was registered at the close of business on such Record
Date. If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the Redemption
Date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes
and in Section 2.12 hereof.
SECTION 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part (with, if the
Issuers or the Trustee so require, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or his attorney duly authorized in writing), the Issuers
shall issue and, upon receipt of an Authentication Order, the Trustee shall
authenticate for the Holder at the expense of the Issuers a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.
-52-
SECTION 3.07. Optional Redemption.
(a) At any time prior to March 15, 2006, the Issuers may on
one or more occasions redeem up to 35% of the aggregate principal amount of
Notes issued under this Indenture at a redemption price of 111.625% of the
principal amount thereof, plus accrued and unpaid interest and Additional
Interest, if any, to the Redemption Date, with the Net Cash Proceeds of any
Equity Offering; provided that
(1) at least 65% of the aggregate principal amount of Notes
issued under this Indenture remains outstanding immediately after the
occurrence of such redemption (excluding Notes held by the Company and
its Subsidiaries); and
(2) the redemption must occur within 45 days after the date
of the closing of such Equity Offering.
(b) Except as set forth in Section 3.07(a) and Section 3.09,
the Issuers do not have the right to redeem any Notes prior to March 15, 2007.
The Notes shall be redeemable at the option of the Issuers, in whole or in part,
at any time on or after March 15, 2007, upon not less than 30 nor more than 60
days' notice, in amounts of $1,000 or an integral multiple of $1,000 (except
that any PIK Note may be redeemed in any denomination that is a whole dollar
amount), at the following redemption prices (expressed as percentages of the
principal amount) if redeemed during the 12-month period commencing March 15 of
the years indicated below, in each case (subject to the right of Holders of
record on a record date to receive interest due (and Additional Interest due, if
any) on an Interest Payment Date that is on or prior to such Redemption Date)
together with accrued and unpaid interest (and Additional Interest, if any)
thereon to the Redemption Date:
YEAR PERCENTAGE
2007......................................... 108.719%
2008......................................... 104.359%
2009 and thereafter.......................... 100.000%
SECTION 3.08. No Mandatory Redemption.
Other than as set forth in Section 3.09 below, the Issuers
shall not be required to make mandatory redemption or sinking fund payments with
respect to the Notes.
SECTION 3.09. Mandatory Disposition in Accordance with Gaming Laws.
(a) Notwithstanding any other provision of this Indenture, if
any Gaming Authority requires that a Holder or beneficial owner of Notes must be
licensed, qualified or found suitable under any applicable Gaming Law and such
Holder or beneficial owner fails to apply for a license, qualification or
finding of suitability within 30 days after being requested to do so by such
Gaming Authority, or such lesser period as may be required by such Gaming
Authority, or if such Holder or such beneficial owner is notified by such Gaming
Authority that such Holder or beneficial owner will not be so licensed,
qualified or found suitable, the Holder or beneficial owner, as the case may be,
will be required to dispose of its Notes within 30 days, or such lesser period
as may be required by the
-53-
Gaming Authority, and the Issuers will have the right to redeem the Notes of the
Holder or beneficial owner, subject to the approval of any Gaming Authority, at
the lesser of
(1) the principal amount thereof plus accrued interest up to
the date of notice from the Gaming Authority that such Holder or
beneficial owner will not be licensed or qualified;
(2) the price at which such Holder or beneficial owner
acquired such Notes; or
(3) Fair Market Value of such Notes.
(b) Immediately upon a determination by any Gaming Authority
that a Holder or beneficial owner of Notes will not be licensed, qualified or
found suitable by such Gaming Authority, such Holder or beneficial owner will
have no further rights with respect to the Notes
(1) to receive any interest with respect to the Notes;
(2) to exercise, directly or through any trustee or nominee,
any right conferred by the Notes; or
(3) to receive any remuneration in any form for services
rendered or otherwise.
(c) The Issuers shall not be required to pay or reimburse any
Holder or beneficial owner of Notes who is required to apply for such license,
qualification or finding of suitability for the costs of the license application
or investigation for such qualification or finding of suitability. Such expense
shall be the obligation of such Holder or beneficial owner.
Notice of any redemption shall be sent, by first-class mail, at
least 30 days and not more than 60 days (unless another notice period shall be
required by applicable law or by order of any Gaming Authority) prior to the
date fixed for redemption to the Holder of each Note to be redeemed to such
Holder's last address as then shown upon the registry books of the Registrar.
Any notice which relates to a Note 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 Note, a
new Note or Notes in a principal amount equal to the unredeemed portion thereof
will be issued.
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Notes.
(a) The Issuers shall pay or cause to be paid the principal
of, premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes and this Indenture. Principal, premium, if any, and
interest shall be considered paid on the date due if the Paying Agent, if other
-54-
than the Issuers or a Subsidiary thereof, holds as of 10:00 a.m. New York City
time on the due date money deposited by the Issuers in immediately available
funds and designated for and sufficient to pay all principal, premium, if any,
and interest then due. The Issuers shall pay all Additional Interest, if any, in
the same manner on the dates and in the amounts set forth in the Registration
Rights Agreement. The Issuers' Obligations under the Notes, this Indenture, the
Registration Rights Agreement and the Collateral Documents are referred to
herein as the "Issuers' Obligations."
(b) On or before February 28 of each fiscal year, beginning
with February 28, 2004 (each such February 28, an "Interest Rate Test Date"),
the Issuers shall calculate the First Priority Leverage Ratio as of and for the
fiscal year ended December 31st of the immediately preceding fiscal year (the
first such fiscal year being the fiscal year ending December 31, 2003). For each
determination of the First Priority Leverage Ratio made pursuant to this Section
4.01(b), the amount in clause (a) of the definition thereof shall be reduced by
the amount in the Open Market Repurchase Account as of the date of such
determination.
SECTION 4.02. Maintenance of Office or Agency.
The Issuers shall maintain in the Borough of Manhattan, the City
of New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-Registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Issuers in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Issuers may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, 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 designate the Corporate Trust Office of the
Trustee as one such office or agency of the Issuers in accordance with Section
2.03 hereof.
SECTION 4.03. Reports.
(a) Whether or not required by the SEC, so long as any Notes
are outstanding, each of the Company and TC Funding (in each case as applicable)
shall furnish by mail, as their names and addresses appear in the Note
Registers, to the Holders, without cost to such Holders and within 15 days of
the date by which the Company or TC Funding would have been required to so file
with the SEC (the "Required Filing Date") pursuant to Section 13(a) or 15(d) of
the Exchange Act if such person were so subject,
-55-
(i) all quarterly and annual financial information that would
be required to be contained in a filing with the SEC on Forms 10-Q and
10-K if the Company or TC Funding were required to file such forms,
including a "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and, with respect to the annual
information only, a report thereon by the Company's or TC Funding's
certified independent accountants; and
(ii) all current reports that would be required to be filed
with the SEC on Form 8-K if the Company or TC Funding were required to
file such reports.
(b) In addition, whether or not required by the rules and
regulations of the SEC, the Company and TC Funding shall file a copy of all
information and reports referred to in clause (a) with the SEC for public
availability on or prior to the respective Required Filing Dates (to the extent
permitted by applicable law) and make such information available to securities
analysts and prospective investors upon request. The Company and TC Funding
shall at all times comply with TIA Section 314(a).
(c) For so long as any Notes remain outstanding, the Company,
TC Funding and the Guarantors shall furnish to the Holders and to securities
analysts and prospective investors, upon their request, the information required
to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(d) In addition, each of the Company and TC Funding shall,
within 15 days of each Required Filing Date, file with the Trustee a copy of all
information and reports referred to in clause (a), together with supplemental
information in respect of summary financial data for each of the Casino
Properties at the Company's cost. Delivery of the reports, information and other
documents set forth in this Section 4.03 to the Trustee is for informational
purposes only and the Trustee's receipt of such reports, information and other
documents shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Company's or TC Funding's compliance with any of its covenants under this
Indenture.
SECTION 4.04. Compliance Certificate.
(a) Each of the Company, TC Funding and each Guarantor (to
the extent that such Guarantor is so required under the TIA) shall deliver to
the Trustee, within 90 days after the end of each fiscal year, an Officers'
Certificate stating that a review of the activities of the Company, TC Funding
and their Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company and TC Funding have kept, observed, performed and fulfilled their
Obligations under this Indenture and the Collateral Documents, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge, the Company and TC Funding have kept, observed, performed
and fulfilled each and every covenant contained in this Indenture and the
Collateral Documents and is not in default in the performance or observance of
any of the terms, provisions and conditions of this Indenture or the Collateral
Documents (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge and
what action the Company and TC Funding (as applicable) are taking or propose to
take with respect thereto) and that to the best of his or her knowledge no event
has occurred and remains in existence by reason of which payments on account of
the principal of or interest, if any, on the Notes is prohibited or if such
event has occurred, a
-56-
description of the event and what action the Company and TC Funding (as
applicable) are taking or propose to take with respect thereto.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
year-end financial statements delivered pursuant to Section 4.03(a) above shall
be accompanied by a written statement of the Company's and TC Funding's
independent public accountants (who shall be a firm of established national
reputation) that in making the examination necessary for certification of such
financial statements, nothing has come to their attention that would lead them
to believe that the Company or TC Funding (as applicable) has violated any
provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company and TC Funding shall, so long as any of the
Notes are outstanding, deliver to the Trustee, forthwith upon any Officer
becoming aware of any Default or Event of Default, an Officers' Certificate
specifying such Default or Event of Default and what action the Company or TC
Funding (as applicable) is taking or proposes to take with respect thereto.
SECTION 4.05. Taxes.
The Company shall pay or discharge or shall cause each of its
Subsidiaries to pay or discharge, before the same shall become delinquent, (1)
all material Taxes levied or imposed upon the Company or any of its Subsidiaries
or upon its or any of its Subsidiaries' income, profits or property and (2) all
lawful material claims for labor, materials and supplies which, in each case, if
unpaid, might by law become a Lien upon the property of the Company or any of
its Subsidiaries; provided, however, that, subject to the terms of the
applicable Collateral Documents, neither the Company nor any of its Subsidiaries
shall be required to pay or discharge or cause to be paid or discharged any such
tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings and for which disputed
amounts adequate reserves have been made in accordance with GAAP. The Company
and each of its Subsidiaries shall prepare and timely file with the appropriate
governmental agencies all Tax Returns required to be filed for any period (or
portion thereof), taking into account any extension of time to file granted to
or obtained on behalf of the Company and/or such Subsidiary, and each such Tax
Return shall be complete and accurate in all material respects.
SECTION 4.06. Stay, Extension and Usury Laws.
The Company, TC Funding and each of the Guarantors covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Company, TC Funding and each of the Guarantors (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law has been enacted.
-57-
SECTION 4.07. Limitation on Restricted Payments.
(a) The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, make any Restricted Payment if, after
giving effect to such Restricted Payment on a pro forma basis:
(1) a Default or an Event of Default shall have occurred and
be continuing;
(2) the Total Leverage Ratio of the Company is less than or
equal to 4.0 to 1.0 both before and after giving effect to such
Restricted Payment; or
(3) the aggregate amount of all Restricted Payments made by
the Company and its Subsidiaries, including after giving effect to
such proposed Restricted Payment, from and after the Issue Date, would
exceed the sum of:
(A) 50% of the aggregate Consolidated Net Income of the
Company and its Consolidated Subsidiaries for the period (taken
as one accounting period) commencing on the first day of the
first fiscal quarter commencing after the Issue Date to and
including the last day of the fiscal quarter ended immediately
prior to the date of each such calculation (or, in the event
Consolidated Net Income for such period is a deficit, then minus
100% of such deficit); plus
(B) 100% of the aggregate Net Cash Proceeds received by
the Company after the Issue Date and on or prior to the date of
such proposed Restricted Payment from (i) the sale of its
Qualified Equity Interests (other than (x) to a Subsidiary of the
Company or (y) to the extent applied in connection with a
Qualified Exchange) or (ii) Capital Contributions.
(b) The foregoing clauses (2) and (3) of the immediately
preceding paragraph, however, shall not prohibit:
(1) a Qualified Exchange;
(2) payments under the Administrative Services Agreement in
an amount not to exceed $6.0 million in any fiscal year;
(3) the redemption, repurchase, retirement or other
acquisition of, or any distributions or dividends to any direct or
indirect parent of the Company to effect the redemption, repurchase,
retirement or other acquisition of, any Equity Interests of the
Company or any direct or indirect parent of the Company to the extent
required by any Gaming Authority or, if determined in the good faith
judgment of the Board of Directors of the Company, to prevent the loss
or to secure the grant or establishment of any Gaming License or other
right to conduct gaming operations;
(4) payments under any indemnification agreements in effect
on the Issue Date (and any renewals or replacements thereof so long as
the terms of such renewals or
-58-
replacements are not less favorable to the Holders in any material
respect) with the members of the Board of Directors of any direct or
indirect parent of the Company;
(5) a previously earned one-time payment of incentive
compensation to ▇▇▇▇▇ Casinos II, Inc. for the year ended December 31,
2002, which will be paid in 2003 pursuant to a management agreement
that will be terminated upon the consummation of the offering of the
Notes under this Indenture on the Issue Date;
(6) for so long as the Company is a limited liability company
or substantially similar pass-through entity for Federal income tax
purposes, cash distributions made by the Company to its Members from
time to time in amounts not to exceed the Permitted Tax Distributions,
so long as the payments are made at the time permitted by the second
sentence of the definition of Permitted Tax Distributions contained
herein;
(7) the payment of any dividend within 60 days after the date
of its declaration if such dividend could have been made on the date
of such declaration in compliance with the foregoing provisions; or
(8) the distribution of a portion of the proceeds of the
offering of Initial Notes and the First Priority Notes on the Issue
Date to THCR Holdings for the purpose of acquiring, redeeming or
otherwise repurchasing THCR Holdings' 15.5% Senior Notes due 2005.
(c) The full amount of any Restricted Payment made pursuant
to clauses (3) and (7) of Section 4.07(b) hereof, however, will be deducted in
the calculation of the aggregate amount of Restricted Payments available to be
made referred to in Section 4.07(a)(3).
SECTION 4.08. Limitation on Incurrence of Additional Indebtedness and
Disqualified Equity Interests.
(a) Except as set forth below in this Section 4.08, the
Company shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, create, issue, assume, guarantee, incur, 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
(other than Permitted Indebtedness) or issue any Disqualified Equity Interests
(including Acquired Indebtedness). Notwithstanding the foregoing if (i) no
Default or Event of Default shall have occurred and be continuing at the time
of, or would occur after giving effect on a pro forma basis to, such incurrence
of Indebtedness or issuance of Disqualified Equity Interests and (ii) on the
date of such incurrence (the "Incurrence Date"), after giving effect on a pro
forma basis to such incurrence of such Indebtedness or issuance of Disqualified
Equity Interests, the Total Leverage Ratio of the Company as of and for the
Reference Period immediately preceding the Incurrence Date, would be less than
or equal to 5.0 to 1.0, then the Company may incur such Indebtedness or issue
such Disqualified Equity Interests or a Guarantor that is a Wholly-Owned
Subsidiary may incur such Indebtedness.
(b) Indebtedness of any person which is outstanding at the
time such person becomes a Subsidiary of the Company, including by designation,
or is merged with or into or consolidated with the Company or a Subsidiary of
the Company shall be deemed to have been incurred at the
-59-
time such person becomes such a Subsidiary of the Company or is merged with or
into or consolidated with the Company or a Subsidiary of the Company, as
applicable. Except to the extent provided otherwise in the definition of
Permitted Indebtedness, any Guarantor may guarantee Indebtedness of the Company
or another Guarantor to the extent and at the time the Company or such other
Guarantor incurs such Indebtedness in compliance with this Section 4.08.
SECTION 4.09. Limitation on Liens.
The Company shall not, and shall not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien of any kind,
other than Permitted Liens, upon any of its property now owned or acquired after
the date hereof or upon any income or profits therefrom.
SECTION 4.10. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries.
The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, assume or otherwise cause or
suffer to exist any consensual encumbrance or restriction of any kind on the
ability of any Subsidiary of the Company to pay dividends or make other
distributions to or on behalf of, or to pay any obligation to or on behalf of,
or otherwise transfer property to or on behalf of, or make or pay loans or
advances to or on behalf of, the Company or any Subsidiary of the Company,
except:
(1) with respect to a Subsidiary that is not a Subsidiary on
the date hereof, any restrictions in existence at the time such person
becomes a Subsidiary of the Company (but not created in connection
with or in contemplation of such person becoming a Subsidiary and not
applicable to any person, property or business, other than the person,
property or business so acquired);
(2) any restrictions with respect to a Subsidiary imposed
pursuant to an agreement which has been entered into for the sale or
disposition of all or substantially all of the Equity Interests or
property of such Subsidiary (which restrictions shall be for the
benefit of the purchaser thereof and no other person and apply only to
the property of the Subsidiary to be sold);
(3) restrictions imposed by a Permitted Lien on the transfer
of the respective property subject thereto;
(4) restrictions contained in this Indenture and the
Collateral Documents, as the same may be amended from time to time in
accordance with the terms hereof and thereof;
(5) restrictions contained in the First Priority Indenture,
as the same may be amended from time to time in accordance with the
terms thereof; provided that no such amendment shall result in such
restrictions being more unfavorable, taken as a whole, to the Holders
of the Notes than the restrictions contained in the First Priority
Indenture as the same is in effect on the Issue Date;
-60-
(6) restrictions imposed by Gaming Authorities on the payment
of dividends by entities holding Gaming Licenses;
(7) any restrictions existing under any agreement which
refinances or replaces the agreements containing any restrictions in
clause (1) or clause (4) of this Section 4.10, provided that the terms
and conditions of any such agreement are not more restrictive than
those under or pursuant to the agreement evidencing the Indebtedness
refinanced; and
(8) restrictions imposed under customary non-assignment
provisions contained in leases and licenses entered into in the
ordinary course of business.
SECTION 4.11. Limitation on Sale of Assets and Subsidiary Stock.
(a) The Company shall not, and shall not permit any of its
Subsidiaries to, engage in an Asset Sale unless
(1) the Company (or such Subsidiary, as the case may be)
receives consideration at the time of such Asset Sale at least equal
to the Fair Market Value of the property or Equity Interests sold or
otherwise disposed of in such Asset Sale;
(2) at least 85% of the consideration therefor received by
the Company or such Subsidiary is in the form of cash or Cash
Equivalents; provided that for purposes of this Section 4.11(a), each
of the following shall be deemed to be cash:
(a) the amount of any liabilities (as shown on the
Company's or such Subsidiary's most recent balance sheet or in
the notes thereto, excluding contingent liabilities and trade
payables) of the Company or any Subsidiary (other than
liabilities that are by their terms subordinated to the Notes or
any guarantee thereof) that are assumed by the transferee of any
such property; and
(b) any securities, notes or other obligations received
by the Company or any such Subsidiary from such transferee that
are substantially contemporaneously (subject to ordinary
settlement periods) converted by the Company or such Subsidiary
into cash (to the extent of the cash received in that
conversion);
(3) if such Asset Sale involves the disposition of
Collateral, the Company or such Subsidiary has complied with Section
10.04 and the Net Asset Sale Proceeds thereof shall be paid directly
by the purchaser of the Collateral to the Collateral Agent for deposit
into the Collateral Account, and, if any property other than cash or
Cash Equivalents so deposited into the Collateral Account is included
in such Net Asset Sale Proceeds, such property shall be made subject
to the Lien of this Indenture and the applicable Collateral Documents;
and
(4) the Company or such Subsidiary, as the case may be,
applies the Net Asset Sale Proceeds as provided in this Section 4.11.
(b) If the Net Asset Sale Proceeds (whether or not relating
to Collateral) received by the Company or any of its Subsidiaries from an Asset
Sale or a series of related Asset Sales are less
-61-
than $10.0 million, the Company may, at its option, apply any such Net Asset
Sale Proceeds (whether or not relating to Collateral) within 365 days of the
related Asset Sale to the acquisition of another business or the acquisition of
other long-term property, in each case, in the same or a similar line of
business as the Company or any of its Subsidiaries was engaged in on the Issue
Date or any reasonable extensions or expansions thereof ("Replacement Assets");
provided that any Replacement Assets acquired with any Net Asset Sale Proceeds
of Collateral shall be owned by the Company or by a Guarantor and shall not be
subject to any Liens other than Permitted Liens (and the Company or such
Guarantor, as the case may be, shall execute and deliver to the Collateral Agent
such Collateral Documents or other instruments as shall be reasonably necessary
to cause such Replacement Assets to become subject to a Lien in favor of the
Collateral Agent on behalf of the Trustee, for the benefit of the Holders of the
Notes, securing its obligations under the Notes or its Guarantee, as the case
may be, and otherwise shall comply with the provisions of this Indenture
applicable to After-Acquired Property).
(c) If the Company does not use any portion of the Net Asset
Sale Proceeds as described in Section 4.11(b) within 365 days, such unused
portion of the Net Asset Sale Proceeds shall constitute "Ordinary Excess
Proceeds" subject to the provisions described in this Section 4.11. In addition,
if the Net Asset Sale Proceeds (whether or not relating to Collateral) received
by the Company or any of its Subsidiaries in an Asset Sale or a series of
related Asset Sales aggregates $10.0 million or more, such Net Asset Sale
Proceeds shall constitute "Material Excess Proceeds" subject to the provisions
described in this Section 4.11; provided that any Net Asset Sale Proceeds
received from the sale of the Riverboat shall not constitute Material Excess
Proceeds if the Company applies such Net Asset Sale Proceeds within 365 days of
the Asset Sale of the Riverboat to the acquisition of a Replacement Riverboat;
provided, further, that any Replacement Riverboat shall be owned by the Company
or by the Guarantor that made the Asset Sale and shall not be subject to any
Liens other than Permitted Liens (and the Company or such Guarantor, as the case
may be, shall execute and deliver to the Collateral Agent such Collateral
Documents or other instruments as shall be reasonably necessary to cause the
Replacement Riverboat to become subject to a Lien in favor of the Collateral
Agent on behalf of the Trustee, for the benefit of the Holders of the Notes,
securing its obligations under the Notes or its Guarantee, as the case may be,
and otherwise shall comply with the provisions of this Indenture applicable to
After-Acquired Property). Ordinary Excess Proceeds and Material Excess Proceeds
are collectively referred to as "Excess Proceeds."
(d) On or prior to 365 days after any such Asset Sale or
Asset Sales that cause the aggregate amount of Ordinary Excess Proceeds to
exceed $10.0 million or within 10 days of the receipt of any Material Excess
Proceeds (taking into account any time period for reinvestment allowed by the
first proviso of the preceding paragraph), the Company will be required to make
an offer or offers (each an "Asset Sale Offer"), on a pro rata basis to all
holders of First Priority Notes and to all holders of First Priority Pari Passu
Indebtedness (to the extent such person's collateral is subject to such Asset
Sale) to purchase the maximum principal amount of First Priority Notes and First
Priority Pari Passu Indebtedness, to the extent applicable, that may be
purchased out of the aggregate amount of such Ordinary Excess Proceeds and/or
Material Excess Proceeds, as the case may be.
(e) The offer price of any Asset Sale Offer in the case of
any Ordinary Excess Proceeds will be equal to 100% of the Accreted Value thereof
and in the case of any Material Excess Proceeds will be 102% of the Accreted
Value thereof, in each case, plus accrued and unpaid interest (and
-62-
Additional Interest, if any) thereon, if any, to the date of purchase, and will
be payable in cash in accordance with the procedures set forth in the First
Priority Indenture.
(f) Solely to the extent permitted by the First Priority
Indenture or to the extent that no First Priority Notes or First Priority Pari
Passu Indebtedness is then outstanding, to the extent that the aggregate amount
of First Priority Notes and First Priority Pari Passu Indebtedness tendered
pursuant to an Asset Sale Offer is less than the aggregate Excess Proceeds, the
Company shall be required to make an offer or offers (each a "Residual Asset
Sale Offer"), within ten days of the earlier of (x) the completion of the Asset
Sale Offer or (y) the date Residual Excess Proceeds (as defined below) are
received, on a pro rata basis to all Holders of Notes to purchase the maximum
principal amount of Notes that may be purchased out of the Ordinary Excess
Proceeds not paid out in an Asset Sale Offer (the "Residual Ordinary Excess
Proceeds") and/or the Material Excess Proceeds not paid out in an Asset Sale
Offer (the "Residual Material Excess Proceeds" and, together with the Residual
Ordinary Excess Proceeds, the "Residual Excess Proceeds") as the case may be.
(g) The offer price of any Residual Asset Sale Offer in the
case of any Residual Ordinary Excess Proceeds shall be equal to 100% of the
principal amount thereof and in the case of any Residual Material Excess
Proceeds will be 102% of the principal amount thereof, in each case, plus
accrued and unpaid interest (and Additional Interest, if any) thereon, if any,
to the date of purchase, and shall be payable in cash in accordance with the
procedures set forth herein.
(h) Upon the completion of any Asset Sale Offer, any
remaining Excess Proceeds shall be deposited in the Open Market Repurchase
Account to the extent required by the First Priority Indenture or used for any
purpose not otherwise prohibited by the First Priority Indenture, and the amount
of Excess Proceeds shall then be reset at zero. Upon the completion of any
Residual Asset Sale Offer, any remaining Residual Excess Proceeds may be used by
the Issuers for any purpose not prohibited by this Indenture, and the amount of
Residual Excess Proceeds shall then be reset at zero.
(i) All Net Asset Sale Proceeds of any Collateral in respect
of any Asset Sale, pending their application in accordance with this Section
4.11 or the release thereof in accordance with Sections 10.04, 10.05 and 11.06,
shall be deposited in the Collateral Account.
(j) Any Asset Sale Offer or Residual Asset Sale Offer shall
remain open for a period of 20 Business Days following its commencement and no
longer, except to the extent that a longer period is required by applicable law
(the "Asset Sale Offer Period"). No later than five Business Days after the
termination of the Asset Sale Offer Period (the "Asset Sale Purchase Date"), the
Company shall purchase the principal amount of First Priority Notes, in respect
of an Asset Sale Offer, or Notes, in respect of a Residual Asset Sale Offer,
required to be purchased pursuant to this Section 4.11 (the "Asset Sale Offer
Amount") or, if less than the Asset Sale Offer Amount has been tendered, all
Notes or First Priority Notes, as the case may be, tendered in response to the
Asset Sale Offer or Residual Asset Sale Offer, as the case may be. Payment for
any Notes so purchased shall be made in the same manner as interest payments are
made.
(k) If the Asset Sale Purchase Date is on or after an
interest record date and on or before the related interest payment date, any
accrued and unpaid interest shall be paid to the person in
-63-
whose name a Note is registered at the close of business on such record date,
and no additional interest shall be payable to Holders who tender Notes pursuant
to the Residual Asset Sale Offer.
(l) On or before the Asset Sale Purchase Date, the Company
shall, to the extent lawful, accept for payment, on a pro rata basis to the
extent necessary, the Asset Sale Offer Amount of Notes or portions thereof
tendered pursuant to the Asset Sale Offer or, if less than the Asset Sale Offer
Amount has been tendered, all Notes tendered, and shall deliver to the Trustee
an Officers' Certificate stating that such Notes or portions thereof were
accepted for payment by the Company in accordance with the terms of this
Section. The Company, the Depositary or the Paying Agent, as the case may be,
shall promptly (but in any case not later than five days after the Asset Sale
Purchase Date) mail or deliver to each tendering Holder an amount equal to the
purchase price of the Notes tendered by such Holder and accepted by the Company
for purchase, and the Company shall promptly issue a new Note, and the Trustee,
upon delivery of an Officers' Certificate from the Company, shall authenticate
and mail or deliver such new Note to such Holder, in a principal amount equal to
any unpurchased portion of the Note surrendered. Any Note not so accepted shall
be promptly mailed or delivered by the Company to the Holder thereof. The
Company shall publicly announce the results of the Asset Sale Offer or Residual
Asset Sale Offer on the Asset Sale Purchase Date.
(m) The Company shall comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of the Notes as a result of an Asset Sale. To the extent
that the provisions of any securities laws or regulations or Gaming Laws
conflict with this Section 4.11, the Company shall comply with the applicable
securities laws and regulations and Gaming Laws and shall not be deemed to have
breached its obligations under this Section 4.11 by virtue thereof.
SECTION 4.12. Line of Business.
The Company shall not, and shall not permit any of its
Subsidiaries to, engage in any business or investment activities other than a
Permitted Business. Neither the Company nor any of its Subsidiaries may conduct
a Permitted Business in any gaming jurisdiction in which the Company or such
Subsidiary is not licensed on the Issue Date if the Holders of the Notes would
be required to be licensed as a result thereof; provided, however, that the
provisions described in this Section 4.12 shall not prohibit the Company or any
of its Subsidiaries from conducting a Permitted Business in any jurisdiction
that does not require the licensing or qualification of all the Holders, but
reserves the discretionary right to require the licensing or qualification of
any Holder.
SECTION 4.13. Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Company or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and its Subsidiaries; provided, however, that the Company shall
not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of its Subsidiaries, if the
Board of Directors
-64-
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Subsidiaries, taken as a whole,
and that the loss thereof is not adverse in any material respect to the Holders.
SECTION 4.14. Repurchase of Notes at the Option of the Holder upon a
Change of Control.
(a) In the event that a Change of Control has occurred, each
Holder of Notes will have the right, at such Holder's option, pursuant to an
irrevocable and unconditional offer by the Company (the "Change of Control
Offer"), to require the Company to repurchase all or any part of such Holder's
Notes (provided that, other than in the case of any PIK Notes, the principal
amount of such Notes must be $1,000 or an integral multiple thereof) on a date
(the "Change of Control Purchase Date") that is no later than 75 days after the
occurrence of such Change of Control, at a cash price (the "Change of Control
Purchase Price") equal to 101% of the principal amount thereof, together with
accrued interest (and Additional Interest, if any) to the Change of Control
Purchase Date. The Change of Control Offer shall be made within 30 days
following a Change of Control and shall remain open for 20 Business Days
following its commencement (the "Change of Control Offer Period"). Upon
expiration of the Change of Control Offer Period, the Company shall purchase all
Notes properly tendered in response to the Change of Control Offer. If required
by applicable law, the Change of Control Purchase Date and the Change of Control
Offer Period may be extended as so required; however, if so extended, it shall
nevertheless constitute an Event of Default if the Change of Control Purchase
Date does not occur within 90 days of the Change of Control.
(b) As used herein, a "Change of Control" means any of the
following events:
(1) THCR Holdings ceases to be the "beneficial owner,"
directly or indirectly, of 65% of the Equity Interests of the Company;
(2) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or
substantially all of the assets of the Company, THCR Holdings or THCR
on a consolidated basis to any person or group of related persons for
purposes of Section 13(d) of the Exchange Act, other than the
Permitted Holder, together with any Affiliates thereof (whether or not
otherwise in compliance with this Indenture);
(3) any "person" or "group" (as such terms are used for
purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or
not applicable), other than the Permitted Holder, is or becomes the
"beneficial owner" (as so defined), directly or indirectly, of more
than 35% of the total voting power of the Voting Stock of THCR
Holdings or THCR, or any successor thereto by merger, consolidation or
otherwise, unless the Permitted Holder "beneficially owns" (as so
defined), directly or indirectly, in the aggregate a greater
percentage of the total voting power of the Voting Stock of THCR
Holdings or THCR than such other person or group and has the right or
ability by voting power, contract or otherwise to elect or designate
for election a majority of the Board of Directors of THCR Holdings or
THCR (for purposes of this definition, such other person shall be
deemed to beneficially own any Voting Stock of a specified corporation
held by a parent corporation, if such other person "beneficially owns"
(as so defined), directly or indirectly, more than 35% of the voting
power of the Voting Stock of such parent corporation and the Permitted
Holder "beneficially owns" (as so defined), directly or indirectly, in
the aggregate, a lesser percentage of the voting power of the Voting
Stock
-65-
of such parent corporation and does not have the right or ability by
voting power, contract or otherwise to elect or designate for election
a majority of the Board of Directors of such parent corporation); or
(4) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors
of THCR (together with any new directors whose election by such Board
of Directors or whose nomination for election by the stockholders of
THCR is approved by the Permitted Holder or by a vote of 66-2/3% of
the directors of THCR then still in office either who are directors at
the beginning of such period or whose election or nomination for
election was previously so approved) have ceased for any reason to
constitute a majority of the Board of Directors of THCR then in
office.
(c) On or before the Change of Control Purchase Date, the
Company shall (i) accept for payment Notes 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 Additional Interest, if any) of all Notes so tendered
and (iii) deliver to the Trustee Notes so accepted together with an Officers'
Certificate listing the Notes or portions thereof being purchased. The Paying
Agent shall promptly mail to the Holders of Notes so accepted payment in an
amount equal to the Change of Control Purchase Price (together with accrued and
unpaid interest and Additional Interest, if any), and the Trustee shall promptly
authenticate and mail or deliver to such Holders a new Note or Notes equal in
principal amount to any unpurchased portion of the Note or Notes surrendered.
Any Notes not so accepted shall be promptly mailed or delivered to the Holder
thereof. The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Purchase
Date.
(d) The Company shall comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of the Notes as a result of a Change of Control. To the
extent that the provisions of any securities laws or regulations conflict with
this Section 4.14, the Company shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its obligations under
this Section 4.14 by virtue thereof.
SECTION4.15. Restriction on Sale and Issuance of Subsidiary Stock.
The Company shall not sell, and shall not permit any of its
Subsidiaries to issue or sell, any Equity Interests of any Subsidiary of the
Company to any person other than the Company or a Wholly Owned Subsidiary of the
Company, except that all of the Equity Interests of a Subsidiary may be sold if
such Asset Sale complies with Sections 4.11 and 5.01 hereof.
SECTION 4.16. Events of Loss.
(a) If an Event of Loss occurs with respect to Collateral,
the Net Loss Proceeds therefrom shall be paid directly to the Collateral Agent
for deposit into the Collateral Account. In the event of an Event of Loss with
respect to any Collateral with a Fair Market Value (or replacement
-66-
cost, if greater) in excess of $1.0 million, the Company or the affected
Guarantor, as the case may be, shall apply the Net Loss Proceeds from such Event
of Loss to the rebuilding, repair, replacement or construction of improvements
to the affected property (the "Subject Property"), with no concurrent obligation
to make any purchase of any Notes; provided, however, that the Company delivers
to the Trustee within 90 days of such Event of Loss:
(1) a written opinion from a reputable contractor that the
Subject Property can be rebuilt, repaired, replaced or constructed and
operating within 365 days from the date of such certification; and
(2) an Officers' Certificate certifying that the Company or
the affected Guarantor has available from Net Loss Proceeds (including
amounts collectible from the applicable insurance carrier) or other
sources sufficient funds to complete the rebuilding, repair,
replacement or construction described in clause (1) above.
(b) Any Net Loss Proceeds that are not reinvested or not
permitted to be reinvested as provided in the first sentence of this Section
4.16 shall be deemed "Excess Loss Proceeds." Within 10 days following the date
that the aggregate amount of Excess Loss Proceeds received by the Company or the
applicable Guarantor exceeds $10.0 million, the Company shall make an offer, on
a pro rata basis (an "Event of Loss Offer"), to all holders of First Priority
Notes and holders of First Priority Pari Passu Indebtedness (to the extent such
person's collateral is subject to such Event of Loss) with the proceeds of
Events of Loss to purchase the maximum principal amount of First Priority Notes
that may be purchased out of the Excess Loss Proceeds. The offer price in any
Event of Loss Offer shall be equal to 100% of principal amount plus accrued and
unpaid interest and Additional Interest, if any, to the date of purchase, and
will be payable in cash. If the aggregate principal amount of First Priority
Notes tendered pursuant to an Event of Loss Offer exceeds the Excess Loss
Proceeds, the First Priority Trustee shall select the First Priority Notes to be
purchased on a pro rata basis based on the principal amount of First Priority
Notes tendered.
(c) Solely to the extent permitted by the First Priority
Indenture or to the extent that no First Priority Notes or First Priority Pari
Passu Indebtedness is then outstanding, if any Excess Loss Proceeds remain after
consummation of an Event of Loss Offer or all such Excess Loss Proceeds to the
extent no First Priority Notes or First Priority Pari Passu Indebtedness is then
outstanding ("Residual Excess Loss Proceeds"), the Company shall, within the
earlier of (x) 10 days of completion of the Event of Loss Offer or (y) the
receipt of Residual Excess Loss Proceeds, make an offer, on a pro rata basis (a
"Residual Event of Loss Offer"), to all Holders of Notes with the Residual
Excess Loss Proceeds to purchase the maximum principal amount of Notes that may
be purchased out of the Residual Loss Proceeds. The offer price in any Residual
Event of Loss Offer shall be equal to 100% of principal amount plus accrued and
unpaid interest and Additional Interest, if any, to the date of purchase, and
will be payable in cash. If the aggregate principal amount of Notes tendered
pursuant to a Residual Event of Loss Offer exceeds the Residual Excess Loss
Proceeds, the Trustee shall select the Notes to be purchased on a pro rata basis
based on the principal amount of Notes tendered.
(d) Upon the completion of any Event of Loss Offer, any
remaining Excess Loss Proceeds shall be deposited in the Collateral Account and
be released to the Issuers only upon satisfaction of the conditions to release
described in the Collateral Documents, and the amount of Excess Loss
-67-
Proceeds shall then be reset at zero. Upon completion of any Residual Event of
Loss Offer, any remaining Residual Excess Loss Proceeds shall be used for any
purpose not prohibited by this Indenture and the amount of Residual Excess Loss
Proceeds shall then be reset at zero.
(e) In the event of any settlement relating to any Event of
Loss, the Company or the affected Guarantor, as the case may be, will be
required to receive consideration at least equal to the Fair Market Value of the
property subject to the Event of Loss.
(f) Any Event of Loss Offer or Residual Event of Loss Offer
shall remain open for a period of 20 Business Days following its commencement
and no longer, except to the extent that a longer period is required by
applicable law (the "Event of Loss Offer Period"). No later than five Business
Days after the termination of the Event of Loss Offer Period (the "Event of Loss
Purchase Date"), the Company shall purchase a principal amount of First Priority
Notes, in respect of an Event of Loss Offer, or Notes, in respect of a Residual
Event of Loss Offer, equal to the Excess Loss Proceeds (the "Event of Loss Offer
Amount") or, if less than the Event of Loss Offer Amount has been tendered, all
Notes or First Priority Notes, as the case may be, tendered in response to the
Event of Loss Offer or Residual Event of Loss Offer, as the case may be. Payment
for any Notes so purchased shall be made in the same manner as interest payments
are made.
(g) If the Event of Loss Purchase Date is on or after an
interest record date and on or before the related interest payment date, any
accrued and unpaid interest shall be paid to the person in whose name a Note is
registered at the close of business on such record date, and no additional
interest shall be payable to Holders who tender Notes pursuant to the Residual
Event of Loss Offer.
(h) On or before the Event of Loss Purchase Date, the Company
shall, to the extent lawful, accept for payment, on a pro rata basis to the
extent necessary, the Event of Loss Offer Amount of Notes or portions thereof
tendered pursuant to the Event of Loss Offer or, if less than the Event of Loss
Offer Amount has been tendered, all Notes tendered, and shall deliver to the
Trustee an Officers' Certificate stating that such Notes or portions thereof
were accepted for payment by the Company in accordance with the terms of this
Section. The Company, the Depositary or the Paying Agent, as the case may be,
shall promptly (but in any case not later than five days after the Event of Loss
Purchase Date) mail or deliver to each tendering Holder an amount equal to the
purchase price of the Notes tendered by such Holder and accepted by the Company
for purchase, and the Company shall promptly issue a new Note, and the Trustee,
upon delivery of an Officers' Certificate from the Company, shall authenticate
and mail or deliver such new Note to such Holder, in a principal amount equal to
any unpurchased portion of the Note surrendered. Any Note not so accepted shall
be promptly mailed or delivered by the Company to the Holder thereof. The
Company shall publicly announce the results of the Event of Loss Offer or
Residual Event of Loss Offer on the Event of Loss Purchase Date.
