EXHIBIT 4.2
MAJESTIC INVESTOR HOLDINGS, LLC
MAJESTIC INVESTOR CAPITAL CORP.
as issuers
and the Subsidiary Guarantors referred to herein
11.653% Senior Secured Notes due 2007
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INDENTURE
Dated as of December 6, 2001
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THE BANK OF NEW YORK,
Trustee
TABLE OF CONTENTS
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ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE.............................................................1
SECTION 1.1 DEFINITIONS.....................................................................................1
SECTION 1.2 OTHER DEFINITIONS..............................................................................23
SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT..............................................24
SECTION 1.4 RULES OF CONSTRUCTION..........................................................................24
ARTICLE 2. THE NOTES.............................................................................................25
SECTION 2.1 FORM AND DATING................................................................................25
SECTION 2.2 EXECUTION AND AUTHENTICATION...................................................................25
SECTION 2.3 REGISTRAR, PAYING AGENT AND DEPOSITARY.........................................................26
SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST............................................................26
SECTION 2.5 HOLDER LISTS...................................................................................27
SECTION 2.6 TRANSFER AND EXCHANGE..........................................................................27
SECTION 2.7 REPLACEMENT NOTES..............................................................................31
SECTION 2.8 OUTSTANDING NOTES..............................................................................31
SECTION 2.9 TREASURY NOTES.................................................................................31
SECTION 2.10 TEMPORARY NOTES................................................................................32
SECTION 2.11 CANCELLATION...................................................................................32
SECTION 2.12 DEFAULTED INTEREST.............................................................................32
SECTION 2.13 LEGENDS........................................................................................33
SECTION 2.14 DEPOSIT OF MONEYS..............................................................................33
ARTICLE 3. REDEMPTION............................................................................................33
SECTION 3.1 NOTICES TO TRUSTEE.............................................................................33
SECTION 3.2 SELECTION OF NOTES TO BE REDEEMED..............................................................34
SECTION 3.3 NOTICE OF REDEMPTION...........................................................................34
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION.................................................................35
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE....................................................................35
SECTION 3.6 NOTES REDEEMED IN PART.........................................................................35
SECTION 3.7 OPTIONAL REDEMPTION............................................................................36
SECTION 3.8 REQUIRED REGULATORY REDEMPTION.................................................................36
SECTION 3.9 NO MANDATORY REDEMPTION........................................................................36
ARTICLE 4. COVENANTS.............................................................................................37
SECTION 4.1 PAYMENT OF NOTES...............................................................................37
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY................................................................37
SECTION 4.3 REPORTS........................................................................................37
SECTION 4.4 COMPLIANCE CERTIFICATE.........................................................................38
SECTION 4.5 TAXES..........................................................................................39
SECTION 4.6 STAY, EXTENSION AND USURY LAWS.................................................................39
SECTION 4.7 LIMITATION ON RESTRICTED PAYMENTS..............................................................39
SECTION 4.8 LIMITATION ON RESTRICTIONS ON SUBSIDIARY DIVIDENDS.............................................43
SECTION 4.9 LIMITATION ON INCURRENCE OF INDEBTEDNESS.......................................................44
SECTION 4.10 LIMITATION ON ASSET SALES......................................................................45
SECTION 4.11 LIMITATION ON TRANSACTIONS WITH AFFILIATES.....................................................47
SECTION 4.12 LIMITATION ON LIENS............................................................................48
SECTION 4.13 EXISTENCE......................................................................................48
SECTION 4.14 REPURCHASE UPON CHANGE OF CONTROL..............................................................49
SECTION 4.15 MAINTENANCE OF PROPERTIES......................................................................50
SECTION 4.16 MAINTENANCE OF INSURANCE.......................................................................51
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SECTION 4.17 RESTRICTIONS ON SALE AND ISSUANCE OF SUBSIDIARY STOCK..........................................51
SECTION 4.18 LINE OF BUSINESS...............................................................................51
SECTION 4.19 RESTRICTIONS ON ACTIVITIES OF CAPITAL..........................................................51
ARTICLE 5. SUCCESSORS............................................................................................51
SECTION 5.1 WHEN THE COMPANY MAY MERGE, ETC................................................................51
SECTION 5.2 SUCCESSOR SUBSTITUTED..........................................................................53
ARTICLE 6. DEFAULTS AND REMEDIES.................................................................................53
SECTION 6.1 EVENTS OF DEFAULT..............................................................................53
SECTION 6.2 ACCELERATION...................................................................................55
SECTION 6.3 OTHER REMEDIES.................................................................................55
SECTION 6.4 WAIVER OF PAST DEFAULTS........................................................................55
SECTION 6.5 CONTROL BY MAJORITY............................................................................56
SECTION 6.6 LIMITATION ON SUITS............................................................................56
SECTION 6.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT...........................................................56
SECTION 6.8 COLLECTION SUIT BY TRUSTEE.....................................................................57
SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM...............................................................57
SECTION 6.10 PRIORITIES.....................................................................................57
SECTION 6.11 UNDERTAKING FOR COSTS..........................................................................58
ARTICLE 7. TRUSTEE...............................................................................................58
SECTION 7.1 DUTIES OF TRUSTEE..............................................................................58
SECTION 7.2 RIGHTS OF TRUSTEE..............................................................................59
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE...................................................................60
SECTION 7.4 TRUSTEE'S DISCLAIMER...........................................................................61
SECTION 7.5 NOTICE OF DEFAULTS.............................................................................61
SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS..................................................................61
SECTION 7.7 COMPENSATION AND INDEMNITY.....................................................................62
SECTION 7.8 REPLACEMENT OF TRUSTEE.........................................................................63
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC...............................................................64
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION..................................................................64
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUERS..............................................64
ARTICLE 8. DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE...................................................65
SECTION 8.1 DISCHARGE; OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE............................65
SECTION 8.2 LEGAL DEFEASANCE AND DISCHARGE.................................................................65
SECTION 8.3 COVENANT DEFEASANCE............................................................................65
SECTION 8.4 CONDITIONS TO LEGAL DEFEASANCE OR COVENANT DEFEASANCE..........................................66
SECTION 8.5 DEPOSITED CASH AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST; OTHER
MISCELLANEOUS PROVISIONS.......................................................................67
SECTION 8.6 REPAYMENT TO THE ISSUERS.......................................................................67
SECTION 8.7 REINSTATEMENT..................................................................................68
ARTICLE 9. AMENDMENTS............................................................................................68
SECTION 9.1 WITHOUT CONSENT OF HOLDERS.....................................................................68
SECTION 9.2 WITH CONSENT OF HOLDERS........................................................................69
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT............................................................70
SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS..............................................................70
SECTION 9.5 NOTATION ON OR EXCHANGE OF NOTES...............................................................71
SECTION 9.6 TRUSTEE TO SIGN AMENDMENTS, ETC................................................................71
ARTICLE 10. COLLATERAL AND SECURITY AND GUARANTY.................................................................71
SECTION 10.1 COLLATERAL DOCUMENTS...........................................................................71
SECTION 10.2 ADDITIONAL COLLATERAL..........................................................................72
SECTION 10.3 OPINIONS.......................................................................................72
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SECTION 10.4 RELEASE OF COLLATERAL..........................................................................72
SECTION 10.5 CERTIFICATES OF THE ISSUERS....................................................................73
SECTION 10.6 AUTHORIZATION OF ACTIONS TO BE TAKEN BY THE TRUSTEE UNDER THE SECURITY DOCUMENTS...............73
SECTION 10.7 AUTHORIZATION OF RECEIPT OF FUNDS BY THE TRUSTEE UNDER THE SECURITY DOCUMENTS..................74
SECTION 10.8 SUBSIDIARY GUARANTEE...........................................................................74
SECTION 10.9 EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.................................................75
SECTION 10.10 LIMITATION ON SUBSIDIARY GUARANTOR'S LIABILITY.................................................76
SECTION 10.11 RIGHTS UNDER THE SUBSIDIARY GUARANTEE..........................................................76
SECTION 10.12 PRIMARY OBLIGATIONS............................................................................77
SECTION 10.13 GUARANTEE BY SUBSIDIARY........................................................................77
SECTION 10.14 RELEASE OF SUBSIDIARY GUARANTORS...............................................................78
SECTION 10.15 GAMING LAW AND LIQUOR LAW CONSIDERATIONS.......................................................78
ARTICLE 11. MISCELLANEOUS........................................................................................78
SECTION 11.1 TRUST INDENTURE ACT CONTROLS...................................................................78
SECTION 11.2 NOTICES........................................................................................78
SECTION 11.3 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS ...................................................80
SECTION 11.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.............................................80
SECTION 11.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION..................................................80
SECTION 11.6 RULES BY TRUSTEE AND AGENTS....................................................................80
SECTION 11.7 LEGAL HOLIDAYS.................................................................................81
SECTION 11.8 NO RECOURSE AGAINST OTHERS.....................................................................81
SECTION 11.9 GOVERNING LAW..................................................................................81
SECTION 11.10 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS..................................................82
SECTION 11.11 SUCCESSORS.....................................................................................82
SECTION 11.12 SEVERABILITY...................................................................................82
SECTION 11.13 COUNTERPART ORIGINALS..........................................................................82
SECTION 11.14 TABLE OF CONTENTS, HEADINGS, ETC...............................................................82
EXHIBIT A - FORM OF NOTE .......................................................................................A-1
EXHIBIT B - CERTIFICATE OF TRANSFEROR ..........................................................................B-1
EXHIBIT C - FORM OF GUARANTY....................................................................................C-1
EXHIBIT D - FORM OF INTERCREDITOR AGREEMENT.....................................................................D-1
EXHIBIT E - FORM OF SECURITY AGREEMENT..........................................................................E-1
EXHIBIT F - FORM OF COPYRIGHT SECURITY AGREEMENT................................................................F-1
EXHIBIT G - FORM OF TRADEMARK SECURITY AGREEMENT................................................................G-1
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INDENTURE, dated as of December 6, 2001, among Majestic Investor
Holdings, LLC, a Delaware limited liability company, Majestic Investor Capital
Corp., a Delaware corporation, the Subsidiary Guarantors (as defined) named
herein and The Bank of New York, a New York banking corporation, as trustee.
The Issuers (as defined) and the Trustee (as defined) agree as follows
for the benefit of each other and for the equal and ratable benefit of the
Holders (as defined) of the Issuers' 11.653% Senior Secured Notes due 2007.
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.1 Definitions.
"Acquired Debt" means Indebtedness of a Person existing at the time such
Person is merged with or into the Company or a Restricted Subsidiary or becomes
a Restricted Subsidiary, other than Indebtedness incurred in connection with, or
in contemplation of, such Person merging with or into the Company or a
Restricted Subsidiary or becoming a Restricted Subsidiary.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, means (a)
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise or (b) beneficial
ownership of 10% or more of the voting securities of such Person.
"Affiliate Transaction" means, with respect to any Person, (1) the sale,
lease, transfer or other disposition of any of such Person's properties or
assets to, or the purchaser of any property or assets from, any Affiliate, and
(2) the entering into by such Person, or the suffering to exist by such Person,
of any contract, agreement, understanding, loan, advance or guaranty with or for
the benefit of any Affiliate of such Person. Notwithstanding the foregoing,
payments to Majestic Star by the Company and its Restricted Subsidiaries of up
to an aggregate of $1,700,000 of Overhead Reimbursements required under the
Management Agreements in any one fiscal year shall not be deemed "Affiliate
Transactions"; provided, that (1) such transactions are conducted in good faith
and on terms that are no less favorable to the Company or the relevant
Restricted Subsidiary than those that would have been obtained in a comparable
transaction at such time by the Company or such Restricted Subsidiary on an
arm's-length basis from a Person that is not an Affiliate of the Company or such
Restricted Subsidiary and (2) the Company shall have delivered to the Trustee an
Officers' Certificate certifying to such effect once during each such fiscal
year; provided, further, that, notwithstanding clause (i)(b) of Section 4.11
hereof, the Company may deliver a single Officers' Certificate for all Overhead
Reimbursements required under the Management Agreements in any one single fiscal
year.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Capital Gain Tax Rate" means a rate equal to the sum of (i)
the highest marginal Federal capital gain tax rate applicable to an individual
who is a citizen of the United States plus (ii) an amount equal to the sum of
the highest marginal state and local capital gain tax rates applicable to an
individual who is a resident of the State of New York, multiplied by a factor
equal to 1 minus the rate described in clause (i) above.
"Applicable Income Tax Rate" means a rate equal to the sum of (i) the
highest marginal Federal income tax rate applicable to an individual who is a
citizen of the United States plus (ii) an amount equal to the sum of the highest
marginal state and local income tax rates applicable to an individual who is a
resident of the State of New York, multiplied by a factor equal to 1 minus the
rate described in clause (i) above.
"Asset Sale" means any (i) transfer (as defined), other than in the
ordinary course of business, of any assets of the Company or any Restricted
Subsidiary; (ii) direct or indirect issuance or sale of any Capital Stock of any
Restricted Subsidiary (other than directors' qualifying shares), in each case to
any Person; or (iii) Event of Loss. For purposes of this definition, (a) any
series of transactions that are part of a common plan shall be deemed a single
Asset Sale and (b) the term "Asset Sale" shall not include (1) any series of
transactions that have a fair market value (or result in gross proceeds) of less
than $1,000,000, until the aggregate fair market value and gross proceeds of the
transactions excluded from the definition of Asset Sale pursuant to this clause
(b)(1) exceed $5,000,000, (2) any disposition of all or substantially all of the
assets of the Company that is governed under and complies with the terms of
Article 5 hereof, (3) the conveyance, sale, transfer, assignment or other
disposition of inventory and other assets acquired and held for resale in the
ordinary course of business, in each case made in the ordinary course of
business, consistent with past practices of the Company and its Restricted
Subsidiaries, (4) the sale or disposition by the Company or any of its
Restricted Subsidiaries of damaged, worn out or other obsolete personal property
in the ordinary course of business so long as such property is no longer
necessary for the proper conduct of the Company's business or the business of
such Restricted Subsidiary, as applicable, and (5) the liquidation of Cash
Equivalents. A transfer of assets by the Company to a Wholly Owned Subsidiary or
by a Wholly Owned Subsidiary to the Company or another Wholly Owned Subsidiary,
and an issuance of Equity Interests by a Wholly Owned Subsidiary to the Company
or to another Wholly Owned Subsidiary, shall not be deemed to be an Asset Sale.
Any Investment that is not prohibited by Section 4.7 hereof will not be deemed
to be an Asset Sale.
"Bankruptcy Law" means title 11, U.S. Code or any similar Federal, state
or foreign law for the relief of debtors.
"BDI" means ▇▇▇▇▇▇ Development, Inc., an Indiana corporation.
"beneficial owner" has the meaning attributed to it in Rules 13d-3 and
13d-5 under the Exchange Act (as in effect on the Issue Date), whether or not
applicable.
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"Board of Directors" means the board of directors or any duly constituted
committee of any corporation or of a corporate general partner of a partnership
and any similar body empowered to direct the affairs of any other entity.
"Business Day" means any day other than a Legal Holiday.
"Capital" means Majestic Investor Capital Corp., a Delaware corporation
and a wholly owned subsidiary of the Company, until a successor replaces such
Person in accordance with the terms of this Indenture, and thereafter means such
successor.
"Capital Contribution" means any contribution to the equity of the
Company from a direct or indirect parent of the Company for which no
consideration other than the issuance of Qualified Capital Stock is given.
"Capital Lease Obligation" means, as to any Person, the obligations of
such Person under a lease that are required to be classified and accounted for
as capital lease obligations under GAAP, and the amount of such obligations at
any date shall be the capitalized amount of such obligations at such date,
determined in accordance with GAAP.
"Capital Stock" means, (i) with respect to any Person that is a
corporation, any and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock, (ii) with respect to a
limited liability company, any and all membership interests, and (iii) with
respect to any other Person, any and all partnership, joint venture or other
equity interests of such Person.
"Cash Equivalent" means (i) any evidence of Indebtedness issued or
directly and fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States of America is pledged in support thereof); (ii) time deposits
and certificates of deposit and commercial paper or bankers acceptance issued by
the parent corporation of any domestic commercial bank of recognized standing
having combined capital and surplus in excess of $250,000,000 and commercial
paper issued by others rated at least A-2 or the equivalent thereof by Standard
& Poor's Corporation or at least P-2 or the equivalent thereof by ▇▇▇▇▇'▇
Investors Service, Inc. and in each case maturing within one year after the date
of acquisition; (iii) investments in money market funds substantially all of
whose assets comprise securities of the type described in clauses (i) and (ii)
above and (iv) repurchase obligations for underlying securities of the types and
with the maturities described above.
"Casino" means a gaming establishment owned by the Company or a
Restricted Subsidiary and containing at least 400 gaming devices and 10,000
square feet of space dedicated to the operation of games of chance.
"Change of Control" means
(i) any merger or consolidation of the Company with or into any
Person or any sale, transfer or other conveyance, whether direct or indirect, of
all or substantially all of the assets of the Company, on a consolidated basis,
in one transaction or a series of related transactions, if, immediately after
giving effect to such transaction(s), any "person" or "group"
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(as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange
Act, whether or not applicable) (other than an Excluded Person) is or becomes
the "beneficial owner," directly or indirectly, of more than 50% of the total
voting power in the aggregate of the Voting Stock of the transferee(s) or
surviving entity or entities,
(ii) any "person" or "group" (as such terms are used for purposes
of Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable)
(other than an Excluded Person) is or becomes the "beneficial owner," directly
or indirectly, of more than 50% of the total voting power in the aggregate of
the Voting Stock of the Company,
(iii) during any period of 12 consecutive months after the Issue
Date, individuals who at the beginning of any such 12-month period constituted
the Managers of the Company (together with any new directors whose election by
such Managers or whose nomination for election by the members of the Company was
approved by a vote of a majority of the directors then still in office who were
either directors at the beginning of such period or whose election or nomination
for election was previously so approved, including new directors designated in
or provided for in an agreement regarding the merger, consolidation or sale,
transfer or other conveyance, of all or substantially all of the assets of the
Company, if such agreement was approved by a vote of such majority of directors)
cease for any reason to constitute a majority of the Managers of the Company
then in office,
(iv) the Company adopts a plan of liquidation, or
(v) the first day on which the Company fails to own 100% of the
issued and outstanding Equity Interests of Capital.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means any assets of the Issuers or any Subsidiary defined as
"Collateral" in any of the Security Documents and assets from time to time on
which a Lien exists as security for any of the Obligations hereunder or under
the Notes, the Security Documents or the Registration Rights Agreement;
provided, that in no event shall Collateral include Excluded Assets.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the TIA, then the body performing such duties at
such time.
"Company" means Majestic Investor Holdings, LLC, a Delaware limited
liability company, until a successor replaces such Person in accordance with the
terms of this Indenture, and thereafter means such successor.
"Company Order" means a written request or order signed in the name of
each of the Issuers by the Chairman, President or Senior Vice President of each
of the Company and Capital, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of each and delivered to the Trustee.
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"Consolidated Cash Flow" means, with respect to any Person (the referent
Person) for any period,
(a) consolidated income (loss) from operations of such Person and its
subsidiaries for such period, determined in accordance with GAAP,
plus
(b) to the extent such amounts are deducted in calculating such income
(loss) from operations of such Person for such period, and without
duplication (i) amortization, depreciation and other non-cash
charges (including, without limitation, amortization of goodwill,
deferred financing fees, and other intangibles but excluding (x)
non-cash charges incurred after the Issue Date that require an
accrual of or a reserve for cash charges for any future period and
(y) normally recurring accruals such as reserves against accounts
receivables), (ii) provision for taxes based on income or profits
of such Person and its subsidiaries and Permitted Tax
Distributions, and (iii) Pre-Opening Expenses;
provided, that (1) the income from operations of any Person that is not a Wholly
Owned Subsidiary of the referent Person or that is accounted for by the equity
method of accounting will be included only to the extent of the amount of
dividends or distributions paid during such period to the referent Person or a
Wholly Owned Subsidiary of the referent Person, (2) the income from operations
of any Person acquired in a pooling of interests transaction for any period
prior to the date of such acquisition will be excluded, and (3) the income from
operations of any Restricted Subsidiary will not be included to the extent that
declarations of dividends or similar distributions by that Restricted Subsidiary
are not at the time permitted, directly or indirectly, by operation of the terms
of its organizational documents or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that Restricted
Subsidiary or its owners.
"Consolidated Interest Expense" means, with respect to any Person for any
period, (a) the consolidated interest expense of such Person and its
subsidiaries for such period, whether paid or accrued (including amortization of
original issue discount, noncash interest payment, and the interest component of
Capital Lease Obligations), to the extent such expense was deducted in computing
Consolidated Net Income of such Person for such period less (b) write-off of
deferred financing costs, the amortization of original issue discount for
Indebtedness in existence on the Issue Date, and any charge related to any
premium or penalty paid, in each case accrued during such period in connection
with redeeming or retiring any Indebtedness before its stated maturity, as
determined in accordance with GAAP, to the extent such expense, cost or charge
was included in the calculation made pursuant to clause (a) above.
"Consolidated Net Income" means, with respect to any Person (the referent
Person) for any period, the aggregate of the Net Income of such Person and its
subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP; provided, that (i) the Net Income of any Person relating to any
portion of such period that such Person (a) is not a Wholly Owned Subsidiary of
the referent Person or (b) is accounted for by the equity method of accounting
will be included only to the extent of the amount of dividends or distributions
paid to the referent Person or a Wholly Owned Subsidiary of the referent Person
during such portion of
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such period, (ii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition will
be excluded, (iii) the Net Income of any Restricted Subsidiary will not be
included to the extent that declarations of dividends or similar distributions
by that Restricted Subsidiary are not at the time permitted, directly or
indirectly, by operation of the terms of its organizational documents or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its owners, and (iv)
solely for the avoidance of doubt, any Returns from Unrestricted Subsidiaries.
"Consolidated Net Worth" means, with respect to any Person, the total
stockholders' (or members') equity of such Person determined on a consolidated
basis in accordance with GAAP, adjusted to exclude (to the extent included in
calculating such equity), (i) the amount of any such stockholders' (or members')
equity attributable to Disqualified Capital Stock or treasury stock of such
Person and its consolidated subsidiaries, (ii) all upward revaluations and other
write-ups in the book value of any asset of such Person or a consolidated
subsidiary of such Person subsequent to the Issue Date, and (iii) all
Investments in subsidiaries of such Person that are not consolidated
subsidiaries and in Persons that are not subsidiaries of such Person.
"Copyright Security Agreement" means that certain Copyright Security
Agreement, dated as of the Issue Date, by and among the Issuers, the Subsidiary
Guarantors and the Trustee, substantially in the form of Exhibit F hereto.
"Corporate Trust Office" shall be at the address of the Trustee specified
in Section 11.2 or such other address as the Trustee may specify by notice to
the Issuers.
"Credit Facility" means (a) the credit facility, dated as of the Issue
Date, between the Company and Foothill Capital Corporation (any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith) and (b) any amendment, modification, supplement,
refunding, refinancing or replacement thereof that has terms and conditions
(including with respect to applicable interest rates and fees) customary for
similar facilities extended to borrowers comparable to the Company, in each
case, that does not permit the Company and its Restricted Subsidiaries to incur
Indebtedness in an aggregate principal amount at any time outstanding in excess
of $15,000,000.
"Custodian" means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.
"Default" means any event that is, or after notice or the passage of time
or both would be, an Event of Default.
"Depositary" means the Person specified in Section 2.3 hereof as the
Depositary with respect to the Notes issuable in global form, until a successor
shall have been appointed and become such pursuant to the applicable provision
of this Indenture, and, thereafter, "Depositary" shall mean or include such
successor.
"Disqualified Capital Stock" means any Equity Interest that (i) either by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable) is or
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upon the happening of an event would be required to be redeemed or repurchased
prior to the final stated maturity of the Notes or is redeemable at the option
of the holder thereof at any time prior to such final stated maturity, or (ii)
is convertible into or exchangeable at the option of the issuer thereof or any
other Person for debt securities.
"DTC" means The Depository Trust Company.
"Equity Holder" means (a) with respect to a corporation, each holder of
stock of such corporation, (b) with respect to a limited liability company or
similar entity, each member of such limited liability company or similar entity
(in each case, which is not disregarded for Federal income tax purposes), (c)
with respect to a partnership, each partner of such partnership and (d) with
respect to any entity that is disregarded for Federal income tax purposes, the
owner of such entity.
"Equity Interests" means Capital Stock or warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or the rules and regulations promulgated thereunder.
"Event of Loss" means, with respect to any property or asset, any (i)
loss, destruction or damage of such property or asset or (ii) any condemnation,
seizure or taking, by exercise of the power of eminent domain or otherwise, of
such property or asset, or confiscation or requisition of the use of such
property or asset.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the offer that may be made by the Issuers pursuant
to the Registration Rights Agreement to exchange Series B Notes for Series A
Notes.
"Excluded Assets" means (i) cash and cash equivalents to the extent a
Lien thereon may not be perfected through the filing of a UCC-1 financing
statement or through the obtaining of "control" (as defined in the Uniform
Commercial Code); (ii) assets securing Purchase Money Obligations or Capital
Lease Obligations permitted to be incurred pursuant to clause (e) of the second
paragraph of Section 4.9 hereof; (iii) all Gaming Licenses and any license,
contract or agreement to which such debtor is a party, to the extent, but only
to the extent, that a grant of a Lien on such license (other than any Gaming
License or license issued under any Liquor Laws), contract or agreement is
prohibited by law, results in a breach or termination of the terms of, or
constitutes a default under or termination of any such license, contract or
agreement (other than to the extent that any such term would be rendered
ineffective pursuant to Section 9-406, 9-407 or 9-408 of the Uniform Commercial
Code (or any successor provision or provisions) of any relevant jurisdiction)
and, in any event, immediately upon the ineffectiveness, lapse or termination of
any such terms of or default under such license, contract or agreement, the
Excluded Assets shall not include, and such debtor shall be deemed to have
granted a security interest in, all such licenses, contracts or agreements as if
such terms or defaults had never been in effect and (iv) the Nevada Leasehold
Interests; provided, that Excluded Assets does not include the proceeds of the
assets under clauses (ii) or (iii) or of any
7
other Collateral to the extent such proceeds do not constitute Excluded Assets
under clause (i) above; without limiting the foregoing, Excluded Assets shall
include gaming equipment subject to such Purchase Money Obligations or Capital
Lease Obligations.
"Excluded Person" means (i) any employee benefit plan of the Company or
any trustee or similar fiduciary holding Capital Stock of the Company for or
pursuant to the terms of any such plan, (ii) BDI, so long as it is controlled by
▇▇▇ ▇. ▇▇▇▇▇▇ or his spouse or an entity controlled by either of them, (iii)
▇▇▇▇▇▇ Management, Inc., so long as it is owned by ▇▇▇ ▇. ▇▇▇▇▇▇, (iv) ▇▇▇ ▇.
▇▇▇▇▇▇ or his spouse or an entity controlled by either of them, (v) the estate
of ▇▇▇ ▇. ▇▇▇▇▇▇, (vi) any descendant of ▇▇▇ ▇. ▇▇▇▇▇▇ or the spouse of any such
descendant, (vii) the estate of any such descendant or the spouse of any such
descendant, (viii) any trust or other arrangement for the benefit of the spouse
of ▇▇▇ ▇. ▇▇▇▇▇▇ or any such descendant or the spouse of any such descendant,
(ix) any charitable organization or trust established by ▇▇▇ ▇. ▇▇▇▇▇▇, (x) The
Majestic Star Casino, LLC, an Indiana limited liability company, as long as it
is controlled by ▇▇▇ ▇. ▇▇▇▇▇▇ or his spouse or an entity controlled by either
of them and (xi) Majestic Investor, LLC, a Delaware limited liability company,
as long as it is controlled by ▇▇▇ ▇. ▇▇▇▇▇▇ or his spouse or an entity
controlled by either of them.