(i) The Company shall comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of the Notes as a result of an Event of Loss. To the extent
that the provisions of any securities laws or regulations conflict with this
Section 4.16, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.16 by virtue thereof.
-68-
SECTION 4.17. Future Guarantors.
(a) All present and future domestic Subsidiaries of the
Company (other than TC Funding, which is one of the Issuers) jointly and
severally will Guarantee irrevocably and unconditionally all principal, premium,
if any, and interest and Additional Interest, if any, on the Notes on a senior
basis, unless any such Subsidiary has total assets with a Fair Market Value of
less than $500,000.
(b) All newly acquired or created Subsidiaries Guaranteeing
the Notes shall execute and deliver to the Trustee (i) a supplemental indenture,
(ii) a joinder to the Security Agreement in the form of Exhibit 3 to the
Security Agreement, (iii) an Opinion of Counsel and (iv) all the Collateral
Documents and other items required pursuant to Section 10.01 relating to such
Subsidiary's property to the extent required by the terms of the Security
Agreement.
SECTION 4.18. Maintenance of Insurance and Properties.
(a) The Company shall, and shall cause its Subsidiaries to,
(1) obtain, prior to the Issue Date, mortgagee title
insurance policies insuring a second mortgage lien on the real estate
portion of the Collateral, as constituted on the Issue Date, subject
to certain exceptions, in an amount not less than the principal amount
of the Notes; and
(2) with respect to each Mortgaged Property, from and at all
times after the Issue Date until the Notes have been paid in full,
have and maintain in effect insurance with responsible carriers
against such risks and in such amounts as is customarily carried by
similar businesses with such deductibles, retentions, self-insured
amounts and coinsurance provisions as are customarily carried by
similar businesses of similar size, including, without limitation,
property and casualty, and, with respect to insurance on the
Collateral, shall maintain the following insurance policies and
coverages with policy limits and deductibles in such amounts as would
be maintained by a Prudent Operator or as the Collateral Agent may
otherwise reasonably request:
(i) Physical hazard insurance on an "all risk" basis
covering, without limitation, hazards commonly covered by such
policies, in an amount equal to the full replacement cost of the
Mortgaged Property and Equipment;
(ii) Commercial general liability insurance against
claims for bodily injury, death or property damage occurring on,
in or about the Mortgaged Property (and any other adjoining
streets, sidewalks and passageways) and other Collateral covering
such matters as are customarily covered by such policies, arising
out of or connected with the possession, use, leasing, operation
or condition of the Collateral;
(iii) Explosion insurance in respect of any boilers,
machinery and similar apparatus located on or comprising the
Mortgaged Property and Equipment;
-69-
(iv) If the Mortgaged Property is located in an area
identified by the Federal Emergency Management Agency as an area
having special flood hazards pursuant to the National Flood
Insurance Act of 1968 or the Flood Disaster Protection Act of
1973, each as amended, or any successor laws, flood insurance;
(v) Worker's compensation insurance as required by the
laws of the state where the Collateral is located to protect the
Pledgors and the Collateral Agent against claims for injuries
sustained in the course of employment at the premises of the
Pledgors; and
(vi) Such other types of insurance against such risks as
the Collateral Agent may from time to time reasonably require to
the extent such Insurance is commercially available at
commercially reasonable prices to the extent secured lenders are
requiring borrowers to obtain such insurance in connection with
financings of the type contemplated by this Indenture.
(b) Each insurance policy described in Section 4.18(a)(2)
shall provide that:
(i) it may not be materially modified, reduced, cancelled or
otherwise terminated without at least thirty (30) days' prior written
notice to the Collateral Agent;
(ii) the Collateral Agent is permitted to pay any premium
therefor within thirty (30) days after receipt of any notice stating
that such premium has not been paid when due;
(iii) all losses thereunder shall be payable notwithstanding
any act or negligence of the applicable Pledgor or its agents or
employees which otherwise might have resulted in a forfeiture of all
or a part of such insurance payments;
(iv) with respect to the insurance policies described in
clauses (i), (iii), (iv) and (v) of Section 4.18(a)(2), all losses
payable thereunder shall be payable to the Collateral Agent, as loss
payee, pursuant to a standard non-contributory New York mortgagee
endorsement and shall be in an amount, at least sufficient to prevent
coinsurance liability; and
(v) with respect to the insurance policies described in
clauses (ii) and to the extent applicable (vi) and (vii) of Section
4.18(a)(2), the Collateral Agent shall be named as an additional
insured.
(c) Settlement or adjustment of any claim under any of the
insurance policies described in Section 4.18(a), if such claim involves any loss
in excess of $5,000,000 (as determined by the Board of Directors acting
reasonably and in good faith) shall require the consent of the Collateral Agent.
(d) On an annual basis, the Pledgors shall deliver to the
Collateral Agent an Officers' Certificate certifying that any insurance policy
described in Section 4.18(a) has been renewed or extended and that any such
policy is in full force and effect.
-70-
(e) The Pledgors shall not purchase separate insurance
policies concurrent in form or contributing in the event of loss with the
insurance policies required to be maintained under this Section 4.18 unless the
Collateral Agent is included thereon as an additional insured and, if
applicable, with loss payable to the Collateral Agent under an endorsement
containing the provisions described in Section 4.19(b). The Pledgors shall
immediately notify the Collateral Agent whenever any such separate insurance
policy is obtained and shall promptly deliver to the Mortgagee the insurance
policy or Insurance Certificate evidencing such insurance.
(f) The Pledgors may maintain the coverages required by this
Section 4.18 under blanket policies covering the Collateral and other locations
owned or operated by the Pledgors or an Affiliate of the Pledgors if the terms
of such blanket policies otherwise comply with the provisions of Section 4.18(b)
and contain specific coverage allocations in respect of the Premises complying
with the provisions of Section 4.18(b).
(g) All insurance with respect to the Collateral required
under Section 4.18(a) hereof (except worker's compensation) shall name the
Collateral Agent as additional insured or loss payee, as applicable. Unless
otherwise agreed to by the Collateral Agent, all such insurance policies shall
be issued by carriers having an A.M. Best & Company, Inc. rating of A- or higher
and a financial size category of not less than X, or if such carrier is not
rated by A.M. Best & Company, Inc., having the financial stability and size
deemed appropriate by an opinion from a reputable insurance broker. The Company
may effect the insurance required by the preceding paragraph under blanket
and/or umbrella policies covering properties owned or leased by Affiliates of
the Company; provided that such policies otherwise comply with this Indenture.
SECTION 4.19. Limitation on BHR Joint Venture.
The Company shall not permit the BHR Joint Venture to, directly
or indirectly,
(a) incur any Indebtedness or issue any Disqualified Equity
Interests; provided that the BHR Joint Venture may incur:
(1) Indebtedness if the Company could incur at least
$1.00 of additional Indebtedness under the Total Leverage Ratio
test set forth in Section 4.08(a) hereof;
(2) Indebtedness other than Indebtedness permitted under
clause (a)(1) above; provided that after giving effect to the
incurrence of such Indebtedness, the aggregate principal amount
of BHR Attributed Debt does not exceed $10.0 million; and
(3) Indebtedness incurred to refinance any Indebtedness
incurred pursuant to clause (a)(1) above or Indebtedness of the
BHR Joint Venture outstanding on the Issue Date;
(b) create, incur, assume or suffer to exist any Lien on any
property of the BHR Joint Venture, or on any income or profits
therefrom, or assign or convey any right to receive income therefrom,
except Permitted Liens and Liens securing Indebtedness permitted to be
incurred pursuant to clause (a)(1) above;
-71-
(c) declare or pay any dividend or make any distribution on
account of any Equity Interests of the BHR Joint Venture, unless such
distributions are made on a pro rata basis to all members of the BHR
Joint Venture, based on each member's ownership interest therein;
(d) purchase, redeem or otherwise acquire or retire for value
any Equity Interest of the BHR Joint Venture (other than any such
Equity Interest owned by the Company or any Subsidiary); or
(e) transfer, other than in the ordinary course of business,
any property of the BHR Joint Venture, unless:
(i) the BHR Joint Venture receives consideration at the
time of such transfer not less than the Fair Market Value of the
property subject to such transfer;
(ii) at least 75% of the consideration for such transfer
is in the form of cash or Cash Equivalents or liabilities of the
BHR Joint Venture that are assumed by the transferees of such
property (provided that following such transfer there is not
further recourse to the BHR Joint Venture with respect to such
liabilities); and
(iii) within 270 days of such transfer, the net proceeds
thereof are (A) invested in property related to the business of
the BHR Joint Venture, (B) applied to permanently repay
Indebtedness of the BHR Joint Venture, or (C) distributed to the
members of the BHR Joint Venture in accordance with clause (c)
above.
SECTION 4.20. Limitation on Transactions with Affiliates.
(a) The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, enter into or suffer to exist any
contract, agreement, arrangement, understanding or transaction or series of
related transactions (including, without limitation, the sale, purchase,
exchange or lease of property or services) with any Affiliate of the Company
(other than a Wholly-Owned Subsidiary of the Company) unless:
(1) such transaction or series of related transactions is on
terms that are no less favorable to the Company or such Subsidiary, as
the case may be, than would be available at the time of such
transaction or transactions in a comparable transaction in
arm's-length dealings with an unaffiliated third party and, with
respect to a transaction or series of related transactions involving
aggregate payments equal to or greater than:
(x) $2.0 million, such transaction or series of related
transactions is approved by a majority of the members of the
Board of Directors of the Company; or
(y) $10.0 million, prior to the consummation of such
transaction or series of related transactions, the Company also
obtains a written favorable opinion as to the fairness thereof to
the Company from a financial point of view from an independent
investment banking firm of national reputation; and
-72-
(2) the Company delivers an Officers' Certificate to the
Trustee certifying that such transaction or transactions comply with
clause (a)(1) above.
(b) The foregoing restriction shall not apply to (1) pro rata
dividends or distributions paid in cash on any class of Equity Interests and not
prohibited under Section 4.07 hereof, (2) the Limited Liability Company
Agreement as in effect on the Issue Date, (3) the arrangements, as in effect on
the Issue Date (and any renewals or replacements thereof so long as the terms of
such renewals or replacements are not less favorable to the Holders in any
material respect), (x) which are described in Schedule 4.20(b) or (y) with the
BHR Joint Venture and with ▇▇▇▇▇▇▇▇▇▇ Harbor Parking Associates, LLC or (4)
agreements and payments not prohibited by Section 4.07 hereof.
SECTION 4.21. Limitation on Activities of TC Funding.
TC Funding shall not conduct any business (including having any
Subsidiary) whatsoever, other than to comply with its obligations under this
Indenture, the Notes, the First Priority Indenture and the First Priority Notes.
TC Funding shall not incur or otherwise become liable for any Indebtedness
(other than this Indenture, the Notes, the First Priority Indenture and the
First Priority Notes and any renewal, extension, substitution, refunding,
refinancing or replacement thereof in accordance with this Indenture) or make
any Restricted Payments.
SECTION 4.22. Restriction on Certain Agreements.
Other than (i) employment agreements in the ordinary course of
business consistent with industry practice and approved by the compensation
committee and (ii) the Administrative Services Agreement, the Company shall not,
and shall not permit any of its Subsidiaries to, enter into any management or
consulting agreement with ▇▇▇▇▇ or any Affiliate of ▇▇▇▇▇.
SECTION 4.23. Limitation on Capital Expenditures.
The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, make any capital expenditure or series
of related capital expenditures in any fiscal year in excess of (A) for each of
the fiscal years ending December 31, 2003 and December 31, 2004, an annual
amount equal to $32.0 million (provided that up to $10 million may be carried
forward from the fiscal year ending December 31, 2003 to the fiscal year ending
December 31, 2004 by depositing such Capex Reserve Amount into the Capex Reserve
Account and such amount carried forward may only be used for Marina Slot
Improvements) and (B) for each fiscal year thereafter, 67% of Consolidated
EBITDA for the immediately preceding fiscal year less (1) all cash interest
payments included in Consolidated Interest Expense for such fiscal year and (2)
all cash payments to New Jersey Casino Reinvestment Development Authority (CRDA)
for such fiscal year; provided, however, that (x) the amounts available for
capital expenditures in any such fiscal year shall be increased by the amount
that would have been deposited in the Open Market Repurchase Account but was in
excess of the amount required to be deposited under the First Priority Indenture
and (y) the foregoing amounts shall be in addition to any expenditures described
in clause (g) of the definition of Permitted Indebtedness.
-73-
SECTION 4.24. Limitation on Status as Investment Company.
The Company and its Subsidiaries shall not be required to
register as an "investment company" (as that term is defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act")) or otherwise
subject to regulation under the Investment Company Act.
SECTION 4.25. Excess Cash Flow Offer.
(a) If the First Half Excess Cash Flow Offer Amount for any
fiscal year is greater than zero, the Issuers shall make a pro rata offer to
repurchase First Priority Notes (the "First Half Excess Cash Flow Offer") at the
Excess Cash Flow Offer Price per First Priority Note in the largest principal
amount that is an integral multiple of $1,000 that may be repurchased with an
amount equal to the First Half Excess Cash Flow Offer Amount for such fiscal
year. In addition, if the Full Fiscal Year Excess Cash Flow Offer Amount is
greater than zero, the Issuers will make a pro rata offer to repurchase First
Priority Notes (the "Full Fiscal Year Excess Cash Flow Offer") at the Excess
Cash Flow Offer Price per First Priority Note in the largest principal amount
that is an integral multiple of $1,000 that may be repurchased with an amount
equal to the Full Fiscal Year Excess Cash Flow Offer Amount for such fiscal
year.
(b) If a First Half Excess Cash Flow Offer or Full Year
Excess Cash Flow Offer is required in any fiscal year, the Issuers shall mail a
notice (an "Excess Cash Flow Offer Notice") to each holder of First Priority
Notes by (i) in the case of a First Half Excess Cash Flow Offer, October 1 of
such fiscal year and (ii) in the case of a Full Fiscal Year Excess Cash Flow
Offer, April 1 of the subsequent fiscal year, in each case to purchase Notes on
the applicable Excess Cash Flow Offer Date (as defined below) pursuant to the
procedures required by Section 4.25(c) and (d) hereof and described in such
notice. Any Excess Cash Flow Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law. No later than five Business Days
after the termination of any Excess Cash Flow Offer (an "Excess Cash Flow Offer
Date"), the Issuers shall purchase, on a pro rata basis if necessary, all First
Priority Notes tendered in response to such Excess Cash Flow Offer. Payment for
any First Priority Notes so purchased shall be made in the same manner as
interest payments are made.
(c) If any Excess Cash Flow Offer Date is on or after an
interest record date and on or before the related interest payment date, any
accrued and unpaid interest shall be paid to the person in whose name a First
Priority Note is registered at the close of business on such record date, and no
additional interest will be payable to holders whose First Priority Notes are
accepted for purchase pursuant to such Excess Cash Flow Offer. On or before any
Excess Cash Flow Offer Date the Issuers shall, to the extent lawful, accept for
payment (on a pro rata basis if necessary) (a) that number of First Priority
Notes (or portions thereof) that may be purchased with the applicable Excess
Cash Flow Offer Amount or (b) if First Priority Notes with an Excess Cash Flow
Offer Price equal to or less than the applicable Excess Cash Flow Offer Amount
have been tendered, all First Priority Notes tendered, and will deliver to the
First Priority Trustee an Officers' Certificate stating the number of First
Priority Notes or portions thereof that were accepted for payment by the Issuers
in accordance with this Section 4.25. To the extent the aggregate purchase price
expended in any Excess Cash Flow Offer is less than the applicable Excess Cash
Flow Offer Amount, the excess shall be deposited in the Open Market Repurchase
Account to the extent required by the First Priority Indenture or may be used by
the Issuers
-74-
for any purpose not otherwise prohibited by this Indenture, including, without
limitation, pursuant to Section 4.23. Upon completion of any Full Fiscal Year
Excess Cash Flow Offer, the amount of Consolidated Excess Cash Flow shall be
reset at zero. The Issuers, the Depositary or the Paying Agent, as the case may
be, shall promptly (but in any case not later than three Business Days after any
Excess Cash Flow Offer Date) mail or deliver to each tendering holder of First
Priority Notes a cash amount equal to the purchase price of the First Priority
Notes being purchased on such Excess Cash Flow Offer Date, and the First
Priority Trustee, upon delivery of an Officers' Certificate, will authenticate
and mail or deliver a new Note to such holder of First Priority Notes in a
principal amount equal to the unpurchased portion of such holder's First
Priority Note that is surrendered. Any First Priority Note not so accepted will
be promptly mailed or delivered by the Issuers to the holder thereof. The
Issuers will publicly announce the results of any Excess Cash Flow Offer on the
applicable Excess Cash Flow Offer Date.
(d) Solely to the extent permitted by the First Priority
Indenture or to the extent that no First Priority Notes are then outstanding,
the Issuers shall determine the First Half Excess Cash Flow Amount and the Full
Fiscal Year Excess Cash Flow Amount and make any Excess Cash Flow Offer that
would be required if the Notes were First Priority Notes, except to the extent
that, in any Excess Cash Flow Offer, the Excess Cash Flow Offer Amount exceeds
the purchase price expended in any Excess Cash Flow Offer, the Issuers shall be
permitted, after the consummation of such Excess Cash Flow Offer, to use such
excess for any purpose not prohibited by this Indenture.
(e) The Issuers shall comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of Notes or First Priority Notes as a result of an Excess
Cash Flow Offer. To the extent that the provisions of any securities laws or
regulations conflict with this Section 4.25, the Issuers shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached their obligations under this Section 4.25 by virtue thereof.
SECTION 4.26. Maintenance of Capex Reserve Account.
On or prior to the Excess Cash Flow Offer Date with respect to
the fiscal year ending December 31, 2003, the Company may deposit the Capex
Reserve Amount into the Capex Reserve Account. The Collateral Agent shall hold
and invest these funds in Cash Equivalents that will be held in the Capex
Reserve Account until the funds are needed to pay for the capital expenditures
provided for in the definition of "Capex Reserve Amount". Any interest income on
the funds deposited in the Capex Reserve Account shall be disbursed by the
Collateral Agent into any account specified by the Company for use in any manner
not prohibited by this Indenture. All of the funds and securities in the Capex
Reserve Account shall be pledged to the Collateral Agent on behalf of the
Trustee for the benefit of the Holders.
-75-
ARTICLE 5
SUCCESSORS
SECTION 5.01. Limitation on Merger, Sale or Consolidation.
(a) The Company shall not consolidate with or merge with or
into any other person or sell, assign, convey, transfer, lease or otherwise
dispose of all or substantially all of its properties (as an entirety or
substantially as an entirety in one transaction or a series of related
transactions) to any person or group of affiliated persons or permit any of its
Subsidiaries to enter into any such transaction or transactions if such
transaction or transactions, in the aggregate, would result in a transfer of all
or substantially all of the property of the Company on a Consolidated basis to
any other person, unless:
(1) the Company shall be the continuing person, or the person
(if other than the Company) formed by such consolidation or into which
the Company is merged or to which the properties of the Company are
transferred (the "Surviving Entity") shall be a limited liability
company or corporation duly organized and validly existing under the
laws of the United States or any state thereof or the District of
Columbia and shall expressly assume, by a supplemental indenture and
supplemental Collateral Documents in form and substance reasonably
satisfactory to the Trustee, all of the obligations of the Company
under the Notes, this Indenture and the Collateral Documents, and the
Notes, this Indenture and the Collateral Documents shall remain in
full force and effect;
(2) immediately before and immediately after giving effect to
such transaction on a pro forma basis, no Event of Default or Default
shall have occurred and be continuing;
(3) immediately after giving effect to such transaction on a
pro forma basis, the Consolidated Net Worth of the Company or the
Surviving Entity, as applicable, is at least equal to the Consolidated
Net Worth of the Company immediately prior to such transaction or
series of transactions;
(4) immediately before and after giving effect to such
transaction on a pro forma basis, the Company or the Surviving Entity,
as applicable, could incur at least $1.00 of additional Indebtedness
under the Total Leverage Ratio test set forth in Section 4.08(a)
hereof; and
(5) immediately after such transaction, the Company or the
Surviving Entity, as applicable, holds all Permits required for the
operation of the business of, and such entity is controlled by a
person or entity (or has retained a person or entity which is)
experienced in, operating casino hotels or otherwise holds all Permits
(including those required from Gaming Authorities) to operate its
business. The Company or the Surviving Entity shall also deliver to
the Trustee an Officers' Certificate and an opinion of counsel, each
stating that (i) such consolidation, merger, sale, assignment,
conveyance, transfer, lease or disposition and such supplemental
indenture comply with this Indenture and the Collateral Documents and
(ii) the transaction shall not impair the rights and powers of the
Trustee and Holders of the Notes under this Indenture or the
Collateral Documents.
-76-
(b) Notwithstanding anything herein to the contrary, TC
Funding shall, at all times that the Company is a partnership or limited
liability company, be maintained as a C corporation and a direct Wholly-Owned
Subsidiary of the Company.
SECTION 5.02. Successor Corporation Substituted for the Company.
Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the property of the Company on a consolidated basis in accordance with Section
5.01 hereof, the successor corporation formed by such consolidation or into or
with which the Company or the Subsidiary is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such
consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" or the "Subsidiary"
shall refer instead to the successor corporation and not to the Company or the
Subsidiary), and may exercise every right and power of the Company under this
Indenture with the same effect as if such successor Person had been named as the
Company or the Subsidiary herein; provided, however, that the predecessor of the
Company shall not be relieved from the Obligation to pay the principal of and
interest on the Notes except in the case of a sale of all of the Company's or
the Subsidiary's property that meets the requirements of Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default and Remedies.
An "Event of Default" wherever used herein means any one of the
following events:
(1) the failure by the Issuers to pay any installment of
interest (including any defaulted interest) or Additional Interest, if
any, on the Notes as and when the same becomes due and payable and the
continuance of any such failure for 30 days;
(2) the failure by the Issuers to pay all or any part of the
principal or premium, if any, on the Notes 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 the purchase price in any Excess Cash Flow
Offer, Residual Event of Loss Offer, Residual Asset Sale Offer or
otherwise;
(3) the failure by the Company or any of its Subsidiaries to
observe or perform any other covenant or agreement contained in the
Notes or this Indenture and, subject to certain exceptions, the
continuance of such failure for a period of 30 days after written
notice 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 Notes outstanding;
-77-
(4) the Issuers or any of their Significant Subsidiaries
pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against
it in an involuntary case,
(C) consents to the appointment of a Custodian of it or
for all or substantially all of its property,
(D) makes a general assignment for the benefit of its
creditors, or
(E) generally is not paying its debts as they become
due; or
(5) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case,
(B) appoints a Custodian of the Company or any
Significant Subsidiary or for all or substantially all of the
property of the Company or any Significant Subsidiary, or
(C) orders the liquidation of the Company or any
Significant Subsidiary, and the order or decree remains unstayed
and in effect for 60 consecutive days.
(6) a default under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Issuers, any
Guarantor or any of the Company's Subsidiaries (or the payment of
which is guaranteed by any Issuer or any of the Guarantors) whether
such Indebtedness or guarantee now exists, or is created after the
Issue Date, which default:
(A) is caused by a failure to pay principal of or
premium, if any, or interest on such Indebtedness, after the
expiration of any grace period provided in such Indebtedness on
the date of such default (a "Payment Default"); or
(B) results in the acceleration of such Indebtedness
prior to its express maturity,
and in each case, the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which there
has been a Payment Default or the maturity of which has been so
accelerated, aggregates $20.0 million or more;
-78-
(7) final unsatisfied judgments aggregating in excess of
$20.0 million at any one time rendered against either or both of the
Issuers or any of their Subsidiaries and not stayed, bonded or
discharged within 60 days;
(8) the revocation, suspension or involuntary loss of
any Permit which results in the cessation of all or a substantial
portion of the operations of either of the Casino Properties for a
period of more than 90 consecutive days;
(9) except as permitted by this Indenture and the Notes,
the cessation of effectiveness of any Guarantee of the Obligations in
any material respect or the finding by any judicial proceeding that
any such Guarantee is unenforceable or invalid in any material respect
or the denial or disaffirmation by any Guarantor in writing of its
obligations under its Guarantee; or
(10) a default by any Issuer or any Guarantor in the
performance of any of their respective obligations under the
Collateral Documents which materially and adversely affects the
enforceability, validity, perfection or priority of the Trustee's Lien
on the Collateral or which adversely affects the condition or value of
the Collateral, taken as a whole, in any material respect, a
repudiation or disaffirmation by any Issuer or any Guarantor of its
obligations under the Collateral Documents or the determination in a
judicial proceeding that the Collateral Documents are unenforceable or
invalid against any Issuer or any Guarantor for any reason.
SECTION 6.02. Acceleration.
(a) If a Default occurs and is continuing, the Trustee shall,
within 90 days after it receives actual notice thereof, give to the Holders
notice of such Default.
(b) If an Event of Default occurs and is continuing (other
than an Event of Default specified in clauses (4) and (5) of Section 6.01
hereof), then in every such case, unless the principal of all of the Notes shall
have already become due and payable, either the Trustee or the Holders of 25% in
aggregate principal amount of the Notes then outstanding, by notice in writing
to the Issuers (and to the Trustee if given by Holders), may, and the Trustee at
the request of such Holders shall, declare all principal, determined as set
forth below, and accrued interest thereon to be due and payable immediately. If
an Event of Default specified in clause (4) or (5) of Section 6.01 hereof
occurs, all principal and accrued interest thereon shall be immediately due and
payable on all outstanding Notes without any declaration or other act on the
part of Trustee or the Holders. The Holders of a majority in aggregate principal
amount of Notes (or such higher percentage as would be required to amend such
provision) are authorized to rescind such acceleration if all existing Events of
Default, other than the non-payment of the principal of, premium, if any, and
interest on the Notes which have become due solely by such acceleration, have
been cured or waived.
SECTION 6.03. Other Remedies.
(a) If an Event of Default occurs and is continuing, subject
to the terms of the Intercreditor Agreements, the Trustee may pursue any
available remedy to collect the payment of principal,
-79-
premium, if any, and interest and Additional Interest, if any, on the Notes or
to enforce the performance of any provision of the Notes, this Indenture or the
Collateral Documents.
(b) The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder of a Note in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 6.04. Waiver of Past Defaults.
Prior to the declaration of acceleration of the maturity of the
Notes, the Holders of a majority in aggregate principal amount of the Notes at
the time outstanding may waive on behalf of all the Holders any Default, except
a Default in the payment of principal of or interest on any Note not yet cured
or a Default with respect to any covenant or provision which cannot be modified
or amended without the consent of the Holder of each outstanding Note affected.
Subject to the provisions of Section 7.01 of this Indenture, the Trustee shall
be under no obligation to exercise any of its rights or powers under this
Indenture at the request, order or direction of any of the Holders, unless such
Holders have offered to the Trustee reasonable security or indemnity. Upon any
such waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
SECTION 6.05. Control by Majority.
Subject to all provisions of this Indenture and applicable law,
the Holders of not less than a majority in aggregate principal amount of the
Notes at the time outstanding 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 on the Trustee.
SECTION 6.06. Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice
of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the
then outstanding Notes make a written request to the Trustee to
institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(c) such Holder or Holders offer and, if requested, provide
to the Trustee indemnity satisfactory to the Trustee against any cost,
loss, liability or expense;
(d) the Trustee does not comply with such request within 60
days after receipt of the request and the offer and, if requested, the
provision of indemnity; and
-80-
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee
a direction inconsistent with such request.
A Holder of a Note may not use this Indenture or the Collateral Documents to
prejudice the rights of another Holder of a Note or to obtain a preference or
priority over another Holder of a Note.
SECTION 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right
of any Holder of a Note to receive payment of principal, premium and interest on
the Note, and Additional Interest, if any, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder;
provided that a Holder shall not have the right to institute any such suit for
the enforcement of payment if and to the extent that the institution or
prosecution thereof or the entry of judgment therein would, under applicable
law, result in the surrender, impairment, waiver or loss of the Lien of this
Indenture and the Collateral Documents upon any of the Collateral.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) occurs
and is continuing, the Trustee is authorized to recover judgment in its own name
and as trustee of an express trust against the Company for the whole amount of
principal of and premium and interest and Additional Interest, if any, remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company (or any
other obligor upon the Notes), its creditors or its property and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition
-81-
affecting the Notes or the rights of any Holder, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. Priorities.
Subject to the terms of the Intercreditor Agreements, if the
Trustee collects any money pursuant to this Article, it shall pay out the money
in the following order:
First: to the Trustee, its agents and attorneys for all amounts
due under Section 7.07 hereof, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the
Trustee and the costs and expenses of collection;
Second: to Holders for amounts due and unpaid on the Notes for
principal and interest, and Additional Interest, if any, ratably,
without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal, premium and interest and
Additional Interest, if any, respectively; and
Third: subject to the Intercreditor Agreements, to the Company
or to such party as a court of competent jurisdiction shall direct.
The Trustee may fix a Record Date and payment date for any
payment to Holders pursuant to this Section 6.10.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder for the
enforcement of the payment of the principal of (or premium, if any) or interest
on any Note on or after the respective maturity or payment dates expressed in
such Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10%
in principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
-82-
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by
the express provisions of this Indenture and the Collateral Documents
and the Trustee need perform only those duties that are specifically
set forth in this Indenture and the Collateral Documents and no
others, and no implied covenants or Obligations shall be read into
this Indenture or the Collateral Documents against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture or the Collateral Documents. However, the Trustee
shall examine such certificates and opinions to determine whether or
not they conform to the requirements of this Indenture or the
Collateral Documents.
(c) The Trustee may not be relieved from liabilities for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof or in
exercising any trust or power conferred upon the Trustee under this
Indenture.
(d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject to
this Section 7.01 and Section 7.02.
(e) No provision of this Indenture or the Collateral
Documents shall require the Trustee to expend or risk its own funds or incur any
liability. The Trustee shall be under no obligation to exercise any of its
rights and powers under this Indenture or the Collateral Documents at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee is hereby authorized to, instruct the
Collateral Agent to, upon request from the Issuers, enter into the Priority
Intercreditor Agreement on terms set forth on Annex A hereto and/or an Access
Intercreditor Agreement.
(g) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Issuers.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
-83-
SECTION 7.02. Rights of Trustee.
(a) In connection with the Trustee's rights and duties under
this Indenture or the Collateral Documents, the Trustee may conclusively rely
upon and shall be protected from acting or refraining from acting upon any
document or instrument believed by it to be genuine and to have been signed or
presented by the proper Person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting under
this Indenture or the Collateral Documents, it may require an Officers'
Certificate or an Opinion of Counsel or both. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder or pursuant to the
Collateral Documents in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes
or omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture or the Collateral
Documents.
(e) Unless otherwise specifically provided in this Indenture
or the Collateral Documents, any demand, request, direction or notice from the
Issuers shall be sufficient if signed by an Officer of the Issuers.
(f) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture or the Collateral
Documents at the request or direction of any of the Holders unless such Holders
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities that might be incurred by it in compliance with
such request or direction.
(g) Except with respect to Section 4.01 hereof, the Trustee
shall have no duty to inquire as to the performance of the Issuers' covenants in
Article 4 hereof. In addition, the Trustee shall not be deemed to have knowledge
of any Default or Event of Default except (i) any Event of Default occurring
pursuant to Sections 6.01(1), 6.01(2) and 4.01 or (ii) any Default or Event of
Default of which the Trustee shall have received written notification or
obtained actual knowledge.
(h) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any Board Resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee may, in its discretion, make such further inquiry or
investigation into such facts or matters as it may see fit and if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Issuers personally or
by agent or attorney.
-84-
(i) To the extent any provisions of the Collateral Documents
conflict with or are silent with respect to the matters set forth in this
Article 7, this Article 7 shall be controlling.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Issuers or any
Affiliate of the Issuers with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest (as defined in the TIA) it must eliminate such conflict within 90 days,
apply to the SEC for permission to continue as trustee or resign. Any Agent may
do the same with like rights and duties. The Trustee is also subject to Sections
7.10 and 7.11 hereof.
SECTION 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes, it
shall not be accountable for the Issuers' use of the proceeds from the Notes or
any money paid to the Issuers or upon the Issuers' direction under any provision
of this Indenture, it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
SECTION 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if
it is known to the Trustee, the Trustee shall mail to Holders a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium, if any, or
interest on any Note, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders.
SECTION 7.06. Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the May 15
following the Issue Date, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders a brief report dated as of such reporting date
that complies with TIA Section 313(a) (but if no event described in TIA Section
313(a) has occurred within the twelve months preceding the reporting date, no
report need be transmitted). The Trustee also shall comply with TIA Section
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders
shall be mailed to the Issuers and filed with the SEC and each stock exchange on
which the Notes are listed in accordance with TIA Section 313(d). The Issuers
shall promptly notify the Trustee when the Notes are listed on any stock
exchange.
-85-
SECTION 7.07. Compensation and Indemnity.
The Issuers shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and the Collateral Documents
and services rendered by it hereunder and thereunder. The Trustee's compensation
shall not be limited by any law in regard to the law of compensation of a
trustee of an express trust. The Issuers shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
The Issuers shall indemnify the Trustee and its officers,
directors, employees, agents and affiliates against any and all losses,
liabilities or expenses (including reasonable attorneys' fees) incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, the Collateral Documents and any landlord waiver or
consent, including the costs and expenses of enforcing this Indenture against
the Issuers (including this Section 7.07) and defending itself against any claim
(whether asserted by the Issuers or any Holder or any other Person) or liability
in connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be
attributable to its negligence or bad faith. The Trustee shall notify the
Issuers promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Issuers shall not relieve the Issuers of their
Obligations hereunder, under the Collateral Documents or under any landlord
waiver or consent. The Issuers shall defend the claim and the Trustee shall
cooperate 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 its prior written consent, which consent
shall not be unreasonably withheld.
The Obligations of the Issuers under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture and the termination of
any Collateral Document.
To secure the Issuers' payment Obligations in this Section 7.07,
the Trustee shall have a Lien prior to the Notes on all money and property held
or collected by the Trustee, except money held in trust to pay principal,
premium, if any, and interest on particular Notes. Such Lien shall survive the
satisfaction and discharge of this Indenture and the termination of any
Collateral Documents.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(1) or 6.01(2) hereof occurs, the
expenses and the compensation for the services (including the fees and expenses
of its agents and counsel) are intended to constitute expenses of administration
under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
SECTION 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
-86-
The Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Issuers. The Holders of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Issuers in writing. The Issuers may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee
or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Issuers shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Issuers.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Issuers or
the Holders of at least 10% in principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder who has been
a Holder for at least six months, fails to comply with Section 7.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers, trusts and duties of the
retiring Trustee under this Indenture. The successor Trustee shall mail a notice
of its succession to Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, provided all sums owing
to the Trustee hereunder have been paid and subject to the Lien provided for in
Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Issuers' obligations under Section 7.07 hereof shall continue
for the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
-87-
SECTION 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trust power, that is subject to supervision or examination by federal
or state authorities and that has a combined capital and surplus of at least
$100,000,000 as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE 8
DISCHARGE OF INDENTURE; LEGAL
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. Satisfaction and Discharge.
This Indenture shall be discharged and shall cease to be of
further effect (except as to surviving rights or registration of transfer or
exchange of Notes) as to all outstanding Notes and the Trustee, on demand of and
at the expense of the Issuers, shall execute and deliver proper instruments
acknowledging satisfaction and discharge of this Indenture and all Collateral
Documents, when either:
(1) all such Notes theretofore authenticated and delivered
(except lost, stolen or destroyed Notes which have been replaced or
paid and Notes for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Issuers and thereafter
repaid to the Issuers or discharged from such trust) have been
delivered to the Trustee for cancellation; or
(2) (a) all such Notes not theretofore delivered to the
Trustee for cancellation have or shall (upon the mailing of a notice
or notices deposited with the Trustee together with irrevocable
instructions to mail such notice or notices to Holders of the Notes)
become due and payable and the Issuers have irrevocably deposited or
caused to be deposited with the Trustee as trust funds in the trust
solely for the benefit of the Holders, an amount of money sufficient
to pay and discharge the entire indebtedness on the Notes not
theretofore delivered to the Trustee for cancellation, for principal,
premium, if any, and accrued interest to the date of such deposit; (b)
the Issuers have paid all sums payable by them under this Indenture;
and (c) the Issuers have delivered irrevocable instructions to the
Trustee to apply the deposited
-88-
money toward the payment of the Notes at maturity or the redemption
date, as the case may be.
In addition, the Issuers shall deliver an Officers' Certificate
and an opinion of counsel stating that all conditions precedent to satisfaction
and discharge have been complied with.
Notwithstanding the foregoing paragraphs, the Issuers'
Obligations in Article 2 and in Sections 4.01, 4.02, 4.13, 7.07, 7.08, 8.07 and
8.08 shall survive until the Notes are no longer outstanding. After the Notes
are no longer outstanding, the Issuers' Obligations in Sections 7.07, 8.07 and
8.08 shall survive.
After such delivery or irrevocable deposit the Trustee upon
request shall acknowledge in writing the discharge of the Issuers' Obligations
under the Notes, the Guarantees and this Indenture except for those surviving
Obligations specified above.
SECTION 8.02. Option to Effect Legal Defeasance or Covenant Defeasance.
The Company or the Issuers may, at the option of their Boards of
Directors evidenced by a Board Resolution set forth in an Officers' Certificate,
at any time, elect to have either Section 8.03 or 8.04 hereof be applied to all
outstanding Notes upon compliance with the conditions set forth below in this
Article 8.
SECTION 8.03. Legal Defeasance and Discharge.
Upon the Issuers' exercise under Section 8.02 hereof of the
option applicable to this Section 8.03, the Issuers and the Guarantors shall,
subject to the satisfaction of the conditions set forth in Section 8.05 hereof,
be deemed to have been discharged from their Obligations with respect to all
outstanding Notes on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means that
the Issuers and the Guarantors shall be deemed to have paid and discharged the
entire Indebtedness represented by the outstanding Notes, which shall thereafter
be deemed to be "outstanding" only for the purposes of Section 8.06 hereof and
the other Sections of this Indenture referred to in (1) and (2) below, and to
have satisfied all their other Obligations under such Notes and this Indenture
(and the Trustee, on demand of and at the expense of the Issuers, shall execute
proper instruments acknowledging the same), except for the following provisions
which shall survive until otherwise terminated or discharged hereunder: (1) the
rights of Holders of outstanding Notes to receive solely from the trust fund
described in Section 8.05 hereof, and as more fully set forth in such Section,
payments in respect of the principal of, premium, and interest, if any, and
Additional Interest, if any, on such Notes when such payments are due, (2) the
Issuers' Obligations with respect to such Notes under Article 2 and Section 4.02
hereof, (3) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Issuers' Obligations in connection therewith and (4) this
Article 8. Subject to compliance with this Article 8, the Issuers may exercise
their option under this Section 8.03 notwithstanding the prior exercise of its
option under Section 8.04 hereof.
-89-
SECTION 8.04. Covenant Defeasance.
Upon the Issuers' exercise under Section 8.02 hereof of the
option applicable to this Section 8.04, the Issuers and the Guarantors shall,
subject to the satisfaction of the conditions set forth in Section 8.05 hereof,
be released from their Obligations under the covenants contained in Sections
4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.14, 4.15, 4.16, 4.18, 4.19, 4.20, 4.21,
4.22, 4.23, 4.24, 4.25 and 4.26 hereof with respect to the outstanding Notes on
and after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Notes shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Notes shall not be deemed outstanding
for accounting purposes). For this purpose, Covenant Defeasance means that, with
respect to the outstanding Notes, the Issuers may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes shall be unaffected thereby. In addition, upon the
Issuers' exercise under Section 8.02 hereof of the option applicable to this
Section 8.04 hereof, subject to the satisfaction of the conditions set forth in
Section 8.05 hereof, the events set forth in Sections 6.01(3) through 6.01(10)
hereof shall not constitute Events of Default. SECTION 8.05. Conditions to Legal
or Covenant Defeasance.