"FF&E" means furniture, fixture and equipment acquired by the Company or
a Restricted Subsidiary in the ordinary course of business for use in the
operation of a Casino.
"FF&E Financing" means Purchase Money Obligations, Capital Lease
Obligations, or Industrial Revenue Bond Obligations incurred solely to acquire
or lease, respectively, FF&E; provided, that the principal amount of such
Indebtedness does not exceed the cost (including sales and excise taxes,
installation and delivery charges and other direct costs and expenses) of the
FF&E purchased or leased with the proceeds thereof.
"FF&E Lender" means a Person that is not an Affiliate of the Company and
is a lender under FF&E Financing.
"Flow Through Entity" means an entity that (a) for Federal income tax
purposes constitutes (i) an "S corporation" (as defined in Section 1361(a) of
the Code), (ii) a "qualified subchapter S subsidiary" (as defined in Section
1361(b)(3)(B) of the Code), (iii) a "partnership" (within the meaning of Section
7701(a)(2) of the Code) other than a "publicly traded partnership" (as defined
in Section 7704 of the Code), (iv) a business entity that is disregarded as an
entity separate from its owner under the Code, the Treasury Regulations or any
published administrative guidance of the Internal Revenue Service, or (v) any
other substantially similar pass-through entity for Federal income tax purposes
(each of the entities described in the immediately preceding clauses (i), (ii),
(iii), (iv) and (v), a "Federal Flow Through Entity") and (b) for state and
local jurisdictions in respect of which Permitted Tax Distributions are being
made, is subject to treatment on a basis under applicable state or local income
tax law substantially similar to a Federal Flow Through Entity.
"gaap" means generally accepted accounting principles, as in effect from
time to time, set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as
8
approved by a significant segment of the accounting profession, and in the rules
and regulations of the Commission.
"GAAP" means gaap as in effect from time to time.
"Gaming Authorities" means the Nevada Gaming Control Board, the Nevada
Gaming Commission, the Mississippi Gaming Commission, the Colorado Gaming
Commission, and any agency, authority, board, bureau, commission, department,
office or instrumentality of any nature whatsoever of the United States or
foreign government, any state, province or any city or other political
subdivision, whether now or hereafter existing, or any officer or official
thereof, including, without limitation, any other agency with authority to
regulate any gaming operation (or proposed gaming operation) owned, managed or
operated by the Company or any of its Subsidiaries.
"Gaming Laws" means the rules and regulations of the Gaming Authorities.
"Gaming Licenses" means every finding of suitability, registration,
license, franchise or other finding of suitability, registration, approval or
authorization required to own, lease, operate or otherwise conduct or manage
riverboat, dockside or land-based gaming activities in any state or jurisdiction
in which the Company or any of its Subsidiaries conducts business and all
applicable liquor licenses.
"Government Securities" means (i) direct obligations of the United States
of America for the timely payment of which its full faith and credit is pledged
or (ii) obligations of a Person controlled or supervised by and acting as an
agency or instrumentality of the United States of America the timely payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America, which, in either case, are not callable or redeemable
at the option of the issuer thereof, and shall also include a depository receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as
custodian with respect to any such Government Security or a specific payment of
principal of or interest on any such Government Security held by such custodian
for the account of the holder of such depository receipt; provided, that (except
as required by law) such custodian is not authorized to make any deduction from
the amount payable to the holder of such depository receipt from any amount
received by the custodian in respect of the Government Security or the specific
payment of principal of or interest on the Government Security evidenced by such
depository receipt.
"Governmental Authority" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States of America or foreign government, any state, province or any
city or other political subdivision or otherwise and whether now or hereafter in
existence, or any officer or official thereof, and any maritime authority.
"guaranty" or "guarantee," used as a noun, means any guaranty (other than
by endorsement of negotiable instruments for collection in the ordinary course
of business), direct or indirect, in any manner (including, without limitation,
letters of credit and reimbursement agreements in respect thereof), of all or
any part of any Indebtedness or other Obligation. "guarantee," used as a verb,
has a correlative meaning.
9
"Hedging Obligations" means, with respect to any Person, the Obligations
of such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements and (ii) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates.
"Holder" means the Person in whose name a Note is registered in the
register of the Notes.
"Indebtedness" of any Person means (without duplication) (i) all
liabilities and obligations, contingent or otherwise, of such Person (A) in
respect of borrowed money (regardless of whether the recourse of the lender is
to the whole of the assets of such Person or only to a portion thereof), (B)
evidenced by bonds, debentures, notes or other similar instruments, (C)
representing the deferred purchase price of property or services (other than
trade payables on customary terms incurred in the ordinary course of business),
(D) created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), (E) representing
Capital Lease Obligations, (F) under bankers' acceptance and letter of credit
facilities, (G) to purchase, redeem, retire, defease or otherwise acquire for
value any Disqualified Capital Stock, or (H) in respect of Hedging Obligations;
(ii) all Indebtedness of others that is guaranteed by such Person; and (iii) all
Indebtedness of others that is secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness; provided, that the amount of such
Indebtedness shall (to the extent such Person has not assumed or become liable
for the payment of such Indebtedness) be the lesser of (x) the fair market value
of such property at the time of determination and (y) the amount of such
Indebtedness. The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date.
Notwithstanding the foregoing, the term Indebtedness shall not include
obligations arising from the honoring by a bank or other financial institution
of a check, draft or similar instrument drawn against insufficient funds in the
ordinary course of business; provided, that such obligation is extinguished
within two business days of its incurrence. The principal amount outstanding of
any Indebtedness issued with original issue discount is the accreted value of
such Indebtedness.
"Indenture" means this Indenture as amended or supplemented from time to
time.
"Industrial Revenue Bond Obligations" means obligations of the Company or
any of its Restricted Subsidiaries in connection with industrial revenue bonds
issued by the Mississippi Business Finance Corporation ("MBFC"), all of the
proceeds of which are loaned by the MBFC to the Company or its Restricted
Subsidiaries for the acquisition, construction or development of hotels or other
improvements at the Company's or its Restricted Subsidiaries' Casino located in
Tunica, Mississippi.
"Initial Purchaser" means ▇▇▇▇▇▇▇▇▇ & Company, Inc.
10
"Intercreditor Agreement" means that certain Intercreditor Agreement
among the Trustee and one or more Lenders, substantially in the form attached
hereto as Exhibit D, which may be entered into after the Issue Date in
accordance with Section 7.1(7) hereof, including any amended or supplemented
agreement or any replacement or substitute agreement, in each case substantially
in the form of Exhibit D attached hereto.
"Interest Coverage Ratio" means, for any period, the ratio of (i)
Consolidated Cash Flow of the Company for such period, to (ii) Consolidated
Interest Expense of the Company for such period. In calculating the Interest
Coverage Ratio for any period, pro forma effect shall be given to the
incurrence, assumption, guarantee, repayment, repurchase, redemption or
retirement by the Company or any of its Subsidiaries of any Indebtedness
subsequent to the commencement of the period for which the Interest Coverage
Ratio is being calculated, as if the same had occurred at the beginning of the
applicable period. For purposes of making the computation referred to above,
acquisitions that have been made by the Company or any of its Restricted
Subsidiaries, including all mergers and consolidations, subsequent to the
commencement of such period shall be calculated on a pro forma basis, assuming
that all such acquisitions, mergers and consolidations had occurred on the first
day of such period. Without limiting the foregoing, the financial information of
the Company with respect to any portion of such period that falls before the
Issue Date shall be adjusted to give pro forma effect to the issuance of the
Notes and the application of the proceeds therefrom as if they had occurred at
the beginning of such period.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of loans, guarantees
and other forms of direct and indirect credit support, advances or capital
contributions (excluding (i) payroll commission, travel and similar advances to
officers and employees of such Person made in the ordinary course of business
and (ii) bona fide accounts receivable arising from the sale of goods or
services in the ordinary course of business consistent with past practice),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, and any other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
"Investor" means Majestic Investor, LLC, a Delaware limited liability
company.
"Investor Pledge Agreement" means that certain Pledge Agreement executed
by Investor, providing for a pledge of the entire membership interest in the
Company held by it in favor of the Trustee, for the ratable benefit of the
Holders of the Notes, as the same may be amended in accordance with the terms
thereof and this Indenture.
"Issue Date" means the date upon which the Notes are first issued.
"Issuers" means Capital and the Company.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in The City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed.
11
"Lender" means a Person that is not an Affiliate of the Company and is a
lender under the Credit Facility.
"Lien" means any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind, regardless of whether filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or other
agreement to sell or give a security interest in and any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction).
"Liquidated Damages" means liquidated damages payable under the
Registration Rights Agreement.
"Liquor Authorities" means the Mississippi Alcoholic Beverage Control
Division of the Mississippi State Tax Commission, and any agency, authority,
board, bureau, commission, department, office or instrumentality of any nature
whatsoever of the United States or foreign government, any state, province or
any city or other political subdivision, whether now or hereafter existing, or
any officer or official thereof, including without limitation, any other agency
with authority to regulate the sale or distribution of alcoholic beverages by
the Company or any of its Subsidiaries.
"Liquor Laws" means the statutes regarding the sale and distribution of
alcoholic beverages enforced by the Liquor Authorities and the rules and
regulations of the Liquor Authorities.
"Majestic Investor" means Majestic Investor, LLC, a Delaware limited
liability company.
"Majestic Star" means The Majestic Star Casino, LLC, an Indiana limited
liability company.
"Management Agreements" means, collectively, (1) that certain Management
Agreement, dated as of September 19, 2001, and amended and restated as of
December 6, 2001, by and between the Company and BDI, pursuant to which the
Company will pay to BDI fees (the "Management Fees") for acting as the Manager
of the Company, which Management Fees, for any fiscal quarter, shall not exceed
1% of net revenues (such Management Fees, the "Revenue-Based Management Fees")
plus 5% of Consolidated Cash Flow (such Management Fees, the "Cash Flow-Based
Management Fees") for the immediately preceding fiscal quarter; provided that
the payment of such Management Fees shall be subordinated to the payment in full
of principal, interest, premium and Liquidated Damages, if any, then due on the
Notes, and (2) that certain Expense Reimbursement/Sharing Agreement, dated as of
October 22, 2001, by and between the Company and Majestic Star, pursuant to
which the Company and its Restricted Subsidiaries will each reimburse (such
reimbursements, "Overhead Reimbursements") Majestic Star for a specified
percentage of the documented out-of-pocket expenses paid by Majestic Star for
the Company's corporate overhead, including (i) the costs and expenses of
executives and certain other employees, including, but not limited to, salaries,
bonuses, benefit payments, insurance, and supplies, (ii) rent and (iii) other
similar costs and expenses.
12
"Managers" means (i) for so long as the Company is a limited liability
company, the Managers appointed pursuant to the Operating Agreement or (ii)
otherwise, the Board of Directors of the Company.
"Member Agreement" means the Member Agreement, dated as of the Issue
Date, by and among the Company, Majestic Investor, Majestic Star and BDI.
"Net Cash Proceeds" means the aggregate amount of cash or Cash
Equivalents received by the Company in the case of a sale, or Capital
Contribution in respect, of Qualified Capital Stock upon any exercise, exchange
or conversion of securities (including options, warrants, rights and convertible
or exchangeable debt) of the Company that were issued for cash or Cash
Equivalents on or after the Issue Date, the amount of cash or Cash Equivalents
originally received by the Company upon the issuance of such securities
(including options, warrants, rights and convertible or exchangeable debt) less,
in each case, the sum of all payments, fees, commissions and expenses
(including, without limitation, the fees and expenses of legal counsel and
investment banking fees and expenses) incurred in connection with such sale of
Qualified Capital Stock or Capital Contribution.
"Net Income" means, with respect to any Person for any period, the net
income (loss) of such Person for such period, determined in accordance with
GAAP, reduced by the maximum amount of Permitted Tax Distributions for such
period, excluding (to the extent included in calculating such net income) (i)
any gain or loss, together with any related taxes paid or accrued on such gain
or loss, realized in connection with any Asset Sales and dispositions pursuant
to sale-leaseback transactions, and (ii) any extraordinary gain or loss,
together with any related taxes paid or accrued on such gain or loss.
"Net Proceeds" means the aggregate proceeds received in the form of cash
or Cash Equivalents in respect of any Asset Sale (other than an Event of Loss)
(including payments in respect of deferred payment obligations and any cash or
Cash Equivalents received upon the sale or disposition of any non-cash
consideration received in any Asset Sale, in each case when received and the net
proceeds received in the form of cash or Cash Equivalents in respect of any
Event of Loss (including insurance or other payments)), net of
(i) the reasonable and customary direct out-of-pocket costs relating
to such Asset Sale (including, without limitation, legal,
accounting and investment banking fees and sales commissions),
other than any such costs payable to an Affiliate of the Company,
(ii) taxes required to be paid by the Company or any of its
Subsidiaries in connection with such Asset Sale in the taxable
year that such sale is consummated or in the immediately
succeeding taxable year or any Permitted Tax Distributions during
the taxable year within which such Asset Sale is consummated or in
the immediately succeeding taxable year that would not otherwise
be permitted to be distributed but for such Asset Sale,
13
(iii) amounts required to be applied to the permanent repayment of
Purchase Money Obligations and Capital Lease Obligations in
connection with such Asset Sale, and
(iv) appropriate amounts provided as a reserve by the Company or any
Restricted Subsidiary, in accordance with GAAP, against any
liabilities associated with such Asset Sale and retained by the
Company or such Restricted Subsidiary, as the case may be, after
such Asset Sale (including, without limitation, as applicable,
pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any
indemnification arising from such Asset Sale).
"Nevada Leasehold Interest" means the leasehold interests of ▇▇▇▇▇▇
Nevada Gaming, LLC (as successor to Fitzgeralds Las Vegas, Inc.) as tenant,
under the following leases: (i) Lease, dated March 4, 1976, between ▇.▇. ▇▇▇,
▇▇., as Trustee and Nevada Building Company, as heretofor signed and amended;
and (ii) Lease Agreement, dated September 1, 1978, between Jewel French ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ and M.B.
Dalitz, as heretofor signed and amended.
"Notes" means, collectively, the Series A Notes and the Series B Notes.
"Obligation" means any principal, premium, interest, penalty, fee,
indemnification, reimbursement, damage and other obligation and liability
payable under the documentation governing any liability.
"Officers" means the Chairman of the Board, the President, the Chief
Operating and Financial Officer, the Treasurer, any Assistant Treasurer,
Controller, Secretary, any Assistant Secretary or any Senior Vice President of
the Issuers.
"Officers' Certificate" means a certificate signed on behalf of the
Issuers by two Officers of each of the Company and Capital, in each case, one of
whom must be the President, Chief Operating and Financial Officer, Treasurer,
Controller or a Senior Vice President.
"Operating Agreement" means the Limited Liability Company agreement of
the Company, as amended from time to time.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee. Such counsel may be an employee of or
counsel to the Company or any Subsidiary of the Company.
"Permitted Investments" means:
(i) Investments in the Company or in any Wholly Owned Subsidiary;
(ii) Investments in Cash Equivalents;
(iii) Investments in a Person, if, as a result of such Investment, such
Person (A) becomes a Wholly Owned Subsidiary, or (B) is merged,
consolidated
14
or amalgamated with or into, or transfers or conveys substantially all of
its assets to, or is liquidated into, the Company or a Wholly Owned
Subsidiary;
(iv) Hedging Obligations;
(v) Investments as a result of consideration received in connection
with an Asset Sale made in compliance with Section 4.10 hereof;
(vi) Investments existing on the Issue Date;
(vii) Investments paid for solely with Capital Stock (other than
Disqualified Capital Stock) of the Company;
(viii) credit extensions to gaming customers in the ordinary course of
business, consistent with industry practice;
(ix) stock, obligations or securities received in settlement of debts
created in the ordinary course of business and owing to the
Company in satisfaction of judgments; and
(x) loans or advances to Affiliates or to employees of the Company and
its Restricted Subsidiaries in an aggregate amount not to exceed
$1,000,000 at any one time outstanding pursuant to this clause
(x).
"Permitted Liens" means:
(i) Liens arising by reason of any judgment, decree or order of any
court for an amount and for a period not resulting in an Event of
Default with respect thereto, so long as such Lien is being
contested in good faith and is adequately bonded, and any
appropriate legal proceedings that may have been duly initiated
for the review of such judgment, decree or order shall not have
been finally adversely terminated or the period within which such
proceedings may be initiated shall not have expired;
(ii) security for the performance of bids, tenders, trade, contracts
(other than contracts for the payment of money) or leases, surety
bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business, consistent with
industry practice;
(iii) Liens (other than Liens arising under ERISA) for taxes,
assessments or other governmental charges not yet due or that are
being contested in good faith and by appropriate proceedings if
adequate reserves with respect thereto are maintained on the books
of the Company in accordance with gaap;
(iv) Liens of carriers, warehousemen, mechanics, landlords, material
men, repairmen or other like Liens arising by operation of law in
the ordinary
15
course of business consistent with industry practices (other than
Liens arising under ERISA) and Liens on deposits made to obtain
the release of such Liens if (a) the underlying obligations are
not overdue for a period of more than 30 days or (b) such Liens
are being contested in good faith and by appropriate proceedings
and adequate reserves with respect thereto are maintained on the
books of the Company in accordance with gaap;
(v) easements, rights of way, zoning and similar restrictions,
covenants, conditions and restrictions and other encumbrances or
title defects incurred in the ordinary course of business,
consistent with industry practices that do not in any case
materially detract from the value of the property subject thereto
(as such property is used by the Company or a Subsidiary) or
interfere with the ordinary conduct of the business of the Company
or any of its Subsidiaries; provided, that such Liens are not
incurred in connection with any borrowing of money or any
commitment to loan any money or to extend any credit;
(vi) pledges or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and
other types of social security legislation;
(vii) Liens securing Refinancing Indebtedness incurred in compliance
with this Indenture to refinance Indebtedness secured by Liens,
provided, (a) such Liens do not extend to any additional property
or assets; (b) if the Liens securing the Indebtedness being
refinanced were subordinated to or pari passu with the Liens
securing the Notes or any intercompany loan, as applicable, such
new Liens are subordinated to or pari passu with such Liens to the
same extent, and any related subordination or intercreditor
agreement is confirmed; and (c) such Liens are no more adverse to
the interests of Holders than the Liens replaced or extended
thereby;
(viii) Liens that secure Acquired Debt; provided, that such Liens do not
extend to or cover any property or assets other than those of the
Person being acquired and were not put in place in anticipation of
such acquisition;
(ix) Liens that secure Purchase Money Obligations or Capital Lease
Obligations permitted to be incurred pursuant to clause (e) of the
second paragraph of Section 4.9 hereof; provided, that such Liens
do not extend to or cover any property or assets other than those
being acquired or developed;
(x) those matters shown as exceptions to title on the title policies,
dated as of the Issue Date, and issued by Fidelity National Title
Insurance Company for the benefit of the Trustee;
(xi) Liens securing Obligations under this Indenture, the Notes or the
Security Documents;
16
(xii) Liens on assets of the Company and the Subsidiaries, and the
proceeds of any or all the foregoing, securing Indebtedness
incurred pursuant to clause (a) of Section 4.9 hereof;
(xiii) with respect to any vessel included in the Collateral, certain
maritime liens, including liens for crew's wages and salvage;
(xiv) leases or subleases granted in the ordinary course of business not
materially interfering with the conduct of the business of the
Company or any of its Restricted Subsidiaries;
(xv) Liens arising from precautionary Uniform Commercial Code financing
statement filings regarding operating leases entered into by the
Company or any of its Subsidiaries in the ordinary course of
business; and
(xvi) the rights of the lessors under ground leases, as in effect on the
Issue Date, relating to real property in Las Vegas, Nevada, leased
by the Company or its Restricted Subsidiaries on the Issue Date.
"Permitted Tax Distributions" in respect of the Company and each
Subsidiary that qualifies as a Flow Through Entity shall mean, with respect to
any taxable year, the sum of:
(a) the product of (i) the excess of (A) all items of taxable income or
gain (other than capital gain) of the Company that is allocated (or
otherwise flows through) to Equity Holders (or the Upper Tier Equity
Holders, as the case may be) for such year over (B) all items of taxable
deduction or loss (other than capital loss) of the Company that is
allocated (or otherwise flows through) to Equity Holders (or the Upper
Tier Equity Holders, as the case may be) for such year and (ii) the
Applicable Income Tax Rate, plus
(b) the product of (i) the net capital gain (i.e., net long-term capital
gain over net short-term capital loss), if any, of the Company that is
allocated (or otherwise flows through) to Equity Holders (or the Upper
Tier Equity Holders, as the case may be) for such year and (ii) the
Applicable Capital Gain Tax Rate, plus
(c) the product of (i) the net short-term capital gain (i.e., net
short-term capital gain in excess of net long-term capital loss), if any,
of the Company that is allocated (or otherwise flows through) to Equity
Holders (or the Upper Tier Equity Holders, as the case may be) for such
year and (ii) the Applicable Income Tax Rate, minus
(d) the aggregate Tax Loss Benefit Amount for the Company for such year;
provided, that in no event shall the Applicable Income Tax Rate or the
Applicable Capital Gain Tax Rate exceed the greater of (1) the highest aggregate
applicable effective marginal rate of Federal, state, and local income to which
a corporation doing business in the State of New York would be subject in the
relevant year of determination (as certified to the Trustee by a nationally
recognized tax accounting firm) plus 5%; and (2) 60%. For purposes of
calculating the amount of
17
the Permitted Tax Distributions, the proportionate part of the items of taxable
income, gain, deduction, or loss (including capital gain or loss) of any
Subsidiary that is a Flow Through Entity shall be included in determining the
taxable income, gain, deduction, or loss (including capital gain or loss) of the
Company.
Estimated tax distributions shall be made within fifteen days following
March 31, May 31, August 31, and December 31 based upon an estimate of the
excess of (x) the tax distributions that would be payable for the period
beginning on January 1 of such year and ending on March 31, May 31, August 31,
and December 31 if such period were a taxable year (computed as provided above)
over (y) distributions attributable to all prior periods during such taxable
year; provided that the estimated tax distribution with respect to the period
ending December 31 may be made within the last five days of such period.
Prior to making any estimated tax distribution, the Company shall require
each Equity Holder and Upper Tier Equity Holder to agree that (a) promptly after
the Company and each Subsidiary file their respective annual tax return, (i)
such Equity Holder and Upper Tier Equity Holder shall be jointly and severally
liable to reimburse the Company to the extent the estimated tax distributions
made to such Equity Holder exceeded the actual Permitted Tax Distributions, as
determined on the basis of such tax returns filed in respect of such taxable
year for that Equity Holder (or Upper Tier Equity Holder, as the case may be)
and (ii) the Company shall make a further payment to such Equity Holder to the
extent such estimated tax distributions were less than the actual Permitted Tax
Distributions, as determined on the basis of such tax returns filed in respect
of such taxable year for that Equity Holder (or Upper Tier Equity Holder, as the
case may be) and (b) if the appropriate Federal or state taxing authority
finally determines that the amount of the items of taxable income, gain,
deduction, or loss (including capital gain or loss) of the Company or any
Subsidiary that is treated as a Flow Through Entity for any taxable year or the
aggregate Tax Loss Benefit Amounts carried forward to such taxable year should
be changed or adjusted (including by reason of a final determination that the
Company or such Subsidiary was not a Flow Through Entity), then (i) such Equity
Holder and Upper Tier Equity Holder shall be jointly and severally liable to
reimburse the Company in an amount (such amount, until reimbursed to the
Company, an "Unreimbursed Tax Distribution Amount") equal to the sum of (A) the
excess of (x) the Permitted Tax Distributions previously made to such Equity
Holder in respect of that taxable year over (y) the Permitted Tax Distributions
with respect to such taxable year, taking into account such change or adjustment
for such Equity Holder, plus (B) interest and penalties imposed on the Company
and its Subsidiaries by a Governmental Authority resulting from a final
determination that the Company or a Subsidiary was not a Flow Through Entity,
and (ii) the Company shall make a further payment to such Equity Holder to the
extent the Permitted Tax Distributions previously made to such Equity Holder in
respect of that taxable year were less than the Permitted Tax Distributions
payable to such Equity Holder with respect to such taxable year taking into
account such change or adjustment.
To the extent that any tax distribution would otherwise be made to any
Equity Holder at a time when an obligation of such Equity Holder to make a
payment to the Company pursuant to the previous paragraph remains outstanding,
the amount of any tax distribution to be made shall be reduced by the amounts
such Equity Holder is obligated to pay the Company.
18
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof, or any other entity.
"Preferred Ship Mortgage" means the preferred ship mortgage on the Tunica
Vessel, dated as of the Issue Date, by and between ▇▇▇▇▇▇ Mississippi Gaming,
LLC and the Trustee.
"Pre-Opening Expenses" means all costs of start-up activities that are
required to be expensed (and are not capitalized) in accordance with SOP 98-5.
"Purchase Money Obligations" means Indebtedness representing, or incurred
to finance, the cost (i) of acquiring any assets and (ii) of construction or
build-out of facilities (including Purchase Money Obligations of any other
Person at the time such other Person is merged with or into or is otherwise
acquired by the Issuers); provided, that (x) the principal amount of such
Indebtedness does not exceed 80% of such cost, including construction charges,
(y) any Lien securing such Indebtedness does not extend to or cover any other
asset or property other than the asset or property being so acquired,
constructed or built and (z) such Indebtedness is incurred, and any Liens with
respect thereto are granted, within 180 days of the acquisition or commencement
of construction or build-out of such property or asset.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Qualified Capital Stock" means, with respect to any Person, Capital
Stock of such Person other than Disqualified Capital Stock.
"Qualified Equity Offering" means (1) an underwritten registered public
offering of Qualified Capital Stock of the Company for cash, other than pursuant
to Form S-8 (or any successor thereto) under the Securities Act and other than
shares of Qualified Capital Stock of the Company issued pursuant to employee
benefit plans or as compensation to employees, and (2) an unregistered offering
of Qualified Capital Stock of the Company for cash resulting in net proceeds to
the Company in excess of $10,000,000.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of the Issue Date, by and among the Issuers and the Initial Purchaser
as such agreement may be amended, modified or supplemented from time to time.
"Related Business" means the gaming and hotel businesses conducted by the
Company as of the Issue Date and any and all businesses that in the good faith
judgment of the Managers are materially related businesses.
"Required Regulatory Redemption" means a redemption by the Issuers of any
Holder's Notes pursuant to, and in accordance with, any order of any
Governmental Authority with appropriate jurisdiction and authority relating to a
Gaming License, or to the extent necessary in the reasonable, good faith
judgment of the Managers to prevent the loss, failure to obtain or material
impairment or to secure the reinstatement of, any Gaming License, where such
redemption or acquisition is required because the Holder or beneficial owner of
Notes is required
19
to be found suitable or to otherwise qualify under any gaming laws and is not
found suitable or so qualified within a reasonable period of time.
"Responsible Officer" when used with respect to the Trustee, means any
officer within the corporate trust department of the Trustee located at the
Corporate Trust Office (or any successor group of the Trustee) or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the designated officers, and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular subject
and who shall have direct responsibility for the administration of this
Indenture.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Securities" means Notes that bear or are required to bear the
legends set forth in Exhibit A hereto.
"Restricted Subsidiary" means a Subsidiary other than an Unrestricted
Subsidiary.
"Return from Unrestricted Subsidiaries" means (a) 50% of the fair market
value of any dividends or distributions received by the Company or a Restricted
Subsidiary from an Unrestricted Subsidiary, to the extent that such dividends or
distributions were not otherwise included in Consolidated Net Income of the
Company, plus (b) to the extent not otherwise included in Consolidated Net
Income of the Company, an amount equal to the net reduction in Investments in
Unrestricted Subsidiaries resulting from (i) repayments of the principal of
loans or advances or other transfers of assets to the Company or any Restricted
Subsidiary from Unrestricted Subsidiaries or (ii) the sale or liquidation of any
Unrestricted Subsidiaries, plus (c) to the extent that any Unrestricted
Subsidiary is designated to be a Restricted Subsidiary, the fair market value of
the Company's Investment in such Subsidiary on the date of such designation.