(a) In order to exercise either Legal Defeasance or Covenant
Defeasance,
(1) the Issuers must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders of the Notes cash in such
amounts as will be sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay the
principal of, premium, if any, and interest and Additional Interest,
if any, on the outstanding Notes on the stated maturity or on the
applicable redemption date, as the case may be, and the Issuers must
specify whether the Notes are being defeased to maturity or to a
particular redemption date;
(2) in the case of Legal Defeasance, the Issuers will have
delivered to the Trustee an opinion of counsel reasonably acceptable
to the Trustee confirming that (a) the Issuers have received from, or
there has been published by, the Internal Revenue Service a ruling or
(b) since the Issue Date, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based
thereon such opinion of counsel will confirm that, the Holders of the
outstanding Notes 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;
(3) in the case of Covenant Defeasance, the Issuers will have
delivered to the Trustee an opinion of counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of
the outstanding Notes will not recognize income, gain or loss for
-90-
federal income tax purposes as a result of such Covenant Defeasance
and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such
Covenant Defeasance had not occurred;
(4) such Legal Defeasance or Covenant Defeasance will not
result in a breach or violation of, or constitute a default under any
material agreement or instrument (other than the Indenture) to which
the Issuers, the Guarantors or any of the Company's Subsidiaries is a
party or by which the Issuers, the Guarantors or any of the Company's
Subsidiaries is bound;
(5) the Issuers must have delivered to the Trustee an opinion
of counsel to the effect that after the 91st day following the
deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
(6) the Issuers must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Issuers with
the intent of preferring the Holders of Notes over the other creditors
of the Issuers with the intent of defeating, hindering, delaying or
defrauding creditors of the Issuers, the Guarantors or others; and
(7) the Issuers must deliver to the Trustee an Officers'
Certificate and an opinion of counsel, each stating that all
conditions precedent to Legal Defeasance or Covenant Defeasance have
been complied with.
(b) Notwithstanding the provisions of Section 8.05(a), the
opinion of counsel required by clause (2) above with respect to a Legal
Defeasance need not be delivered if all Notes not theretofore delivered to the
Trustee for cancellation (x) have become due and payable or (y) will become due
and payable on the Stated Maturity within one year under arrangements
satisfactory to the Trustee for the giving or notice of redemption by the
Trustee in the name, and at the expense, of the Issuers.
SECTION 8.06. Deposited Money and Government Securities to Be Held in
Trust; Other Miscellaneous Provisions.
Subject to Section 8.07 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.06, the "Trustee") pursuant to Section 8.05 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due thereon in respect of principal, premium, if any, and
interest, but such money need not be segregated from other funds, except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.05 hereof or the principal
and interest received in respect thereof.
-91-
Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable Government Securities held by it as
provided in Section 8.05 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.05(a)(1) hereof), are in excess of the amount thereof that would then
be required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
SECTION 8.07. Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of or premium or
interest or Additional Interest, if any, on any Note and remaining unclaimed for
two years after such principal, and premium, if any, Additional Interest, if
any, or interest has become due and payable shall be paid to the Company on its
request or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Note shall thereafter, as a creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may (but
shall not be obligated to) at the expense of the Company cause to be published
once, in the New York Times and The Wall Street Journal (national edition),
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such notification
or publication, any unclaimed balance of such money then remaining shall be
repaid to the Company.
SECTION 8.08. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with Section
8.03 or 8.04 hereof, as the case may be, by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Issuers' Obligations under this Indenture
and the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.03 or 8.04 hereof until such time as the Trustee or Paying
Agent is permitted to apply all such money in accordance with Section 8.03 or
8.04 hereof, as the case may be; provided, however, that, if the Company makes
any payment of principal of, premium, if any, or interest on any Note following
the reinstatement of its Obligations, the Company shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money held
by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. Without Consent of Holders.
Notwithstanding Section 9.02 of this Indenture, the Company and
the Trustee may, from time to time, amend or supplement this Indenture, the
Notes, the Guarantees or the Collateral
-92-
Documents without the consent of any Holder and the Collateral Agent may amend
the Priority Intercreditor Agreement without the consent of any Holder to:
(a) cure any ambiguity, defect or inconsistency;
(b) provide for uncertificated Notes in addition to or in
place of Definitive Notes;
(c) provide for the assumption of the Issuers' or any
Guarantor's Obligations to the Holders in the case of a merger or
consolidation pursuant to Articles 5 or 12 hereof or a sale of all or
substantially all of the Issuers' or any Guarantor's property;
(d) provide for additional Guarantors as set forth in Section
4.17 or to provide for the release of a Guarantor pursuant to Section
12.03;
(e) make any change that would provide any additional rights
or benefits to the Holders or that does not adversely affect the
rights hereunder of any Holder;
(f) comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA; or
(g) amend the Priority Intercreditor in accordance with the
terms set forth on Annex A hereto in order to add the Representative
of any First Priority Pari Passu Indebtedness that is secured by a
Lien on all or part of the Collateral.
Upon the request of the Issuers accompanied by a Board Resolution
authorizing the execution of any such amended or supplemental Indenture, and
upon receipt by the Trustee of the documents described in Section 7.02 hereof,
the Trustee shall join with the Issuers in the execution of any amended or
supplemental Indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into such
amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.02. With Consent of Holders.
Except as provided below in this Section 9.02, this Indenture,
the Notes, the Guarantees or the Collateral Documents may be amended or
supplemented with the consent of the Holders of at least a majority in aggregate
principal amount of the Notes then outstanding (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, Notes), and any existing default or compliance with any provision of
this Indenture, the Notes, the Guarantees or the Collateral Documents may be
waived with the consent of the Holders of a majority in principal amount of the
then outstanding Notes (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, Notes).
However, without the consent of each Holder affected, an amendment or waiver may
not:
(1) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver of this Indenture,
Notes, Guarantees or Collateral Documents;
-93-
(2) reduce the principal of or change the fixed maturity of
any Note or alter the provisions with respect to the redemption of the
Notes;
(3) reduce the rate of or change the time for payment of
interest on any Note;
(4) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest or Additional Interest on
the Notes (except a rescission of acceleration of the Notes by the
Holders of at least a majority in aggregate principal amount of the
Notes and a waiver of the payment default that resulted from such
acceleration in accordance with the provisions of Article 6);
(5) make any Note payable in money other than that stated in
the Notes;
(6) make any change in the provisions of this Indenture, the
Notes, the Guarantees or the Collateral Documents relating to waivers
of past Defaults or the rights of Holders of Notes to receive payments
of principal of or premium, if any, or interest or Additional
Interest, if any, on the Notes;
(7) amend, modify or supplement, or permit or consent to any
amendment, modification or supplement of the Collateral Documents in
any way that would be adverse to the Holders in any material respect
(except as provided in Article 9);
(8) waive a redemption payment with respect to any Note;
(9) following an event or circumstance which may give rise to
the requirement to make an offer as required by the covenants
described above under Sections 4.11, 4.14, 4.16 and 4.25 modify the
provisions of any such covenant (or related definition) in this
Indenture requiring the Company of make an offer to purchase in a
manner materially adverse to the Holders of Notes affected thereby; or
(10) make any change in the foregoing amendment and waiver
provisions.
Notwithstanding the foregoing, Collateral may only be released
with the consent of the Holders of at least 75% in aggregate principal amount of
the then outstanding Notes, in addition to releases of Collateral expressly
permitted by this Indenture and the Collateral Documents; provided that such
requirement shall not apply to a release of Collateral that is required by
Section 10.03(d) hereof.
It shall not be necessary for the consent of the Holders under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
SECTION 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes
shall be set forth in a amended or supplemental Indenture that complies with the
TIA as then in effect.
-94-
SECTION 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent Holder
of a Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 9.05. Notation on or Exchange of Notes.
The Trustee may (but shall not be obligated to) place an
appropriate notation about an amendment, supplement or waiver on any Note
thereafter authenticated. The Company in exchange for all Notes may issue and
the Trustee upon receipt of an Authentication Order, shall authenticate new
Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
SECTION 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental Indenture or
Collateral Document authorized pursuant to this Article 9 if the amendment or
supplement does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. The Company may not sign an amendment or supplemental
Indenture or Collateral Document until the Board of Directors approves it. In
executing any amended or supplemental indenture, the Trustee shall be entitled
to receive indemnity reasonably satisfactory to it and to receive and (subject
to Section 7.01) shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel stating that the execution of such amended
or supplemental Indenture or Collateral Document is authorized or permitted by
this Indenture.
ARTICLE 10
COLLATERAL
SECTION 10.01. Collateral Documents; Additional Collateral; Substitute
Collateral.
(a) Collateral Documents. In order to secure the due and
punctual payment of the principal or premium, if any, and interest and
Additional Interest, if any, on the Notes when and as the same shall be due and
payable, whether on an Interest Payment Date, at maturity, on any Asset Sale
Offer Payment Date, Excess Loss Proceeds Payment Date, Excess Cash Flow Offer
Date or Change of Control Purchase Date, or by acceleration, redemption or
otherwise, and interest on the overdue principal of and (to the extent permitted
by law) interest and Additional Interest, if any, on the Notes and the
performance of all other Obligations of each of the Issuers and the Guarantors
to the Holders or the
-95-
Trustee under this Indenture, the Notes, the Guarantees, and any other documents
contemplated hereby, as the case may be, the Issuers, the Guarantors, the
Collateral Agent and the Trustee, as applicable, have simultaneously with the
execution of this Indenture entered into the Collateral Documents to create the
security interests and for related matters. The Trustee, the Issuers and the
Guarantors each hereby agree that the Collateral Agent and Trustee hold their
interest in the Collateral in trust for their benefit and for the benefit of the
Holders pursuant to the terms of the Collateral Documents. Each of the Issuers
and the Guarantors covenants and agrees that it shall execute, acknowledge and
deliver to the Collateral Agent such further assignments, transfers, assurances
or other instruments and shall do or cause to be done all such acts and things
as may be necessary or proper to assure and confirm to the Collateral Agent and
Trustee their interest in the Collateral, or any part thereof, as from time to
time constituted, and the right, title and interest in and to the Collateral
Documents so as to render the same available for the security and benefit of
this Indenture and of the Notes.
(b) Additional Collateral. As soon as practicable following
the acquisition by the Issuers or any Subsidiary of any property of the type
which constitutes Collateral, to the extent not prohibited by Gaming Authorities
or applicable Gaming Laws,
(i) the Issuers or the applicable Guarantor, as the case may
be, and the Collateral Agent shall enter into such amendments or
supplements to the Collateral Documents or such additional Mortgages
or Ship Mortgages (in each case in registrable or recordable form) and
other Collateral Documents, in each case in accordance with the terms
thereof and subject to any exclusions relating to a particular item of
Collateral and the Issuers shall cause such amendments, supplements,
mortgages and other Collateral Documents to be filed and recorded in
all such governmental offices as shall be necessary in order to grant
and create a valid Lien on and security interest in such
After-Acquired Property in favor of the Collateral Agent (subject to
no Liens except Permitted Liens), the Issuers shall cause appropriate
financing statements to be filed in such governmental offices as shall
be reasonably necessary in order to perfect any security interest in
such After-Acquired Property as to which a security interest may,
under the UCC of the applicable jurisdiction, be perfected by the
filing of a financing statement and, if any such After-Acquired
Property consists of stock certificates, promissory notes or other
property as to which, under the relevant UCC, a security interest may
be perfected by possession or control, deliver such certificates,
promissory notes and other property (together with stock powers or
assignments duly endorsed in blank), or deliver issuer acknowledgments
and control agreements relating to such property in accordance with
the provisions of the applicable Collateral Documents to the
Collateral Agent;
(ii) in the case of additional Collateral which constitutes
Real Property having a Fair Market Value in excess of $1.0 million,
each of the Issuers or the applicable Guarantor, as the case may be,
shall also deliver to the Collateral Agent the following:
(A) a title insurance policy or an endorsement to an
existing title insurance policy, in the American Land Title
Insurance Loan Policy Extended Coverage form, or its equivalent,
and in an amount at least equal to the purchase price thereof
(or, if such property was not purchased or such purchase price
cannot be determined by the Issuers, the Fair Market Value
thereof), in favor of the Collateral Agent insuring that the Lien
of the Collateral Documents or any additional Collateral
Documents
-96-
constitutes a valid and perfected Lien, subject to no Liens
except Permitted Liens on such Real Property in an aggregate
amount equal to the purchase price or the Fair Market Value, as
applicable, of the Real Property and containing such endorsements
and other assurances of the type reasonably acceptable to the
Trustee, together with an Officers' Certificate stating that any
Liens on such Real Property are Liens expressly permitted by this
Indenture and the applicable Collateral Documents;
(B) any Opinion of Counsel required pursuant to Section
10.02(b) below;
(C) a Survey with respect to such Real Property;
(D) a policy or certificate of insurance as required by
any Mortgage relating to such Real Property, which policy or
certificate shall bear mortgagee endorsements of the character
required by Section 10.02 of this Indenture;
(E) evidence of payment or a closing statement
indicating payments to be made by the applicable Guarantor of all
title premiums, recording charges, transfer taxes and other costs
and expenses including reasonable legal fees and disbursements of
counsel for the Trustee (and any local counsel) that may be
incurred to validly and effectively subject such Real Property to
the Lien of any applicable Collateral Document to perfect such
Lien;
(F) copies of all Leases;
(G) an Officers' Certificate of the Company stating that
there has been issued and is in effect a valid and proper
certificate of occupancy or local or foreign equivalent, if
required by the local or foreign codes or ordinances for the use
then being made of such Real Property and that there is not
outstanding any citation, violation or similar notice indicating
that such Real Property contains conditions which are not in
compliance with local or foreign codes or ordinances relating to
building or fire safety or structural soundness which materially
impairs (i) the ability of such Real Property to be used for its
intended purpose or (ii) the value or utility of such Real
Property; and
(H) such consents, approvals, amendments, supplements,
estoppels, tenant subordination agreements or other instruments
as shall be necessary in order for the owner or holder of the fee
interest or leasehold interest to grant the Lien contemplated by
the Mortgage with respect to such Real Property; provided, that
the Company shall only be obligated to use commercially
reasonable efforts to obtain the items set forth in this clause
(H); and
(iii) The Issuers shall deliver to the Collateral Agent an
Opinion of Counsel and an Officers' Certificate to the effect that the
documents that have been or are therewith delivered to the Collateral
Agent pursuant to this Section 10.01(b) (including any amendments,
supplements, mortgages or other Collateral Documents referred to in
paragraph (i) above) conform to the requirements of this Indenture.
-97-
SECTION 10.02. Recording, Registration and Opinions.
(a) The Issuers and the Guarantors shall take or cause to be
taken all action required to perfect, maintain, preserve and protect the Lien on
and security interest in the Collateral granted by the Collateral Documents
(subject only to Permitted Liens), including without limitation, the filing of
financing statements, continuation statements, Mortgages, Ship Mortgages and any
instruments of further assurance, in such manner and in such places as may be
required by law fully to preserve and protect the rights of the Collateral
Agent, the Holders and the Trustee under this Indenture and the Collateral
Documents to all property comprising the Collateral. The Issuers and the
Guarantors shall from time to time promptly pay all financing, continuation
statement and mortgage recording, registration and/or filing fees, charges and
taxes relating to this Indenture and the Collateral Documents, any amendments
thereto and any other instruments of further assurance required hereunder or
pursuant to the Collateral Documents. Neither the Trustee nor the Collateral
Agent shall have any obligation to, nor shall either be responsible for any
failure to, so register, file or record.
(b) The Issuers shall furnish to the Trustee, promptly but in
no event later than 30 days after the execution and delivery of this Indenture,
Opinion(s) of Counsel required by TIA Section 314(b)(1).
(c) The Issuers shall furnish to the Trustee on the
anniversary of the Issue Date in each year, beginning with 2004, an Opinion of
Counsel, dated as of such date, which complies with TIA Section 314(b)(2),
either (i)(x) stating that, in the opinion of such counsel, such action has been
taken with respect to the recordings, registrations, filings, re-recordings,
re-registrations and refilings of this Indenture and all supplemental
indentures, financing statements, continuation statements and other instruments
of further assurance as are necessary to maintain the perfected Liens of the
Collateral Documents under the UCC or the applicable law in those items of
Collateral that can be perfected by the filing, recordings or registrations and
reciting with respect to such Liens on and security interests in the Collateral
the details of such action or referring to prior Opinions of Counsel in which
such details are given, and (y) stating that, based on relevant laws as in
effect on the date of such Opinion of Counsel, all financing statements,
continuation statements, Mortgage, Ship Mortgage and other documents have been
executed and filed that are necessary, as of such date and during the succeeding
12 months, fully to maintain the perfection of the security interests of the
Collateral Agent, the Holders and the Trustee hereunder and under the Collateral
Documents with respect to the Collateral; provided that if there is a required
filing of a continuation statement or other instrument within such 12 month
period and such continuation statement or other instrument is not effective if
filed at the time of the opinion, such opinion may so state and in that case the
Issuers shall cause a continuation statement or other instrument to be timely
filed so as to maintain such Liens and security interests and shall provide a
further Opinion of Counsel to the effect of this clause (i) upon the filing of
the relevant continuation statement or other instrument; or (ii) stating that,
in the opinion of such counsel, no such action is necessary to maintain such
Liens or security interests.
SECTION 10.03. Release of Collateral.
(a) The Trustee shall not at any time instruct the Collateral
Agent to release Collateral from the Liens created by this Indenture and the
Collateral Documents unless such release is in accordance with the provisions of
this Indenture and the Collateral Documents.
-98-
(b) The release of any Collateral from the Lien of the
Collateral Documents shall not be deemed to impair the security under this
Indenture in contravention of the provisions hereof if and to the extent the
Collateral is released pursuant to this Indenture and the Collateral Documents.
To the extent applicable, the Issuers shall comply with TIA Section 313(b)(1)
and TIA Section 314(d) relating to the release of property from the Lien of the
Collateral Documents and relating to the substitution therefor of any property
to be subjected to the Lien of the Collateral Documents. Any certificate or
opinion required by TIA Section 314(d) may be made by an Officer of the each of
the Issuers, except in cases where TIA Section 314(d) requires that such
certificate or opinion be made by an independent person, which person shall be
an independent engineer, appraiser or other expert selected by the Issuers.
(c) Upon the release of any Guarantor from its obligations
under this Indenture and its Guarantee as described in Section 12.03, such
Guarantor shall be entitled to obtain the release of all of its Collateral.
(d) Notwithstanding the foregoing and subject to and in
accordance with the provisions of this Indenture and the Collateral Documents,
at any time that the First Priority Trustee or any Representative is entitled to
require the release of the Liens securing the Obligations from all or part of
the Collateral, in accordance with the provisions of the Priority Intercreditor
Agreement, such Lien shall be deemed to be automatically released to the extent
provided in the Priority Intercreditor Agreement.
SECTION 10.04. Possession, Use and Release of Collateral.
Subject to and in accordance with the provisions of this
Indenture and the Collateral Documents, so long as the Trustee or Collateral
Agent has not exercised rights or remedies with respect to the Collateral in
connection with an Event of Default that has occurred and is continuing, the
Issuers and the Guarantors shall have the right to remain in possession and
retain exclusive control of the Collateral (other than any Trust Monies
deposited with the Collateral Agent and other than as set forth in the
Collateral Documents), to freely operate, use and consume the Collateral (other
than Trust Monies held by the Collateral Agent, other monies and Government
Securities deposited pursuant to Article 8 and other than as set forth in the
Collateral Documents and this Indenture), to alter or repair any Collateral so
long as such alterations and repairs do not impair the Lien of the Collateral
Documents thereon, and otherwise comply with Section 10.06 hereof, and to
collect, receive, use, invest and dispose of the reversions, remainders,
interest, rents, lease payments, issues, profits, revenues, proceeds and other
income thereof.
SECTION 10.05. Specified Releases of Collateral.
(a) Satisfaction and Discharge; Defeasance. The Issuers and
the Guarantors shall, subject to the provisions of the Priority Intercreditor
Agreement, be entitled to obtain a full release of all of the Collateral from
the Liens of this Indenture and of the Collateral Documents upon payment in full
of all principal, premium, if any, interest and Additional Interest, if any, on
the Notes and of all Obligations for the payment of money due and owing to the
Trustee or the Holders, or upon compliance with the conditions precedent set
forth in Article 8 for Satisfaction and Discharge, Legal Defeasance or Covenant
Defeasance. Upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel, each to the effect that such conditions
precedent have been complied
-99-
with (and which may be the same Officers' Certificate and Opinion of Counsel
required by Article 8), together with such documentation, if any, as may be
required by the Trustee or the TIA (including, without limitation, TIA Section
314(d)) prior to the release of such Collateral, the Trustee shall, subject to
the terms of the Priority Intercreditor Agreement, forthwith instruct the
Collateral Agent to take all necessary action (at the request of and the expense
of the Issuers) to release and reconvey to the each of the Issuers and the
applicable Guarantors without recourse all of the Collateral, and shall instruct
the Collateral Agent, subject to the provisions of the Priority Intercreditor
Agreement, to deliver such Collateral in its possession to the Company and the
applicable Guarantors including, without limitation, the execution and delivery
of releases and satisfactions wherever required.
(b) Release of Collateral from Lien of Collateral Documents
Upon Satisfaction of Conditions. The Issuers and the Guarantors, as the case may
be, shall, subject to the provisions of the Priority Intercreditor Agreement,
have the right to obtain a release of items of Collateral from the Lien of the
Collateral Documents securing the Obligations (other than Trust Monies) (the
"Released Collateral") subject to a sale or disposition, and the Trustee shall
instruct the Collateral Agent, subject to the provisions of the Priority
Intercreditor Agreement, to release the Released Collateral from the Lien
securing the Obligations of the Collateral Documents and reconvey the Released
Collateral to the Issuers or any such Guarantor upon compliance with the
condition that the Issuers deliver to the Collateral Agent the following:
(i) a notice from the Issuers requesting the release of
Released Collateral, (i) specifically describing the proposed Released
Collateral, (ii) specifying the Fair Market Value of such Released
Collateral on a date within 60 days of such notice (the "Valuation
Date"), (iii) stating that such Released Collateral is to be sold or
otherwise disposed of and that the consideration to be received in
respect of the Released Collateral is at least equal to the Fair
Market Value of the Released Collateral and is also to be made
Collateral subject to the Collateral Documents to the extent required
by the provisions of this Indenture, (iv) stating that the release of
such Released Collateral shall not impair the value of the remaining
Collateral, taken as a whole, or interfere with the Collateral Agent's
or the Trustee's ability to realize the value of the remaining
Collateral and shall not impair the maintenance and operation of the
remaining Collateral, (v) confirming the sale or other disposition of,
or an agreement to sell or otherwise dispose of, such Released
Collateral in a bona fide sale to a person that is not an Affiliate of
the Issuers or, in the event that such sale is to a person that is an
Affiliate, confirming that such sale is made in compliance with the
provisions set forth under Section 4.20 and (vi) certifying that if
the sale of such Released Collateral constitutes an Asset Sale, such
Asset Sale complies with the terms and conditions of this Indenture
with respect thereto, including, without limitation, the provisions
set forth under Section 4.11;
(ii) an Officers' Certificate of the Issuers stating that (i)
such sale or other disposition covers only the Released Collateral or
such other property subject to the sale or disposition, (ii) all Net
Asset Sale Proceeds, if any, from the sale of any of the Released
Collateral shall be applied pursuant to the provisions of this
Indenture in respect of Asset Sales, (iii) there is no Default or
Event of Default in effect or continuing on the date thereof or the
Valuation Date, (iv) the release of the Collateral shall not result in
a Default or Event of Default under this Indenture, and (v) all
conditions precedent in this Indenture relating to the release in
question have been complied with; and
-100-
(iii) all documentation required by the TIA, if any, prior to
the release of the Released Collateral by the Collateral Agent and, in
the event that there is to be a substitution of property for the
Released Collateral subject to the Asset Sale, all documentation
necessary to effect the substitution of such new Collateral and to
subject such new Collateral to the Lien of the relevant Collateral
Documents.
Upon compliance by the Issuers with the conditions precedent set
forth above, the Trustee shall cause to be released and reconveyed to the
Issuers or the applicable Guarantor the Released Collateral without recourse by
instructing the Collateral Agent to execute a release in the form provided by
the Issuers or the applicable Guarantor and reasonably acceptable to the Trustee
and the Collateral Agent.
(c) Release of Collateral in Connection with Events of Loss.
The Issuers and the Guarantors, as the case may be, shall be entitled to obtain
a release of, and the Trustee shall instruct the Collateral Agent to release
from the Lien securing the Obligations under the relevant Collateral Documents,
items of Collateral (other than Trust Monies, excluding Trust Monies
constituting Net Loss Proceeds from an Event of Loss, which Trust Monies are
subject to release from the Lien of the Collateral Documents as provided under
Article 11) subject to an Event of Loss, upon compliance with the conditions
precedent that the Company shall have delivered to the Trustee the following:
(i) an Officers' Certificate of the Company certifying that
(A) such Collateral is the subject of an Event of Loss and the amount
of the Net Loss Proceeds, and (B) all conditions precedent to such
release have been complied with;
(ii) the Net Loss Proceeds to be held as Trust Monies subject
to the disposition thereof pursuant to Article 11;
(iii) all documentation required by the TIA (including, without
limitation, TIA Section 314(d)), if any, prior to the release of
Collateral by the Trustee; and
(iv) an Opinion of Counsel substantially to the effect
(1) if applicable, that such property has been taken by
eminent domain, or has been sold pursuant to the exercise of a
right vested in a governmental authority to purchase, or to
designate a purchaser or order a sale of, such property;
(2) in the case of a taking by eminent domain, that the
award for the property so taken has become final and that an
appeal from such award is not advisable in the interests of the
Issuers or the Holders, which opinion may rely as to factual
matters on a certificate of an officer of an Issuer or Guarantor,
as applicable; and
(3) that the instrument or instruments and the award or
payment of such Taking which have been or are therewith delivered
to and deposited with the Trustee conform to the requirements of
this Indenture and the applicable Collateral Documents and that,
upon the basis of such application, the Trustee is permitted by
the terms hereof and of the Collateral Documents to instruct the
Collateral Agent to execute and deliver the release requested,
and that all conditions precedent herein and in
-101-
the Collateral Documents provided for relating to such release
have been complied with.
In any proceedings for the taking of any part of the Collateral,
the Trustee and the Collateral Agent may be represented by counsel who may be
counsel for the Issuers or the applicable Guarantor.
Upon compliance by the Issuers with the conditions precedent set
forth above, the Trustee shall instruct the Collateral Agent to cause to be
released and reconveyed to the Issuers or the applicable Guarantor without
recourse the aforementioned items of Collateral which are the subject of such
Event of Loss by executing a release in the form provided by each of the Issuers
or the applicable Guarantor.
SECTION 10.06. Unconditional Release of Collateral from Lien of
Collateral Documents.
Notwithstanding the provisions of Section 10.05(b) above, so long
as no Default or Event of Default shall have occurred and be continuing or would
result therefrom, the Issuers and the Guarantors may release items of Collateral
from the Lien securing the Obligations under the relevant Collateral Documents
(and upon request from the Issuers, the Trustee shall instruct the Collateral
Agent to confirm in writing any such release) provided that, with respect to
such items of Collateral, the Issuers or Guarantors:
(i) sell or otherwise dispose of, in any transaction or
series of related transactions, any property subject to the Lien of
the Collateral Documents which has become worn out, defective,
obsolete or is not used or useful in the operation of the Issuers' or
any Guarantor's business and which has an aggregate Fair Market Value
of $100,000 or less;
(ii) sell or otherwise dispose of, in any transaction or
series of related transactions, any property subject to the Lien of
the Collateral Documents which has become worn out or obsolete and
which is replaced by property of substantially equivalent or greater
value which becomes subject to the Lien of the Collateral Documents as
After-Acquired Property;
(iii) demolish, dismantle, tear down, scrap or abandon any
Collateral if, as conclusively determined (absent manifest error) by
the Board of Directors of the Company in its good faith opinion, such
demolition, dismantling, tearing down, scrapping or abandonment is in
the best interest of the Issuers and the Guarantors;
(iv) alter, repair, replace, change the location or position
of and add to its plants, structures, machinery, systems, Equipment,
fixtures and appurtenances; provided, however, that no change in the
location of any such Collateral subject to the Lien securing the
Obligations of any of the Collateral Documents shall be made which (1)
removes such property into a jurisdiction in which any instrument
required by law to perfect the Lien of any of the relevant Collateral
Document on such property, including all necessary instruments of
further assurance, has not been recorded, registered or filed in the
manner required by law to continue the perfection of the Lien of any
of the Collateral Documents on such property, (2) does not
-102-
comply with the terms of this Indenture and the Collateral Documents
or (3) otherwise impairs the Lien of the Collateral Documents;
(v) subject to the provisions of the Collateral Documents,
abandon, terminate, cancel, release or make alterations in or
substitutions of any leases, contracts or rights-of-way subject to the
Lien securing the Obligations of the Collateral Documents; provided,
however, that (a) any altered or substituted leases, contracts or
rights-of-way shall forthwith, without further action, be subject to
the Lien of the Collateral Documents to the same extent as those
previously existing and (b) if the Issuers or the relevant Guarantor
shall receive any money or property in excess of the Issuers' or the
relevant Guarantor's expenses in connection with such termination,
cancellation, release, alteration or substitution as consideration or
compensation for such termination, cancellation, release, alteration
or substitution, such money or property, to the extent it exceeds
$100,000 (in which case all of the money and property so received and
not just the portion in excess of $100,000 shall be subject to this
clause), forthwith upon its receipt by such entity, shall be deposited
with the Collateral Agent (unless otherwise required by a Permitted
Lien permitted under the applicable Collateral Documents) as Trust
Monies subject to disposition as provided in Article 11 hereof or
otherwise subjected to the Lien securing the Obligations of the
Collateral Documents;
(vi) grant a non-exclusive license of any Intellectual
Property;
(vii) abandon any Intellectual Property that the Issuers or the
relevant Guarantor, in its reasonable business judgment, concludes is
no longer used or useful in any material respect in the conduct of the
business of Issuers or the relevant Guarantor;
(viii) surrender or modify any franchise, license or permit
subject to the Lien of any of the Collateral Documents which it may
own or under which it may be operating if the Issuers or the relevant
Guarantor in its reasonable business judgment concludes that such
franchise, license or permit is no longer used or useful in the
conduct of the business of the Issuers or the relevant Guarantor; and
(ix) subject to the provisions of the Collateral Documents,
grant leases or subleases in respect of any Real Property in the event
that the Issuers or the relevant Guarantor determines, in its
reasonable business judgment, that such Real Property is no longer
useful in the conduct of such entity's business and such leases or
subleases do not materially interfere with the ordinary course of
business of the Issuers and its Subsidiaries and do not materially
adversely affect the value of the property subject thereto; provided,
however, that any such lease or sublease shall by its terms be subject
and subordinate to the Lien, and otherwise comply with the provisions,
of the Mortgage affecting such Real Property.
SECTION 10.07. Form and Sufficiency of Release.
In the event that the Issuers or any Guarantor has sold,
exchanged, or otherwise disposed of or proposes to sell, exchange or otherwise
dispose of any portion of the Collateral that under the provisions of Section
10.05 or 10.06 may be sold, exchanged or otherwise disposed of by the Issuers or
any Guarantor, and the Issuers or such Guarantor requests the Trustee to
instruct the Collateral
-103-
Agent to furnish a written disclaimer, release or quitclaim of any interest in
such property in respect of the Obligations under this Indenture, the applicable
Guarantee and the Collateral Documents, upon being satisfied that the Issuers or
such Guarantor is selling, exchanging or otherwise disposing of the Collateral
in accordance with the provisions of Section 10.05 or 10.06 (which, in the case
of Section 10.06, shall include receipt of (i) an Officers' Certificate by the
Issuers or such Guarantor reciting the sale, exchange or other disposition made
or proposed to be made and describing in reasonable detail the property affected
thereby, and stating that such property is property which by the provisions of
Section 10.06 may be sold, exchanged or otherwise disposed of or dealt with by
the Issuers or such Guarantor without any release or consent of the Trustee or
the Collateral Agent and (ii) an Opinion of Counsel (which may rely as to
factual matters upon a certificate of an officer of the Issuers or a Guarantor,
as applicable) stating that the sale, exchange or other disposition made or
proposed to be made was duly taken by the Issuers or such Guarantor in
conformity with a designated subsection of Section 10.06 and that the execution
and form of such written disclaimer, release or quit-claim is appropriate under
this Section 10.07), the Trustee shall instruct the Collateral Agent to execute,
acknowledge and deliver to the Issuers or such Guarantor such an instrument in
the form provided by the Issuers or such Guarantor, and providing for release
without recourse, promptly after satisfaction of the conditions set forth herein
for delivery of any such release and shall take such other action as the Issuers
or such Guarantor may reasonably request and as necessary to effect such
release. Notwithstanding the preceding sentence, all purchasers and grantees of
any property or rights purporting to be released shall be entitled to rely upon
any release executed by the Collateral Agent hereunder at the instruction of the
Trustee as sufficient for the purpose of this Indenture and as constituting a
good and valid release of the property therein described from the Lien of this
Indenture and of the Collateral Documents.
SECTION 10.08. Purchaser Protected.
No purchaser or grantee of any property or rights purporting to
be released shall be bound to ascertain the authority of the Collateral Agent to
execute the release or to inquire as to the existence of any conditions herein
prescribed for the exercise of such authority.
SECTION 10.09. Authorization of Actions to Be Taken by the Trustee Under
the Collateral Documents.
Subject to the provisions of the Collateral Documents:
(a) the Trustee and the Collateral Agent may, in their sole
discretion and without the consent of the Holders, take all actions they deem
necessary or appropriate in order to (i) enforce any of the terms of the
Collateral Documents and (ii) collect and receive any and all amounts payable in
respect of the obligations of the Issuers and the Guarantors hereunder and under
the Collateral Documents; and
(b) the Trustee and the Collateral Agent shall have power to
institute and to maintain such suits and proceedings as they may deem expedient
to prevent any impairment of the Collateral by any act that may be unlawful or
in violation of the Collateral Documents or this Indenture, and such suits and
proceedings as the Trustee and the Collateral Agent may deem expedient to
preserve or protect their interests and the interests of the Holders in the
Collateral (including the power to institute and maintain suits or proceedings
to restrain the enforcement of or compliance with any legislative or
-104-
other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment,
rule or order would impair the security interest thereunder or be prejudicial to
the interests of the Holders, the Trustee or the Collateral Agent).
SECTION 10.10. Authorization of Receipt of Funds by the Trustee Under
the Collateral Documents.
The Trustee and the Collateral Agent are each hereby authorized
to receive any funds for the benefit of Holders distributed under the Collateral
Documents, to apply such funds as provided in this Indenture and the Collateral
Documents, and to make further distributions of such funds to the Holders in
accordance with the provisions of Article 11 and the other provisions of this
Indenture.
SECTION 10.11. Powers Exercisable by Receiver or Trustee.
In case the Collateral shall be in the possession of a receiver
or trustee, lawfully appointed, the powers conferred in this Article 10 upon the
Issuers or any Guarantor, as applicable, with respect to the release, sale or
other disposition of such property may be exercised by such receiver or trustee,
and an instrument signed by such receiver or trustee shall be deemed the
equivalent of any similar instrument of the Issuers or any Guarantor, as
applicable, or of any officer or officers thereof required by the provisions of
this Article 10.
SECTION 10.12. Access Intercreditor Agreement.
In connection with the incurrence by the Company of any
Indebtedness where the Representative in respect of such Indebtedness or the
terms of this Indenture require that an intercreditor agreement be entered into,
the Trustee shall, upon the request of the Company (which request shall include
an Officers' Certificate and an Opinion of Counsel, each to the effect that such
Indebtedness and the Lien securing such Indebtedness are being incurred in
compliance with the terms of this Indenture), instruct the Collateral Agent to
enter into an access, use and intercreditor agreement (the "Access Intercreditor
Agreement"). The Access Intercreditor Agreement will provide that:
(a) the Collateral Agent and the Representative will provide
notices to each other with respect to the occurrence of an event of
default under this Indenture or the applicable Indebtedness, as the
case may be;
(b) for a period of up to 45 days following the date of
receipt by the Representative of written notice from the Collateral
Agent directing the removal by the Representative of the collateral
securing the property subject to Liens permitted by clauses (k), (o),
(s) and (t) of the definition of "Permitted Liens", the Representative
may enter and use the properties on which the Collateral Agent has
Liens and the equipment located on those properties constituting
Collateral to the extent necessary to collect accounts and repossess,
remove, sell or otherwise dispose of collateral securing such
Indebtedness; and
(c) the Collateral Agent and the Representative shall
acknowledge the respective priorities of their respective Liens in the
applicable property and provide written confirmation of such
priorities to the extent reasonably requested by the other person.
-105-
SECTION 10.13. Certain Provisions Relating to Mortgaged Property.
(a) Maintenance of Mortgaged Property. Each Mortgagor (as
defined in the applicable Mortgage) shall, at all times, maintain the applicable
Mortgaged Property in good order, condition and repair, reasonable wear and tear
excepted. Except to the extent (i) permitted pursuant to the provisions of
Section 10.06 hereof or (ii) for any Alteration that would not result in a
Property Material Adverse Effect (as defined in the applicable Mortgage), no
Mortgagor shall remove, demolish or alter the design or structural character of
any improvement now or hereafter erected upon all or any portion of the
applicable Mortgaged Property, or permit any such removal, demolition or
alteration.
(b) Alterations. No Mortgagor (as defined in the applicable
Mortgage) shall make any Alteration (as defined in each Mortgage) to the
applicable Mortgaged Property except (i) as permitted by Section 10.06 hereof or
(ii) would not result in a Property Material Adverse Effect (as defined in the
applicable Mortgage). Each Mortgagor shall (i) use commercially reasonable
efforts to complete each Alteration promptly, in a good and workmanlike manner,
(ii) complete each Alteration in compliance with all applicable local laws,
ordinances and requirements, except where such failure so to comply would not
result in a Property Material Adverse Effect (as defined in each Mortgage) and
(iii) pay when due all claims for labor performed and materials furnished in
connection with such Alterations, except where the failure so to pay would
result in a Permitted Lien of the type described in clause (b) of the definition
thereof.
(c) Leases. Mortgagor (as defined in the applicable Mortgage)
shall not:
(i) lease the Mortgaged Property substantially as an entirety
to any person (except in accordance with the provisions of Section
5.01 hereof);
(ii) enter into any Lease, or renew, modify, extend,
terminate, or amend any Lease, except in the ordinary course of
business of operating the Mortgaged Property;
(iii) receive or collect, or permit the receipt or collection
of, any rental payments under any Lease more than one month in advance
of the respective periods in respect of which they are to accrue,
except that, in connection with the execution and delivery of any
Lease or of any amendment to any Lease, rental payments thereunder may
be collected and received in advance in an amount not in excess of
three months' rent and/or a security deposit may be required
thereunder;
(iv) collaterally assign, transfer or hypothecate (other than
to the Collateral Agent) (x) any rental payment under any Lease
whether then due or to accrue in the future, (y) the interest of
Mortgagor as landlord under any Lease or (z) the rents, issues or
profits of the Mortgaged Property;
(v) after the date hereof, enter into any Lease, or renew any
Lease, unless such Lease contains terms to the effect as follows:
(A) the Lease and the rights of the tenants thereunder
shall be subject and subordinate to the rights of the Collateral
Agent under the applicable Mortgage,
-106-
(B) the Lease may be assigned by the landlord thereunder
to the Collateral Agent, and
(C) the rights and remedies of the tenant in respect of
any obligations of the landlord thereunder shall be nonrecourse
as to any assets of the landlord other than its equity in the
building in which the leased premises are located or the proceeds
thereof; or
(vi) modify any Lease with respect to the matters described in
clauses (A) and (B) of paragraph (v).
ARTICLE 11
APPLICATION OF TRUST MONIES
SECTION 11.01. Collateral Account.
(a) On the Issue Date there shall be established and, at all
times hereafter until this Indenture shall have terminated, there shall be
maintained with the Collateral Agent the Collateral Account. All Trust Monies
(including, without limitation, all Net Asset Sale Proceeds, all Net Loss
Proceeds, any Capex Reserve Amount under Sections 4.11, 4.16 and 4.26 required
to be deposited with the Collateral Agent and all amounts required to be
deposited into the Open Market Repurchase Account) shall be held by the
Collateral Agent as a part of the Collateral securing the Notes and shall,
subject to the provisions of the Priority Intercreditor Agreement, be released
by the Collateral Agent in accordance with this Article 11.
(b) The Trustee shall, subject to the terms of the Priority
Intercreditor Agreement, be entitled to instruct the Collateral Agent to apply
any Trust Monies to cure any Event of Default.
(c) So long as no Event of Default shall have occurred and be
continuing, subject to the terms of the Priority Intercreditor Agreement, the
Trustee shall, upon the written request of the Company, instruct the Collateral
Agent to release all or a portion of (i) all interest, dividends or other
amounts paid on funds in the Capex Reserve Account and (ii) all funds in the
Open Market Repurchase Account in excess of 10% of the aggregate principal
amount of First Priority Notes then outstanding.
SECTION 11.02. Withdrawal of Loss Proceeds.
To the extent that any Trust Monies consist of Net Loss Proceeds,
such Trust Monies may be withdrawn by the Issuers and the Trustee shall instruct
the Collateral Agent upon a request delivered to the Trustee to reimburse the
Issuers or the applicable Guarantor for expenditures made, or to pay costs
incurred, by the Issuers or such Guarantor in connection with the repair,
rebuilding or replacement of or substitution for the Collateral destroyed,
damaged or taken, upon receipt by the Trustee of the following:
-107-
(a) An Officers' Certificate, dated not more then 30 days
prior to the date of the application for the withdrawal and payment of
such Trust Monies setting forth
(i) that expenditures have been made, or costs incurred
by the Issuers or such Guarantor, as the case may be, in a
specified amount in connection with certain repairs, rebuildings
and replacements of or substitutions for the Collateral, which
shall be briefly described, and stating the Fair Market Value
thereof to the Issuers or such Guarantor at the date of the
acquisition thereof by the Issuers or such Guarantor;
(ii) that no part of such expenditures or costs that is
the subject of such request has been or is being made the basis
for the withdrawal of any Trust Monies in any previous or then
pending application pursuant to this Section 11.02;
(iii) that no part of such expenditures or costs that is
the subject of such request has been paid out of the proceeds of
insurance upon any part of the Collateral not required to be paid
to the Collateral Agent under the Collateral Documents;
(iv) that there is no outstanding Indebtedness, other
than costs for which payment is being requested, known to the
Issuers, after due inquiry, for the purchase price or
construction of such repairs, rebuildings or replacements, or for
labor, wages, materials or supplies in connection with the making
thereof, which, if unpaid, might become the subject of a
vendor's, mechanic's, laborer's, materialman's, statutory or
other similar Lien upon any such repairs, rebuildings or
replacement, which Lien might, in the opinion of the signers of
such Officers' Certificate, materially impair the security
afforded by such repairs, rebuildings or replacements;
(v) that the property to be repaired, rebuilt or
replaced is necessary or desirable in the conduct of the Issuer's
or such Guarantor's business;
(vi) that the Issuers or such Guarantor has (or will
have) title to such repairs, rebuildings and replacements that is
substantially similar to its title to the property destroyed,
damaged or taken and that any Liens upon such repairs,
rebuildings and replacements are expressly permitted by this
Indenture and the applicable Collateral Documents;
(vii) that no Default or Event of Default shall have
occurred and be continuing; and
(viii) that all conditions precedent herein provided for
relating to such withdrawal and payment have been complied with;
(b) All documentation required under the TIA (including,
without limitation, TIA Section 314(d));
(c) (i) In case any part of such repairs, rebuildings,
replacements, or substitutions constitutes Real Property,
-108-
(A) with respect to any such repairs, rebuildings or
replacements or substitutions that are not encompassed within or
are not erected upon Mortgaged Property, an instrument or
instruments in recordable form sufficient for the Lien of any
applicable Mortgage to cover such repairs, rebuildings,
replacements or substitutions which, if such repairs,
rebuildings, replacements or substitutions include leasehold or
easement interests, shall include normal and customary provisions
with respect thereto and evidence of the filing of all such
documents as may be necessary to perfect such Liens;
(B) in the event such repairs, rebuildings or
replacements have a Fair Market Value in excess of $1.0 million,
a policy of title insurance (or a commitment to issue title
insurance) insuring that the Lien of any applicable Mortgage
constitutes a valid and perfected mortgage Lien on such repairs,
rebuildings or replacements to the extent that such repairs,
rebuildings or replacements extend beyond the exterior
configuration of any improvement (subject to no Liens other than
Permitted Liens) in an aggregate amount equal to the Fair Market
Value of such repairs, rebuildings or replacements or other
investments, together with such endorsements and other opinions
as are contemplated by Section 10.01(b), or with respect to any
such repairs, rebuildings or replacements that are encompassed
within or are erected upon Real Property subject to the Lien of a
Mortgage, an endorsement to the title insurance policy issued
pursuant to Section 10.01(b) regarding the affected Real Property
confirming that such repairs, rebuildings or replacements are
encumbered by the Lien of the applicable Mortgage (subject to no
Liens other than Permitted Liens);
(C) in the event such repairs, rebuildings or
replacements have a Fair Market Value in excess of $1.0 million
and affect the exterior configuration of an improvement, a Survey
with respect thereto; and
(D) evidence of payment or a closing statement
indicating payments to be made by the Company or the applicable
Guarantor of all title insurance premiums, recording charges,
and/or transfer taxes, if any, and other costs and expenses,
including reasonable legal fees and disbursements of counsel for
the Trustee (and any local counsel), that may be incurred to
validly and effectively subject such repairs, rebuildings or
replacements to the Lien of any applicable Collateral Document to
perfect such Lien; and
(ii) in case any part of such repairs, rebuildings or
replacements constitutes personal property interests,
(A) to the extent necessary, an instrument in recordable
form sufficient for the Lien of any applicable Collateral
Document to cover such repairs, rebuildings or replacements; and
(B) evidence of payment or a closing statement
indicating payments to be made by the Issuers or the applicable
Guarantor of all filing fees, recording charges and/or transfer
taxes, if any, and other costs and expenses, including reasonable
legal
-109-
fees and disbursements of counsel for the Trustee (and any local
counsel), that may be incurred to validly and effectively subject
such repairs, rebuildings or replacements to the Lien of any
Collateral Document; and
(d) An Opinion of Counsel substantially stating
(i) that the instruments that have been or are therewith
delivered to the Trustee conform to the requirements of this
Indenture and the other Collateral Documents, and that, upon the
basis thereof and the accompanying documents specified in this
Section 11.02, all conditions precedent herein provided for
relating to such withdrawal and payment have been complied with,
and the Trust Monies whose withdrawal is then requested may be
paid over under this Section 11.02;
(ii) that the relevant Collateral Documents create a
valid, binding and enforceable Lien on and security interest in
such repairs, rebuildings and replacements in favor of the
Collateral Agent, the Trustee and the Holders and, to the extent
that a security interest in any such property may be perfected
under the relevant UCC, a perfected security interest in such
property; and
(iii) that all the Issuers' or such Guarantor's right,
title and interest in and to said repairs, rebuilding or
replacements, or combination thereof are then subject to the Lien
of this Indenture and the relevant Collateral Documents.
Upon compliance with the foregoing provisions of this Section 11.02 and Section
11.01, the Trustee shall, upon receipt of a Company request, instruct the
Collateral Agent to pay an amount of Net Loss Proceeds constituting Trust Monies
equal to the amount of the expenditures or costs stated in the Officers'
Certificate required by clause (i) of paragraph (a) of this Section 11.02, or
the Fair Market Value to the Company or the applicable Guarantor of such
repairs, rebuildings and replacements stated in such Officers' Certificate (or
in an independent appraiser's or independent financial advisor's certificate, if
required by the TIA), whichever is less.
SECTION 11.03. Withdrawal of Net Asset Sale Proceeds to Fund an Asset
Sale Offer or a Residual Asset Sale Offer.
To the extent that any Trust Monies consist of Net Asset Sale
Proceeds received by the Collateral Agent pursuant to the provisions of Section
4.11 hereof and an Asset Sale Offer or a Residual Asset Sale Offer, as the case
may be, has been made in accordance therewith, such Trust Monies may be
withdrawn by the Issuers (and the Trustee shall instruct the Collateral Agent to
remit such Trust Monies to the Paying Agent) and shall be paid by the Collateral
Agent to the Paying Agent for application in accordance with Section 4.11 upon
Company Order to the Trustee and upon receipt by the Trustee of the following:
(a) An Officers' Certificate, dated not more than three days
prior to the Asset Sale Purchase Date stating
-110-
(i) that no Default or Event of Default shall have
occurred and be continuing;
(ii) (x) that such Trust Monies constitute Net Asset Sale
Proceeds, (y) that pursuant to and in accordance with Section
4.11, the Company has made an Asset Sale Offer or Residual Asset
Sale Offer, as the case may be and (z) the amount of Excess
Proceeds or Residual Excess Proceeds, as the case may be, to be
applied to the repurchase of the Notes pursuant to the Asset Sale
Offer or the Residual Asset Sale Offer, as the case may be;
(iii) the Asset Sale Purchase Date;
(iv) that all conditions precedent and covenants herein
provided for relating to such application of Trust Monies have
been complied with; and
(b) All documentation, if any, required under TIA Section
314(d).
Upon compliance with the foregoing provisions of this Section
11.03, the Trustee shall instruct the Collateral Agent to apply the Trust Monies
as directed and specified by such Company Order, subject to Section 4.11.
SECTION 11.04. Withdrawal of Trust Monies for Investment in Replacement
Assets.
In the event the Company intends to reinvest Net Asset Sale
Proceeds of an Asset Sale in Replacement Assets (the "Released Trust Monies"),
such Net Asset Sale Proceeds constituting Trust Monies may be withdrawn by the
Issuers (and the Trustee shall instruct the Collateral Agent to remit such Trust
Monies to the Issuers) and shall be paid by the Collateral Agent to the Issuers
upon a Company Order to the Trustee and upon receipt by the Trustee of the
following:
(a) a notice signed by the Issuers which shall (i) refer to
this Section 11.04, (ii) be accompanied by all documents referred to
below, (iii) describe with particularity the Released Trust Monies and
(iv) describe with particularity the Replacement Assets to be invested
in with respect to the Released Trust Monies;
(b) An Officers' Certificate certifying that (i) such Trust
Monies constitute Net Asset Sale Proceeds, (ii) the release of the
Released Trust Monies complies with the terms and conditions of this
Indenture, (iii) there is no Default or Event of Default (both before
and after investing in the Replacement Asset) in effect or continuing
on the date thereof, (iv) the release of the Released Trust Monies
shall not result in a Default or Event of Default hereunder and (v)
all conditions precedent herein to such release have been complied
with;
(c) All documentation required under the TIA (including,
without limitation, TIA Section 314(d));
(d) If the Replacement Asset proposed for investment is Real
Property, the Issuers or the appropriate Guarantor shall also deliver
to the Trustee:
-111-
(i) an instrument or instruments in recordable form
sufficient for the Lien of any applicable Mortgage to cover such
Real Property which, if the Real Property is a leasehold or
easement interest, shall include normal and customary provisions
with respect thereto and evidence of the filing of all such
financing statements and other instruments as may be necessary to
perfect such Liens;
(ii) a policy of title insurance (or a commitment to
issue title insurance) insuring that the Lien of any applicable
Mortgage constitutes a valid and perfected mortgage Lien on such
Real Property (subject to no Liens other than Permitted Liens) in
an aggregate amount equal to the Fair Market Value of the Real
Property, together with an Officers' Certificate stating that any
specific exceptions to such title insurance are Permitted Liens,
together with such endorsements and other opinions as are
contemplated by Section 10.02(b);
(iii) in the event the Fair Market Value of the Real
Property is in excess of $1.0 million, a Survey with respect
thereto; and
(iv) evidence of payment or a closing statement
indicating payments to be made by the Issuers or the appropriate
Guarantor of all title premiums, recording charges, and/or
transfer taxes, if any, and other costs and expenses, including
reasonable legal fees and disbursements of one counsel for the
Trustee (and any local counsel), that may be incurred to validly
and effectively subject the Real Property to the Lien of any
applicable Collateral Document to perfect such Lien;
(e) If the Replacement Asset is a personal property interest,
the Issuers or the appropriate Guarantor shall deliver to the Trustee:
(i) financing statements and other instruments in form
sufficient to perfect the Lien of any applicable Collateral
Document on such personal property interest; and
(ii) evidence of payment or a closing statement
indicating payments to be made by the Issuers or the appropriate
Guarantor of all filing fees, recording charges and/or transfer
taxes, if any, and other costs and expenses, including reasonable
legal fees and disbursements of one counsel for the Collateral
Agent (and any local counsel), that may be incurred to validly
and effectively subject the Replacement Asset to the Lien of any
Collateral Document; and
(f) An Opinion of Counsel stating that the documents that
have been or are therewith delivered to the Trustee in connection with
an investment in Replacement Assets conform to the requirements of
this Indenture and that all conditions precedent herein provided for
relating to such application of Trust Monies have been complied with.
Upon compliance with the foregoing provisions, the Trustee shall
instruct the Collateral Agent to apply the Released Trust Monies as directed and
specified by the Company.
-112-
SECTION 11.05. Withdrawal of Capex Reserve Amount.
The Company shall have the right to obtain a release of all or a
portion of the Capex Reserve Amount from the Capex Reserve Account and from the
Lien of the Collateral Documents upon compliance with the condition that the
Issuers deliver to the Collateral Agent an Officers' Certificate from the
Company:
(i) requesting the release of all or a portion of the Capex
Reserve Amount specifically describing the proposed capital
expenditure that such Capex Reserve Amount will be used for;
(ii) stating that there is no Default or Event of Default in
effect or continuing on the date thereof;
(iii) stating that the release of the Capex Reserve Amount will
not result in a Default or Event of Default under this Indenture; and
(iv) stating that all conditions precedent in this Indenture
relating to the release in question have been complied with.
Any portion of the Capex Reserve Amount remaining in the Capex
Reserve Account on December 31, 2004 (the "Unused Capex Reserve Amount") shall
be subject to Section 4.25 hereof.
SECTION 11.06. Investment of Trust Monies.
So long as no Default or Event of Default shall have occurred and
be continuing, all or any part of any Trust Monies held by the Collateral Agent
shall from time to time be invested or reinvested by the Collateral Agent in any
Cash Equivalents pursuant to a Company request in the form of an Officers'
Certificate, which shall specify the Cash Equivalents in which such Trust Monies
shall be invested and shall certify that such investments constitute Cash
Equivalents and the Trustee shall instruct the Collateral Agent to sell any such
Cash Equivalent only upon receipt of such a Company request specifying the
particular Cash Equivalent to be sold. So long as no Default or Event of Default
occurs and is continuing, any interest or dividends accrued, earned or paid on
such Cash Equivalents (in excess of any accrued interest or dividends paid at
the time of purchase) that may be received by the Collateral Agent shall be
forthwith paid to the Company. Such Cash Equivalents shall be held by the
Collateral Agent as a part of the Collateral, subject to the same provisions
hereof as the cash used by it to purchase such Cash Equivalents.
Neither the Trustee nor the Collateral Agent shall be liable or
responsible for any loss resulting from such investments or sales except only
for its own negligent action, its own negligent failure to act or its own
willful misconduct in complying with this Section 11.06.
SECTION 11.07. Use of Trust Monies; Retirement of Notes.
To the extent permitted by this Indenture, the First Priority
Indenture, and the Collateral Documents, the Trustee shall instruct the
Collateral Agent to apply Trust Monies not required to be applied to fund an
Asset Sale Offer, Event of Loss Offer or an open market repurchase of First
-113-
Priority Notes, Residual Asset Sale Offer or Residual Event of Loss Offer or
required to be held pending application to the acquisition of Replacement Assets
from time to time to the payment of the principal of, premium, and interest on,
any Notes, on any Interest Payment Date, Redemption Date, the Stated Maturity or
the Stated Maturity of the First Priority Notes or to the redemption thereof or
of the First Priority Notes or in any one or more of such ways, including,
without limitation, pursuant to a Change of Control Offer for the First Priority
Notes and/or the Second Priority Notes, as the Issuers shall request in writing,
upon receipt by the Trustee of the following:
(a) Board Resolutions of the Issuers directing the
application pursuant to this Section 11.07 of a specified amount of
Trust Monies and, in case any such monies are to be applied to
payment, designating the Notes so to be paid and, in case any such
monies are to be applied to the purchase of Notes, prescribing the
method of purchase, the price or prices to be paid and the maximum
aggregate principal amount of Notes to be purchased and any other
provisions of this Indenture governing such purchase;
(b) an Officers' Certificate, dated not more than three days
prior to the date of the relevant application stating
(i) that no Default or Event of Default exists unless
such Default or Event of Default would be cured thereby; and
(ii) that all conditions precedent and covenants herein
provided for relating to such application of Trust Monies have
been complied with; and
(c) an Opinion of Counsel stating that all conditions
precedent herein provided for and relating to such application of
Trust Monies have been complied with.
Upon compliance with the foregoing provisions of this Section
11.07, the Trustee shall instruct the Collateral Agent to apply Trust Monies as
directed and specified by such Board Resolution.
A Board Resolution expressed to be irrevocable directing the
application of Trust Monies under this Section 11.07 to the payment of the
principal of, premium, interest and Additional Interest, if any, on the Notes
shall for all purposes of this Indenture be deemed the equivalent of the deposit
of money with the Collateral Agent in trust for such purpose. Such Trust Monies
shall not, after compliance with the foregoing provisions of this Section 11.07,
be deemed to be part of the Collateral or Trust Monies.
SECTION 11.08. Withdrawal of Trust Monies for Open Market Repurchases.
So long as no Default or Event of Default has occurred and is
continuing or would occur as a result thereof, the Trustee shall instruct the
Collateral Agent to release all or a portion of the funds held in the Open
Market Repurchase Account upon receipt by the Trustee of the following:
-114-
(a) an Officers' Certificate, dated not more then 30 days
prior to the date of the application for the withdrawal and payment of
such Trust Monies from the Open Market Repurchase Account setting
forth
(i) a statement that such Trust Monies shall be used to
repurchase First Priority Notes in accordance with the provisions
of the First Priority Indenture;
(ii) that no part of such repurchase has been or is being
made the basis for the withdrawal of any Trust Monies in any
previous or then pending application pursuant to this Section
11.08;
(iii) that no Default or Event of Default shall have
occurred and be continuing; and
(iv) that all conditions precedent herein provided for
relating to such withdrawal and payment have been complied with;
(b) all documentation required under the TIA (including,
without limitation, TIA Section 314(d));
(c) an Opinion of Counsel stating that all conditions
precedent herein provided for relating to such application of Trust
Monies have been complied with.
Upon compliance with the foregoing provisions of this Section
11.08, the Trustee shall instruct the Collateral Agent to apply Trust Monies as
directed and specified by such application.
SECTION 11.09. Disposition of Notes Retired.
All Notes received by the Trustee and for whose purchase Trust
Monies are applied under Section 11.07, if not otherwise cancelled, shall be
promptly delivered to the Trustee for cancellation and destruction in accordance
with the Trustee's customary procedures.
SECTION 11.10. Withdrawal of Net Loss Proceeds to Fund an Event of Loss
Offer or Residual Event of Loss Offer.
To the extent that any Trust Monies consist of Net Loss Proceeds
received by the Collateral Agent pursuant to the provisions of Section 4.16
hereof and an Event of Loss Offer or a Residual Event of Loss Offer, as the case
may be, has been made in accordance therewith, such Trust Monies may be
withdrawn by the Issuers (and the Trustee shall instruct the Collateral Agent to
remit such Trust Monies to the Paying Agent) and shall be paid by the Collateral
Agent to the Paying Agent for application in accordance with Section 4.16 upon
Company Order to the Trustee and upon receipt by the Trustee of the following:
(a) An Officers' Certificate, dated not more than three days
prior to the Event of Loss Offer Purchase Date stating
-115-
(i) that no Default or Event of Default shall have
occurred and be continuing;
(ii) (x) that such Trust Monies constitute Net Loss
Proceeds, (y) that pursuant to and in accordance with Section
4.16, the Company has made an Event of Loss Offer or Residual
Event of Loss Offer, as the case may be and (z) the amount of Net
Loss Proceeds to be applied to the repurchase of the Notes
pursuant to the Event of Loss Offer or Residual Event of Loss
Offer, as the case may be;
(iii) the Event of Loss Offer Purchase Date;
(iv) that all conditions precedent and covenants herein
provided for relating to such application of Trust Monies have
been complied with; and
(b) All documentation, if any, required under TIA Section
314(d).
Upon compliance with the foregoing provisions of this Section
11.10, the Trustee shall instruct the Collateral Agent to apply the Trust Monies
as directed and specified by such Company Order, subject to Section 4.16.
ARTICLE 12
GUARANTEES
SECTION 12.01. Guarantees.
Subject to the provisions of this Article 12, each Guarantor,
jointly and severally, hereby irrevocably and unconditionally guarantees (each a
"Guarantee"), on a senior basis, to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns, that
(a) the principal of, premium, if any, and interest and Additional Interest, if
any, on the Notes shall be duly and punctually paid in full when due, whether at
maturity, by acceleration or otherwise, and interest on overdue principal, and
premium, if any, and (to the extent permitted by law) interest on any interest,
if any, on the Notes and all other Obligations of the Company to the Holders or
the Trustee hereunder or under the Notes or under the Collateral Documents
(including fees, expenses or other Obligations) shall be promptly paid in full
or performed, all in accordance with the terms hereof and thereof; and (b) in
case of any extension of time of payment or renewal of any Notes or any of such
other Obligations, the same shall be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise (collectively, the "Guarantee
Obligations"). Failing payment when due of any Guarantee Obligation or failing
performance of any other Obligation of the Company to the Holders, for whatever
reason, each Guarantor shall be obligated to pay, or to perform or to cause the
performance of, the same immediately. An Event of Default under this Indenture
or the Notes shall constitute an event of default under this Guarantee, and
shall entitle the Trustee or the Holders to accelerate the Guarantee Obligations
of each Guarantor hereunder in the same manner and to the same extent as the
Company Obligations. Each Guarantor hereby agrees that its Guarantee Obligations
hereunder shall be
-116-
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder with respect to any thereof, the entry of any
judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a Guarantor. Each Guarantor hereby waives and relinquishes (a) any
right to require the Trustee, the Holders or the Company (each, a "Benefited
Party") to proceed against the Company, the Subsidiaries or any other Person or
to proceed against or exhaust any security held by a Benefited Party at any time
or to pursue any other remedy in any secured party's power before proceeding
against such Guarantor; (b) any defense that may arise by reason of the
incapacity, lack of authority, death or disability of any other Person or
Persons or the failure of a Benefited Party to file or enforce a claim against
the estate (in administration, bankruptcy or any other proceeding) of any other
Person or Persons; (c) demand, protest and notice of any kind (except as
expressly required by this Indenture), including but not limited to notice of
the existence, creation or incurring of any new or additional Indebtedness or
Obligation or of any action or non-action on the part of the Guarantors, the
Company, the Subsidiaries, any Benefited Party, any creditor of the Guarantors,
the Company or the Subsidiaries or on the part of any other Person whomsoever in
connection with any Obligations the performance of which are hereby guaranteed;
(d) any defense based upon an election of remedies by a Benefited Party,
including but not limited to an election to proceed against the Guarantors for
reimbursement; (e) any defense based upon any statute or rule of law which
provides that the Obligation of a surety must be neither larger in amount nor in
other respects more burdensome than that of the principal; (f) any defense
arising because of a Benefited Party's election in any proceeding instituted
under the Bankruptcy Law of the application of Section 1111(b)(2) of the
Bankruptcy Code; and (g) any defense based on any borrowing or grant of a
security interest under Section 364 of the Bankruptcy Code. The Guarantors
hereby covenant that the Guarantees shall not be discharged except by payment in
full of all Guarantee Obligations, including the principal, premium, if any, and
interest on the Notes and all other costs provided for under this Indenture, the
Collateral Documents or as provided in Section 8.01.
If any Holder or the Trustee is required by any court or
otherwise to return to either the Company or the Guarantors, or any trustee or
similar official acting in relation to either the Company or the Guarantors, any
amount paid by the Company or the Guarantors to the Trustee or such Holder, the
Guarantees, to the extent theretofore discharged, shall be reinstated in full
force and effect. Each of the Guarantors agrees that it shall not be entitled to
any right of subrogation in relation to the Holders in respect of any Guarantee
Obligations hereby until payment in full of all such Obligations. Each Guarantor
agrees that, as between it, on the one hand, and the Holders and the Trustee, on
the other hand, (x) the maturity of the Obligations guaranteed hereby may be
accelerated as provided in Article 6 hereof for the purposes hereof,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Guarantee Obligations, and (y) in the event of
any acceleration of such Obligations as provided in Article 6 hereof, such
Guarantee Obligations (whether or not due and payable) shall forthwith become
due and payable by such Guarantor for the purpose of the Guarantee.
SECTION 12.02. Execution and Delivery of Guarantees.
To evidence the Guarantees set forth in Section 12.01 hereof,
each of the Guarantors agrees that a notation of the Guarantees substantially in
the form included in Exhibit A hereto shall be
-117-
endorsed on each Note authenticated and delivered by the Trustee and that this
Indenture shall be executed on behalf of the Guarantors by the President or one
of the Vice Presidents of the Guarantors.
Each of the Guarantors agree that the Guarantees set forth in
this Article 12 shall remain in full force and effect and apply to all the Notes
notwithstanding any failure to endorse on each Note a notation of the
Guarantees.
If an Officer whose facsimile signature is on a Note no longer
holds that office at the time the Trustee authenticates the Note on which the
Guarantees are endorsed, the Guarantees shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantees set forth in
this Indenture on behalf of the Guarantors.
SECTION 12.03. Guarantors May Consolidate, etc., on Certain Terms.
(a) Nothing contained in this Indenture or in the Notes shall
prevent any consolidation or merger of a Guarantor with or into the Company or
another Wholly-Owned Subsidiary that is a Guarantor, or shall prevent the
transfer of all or substantially all of the assets of a Guarantor to the Company
or another Wholly-Owned Subsidiary that is a Guarantor. Upon any such
consolidation, merger, transfer or sale, the Guarantee of such Guarantor shall
no longer have any force or effect.
(b) Subject to the provisions of clause (c) below, no
Guarantor shall, directly or indirectly, consolidate or merge with or into
(whether or not such Guarantor is the surviving corporation), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions, to another Person,
other than the Company or another Wholly-Owned Subsidiary that is a Guarantor,
unless:
(1) either (i) the Guarantor is the surviving
corporation; or (ii) the Person formed by or surviving any such
consolidation or merger (if other than the Guarantor) is an entity
organized or existing under the laws of the United States, any state
thereof or the District of Columbia (the "Surviving Guarantor
Entity");
(2) the Surviving Guarantor Entity (if other than the
Guarantor) assumes all the Obligations of the Guarantor under its
Guarantee, this Indenture, the Registration Rights Agreement and the
Collateral Documents pursuant to agreements reasonably satisfactory to
the Trustee;
(3) immediately after giving effect to such transaction no
Default or Event of Default exists;
(4) immediately after such transaction, the surviving person
holds all Permits required for operation of the business of, and such
entity is controlled by a person or entity (or has retained a person
or entity which is) experienced in, operating casino hotels or
otherwise holds all Permits (including those required from Gaming
Authorities) to operate its business, except where the failure to hold
such Permits would not have a material adverse effect on the general
affairs, management, business, properties, condition (financial or
otherwise), prospects
-118-
or results of operations of the Issuers and the Guarantors, taken as a
whole. Such Guarantor shall also deliver to the Trustee an Officers'
Certificate and an opinion of counsel, each stating that (a) such
consolidation, merger, sale, assignment, conveyance, transfer, lease
or disposition and such supplemental indenture comply with this
Indenture and the Collateral Documents and (b) the transaction shall
not impair the rights and powers of the Trustee and Holders of the
Notes under this Indenture or the Collateral Documents;
(5) the Surviving Guarantor Entity causes such amendments,
supplements or other instruments to be filed and recorded in such
jurisdictions as may be required by applicable law to preserve and
protect the Lien of the Collateral Documents on the Collateral owned
by or transferred to the Surviving Guarantor Entity, together with
such financing statements as may be required to perfect any security
interests in such Collateral which may be perfected by the filing of a
financing statement under the UCC of the relevant states;
(6) the Collateral owned by or transferred to the Surviving
Guarantor Entity shall
(i) continue to constitute Collateral under this
Indenture and the Collateral Documents,
(ii) be subject to the Lien in favor of the Trustee for
the benefit of the Holders, and
(iii) not be subject to any Lien other than Permitted
Liens;
(7) the property and assets of the Person which is merged or
consolidated with or into the Surviving Guarantor Entity, to the
extent that they are property or assets of the types which would
constitute Collateral under the Collateral Documents, shall be treated
as After-Acquired Property and the Surviving Guarantor Entity shall
take such action as may be reasonably necessary to cause such property
and assets to be made subject to the Lien of the Collateral Documents
in the manner and to the extent required in this Indenture; and
(8) such transaction would not require any Holder or
beneficial owner of Notes to obtain a Gaming License or be qualified
or found suitable under the law of any applicable gaming jurisdiction;
provided that such Holder or beneficial owner would not have been
required to obtain a Gaming License or be qualified or found suitable
under the laws of any applicable gaming jurisdiction in the absence of
such transaction.
(c) In the event of:
(x) a sale or other disposition of all or substantially all
of the assets of any Guarantor, by way of merger, consolidation or
otherwise; or
(y) a sale or other disposition of all of the Equity
Interests of any Guarantor, in each case to a Person which is not the
Company or a Subsidiary (but excluding a Subsidiary that is a
Non-Guarantor Subsidiary) or another Affiliate of the Company;
-119-
then such Guarantor (in the event of a sale or other disposition, by way of such
a merger, consolidation or otherwise, of all of the Equity Interests of such
Guarantor) or the Person acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of such Guarantor) shall
be released and relieved of any Obligations under its Guarantee, this Indenture
and the Collateral Documents; provided that:
(1) the Net Asset Sale Proceeds of such sale or other
disposition are applied in accordance with the provisions described in
Section 4.11; and
(2) all Obligations of such Guarantor under all of its
guarantees of, and under all of its pledges of assets or other Liens
which secure, Indebtedness of the Company or any of its Subsidiaries,
shall also terminate.
SECTION 12.04. Limitation of Guarantor's Liability.
Each Guarantor, and by its acceptance hereof each Holder, hereby
confirms that it is the intention of all such parties that the Guarantee by such
Guarantor pursuant to its Guarantee not constitute a fraudulent transfer or
conveyance for purposes of any Bankruptcy Law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar federal or state law. To
effectuate the foregoing intention, the Holders and such Guarantor hereby
irrevocably agree that the Guarantee Obligations of such Guarantor under this
Article 12 shall be limited to the maximum amount as shall, after giving effect
to all other contingent and fixed liabilities of such Guarantor and after giving
effect to any collections from or payments made by or on behalf of any other
Guarantor in respect of the Guarantee Obligations of such other Guarantor under
this Article 12, result in the Guarantee Obligations of such Guarantor under the
Guarantee of such Guarantor not constituting a fraudulent transfer or
conveyance.
SECTION 12.05. Application of Certain Terms and Provisions to the
Guarantors.
(a) For purposes of any provision of this Indenture which
provides for the delivery by any Guarantor of an Officers' Certificate and/or an
Opinion of Counsel, the definitions of such terms in Section 1.01 shall apply to
such Guarantor as if references therein to the Company were references to such
Guarantor.
(b) Any request, direction, order or demand which by any
provision of this Indenture is to be made by any Guarantor, shall be sufficient
if evidenced as described in Section 13.02 as if references therein to the
Company were references to such Guarantor.
(c) Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or by
the Holders to or on any Guarantor may be given or served as described in
Section 13.02 as if references therein to the Company were references to such
Guarantor.
(d) Upon any demand, request or application by any Guarantor
to the Trustee to take any action under this Indenture, such Guarantor shall
furnish to the Trustee such certificates and
-120-
opinions as are required in Section 13.04 hereof as if all references therein to
the Company were references to such Guarantor.
ARTICLE 13
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA Section 318(c), the imposed duties shall control.
SECTION 13.02. Notices.
Any notice or communication by the Issuers or the Trustee to the
other is duly given if in writing and delivered in Person or mailed by first
class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
other's address:
If to the Issuers:
▇▇▇▇▇ Casino Holdings, LLC
▇▇▇▇▇ Casino Funding, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Executive Vice-President and Corporate Treasurer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
and a copy to:
LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
-121-
If to the Trustee:
U.S. Bank National Association
▇.▇. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
The Issuers or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given at the time delivered by hand, if
personally delivered; five (5) calendar days after mailing if sent by registered
or certified mail, postage prepaid (except that a notice of change of address
shall not be deemed to have been given until actually received by the
addressee); when answered back, if telexed; when receipt acknowledged, if
telecopied; and the next Business Day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication shall also be so mailed to
any Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Issuers mail a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
SECTION 13.03. Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Issuers, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 13.05 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for
in this Indenture relating to the proposed action have been satisfied;
and
-122-
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 13.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been
satisfied.
SECTION 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or
she has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
SECTION 13.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
SECTION 13.07. No Personal Liability of Members, Stockholders, Officers,
Directors; Non-Recourse.
No direct or indirect stockholder, partner, member, employee,
officer or director, as such, past, present or future, of either of the Issuers,
any Guarantor or any successor entity shall have any personal liability in
respect of the obligations of the Issuers or any Guarantor under this Indenture
or the Notes or the Guarantees thereof by reason of his or its status as such
stockholder, partner, member, employee, officer or director, except to the
extent such person is an Issuer or Guarantor. Each Holder by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
SECTION 13.08. Governing Law.
THIS INDENTURE AND THE NOTES 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. EACH OF THE PARTIES HERETO
AGREES TO SUBMIT TO THE
-123-
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE NOTES.
SECTION 13.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture,
loan or debt agreement of the Company or its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.
SECTION 13.10. Successors.
All agreements of the Company in this Indenture and the Notes
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
SECTION 13.11. Severability.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 13.12. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 13.13. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
SECTION 13.14. Gaming Authorities.
Nothing in this Indenture shall require the Trustee to take any
action contrary to the New Jersey Casino Control Act, the Indiana Riverboat Act
or any other Gaming Law or the rules, regulations or determinations promulgated
by any Gaming Authority.
[Signatures on following pages]
-124-
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, all as of the day and year first above written.
ISSUERS:
▇▇▇▇▇ CASINO HOLDINGS, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: CFO, Executive Vice President,
Corporate Treasurer and Secretary
▇▇▇▇▇ CASINO FUNDING, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: CFO, Executive Vice President,
Corporate Treasurer and Secretary
S-1
[Indenture]
GUARANTORS:
▇▇▇▇▇ INDIANA, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President and Treasurer
▇▇▇▇▇ INDIANA REALTY, LLC
By: ▇▇▇▇▇ Casino Holdings, LLC, its member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: CFO, Executive Vice President,
Corporate Treasurer and Secretary
▇▇▇▇▇ ▇▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and Treasurer
▇▇▇▇▇ ▇▇▇▇▇▇ ASSOCIATES, L.P.
By: ▇▇▇▇▇ ▇▇▇▇▇▇, Inc., its general partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and Treasurer
S-2
[Indenture]
THCR MANAGEMENT HOLDINGS, LLC
By: ▇▇▇▇▇ Casino Holdings, LLC, its member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: CFO, Executive Vice President,
Corporate Treasurer and Secretary
THCR MANAGEMENT SERVICES, LLC
By: THCR Management Holdings, LLC, its member
By: ▇▇▇▇▇ Casino Holdings, LLC, its member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: CFO, Executive Vice President,
Corporate Treasurer and Secretary
S-3
[Indenture]
TRUSTEE:
U.S. BANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
COLLATERAL AGENT:
U.S. BANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
S-4
[Indenture]
EXHIBIT A
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY. THIS NOTE IS NOT EXCHANGEABLE
FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, AND TRANSFERS OF INTERESTS IN THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.16 OF THE INDENTURE.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
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 COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE 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.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT
OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS NOT A U.S. PERSON AND
IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE
904 UNDER THE SECURITIES ACT, OR (C) IT IS AN ACCREDITED INVESTOR (AS DEFINED IN
RULE 501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES ACT (AN "ACCREDITED
INVESTOR"), (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A)
TO THE ISSUERS OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN
A-1
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES
TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS
FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS
ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
TRUSTEE FOR THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT (IF AVAILABLE),
(E) PURSUANT TO THE EXEMPTION FROM THE REGISTRATION PROVIDED BY RULE 144A UNDER
THE SECURITIES ACT (IF AVAILABLE), (F) 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), OR (G) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE
TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED
TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATIONS UNDER THE SECURITIES ACT.
A-2
(Face of Note)
CUSIP No: [ ]
17-5/8% Second Priority Mortgage Notes due 2010
No. [ ] $
▇▇▇▇▇ CASINO HOLDINGS, LLC
▇▇▇▇▇ CASINO FUNDING, INC.
promises to pay to [ ] or registered assigns,
the principal sum of Dollars on September 15, 2010.
Interest Payment Dates: March 15 and September 15, commencing September 15, 2003
Record Dates: March 1 and September 1
Dated:
▇▇▇▇▇ CASINO HOLDINGS, LLC
By:
------------------------------------------------
Name:
Title:
▇▇▇▇▇ CASINO FUNDING, INC.
By:
------------------------------------------------
Name:
Title:
A-3
Certificate of Authentication:
This is one of the Global Notes referred to in the within-mentioned Indenture:
U.S. BANK NATIONAL ASSOCIATION
By:
-----------------------------------
Authorized Signatory
Dated:
A-4
(Back of Note)
17-5/8% Second Priority Mortgage Notes due 2010
Capitalized terms used herein shall have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.
1. Interest. ▇▇▇▇▇ Casino Holdings, LLC, a Delaware limited
liability company and ▇▇▇▇▇ Casino Funding, Inc., a Delaware corporation (the
"Issuers"), promise to pay interest on the principal amount of this Note (x) in
cash at a rate per annum equal to 11-5/8% (the "Base Cash Interest Rate") and
(y) by the issuance of Additional Notes (the "PIK Notes") having identical terms
as this Note at a rate per annum equal to 6.0% (the "Pay-in-Kind Interest") and
in aggregate principal amount equal to the Pay-in-Kind Interest then due on this
Note. Each PIK Note shall be dated as of, and begin accruing interest on, the
Interest Payment Date on which it is issued. Notwithstanding the foregoing, in
the event the Issuers are required to issue any PIK Notes to a Holder in respect
of any Pay-in-Kind Interest in an amount that is not a whole dollar amount, the
Issuers shall round such Pay-in-Kind Interest to the nearest whole dollar amount
and issue such Holder PIK Notes in such rounded dollar amount. The Issuers shall
pay interest and Additional Interest, if any, semi-annually on March 15 and
September 15 of each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each an "Interest Payment Date") beginning September
15, 2003. Interest on the Notes shall accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of
issuance of this Note. Interest shall be computed on the basis of a 360-day year
of twelve 30-day months.
If the First Priority Leverage Ratio as of and for any fiscal
year for which a calculation of the First Priority Leverage Ratio is made
pursuant to Section 4.01(b) of the Indenture (as defined below) is determined to
be in excess of (x) 4.8 to 1.0, the Base Cash Interest Rate shall increase by
0.5% per annum and (y) 5.3 to 1.0, the Base Cash Interest Rate shall increase by
1.0% per annum, in each case from and after March 15 of such fiscal year up to
but not including March 15 of the following year, at which point the interest
rate on the Notes shall revert to the original Base Cash Interest Rate, subject
to increase as of March 15 of such following fiscal year if the calculation of
the First Priority Leverage Ratio pursuant to Section 4.01(b) of the Indenture
on February 28th of such following fiscal year requires an increase of the Base
Cash Interest Rate pursuant to this sentence; provided that the Base Cash
Interest Rate shall in no event increase by more than 1.0% as a result of the
provisions of this paragraph.