"Rule 144A" means Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or under any similar rule or regulation hereafter
adopted by the Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means that certain Security and Pledge Agreement to
encumber substantially all of the assets of the Company, in favor of the
Trustee, for the ratable benefit of the Holders of the Notes, as the same may be
amended in accordance with the terms thereof and this Indenture.
"Security Documents" means, collectively, the Investor Pledge Agreement,
the Preferred Ship Mortgage, the Security Agreement, the Copyright Security
Agreement, the Trademark Security Agreement, and any other agreements,
instruments, financing statements or other documents that evidence, set forth or
limit the Lien of the Trustee in the Collateral.
20
"Series A Notes" means the Issuers' 11.653% Series A Senior Notes due
2007, as authenticated and issued under this Indenture.
"Series B Notes" means the Issuers' 11.653% Series B Senior Notes due
2007, as authenticated and issued under this Indenture.
"subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity (including a limited liability company) of
which more than 50% of the total voting power of shares of Voting Stock thereof
is at the time owned or controlled, directly or indirectly, by such Person or
one or more of the other subsidiaries of that Person or a combination thereof
and (ii) any partnership in which such Person or any of its subsidiaries is a
general partner.
"Subsidiary" means any subsidiary of the Company.
"Subsidiary Guarantor" means any Restricted Subsidiary that has executed
and delivered in accordance with this Indenture an unconditional and irrevocable
Subsidiary Guarantee of the Issuers' obligations under the Notes and such
Person's successors and assigns.
"Tax Loss Benefit Amount" means, with respect to any taxable year, the
amount by which the Permitted Tax Distributions would be reduced were a net
operating loss or net capital loss from a prior taxable year of the Company
ending subsequent to the Issue Date carried forward to such taxable year;
provided, that for such purpose the amount of any such net operating loss or net
capital loss shall be utilized only once and in each case shall be carried
forward to the next succeeding taxable year until so utilized. For purposes of
calculating the Tax Loss Benefit Amount, the proportionate part of the items of
taxable income, gain, deduction, or loss (including capital gain or loss) of any
Subsidiary that is a Flow Through Entity for a taxable year of such Subsidiary
ending subsequent to the Issue Date shall be included in determining the amount
of net operating loss or net capital loss of the Company.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ▇▇.▇▇.
77aaa-77bbbb), as amended, as in effect on the date hereof until such time as
this Indenture is qualified under the TIA, and thereafter as in effect on the
date on which this Indenture is qualified under the TIA.
"Trademark Security Agreement" means that certain Trademark Security
Agreement, dated as of the Issue Date, by and among the Issuers, the Subsidiary
Guarantors and the Trustee, substantially in the form of Exhibit G hereto.
"transfer" means, with respect to any asset, any direct or indirect sale,
assignment, transfer, lease, conveyance, or other disposition (including,
without limitation, by way of merger or consolidation).
"Trustee" means The Bank of New York, a New York banking corporation,
until a successor replaces it in accordance with the applicable provisions of
this Indenture and thereafter means the successor serving hereunder.
"Tunica Vessel" means that certain vessel and appurtenances described as:
21
Name Fitzgeralds Tunica
Official Number: 262757
Type: Barge
"Unrestricted Subsidiary" means any Subsidiary that, at or prior to the
time of determination, shall have been designated by the Managers as an
Unrestricted Subsidiary; provided, that such Subsidiary (a) does not hold any
Indebtedness or Capital Stock of, or any Lien on any assets of, the Company or
any Restricted Subsidiary; (b) is not party to any agreement, contract,
arrangement or understanding with the Company or any Restricted Subsidiary
unless the terms of any such agreement, contract, arrangement or understanding
are no less favorable to the Company or such Restricted Subsidiary than those
that might be obtained at the time from Persons who are not Affiliates of the
Company; (c) is a Person with respect to which neither the Company nor any of
its Restricted Subsidiaries has any direct or indirect obligation (x) to
subscribe for additional Equity Interests or (y) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results; and (d) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of the Company or any of
its Restricted Subsidiaries. If, at any time, any Unrestricted Subsidiary would
fail to meet the foregoing requirements as an Unrestricted Subsidiary, it shall
thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture
and any Indebtedness of such Subsidiary shall be deemed to be incurred by a
Restricted Subsidiary as of such date. The Managers may at any time designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of any outstanding Indebtedness of such Unrestricted Subsidiary and
such designation shall only be permitted if (i) such Indebtedness is permitted
under the Interest Coverage Ratio test set forth in Section 4.9 hereof
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period, and (ii) no Default or Event of
Default would be in existence following such designation. The Managers may
designate any Restricted Subsidiary to be an Unrestricted Subsidiary so long as
no Default or Event of Default is in existence at the time of such designation
or would be in existence following such designation. The Company shall be deemed
to make an Investment in each Subsidiary designated as an Unrestricted
Subsidiary immediately following such designation in an amount equal to the
Investment in such Subsidiary and its subsidiaries immediately prior to such
designation. Any such designation by the Managers shall be evidenced to the
Trustee by filing with the Trustee a certified copy of the resolution of the
Managers giving effect to such designation and an Officers' Certificate
certifying that such designation complies with the foregoing conditions and is
permitted by Section 4.9 hereof.
"Upper Tier Equity Holder" means, in the case of any Flow Through Entity
the Equity Holder of which is, in turn, a Flow Through Entity, the person that
is ultimately subject to tax on a net income basis on the items of taxable
income, gain, deduction, and loss of the Company and its Subsidiaries that are
Flow Through Entities.
"U.S. Government Obligations" means direct obligations of the United
States of America, or any agency or instrumentality thereof for the payment of
which the full faith and credit of the United States of America is pledged.
22
"Voting Stock" means, with respect to any Person, (i) one or more classes
of the Capital Stock of such Person having general voting power to elect at
least a majority of the Board of Directors, managers or trustees of such Person
(regardless of whether at the time Capital Stock of any other class or classes
have or might have voting power by reason of the happening of any contingency)
and (ii) any Capital Stock of such Person convertible or exchangeable without
restriction at the option of the holder thereof into Capital Stock of such
Person described in clause (i) above.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years (rounded to the nearest
one-twelfth) obtained by dividing (i) the then outstanding principal amount of
such Indebtedness into (ii) the total of the product obtained by multiplying (A)
the amount of each then remaining installment, sinking fund, serial maturity or
other required payments of principal, including payment at final maturity, in
respect thereof, by (B) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment.
"Wholly Owned Subsidiary" of any Person means a subsidiary of such Person
all the Capital Stock of which (other than directors' qualifying shares) is
owned directly or indirectly by such Person or by a Wholly Owned Subsidiary of
such Person; provided, that with respect to the Company, the term Wholly Owned
Subsidiary shall exclude Unrestricted Subsidiaries.
Section 1.2 Other Definitions.
Defined in
Term Section
---- ----------
"Affiliate Transaction" 4.11
"Cash Flow-Based Management Fees" 1.1
"Change of Control Offer" 4.14
"Change of Control Payment" 4.14
"Change of Control Payment Date" 4.14
"Definitive Notes" 2.1
"Event of Default" 6.1
"Excess Proceeds" 4.10
"Excess Proceeds Offer" 4.10
"Excess Proceeds Offer Period" 4.10
"Excess Proceeds Payment Date" 4.10
"Global Notes" 2.1
"Paying Agent" 2.3
"Purchase Amount" 4.10
"Refinance" 4.9(h)
"Refinancing Indebtedness" 4.9(h)
"Registrar" 2.3
"Restricted Payments" 4.7
"Revenue-Based Management Fees" 1.1
"Subsidiary Guarantee" 10.8
23
Defined in
Term Section
---- ----------
"Unreimbursed Tax Distributions 1.1
Section 1.3 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Issuers, the Subsidiary Guarantors and
any successor obligor upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute, or defined by Commission rule under
the TIA have the meanings so assigned to them.
Section 1.4 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions;
(6) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision, and the terms "Article," "Section," "Exhibit" and
"Schedule," unless otherwise specified or indicated
24
by the context in which used, mean the corresponding Article or Section
of, or the corresponding Exhibit or Schedule to, this Indenture; and
(7) references to agreements and other instruments include
subsequent amendments, supplements and waivers to such agreements or
instruments but only to the extent not prohibited by this Indenture.
ARTICLE 2.
THE NOTES
Section 2.1 Form and Dating.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A attached hereto, the terms of which are
incorporated in and made a part of this Indenture. Each Note shall include the
Subsidiary Guarantee executed by each of the Subsidiary Guarantors in the form
of Exhibit C attached hereto, the terms of which are incorporated into and made
a part of this Indenture. The Notes may have notations, legends or endorsements
required by law, stock exchange rule, agreements to which the Issuers are
subject or usage. Each Note shall be dated the date of its authentication. The
Notes shall be issued in denominations of $1,000 and integral multiples thereof.
The Notes will be issued (i) in global form (the "Global Notes"),
substantially in the form of Exhibit A attached hereto (including the text
referred to in footnotes 1 and 3 thereto) and (ii) under certain circumstances,
in definitive form (the "Definitive Notes"), substantially in the form of
Exhibit A attached hereto (excluding the text referred to in footnotes 1 and 3
thereto). Each Global Note shall represent the aggregate amount of outstanding
Notes from time to time endorsed thereon; provided, that the aggregate amount of
outstanding Notes represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions. Any endorsement
of a Global Note to reflect the amount of any increase or decrease in the amount
of outstanding Notes represented thereby shall be made by the Trustee, in
accordance with instructions given by the Holder thereof as required by Section
2.6 hereof.
Section 2.2 Execution and Authentication.
Two Officers of each of the Issuers shall sign the Notes for the Issuers
by manual or facsimile signature. If an Officer whose signature is on a Note no
longer holds that office at the time the Note is authenticated, the Note shall
nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature of the Trustee shall be conclusive evidence that the
Note has been authenticated under this Indenture. The form of Trustee's
certificate of authentication to be borne by the Notes shall be substantially as
set forth in Exhibit A attached hereto.
The Trustee shall, upon a Company Order, authenticate for original issue
Notes in any aggregate principal amount. The aggregate principal amount of Notes
that may be authenticated and delivered under this Indenture is unlimited.
Subject to Section 4.9 hereof, additional Notes may be issued hereunder from
time to time, without the consent of the Holders of previously issued Notes, in
an aggregate principal amount to be determined from time to time
25
by the Issuers; provided, that additional Notes may not be issued with original
issue discount as determined under section 1271 et seq. of the Code.
The Trustee may appoint an authenticating agent acceptable to the Issuers
to authenticate Notes. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Notes whenever the Trustee may do so. Each
reference in this Indenture to authenticating by the Trustee includes
authenticating by such agent. An authenticating agent has the same rights as an
Agent to deal with the Issuers or an Affiliate of the Issuers.
The Issuers, the Trustee and any agent of the Issuers or the Trustee may
treat the Person in whose name any Note is registered as the owner of such Note
for the purpose of receiving payment of principal of and (subject to the
provisions of this Indenture and the Notes with respect to record dates)
interest on such Note and for all other purposes whatsoever, whether or not such
Note is overdue, and neither the Issuers, the Trustee nor any agent of the
Issuers or the Trustee shall be affected by notice to the contrary.
Section 2.3 Registrar, Paying Agent and Depositary.
The Issuers shall maintain (i) an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and (ii) an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Issuers initially appoint the Trustee as Registrar and Paying Agent. The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Issuers may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Issuers may change any
Paying Agent or Registrar without notice to any Holder. The Issuers shall notify
the Trustee of the name and address of any Agent not a party to this Indenture.
If the Issuers fail to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may
act as Paying Agent or Registrar, except that for purposes of Articles Three and
Eight and Sections 4.1, 4.10 and 4.14, neither the Company nor any of its
Subsidiaries shall act as Paying Agent.
The Issuers shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which shall incorporate the provisions of
the TIA. The agreement shall implement the provisions of this Indenture that
relate to such Agent.
The Issuers initially appoint DTC to act as Depositary with respect to
the Global Notes. The Trustee shall act as custodian for the Depositary with
respect to the Global Notes.
Section 2.4 Paying Agent to Hold Money in Trust.
The Issuers shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent shall hold in trust for the benefit of
the Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium, if any, or interest on the Notes and shall notify the
Trustee in writing of any default by the Issuers in making any such payment.
While any such default continues, the Trustee may require a Paying Agent to pay
all money held by it to the Trustee. The Issuers at any time may require a
Paying Agent to pay all money held by it to the Trustee. Upon payment over to
the Trustee, the Paying Agent (if other
26
than the Company or a Subsidiary of the Company) shall have no further liability
for the money delivered to the Trustee. If the Company or a Subsidiary of the
Company acts as Paying Agent (subject to Section 2.3), it shall 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 related to the
Company, the Trustee shall serve as Paying Agent for the Notes.
Section 2.5 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Issuers shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders,
including the aggregate principal amount of Notes held by each such Holder, and
the Issuers shall otherwise comply with TIA ss. 312(a).
Section 2.6 Transfer and Exchange.
(a) Transfer and Exchange of Definitive Notes. When Definitive Notes are
presented by a Holder to the Registrar with a request (1) to register the
transfer of the Definitive Notes or (2) to exchange such Definitive Notes for an
equal principal amount of Definitive Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided, that the Definitive
Notes so presented (A) have been duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar duly executed by
such Holder or by his attorney, duly authorized in writing; and (B) in the case
of a Restricted Security, such request shall be accompanied by the following
additional documents:
(i) if such Restricted Security is being delivered to the
Registrar by a Holder for registration in the name of such Holder, without
transfer, a certification to that effect (in substantially the form of Exhibit B
attached hereto); or
(ii) if such Restricted Security is being transferred to a QIB in
accordance with Rule 144A or pursuant to an effective registration statement
under the Securities Act, a certification to that effect (in substantially the
form of Exhibit B attached hereto); or
(iii) if such Restricted Security is being transferred in reliance
on another exemption from the registration requirements of the Securities Act, a
certification to that effect (in substantially the form of Exhibit B attached
hereto) and an opinion of counsel reasonably acceptable to the Issuers and the
Registrar to the effect that such transfer is in compliance with the Securities
Act.