2. Method of Payment. The Issuers shall pay interest on the
Notes (except defaulted interest) and Additional Interest to the Persons who are
registered Holders at the close of business on the March 1 or September 1 next
preceding the Interest Payment Date, even if such Notes are cancelled after such
Record Date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The Notes
shall be payable as to principal, premium, interest and Additional Interest, if
any, at the office or agency of the Issuers maintained for such purpose within
or without the City and State of New York, or, at the option of the Issuers,
payment of interest and Additional 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 shall be required
with respect to principal of and interest, premium and Additional Interest on
all Global
A-5
Notes and all other Notes the Holders of more than $1,000 in aggregate principal
amount of Notes which shall have provided wire transfer instructions to the
Issuers or the Paying Agent. Other than with respect to the payment of the
Pay-in-Kind Interest, such payment shall be in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts.
3. Paying Agent and Registrar. Initially, U.S. Bank National
Association, the Trustee under the Indenture, shall act as Paying Agent and
Registrar. The Issuers may change any Paying Agent or Registrar without notice
to any Holder. The Issuers or any of its Subsidiaries may act in any such
capacity.
4. Indenture. The Issuers issued the Notes under an
Indenture dated as of March 25, 2003 ("Indenture") among the Issuers, the
Guarantors and the Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code Sections 77aaa-77bbbb).
The Notes are subject to all such terms, and Holders are referred to the
Indenture and such Act for a statement of such terms. To the extent any
provision of this Note conflicts with the express provisions of the Indenture,
the provisions of the Indenture shall govern and be controlling.
The Obligations under the Indenture, the Notes and the Guarantees
thereof are secured by the Collateral described in the Collateral Documents,
subject to the provisions of such documents. Holders are referred to the
Collateral Documents for a statement of such terms.
5. Optional Redemption. On or after March 15, 2007, the
Issuers may redeem all or a part of the Notes upon not less than 30 nor more
than 60 days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest and
Additional Interest, if any, thereon to the applicable redemption date, if
redeemed during the 12-month period beginning on March 15 of the years indicated
below:
YEAR PERCENTAGE
2007.......................... 108.719%
2008.......................... 104.359%
2009 and thereafter........... 100.000%
In addition, at any time prior to March 15, 2006, the Issuers may
on one or more occasions redeem up to 35% of the aggregate principal amount of
Notes issued under the Indenture at a redemption price of 111.625% of the
principal amount thereof, plus accrued and unpaid interest and Additional
Interest, if any, to the redemption date, with the net cash proceeds of any
Equity Offering; provided that:
(1) at least 65% of the aggregate principal amount of Notes
issued under the Indenture remains outstanding immediately after the
occurrence of such redemption (excluding Notes held by the Issuers and
their Subsidiaries); and
(2) the redemption must occur within 45 days after the date
of the closing of such Equity Offering.
A-6
Except pursuant to the preceding paragraph, the Notes shall not
be redeemable at the Issuers' option prior to March 15, 2007.
6. Mandatory Redemption. Other than as set forth in
paragraph 7 below, the Company shall not be required to make mandatory
redemption payments or sinking fund payments with respect to the Notes.
7. Mandatory Disposition in Accordance with Gaming Laws. If
any Gaming Authority requires that a Holder or beneficial owner of Notes be
licensed, qualified or found suitable under any applicable Gaming Law and such
Holder or beneficial owner (i) fails to apply for a license, qualification or a
finding of suitability within 30 days (or such lesser period as may be required
by the applicable Gaming Authority) after being requested to do so by the Gaming
Authority or (ii) is denied such license or qualification or not found suitable,
the Issuers shall have the right, at its option, (1) to require any such Holder
or beneficial owner to dispose of its Notes within 30 days (or such lesser
period as may be required by the applicable Gaming Authority) of the occurrence
of the event described in clause (i) or (ii) above or (2) to redeem the Notes of
such Holder or beneficial owner at a redemption price equal to the lesser of (x)
the principal amount thereof, together with accrued and unpaid interest and
Additional Interest, if any, to the date of the denial of license or
qualification or of the finding of unsuitability by such Gaming Authority, (y)
the price at which such Holder or beneficial owner acquired the Notes, together
with accrued and unpaid interest and Additional Interest, if any, to the date of
the denial of license or qualification or of the finding of unsuitability by
such Gaming Authority and (z) the Fair Market Value of such Notes. The Issuers
shall notify the Trustee in writing of any redemption pursuant to Section 3.09
of the Indenture as soon as practicable.
Immediately upon a determination by a Gaming Authority that a
Holder or beneficial owner of the Notes will not be licensed, qualified or found
suitable, the Holder or beneficial owner will, to the extent required by
applicable law, have no further rights (i) to receive any interest with respect
to the Notes; or (ii) to exercise, directly or through any trustee or nominee,
any right conferred by the Notes; or (iii) receive any remuneration in any form
for services rendered or otherwise.
The Holder or beneficial owner that is required to apply for a
license, qualification or a finding of suitability shall pay all fees and costs
of applying for and obtaining the license, qualification or finding of
suitability and of any investigation by the applicable Gaming Authorities.
Neither the Issuers nor any Subsidiary shall be liable therefor.
8. Change of Control Offer. Upon the occurrence of a Change
of Control, the Issuers shall offer to repurchase all or any part (equal to,
except in the case of any PIK Note (which may be in any denomination that is a
whole dollar amount), $1,000 or an integral multiple thereof) of such Holder's
Notes pursuant to the offer described below at an offer price in cash equal to
101% of the aggregate principal amount thereof plus accrued and unpaid interest
and Additional Interest thereon to the date of purchase. Within 30 days
following any Change of Control, the Issuers shall mail a notice to each Holder
describing the transaction or transactions that constitute the Change of Control
and offering to repurchase Notes pursuant to the procedures required by the
Indenture and described in such notice. The Issuers shall comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and
A-7
regulations are applicable in connection with the repurchase of the Notes as a
result of a Change of Control.
9. Denominations, Transfer, Exchange. Except in the case of
any PIK Notes, which may be in any denomination that is a whole dollar amount,
the Notes are in registered form without coupons in denominations of $1,000 and
integral multiples of $1,000. The transfer of Notes may be registered and Notes
may be exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Issuers may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Issuers need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, it need not exchange or register the transfer of any Notes for a
period of 15 Business Days before a selection of Notes to be redeemed.
10. Persons Deemed Owners. The registered holder of a Note
may be treated as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
consent of the Holders of at least a majority in aggregate principal amount of
the then outstanding Notes, and any existing Default or noncompliance with any
provision of the Indenture or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes
including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, Notes. Without the consent of any
Holder of a Note, the Indenture or the Notes may be amended or supplemented to
cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes
in addition to or in place of certificated Notes, to provide for the assumption
of the Issuers' or any Guarantor's obligations to Holders in case of a merger or
consolidation or sale of all or substantially all of the Issuers' or any
Guarantor's property, to make any change that would provide any additional
rights or benefits to the Holders or that does not adversely affect the rights
under the Indenture of any such Holder, or to comply with the requirements of
the SEC in order to effect or maintain the qualification of the Indenture under
the TIA.
Notwithstanding the foregoing, Collateral may only be released
with the consent of the Holders of at least 75% in aggregate principal amount of
the then outstanding Notes in addition to releases of Collateral expressly
permitted by the Collateral Documents.
12. Defaults and Remedies. Events of Default are set forth in
the Indenture. If any Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in principal amount of the then outstanding Notes
may declare all the Notes to be due and payable. Notwithstanding the foregoing,
in the case of an Event of Default arising from certain events of bankruptcy or
insolvency, all outstanding Notes shall become due and payable without further
action or notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a majority
in principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders notice of
any continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Notes then outstanding by notice to the Trustee may on
A-8
behalf of the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing Default or
Event of Default in the payment of interest on, or the principal of, the Notes.
The Company is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture and the Collateral Documents, and the Company is
required upon becoming aware of any Default or Event of Default, to deliver to
the Trustee a statement specifying such Default or Event of Default.
13. Ranking and Security. The Notes shall be senior
Obligations of the Issuers and shall rank equal in right of payment with all
existing and future senior indebtedness of the Issuers and senior in right of
payment to all existing and future subordinated debt.
The Issuers' Obligations under the Notes shall be fully and
unconditionally guaranteed on a senior basis, jointly and severally, by each of
the Guarantors. The Guarantees shall be senior Obligations of the Guarantors and
shall rank equal in right of payment with all existing and future senior debt of
the Guarantors and senior in right of payment to any Indebtedness of the
Guarantors that is subordinated to such Guarantees.
Pursuant to the Collateral Documents, the Notes and the
Guarantees shall be secured by a second priority Lien (subject to certain
exceptions described in the Collateral Documents) on the Collateral.
14. Trustee Dealings with Issuers. The Trustee, 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.
15. No Recourse Against Others. A director, officer,
employee, incorporator or stockholder, of the Issuers, as such, shall not have
any liability for any Obligations of the Issuers under the Notes or the
Indenture or for any claim based on, in respect of, or by reason of, such
Obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
16. Authentication. This Note shall not be valid until
authenticated by the manual or facsimile signature of the Trustee or an
authenticating agent.
17. Abbreviations. Customary abbreviations may be used in the
name of a Holder or an assignee, such as TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
18. Additional Rights of Holders of Notes. In addition to the
rights provided to Holders under the Indenture, Holders of Notes shall have all
the rights set forth in the Registration Rights Agreement dated as of the Issue
Date, among the Issuers, the Guarantors and the Initial Purchaser.
19. CUSIP Numbers. Pursuant to a recommendation promulgated
by the Committee on Uniform Security Identification Procedures, the Issuers have
caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed on the Notes or
A-9
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Issuers shall furnish to any Holder upon written request and
without charge a copy of this Indenture, the Collateral Documents and/or the
Registration Rights Agreement. Requests may be made to:
▇▇▇▇▇ Casino Holdings, LLC
▇▇▇▇▇ Casino Funding, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Executive Vice President and
Corporate Treasurer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
A-10
GUARANTEE
The Guarantors listed below (hereinafter referred to as the
"Guarantors," which term includes any successors or assigns under the Indenture
and any additional Guarantors), have irrevocably and unconditionally guaranteed
the Guarantee Obligations, which include that (a) the principal of, and premium
and interest and Additional Interest, if any, on the 17-5/8% Second Priority
Mortgage Notes due 2010 (the "Notes") of ▇▇▇▇▇ Casino Holdings, LLC and ▇▇▇▇▇
Casino Funding, Inc. (the "Issuers"), shall be duly and punctually paid in full
when due, whether at maturity, by acceleration or otherwise, and interest on
overdue principal, and premium, if any, and (to the extent permitted by law)
interest on any interest, if any, on the Notes and all other Obligations of the
Issuers to the Holders or the Trustee hereunder or under the Notes or under the
Collateral Documents (including fees, expenses or other) shall be promptly paid
in full or performed, all in accordance with the terms hereof and thereof; and
(b) in case of any extension of time of payment or renewal of any Notes or any
of such other Obligations, the same shall be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise.
The Obligations of each Guarantor to the Holders and to the
Trustee pursuant to this Guarantee and this Indenture are expressly set forth in
Article 12 of the Indenture and reference is hereby made to such Indenture for
the precise terms of this Guarantee. The Obligations are secured by a pledge of
the Collateral pursuant to Articles 10 and 11 of the Indenture and the
Collateral Documents.
No stockholder, officer, director or incorporator, as such, past,
present or future of each Guarantor shall have any liability under this
Guarantee by reason of his or its status as such stockholder, officer, director
or incorporator.
Except as set forth in the Indenture, this is a continuing
Guarantee and shall remain in full force and effect and shall be binding upon
each Guarantor and its successors and assigns until full and final payment of
all of the Issuers' Obligations under the Notes and the Indenture and shall
inure to the benefit of the successors and assigns of the Trustee and the
Holders, and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges herein conferred upon that party shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof. This is a Guarantee of payment and
not of collectibility.
This Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Note upon which this Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
The Obligations of each Guarantor under its Guarantee shall be
limited to the extent necessary to insure that it does not constitute a
fraudulent conveyance under applicable law.
THE TERMS OF ARTICLE 12 OF THE INDENTURE ARE INCORPORATED HEREIN
BY REFERENCE.
Capitalized terms used herein have the same meanings given in
this Indenture unless otherwise indicated.
A-11
Dated as of March 25, 2003
GUARANTORS:
▇▇▇▇▇ INDIANA, INC.
By:
------------------------------------------------
Name:
Title:
▇▇▇▇▇ INDIANA REALTY, LLC
By: ▇▇▇▇▇ Casino Holdings, LLC, its member
By:
------------------------------------------------
Name:
Title:
▇▇▇▇▇ ▇▇▇▇▇▇, INC.
By:
------------------------------------------------
Name:
Title:
▇▇▇▇▇ ▇▇▇▇▇▇ ASSOCIATES, L.P.
By: ▇▇▇▇▇ ▇▇▇▇▇▇, Inc., its general partner
By:
------------------------------------------------
Name:
Title:
A-12
THCR MANAGEMENT HOLDINGS, LLC
By: ▇▇▇▇▇ Casino Holdings, LLC, its member
By:
------------------------------------------------
Name:
Title:
THCR MANAGEMENT SERVICES, LLC
By: THCR Management Holdings, LLC, its member
By: ▇▇▇▇▇ Casino Holdings, LLC, its member
By:
------------------------------------------------
Name:
Title:
A-13
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to___________________________________________________________
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Issuers. The agent may substitute
another to act for him.
Date:______________________
Your Signature:__________________________________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee.
A-14
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuers
pursuant to Section 4.11, 4.14, 4.16 or 4.25 of the Indenture, check the box
below:
[ ]Section 4.11 [ ]Section 4.14 [ ]Section 4.16 [ ]Section 4.25
If you want to elect to have only part of the Note purchased by
the Issuers pursuant to Section 4.11, 4.14, 4.16 or 4.25 of the Indenture, state
the amount you elect to have purchased: $___________
Date: Your Signature:
----------------------- ------------------------------
(Sign exactly as your name appears on the Note)
Tax Identification No.:________________________
Signature Guarantee:
-----------------------------------------------
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
A-15
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an
interest in another Global Note or for a Definitive Note, or exchanges of a part
of another Global Note or Definitive Note for an interest in this Global Note,
have been made:
Principal Amount of
Amount of decrease Amount of increase this Global Note Signature of
in Principal Amount in Principal Amount following such authorized officer
of of decrease (or of Trustee or Note
Date of Exchange this Global Note this Global Note increase) Custodian
----------------- ------------------- ------------------- ------------------- ------------------
A-16
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Re: ▇▇▇▇▇ Casino Holdings, LLC's and ▇▇▇▇▇ Casino Funding, Inc.'s
17-5/8% Second Priority Mortgage Notes due 2010 (the "Notes")
This Certificate relates to $_______ principal amount of Notes
held in the form of* ___ a beneficial interest in a Global Note or* _______
Definitive Notes by ______ (the "Transferor").
The Transferor:
[ ] has requested by written order that the Registrar
deliver in exchange for its beneficial interest in the Global Note held by the
Depositary a Definitive Note or Definitive Notes in definitive, registered form
of authorized denominations and an aggregate number equal to its beneficial
interest in such Global Note (or the portion thereof indicated above); or
[ ] has requested by written order that the Registrar
exchange or register the transfer of a Definitive Note or Definitive Notes.
In connection with such request and in respect of each such Note,
the Transferor does hereby certify that the Transferor is familiar with the
Indenture relating to the above captioned Notes and the restrictions on
transfers thereof as provided in Section 2.16 of such Indenture, and that the
transfer of the Notes does not require registration under the Securities Act of
1933, as amended (the "Securities Act"), because*:
[ ] Such Note is being acquired for the Transferor's own
account, without transfer (in satisfaction of Section 2.16 of the Indenture).
[ ] Such Note is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act), in
reliance on Rule 144A.
[ ] Such Note is being transferred to an institutional
"accredited investor" (within the meaning of subparagraph (a)(1), (2), (3) or
(7) of Rule 501 under the Securities Act) which delivers a certificate to the
Trustee in the form of Exhibit C to the Indenture.
[ ] Such Note is being transferred in reliance on
Regulation S under the Securities Act and a transfer certificate for Regulation
S transfers in the form of Exhibit D to the Indenture accompanies this
certification. [An Opinion of Counsel to the effect that such transfer does not
require registration under the Securities Act accompanies this certification.]
[ ] Such Note is being transferred in reliance on Rule 144
under the Securities Act. [An Opinion of Counsel to the effect that such
transfer does not require registration under the Securities Act accompanies this
certification.]
B-1
[ ] Such Note is being transferred in reliance on and in
compliance with an exemption from the registration requirements of the
Securities Act other than Rule 144A or Rule 144 under the Securities Act to a
person other than an institutional "accredited investor." [An Opinion of Counsel
to the effect that such transfer does not require registration under the
Securities Act accompanies this certification.]
----------------------------------------------------
[INSERT NAME OF TRANSFEROR]
By:
------------------------------------------------
[Authorized Signatory]
Date:
------------------
*Check applicable box.
B-2
EXHIBIT C
Form of Transferee Letter of Representation
U.S. Bank National Association
U.S. Bank Trust Center
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $________
principal amount of the 17-5/8% Second Priority Mortgage Notes due 2010 of ▇▇▇▇▇
Casino Holdings, LLC and ▇▇▇▇▇ Casino Funding, Inc. (the "Issuers"), and any
guarantee thereof (the "Notes"). Upon transfer, the Notes would be registered in
the name of the new beneficial owner as follows:
Name:___________________________________________
Address:________________________________________
Taxpayer ID Number:_____________________________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933 (the
"Securities Act")) purchasing Notes for our own account or for the account of
such an institutional "accredited investor" and we are acquiring the Notes not
with a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act. We have such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risk of our investment in the Notes and we invest in or purchase securities
similar to the Notes in the normal course of our business. We and any accounts
for which we are acting are each able to bear the economic risk of our or its
investment.
2. We acknowledge that we have had access to such financial
and other information, and have been afforded the opportunity to ask such
questions of representatives of the Issuers and receive answers thereto, as we
deem necessary.
3. We understand that the Notes have not been registered
under the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf of
any investor account for which we are purchasing Notes that we shall not prior
to the date (the "Resale Restriction Termination Date") that is two years after
the later of the original issuance of the Notes and the last date on which the
Issuers or any affiliate of the Issuers was the owner of such Notes (or any
predecessor thereto) offer, sell or otherwise transfer such Notes except (a) to
the Issuers or any subsidiary of the Issuers, (b) inside the United States to a
"qualified institutional buyer" in compliance with Rule 144A under the
Securities Act (c) inside the United States to an "institutional accredited
investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
C-1
Securities Act that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to the Trustee a signed letter substantially in
the form of this letter (d) outside the United States in an offshore transaction
in compliance with Rule 904 under the Securities Act (e) pursuant to any other
available exemption from the registration requirements of the Securities Act or
(f) pursuant to an effective registration statement under the Securities Act. We
acknowledge that the Issuers and the Trustee reserve the right prior to any
offer, sale or other transfer prior to the Resale Restriction Termination Date
of the applicable Notes pursuant to clause (c) or (e) above to require the
delivery of an Opinion of Counsel, certification and/or other information
satisfactory to the Issuers and the Trustee.
We understand that the Trustee shall not be required to accept
for registration of transfer any Notes acquired by us, except upon presentation
of evidence satisfactory to the Issuers and the Trustee that the foregoing
restrictions on transfer have been complied with. We further understand that any
Notes purchased by us shall be in the form of definitive physical certificates
and that such certificates shall bear a legend reflecting the substance of
paragraph 3 of this letter. We further agree to provide to any person acquiring
any of the Notes from us a notice advising such person that transfers of such
Notes are restricted as stated herein and that certificates representing such
Notes shall bear a legend to that effect.
We represent that the Issuers and the Trustee and others are
entitled to rely upon the truth and accuracy of our acknowledgments,
representations and agreements set forth herein, and we agree to notify you
promptly in writing if any of our acknowledgments, representations or agreements
herein cease to be accurate and complete. You are also irrevocably authorized to
produce this letter or a copy hereof to any interested party in any
administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
We represent to you that we have full power to make the foregoing
acknowledgments, representations and agreements on our own behalf and on behalf
of any investor account for which we are acting as fiduciary agent.
As used herein, the terms "offshore transaction," "United States"
and "U.S. person" have the respective meanings given to them in Regulation S
under the Securities Act.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
Dated: TRANSFEREE:
-----------------
By:
------------------------------------------------
C-2
EXHIBIT D
Form of Certificate To Be
Delivered in Connection
with Regulation S Transfers
___________, ____
U.S. Bank National Association
U.S. Bank Trust Center
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services
Re: ▇▇▇▇▇ Casino Holdings, LLC and ▇▇▇▇▇ Casino Funding, Inc.'s 17-5/8% Second
Priority Mortgage Notes due 2010 (the "Notes")
Ladies and Gentlemen:
In connection with our proposed sale of $__________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the
United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting
on our behalf reasonably believed that the transferee was outside the
United States, or (b) the transaction was executed in, on or through
the facilities of a designated off-shore securities market and neither
we nor any person acting on our behalf knows that the transaction has
been prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(a) or Rule
904(a) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer
restrictions applicable to the Notes.
D-1
You and the Issuers are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Defined terms used herein without
definition have the respective meanings provided in Regulation S.
Very truly yours,
[Name of Transferor]
By:
------------------------------------------------
D-2
EXHIBIT E
FORM OF SECURITY AGREEMENT
[Intentionally omitted-filed herewith as separate exhibit]
E-1
EXHIBIT F-1
FORM OF MORTGAGE
[Intentionally omitted-filed herewith as separate exhibit]
F-1-1
EXHIBIT F-2
================================================================================
[FORM OF] SECOND LEASEHOLD MORTGAGE, ASSIGNMENT
OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
BY
[_________________]
Mortgagor,
TO
U.S. BANK NATIONAL ASSOCIATION,
as Collateral Agent,
Mortgagee
Dated as of [_______], [_____]
Relating to Premises in:
[______] County, [________]
================================================================================
After recording, please return to:
Athy ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
----------
F-2-1
TABLE OF CONTENTS
Page
----
PREAMBLE.......................................................................................1
RECITALS.......................................................................................1
AGREEMENT......................................................................................2
ARTICLE I DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions..............................................................2
SECTION 1.2 Interpretation...........................................................8
SECTION 1.3 Resolution of Drafting Ambiguities.......................................8
ARTICLE II GRANTS AND SECURED OBLIGATIONS
SECTION 2.1 Grant of Mortgaged Property..............................................8
SECTION 2.2 Assignment of Leases and Rents...........................................9
SECTION 2.3 Secured Obligations......................................................9
SECTION 2.4 Future Advances.........................................................10
SECTION 2.5 No Release..............................................................10
ARTICLE III REPRESENTATIONS AND WARRANTIES OF MORTGAGOR
SECTION 3.1 Authority and Validity..................................................10
SECTION 3.2 Warranty of Title.......................................................11
SECTION 3.3 Condition of Mortgaged Property.........................................11
SECTION 3.4 Leases..................................................................12
SECTION 3.5 Insurance...............................................................13
SECTION 3.6 Charges.................................................................13
SECTION 3.7 Environmental...........................................................13
SECTION 3.8 No Conflicts, Consents, etc.............................................14
SECTION 3.9 Benefit to the Mortgagor................................................14
ARTICLE IV CERTAIN COVENANTS OF MORTGAGOR
SECTION 4.1 Payment.................................................................15
SECTION 4.2 Title...................................................................15
SECTION 4.3 Maintenance and Use of Leased Premises; Alterations.....................15
SECTION 4.4 Notices Regarding Certain Defaults......................................16
SECTION 4.5 Access to Leased Premises, Books and Records; Other Information.........16
SECTION 4.6 Limitation on Liens; Transfer Restrictions..............................16
SECTION 4.7 Environmental...........................................................17
SECTION 4.8 Estoppel Certificates...................................................18
Page
----
ARTICLE V LEASES
SECTION 5.1 Mortgagor's Affirmative Covenants with Respect to Leases................18
SECTION 5.2 Mortgagor's Negative Covenants with Respect to Leases...................19
SECTION 5.3 Additional Requirements with Respect to New Leases......................19
ARTICLE VI CONCERNING ASSIGNMENT OF LEASES AND RENTS
SECTION 6.1 Present Assignment; License to the Mortgagor............................19
SECTION 6.2 Collection of Rents by the Mortgagee....................................19
SECTION 6.3 No Release..............................................................19
SECTION 6.4 Irrevocable Interest....................................................20
SECTION 6.5 Amendment to Leases.....................................................20
ARTICLE VII TAXES AND CERTAIN STATUTORY LIENS
SECTION 7.1 Payment of Charges......................................................20
SECTION 7.2 Escrow of Taxes.........................................................20
SECTION 7.3 Certain Statutory Liens.................................................20
SECTION 7.4 Stamp and Other Taxes...................................................21
SECTION 7.5 Certain Tax Law Changes.................................................21
SECTION 7.6 Proceeds of Tax Claim...................................................21
ARTICLE VIII INSURANCE
SECTION 8.1 Required Insurance Policies and Coverages...............................21
SECTION 8.2 Delivery After Foreclosure..............................................21
ARTICLE IX CONTESTING OF PAYMENTS
SECTION 9.1 Contesting of Charges...................................................21
SECTION 9.2 Contesting of Insurance.................................................22
ARTICLE X EVENTS OF LOSS
SECTION 10.1 Events of Loss..........................................................22
ARTICLE XI EVENTS OF DEFAULT AND REMEDIES
SECTION 11.1 Events of Default.......................................................22
SECTION 11.2 Remedies in Case of an Event of Default.................................22
SECTION 11.3 Sale of Mortgaged Property if Event of Default Occurs; Proceeds of Sale.23
SECTION 11.4 Additional Remedies in Case of an Event of Default......................24
-iii-
Page
----
SECTION 11.5 Legal Proceedings After an Event of Default.............................25
SECTION 11.6 Remedies Not Exclusive..................................................26
SECTION 11.7 Jurisdiction of the [STATE GAMING COMMISSION]...........................26
ARTICLE XII SECURITY AGREEMENT AND FIXTURE FILING
SECTION 12.1 Security Agreement......................................................26
SECTION 12.2 Fixture Filing..........................................................27
ARTICLE XIII FURTHER ASSURANCES
SECTION 13.1 Recording Documentation to Assure Security..............................27
SECTION 13.2 Further Acts............................................................28
SECTION 13.3 Additional Security.....................................................28
ARTICLE XIV MISCELLANEOUS
SECTION 14.1 Covenants To Run with the Leased Premises...............................28
SECTION 14.2 No Merger...............................................................28
SECTION 14.3 Concerning Mortgagee....................................................28
SECTION 14.4 Mortgagee May Perform; Mortgagee Appointed Attorney-in-Fact.............29
SECTION 14.5 Expenses................................................................30
SECTION 14.6 Indemnity...............................................................30
SECTION 14.7 Continuing Security Interest; Assignment................................31
SECTION 14.8 Termination; Release....................................................31
SECTION 14.9 Modification in Writing.................................................31
SECTION 14.10 Notices.................................................................32
SECTION 14.11 GOVERNING LAW; SERVICE OF PROCESS; WAIVER OF JURY TRIAL.................32
SECTION 14.12 Severability of Provisions..............................................32
SECTION 14.13 Limitation on Interest Payable..........................................32
SECTION 14.14 Business Days...........................................................33
SECTION 14.15 Relationship............................................................33
SECTION 14.16 No Credit for Payment of Taxes or Impositions...........................33
SECTION 14.17 No Claims Against the Mortgagee.........................................33
SECTION 14.18 Obligations Absolute....................................................33
SECTION 14.19 Mortgagee's Right To Sever Indebtedness.................................34
SECTION 14.20 Mortgaged Leases........................................................35
SECTION 14.21 Gaming Authorities......................................................36
SIGNATURE
ACKNOWLEDGMENTS
SCHEDULE A Legal Description
-iv-
SCHEDULE B Mortgaged Leases
SCHEDULE C Prior Liens
EXHIBIT 1 Form of Subordination, Non-Disturbance
and Attornment Agreement
-v-
SECOND LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY
AGREEMENT AND FIXTURE FILING
THIS SECOND LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY
AGREEMENT AND FIXTURE FILING (the "Mortgage"), dated as of [______], 2003, made
by [_____________], a [________] [_________] having an office at
[_______________], as mortgagor, assignor and debtor (in such capacities and
together with any successors in such capacities, the "Mortgagor"), in favor of
U.S. BANK NATIONAL ASSOCIATION, a national banking association, having an office
at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇ ("U.S. Bank"), in its capacity as
collateral agent pursuant to the Priority Intercreditor Agreement (as
hereinafter defined) (the "Collateral Agent"), and as mortgagee, assignee and
secured party hereunder (in such capacities and together with any successors in
such capacities, the "Mortgagee").
RECITALS:
▇. ▇▇▇▇▇ Casino Holdings, LLC ("Holdings") and ▇▇▇▇▇ Casino
Funding, Inc. ("Funding", together with Holdings, the "Issuers"), the Guarantors
(from time to time party thereto) and U.S. Bank, as trustee (in such capacity,
along with successors in such capacity, the "First Priority Trustee") have, in
connection with the execution and delivery of the First Priority Mortgage (as
hereinafter defined), entered into that certain indenture, dated as of March 25,
2003 (as amended, amended and restated, supplemented, or otherwise modified from
time to time, the "First Priority Indenture"), pursuant to which the Issuers
under the First Priority Indenture have issued their 11?% first priority
mortgage notes due 2010 in the aggregate principal amount of $425,000,000 (the
"First Priority Mortgage Notes"). It is contemplated that the Issuers under the
First Priority Indenture may, after the date hereof, issue (a) exchange notes
and private exchange notes (the "First Priority Mortgage Exchange Notes") and
(b) additional notes (the "Additional First Priority Mortgage Notes"; together
with the First Priority Mortgage Exchange Notes and the First Priority Mortgage
Notes, the "First Notes") pursuant to the provisions of the First Priority
Indenture.
B. The Issuers, the Guarantors (from time to time party thereto)
and U.S. Bank, as trustee (in such capacity, along with successors in such
capacity, the "Second Priority Trustee") have, in connection with the execution
and delivery of this Mortgage, entered into that certain indenture, dated as of
March 25, 2003 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "Second Priority Indenture"), pursuant to which
the Issuers under the Second Priority Indenture have issued their 17?% second
priority notes due 2010 in the aggregate principal amount of $65,000,000 (the
"Second Priority Mortgage Notes"). It is expressly understood and agreed that
the Issuers under the Second Priority Indenture shall pay a portion of the
interest on the Second Notes (as hereinafter defined) by the issuance of
pay-in-kind notes (the "PIK Notes"), which PIK Notes shall increase the
aggregate principal amount of this Mortgage. It is contemplated that the Issuers
under the Second Priority Indenture may, after the date hereof, issue exchange
notes and private exchange notes (the "Second Priority Mortgage Exchange Notes";
together with the PIK Notes and the Second Priority Mortgage Notes, the "Second
Notes") pursuant to the provisions of the Second Priority Indenture.
C. Mortgagee has been appointed the collateral agent pursuant to
that certain Priority Intercreditor Agreement dated as of March 25, 2003 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Priority Intercreditor Agreement") to act for its benefit and for the
benefit of the Second Priority Trustee (for the benefit of the Holders of the
Second
-2-
Notes) (the Second Priority Trustee, the Holders of the Second Notes and the
Collateral Agent, the "Secured Parties").
D. The Mortgagor has, pursuant to the Second Priority Indenture,
among other things, unconditionally guaranteed the obligations of the Issuers
under the Second Priority Indenture and the Second Notes.
E. The Mortgagor will receive substantial benefits from the
execution, delivery and performance of the obligations under the Second Priority
Indenture and the Second Notes and is, therefore, willing to enter into this
Mortgage.
F. The Mortgagor is the legal owner of (i) the Mortgaged Property
(as hereinafter defined) and (ii) the tenant's or lessee's interest created by
those certain leases, subleases and other agreements (as amended to date and as
amended from time to time in accordance with the provisions of this Mortgage,
the "Mortgaged Leases") set forth in Schedule B annexed hereto, which affect a
portion of the property set forth in Schedule A annexed hereto as indicated
therein. The Mortgaged Leases or Memoranda of Leases relating to the Mortgaged
Leases, as the case may be, were recorded at the times and in the real property
records set forth in Schedule B annexed hereto.
G. Holdings owns, directly or through its Subsidiaries, all of the
issued and outstanding equity interests of the Mortgagor.
H. Pursuant to the requirements of the Second Priority Indenture,
the Mortgagor is entering into this Mortgage to create a second priority
mortgage lien on and security interest in the Mortgaged Property to secure the
performance and payment by the Mortgagor of all the Secured Obligations (as
hereinafter defined). The First Priority Indenture requires the granting by the
Mortgagor of a First Leasehold Mortgage, Assignment of Leases and Rents,
Security Agreement and Fixture Filing (the "First Priority Mortgage") on the
Mortgaged Property in favor of the Collateral Agent for the benefit of the First
Priority Secured Parties to secure the First Priority Obligations (as
hereinafter defined).
I. It is expressly understood and agreed that, notwithstanding the
terms of this Mortgage, this Mortgage and the rights of the Secured Parties
hereunder, shall at all times be and remain subject and subordinate in all
respects to the First Priority Mortgage and the rights of the secured parties
thereunder, all as more particularly set forth in the Priority Intercreditor
Agreement
AGREEMENT:
NOW THEREFORE, in consideration of the foregoing premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Mortgagor hereby covenants and agrees with the Mortgagee as
follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions. (a) Capitalized terms used but not otherwise
defined herein that are defined in the Second Priority Indenture shall have the
meanings given to them in the Second Priority Indenture, including the
following:
-3-
"Affiliate"; "Bankruptcy Code"; "Business Day"; "Collateral";
"Collateral Documents"; "Event of Default"; "FF&E Financing Agreement";
"GAAP"; "Gaming Authorities"; "Gaming Law"; "Gaming Licenses"; "Holder";
"Indebtedness"; "Lien"; "Net Asset Sale Proceeds"; "Net Loss Proceeds";
"Officers' Certificate"; "Permitted Indebtedness"; "Permitted Liens";
and "Security Agreement".
(b) The following terms in this Mortgage shall have the
following meanings:
"ACM" shall have the meaning assigned to such term in Section
4.7(ii) hereof.
"Alterations" shall mean any and all alterations, installations,
improvements, additions, modifications or changes, structural or nonstructural.
"Charges" shall mean any and all real estate, property and other
taxes, assessments and special assessments, levies, fees, all water and sewer
rents and charges and all other governmental charges imposed upon or assessed
against, and all claims (including, without limitation, landlords', carriers',
mechanics', workmen's, repairmen's, laborers', materialmen's, suppliers' and
warehousemen's Liens and other claims arising by operation of law) against, all
or any portion of the Mortgaged Property.
"Collateral Agent" shall have the meaning assigned to such term
in the Preamble hereof.
"Collateral Documents" shall mean those Collateral Documents as
defined in the Second Priority Indenture other than those which specifically
secure the First Notes.
"Contracts" shall mean, collectively, any and all right, title
and interest of the Mortgagor in and to any and all contracts relating to the
Mortgaged Property and all reserves, deferred payments, deposits, refunds and
claims of every kind, nature or character relating thereto.
"Default Rate" shall mean the rate per annum equal to the
highest rate then payable under the Second Priority Indenture.
"Environmental Laws" shall mean any and all present and future
(except with respect to representations and warranties contained herein which
shall relate to such laws as in effect on the date such representation or
warranty is made) applicable laws, rules or regulations of any Governmental
Authority, any orders, decrees, judgments or injunctions and the common law, in
each case as now or hereafter in effect, relating to pollution or protection of
human health, safety or the environment, (including without limitation, ambient
air, indoor air, soil, surface water, ground water, land or subsurface strata,
and natural resources such as wetlands, flora and fauna), and including, without
limitation, those relating to releases or threatened releases of Hazardous
Materials in or into the environment, or otherwise relating to the manufacture,
processing, generation, distribution, use, treatment, storage, discharge,
disposal, collection, transfer, transport or handling of Hazardous Materials.
"Event of Loss" shall mean any Event of Loss as defined in the
Second Priority Indenture with respect to the Premises and the Leased Premises
or any part thereof.
"Excluded Property" shall have the meaning assigned to such term
in the Security Agreement.
-4-
"First Priority Mortgage" shall have the meaning assigned to
such term in Recital H hereof.
"First Priority Obligations" shall mean obligations (whether or
not constituting future advances, obligatory or otherwise) of the Issuers under
the First Priority Indenture and any and all of the Guarantors (as defined in
the First Priority Indenture) from time to time arising under or in respect of
the First Priority Mortgage, the First Priority Indenture, the First Notes and
the other Collateral Documents (including, without limitation, the obligations
to pay principal, interest and all other charges, fees, expenses, commissions,
reimbursements, premiums, indemnities and other payments related to or in
respect of the obligations contained in the First Priority Mortgage, the First
Priority Indenture, the First Notes and the other Collateral Documents), in each
case whether (i) such obligations are direct or indirect, secured or unsecured,
joint or several, absolute or contingent, due or to become due whether at stated
maturity, by acceleration or otherwise, (ii) arising in the regular course of
business or otherwise, (iii) for payment or performance and/or (iv) now existing
or hereafter arising (including, without limitation, interest and other
obligations arising or accruing after the commencement of any bankruptcy,
insolvency, reorganization or similar proceeding with respect to the Issuers
under the First Priority Indenture, any Guarantor or any other Person, or which
would have arisen or accrued but for the commencement of such proceeding, even
if such obligation or the claim therefor is not enforceable or allowable in such
proceeding).
"First Priority Secured Parties" shall mean the First Priority
Trustee and the Holders of the First Notes.
"Fixture" shall mean, to the extent owned (and with respect to
the Leased Premises, to the extent demised pursuant to the Mortgaged Leases) by
the Mortgagor, all machinery, apparatus, equipment, fittings, fixtures,
Improvements and articles of personal property of every kind, description and
nature whatsoever now or hereafter attached or affixed to the land that is the
subject of the Mortgaged Leases or any other Improvement or used in connection
with the use and enjoyment of the land that is the subject of the Mortgaged
Leases or any other Improvement, which by the nature of their location thereon
or attachment thereto are fixtures under the UCC or any other applicable law
including, without limitation, all utility systems, fire sprinkler and security
systems, drainage facilities, lighting facilities, all water, sanitary and storm
sewer, drainage, electricity, steam, gas, telephone and other utility equipment
and facilities, pipes, fittings and other items of every kind and description
now or hereafter attached to or located on the land that is subject to the
Mortgaged Leases which by the nature of their location thereon or attachment
thereto are real property under applicable law, HVAC equipment, boilers,
electronic data processing, telecommunications or computer equipment,
refrigeration, electronic monitoring, water or lighting systems, power,
sanitation, waste removal, elevators, maintenance or other systems or equipment
and all additions thereto and betterments, renewals, substitutions and
replacements thereof.
"Governmental Authority" shall mean any Federal, state, local,
foreign or other governmental, quasi-governmental or administrative (including
self-regulatory) body, instrumentality, department, agency, authority, board,
bureau, commission, office of any nature whatsoever or other subdivision
thereof, or any court, tribunal, administrative hearing body, arbitration panel
or other similar dispute-resolving body, whether now or hereafter in existence,
or any officer or official thereof, having jurisdiction over the Mortgagor or
the Mortgaged Property or any portion thereof.
"Guarantor" shall have the meaning assigned to such term in the
Second Priority Indenture and collectively shall be referred to as the
"Guarantors".
-5-
"Hazardous Materials" shall mean any pollutant, contaminant,
toxic, hazardous or extremely hazardous substance, material, constituent or
waste, or any other constituent, waste, material, compound or substance subject
to regulation under any Environmental Law including, without limitation,
petroleum or any petroleum product, including crude oil or any fraction thereof,
polychlorinated biphenyls, urea-formaldehyde insulation and asbestos.
"Improvements" shall mean all buildings, structures and other
improvements of every kind or description and any and all Alterations now or
hereafter located, attached or erected on the land that is the subject of the
Mortgaged Leases, including, without limitation (i) all Fixtures, (ii) all
attachments, foundations, sidewalks, drives, roads, curbs, streets, ways,
subways, pedestrian bridges, alleys, passages, passageways, sewer rights,
parking areas, driveways, fences, walls and all other facilities and (iii) all
materials now or hereafter located on the land that is the subject of the
Mortgaged Leases, intended for the construction, reconstruction, repair,
replacement, alteration, addition or improvement of or to such buildings,
Fixtures, structures and improvements that are also incorporated therein.
"Indemnified Liabilities" shall have the meaning assigned to
such term in Section 14.6(i) hereof.
"Indemnitees" shall have the meaning assigned to such term in
Section 14.6(i) hereof.
"Insurance Policies" means the insurance policies and coverages
required to be maintained by the Mortgagor with respect to the Mortgaged
Property pursuant to Section 4.18 of the Second Priority Indenture and all
renewals and extensions thereof.
"Insurance Requirements" means, collectively, all provisions of
the Insurance Policies, all requirements of the issuer of any of the Insurance
Policies and all orders, rules, regulations and any other requirements of the
National Board of Fire Underwriters (or any other body exercising similar
functions) binding upon the Mortgagor and applicable to the Mortgaged Property
or any use or condition thereof.
"Issuers" shall have the meaning assigned to such term in
Recital A hereof.
"Landlord" shall mean any landlord, sublandlord, lessor,
sublessor, franchisor, licensor or grantor, as applicable.
"Leased Premises" shall mean the Mortgagor's interest and estate
in the Mortgaged Leases and all recorded or unrecorded extensions, amendments,
supplements and restatements thereof, together with all right, title and
interest of the lessee under the Mortgaged Leases in and to (i) the land that is
the subject of the Mortgaged Leases, (ii) any and all easements, rights-of-way,
reversions, sidewalks, strips and gores of land, drives, roads, curbs, streets,
ways, alleys, passages, passageways, sewer rights, waters, water courses, water
rights, mineral, gas and oil rights, and all power, air, light and other rights,
estates, titles, interests, privileges, liberties, servitudes, licenses,
tenements, hereditaments and appurtenances whatsoever, in any way demised under
the Mortgaged Leases, if any, and/or described in Schedule B, or which hereafter
shall in any way be demised under the Mortgaged Leases and (iii) the
Improvements.
"Leases" shall mean, collectively, any and all interests of the
Mortgagor, as Landlord, in all leases and subleases of space, tenancies,
franchise agreements, licenses, occupancy or concession
-6-
agreements now existing or hereafter entered into, whether or not of record,
relating in any manner to the Leased Premises and any and all amendments,
modifications, supplements, replacements, extensions and renewals, if any,
thereof, whether now in effect or hereafter coming into effect, but excluding
room rental agreements for hotel guests and boat slip agreements.
"Mortgage" means this Mortgage, as amended, amended and
restated, supplemented or otherwise modified from time to time.
"Mortgaged Leases" shall have the meaning assigned to such term
in Recital F hereof.
"Mortgaged Property" shall have the meaning assigned to such
term in Section 2.1 hereof.
"Mortgagee" shall have the meaning assigned to such term in the
Preamble hereof.
"Mortgagor" shall have the meaning assigned to such term in the
Preamble hereof.
"Mortgagor's Interest" shall have the meaning assigned to such
term in Section 2.2 hereof.
"Permit" shall mean any and all permits, certificates,
approvals, authorizations, consents, licenses, variances, franchises or other
instruments, however characterized, of any Governmental Authority (or any Person
acting on behalf of a Governmental Authority) now or hereafter acquired or held,
together with all amendments, modifications, extensions, renewals and
replacements of any thereof issued or in any way furnished in connection with
the Mortgaged Property including, without limitation, building permits,
certificates of occupancy, environmental permits or certificates, industrial
permits or licenses and certificates of operation; provided, however, Gaming
Licenses shall not constitute Permits for the purposes of this definition.
"Permitted Mortgaged Property Liens" shall have the meaning
assigned to such term in Section 4.6(i) hereof.
"Person" shall have the meaning assigned to the term "person" in
the Second Priority Indenture.
"PIK Notes" shall have the meaning assigned to such term in
Recital B hereof.
"Prior Liens" shall mean, collectively, the Liens identified in
Schedule C annexed to this Mortgage.
"Priority Intercreditor Agreement" shall have the meaning
assigned to such term in Recital D hereof.
"Proceeds" shall mean, collectively, any and all (i) proceeds of
the conversion, voluntary or involuntary, of any of the Mortgaged Property or
any portion thereof into cash or liquidated claims, (ii) proceeds of any
insurance (except payments made to a Person which is not a party to this
Mortgage), indemnity, warranty, guaranty or claim payable to the Mortgagee or to
the Mortgagor from time to time with respect to any of the Mortgaged Property
including, without limitation, all Net Loss Proceeds, (iii) payments (in any
form whatsoever) made or due and payable to the Mortgagor from time to time in
-7-
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any portion of the Leased Premises by any Governmental
Authority (or any Person acting on behalf of a Governmental Authority)
including, without limitation, all Net Loss Proceeds, (iv) products of the
Mortgaged Property and (v) other amounts from time to time paid or payable under
or in connection with any of the Mortgaged Property including, without
limitation, refunds of real estate taxes and assessments, including interest
thereon.
"Property Material Adverse Effect" shall mean, as of any date of
determination and whether individually or in the aggregate, (a) any event,
circumstance, occurrence or condition which has caused or resulted in (or would
reasonably be expected to cause or result in) a material adverse effect on the
business or operations of the Mortgagor as presently conducted at the Leased
Premises; (b) any event, circumstance, occurrence or condition which has caused
or resulted in (or would reasonably be expected to cause or result in) a
material adverse effect on the value or utility of the Mortgaged Property; or
(c) any event, circumstance, occurrence or condition which has caused or
resulted in (or would reasonably expect to cause or result in) a material
adverse effect on the legality, priority or enforceability of the Lien created
by this Mortgage or the rights and remedies of the Mortgagee hereunder.
"Prudent Operator" shall mean a prudent operator of property
similar in use and configuration to the Leased Premises and located in the
locality where the Leased Premises are located as applicable.
"Records" shall mean, collectively, any and all right, title and
interest of the Mortgagor in and to any and all drawings, plans, specifications,
file materials, operating and maintenance records, catalogues, Tenant lists,
correspondence, advertising materials, operating manuals, warranties,
guarantees, appraisals, studies and data relating to the Mortgaged Property or
the construction of any Alteration or the maintenance of any Permit.
"Rents" shall mean, collectively, any and all rents, additional
rents, royalties, cash, guaranties, letters of credit, bonds, sureties or
securities deposited under any Lease to secure performance of the Tenant's
obligations thereunder, revenues, earnings, profits and income, advance rental
payments, payments incident to assignment, sublease or surrender of a Lease,
claims for forfeited deposits and claims for damages, now due or hereafter to
become due, with respect to any Lease, any indemnification against, or
reimbursement for, sums paid and costs and expenses incurred by the Mortgagor
under any Lease or otherwise, and any award in the event of the bankruptcy of
any Tenant under or guarantor of a Lease.
"Requirements of Law" shall mean, collectively, any and all
requirements of any Governmental Authority including, without limitation, any
and all orders, decrees, determinations, laws, treaties, ordinances, rules,
regulations or similar statutes or case law.
"Secured Obligations" shall mean all obligations (whether or not
constituting future advances, obligatory or otherwise) of the Issuers under the
Second Priority Indenture and any and all of the Guarantors from time to time
arising under or in respect of this Mortgage, the Second Priority Indenture, the
Second Notes and the other Collateral Documents (including, without limitation,
the obligations to pay principal, interest and all other charges, fees,
expenses, commissions, reimbursements, premiums, indemnities and other payments
related to or in respect of the obligations contained in this Mortgage, the
Second Priority Indenture, the Second Notes and the other Collateral Documents),
in each case whether (i) such obligations are direct or indirect, secured or
unsecured, joint or several, absolute or contingent,
-8-
due or to become due whether at stated maturity, by acceleration or otherwise,
(ii) arising in the regular course of business or otherwise, (iii) for payment
or performance and/or (iv) now existing or hereafter arising (including, without
limitation, interest and other obligations arising or accruing after the
commencement of any bankruptcy, insolvency, reorganization or similar proceeding
with respect to the Issuers under the Second Priority Indenture, any Guarantor
or any other Person, or which would have arisen or accrued but for the
commencement of such proceeding, even if such obligation or the claim therefor
is not enforceable or allowable in such proceeding).
"Secured Parties" shall have the meaning assigned to such term
in Recital C hereof.
"Subordination Agreement" shall mean a subordination,
nondisturbance and attornment agreement substantially in the form of Exhibit 1
annexed to this Mortgage.
"Subsidiary" shall have the meaning assigned to such term in the
Second Priority Indenture and collectively shall be referred to as the
"Subsidiaries".
"Tenant" shall mean any tenant, subtenant, lessee, sublessee,
franchisee, licensee, grantee or obligee, as applicable.
"UCC" shall mean the Uniform Commercial Code as in effect on the
date hereof in the jurisdiction in which the Leased Premises are located;
provided, however, that if by reason of mandatory provisions of law, the
perfection or the effect of perfection or non-perfection of the security
interest in any item or portion of the Mortgaged Property is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the
jurisdiction in which the Leased Premises are located, "UCC" shall also mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such perfection or effect of perfection or
non-perfection.
SECTION 1.2 Interpretation. The rules of construction set forth in
Section 1.04 of the Second Priority Indenture shall be applicable to this
Mortgage.
SECTION 1.3 Resolution of Drafting Ambiguities. The Mortgagor
acknowledges and agrees that it was represented by counsel in connection with
the execution and delivery hereof, that it and its counsel reviewed and
participated in the preparation and negotiation hereof and that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party (i.e., Mortgagee) shall not be employed in the interpretation
hereof.
ARTICLE II
GRANTS AND SECURED OBLIGATIONS
SECTION 2.1 Grant of Mortgaged Property. The Mortgagor hereby grants,
mortgages, bargains, sells, assigns and conveys to the Mortgagee (for its
benefit and for the benefit of the other Secured Parties), and hereby grants to
the Mortgagee (for its benefit and for the benefit of the other Secured
Parties), a security interest in and upon, all of the Mortgagor's estate, right,
title and interest in, to and under the following property, whether now owned or
held or hereafter acquired from time to time (collectively, the "Mortgaged
Property"):
(i) Leased Premises;
-9-
(ii) Leases;
(iii) Rents;
(iv) Permits;
(v) Contracts;
(vi) Records; and
(vii) Proceeds.
Notwithstanding anything to the contrary contained in clauses (i)
through (vii) above, the Lien created by this Mortgage shall not extend to, and
the term "Mortgaged Property" shall not include, any Excluded Property.
TO HAVE AND TO HOLD the Mortgaged Property, together with all estate,
right, title and interest of the Mortgagor and anyone claiming by, through or
under the Mortgagor in and to the Mortgaged Property and all rights and
appurtenances relating thereto, unto the Mortgagee, its successors and assigns,
for the purpose of securing the payment and performance in full of all the
Secured Obligations.
SECTION 2.2 Assignment of Leases and Rents. During the term hereof,
the Mortgagor absolutely, presently, unconditionally and irrevocably pledges,
grants, sells, conveys, delivers, hypothecates, assigns, transfers and sets over
to the Mortgagee (for its benefit and for the benefit of the other Secured
Parties), and grants to the Mortgagee (for its benefit and for the benefit of
the other Secured Parties), subject to the terms of Article VI hereof, all of
the Mortgagor's estate, right, title, interest, claim and demand, as Landlord,
under any and all of the Leases including, without limitation, the following
(such assigned rights, the "Mortgagor's Interest"):
(i) the immediate and continuing right to receive and
collect Rents payable by the Tenants pursuant to the Leases;
(ii) all claims, rights, powers, privileges and remedies of
the Mortgagor, whether provided for in the Leases or arising by statute
or at law or in equity or otherwise, consequent on any failure on the
part of the Tenants to perform or comply with any term of the Leases
including damages or other amounts payable to the Mortgagor as a result
of such failure;
(iii) all rights to take all actions upon the happening of a
default under the Leases as shall be permitted by the Leases or by law
including, without limitation, the commencement, conduct and
consummation of proceedings at law or in equity; and
(iv) the full power and authority, in the name of the
Mortgagor or otherwise, to enforce, collect, receive and receipt for any
and all of the foregoing and to take all other actions whatsoever which
the Mortgagor, as Landlord, is or may be entitled to take under the
Leases.
SECTION 2.3 Secured Obligations. This Mortgage secures, and the
Mortgaged Property is collateral security for, the payment and performance in
full when due of the Secured Obligations.
-10-
SECTION 2.4 Future Advances. This Mortgage shall secure the maximum
aggregate amount of all advances of principal under the Second Priority
Indenture (which advances are obligatory to the extent the conditions set forth
in the Second Priority Indenture relating thereto are satisfied), plus interest
thereon, collection costs, sums advanced for the payment of taxes, assessments,
maintenance and repair charges, insurance premiums and any other costs incurred
to protect the security encumbered hereby or the Lien hereof, expenses incurred
by the Mortgagee by reason of any default by the Mortgagor under the terms
hereof, together with all other sums secured hereby.
SECTION 2.5 No Release. Nothing set forth in this Mortgage shall
relieve the Mortgagor from the performance of any term, covenant, condition or
agreement on the Mortgagor's part to be performed or observed under or in
respect of any of the Mortgaged Property or from any liability to any Person
under or in respect of any of the Mortgaged Property or shall impose any
obligation on the Mortgagee or any other Secured Party to perform or observe any
such term, covenant, condition or agreement on the Mortgagor's part to be so
performed or observed or shall impose any liability on the Mortgagee or any
other Secured Party for any act or omission on the part of the Mortgagor
relating thereto or for any breach of any representation or warranty on the part
of the Mortgagor contained in this Mortgage, the Second Priority Indenture, the
Second Notes or any other Collateral Document, or under or in respect of the
Mortgaged Property or made in connection herewith or therewith. The obligations
of the Mortgagor contained in this Section 2.5 shall survive the termination
hereof and the discharge of the Mortgagor's other obligations under this
Mortgage and the Second Priority Indenture, the Second Notes and the Collateral
Documents.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF MORTGAGOR
SECTION 3.1 Authority and Validity. The Mortgagor represents and
warrants that as of the date hereof:
(i) it is duly organized or formed, validly existing and, if
applicable, in good standing under the laws of the jurisdiction of its
organization;
(ii) it is duly qualified to transact business and is in good
standing in the state in which the Leased Premises are located;
(iii) it has full corporate or other organizational power and
lawful authority to execute and deliver this Mortgage and to mortgage
and ▇▇▇▇▇ ▇ ▇▇▇▇ on and security interest in the Mortgaged Property and
otherwise assign the Mortgagor's Interest and otherwise perform its
obligations as contemplated herein, and all corporate and governmental
actions, consents, authorizations and approvals necessary or required
therefor have been duly and effectively taken or obtained; and
(iv) this Mortgage is a legal, valid and binding obligation
of the Mortgagor, enforceable against the Mortgagor in accordance with
its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally or by equitable principles relating to
enforceability or by other laws and regulations of non-U.S.
jurisdictions.
-11-
SECTION 3.2 Warranty of Title. The Mortgagor represents and warrants
that:
(i) it owns the tenant's interest in the Mortgaged Leases
and holds the Landlord's interest and estate under or in respect of the
Leases and holds good title to the interest it purports to own or hold
in and to each of the Permits, the Contracts and the Records, in each
case subject to no Liens, except for Permitted Mortgaged Property Liens;
(ii) each of the Mortgaged Leases (a) is a valid and existing
lease, and is superior and paramount to all other Leases respecting the
property to which the Mortgaged Leases relate, (b) is in full force and
effect, to the best of the Mortgagor's knowledge and no default (nor any
event which, with notice or lapse of time or both, would constitute such
a default) has occurred or is continuing under any of the Mortgaged
Leases and (c) to the best of Mortgagor's knowledge are not subject to
any defenses, offsets or counterclaims and there have been no renewals
or extensions of or supplements, modifications or amendments to the
Mortgaged Leases not previously disclosed to the Mortgagee;
(iii) subject to the rights of tenants under the Leases
disclosed in Schedule D hereof and the rights of hotel guests under room
rental agreements, it is in actual possession of the Leased Premises;
(iv) it is in compliance with each term, condition and
provision of any obligation of the Mortgagor which is secured by the
Mortgaged Property or the noncompliance with which would result in a
Property Material Adverse Effect; and
(v) this Mortgage creates and constitutes a valid and
enforceable second priority Lien on the Mortgaged Property subject to
Permitted Mortgaged Property Liens, and, to the extent any of the
Mortgaged Property shall consist of Fixtures, a second priority security
interest in the Fixtures, which second priority Lien and second priority
security interest are subject only to Permitted Mortgaged Property
Liens.
SECTION 3.3 Condition of Mortgaged Property. The Mortgagor represents
and warrants that:
(i) there has been issued and there remains in full force
and effect subject to no revocation, suspension, forfeiture or
modification, each and every material Permit necessary for the present
use, operation and occupancy of the Leased Premises by the Mortgagor and
the conduct of their respective businesses and all required zoning,
building code, land use, environmental and other similar Permits except
those Permits which, if not so issued and in full force and effect,
would not reasonably be expected to result in a Property Material
Adverse Effect;
(ii) the Leased Premises and the present and contemplated use
and occupancy thereof comply with all applicable zoning ordinances,
building codes, land use laws, setback or other development and use
requirements of Governmental Authorities, except any non-compliance
which would not reasonably be expected to result in a Property Material
Adverse Effect;
(iii) the Leased Premises are served by all utilities
necessary for the present use thereof, and the Mortgagor has not
received notice of termination of such utility service;
-12-
(iv) the Mortgagor has access to the Leased Premises from
public and private roads and, to the extent applicable, public or
private rail or waterway, sufficient to allow the Mortgagor and its
Tenants and invitees to conduct their respective businesses at the
Leased Premises in accordance with sound commercial practices and the
Mortgagor has not received notice of termination of such access, except
where the failure to be served would not reasonably be expected to
result in a Property Material Adverse Effect;
(v) the Mortgagor has not received notice of any Event of
Loss as a result of a condemnation or the commencement or pendency of
any action or proceeding therefor related to the Leased Premises;
(vi) there has not occurred any Event of Loss as a result of
any fire or other casualty which has not been fully restored;
(vii) there are no disputes regarding boundary lines,
location, encroachments or possession of any portions of the Leased
Premises and no state of facts exists which could give rise to any such
claim other than such disputes that would not reasonably be expected to
result in a Property Material Adverse Effect;
(viii) all liquid and solid waste disposal, septic and sewer
systems located on the Leased Premises are in a good and safe condition
and repair and in material compliance with all Requirements of Law,
except such non-compliance which would not reasonably be expected to
result in a Property Material Adverse Effect;
(ix) no portion of the Leased Premises is located in an area
identified by the Federal Emergency Management Agency or any successor
thereto as an area having special flood hazards pursuant to the Flood
Insurance Acts or, if any portion of the Leased Premises is located
within such area, the Mortgagor has obtained the insurance prescribed in
Article VIII hereof; and
(x) there are no options or rights of first refusal to
purchase or acquire all or any portion of the Leased Premises other than
those in favor of the Mortgagor.
SECTION 3.4 Leases. The Mortgagor represents and warrants that:
(i) the Leases identified on Schedule D attached hereto are
the only Leases in existence on the date hereof with respect to the
Leased Premises;
(ii) true copies of such Leases have been previously
delivered to the Mortgagee and there are no agreements with any Tenant
under such Leases other than those agreements expressly set forth
therein;
(iii) it is the sole owner of all of the Mortgagor's Interest
in such Leases;
(iv) each of such Leases is in full force and effect,
constitutes a legal, valid and binding obligation of the Mortgagor and
the applicable Tenant thereunder, and is enforceable against the
Mortgagor and such Tenant in accordance with its terms except as
enforceability may be limited by applicable bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors' rights generally or
by equitable principles relating to enforceability or by other laws and
regulations of non-U.S. jurisdictions;
-13-
(v) to the best of Mortgagor's knowledge, there is no
default under any of such material Leases and there is existing no
condition which with the giving of notice or passage of time or both
would cause a default thereunder;
(vi) all Rents due under such Leases have been paid in full
through the date hereof;
(vii) none of the Rents reserved under such Leases have been
assigned or otherwise pledged or hypothecated except in favor of the
Mortgagee pursuant to the provisions hereof;
(viii) none of the Rents (other than any security deposit
collected in accordance with the provisions of the applicable Lease)
have been collected for more than one (1) month in advance;
(ix) to the best of Mortgagor's knowledge, there exists no
offsets or defenses to the payment of any portion of the Rents and the
Mortgagor owes no monetary obligation to any Tenant under any such
Lease;
(x) it has received no notice from any Tenant challenging
the validity or enforceability of any such Lease;
(xi) no such Lease contains any option to purchase, right of
first refusal to purchase, right of first refusal to relet, or any other
similar provision; and
(xii) each such Lease is subordinate to this Mortgage either
pursuant to its terms or pursuant to a recordable Subordination
Agreement.
SECTION 3.5 Insurance. The Mortgagor represents and warrants that,
except where the failure of clauses (i), (ii) or (iii) hereof to be true would
not reasonably be expected to result in a Property Material Adverse Effect, (i)
the Leased Premises and the use, occupancy and operation thereof comply with all
Insurance Requirements and there exists no default under any Insurance
Requirement, (ii) all premiums due and payable with respect to the Insurance
Policies have been paid, (iii) all Insurance Policies are in full force and
effect and the Mortgagor has not received notice of violation or cancellation
thereof and (iv) all Insurance Policies or insurance certificates required
pursuant to the Second Priority Indenture have been delivered to the Mortgagee.
SECTION 3.6 Charges. The Mortgagor represents and warrants that all
Charges imposed upon or assessed against the Mortgaged Property have been paid
and discharged except to the extent such Charges constitute a Permitted
Mortgaged Property Lien but are not yet due and payable.
SECTION 3.7 Environmental. The Mortgagor represents and warrants that:
(i) it has obtained all material Permits which are necessary
with respect to the ownership and operation of its business and the
Leased Premises under any and all Environmental Laws and is in material
compliance with all terms and conditions thereof;
(ii) it is in material compliance with and has no material
liability under any and all Environmental Laws applicable to the
ownership and operation of its business and the Leased Premises
including, without limitation, all other limitations, restrictions,
conditions, standards,
-14-
prohibitions, requirements, obligations, schedules and timetables
contained in such Environmental Laws;
(iii) there is no material civil, criminal or administrative
action, suit, demand, claim, hearing, notice of violation,
investigation, proceeding, notice or demand letter pending or
threatened, to Mortgagor's knowledge, against it or any Affiliate under
the Environmental Laws which with respect to the Leased Premises would
reasonably be expected to result in a material liability or material
obligation under Environmental Laws, or in a Property Material Adverse
Effect; and
(iv) there are no past or present events, conditions,
circumstances, activities, practices, incidents, actions or plans which
may materially interfere with or prevent material compliance by the
Mortgagor with the Environmental Laws, or which may give rise to any
material liability under Environmental Laws including, without
limitation, material liability under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, or any
other Environmental Law or related common law theory or otherwise form
the basis of any material claim, action, demand, suit, proceeding,
hearing or notice of violation, study or investigation, against or
relating to the Mortgagor based on or related to the manufacture,
processing, distribution, use, generation, treatment, storage, disposal,
transport or handling, or the emission, discharge, release or threatened
release into the environment, of any Hazardous Materials, which would
reasonably be expected to result in a material liability or material
obligation under Environmental Laws or in a Property Material Adverse
Effect.
SECTION 3.8 No Conflicts, Consents, etc. Neither the execution and
delivery hereof by the Mortgagor nor the consummation of the transactions herein
contemplated nor the fulfillment of the terms hereof (i) violates the terms of
any agreement, indenture, mortgage, deed of trust, equipment lease, instrument
or other document to which the Mortgagor is a party, or by which it may be bound
or to which any of its properties or assets may be subject, (ii) conflicts with
any Requirement of Law applicable to the Mortgagor or its property or (iii) will
result in or require the creation or imposition of any Lien (other than the Lien
contemplated hereby) upon or with respect to any of the Mortgaged Property,
except in the case of clause (i) and (ii) of this sentence, where such violation
or conflict, would not result in a Property Material Adverse Effect. Other than
consents previously provided to the Mortgagor, no consent of any party
(including, without limitation, equityholders or creditors of the Mortgagor) and
no consent, authorization, approval, license or other action by, and no notice
to or filing with, any Governmental Authority or regulatory body or other Person
is required for (i) the granting of a mortgage Lien on and security interest in
the Mortgaged Property by the Mortgagor granted by it pursuant to this Mortgage
or for the execution, delivery or performance hereof by the Mortgagor except for
the filing of this Mortgage and the other filings contemplated hereby or (ii)
other than as described in Article XI, the exercise by the Mortgagee of the
remedies in respect of the Mortgaged Property pursuant to this Mortgage.
SECTION 3.9 Benefit to the Mortgagor. The Mortgagor represents and
warrants that it will receive substantial benefit as a result of the execution,
delivery, and performance of the Second Priority Indenture, the Second Notes and
the Collateral Documents.
-15-
ARTICLE IV
CERTAIN COVENANTS OF MORTGAGOR
SECTION 4.1 Payment. The Mortgagor shall pay as and when the same
shall become due, whether at its stated maturity, by acceleration or otherwise,
each and every amount payable by the Mortgagor under the Second Priority
Indenture, the Second Notes and the Collateral Documents.
SECTION 4.2 Title. The Mortgagor shall:
(i) (A) keep in effect all rights and appurtenances to or
that constitute a part of the Mortgaged Property except as permitted
pursuant to the Second Priority Indenture and (B) protect, preserve and
defend its interest in the Mortgaged Property and title thereto;
(ii) (A) comply with each of the terms, conditions and
provisions of any obligation of the Mortgagor which is secured by the
Mortgaged Property, or the noncompliance with which may result in the
imposition of a Lien (other than a Permitted Mortgaged Property Lien) on
the Mortgaged Property, except where the failure to so comply would not
result in a Property Material Adverse Effect, or the noncompliance with
which may result in the imposition of a Lien (other than a Permitted
Mortgaged Property Lien) on the Mortgaged Property, (B) forever warrant
and defend to the Mortgagee the Lien and security interests created and
evidenced hereby and the validity and priority hereof in any action or
proceeding against the claims of any and all Persons whomsoever
affecting or purporting to affect the Mortgaged Property or any of the
rights of the Mortgagee hereunder and (C) maintain a valid and
enforceable second priority Lien on the Mortgaged Property and, to the
extent any of the Mortgaged Property shall consist of Fixtures, a second
priority security interest in the Mortgaged Property, which second
priority Lien and security interest shall be subject only to Permitted
Mortgaged Property Liens; and
(iii) immediately upon obtaining knowledge of the pendency of
any proceedings for the eviction of the Mortgagor from the Leased
Premises or any part thereof by paramount title or otherwise questioning
the Mortgagor's right, title and interest in, to and under the Leased
Premises as warranted in this Mortgage, or of any condition that could
give rise to any such proceedings, notify the Mortgagee thereof. The
Mortgagee may participate in such proceedings and the Mortgagor will
deliver or cause to be delivered to the Mortgagee all instruments
requested by the Mortgagee to permit such participation. In any such
proceedings, the Mortgagee may be represented by counsel satisfactory to
the Mortgagee at the expense of the Mortgagor. If, upon the resolution
of such proceedings, the Mortgagor shall suffer a loss of the Leased
Premises or any part thereof or interest therein and title insurance
proceeds shall be payable in connection therewith, such Proceeds are
hereby assigned to and shall be paid to the Mortgagee for deposit into
the Collateral Account and shall be applied in the manner applicable to
Net Loss Proceeds to restore the Leased Premises in accordance with the
provisions of Section 4.16 of the Second Priority Indenture.
SECTION 4.3 Maintenance and Use of Leased Premises; Alterations.
(i) Maintenance. The Mortgagor shall cause the
representations and warranties set forth in Section 3.3 hereof to
continue to be true, in each and every respect, except where the failure
so to be true would not result in a Property Material Adverse Effect.
-16-
(ii) Maintenance of Leased Premises. The Mortgagor shall
maintain the Leased Premises in accordance with the provisions of the
Second Priority Indenture.
(iii) Alterations. The Mortgagor shall not make any Alteration
to the Leased Premises except as permitted pursuant to the Second
Priority Indenture.
(iv) Permits. The Mortgagor shall maintain, or cause to be
maintained, in full force and effect all Permits contemplated by Section
3.3(i) hereof, except where the failure to maintain such Permits would
not reasonably be expected to have a Property Material Adverse Effect.
Unless and to the extent contested by the Mortgagor in accordance with
the provisions of Article IX hereof, the Mortgagor shall comply with all
requirements set forth in the Permits and all Requirements of Law
applicable to all or any portion of the Leased Premises or the
condition, use or occupancy of all or any portion thereof or any
recorded deed of restriction, declaration, covenant running with the
land or otherwise, now or hereafter in force, except where the failure
so to be in compliance would not reasonably be expected to result in a
Property Material Adverse Effect.
(v) Zoning. The Mortgagor shall not initiate, join in, or
consent to any change in the zoning or any other permitted use
classification of the Leased Premises without the prior written consent
of the Mortgagee, which consent will not be unreasonably withheld,
conditioned or delayed.
SECTION 4.4 Notices Regarding Certain Defaults. The Mortgagor shall,
promptly upon receipt of any written notice regarding (i) any material default
by the Mortgagor relating to the Mortgaged Property or any material portion
thereof or (ii) the failure to discharge any of the Mortgagor's material
obligations with respect to the Mortgaged Property or any portion thereof
described herein, furnish a copy of such notice to the Mortgagee.
SECTION 4.5 Access to Leased Premises, Books and Records; Other
Information. Subject to the requirements of any Gaming Laws, upon reasonable
prior notice to the Mortgagor, the Mortgagee, its agents, accountants and
attorneys shall have reasonable access to visit and inspect, as applicable,
during normal business hours and such other reasonable time as may be requested
by the Mortgagee to all of the Mortgaged Property including, without limitation,
all of the books, correspondence and Records of the Mortgagor relating thereto.
The Mortgagee and its representatives may examine the same, take extracts
therefrom and make photocopies thereof, and the Mortgagor agrees to render to
the Mortgagee at the Mortgagor's cost and expense, such clerical and other
assistance as may be reasonably requested by the Mortgagee with regard thereto.
The Mortgagor shall, at any and all times, within a reasonable time after
written request by the Mortgagee, furnish or cause to be furnished to the
Mortgagee, in such manner and in such detail as may be reasonably requested by
the Mortgagee, additional information with respect to the Leased Premises;
provided that any such inspection shall not unreasonably interfere with the
Mortgagor's operations.
SECTION 4.6 Limitation on Liens; Transfer Restrictions. (a) The
Mortgagor may not, without the prior written consent of the Mortgagee, further
mortgage, encumber or hypothecate all or any part of the Mortgaged Property or
suffer or allow any of the foregoing to occur by operation of law or otherwise;
provided, however, that so long as no Event of Default shall have occurred and
be continuing, the Mortgagor shall have the right to suffer to exist the
following Liens in respect of the Mortgaged Property: (i) Prior Liens (but not
extensions, amendments, supplements or replacements of Prior Liens unless
consented to by the Mortgagee); (ii) Permitted Liens (other than those described
in clauses (c), (j), (l) and (p) of the definition of Permitted Liens); (iii)
the Liens created pursuant to the Collateral Documents (as
-17-
defined in the Second Priority Indenture) and (iv) Leases to the extent
permitted pursuant to the provisions of Article V hereof (the Liens described in
clauses (i) through (iv) of this sentence, collectively, "Permitted Mortgaged
Property Liens").
(b) The Mortgagor shall not sell, convey or otherwise
dispose of any part of the Mortgaged Property except as permitted in the Second
Priority Indenture.
SECTION 4.7 Environmental.
(i) Hazardous Materials. The Mortgagor shall (A) comply in
all material respects with any and all present and future Environmental
Laws, (B) not release, store, treat, handle, use, process, generate,
discharge or dispose of any Hazardous Materials at, on, under or from
the Leased Premises in material violation of or in a manner that could
reasonably be expected to result in any material liability under any
present and future Environmental Law and (C) take all commercially
reasonable steps to initiate and expeditiously complete all
investigative, remedial, corrective and other action to eliminate any
(1) violation of Environmental Laws or other conditions which could
reasonably be expected to give rise to material liability or material
obligations under Environmental Laws or (2) Property Material Adverse
Effect. In the event the Mortgagor fails to comply with the covenants in
the preceding sentence, the Mortgagee may, in addition to any other
remedies set forth herein, as agent for and at the Mortgagor's sole cost
and expense, cause any necessary investigation, remediation, removal or
response action relating to Hazardous Materials to be taken and the
Mortgagor shall provide to the Mortgagee and its agents and employees
access to the Leased Premises for such purpose. Any costs or expenses
incurred by the Mortgagee for such purpose shall be immediately due and
payable by the Mortgagor and shall bear interest at the Default Rate.
If, at any time that the Secured Obligations are outstanding, the
Mortgagee has a reasonable basis to conclude that the Mortgagor has
failed to comply with the covenants in this Section 4.7, or has breached
the representations and warranties in Section 3.7 hereof, the Mortgagee
shall have the right, but not the obligation, at the sole cost and
expense of the Mortgagor, to conduct an environmental assessment of the
Leased Premises by such Persons or firms appointed by the Mortgagee, and
the Mortgagor shall cooperate in all respects in the conduct of such
environmental assessment, including, without limitation, by providing
reasonable access to the Leased Premises and to all Records relating
thereto. To the extent that any environmental assessment identifies
conditions which materially violate, or would reasonably be expected to
give rise to material liability or material obligations under,
Environmental Laws, or such violation, liability, or obligation would
reasonably be expected to have a Property Material Adverse Effect, the
Mortgagor agrees to expeditiously correct any such violation or respond
to conditions giving rise to such liability or obligations in a manner
which complies in all material respects with the Environmental Laws and
mitigates associated material health and environmental risks. Mortgagor
shall indemnify and hold the Mortgagee and each Holder harmless from and
against all loss, cost, damage (including, without limitation,
consequential damages) or expense (including, without limitation,
reasonable attorneys' and consultants' fees and disbursements and the
allocated costs of staff counsel) that the Mortgagee or the Holders may
sustain by reason of the assertion against the Mortgagee or the Holders
by any party of any claim relating to such Hazardous Materials on,
under, or from the Leased Premises or actions taken with respect thereto
as authorized hereunder except to the extent such claim arises from the
gross negligence or willful misconduct of the Mortgagee or the Holders
or is based upon acts or omissions subsequent to the Mortgagee's or
Holders' (or either of their agent's or designees') taking of possession
and control of the Mortgaged Property. The foregoing indemnification
shall survive repayment of all Secured Obligations and any release or
assignment hereof; and
-18-
(ii) Asbestos. The Mortgagor shall not install nor permit to
be installed in or removed from the Leased Premises, asbestos or any
asbestos-containing material (collectively, "ACM") except in compliance,
in all material respects, with all Environmental Laws, and with respect
to any ACM currently present in the Leased Premises, such Mortgagor
shall promptly either (A) remove or encapsulate any ACM which such
Environmental Laws require to be removed or (B) otherwise comply, in all
material respects, with such Environmental Laws with respect to such
ACM, all at such Mortgagor's sole cost and expense. If such Mortgagor
shall fail so to remove or encapsulate any ACM or otherwise comply, in
all material respects, with such Environmental Laws, the Mortgagee may,
in addition to any other remedies set forth herein, take reasonable or
necessary steps to remove or encapsulate any ACM from the Leased
Premises or otherwise comply, in all material respects, with applicable
Environmental Laws, regulations or orders and such Mortgagor shall
provide to the Mortgagee and its agents and employees reasonable access
to the Leased Premises for such purpose. Any reasonable costs or
expenses incurred by the Mortgagee for such purpose shall be immediately
due and payable by the Mortgagor and bear interest at the Default Rate.
The Mortgagor shall indemnify and hold the Mortgagee and each Holder
harmless from and against all loss, cost, damage and expense (including,
without limitation, reasonable attorneys' and consultants' fees and
disbursements) that the Mortgagee or the Holders may sustain, as a
result of the presence of any ACM and any removal thereof or compliance
with all applicable Environmental Laws, except to the extent arising
from the gross negligence or willful misconduct of the Mortgagee or its
respective employees or agents or is based upon acts or omissions
subsequent to the Mortgagee's or Holders' (or either of their agent's or
designees') taking of possession and control of the Mortgaged Property.
The foregoing indemnification shall survive repayment of all Secured
Obligations and any release or assignment hereof.
SECTION 4.8 Estoppel Certificates. The Mortgagor shall, from time to
time, upon ten (10) days' prior written request of the Mortgagee, execute,
acknowledge and deliver to the Mortgagee an Officers' Certificate stating that
this Mortgage, the Second Priority Indenture, the Second Notes and the
Collateral Documents are unmodified and in full force and effect (or, if there
have been modifications, that to the Mortgagor's knowledge this Mortgage, the
Second Priority Indenture, the Second Notes and the Collateral Documents, as
applicable, are in full force and effect as modified and setting forth such
modifications) and stating the date to which principal and interest have been
paid on the Second Notes.
ARTICLE V
LEASES
SECTION 5.1 Mortgagor's Affirmative Covenants with Respect to Leases.
With respect to each material Lease, the Mortgagor shall:
(i) observe and perform all the material obligations imposed
upon the Landlord under such Lease;
(ii) promptly send copies to the Mortgagee of all notices of
a material default which the Mortgagor shall send or receive thereunder;
and
(iii) enforce all of the material terms, covenants and
conditions contained in such Lease upon the part of the Tenant
thereunder to be observed or performed, to the extent such enforcement
would be commercially reasonable.
-19-
SECTION 5.2 Mortgagor's Negative Covenants with Respect to Leases.
With respect to each Lease, the Mortgagor shall comply with provisions
concerning Mortgagor's Negative Covenants within the Second Priority Indenture.
SECTION 5.3 Additional Requirements with Respect to New Leases. In
addition to the requirements of Sections 5.1 and 5.2 hereof, the Mortgagor shall
not enter into any Lease after the date hereof unless the Tenant under such
Lease has subordinated its interest in the Leased Premises to the Lien of this
Mortgage by the terms of such Lease or by entering into a Subordination
Agreement and has otherwise complied with the provisions of Section 10.06(ix) of
the Second Priority Indenture.
ARTICLE VI
CONCERNING ASSIGNMENT OF LEASES AND RENTS
SECTION 6.1 Present Assignment; License to the Mortgagor. Section 2.2
of this Mortgage constitutes a present, absolute, effective, irrevocable and
complete assignment by the Mortgagor to the Mortgagee of the Leases and Rents
and the right, subject to applicable law, to collect all sums payable to the
Mortgagor thereunder and apply the same as Mortgagee may, in its sole
discretion, determine to be appropriate in accordance with the Second Priority
Indenture (including the payment of reasonable costs and expenses in connection
with the maintenance, operation, improvement, insurance, taxes and upkeep of the
Leased Premises), which is not conditioned upon Mortgagee being in possession of
the Leased Premises. The Mortgagee hereby grants to the Mortgagor, however, a
license to collect and apply the Rents and to enforce the obligations of Tenants
under the Leases. Immediately upon the occurrence and during the continuance of
any Event of Default, the license granted in the immediately preceding sentence
shall cease and terminate, with or without any notice, action or proceeding or
the intervention of a receiver appointed by a court.
SECTION 6.2 Collection of Rents by the Mortgagee.