(b) Transfer of a Definitive Note for a Beneficial Interest in a Global
Note. A Definitive Note may be exchanged for a beneficial interest in a Global
Note only upon receipt by the Trustee of a Definitive Note, duly endorsed or
accompanied by appropriate instruments of transfer, in form satisfactory to the
Trustee, together with:
27
(i) written instructions directing the Trustee to make an
endorsement on the appropriate Global Note to reflect an increase in the
aggregate principal amount of the Notes represented by such Global Note; and
(ii) if such Definitive Note is a Restricted Security, a
certification (in substantially the form of Exhibit B attached hereto) and, if
applicable, a legal opinion, in each case similar to that required pursuant to
Section 2.6(a)(i)-(iii), as applicable;
in which case the Trustee shall cancel such Definitive Note and cause the
aggregate principal amount of Notes represented by the appropriate Global Note
to be increased accordingly. If no Global Note is then outstanding, the Issuers
shall issue and the Trustee shall authenticate a new Global Note in the
appropriate principal amount.
(c) Transfer and Exchange of Global Notes. The transfer and exchange of
Global Notes or beneficial interests therein shall be effected through the
Depositary in accordance with this Indenture and the procedures of the
Depositary therefor, which shall include restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act.
(d) Transfer of a Beneficial Interest in a Global Note for a Definitive
Note. Upon receipt by the Trustee of written transfer instructions (or such
other form of instructions as is customary for the Depositary), from the
Depositary (or its nominee) on behalf of any Person having a beneficial interest
in a Global Note, the Trustee shall, in accordance with the standing
instructions and procedures existing between the Depositary and the Trustee,
cause the aggregate principal amount of Global Notes to be reduced accordingly
and, following such reduction, the Issuers shall execute and the Trustee shall
authenticate and deliver to the transferee a Definitive Note in the appropriate
principal amount; provided, that in the case of a Restricted Security, such
instructions shall be accompanied by the following additional documents:
(i) if such beneficial interest is being transferred to the Person
designated by the Depositary as being the beneficial owner, a certification to
that effect (in substantially the form of Exhibit B attached hereto); or
(ii) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A or pursuant to an effective registration statement
under the Securities Act, a certification to that effect (in substantially the
form of Exhibit B attached hereto); or
(iii) if such beneficial interest is being transferred in reliance
on another exemption from the registration requirements of the Securities Act, a
certification to that effect (in substantially the form of Exhibit B attached
hereto) and an opinion of counsel reasonably acceptable to the Issuers and to
the Registrar to the effect that such transfer is in compliance with the
Securities Act.
Definitive Notes issued in exchange for a beneficial interest in a Global
Note shall be registered in such names and in such authorized denominations as
the Depositary shall instruct the Trustee.
28
(e) Transfer and Exchange of Global Notes. Notwithstanding any other
provision of this Indenture, the Global Note may not be transferred as a whole
except by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary; provided, that if:
(i) the Depositary (a) notifies the Issuers that the Depositary is
unwilling or unable to continue as Depositary and a successor Depositary is not
appointed by the Issuers within 90 days after delivery of such notice, or (b)
has ceased to be a clearing agency registered under the Exchange Act; or
(ii) the Issuers, at their sole discretion, notify the Trustee in
writing that they elect to cause the issuance of Definitive Notes under this
Indenture;
then the Issuers shall execute and the Trustee shall authenticate and deliver,
Definitive Notes in an aggregate principal amount equal to the aggregate
principal amount of the Global Note in exchange for such Global Note.
(f) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in the Global Note have either been exchanged for
Definitive Notes, redeemed, repurchased or cancelled, the Global Note shall be
returned to (or retained by) and cancelled by the Trustee. At any time prior to
such cancellation, if any beneficial interest in the Global Note is exchanged
for Definitive Notes, redeemed, repurchased or cancelled, the aggregate
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note by the Trustee
to reflect such reduction.
(g) General Provisions Relating to Transfers and Exchanges. To permit
registrations of transfers and exchanges, the Issuers shall execute and the
Trustee shall authenticate Definitive Notes and Global Notes at the Registrar's
request. All Definitive Notes and Global Notes issued upon any registration of
transfer or exchange of Definitive Notes or Global Notes shall be legal, valid
and binding obligations of the Issuers, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Definitive Notes or Global
Notes surrendered upon such registration of transfer or exchange.
No service charge shall be made to a Holder for any registration of
transfer or exchange, but the Issuers may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar governmental charge
payable upon exchange (without transfer to another person) pursuant to Sections
2.10, 3.7, 3.8, 4.10, 4.14 and 9.5 of this Indenture).
The Issuers shall not be required to: (i) issue, register the transfer of
or exchange Notes during a period beginning at the opening of business 15 days
before the day of any selection of Notes for redemption under Section 3.2 hereof
and ending at the close of business on the day of selection; or (ii) register
the transfer of or exchange any Note so selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in
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part; or (iii) register the transfer of or exchange a Note between a record
date and the next succeeding interest payment date.
Prior to due presentment for the registration of a transfer of any Note,
the Trustee, any Agent and the Issuers may deem and treat the Person in whose
name any Note is registered as the absolute owner of such Note for all purposes,
and neither the Trustee, any Agent nor the Issuers shall be affected by notice
to the contrary.
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 Depositary Participants or
beneficial owners of interests in any Global Note) other than to require
delivery of such certificates and other documentation or evidence as are
expressly require 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 thereof.
(h) Exchange of Series A Notes for Series B Notes. The Series A Notes may
be exchanged for Series B Notes pursuant to the terms of the Exchange Offer. The
Trustee and Registrar shall make the exchange as follows:
The Issuers shall present the Trustee with an Officers' Certificate
certifying the following:
(A) upon issuance of the Series B Notes, the transactions
contemplated by the Exchange Offer have been consummated; and
(B) the principal amount of Series A Notes properly tendered in
the Exchange Offer that are represented by a Global Note and the principal
amount of Series A Notes properly tendered in the Exchange Offer that are
represented by Definitive Notes; the name of each Holder of such Definitive
Notes; the principal amount properly tendered in the Exchange Offer by each such
Holder; and the name and address to which Definitive Notes for Series B Notes
shall be registered and sent for each such Holder.
The Trustee, upon receipt of (i) such Officers' Certificate, (ii) an
Opinion of Counsel (x) to the effect that the Series B Notes have been
registered under Section 5 of the Securities Act and this Indenture has been
qualified under the TIA and (y) with respect to the matters set forth in Section
6(p) of the Registration Rights Agreement and (iii) a Company Order, shall
authenticate (A) a Global Note for Series B Notes in aggregate principal amount
equal to the aggregate principal amount of Series A Notes represented by a
Global Note indicated in such Officers' Certificate as having been properly
tendered and (B) Definitive Notes representing Series B Notes registered in the
names of, and in the principal amounts indicated in such Officers' Certificate.
If the principal amount at maturity of the Global Note for the Series B
Notes is less than the principal amount at maturity of the Global Note for the
Series A Notes, the Trustee shall make an endorsement on such Global Note for
Series A Notes indicating a reduction in the principal amount at maturity
represented thereby.
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The Trustee shall deliver such Definitive Notes for Series B Notes to the
Holders thereof as indicated in such Officers' Certificate.
Section 2.7 Replacement Notes.
If any mutilated Note is surrendered to the Trustee, or the Issuers and
the Trustee receive evidence to their satisfaction of the destruction, loss or
theft of any Note, the Issuers shall issue and the Trustee shall authenticate a
replacement Note if the Trustee's requirements for replacements of Notes are
met. If required by the Trustee or the Issuers, an indemnity bond must be
supplied by the Holder that is sufficient in the judgment of the Trustee and the
Issuers to protect the Issuers, the Trustee, any Agent or any authenticating
agent from any loss that any of them may suffer if a Note is replaced. The
Issuers or the Trustee may charge for their expenses in replacing a Note.
Every replacement Note is an obligation of the Issuers and shall be
entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
Section 2.8 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section 2.8 as not outstanding.
If a Note is replaced pursuant to Section 2.7 hereof, the replaced Note
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section 4.1
hereof, it ceases to be outstanding and interest on it ceases to accrue.
Subject to Section 2.9 hereof, a Note does not cease to be outstanding
because the Issuers or an Affiliate of the Issuers holds the Note; however,
Notes held by the Trustee shall not be deemed to be outstanding for purposes of
Section 3.7 hereof.
Section 2.9 Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Issuers or any Affiliate of the Issuers shall be considered as though not
outstanding, except that for purposes of determining whether the Trustee shall
be protected in relying on any such direction, waiver or consent, only Notes
that a Responsible Officer of the Trustee actually knows to be so owned shall be
considered as not outstanding.
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Section 2.10 Temporary Notes.
Pending the preparation of definitive Notes, the Issuers (and the
Subsidiary Guarantors) may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Notes that are printed, lithographed,
typewritten, mimeographed or otherwise reproduced, in any authorized
denomination, substantially of the tenor of the definitive Notes in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Notes may
determine, as conclusively evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuers (and the Subsidiary
Guarantors) shall cause definitive Notes to be prepared without unreasonable
delay. The definitive Notes shall be printed, lithographed or engraved, or
provided by any combination thereof, or in any other manner permitted by the
rules and regulations of any principal national securities exchange, if any, on
which the Notes are listed, all as determined by the Officers executing such
definitive Notes. After the preparation of definitive Notes, the temporary Notes
shall be exchangeable for definitive Notes upon surrender of the temporary Notes
at the office or agency maintained by the Issuers for such purpose pursuant to
Section 4.2 hereof, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Notes, the Issuers (and the Subsidiary
Guarantors) shall execute, and the Trustee shall authenticate and deliver, in
exchange therefor the same aggregate principal amount of definitive Notes of
authorized denominations. Until so exchanged, the temporary Notes shall in all
respects be entitled to the same benefits under this Indenture as definitive
Notes.
Section 2.11 Cancellation.
The Issuers at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall retain or
destroy cancelled Notes in accordance with its normal practices (subject to the
record retention requirement of the Exchange Act) unless the Issuers direct them
to be returned to the Issuers. The Issuers may not issue new Notes to replace
Notes that have been redeemed or paid or that have been delivered to the Trustee
for cancellation. All cancelled Notes held by the Trustee shall be destroyed and
certification of their destruction delivered to the Issuers unless by a written
order, signed by one Officer of each of the Issuers, the Issuers shall direct
that cancelled Notes be returned to them.
Section 2.12 Defaulted Interest.
If the Issuers default in a payment of interest on the Notes, the Issuers
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, which date shall be at the earliest
practicable date but in all events at least five Business Days prior to the
payment date, in each case at the rate provided in the Notes and in Section 4.1
hereof. The Issuers shall, with the consent of the Trustee, fix or cause to be
fixed each such special record date and payment date. At least 15 days before
the special record date, the Issuers (or the
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Trustee, in the name of and at the expense of the Issuers) shall mail to the
Holders a notice that states the special record date, the related payment date
and the amount of such interest to be paid.
Section 2.13 Legends.
(a) Except as permitted by subsections (b) or (c) of this Section 2.13,
each Note shall bear legends relating to restrictions on transfer pursuant to
the securities laws in substantially the form set forth on Exhibit A attached
hereto.
(b) Upon any sale or transfer of a Restricted Security (including any
Restricted Security represented by a Global Note) pursuant to Rule 144 under the
Securities Act or pursuant to an effective registration statement under the
Securities Act:
(i) in the case of any Restricted Security that is a Definitive
Note, the Registrar shall permit the Holder thereof to exchange such
Restricted Security for a Definitive Note that does not bear the legends
required by subsection (a) above; and
(ii) in the case of any Restricted Security represented by a
Global Note, such Restricted Security shall not be required to bear the legends
required by subsection (a) above, but shall continue to be subject to the
provisions of Section 2.6(c) hereof; provided, that with respect to any request
for an exchange of a Restricted Security that is represented by a Global Note
for a Definitive Note that does not bear the legends required by subsection (a)
above, which request is made in reliance upon Rule 144, the Holder thereof shall
certify in writing to the Registrar that such request is being made pursuant to
Rule 144.
(iii) The Issuers (and the Subsidiary Guarantors) shall issue and
the Trustee shall authenticate Series B Notes in exchange for Series A Notes
accepted for exchange in the Exchange Offer. The Series B Notes shall not bear
the legends required by subsection (a) above unless the Holder of such Series A
Notes is either (A) a broker-dealer who purchased such Series A Notes directly
from the Issuers to resell pursuant to Rule 144A or any other available
exemption under the Securities Act, (B) a Person participating in the
distribution of the Series A Notes or (C) a Person who is an affiliate (as
defined in Rule 144A) of the Issuers.
Section 2.14 Deposit of Moneys.
Subject to Section 3.5 hereof, prior to 10:00 a.m. on each date on which
the principal of, premium, if any, and interest on the Notes are due, the
Issuers shall deposit with the Trustee or Paying Agent in immediately available
funds, money sufficient to make cash payments, if any, due on such date in a
timely manner that permits the Trustee or the Paying Agent to remit payment to
the Holders on such date.
ARTICLE 3.
REDEMPTION
Section 3.1 Notices to Trustee.
If the Issuers elect to redeem Notes pursuant to Section 3.7 hereof, or
are required to redeem Notes pursuant to Section 3.8 hereof, the Issuers shall
furnish to the Trustee, at least
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45 days but not more than 60 days before a redemption date (except in the case
of a Required Regulatory Redemption requiring less notice), an Officers'
Certificate setting forth (i) the clause of Section 3.7 pursuant to which the
redemption shall occur or if the redemption is required by Section 3.8, (ii) the
redemption date, (iii) the principal amount of Notes to be redeemed and (iv) the
redemption price.
Section 3.2 Selection of Notes to Be Redeemed.