(i) Any Rents receivable by the Mortgagee hereunder, after
payment of all proper costs and charges shall be applied to the Secured
Obligations. The Mortgagee shall be accountable to the Mortgagor only
for Rents actually received by the Mortgagee. The collection of such
Rents and the application thereof shall not cure or waive any Event of
Default or waive, modify or affect notice of any Event of Default or
invalidate any act done pursuant to such notice.
(ii) The Mortgagor hereby irrevocably authorizes and directs
the Tenant under each Lease to rely upon and comply with any and all
notices or demands from the Mortgagee following the occurrence and
during the continuance of an Event of Default for payment of Rents to
the Mortgagee and the Mortgagor shall have no claim against Tenant for
Rents paid by Tenant to the Mortgagee pursuant to such notice or demand.
For the purposes of this Section 6.2, a notice from the Mortgagee to the
Tenant shall be deemed to be conclusive.
SECTION 6.3 No Release. Neither this Mortgage nor any action or
inaction on the part of the Mortgagee shall release Tenant under any Lease, any
guarantor of any Lease or the Mortgagor from any of their respective obligations
under such Leases or constitute an assumption of any such obligation on the part
of the Mortgagee. No action or failure to act on the part of the Mortgagor shall
adversely affect or limit the rights of the Mortgagee under this Mortgage or,
through this Mortgage, under such Leases. Nothing contained herein shall operate
or be construed to (i) obligate the Mortgagee to perform
-20-
any of the terms, covenants or conditions contained in any Lease or otherwise to
impose any obligation upon the Mortgagee with respect to such Lease (including,
without limitation, any obligation arising out of any covenant of quiet
enjoyment contained in such Lease in the event that Tenant under such Lease
shall have been joined as a party defendant in any action by which the estate of
such Tenant shall be terminated) or (ii) place upon the Mortgagee any obligation
for the operation, control, care, management or repair of the Leased Premises.
SECTION 6.4 Irrevocable Interest. All rights, powers and privileges of
the Mortgagee herein set forth are coupled with an interest and are irrevocable,
subject to the terms and conditions hereof, and the Mortgagor shall not take any
action under the Leases or otherwise which is inconsistent with this Mortgage or
any of the terms hereof and any such action inconsistent herewith or therewith
shall be void.
SECTION 6.5 Amendment to Leases. Each Lease, including, without
limitation, all amendments, modifications, supplements, replacements, extensions
and renewals thereof, shall continue to be subject to the provisions hereof
without the necessity of any further act by any of the parties hereto.
ARTICLE VII
TAXES AND CERTAIN STATUTORY LIENS
SECTION 7.1 Payment of Charges. Unless and to the extent contested by
the Mortgagor in accordance with the provisions of Article IX hereof, the
Mortgagor shall pay and discharge, or cause to be paid and discharged, from time
to time when the same shall become due, all Charges that the Mortgagor is
required to pay under the Mortgaged Leases. The Mortgagor shall, upon the
Mortgagee's request, deliver to the Mortgagee receipts evidencing the payment of
all such Charges.
SECTION 7.2 Escrow of Taxes. From and after the occurrence of an Event
of Default, at the option and upon the request of the Mortgagee and to the
extent not required by the First Priority Trustee pursuant to the terms of the
First Priority Indenture, the Mortgagor shall deposit with the Mortgagee in an
account maintained by the Mortgagee (the "Tax Escrow Fund"), on the first day of
each month, an amount estimated by the Mortgagee to be equal to one-twelfth of
the annual real property taxes and other annual Charges required to be
discharged by the Mortgagor under Section 7.1 hereof. Such amounts shall be held
by the Mortgagee without interest to the Mortgagor and applied to the payment of
the obligations in respect of which such amounts were deposited, in such
priority as the Mortgagee shall determine, on or before the respective dates on
which such obligations or any part thereof would become delinquent. Nothing
contained in this Article VII shall (i) affect any right or remedy of the
Mortgagee under any provision hereof or of any statute or rule of law to pay any
such amount as provided above from its own funds and to add the amount so paid,
together with interest at the Default Rate during such time that any amount
remains outstanding, to the Secured Obligations or (ii) relieve the Mortgagor of
its obligations to make or provide for the payment of the annual real property
taxes and other annual Charges required to be discharged by the Mortgagor under
Section 7.1 hereof.
SECTION 7.3 Certain Statutory Liens. Unless and to the extent
contested by the Mortgagor in accordance with the provisions of Article IX
hereof, the Mortgagor shall timely pay, or cause to be paid, all lawful claims
and demands of mechanics, materialmen, laborers, government agencies
administering worker's compensation insurance, old age pensions and social
security benefits and all other claims, judgments, demands or amounts of any
nature which, if unpaid, would result in, or permit
-21-
the creation of, a Lien on the Mortgaged Property or any part thereof, unless
such Lien would constitute a Permitted Mortgage Property Lien.
SECTION 7.4 Stamp and Other Taxes. Unless and to the extent contested
by the Mortgagor in accordance with the provisions of Article IX hereof, the
Mortgagor shall pay any United States documentary stamp taxes, with interest and
fines and penalties, and any mortgage recording taxes, with interest and fines
and penalties, that may hereafter be levied, imposed or assessed under or upon
or by reason hereof or the Secured Obligations or any instrument or transaction
affecting or relating to either thereof and in default thereof the Mortgagee may
advance the same and the amount so advanced shall be payable by the Mortgagor to
the Mortgagee in accordance with the provisions of Section 14.5 hereof.
SECTION 7.5 Certain Tax Law Changes. In the event of the passage after
the date hereof of any law deducting from the value of real property, for the
purpose of taxation, amounts in respect of any Lien thereon or changing in any
way the laws for the taxation of mortgages or debts secured by mortgages for
state or local purposes or the manner of the collection of any Charges, and
imposing any Charges, either directly or indirectly, on this Mortgage, the
Second Priority Indenture, the Second Notes or any other Collateral Document,
the Mortgagor shall promptly pay to the Mortgagee such amount or amounts as may
be necessary from time to time to pay any such Charges.
SECTION 7.6 Proceeds of Tax Claim. In the event that the proceeds of
any tax claim are paid after the Mortgagee has exercised its right to foreclose
the Lien hereof, such Proceeds shall be paid to the Mortgagee to satisfy any
deficiency remaining after such foreclosure. The Mortgagee shall retain its
interest in the Proceeds of any tax claim during any redemption period. The
amount of any such Proceeds in excess of any deficiency claim of the Mortgagee
shall in a reasonably prompt manner be released to the Mortgagor. The amount of
any such Proceeds in excess of any deficiency claim of the Mortgagee shall be
applied in accordance with the Priority Intercreditor Agreement.
ARTICLE VIII
INSURANCE
SECTION 8.1 Required Insurance Policies and Coverages. The Mortgagor
shall maintain in respect of the Leased Premises the Insurance Policies and
coverages required under Section 4.18 of the Second Priority Indenture.
SECTION 8.2 Delivery After Foreclosure. In the event that the Proceeds
of any insurance claim are paid after the Mortgagee has exercised its right to
foreclose the Lien hereof, such Proceeds shall be paid to the Mortgagee to
satisfy any deficiency remaining after such foreclosure. Mortgagee shall retain
its interest in the Insurance Policies required to be maintained pursuant to
this Mortgage during any redemption period. The amount of any such Proceeds in
excess of any deficiency claim of the Mortgagee shall be applied in accordance
with the Priority Intercreditor Agreement.
ARTICLE IX
CONTESTING OF PAYMENTS
SECTION 9.1 Contesting of Charges. The Mortgagor may at its own
expense contest the validity, amount or applicability of any Charges by
appropriate legal or administrative proceedings,
-22-
prosecution of which operates to prevent the collection or enforcement thereof
and the sale or forfeiture of the Mortgaged Property or any part thereof to
satisfy such obligations; to the extent that such contest is permitted by and
conducted in accordance with the provisions set forth in clauses (a), (b), (e)
and (f) of the definition of Permitted Liens. Notwithstanding the foregoing
provisions of this Section 9.1, (i) no contest of any such obligations may be
pursued by the Mortgagor if such contest would expose the Mortgagee or any other
Secured Party to (A) any possible criminal liability or (B) any additional civil
liability unless the Mortgagor shall have furnished a bond or other security
therefor satisfactory to the Mortgagee and (ii) if at any time payment or
performance of any obligation contested by the Mortgagor pursuant to this
Section 9.1 shall become necessary to prevent the imposition of remedies because
of non-payment, the Mortgagor shall pay or perform the same in sufficient time
to prevent the imposition of remedies in respect of such default or prospective
default.
SECTION 9.2 Contesting of Insurance. The Mortgagor shall not take any
action that could reasonably be expected to be the basis for termination,
revocation or denial of any insurance coverage required to be maintained under
this Mortgage or that could reasonably be expected to be the basis for a defense
to any claim under any Insurance Policy maintained in respect of the Leased
Premises and the Mortgagor shall otherwise comply in all respects with all
Insurance Requirements in respect of the Leased Premises; provided, however,
that the Mortgagor may, at its own expense and after written notice to the
Mortgagee, (i) contest the applicability or enforceability of any such Insurance
Requirements by appropriate legal proceedings, prosecution of which does not
constitute a basis for cancellation or revocation of any insurance coverage
required under Article VIII hereof or (ii) cause the Insurance Policy containing
any such Insurance Requirement to be replaced by a new policy complying with the
provisions of Article VIII hereof.
ARTICLE X
EVENTS OF LOSS
SECTION 10.1 Events of Loss. If there shall occur any Event of Loss,
individually or in the aggregate, in excess of $1.0 million, the Mortgagor shall
promptly send to the Mortgagee a written notice setting forth the nature and
extent of such Event of Loss. The Proceeds of any Event of Loss, insurance
payable or award or payment in respect of such Event of Loss are hereby assigned
and shall be paid to the Mortgagee. The Mortgagor shall take all steps
reasonably necessary to notify the condemning authority of such assignment. All
Net Loss Proceeds, shall be made available to the Mortgagor for application in
accordance with the provisions of Section 4.16 of the Second Priority Indenture.
ARTICLE XI
EVENTS OF DEFAULT AND REMEDIES
SECTION 11.1 Events of Default. It shall be an Event of Default
hereunder if there shall have occurred and be continuing an Event of Default
under the Second Priority Indenture.
SECTION 11.2 Remedies in Case of an Event of Default. If any Event of
Default shall have occurred and be continuing, the Mortgagee may, subject to the
provisions of any applicable Gaming Laws, at its option, in addition to any
other action permitted under this Mortgage or the Second Priority Indenture or
by law, statute or in equity, take one or more of the following actions to the
greatest extent permitted by local law:
(i) by written notice to the Mortgagor, declare the entire
unpaid amount of the Secured Obligations to be due and payable
immediately;
(ii) personally, or by its agents or attorneys, (A) give
notice of such Event of Default to the Lessor under the Mortgaged
Leases, (B) to the extent permitted by the Mortgaged Leases, act in all
respects as lessee in respect of the Mortgaged Leases and perform on
behalf of and for the account of the Mortgagor, any of the obligations
of lessee thereunder, (C) enter into and upon and take possession of all
or any part of the Leased Premises together with the books, Records and
accounts of the Mortgagor relating thereto and, exclude the Mortgagor,
its agents and servants wholly therefrom, (D) use, operate, manage and
control the Leased Premises and conduct the business thereof, (E)
maintain and restore the Leased Premises, (F) make all reasonably
necessary or proper repairs, renewals and replacements and such useful
Alterations thereto and thereon as the Mortgagee may deem advisable, (G)
manage, lease and operate the Leased Premises and carry on the business
thereof and exercise all rights and powers of the Mortgagor with respect
thereto either in the name of the Mortgagor or otherwise or (H) collect
and receive all Rents;
(iii) with or without entry, personally or by its agents or
attorneys, (A) sell the Mortgaged Property and all estate, right, title
and interest, claim and demand therein at one or more sales in one or
more parcels, in accordance with the provisions of Section 11.3 or (B)
institute and prosecute proceedings for the complete or partial
foreclosure of the Lien and security interests created and evidenced
hereby; or
(iv) take such steps to protect and enforce its rights
whether by action, suit or proceeding at law or in equity for the
specific performance of any covenant, condition or agreement in the
Second Priority Indenture, the Second Notes and the other Collateral
Documents, or in aid of the execution of any power granted in this
Mortgage, or for any foreclosure hereunder, or for the enforcement of
any other appropriate legal or equitable remedy or otherwise as the
Mortgagee shall elect.
SECTION 11.3 Sale of Mortgaged Property if Event of Default Occurs;
Proceeds of Sale.
(i) If any Event of Default shall have occurred and be
continuing, the Mortgagee may institute an action to foreclose this
Mortgage or take such other action as may be permitted and available to
the Mortgagee at law or in equity for the enforcement of the Second
Priority Indenture and the Second Notes and realization on the Mortgaged
Property and Proceeds thereon through power of sale or to final judgment
and execution thereof for the Secured Obligations, and in furtherance
thereof the Mortgagee may sell the Mortgaged Property at one or more
sales, as an entirety or in parcels, at such time and place, upon such
terms and after such notice thereof as may be required or permitted by
law or statute or in equity. The Mortgagee may execute and deliver to
the purchaser at such sale a conveyance of the Mortgaged Property and an
assignment or conveyance of all the Mortgagor's Interest in the Leases
and the Mortgaged Property, each of which conveyances and assignments
shall contain recitals as to the Event of Default upon which the
execution of the power of sale herein granted depends, and, (to the
extent permitted by applicable Gaming Laws), the Mortgagor hereby
constitutes and appoints the Mortgagee the true and lawful attorney in
fact of the Mortgagor to make any such recitals, sale, assignment and
conveyance, and all of the acts of the Mortgagee as such attorney in
fact are hereby ratified and confirmed. The Mortgagor agrees that such
recitals shall be binding and conclusive upon the Mortgagor and that any
-24-
assignment or conveyance to be made by the Mortgagee shall divest the
Mortgagor of all right, title, interest, equity and right of redemption,
including any statutory redemption, in and to the Mortgaged Property so
assigned or conveyed. The power and agency hereby granted are coupled
with an interest and are irrevocable by dissolution, or otherwise, and
are in addition to any and all other remedies which the Mortgagee may
have hereunder, at law or in equity. So long as the Secured Obligations,
or any part thereof, remain unpaid, the Mortgagor agrees that possession
of the Leased Premises by the Mortgagor, or any Person claiming under
the Mortgagor, shall be as Tenant, and, in case of a sale under power or
upon foreclosure as provided in this Mortgage, the Mortgagor and any
Person in possession under the Mortgagor, as to whose interest such sale
was not made subject, shall, at the option of the purchaser at such
sale, then become and be Tenants holding over, and shall forthwith
deliver possession to such purchaser, or be summarily dispossessed in
accordance with the laws applicable to Tenants holding over. In case of
any sale under this Mortgage by virtue of the exercise of the powers
herein granted, or pursuant to any order in any judicial proceeding or
otherwise, the Mortgaged Property may be sold as an entirety or in
separate parcels in such manner or order as the Mortgagee in its sole
discretion may elect. One or more exercises of powers herein granted
shall not extinguish or exhaust such powers, until the entire Mortgaged
Property is sold or all amounts secured hereby are paid in full.
(ii) In the event of any sale made under or by virtue of this
Article XI, the entire principal of, and interest in respect of the
Secured Obligations, if not previously due and payable, shall, at the
option of the Mortgagee, immediately become due and payable, anything in
this Mortgage to the contrary notwithstanding.
(iii) The Proceeds of any sale made under or by virtue of this
Article XI, together with any other sums which then may be held by the
Mortgagee under this Mortgage, whether under the provisions of this
Article XI or otherwise, shall be applied in accordance with the
provisions of the Priority Intercreditor Agreement.
(iv) Subject to the provisions of any applicable Gaming Laws,
the Mortgagee may bid for and acquire the Mortgaged Property or any part
thereof at any sale made under or by virtue of this Article XI and, in
lieu of paying cash therefor, may make settlement for the purchase price
by crediting against the purchase price the unpaid amounts (whether or
not then due and owing) in respect of the Secured Obligations, after
deducting from the sales price the expense of the sale and the
reasonable costs of the action or proceedings and any other sums that
the Mortgagee is authorized to deduct under this Mortgage.
(v) The Mortgagee may adjourn from time to time any sale by
it to be made under or by virtue hereof by announcement at the time and
place appointed for such sale or for such adjourned sale or sales, and,
the Mortgagee, without further notice or publication, may make such sale
at the time and place to which the same shall be so adjourned.
(vi) If the Leased Premises are comprised of more than one
parcel of land, the Mortgagee may take any of the actions authorized by
this Section 11.3 in respect of any or a number of individual parcels.
SECTION 11.4 Additional Remedies in Case of an Event of Default.
(i) The Mortgagee shall be entitled to recover judgment as
aforesaid either before, after or during the pendency of any proceedings
for the enforcement of the provisions hereof, and the
-25-
right of the Mortgagee to recover such judgment shall not be affected by
any entry or sale hereunder, or by the exercise of any other right,
power or remedy for the enforcement of the provisions hereof, or the
foreclosure of, or absolute conveyance pursuant to, this Mortgage. In
case of proceedings against the Mortgagor in insolvency or bankruptcy or
any proceedings for its reorganization or involving the liquidation of
its assets, the Mortgagee shall be entitled to prove the whole amount of
principal and interest and other payments, Charges and costs due in
respect of the Secured Obligations to the full amount thereof without
deducting therefrom any Proceeds obtained from the sale of the whole or
any part of the Mortgaged Property; provided, however, that in no case
shall the Mortgagee receive a greater amount than the aggregate of such
principal, interest and such other payments, Charges and costs (with
interest at the Default Rate) from the Proceeds of the sale of the
Mortgaged Property and the distribution from the estate of the
Mortgagor.
(ii) Any recovery of any judgment by the Mortgagee and any
levy of any execution under any judgment upon the Mortgaged Property
shall not affect in any manner or to any extent the Lien and security
interests created and evidenced hereby upon the Mortgaged Property or
any part thereof, or any conveyances, powers, rights and remedies of the
Mortgagee hereunder, but such conveyances, powers, rights and remedies
shall continue unimpaired as before.
(iii) Any monies collected by the Mortgagee under this Section
11.4 shall be applied in accordance with the provisions of the Priority
Intercreditor Agreement.
SECTION 11.5 Legal Proceedings After an Event of Default.
(i) After the occurrence of any Event of Default and
immediately upon the commencement of any action, suit or legal
proceedings to obtain judgment for the Secured Obligations or any part
thereof, or of any proceedings to foreclose the Lien and security
interest created and evidenced hereby or otherwise enforce the
provisions hereof or of any other proceedings in aid of the enforcement
hereof, the Mortgagor shall enter its voluntary appearance in such
action, suit or proceeding.
(ii) Upon the occurrence and during the continuance of an
Event of Default, the Mortgagee shall be entitled forthwith as a matter
of right, concurrently or independently of any other right or remedy
hereunder either before or after declaring the Secured Obligations or
any part thereof to be due and payable, to the appointment of a receiver
without giving notice to any party and without regard to the adequacy or
inadequacy of any security for the Secured Obligations or the solvency
or insolvency of any Person or entity then legally or equitably liable
for the Secured Obligations or any portion thereof. The Mortgagor hereby
consents to the appointment of such receiver. Notwithstanding the
appointment of any receiver, the Mortgagee shall be entitled as pledgee
to the possession and control of any Mortgaged Property at the time held
by or payable or deliverable under the terms of the Second Priority
Indenture.
(iii) The Mortgagor shall not (A) at any time insist upon, or
plead, or in any manner whatsoever claim or take any benefit or
advantage of any stay or extension or moratorium law, any exemption from
execution or sale of the Mortgaged Property or any part thereof,
wherever enacted, now or at any time hereafter in force, which may
affect the covenants and terms of performance hereof, (B) claim, take or
insist on any benefit or advantage of any law now or hereafter in force
providing for the valuation or appraisal of the Mortgaged Property, or
any part thereof, prior to any sale or sales of the Mortgaged Property
which may be made pursuant to this Mortgage, or pursuant to any decree,
judgment or order of any court of competent jurisdiction or (C) after
any such sale or sales, claim or exercise any right under any statute
heretofore or hereafter enacted to redeem the property so sold or any
part thereof.
-26-
To the extent permitted by applicable law, the Mortgagor hereby
expressly (A) waives all rights to have the Mortgaged Property
marshalled on any foreclosure of this Mortgage, (B) waives any and all
rights to trial by jury in any action or proceeding related to the
enforcement hereof, (C) waives any objection which it may now or
hereafter have to the laying of venue of any action, suit or proceeding
brought in connection with this Mortgage and further waives and agrees
not to plead that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum and (D) covenants
not to hinder, delay or impede the execution of any power granted or
delegated to the Mortgagee by this Mortgage but to suffer and permit the
execution of every such power as though no such law or laws had been
made or enacted. The Mortgagee shall not be liable for any incorrect or
improper payment made pursuant to this Article XI in the absence of
gross negligence or willful misconduct.
SECTION 11.6 Remedies Not Exclusive. (a) No remedy conferred upon or
reserved to the Mortgagee by this Mortgage is intended to be exclusive of any
other remedy or remedies, and each and every such remedy shall be cumulative and
shall be in addition to every other remedy given under this Mortgage or now or
hereafter existing at law or in equity. Any delay or omission of the Mortgagee
to exercise any right or power accruing on any Event of Default shall not impair
any such right or power and shall not be construed to be a waiver of or
acquiescence in any such Event of Default. Every power and remedy given by this
Mortgage may be exercised from time to time concurrently or independently, when
and as often as may be deemed expedient by the Mortgagee in such order and
manner as the Mortgagee, in its sole discretion, may elect. If the Mortgagee
accepts any monies required to be paid by the Mortgagor under this Mortgage
after the same become due, such acceptance shall not constitute a waiver of the
right either to require prompt payment, when due, of all other sums secured by
this Mortgage or to declare an Event of Default with regard to subsequent
defaults. If the Mortgagee accepts any monies required to be paid by the
Mortgagor under this Mortgage in an amount less than the sum then due, such
acceptance shall be deemed an acceptance on account only and on the condition
that it shall not constitute a waiver of the obligation of the Mortgagor to pay
the entire sum then due, and the Mortgagor's failure to pay the entire sum then
due shall be and continue to be a default hereunder notwithstanding acceptance
of such amount on account.
(b) The word "sale" as used in this Article XI with respect to the
Mortgaged Leases shall mean the sale, transfer, assignment or conveyance for
value of the leasehold interest of the Mortgagor in the Mortgaged Leases,
together with all of the Mortgagor's right, title and interest in and to the
other items comprising the Mortgaged Property.
SECTION 11.7 Jurisdiction of the [STATE GAMING COMMISSION]. [Local
counsel to provide].
ARTICLE XII
SECURITY AGREEMENT AND FIXTURE FILING
SECTION 12.1 Security Agreement. To the extent that the Mortgaged
Property includes personal property or items of personal property which are or
are to become fixtures under applicable law, this Mortgage shall also be
construed as a security agreement under the UCC; and, upon and during the
continuance of an Event of Default, the Mortgagee shall be entitled with respect
to such personal property to exercise all remedies hereunder, all remedies
available under the UCC with respect to fixtures and all other remedies
available under applicable law. Without limiting the foregoing, subject to the
provisions of any applicable Gaming Laws, such personal property may, at the
Mortgagee's option, (i) be
-27-
sold hereunder together with any portion of the Mortgaged Property or otherwise,
(ii) be sold pursuant to the UCC, or (iii) be dealt with by the Mortgagee in any
other manner permitted under applicable law. The Mortgagee may require the
Mortgagor to assemble such personal property and make it available to the
Mortgagee at a place to be designated by the Mortgagee. The Mortgagor
acknowledges and agrees that a disposition of the personal property in
accordance with the Mortgagee's rights and remedies in respect to the Mortgaged
Property as heretofore provided is a commercially reasonable disposition
thereof; provided, however, that the Mortgagee shall give the Mortgagor not less
than ten (10) days' prior notice of the time and place of any intended
disposition.
SECTION 12.2 Fixture Filing. To the extent that the Mortgaged Property
includes items of personal property which are or are to become fixtures under
applicable law, and to the extent permitted under applicable law, the filing
hereof in the real estate records of the county in which such Mortgaged Property
is located shall also operate from the time of filing as a fixture filing with
respect to such Mortgaged Property, and the following information is applicable
for the purpose of such fixture filing, to wit:
NAME AND ADDRESS OF THE DEBTOR: NAME AND ADDRESS OF THE SECURED PARTY:
U.S. Bank National Association,
_______________________ as Collateral Agent
_______________________ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
_______________________ ▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
This Financing Statement covers the following types or items of property:
This instrument covers the Mortgaged Property and goods or items of
personal property which are or are to become Fixtures upon the real
property described in Schedule A attached hereto.
The name of the record
owner of the Property on which such Fixtures are or are to be located is
[_____________].
ARTICLE XIII
FURTHER ASSURANCES
SECTION 13.1 Recording Documentation to Assure Security. The Mortgagor
shall, forthwith after the execution and delivery hereof and thereafter, from
time to time, cause this Mortgage and any financing statement, continuation
statement or similar instrument relating to any thereof or to any property
intended to be subject to the Lien hereof to be filed, registered and recorded
in such manner and in such places as may be required by any present or future
law in order to publish notice of and fully to protect the validity and priority
thereof or the Lien hereof purported to be created upon the Mortgaged Property
and the interest and rights of the Mortgagee therein. The Mortgagor shall (if it
has not already done so), at its sole cost and expense, properly, duly and
validly record an appropriate memorandum of the Mortgaged Leases and any
material amendments or supplements thereto in each jurisdiction in which any of
the land underlying the Leased Premises may be situated. The Mortgagor shall pay
or cause to be
-28-
paid all taxes and fees incident to such filing, registration and
recording, and all expenses incident to the preparation, execution and
acknowledgment thereof, and of any instrument of further assurance, and all
Federal or state stamp taxes or other taxes, duties and charges arising out of
or in connection with the execution and delivery of such instruments.
SECTION 13.2 Further Acts. The Mortgagor shall, at the sole cost and
expense of the Mortgagor, do, execute, acknowledge and deliver all and every
such further acts, deeds, conveyances, mortgages, assignments, notices of
assignment, transfers, financing statements, continuation statements,
instruments and assurances as the Mortgagee shall from time to time reasonably
request, which may be necessary in the reasonable judgment of the Mortgagee from
time to time to assure, perfect, convey, assign, mortgage, transfer and confirm
unto the Mortgagee, the property and rights hereby conveyed or assigned or which
the Mortgagor may be or may hereafter become bound to convey or assign to the
Mortgagee or for carrying out the intention or facilitating the performance of
the terms hereof or the filing, registering or recording hereof. Without
limiting the generality of the foregoing, in the event that the Mortgagee
desires to exercise any remedies, consensual rights or attorney-in-fact powers
set forth in this Mortgage and reasonably determines it necessary to obtain any
approvals or consents of any Governmental Authority or any other Person
therefor, then, upon the reasonable request of the Mortgagee, the Mortgagor
agrees to use its commercially reasonable efforts to assist and aid the
Mortgagee to obtain as soon as practicable any necessary approvals or consents
for the exercise of any such remedies, rights and powers. In the event the
Mortgagor shall fail within ten (10) days after written demand to execute any
instrument or take any action required to be executed or taken by the Mortgagor
under this Section 13.2, the Mortgagee may, to the extent permitted by
applicable Gaming Laws, execute or take the same as the attorney-in-fact for the
Mortgagor, such power of attorney being coupled with an interest and
irrevocable.
SECTION 13.3 Additional Security. Without notice to or consent of the
Mortgagor and without impairment of the Lien and rights created by this
Mortgage, the Mortgagee may accept (but the Mortgagor shall not be obligated to
furnish) from the Mortgagor or from any other Person, additional security for
the Secured Obligations. Neither the giving hereof nor the acceptance of any
such additional security shall prevent the Mortgagee from resorting, first, to
such additional security, and, second, to the security created by this Mortgage
without affecting the Mortgagee's Lien and rights under this Mortgage.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Covenants To Run with the Leased Premises. All of the
grants, covenants, terms, provisions and conditions in this Mortgage shall run
with the Leased Premises and shall apply to, and bind the successors and assigns
of, the Mortgagor. If there shall be more than one mortgagor with respect to the
Mortgaged Property, the covenants and warranties hereof shall be joint and
several.
SECTION 14.2 No Merger. The rights and estate created by this Mortgage
shall not, under any circumstances, be held to have merged into any other estate
or interest now owned or hereafter acquired by the Mortgagee unless the
Mortgagee shall have consented to such merger in writing.
SECTION 14.3 Concerning Mortgagee.
(i) The Mortgagee has been appointed as Collateral Agent
pursuant to the Priority Intercreditor Agreement. The actions of the
Mortgagee hereunder are subject to the provisions of the
-29-
Priority Intercreditor Agreement. The Mortgagee shall have the right
hereunder to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking action
(including, without limitation, the release or substitution of the
Mortgaged Property), in accordance with this Mortgage and the Priority
Intercreditor Agreement. The Mortgagee may employ agents and
attorneys-in-fact in connection herewith and except as expressly set
forth herein to the contrary, shall not be liable for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it in
good faith. The Mortgagee may resign and a successor Mortgagee may be
appointed in the manner provided in the Priority Intercreditor
Agreement. Upon the acceptance of any appointment as the Mortgagee by a
successor Mortgagee, that successor Mortgagee shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of
the retiring Mortgagee under this Mortgage, and the retiring Mortgagee
shall thereupon be discharged from its duties and obligations under this
Mortgage. After any retiring Mortgagee's resignation, the provisions
hereof shall inure to its benefit as to any actions taken or omitted to
be taken by it under this Mortgage while it was the Mortgagee.
(ii) The Mortgagee shall be deemed to have exercised
reasonable care in the custody and preservation of the Mortgaged
Property in its possession if such Mortgaged Property is accorded
treatment substantially equivalent to that which the Mortgagee, in its
individual capacity, accords its own property consisting of similar
instruments or interests, it being understood that neither the Mortgagee
nor any of the Secured Parties shall have responsibility for taking any
necessary steps to preserve rights against any Person with respect to
any Mortgaged Property.
(iii) The Mortgagee shall be entitled to rely upon any written
notice, statement, certificate, order or other document or any telephone
message reasonably believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person, and, with respect to all
matters pertaining to this Mortgage and its duties hereunder, upon
advice of counsel selected by it.
(iv) If any portion of the Mortgaged Property also
constitutes collateral granted to the Mortgagee under any other deed of
trust, mortgage, security agreement, pledge or instrument of any type,
the Mortgagee, in its sole discretion, shall select which provision or
provisions shall control in the event of any conflict between the
provisions hereof and the provisions of such other deed of trust,
mortgage, security agreement, pledge or instrument of any type in
respect of such collateral.
SECTION 14.4 Mortgagee May Perform; Mortgagee Appointed
Attorney-in-Fact. If the Mortgagor shall fail to perform any covenants contained
in this Mortgage and such failure shall continue for a period of thirty (30)
days after written notice thereof or, if such failure cannot be cured within
such thirty (30) day period after diligent efforts by the Mortgagor to so cure,
the cure period shall be extended for such period of time as is necessary to so
cure, provided that the Mortgagor shall continuously, diligently and in good
faith pursue a cure, (including, without limitation, the Mortgagor's covenants
to (i) pay the premiums in respect of all required Insurance Policies hereunder,
(ii) pay Charges, (iii) make repairs, (iv) discharge Liens that do not
constitute Permitted Mortgaged Property Liens or (v) pay or perform any
obligations of the Mortgagor under any of the Mortgaged Leases) or if any
warranty on the part of the Mortgagor contained herein shall be breached, the
Mortgagee may (but shall not be obligated to), subject to the provisions of any
applicable Gaming Laws and to the extent the same or similar rights are not
exercised by the First Priority Trustee pursuant to the terms of the First
Priority Indenture, do the same or cause it to be done or remedy any such
breach, and may expend funds for such purpose; provided, however, that the
Mortgagee shall in no event be bound to inquire into the validity of any tax,
Lien, imposition or other obligation which the Mortgagor fails to pay or perform
as and when required hereby and which the Mortgagor does not contest in
accordance with the provisions of Article IX hereof or the
-30-
Second Priority Indenture. Any and all amounts so expended by the Mortgagee
shall be paid by the Mortgagor in accordance with the provisions of Section 14.5
hereof. Neither the provisions of this Section 14.4 nor any action taken by the
Mortgagee pursuant to the provisions of this Section 14.4 shall prevent any such
failure to observe any covenant contained in this Mortgage nor any breach of
warranty from constituting an Event of Default. Upon the occurrence and during
the continuance of an Event of Default, subject to the provisions of any
applicable Gaming Laws, the Mortgagor hereby appoints the Mortgagee its
attorney-in-fact, with full authority in the place and stead of the Mortgagor
and in the name of the Mortgagor to take any action and to execute any
instrument consistent with the terms hereof and the other Collateral Documents
which the Mortgagee may deem necessary or advisable to accomplish the purposes
hereof. The foregoing grant of authority is a power of attorney coupled with an
interest and such appointment shall be irrevocable for the term hereof. The
Mortgagor hereby ratifies all that such attorney shall lawfully do or cause to
be done by virtue hereof.
SECTION 14.5 Expenses. The Mortgagor will upon demand pay to the
Mortgagee the amount of any and all reasonable costs and expenses, including the
reasonable fees and expenses of its counsel and the reasonable fees and expenses
of any experts and agents which the Mortgagee may reasonably incur in connection
with (i) any action, suit or other proceeding affecting the Mortgaged Property
or any part thereof commenced, in which action, suit or proceeding the Mortgagee
is made a party or participates pursuant to the provisions of this Mortgage or
in which the right to use the Leased Premises or any part thereof is threatened,
or in which it becomes necessary in the reasonable judgment of the Mortgagee to
defend or uphold the Lien hereof (including, without limitation, any action,
suit or proceeding to establish or uphold the compliance of the Leased Premises
with any Requirements of Law), (ii) the collection of the Secured Obligations,
(iii) the enforcement and administration hereof, (iv) the custody or
preservation of, or the sale of, collection from, or other realization upon, any
of the Mortgaged Property, (v) the exercise or enforcement of any of the rights
of the Mortgagee or any Secured Party hereunder or (vi) the failure by the
Mortgagor to perform or observe any of the provisions hereof. All amounts
expended by the Mortgagee and payable by the Mortgagor under this Section 14.5
shall be due three (3) days after demand thereof (together with interest thereon
accruing at the Default Rate during the period from and including the date on
which such funds were so expended to the date of repayment) and shall be part of
the Secured Obligations. The Mortgagor's obligations under this Section 14.5
shall survive the termination hereof and the discharge of the Mortgagor's other
obligations under this Mortgage.
SECTION 14.6 Indemnity.
(i) The Mortgagor agrees to indemnify, pay and hold harmless
the Mortgagee and the officers, directors, employees, agents and
Affiliates of the Mortgagee (collectively, the "Indemnitees") from and
against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs (including, without
limitation, settlement costs), expenses or disbursements of any kind or
nature whatsoever (including, without limitation, the reasonable fees
and disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding, commenced or
threatened, whether or not such Indemnitee shall be designated a party
thereto), which may be imposed on, incurred by or asserted against that
Indemnitee, in any manner relating to or arising out hereof, the Second
Priority Indenture, the Second Notes, any other Collateral Document or
any other document evidencing the Secured Obligations (including,
without limitation, any misrepresentation by the Mortgagor in this
Mortgage, the Second Priority Indenture, the Second Notes, any other
Collateral Document or any other document evidencing the Secured
Obligations (the "Indemnified Liabilities"); provided, however, that the
Mortgagor shall have no obligation to an Indemnitee hereunder with
respect to Indemnified Liabilities if it has been determined by a final
decision (after all appeals and the expiration
-31-
of time to appeal) by a court of competent jurisdiction that such
Indemnified Liabilities arose from the gross negligence or willful
misconduct of that Indemnitee. The Mortgagor need not pay for any
settlement made without its consent. To the extent that the undertaking
to indemnify, pay and hold harmless set forth in the preceding sentence
may be unenforceable because it is violative of any law or public
policy, the Mortgagor shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all Indemnified Liabilities incurred by the Indemnitees
or any of them or are based upon acts or omissions subsequent to the
Mortgagee's or the Holders' (or either of their agents' or designees')
taking of possession and control of the Mortgaged Property.
(ii) Survival. The obligations of the Mortgagor contained in
this Section 14.6 shall survive the termination hereof and the discharge
of the Mortgagor's other obligations under this Mortgage, the Second
Priority Indenture and the other Collateral Documents.
(iii) Reimbursement. Any amount paid by any Indemnitee as to
which such Indemnitee has the right to reimbursement shall constitute
Secured Obligations secured by the Mortgaged Property.
SECTION 14.7 Continuing Security Interest; Assignment. This Mortgage
shall create a continuing Lien on and security interest in the Mortgaged
Property and shall (i) be binding upon the Mortgagor, its respective successors
and assigns and (ii) subject to the provisions of applicable Gaming Laws, inure,
together with the rights and remedies of the Mortgagee hereunder, to the benefit
of the Mortgagee and the other Secured Parties and each of their respective
successors, transferees and assigns. No other Persons (including, without
limitation, any other creditor of the Mortgagor) shall have any interest herein
or any right or benefit with respect hereto. Without limiting the generality of
the foregoing clause (ii), subject to the provisions of applicable Gaming Laws,
any Holder of the Second Notes may assign or otherwise transfer any indebtedness
held by it secured by this Mortgage to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to such Holder, herein or otherwise, subject however, to the provisions of the
Second Priority Indenture.
SECTION 14.8 Termination; Release. The Mortgaged Property shall be
released from the Lien of this Mortgage in accordance with the provisions of the
Second Priority Indenture. Mortgagee, on the written request and at the expense
of the Mortgagor, will execute and deliver such proper instruments of release
and satisfaction or assignment as may reasonably be requested to evidence such
release or assignment, and any such instrument, when duly executed by Mortgagee
and duly recorded by the Mortgagor in the places where this Mortgage is
recorded, shall conclusively evidence the release or assignment of this
Mortgage.
SECTION 14.9 Modification in Writing. No amendment, modification,
supplement, termination or waiver of or to any provision hereof, nor consent to
any departure by the Mortgagor therefrom, shall be effective unless the same
shall be done in accordance with the terms of the Second Priority Indenture and
unless in writing and signed by the Mortgagee and the Mortgagor. Any amendment,
modification or supplement of or to any provision hereof, any waiver of any
provision hereof and any consent to any departure by the Mortgagor from the
terms of any provision hereof shall be effective only in the specific instance
and for the specific purpose for which made or given. Except where notice is
specifically required by this Mortgage or any other Collateral Document, no
notice to or demand on the Mortgagor in any case shall entitle the Mortgagor to
any other or further notice or demand in similar or other circumstances.
-32-
SECTION 14.10 Notices. Unless otherwise provided herein or in the Second
Priority Indenture, any notice or other communication herein required or
permitted to be given shall be given in the manner and become effective as set
forth in the Second Priority Indenture, if to the Mortgagor, addressed to it at
the address of the Issuers under the Second Priority Indenture set forth in the
Second Priority Indenture, and if to the Mortgagee, addressed to it at its
address set forth in the Second Priority Indenture, or in each case at such
other address as shall be designated by such party in a written notice to the
other party complying as to delivery with the terms of this Section 14.10.
SECTION 14.11 GOVERNING LAW; SERVICE OF PROCESS; WAIVER OF JURY TRIAL.
THIS MORTGAGE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE IN WHICH THE LEASED PREMISES ARE LOCATED,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS, EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR ITEM OR TYPE OF MORTGAGED PROPERTY ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE. THE MORTGAGOR
AGREES THAT SERVICE OF PROCESS IN ANY PROCEEDING MAY BE EFFECTED BY MAILING A
COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM
OF MAIL), POSTAGE PREPAID, TO THE MORTGAGOR AT ITS ADDRESS SET FORTH IN THE
SECOND PRIORITY INDENTURE OR AT SUCH OTHER ADDRESS OF WHICH THE MORTGAGEE SHALL
HAVE BEEN NOTIFIED PURSUANT THERETO. IF ANY AGENT APPOINTED BY THE MORTGAGOR
REFUSES TO ACCEPT SERVICE, THE MORTGAGOR HEREBY AGREES THAT SERVICE UPON IT BY
MAIL SHALL CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
OF THE MORTGAGEE TO BRING PROCEEDINGS AGAINST THE MORTGAGOR IN THE COURTS OF ANY
OTHER JURISDICTION. THE MORTGAGOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS MORTGAGE OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 14.12 Severability of Provisions. Any provision hereof which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 14.13 Limitation on Interest Payable. It is the intention of the
parties to conform strictly to the usury laws, whether state or Federal, that
are applicable to the transaction of which this Mortgage is a part. All
agreements between the Mortgagor and the Mortgagee, whether now existing or
hereafter arising and whether oral or written, are hereby expressly limited so
that in no contingency or event whatsoever shall the amount paid or agreed to be
paid by the Mortgagor for the use, forbearance or detention of the money to be
loaned or advanced under the Second Priority Indenture or any related document,
or for the payment or performance of any covenant or obligation contained herein
or in the Second Priority Indenture or any other related document exceed the
maximum amount permissible under applicable Federal or state usury laws. If
under any circumstances whatsoever fulfillment of any such provision, at the
time performance of such provision shall be due, shall involve exceeding the
limit of validity prescribed by law, then the obligation to be fulfilled shall
be reduced to the limit of such validity. If under any circumstances the
Mortgagor shall have paid an amount deemed interest by applicable law, which
would exceed the highest lawful rate, such amount that would be excessive
interest under applicable
-33-
usury laws shall be applied to the reduction of the principal amount owing in
respect of the Secured Obligations and not to the payment of interest, or if
such excessive interest exceeds the unpaid balance of principal and any other
amounts due hereunder, the excess shall be refunded to the Mortgagor. All sums
paid or agreed to be paid for the use, forbearance or detention of the principal
under any extension of credit by the Mortgagee shall, to the extent permitted by
applicable law, and to the extent necessary to preclude exceeding the limit of
validity prescribed by law, be amortized, prorated, allocated and spread from
the date hereof until payment in full of the Secured Obligations so that the
actual rate of interest on account of such principal amounts is uniform
throughout the term hereof.
SECTION 14.14 Business Days. In the event any time period or any date
provided in this Mortgage ends or falls on a day other than a Business Day, then
such time period shall be deemed to end and such date shall be deemed to fall on
the next succeeding Business Day, and performance herein may be made on such
Business Day, with the same force and effect as if made on such other day.
SECTION 14.15 Relationship. The relationship of the Mortgagee to the
Mortgagor hereunder is strictly and solely that of mortgagor and mortgagee and
nothing contained in the Second Priority Indenture, the Second Notes, this
Mortgage or any other document or instrument now existing and delivered in
connection therewith or otherwise in connection with the Secured Obligations is
intended to create, or shall in any event or under any circumstance be construed
as creating a partnership, joint venture, tenancy-in-common, joint tenancy or
other relationship of any nature whatsoever between the Mortgagee and the
Mortgagor other than as mortgagor and mortgagee.
SECTION 14.16 No Credit for Payment of Taxes or Impositions. The
Mortgagor shall not be entitled to any credit against the principal, premium, if
any, or interest payable under the Second Priority Indenture or the Second
Notes, and the Mortgagor shall not be entitled to any credit against any other
sums which may become payable under the terms thereof or hereof, by reason of
the payment of any Charge on the Leased Premises or any part thereof.
SECTION 14.17 No Claims Against the Mortgagee. Nothing contained in this
Mortgage shall constitute any consent or request by the Mortgagee, express or
implied, for the performance of any labor or services or the furnishing of any
materials or other property in respect of the Leased Premises or any part
thereof, nor as giving the Mortgagor any right, power or authority to contract
for or permit the performance of any labor or services or the furnishing of any
materials or other property in such fashion as would permit the making of any
claim against the Mortgagee in respect thereof or any claim that any Lien based
on the performance of such labor or services or the furnishing of any such
materials or other property is prior to the Lien hereof.
SECTION 14.18 Obligations Absolute. All obligations of the Mortgagor
hereunder shall be absolute and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of the Issuers under
the Second Priority Indenture, the Mortgagor or any other Guarantor;
(ii) any lack of validity or enforceability of the Second
Priority Indenture, the Second Notes or any other agreement or
instrument relating thereto;
-34-
(iii) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Secured Obligations, or any
other amendment or waiver of or any consent to any departure from the
Second Priority Indenture, the Second Notes or any other agreement or
instrument relating thereto;
(iv) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to any
departure from any guarantee, for all or any of the Secured Obligations;
(v) any exercise or non-exercise, or any waiver of any
right, remedy, power or privilege under or in respect hereof, the Second
Priority Indenture, the Second Notes or any other agreement or
instrument relating thereto except as specifically set forth in a waiver
granted pursuant to the provisions of Section 14.9 hereof; or
(vi) any other circumstances which might otherwise constitute
a defense available to, or a discharge of, the Mortgagor.
SECTION 14.19 Mortgagee's Right To Sever Indebtedness.
(i) The Mortgagor acknowledges that (A) the Mortgaged
Property does not constitute the sole source of security for the payment
and performance of the Secured Obligations and that the Secured
Obligations are also secured by property of the Mortgagor and its
Affiliates in other jurisdictions (all such property, collectively, the
"Collateral"), (B) the number of such jurisdictions and the nature of
the transaction of which this instrument is a part are such that it
would have been impracticable for the parties to allocate to each item
of Collateral a specific amount and to execute in respect of such item a
separate indenture and (C) the Mortgagor intends that the Mortgagee have
the same rights with respect to the Mortgaged Property, in foreclosure
or otherwise, that the Mortgagee would have had if each item of
Collateral had been secured, mortgaged or pledged pursuant to a separate
indenture, mortgage or security instrument. In furtherance of such
intent, the Mortgagor agrees that the Mortgagee may at any time by
notice (an "Allocation Notice") to the Mortgagor allocate a portion (the
"Allocated Indebtedness") of the Secured Obligations to the Mortgaged
Property and sever from the remaining Secured Obligations the Allocated
Indebtedness. From and after the giving of an Allocation Notice with
respect to the Mortgaged Property, the Secured Obligations hereunder
shall be limited to the extent set forth in the Allocation Notice and
(as so limited) shall, for all purposes, be construed as a separate
obligation of the Mortgagor unrelated to the other transactions
contemplated by the Second Priority Indenture, any other Collateral
Document or any document related to any thereof. To the extent that the
proceeds on any foreclosure of the Mortgaged Property shall exceed the
Allocated Indebtedness, such proceeds shall belong to the Mortgagor and
shall not be available hereunder to satisfy any Secured Obligations of
the Mortgagor other than the Allocated Indebtedness. In any action or
proceeding to foreclose the Lien hereof or in connection with any power
of sale, foreclosure or other remedy exercised under this Mortgage
commenced after the giving by the Mortgagee of an Allocation Notice, the
Allocation Notice shall be conclusive proof of the limits of the Secured
Obligations hereby secured, and the Mortgagor may introduce, by way of
defense or counterclaim, evidence thereof in any such action or
proceeding. Notwithstanding any provision of this Section 14.19, the
proceeds received by the Mortgagee pursuant to this Mortgage shall be
applied by the Mortgagee in accordance with the provisions of the
Priority Intercreditor Agreement.
(ii) The Mortgagor hereby waives to the greatest extent
permitted under law the right to a discharge of any of the Secured
Obligations under any statute or rule of law now or hereafter in effect
-35-
which provides that foreclosure of the Lien hereof or other remedy
exercised under this Mortgage constitutes the exclusive means for
satisfaction of the Secured Obligations or which makes unavailable a
deficiency judgment or any subsequent remedy because the Mortgagee
elected to proceed with a power of sale foreclosure or such other remedy
or because of any failure by the Mortgagee to comply with laws that
prescribe conditions to the entitlement to a deficiency judgment. In the
event that, notwithstanding the foregoing waiver, any court shall for
any reason hold that the Mortgagee is not entitled to a deficiency
judgment, the Mortgagor shall not (A) introduce in any other
jurisdiction such judgment as a defense to enforcement against the
Mortgagor of any remedy in the Second Priority Indenture or any other
Collateral Document or (B) seek to have such judgment recognized or
entered in any other jurisdiction, and any such judgment shall in all
events be limited in application only to the state or jurisdiction where
rendered.
(iii) In the event any instrument in addition to the
Allocation Notice is necessary to effectuate the provisions of this
Section 14.19, including, without limitation, any amendment to this
Mortgage, any substitute promissory note or affidavit or certificate of
any kind, the Mortgagee may, subject to the provisions of applicable
Gaming Laws, and following the Mortgagor's failure to do so within ten
(10) days of a request therefor, execute, deliver or record such
instrument as the attorney-in-fact of the Mortgagor. Such power of
attorney is coupled with an interest and is irrevocable.
(iv) Notwithstanding anything set forth herein to the
contrary, the provisions of this Section 14.19 shall be effective only
to the maximum extent permitted by law.
SECTION 14.20 Mortgaged Leases.
(i) The Mortgagor shall punctually and properly perform,
observe and otherwise comply with each and every covenant, agreement,
requirement and condition set forth in the Mortgaged Leases and do or
cause to be done all things necessary or appropriate to keep the
Mortgaged Leases in full force and effect and to preserve and keep
unimpaired the rights of the Mortgagor thereunder. Upon request of the
Mortgagee, the Mortgagor shall, subject to the terms of the Mortgaged
Leases, request from the Lessor an estoppel certificate, addressed to
the Mortgagee, stating that there is no default under the Mortgaged
Leases, or any state of facts which, with the passage of time or notice
or both, would constitute a default thereunder, or if there be any
default under the Mortgaged Leases, giving the details thereof.
(ii) In the event the Mortgagor acquires the fee simple title
or any other estate or interest in the property subject to the Mortgaged
Leases, such acquisition will not merge with the leasehold estate
created by the Mortgaged Leases, but such other estate or interest will
remain discrete and immediately become subject to the Lien of this
Mortgage, and the Mortgagor shall execute, acknowledge and deliver any
instruments requested by the Mortgagee to confirm the coverage of the
Lien evidenced hereby upon such other estate or interest. The Mortgagor
shall pay any and all conveyance or mortgage taxes and filing or similar
fees in connection with the execution, delivery, filing or recording of
any such instrument.
(iii) The Mortgagor shall promptly notify the Mortgagee in
writing of the occurrence of any default (or any event which, with the
lapse of time or notice or both, would constitute a default) on the part
of or caused by any party to the Mortgaged Leases. If for any reason the
Mortgagor cannot timely make any payment under the Mortgaged Leases or
perform or comply with any of its obligations under the Mortgaged
Leases, the Mortgagor shall notify the Mortgagee in sufficient time to
enable the Mortgagee (but the Mortgagee shall not be obligated) timely
to make such payments and/or to perform or comply with such other
obligations. On receipt by the Mortgagee from the Mortgagor pursuant to
this
-36-
subsection 14.20(iii), or from the Lessor under the Mortgaged Leases, of
any such notice of default by, or inability to make any payment by, the
Mortgagor thereunder, the Mortgagee may rely thereon and, after
reasonable notice to the Mortgagor, take such action as the Mortgagee
deems reasonably necessary or desirable to cure such default, even
though the existence of such default or the nature thereof is denied by
the Mortgagor or by any other person.
(iv) The Mortgagor shall not surrender the leasehold estate
created by the Mortgaged Leases, or terminate or cancel the Mortgaged
Leases. The Mortgagor shall not, without the prior written consent of
the Mortgagee (which consent will not be unreasonably withheld,
conditioned or delayed), amend, modify, surrender, impair, forfeit,
cancel, or terminate, or permit the amendment, modification, surrender,
impairment, forfeiture, cancellation, or termination of the Mortgaged
Leases in whole or in part, whether or not a default shall have occurred
and shall be continuing thereunder. Any such termination, cancellation,
modification, change, supplement, alteration, amendment or extension
without the prior written consent contemplated by this subsection
14.20(iv) shall be void and of no force or effect.
(v) No forbearance of any of the Mortgagor's obligations
under the Mortgaged Leases, pursuant to the terms thereof, by agreement,
operation of law or otherwise, shall release the Mortgagor from any of
the Mortgagor's obligations under this Mortgage, including, without
limitation, the Mortgagor's obligations with respect to the payment of
rent as provided in the Mortgaged Leases and the performance of all of
the other terms, provisions, covenants, conditions and agreements
contained in the Mortgaged Leases to be performed by the Mortgagor
thereunder.
(vi) The leasehold estate of the Mortgagor created by the
Mortgaged Leases and the estate of the Lessor under the Mortgaged Leases
shall each at all times remain separate and apart and retain their
separate identities, and no merger of the estate of the Mortgagor with
the estate of the Lessor will result with respect to the Mortgagee or
with respect to any purchaser acquiring the Leased Premises at any sale
on foreclosure of the Lien of this Mortgage without the written consent
of the Mortgagee.
(vii) The Mortgagor covenants and agrees that if it shall be
the subject of a proceeding under the Federal Bankruptcy Code, it shall
not elect to treat the Mortgaged Leases as terminated (pursuant to
Section 365 of the Federal Bankruptcy Code or any similar statute or
law) without the prior written consent of the Mortgagee. The Mortgagor
hereby irrevocably assigns to the Mortgagee the right to exercise such
election.
SECTION 14.21 Gaming Authorities. Nothing in this Mortgage shall require
the Mortgagee to take any action contrary to the Indiana Riverboat Gambling Act
or any Gaming Law or the rules, regulations or determinations promulgated by any
Gaming Authority.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Mortgagor has caused this Mortgage to be
duly executed and delivered under seal the day and year first above written.
[________________],
Mortgagor
By:
------------------------------
Name:
Title:
ACKNOWLEDGMENT
[Local counsel to provide]
Schedule A
[Legal Description]
[to come from title policy]
Schedule B
Mortgaged Leases
[To show]
Schedule C
Each of the liens and other encumbrances excepted as being prior to the Lien
hereof as set forth in Schedule B to the marked title insurance commitment or
the pro forma title commitment, as the case may be, issued by [_____] Title
Insurance Company, dated as of the date hereof and delivered to Collateral Agent
on the date hereof, bearing [_______] Title Insurance Company policy number
[________] relating to the real property described in Schedule A attached
hereto.
Schedule D
Leases
[To come]
Exhibit 1
FORM OF SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
(the "Agreement") is made and entered into as of the ____ day of _______, 200__
by and between _________________________________, as collateral agent, having an
office at ______________________________ (in such capacity, "Collateral Agent"),
and _____________________, having an office at __________________________
("Tenant").
RECITALS:
A. Tenant is the tenant under a certain lease dated
_____________, ____ between ________________________________, as landlord
("Landlord"), and Tenant, as tenant (as amended through the date hereof, the
"Lease"), pursuant to which Tenant leased a portion (the "Leased Premises") of
the property known as _____________________________, located at
_____________________________, as more particularly described in Schedule A
attached hereto (the "Property").
B. Landlord has or will grant a mortgage lien on and security
interest in the Property to Collateral Agent (for its benefit and for the
benefit of the holders of certain senior secured notes and notes issued in
exchange therefor pursuant to that certain indenture dated as of March __, 2003)
pursuant to one or more mortgages, deeds of trust, deeds to secure debt or
similar security instruments (collectively, the "Security Instruments").
C. Tenant has agreed to subordinate the Lease to the Security
Instruments and to the lien thereof and Collateral Agent has agreed not to
disturb Tenant's possessory rights in the Leased Premises under the Lease on the
terms and conditions hereinafter set forth.
AGREEMENT:
NOW, THEREFORE, the parties hereto mutually agree as follows:
1. Subordination. Notwithstanding anything to the contrary
set forth in the Lease, the Lease and the leasehold estate created thereby and
all of Tenant's rights thereunder are and shall at all times be subject and
subordinate in all respects to the Security Instruments and the lien thereof,
and to all rights of Collateral Agent thereunder, and to any and all advances to
be made thereunder, and to all renewals, modifications, consolidations,
replacements and extensions thereof.
2. Nondisturbance. So long as Tenant complies with the
provisions of this Agreement, pays all rents and other charges as specified in
the Lease and is not otherwise in default (beyond applicable notice and cure
periods) of any of its obligations and covenants pursuant to the Lease,
Collateral Agent agrees for itself and its successors in interest and for any
other person acquiring title to the Property through a foreclosure (an
"Acquiring Party"), that Tenant's possession of the Leased Premises as described
in the Lease will not be disturbed during the term of the Lease by reason of a
foreclosure. For purposes of this Agreement, a "foreclosure" shall include (but
not be limited to) a sheriff's or trustee's
-2-
sale under the power of sale contained in the Security Instruments, the
termination of any superior lease of the Property and any other transfer of the
Landlord's interest in the Property under peril of foreclosure, including,
without limitation to the generality of the foregoing, an assignment or sale in
lieu of foreclosure.
3. Attornment. Tenant agrees to attorn to, accept and
recognize any Acquiring Party as the landlord under the Lease pursuant to the
provisions expressly set forth therein for the then remaining balance of the
term of the Lease, and any extensions thereof as made pursuant to the Lease. The
foregoing provision shall be self-operative and shall not require the execution
of any further instrument or agreement by Tenant as a condition to its
effectiveness.
4. No Liability. Notwithstanding anything to the contrary
contained herein or in the Lease, it is specifically understood and agreed that
neither the Collateral Agent, any receiver nor any Acquiring Party shall be:
(a) liable for any act, omission, negligence or default of any
prior landlord (including Landlord); or
(b) liable for any failure of any prior landlord (including
Landlord) to construct any improvements or bound by any covenant to
construct any improvement either at the commencement of the term of the
Lease or upon any renewal or extension thereof or upon the addition of
additional space pursuant to any expansion right contained in the Lease;
or
(c) subject to any offsets, credits, claims or defenses which
Tenant might have against any prior landlord (including Landlord); or
(d) bound by any rent or additional rent which is payable on a
monthly basis and which Tenant might have paid for more than one (1)
month in advance to any prior landlord (including Landlord) or by any
security deposit or other prepaid charge which Tenant might have paid in
advance to any prior landlord (including Landlord); or
(e) liable to Tenant hereunder or under the terms of the Lease
beyond its interest in the Property; or
(f) bound by any assignment, subletting, renewal, extension or
any other agreement or modification of the Lease made without the
written consent of Collateral Agent; or
(g) bound by any consensual or negotiated surrender,
cancellation or termination of the Lease, in whole or in part, agreed
upon between Landlord and Tenant unless effected unilaterally by Tenant
pursuant to the express terms of the Lease.
Notwithstanding the foregoing, Tenant reserves its right to any
and all claims or causes of action (i) against such prior landlord for prior
losses or damages and (ii) against the successor landlord for all losses or
damages arising from and after the date that such successor landlord takes title
to the Property.
5. Certain Acknowledgments and Agreements by Tenant. (a)
Tenant has notice that the Lease and the rents and all other sums due thereunder
have been assigned to Collateral Agent as security for the notes secured by the
Security Instruments. In the event Collateral Agent notifies Tenant
-3-
of the occurrence of a default under the Security Instruments and demands that
Tenant pay its rents and all other sums due or to become due under the Lease
directly to Collateral Agent, Tenant shall honor such demand and pay its rent
and all other sums due under the Lease directly to Collateral Agent or as
otherwise authorized in writing by Collateral Agent. Landlord irrevocably
authorizes Tenant to make the foregoing payments to Collateral Agent upon such
notice and demand.
(b) Tenant shall send a copy of any and all notices or
statements under the Lease to Collateral Agent at the same time such
notices or statements are sent to Landlord.
(c) This Agreement satisfies any and all conditions or
requirements in the Lease relating to the granting of a non-disturbance
agreement.
6. Collateral Agent to Receive Default Notices. Tenant
shall notify Collateral Agent of any default by Landlord under the Lease which
would entitle Tenant to cancel the Lease, and agrees that, notwithstanding any
provisions of the Lease to the contrary, no notice of cancellation thereof shall
be effective unless Collateral Agent shall have received notice of default
giving rise to such cancellation and shall have failed within thirty (30) days
after receipt of such notice to cure such default or, if such default cannot be
cured within thirty (30) days, shall have failed within thirty (30) days after
receipt of such notice to commence and thereafter diligently pursue any action
necessary to cure such default.
7. Estoppel. Tenant hereby certifies and represents to
Collateral Agent that as of the date of this Agreement:
(a) the Lease is in full force and effect;
(b) all requirements for the commencement and validity of the
Lease have been satisfied and there are no unfulfilled conditions to
Tenant's obligations under the Lease;
(c) Tenant is not in default under the Lease and has not
received any uncured notice of any default by Tenant under the Lease; to
the best of Tenant's knowledge, Landlord is not in default under the
Lease; no act, event or condition has occurred which with notice or the
lapse of time, or both, would constitute a default by Tenant or Landlord
under the Lease; no claim by Tenant of any nature exists against
Landlord under the Lease; and all obligations of Landlord have been
fully performed;
(d) there are no defenses, counterclaims or setoffs against
rents or charges due or which may become due under the Lease;
(e) none of the rent which Tenant is required to pay under the
Lease has been prepaid, or will in the future be prepaid, more than one
(1) month in advance;
(f) Tenant has no right or option contained in the Lease or in
any other document to purchase all or any portion of the Leased
Premises;
(g) except for ____________, the Lease has not been modified or
amended and constitutes the entire agreement between Landlord and Tenant
relating to the Leased Premises;
(h) except for _____________,Tenant has not assigned, mortgaged,
sublet, encumbered, conveyed or otherwise transferred any or all of its
interest under the Lease; and
-4-
(i) Tenant has full authority to enter into this Agreement,
which has been duly authorized by all necessary action.
8. Notices. All notices or other written communications
hereunder shall be deemed to have been properly given (i) upon delivery, if
delivered in person with receipt acknowledged by the recipient thereof, (ii) one
(1) Business Day (hereinafter defined) after having been deposited for overnight
delivery with any reputable overnight courier service, or (iii) three (3)
Business Days after having been deposited in any post office or mail depository
regularly maintained by the United States Postal Service and sent by registered
or certified mail, postage prepaid, return receipt requested, addressed to the
receiving party at its address set forth above or addressed as such party may
from time to time designate by written notice to the other parties. For purposes
of this Section 8, the term "Business Day" shall mean any day other than
Saturday, Sunday or any other day on which banks are required or authorized to
close in New York, New York. Either party by notice to the other may designate
additional or different addresses for subsequent notices or communications.
9. Successors. The obligations and rights of the parties
pursuant to this Agreement shall bind and inure to the benefit of the
successors, assigns, heirs and legal representatives of the respective parties;
provided, however, that in the event of the assignment or transfer of the
interest of Collateral Agent, all obligations and liabilities of Collateral
Agent under this Agreement shall terminate, and thereupon all such obligations
and liabilities shall be the responsibility of the party to whom Collateral
Agent's interest is assigned or transferred; and provided, further, that the
interest of Tenant under this Agreement may not be assigned or transferred
without the prior written consent of Collateral Agent which consent shall not be
unreasonably withheld, conditioned or delayed. In addition, Tenant acknowledges
that all references herein to Landlord shall mean the owner of the landlord's
interest in the Lease, even if said owner shall be different from the Landlord
named in the Recitals.
10. Duplicate Original; Counterparts. This Agreement may be
executed in any number of duplicate originals and each duplicate original shall
be deemed to be an original. This Agreement may be executed in several
counterparts, each of which counterparts shall be deemed an original instrument
and all of which together shall constitute a single agreement.
11. Limitation of Collateral Agent's Liability. (a)
Collateral Agent shall have no obligations nor incur any liability with respect
to any warranties of any nature whatsoever, whether pursuant to the Lease or
otherwise, including, without limitation, any warranties respecting use,
compliance with zoning, Landlord's title, Landlord's authority, habitability,
fitness for purpose or possession.
(b) In the event that Collateral Agent shall acquire title to
the Leased Premises or the Property, Collateral Agent shall have no
obligation, nor incur any liability, beyond Collateral Agent's then
equity interest, if any, in the Leased Premises, and Tenant shall look
exclusively to such equity interest of Collateral Agent, if any, in the
Leased Premises for the payment and discharge of any obligations imposed
upon Collateral Agent hereunder or under the Lease, and Collateral Agent
is hereby released and relieved of any other obligations hereunder and
under the Lease.
12. Modification in Writing. This Agreement may not be
modified except by an agreement in writing signed by the parties hereto or their
respective successors in interest.
13. Lien of Security Instruments. Nothing contained in this
Agreement shall in any way impair or affect the lien created by the Security
Instruments or the provisions thereof.
-5-
14. Compliance with Lease. Tenant agrees that in the event
there is any inconsistency between the terms and provisions hereof and the terms
and provisions of the Lease, the terms and provisions hereof shall be
controlling.
15. Governing Law; Severability. This Agreement shall be
governed by the laws of the State of [ ]. If any term of this Agreement or the
application thereof to any person or circumstances shall to any extent be
invalid or unenforceable, the remainder of this Agreement or the application of
such terms to any person or circumstances other than those as to which it is
invalid or unenforceable shall not be affected thereby, and each term of this
Agreement shall be valid and enforceable to the fullest extent permitted by law.
16. Further Actions. Tenant agrees at its own expense to
execute and deliver, at any time and from time to time upon the reasonable
request of Collateral Agent or any Acquiring Party, such documents and
instruments (in recordable form, if requested) as may be necessary or
appropriate, in the opinion of Collateral Agent or any Acquiring Party, to fully
implement or to further evidence the understandings and agreements contained in
this Agreement. Moreover, Tenant hereby irrevocably appoints and constitutes
Collateral Agent or any Acquiring Party as its true and lawful attorney-in-fact
to execute and deliver any such documents or instruments which may be necessary
or appropriate, in the opinion of Collateral Agent or any Acquiring Party, to
implement or further evidence such understandings and agreements and which
Tenant, after thirty (30) days' notice from Collateral Agent or any Acquiring
Party, has failed to execute and deliver.
IN WITNESS WHEREOF, Collateral Agent and Tenant have duly
executed this Agreement as of the date first above written.
-----------------------------,
as Collateral Agent
By:
-------------------------
Name:
Title:
-----------------------------,
as Tenant
By:
-------------------------
Name:
Title:
The undersigned, as the Landlord named in the Recitals, having
duly executed this Agreement as of the date first written above, and as
mortgagor, pledgor, assignor or debtor under the Security Instruments, hereby
accepts and agrees for itself and its successors and assigns, (i) to be bound by
the provisions of Section 5 hereof, (ii) that nothing contained in the foregoing
Agreement (x) shall in any way be deemed to constitute a waiver by Collateral
Agent of any of its rights or remedies under the Security Instruments or (y)
shall in any way be deemed to release Landlord from its obligations to comply
with the terms, provisions, conditions, covenants and agreements set forth in
the Security Instruments and (iii) that the provisions of the Security
Instruments remain in full force and effect and must be complied with by
Landlord.
--------------------------, a
------------------------------
By:
-------------------------
Name
Title:
ACKNOWLEDGMENT
[Local counsel to provide]
SCHEDULE A to EXHIBIT 1
Description of Real Property
EXHIBIT F-3
FORM OF SHIP MORTGAGE
[Intentionally omitted-filed herewith as separate exhibit]
F-3-1
EXHIBIT F-4
FORM OF PRIORITY INTERCREDITOR AGREEMENT
[Intentionally omitted-filed herewith as separate exhibit]
F-3-1
Annex A
Terms of Amendment to Priority Intercreditor Agreement
The amendment to the Priority Intercreditor Agreement agreement
required to be entered into by each Representative of First Priority Pari Passu
Indebtedness that is secured by a pari passu first priority Lien on any part of
the Collateral shall contain the following terms and shall otherwise be
substantially consistent with the existing terms of the Priority Intercreditor
Agreement:
Appointment of Collateral Agent
The Representative shall appoint the Collateral Agent to take all such
actions with respect to the Liens on the Collateral securing such First Priority
Pari Passu Indebtedness as Collateral Agent is authorized to take on behalf of
the First Priority Trustee with respect to the Liens securing the First Priority
Secured Obligations and the Second Priority Secured Obligations (as defined in
the Priority Intercreditor Agreement), including without limitation, to: (i)
execute and deliver any documents relating to the Lien securing such First
Priority Pari Passu Indebtedness, (ii) hold its Lien on the Collateral and (iii)
act as its agent in any enforcement action relating to the Collateral.
Acknowledgement of Liens
The Representative shall acknowledge the Liens on the Collateral
securing the First Priority Secured Obligations and the Second Priority Secured
Obligations and shall agree that it will not contest such Liens in any judicial
or other proceeding and the First Priority Trustee and the Trustee will
acknowledge the Liens on the Collateral securing such First Priority Pari Passu
Indebtedness and shall agree that each will not contest such Liens in any
judicial or other proceeding.
Enforcement; Cooperation
The Representative shall agree that it shall not take any action
directly or indirectly to enforce the Liens on the Collateral securing the First
Priority Pari Passu Indebtedness (including, without limitation, commencing or
joining with any creditor other than Collateral Agent or the First Priority
Trustee in any enforcement, collection, execution, levy or foreclosure
proceeding with respect to the Collateral) prior to the First Priority
Obligations being indefeasibly paid in full in cash and the First Priority
Indenture being discharged in accordance with its terms. The Representative
shall agree to cooperate in any such enforcement action brought by the First
Priority Trustee with respect to the Collateral. The amendment will also provide
that after the First Priority Secured Obligations have been indefeasibly paid in
full in cash and the First Priority Indenture has been discharged in accordance
with its terms, the Representative shall have the same control over enforcement
proceedings with respect to the Collateral securing such First Priority Pari
Passu Indebtedness with respect to the Trustee as the First Priority Trustee had
with respect to the Representative and the Trustee prior to such repayment of
the First Priority Secured Obligations. The Collateral Agent shall agree not to
follow any instruction from Representative that is inconsistent on its face with
the limitations on the Representative's powers provided in such amendment to the
Priority Intercreditor Agreement.
F-3-1
Liquidation; Dissolution; Bankruptcy
After the First Priority Obligations have been indefeasibly paid in
full in cash and the First Priority Indenture has been discharged in accordance
with its terms, the holders of First Priority Pari Passu Indebtedness on whose
behalf the Representative are acting shall have the same rights concerning the
matters set forth in the preceding sentence with respect to the Trustee as are
provided to the First Priority Trustee with respect to the Representative and
the Trustee prior to such repayment of the First Priority Secured Obligations.
The Representative shall agree not to contest the enforceability of the
provisions of the Priority Intercreditor Agreement in any bankruptcy or similar
proceeding.
Application of Proceeds of Shared Collateral
The Representative shall agree that any proceeds received from any
disposition of Collateral on which the holders of the First Priority Pari Passu
Indebtedness on whose behalf it is acting has a Lien shall be paid: first, to
the expenses of the Collateral Agent in connection with such disposition;
second, pro rata to the First Priority Trustee and the Representative for
payment of their respective expenses under the First Priority Indenture and the
instrument creating or evidencing the First Priority Pari Passu Indebtedness for
the holders of which the Representative is acting; third, pro rata to the First
Priority Trustee for payment of the First Priority Secured Obligations and the
Indebtedness held by the Representative; fourth, to the Trustee for payment of
the Second Priority Secured Obligations in accordance with the terms of the
Indenture; and fifth, to the Issuers, the Guarantors or any other party entitled
thereto.
Paying over of Proceeds
The Representative shall agree that in the event it forecloses upon or
receives any proceeds of Collateral prior to the First Priority Secured
Obligations being paid in full in cash, it shall turn such Collateral or
proceeds over to the Collateral Agent for application as provided in the
Priority Intercreditor Agreement. The Trustee shall agree that in the event it
forecloses upon or receives any proceeds of Collateral on which the holders of
First Priority Pari Passu Indebtedness have been granted a Lien prior to such
First Priority Pari Passu Indebtedness being paid in full in cash, it shall turn
such Collateral or proceeds over to the Collateral Agent for application as
provided in the Priority Intercreditor Agreement.
F-2-2
SCHEDULE 4.20(b)
RELATED TRANSACTIONS
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Affiliate party transactions are governed by the provisions of the
indentures governing the Notes, which generally require that such transactions
be on terms as favorable as would be obtainable from an unaffiliated party.
Transaction with ▇▇▇▇▇ Casinos II, Inc. Pursuant to the Castle Services
Agreement, TCI-II agreed to provide Marina Associates consulting services on a
non-exclusive basis, relating to marketing, advertising, promotional and other
services with respect to the business and operations of Marina Associates, in
exchange for certain fees to be paid in those years in which EBITDA exceeds
prescribed amounts, as discussed below. For purposes of calculating the fees
pursuant to the Castle Services Agreement, EBITDA represents income from
operations before depreciation, amortization, refinancing costs and the
non-cash write-downs of CRDA investments.
Under the Castle Services Agreement, Marina Associates was required to pay
TCI-II an annual fee of $1.5 million for each year in which EBITDA exceeded $50
million. If EBITDA in any fiscal year did not exceed such amount, no annual fee
was due. In addition to the annual fee, TCI-II was entitled to receive an
incentive fee in an amount equal to 10% of EBITDA in excess of $45.0 million
for such fiscal year. Pursuant to the Castle Services Agreement, ▇▇. ▇▇▇▇▇
earned approximately $2.3 million, $2.2 million and $3.5 million, based on
Marina Associates' EBITDA for the years ended December 31, 2000, 2001 and 2002,
respectively.
In connection with the offering, ▇▇. ▇▇▇▇▇ has caused TCI-II to agree to
terminate the Castle Services Agreement if the offering is consummated;
provided, however, that any incentive compensation earned under the Castle
Services Agreement in respect of 2002 but payable thereafter shall remain
payable.
Transaction with ▇▇▇▇▇ ▇▇▇ Majal Associates. In December 2000, ▇▇▇▇▇
Administration, a division of ▇▇▇▇▇ ▇▇▇ Majal Associates, assumed the rights
and responsibilities of ▇▇▇▇▇ Casino Services, LLC, or TCS, as a result of the
merger of TCS with and into ▇▇▇▇▇ ▇▇▇ Majal Associates. TCS was formed in June
1996 to provide managerial, financial, accounting, purchasing, legal and other
services necessary and incidental to the operations of each of the ▇▇▇▇▇ casino
properties pursuant to a Second Amended and Restated Services Agreement (or the
Administrative Services Agreement), dated as of January 1, 1998, by and among
TCS and each of (i) ▇▇▇▇▇ Plaza Associates, (ii) ▇▇▇▇▇ ▇▇▇ Majal Associates,
(iii) Marina Associates, and (iv) ▇▇▇▇▇ Indiana, Inc. The Administrative
Services Agreement requires ▇▇▇▇▇ Plaza Associates, ▇▇▇▇▇ ▇▇▇ Majal Associates,
Marina Associates and/or ▇▇▇▇▇ Indiana, Inc., as the case may be, to pay ▇▇▇▇▇
Administration on an allocated basis all of the costs and expenses incurred by
▇▇▇▇▇ Administration in providing such services, including without limitation,
all payroll and employee benefits and related costs associated with the
employees utilized by ▇▇▇▇▇ Administration in providing such services as well
as all overhead and other expenses incurred in the ordinary course of providing
the administrative services for the casinos. The term of the Administrative
Services Agreement is 10 years unless terminated earlier by any of the parties
upon 90 days prior written notice to each of the other parties. For the years
ended December 31, 2000, 2001 and 2002, Marina Associates and ▇▇▇▇▇ Indiana,
Inc. incurred fees and expenses of approximately $4.9 million, $3.5 million and
$3.4 million respectively, under the Administrative Services Agreement. The
indentures governing the Notes limit the total amounts payable by the Company
under the Administrative Services Agreement with respect to such administrative
services to $6.0 million per year.
Transaction with ▇▇▇▇▇ Marketing Services, LLC. On April 27, 2001, ▇▇▇▇▇
Indiana, Inc. entered into a Marketing Agreement with ▇▇▇▇▇ Marketing Services,
LLC, or ▇▇▇▇▇ Marketing, an entity wholly-owned by THCR Holdings. Pursuant to
the Marketing Agreement, ▇▇▇▇▇ Marketing agreed to (i) conduct and manage all
marketing and player development activities at ▇▇▇▇▇ Indiana; (ii) develop and
implement hotel sales and reservation systems; and (iii) develop and produce
live entertainment stage shows. In addition, ▇▇▇▇▇ Marketing granted to ▇▇▇▇▇
Indiana, Inc. a non-exclusive right and license to use the "▇▇▇▇▇" name in
connection with casino gaming and related activities conducted by ▇▇▇▇▇ Indiana,
Inc. in consideration for payment of an annual fee of $2 million. In
consideration of the services rendered by ▇▇▇▇▇ Marketing, ▇▇▇▇▇ Indiana is
required to pay an annual base fee of $2.5 million plus an annual incentive fee
equal to a percentage of gross operating profit (as defined in the Marketing
Agreement) of ▇▇▇▇▇ Indiana, Inc. in excess of a specified amount. ▇▇▇▇▇
Indiana, Inc. also agreed to reimburse for reasonable and sufficiently
documented expenses incurred by ▇▇▇▇▇ Marketing, its officers and employees
and/or agents in rendering services pursuant to the Marketing Agreement. For the
years ended December 31, 2000, 2001 and 2002, ▇▇▇▇▇ Marketing earned $4.7
million, $4.7 million and $6.1 million, respectively.
Prior to the closing of this offering and the concurrent private offering of
Second Priority Notes to an affiliate of ours, ▇▇▇▇▇ Marketing will assign all
of its rights under this Marketing Agreement to ▇▇▇▇▇ Casino Holdings, an
issuer of the Notes, effectively eliminating this expense on a consolidated
basis. The Marketing Agreement will be amended to extend the term to December
1, 2010 at the closing of this offering and the concurrent private offering of
Second Priority Notes to an affiliate of ours.
Intercompany Promissory Note. ▇▇▇▇▇ Indiana, Inc. issued a promissory note,
dated as of January 1, 1996 and amended and restated as of April 27, 2001, to
THCR Holdings in a principal amount up to $90 million in respect of investments
made in ▇▇▇▇▇ Indiana, Inc. Interest on the promissory note is payable
quarterly on the first day of March, June, September and December until
maturity at a rate of 15% per annum. THCR Holdings will contribute the
promissory note to ▇▇▇▇▇ Casino Holdings prior to the closing of this offering
and the concurrent private offering of Second Priority Notes to an affiliate of
ours, effectively eliminating this expense on a consolidated basis. The
promissory note will be amended to extend the maturity date to December 1, 2010
at the closing of this offering and the concurrent private offering of Second
Priority Notes to an affiliate of ours.
Indemnification Agreements. In March 2000, the Board of Directors of THCR
authorized and directed THCR to cause Marina Associates and ▇▇▇▇▇ Indiana, Inc.
to enter into indemnification agreements with each of the Directors of THCR in
connection with the performance of their duties as directors. In addition,
directors and officers of the Issuers and the Guarantors are entitled to
indemnification under their respective organizational documents.
Use of Proceeds. A portion of the net proceeds of this offering and the
concurrent private offering of Second Priority Notes to an affiliate of ours
will be distributed to THCR Holdings, an affiliate of the Company, and used to
retire debt of THCR Holdings, some of which debt ($1.7 million principal
amount) is owned by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
Second Priority Notes. In connection with the issuance of the Notes, ▇▇▇▇▇▇
▇. ▇▇▇▇▇, or one of his affiliates, will purchase, in a concurrent private
offering, $15.0 million aggregate principal amount of additional Second
Priority Notes at the same purchase price at which the Initial Purchasers are
purchasing the Second Priority Notes. A portion of the funds required by ▇▇.
▇▇▇▇▇ to purchase such Second Priority Notes may be obtained through a loan
from an affiliate of UBS Warburg LLC, one of the Initial Purchasers. In
connection with such purchase, we have agreed to provide the purchaser with
certain registration rights under the Securities Act.
Affiliates of certain of the Initial Purchasers may purchase all or a
portion of the Second Priority Notes offered hereby.