If less than all of the Notes are to be redeemed pursuant to Section 3.7
or 3.8 hereof, the Trustee shall select the Notes to be redeemed in compliance
with the requirements of the principal national securities exchange, if any, on
which the Notes are listed, or, if the Notes are not so listed, on a pro rata
basis, by lot or by such method as the Trustee deems to be fair and reasonable.
The Trustee shall promptly notify the Issuers in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.3 Notice of Redemption.
At least 30 days but not more than 60 days before a redemption date
(except in the case of a Required Regulatory Redemption requiring less notice),
the Issuers shall mail a notice of redemption by first class mail to each Holder
whose Notes are to be redeemed at such Holder's registered address.
The notice shall identify the Notes to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) if any Note is being redeemed in part only, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date, upon cancellation of the original Note, a new Note or
Notes in principal amount equal to the unredeemed portion shall be
issued;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(6) that, unless the Issuers default in making such redemption
payment, interest on Notes or portions of Notes called for redemption
ceases to accrue on and after the redemption date;
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(7) the paragraph of the Notes and/or the section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
(8) the CUSIP number of the Notes to be redeemed.
At the Issuers' request, the Trustee shall give the notice of redemption
in the name of the Issuers and at the Issuers' expense; provided that the
Issuers shall deliver to the Trustee, at least 15 days (unless a shorter period
is acceptable to the Trustee) prior to the date such notice is to be given, an
Officers' Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as provided in the preceding
paragraph.
Section 3.4 Effect of Notice of Redemption.
Once notice of redemption has been mailed to the Holders in accordance
with Section 3.3 herein, Notes called for redemption become due and payable on
the redemption date at the redemption price. At any time prior to the mailing of
a notice of redemption to the Holders pursuant to Section 3.3, the Issuers may
withdraw, revoke or rescind any notice of redemption delivered to the Trustee
without any continuing obligation to redeem the Notes as contemplated by such
notice of redemption.
Section 3.5 Deposit of Redemption Price.
At or before 10:00 a.m. on the redemption date, the Issuers shall deposit
with the Trustee (to the extent not already held by the Trustee) or with the
Paying Agent money in immediately available funds sufficient to pay the
redemption price of and accrued interest on all Notes to be redeemed on that
date. The Trustee or the Paying Agent shall return to the Issuers any money
deposited with the Trustee or the Paying Agent by the Issuers in excess of the
amounts necessary to pay the redemption price of, and accrued interest on, all
Notes to be redeemed.
Interest on the Notes to be redeemed shall cease to accrue on the
applicable redemption date, whether or not such Notes are presented for payment,
if the Issuers make or deposit the redemption payment in accordance with this
Section 3.5. If any Note called for redemption shall not be paid upon surrender
for redemption because of the failure of the Issuers to comply with the
preceding paragraph, interest shall be paid on the unpaid principal, from the
redemption date until such principal is paid, and to the extent lawful on any
interest not paid on such unpaid principal, in each case at the rate provided in
the Notes.
Section 3.6 Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Issuers shall
issue and the Trustee shall authenticate for the Holder at the expense of the
Issuers a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.
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Section 3.7 Optional Redemption.
(a) Except as set forth in Sections 3.7(b) and 3.8 hereof, the Notes are
not redeemable at the Issuers' option prior to November 30, 2005. Thereafter,
the Notes will be subject to redemption at the option of the Issuers, in whole
or in part, at the redemption prices (expressed as percentages of principal
amount) set forth below, plus accrued and unpaid interest thereon and Liquidated
Damages, if any, to the applicable date of redemption, if redeemed during the
12-month period beginning on November 30 of the years indicated below:
Year Percentage
---- ----------
2005 105.827%
2006 and thereafter 100.000%
Notwithstanding the foregoing, at any time or from time to time prior to
November 30, 2004, the Issuers may redeem, at their option, up to 35% of the
aggregate principal amount of the Notes then outstanding at a redemption price
of 111.653% of the principal amount thereof, plus accrued and unpaid interest
thereon and Liquidated Damages, if any, through the applicable date of
redemption, with the Net Cash Proceeds of one or more Qualified Equity
Offerings; provided, that (a) such redemption shall occur within 60 days of the
date of closing of such Qualified Equity Offerings and (b) at least 65% of the
aggregate principal amount of Notes issued on or after the Issue Date remains
outstanding immediately after giving effect to each such redemption.
Section 3.8 Required Regulatory Redemption.
The Notes shall be redeemable by the Issuers, in whole or in part, at any
time upon not less than 20 Business Days nor more than 60 days notice (or such
earlier date as may be required by any Gaming Authority) at 100% of the
principal amount thereof plus accrued and unpaid interest thereon (or, if
required by any Gaming Authority, the fair market value of such Notes, or such
other amount as may be required by applicable law or order of such Gaming
Authority) and Liquidated Damages (if permitted by relevant Gaming Authorities),
if any, to the redemption date, pursuant to a Required Regulatory Redemption.
Any Required Regulatory Redemption shall, except as specifically provided in
this Section 3.8, be made in accordance with the applicable provisions of
Sections 3.3, 3.4 and 3.5 unless other procedures are required by any Gaming
Authority. In addition, where such redemption is required because the Holder or
beneficial owner of Notes is required to be found suitable or to otherwise
qualify under any gaming laws and is not found suitable or so qualified, the
Issuers shall have the right to require any such Holder or beneficial owner to
dispose of its Notes upon 30 days' notice (or such earlier date as may be
required by the applicable Gaming Authority).
Section 3.9 No Mandatory Redemption.
The Issuers shall not be required to make mandatory redemption payments
with respect to the Notes (except for a Required Regulatory Redemption). The
Notes shall not have the benefit of any sinking fund.
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ARTICLE 4.
COVENANTS
Section 4.1 Payment of Notes.
The Issuers shall pay the principal and premium, if any, of, and interest
on, the Notes on the dates and in the manner provided in the Notes. Principal,
premium, if any, and interest shall be considered paid on the date due if the
Paying Agent, other than the Company or a Subsidiary of the Company, holds on or
before that date money deposited by the Issuers in immediately available funds
and designated for and sufficient to pay all principal, premium, if any, and
interest then due. Such Paying Agent shall return to the Issuers, no later than
three Business Days following the date of payment, any money that exceeds such
amount of principal, premium, if any, and interest then due and payable on the
Notes. The Issuers shall pay any and all amounts, including, without limitation,
Liquidated Damages, if any, on the dates and in the manner required under the
Registration Rights Agreement.
The Issuers shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
Section 4.2 Maintenance of Office or Agency.
The Issuers shall maintain an office or agency (which may be an office of
the Trustee, Registrar or co-registrar) in the Borough of Manhattan, The City of
New York where Notes may be surrendered for registration of transfer or exchange
and where notices and demands to or upon the Issuers in respect of the Notes and
this Indenture may be served. The Issuers shall give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency. If at any time the Issuers shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Issuers may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
that no such designation or rescission shall in any manner relieve the Issuers
of their obligation to maintain an office or agency for such purposes. The
Issuers shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
The Issuers hereby designate the Corporate Trust Office of the Trustee as
one such office or agency of the Issuers in accordance with Section 2.3.
Section 4.3 Reports.
(a) Regardless of whether required by the rules and regulations of the
Commission, so long as any Notes are outstanding, the Issuers will furnish to
the Trustee and
37
Holders, within 15 days after either Issuer is or would have been required to
file such with the Commission, (i) all quarterly and annual financial
information that would be required to be contained in a filing with the
Commission on Forms 10-Q and 10-K if either of the Issuers were required to file
such Forms, including for each 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 Issuers' independent certified public
accountants and (ii) all information that would be required to be contained in a
filing with the Commission on Form 8-K if either of the Issuers were required to
file such reports. From and after the time either of the Issuers files a
registration statement with the Commission with respect to the Notes, the
Issuers will file such information with the Commission so long as the Commission
will accept such filings.
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
(b) So long as is required for an offer or sale of the Notes to qualify
for an exemption under Rule 144A, the Issuers (and the Subsidiary Guarantors)
shall, upon request, provide the information required by clause (d)(4)
thereunder to each Holder and to each beneficial owner and prospective purchaser
of Notes identified by any Holder of Restricted Securities.
Section 4.4 Compliance Certificate.
(a) The Issuers shall deliver to the Trustee, within 120 days after the
end of each fiscal year, an Officers' Certificate (provided, that two of the
signatories to such Officers' Certificate shall be the principal executive
officer, principal financial officer or principal accounting officer of each of
the Issuers) stating that a review of the activities of the Issuers and the
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determine whether each has
kept, observed, performed and fulfilled their obligations under this Indenture,
and further stating, as to each such Officer signing such certificate, that each
of the Issuers and the Subsidiaries has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
or thereof (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he may have knowledge and what
action each is taking or proposes to take with respect thereto).
(b) The year-end financial statements delivered pursuant to Section 4.3
above shall be accompanied by a written statement of the independent public
accountants of the Company (which shall be a firm of established national
reputation reasonably satisfactory to the Trustee) that in making the
examination necessary for certification of such financial statements nothing has
come to their attention which would lead them to believe that either the Company
or any of its Subsidiaries has violated any provisions of this Indenture or, if
any such violation has occurred, specifying the nature and period of existence
thereof, it being understood that such
38
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.
(c) So long as any of the Notes are outstanding, the Issuers shall
deliver to the Trustee forthwith upon any Officer becoming aware of (i) any
Default or Event of Default or (ii) any event of default under any mortgage,
indenture or instrument referred to in Section 6.1(5) hereof, an Officers'
Certificate specifying such Default, Event of Default or other event of default
and what action the Issuers are taking or propose to take with respect thereto.
Section 4.5 Taxes.
The Company shall, and shall cause its Subsidiaries to, file all tax
returns required to be filed and to pay prior to delinquency all material taxes,
assessments and governmental levies except as contested in good faith and by
appropriate proceedings and for which reserves have been established in
accordance with GAAP.
Section 4.6 Stay, Extension and Usury Laws.
The Issuers (and each Subsidiary Guarantor) covenant (to the extent that
it may lawfully do so) that neither of them shall at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension, usury or other law, wherever enacted, now or at any time
hereafter in force, that would prohibit or forgive the payment of all or any
portion of the principal of or interest on the Notes, or that may affect the
covenants or the performance of this Indenture; and each of the Issuers and each
Subsidiary Guarantor (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law and covenants that it shall not,
by resort to any such law, hinder, delay or impede the execution of any power
herein granted to the Trustee but shall suffer and permit the execution of every
such power as though no such law has been enacted.
Section 4.7 Limitation on Restricted Payments.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any distribution on
account of any Equity Interests of the Company or any of its Subsidiaries or
make any other payment to any Excluded Person or Affiliate thereof (other than
(A) dividends or distributions payable in Equity Interests (other than
Disqualified Capital Stock) of the Company or (B) amounts payable to the Company
or any Restricted Subsidiary);
(ii) purchase, redeem or otherwise acquire or retire for value any
Equity Interest of the Company or any Affiliate (other than any Restricted
Subsidiary of the Company) of the Company (other than any such Equity Interest
owned by the Company or any Restricted Subsidiary);
(iii) make any principal payment on, or purchase, redeem, defease
or otherwise acquire or retire for value, any Indebtedness of the Company or any
Subsidiary Guarantor that is subordinated in right of payment to the Notes or
such Subsidiary Guarantor's
39
Subsidiary Guarantee thereof, as the case may be, prior to any scheduled
principal payment, sinking fund payment or other payment at the stated maturity
thereof; or
(iv) make any Restricted Investment
(all such payments and other actions set forth in clauses (i) through (iv) above
being collectively referred to as "Restricted Payments"), unless, at the time of
such Restricted Payment:
(a) no Default or Event of Default has occurred and is continuing or
would occur as a consequence thereof, and
(b) immediately after giving effect to such Restricted Payment on a pro
forma basis, the Company could incur at least $1.00 of additional Indebtedness
under the Interest Coverage Ratio test set forth in Section 4.9 hereof, and
(c) such Restricted Payment (the value of any such payment, if other than
cash, being determined in good faith by the Managers of the Company and
evidenced by a resolution set forth in an Officers' Certificate delivered to the
Trustee), together with the aggregate of all other Restricted Payments made on
or after the Issue Date (including Restricted Payments permitted by clauses (i),
(v) (to the extent such payments do not reduce Consolidated Net Income), (vi)
(to the extent such payments do not reduce Consolidated Net Income), (vii),
(viii), (ix), (x) and, to the extent the Company is given credit for such Net
Cash Proceeds pursuant to clause (2) of this paragraph, (ii) of the next
following paragraph and excluding Restricted Payments permitted by clauses (iii)
and (iv) of the next following paragraph), is less than the sum, without
duplication, of
(1) 50% of the Consolidated Net Income of the Company for the period
(taken as one accounting period) from the beginning of the first
fiscal quarter commencing immediately after the Issue Date to the
end of the Company's most recently ended fiscal quarter for which
internal financial statements are available at the time of such
Restricted Payment (or, if such Consolidated Net Income for such
period is a deficit, 100% of such deficit), plus
(2) 100% of the aggregate Net Cash Proceeds received by the Company
from the issuance or sale, other than to a Subsidiary, of Equity
Interests of the Company (other than Disqualified Capital Stock)
after the Issue Date and on or prior to the time of such
Restricted Payment (other than the first $5,000,000 of Net Cash
Proceeds from the issuance or sale of Equity Interests to Majestic
Star, BDI, or any Affiliate thereof), plus
(3) 100% of the aggregate Net Cash Proceeds received by the Company
from the issuance or sale, other than to a Subsidiary, of any
convertible or exchangeable debt security of the Company that has
been converted or exchanged into Equity Interests of the Company
(other than Disqualified Capital Stock) pursuant to the terms
thereof after the Issue Date and on or prior to the time of such
Restricted Payment (including any additional net cash proceeds
received by the Company upon such conversion or
40
exchange) (other than the first $5,000,000 of Net Cash Proceeds
from the issuance or sale of any convertible or exchangeable debt
securities to Majestic Star, BDI, or any Affiliate thereof) plus
(4) the aggregate Return from Unrestricted Subsidiaries after the
Issue Date and on or prior to the time of such Restricted Payment.
The foregoing provisions shall not prohibit:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment
would not have been prohibited by the provisions of this
Indenture;
(ii) the redemption, purchase, retirement or other acquisition of any
Equity Interests of the Company or Indebtedness of the Company or
any Restricted Subsidiary in exchange for, or out of the Net Cash
Proceeds of, the substantially concurrent sale (other than to a
Subsidiary) of, other Equity Interests of the Company (other than
Disqualified Capital Stock) (other than the first $5,000,000 of
Net Cash Proceeds from the issuance or sale of Equity Interests to
Majestic Star, BDI, or any Affiliate thereof);
(iii) so long as clause (a) above is satisfied, with respect to each
taxable year that the Company qualifies as a Flow Through Entity,
the payment of Permitted Tax Distributions; provided, that (A)
prior to any payment of Permitted Tax Distributions the Company
provides an Officers' Certificate and Opinion of Counsel to the
effect that the Company and each Subsidiary in respect of which
such distributions are being made, qualify as Flow Through
Entities for Federal income tax purposes and for the states in
respect of which such distributions are being made and (B) at the
time of such distribution, the most recent audited financial
statements of the Company provided to the Trustee pursuant to
Section 4.3 hereof, provide that the Company and each such
Subsidiary were treated as Flow Through Entities for the period of
such financial statements, provided that the requirement set forth
in this subclause (B) shall not apply to the extent that such
Subsidiary that is acquired after the date hereof is not a Flow
Through Entity on the date of such acquisition but subsequently
becomes a Flow Through Entity after any period covered by such
financial statements;
(iv) the redemption, repurchase or payoff of any Indebtedness of the
Company or a Restricted Subsidiary with cash proceeds of or in
exchange for any Refinancing Indebtedness permitted to be incurred
pursuant to Section 4.9(g) hereof;
(v) so long as clause (a) above is satisfied any employment agreement
entered into, or any compensation or employee benefits paid to
employees, in each case, in the ordinary course of business,
consistent with past practices and
41
not involving the purchase, redemption or other acquisition or
retirement for value of any Equity Interests of the Company or any
Affiliate (other than any Restricted Subsidiary of the Company);
(vi) so long as clause (a) above is satisfied, Overhead Reimbursement
under any of the Management Agreements, in each case, as in effect
on the Issue Date, without giving effect to any amendment,
supplement or modification thereof;
(vii) so long as clause (a) above is satisfied, Cash Flow-Based
Management Fees required under any of the Management Agreements,
in each case, as in effect on the Issue Date, without giving
effect to any amendment, supplement or modification thereof;
provided, that the Interest Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date
on which such payment is made would have been not less than 1.50
to 1.0, determined on a pro forma basis, as if such payment had
been made during such four-quarter period;
(viii) so long as clause (a) above is satisfied, Revenue-Based Management
Fees required under any of the Management Agreements, in each
case, as in effect on the Issue Date, without giving effect to any
amendment, supplement or modification thereof; provided, that the
Interest Coverage Ratio for the Company's most recently ended four
full fiscal quarter for which internal financial statements are
available immediately preceding the date on which such payment is
made would have been not less than 1.25 to 1.0, determined on a
pro forma basis, as if such payment had been made during such
four-quarter period;
(ix) the redemption and repurchase of any Equity Interests or
Indebtedness of the Company or any of its Subsidiaries to the
extent required by any Gaming Authority or, if determined in the
good faith judgment of the Managers of the Company as evidenced by
a resolution of the Managers that has been delivered to the
trustee, to prevent the loss, or to secure the grant or
establishment, of any gaming license or other right to conduct
lawful gaming operations; and
(x) any Unreimbursed Tax Distribution Amounts (as defined in the
definition of "Permitted Tax Distributions").
Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.7 were computed, which calculations may
be based upon the Company's latest available financial statements.
Notwithstanding the foregoing, the Company shall not be required to deliver an
Officers' Certificate to the Trustee pursuant to this covenant if any action is
taken pursuant to subsection (ii), (iv) or (v) of the immediately preceding
paragraph.
42
Section 4.8 Limitation on Restrictions on Subsidiary Dividends.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Restricted
Subsidiary to:
(i) pay dividends or make any other distributions to the Company
or any of its Restricted Subsidiaries (a) on such Restricted Subsidiary's
Capital Stock or (b) with respect to any other interest or participation in, or
measured by, such Restricted Subsidiary's profits, or
(ii) pay any Indebtedness owed to the Company or any of its
Restricted Subsidiaries, or
(iii) make loans or advances to the Company or any of its
Restricted Subsidiaries, or
(iv) transfer any of its assets to the Company or any of its
Restricted Subsidiaries,
except, with respect to clauses (i) through (iv) above, for such encumbrances or
restrictions existing under or by reason of:
(1) any Credit Facility containing dividend or other payment
restrictions that are not more restrictive than those contained in the
documents governing the Credit Facility on the Issue Date;
(2) this Indenture, the Security Documents and the Notes;
(3) applicable law;
(4) Acquired Debt; provided, that such encumbrances and
restrictions are not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or assets of
the Person, so acquired;
(5) customary non-assignment and net worth provisions of any
contract, lease or license entered into in the ordinary course of
business;
(6) customary restrictions on the transfer of assets subject to a
Permitted Lien imposed by the holder of such Lien; and
(7) the agreements governing permitted Refinancing Indebtedness;
provided, that such restrictions contained in any agreement governing
such Refinancing Indebtedness are no more restrictive than those
contained in any agreements governing the Indebtedness being refinanced.
43
Section 4.9 Limitation on Incurrence of Indebtedness.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, (i) create, incur, issue, assume,
guaranty or otherwise become directly or indirectly liable with respect to,
contingently or otherwise (collectively, "incur"), any Indebtedness (including,
without limitation, Acquired Debt) or (ii) issue any Disqualified Capital Stock;
provided, that the Company and the Subsidiary Guarantors may incur Indebtedness
(other than Disqualified Capital Stock) (including, without limitation, Acquired
Debt) and the Company may issue shares of Disqualified Capital Stock if (x) no
Default or Event of Default shall have occurred and be continuing at the time
of, or would occur after giving effect on a pro forma basis to such incurrence
or issuance, and (y) the Interest Coverage Ratio for the Company's most recently
ended four full fiscal quarters for which internal financial statements are
available immediately preceding the date on which such additional Indebtedness
is incurred or such Disqualified Capital Stock is issued would have been not
less than 2.0 to 1.0, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred, or the Disqualified Capital Stock had been issued, as the
case may be, at the beginning of such four-quarter period.
Notwithstanding the foregoing, the foregoing limitations will not
prohibit the incurrence of:
(a) Indebtedness under the Credit Facility in an aggregate principal
amount not to exceed at any time outstanding, $15,000,000 less the aggregate
amount of repayments of such indebtedness contemplated by clause (iii) of
Section 4.10 hereof;
(b) performance bonds, appeal bonds, surety bonds, insurance obligations
or bonds and other similar bonds or obligations (including Obligations under
letters of credit) incurred in the ordinary course of business, and any
guarantees thereof;
(c) Hedging Obligations incurred to fix the interest rate on any variable
rate Indebtedness otherwise permitted by this Indenture; provided, that the
notional principal amount of each such Hedging Obligation does not exceed the
principal amount of the Indebtedness to which such Hedging Obligation relates
and that such Hedging Obligations shall not have been incurred for purposes of
speculation;
(d) Indebtedness outstanding on the Issue Date (other than Indebtedness
under the Credit Facility which shall not be deemed to be outstanding pursuant
to this clause (d)), including the Notes and the Security Documents, to the
extent they constitute Indebtedness outstanding on the Issue Date;
(e) Indebtedness incurred by the Company in an aggregate principal amount
not to exceed, at any time outstanding pursuant to this clause (e), $3,000,000
less the aggregate amount of repayments of such indebtedness contemplated by
clause (iii) of Section 4.10 hereof;
(f) any Subsidiary Guarantee of the Notes or the Indebtedness permitted
by clause (e) above; and
44
(g) Indebtedness issued in exchange for, or the proceeds of which are
contemporaneously used to extend, refinance, renew, replace, or refund
(collectively, "Refinance"), Indebtedness incurred pursuant to the Interest
Coverage Ratio test set forth in the immediately preceding paragraph, clause (d)
above or this clause (g) (the "Refinancing Indebtedness"); provided, that (i)
the principal amount of such Refinancing Indebtedness does not exceed the
principal amount of Indebtedness so Refinanced (including any required premiums
and out-of-pocket expenses reasonably incurred in connection therewith), (ii)
the Refinancing Indebtedness has a final scheduled maturity that equals or
exceeds the final stated maturity, and a Weighted Average Life to Maturity that
is equal to or greater than the Weighted Average Life to Maturity, of the
Indebtedness being Refinanced, (iii) the Refinancing Indebtedness ranks, in
right of payment, no more favorable to the Notes than the Indebtedness being
Refinanced, and (iv) such Refinancing Indebtedness shall only be used to
refinance outstanding Indebtedness of such Person issuing such Refinancing
Indebtedness.
Section 4.10 Limitation on Asset Sales.
The Company shall not, and shall not permit any Restricted Subsidiary to,
make any Asset Sale unless
(i) the Company or such Restricted Subsidiary receives
consideration at the time of such Asset Sale not less than the fair market value
of the assets subject to such Asset Sale;
(ii) at least 75% of the consideration for such Asset Sale is in
the form of (A) cash or Cash Equivalents, (B) liabilities of the Company or any
Restricted Subsidiary (other than liabilities that are by their terms
subordinated to the Notes or the Subsidiary Guarantees) that are assumed by the
transferee of such assets (provided, that following such Asset Sale there is no
further recourse to the Company or its Restricted Subsidiaries with respect to
such liabilities), or (C) fixed assets or property that, in the good faith
judgement of the Managers, at the time of such Asset Sale will be used in a
Related Business of the Company or its Restricted Subsidiaries; and
(iii) within 270 days of such Asset Sale (or within 30 days in the
case of an Asset Sale or series of related Asset Sales with Net Proceeds of
$15,000,000 or more), the Net Proceeds thereof are (A) in the case of an Asset
Sale or series of related Asset Sales with Net Proceeds of less than
$15,000,000, invested in fixed assets or property that, in the good faith
judgment of the Managers, at the time of such Asset Sale will be used in a
Related Business of the Company or its Restricted Subsidiaries, (B) applied to
repay Indebtedness under Purchase Money Obligations incurred in connection with
the asset so sold, (C) applied to repay Indebtedness under the Credit Facility
and permanently reduce the commitment thereunder in the amount of the
Indebtedness so repaid or (D) to the extent not used as provided in clauses (A),
(B), or (C) applied to make an offer to purchase Notes as described below (an
"Excess Proceeds Offer"); provided, that the Company will not be required to
make an Excess Proceeds Offer until the amount of Excess Proceeds is greater
than $5,000,000.
The foregoing provisions in (i) or (ii) above shall not apply to an Event
of Loss.
45
Pending the final application of any Net Proceeds, the Company may
temporarily reduce Indebtedness under the Credit Facility or temporarily invest
such Net Proceeds in Cash Equivalents.
Net Proceeds not invested or applied as set forth in subclause (A), (B)
or (C) of clause (iii) above constitute "Excess Proceeds." If the Company
elects, or becomes obligated to make an Excess Proceeds Offer, the Issuers shall
offer to purchase Notes having an aggregate principal amount equal to the Excess
Proceeds (the "Purchase Amount"), at a purchase price equal to 100% of the
aggregate principal amount thereof, plus accrued and unpaid interest thereon and
Liquidated Damages, if any, to the purchase date. The Issuers must consummate
such Excess Proceeds Offer not later than 30 days after the expiration of the
270 day period following the Asset Sale that produced such Excess Proceeds. If
the aggregate purchase price for the Notes tendered pursuant to the Excess
Proceeds Offer is less than the Excess Proceeds, the Company and its Restricted
Subsidiaries may use the portion of the Excess Proceeds remaining after payment
of such purchase price for general corporate purposes.
Each Excess Proceeds Offer shall remain open for a period of 20 Business
Days and no longer, unless a longer period is required by law (the "Excess
Proceeds Offer Period"). Promptly after the termination of the Excess Proceeds
Offer Period (the "Excess Proceeds Payment Date"), the Issuers shall purchase
and mail or deliver payment for the Purchase Amount for the Notes or portions
thereof tendered, pro rata or by such other method as may be required by law,
or, if less than the Purchase Amount has been tendered, all Notes tendered
pursuant to the Excess Proceeds Offer.
To the extent that the provisions of any securities laws or regulations
conflict with the provisions of this Section 4.10, the Issuers shall comply with
the applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 4.10 by virtue thereof. The Company
shall not, and shall not permit any of its Restricted Subsidiaries to, create or
suffer to exist or become effective any restriction that would impair the
ability of the Issuers to make an Excess Proceeds Offer upon an Asset Sale or,
if such Excess Proceeds Offer is made, to pay for the Notes tendered for
purchase.
The Issuers shall, no later than 30 days following the expiration of the
12-month period following the Asset Sale that produced Excess Proceeds, commence
the Excess Proceeds Offer by mailing to the Trustee and each Holder, at such
Holder's last registered address, a notice, which shall govern the terms of the
Excess Proceeds Offer, and shall state:
(1) that the Excess Proceeds Offer is being made pursuant to this
Section 4.10, the principal amount of Notes which shall be accepted for
payment and that all Notes validly tendered shall be accepted for payment
on a pro rata basis;
(2) the purchase price and the date of purchase;
(3) that any Notes not tendered or accepted for payment pursuant
to the Excess Proceeds Offer shall continue to accrue interest;
46
(4) that, unless the Issuers default in the payment of the
purchase price with respect to any Notes tendered, Notes accepted for
payment pursuant to the Excess Proceeds Offer shall cease to accrue
interest after the Excess Proceeds Payment Date;
(5) that Holders electing to have Notes purchased pursuant to an
Excess Proceeds Offer shall be required to surrender their Notes, with
the form entitled "Option of Holder to Elect Purchase" on the reverse of
the Note completed, to the Issuers prior to the close of business on the
third Business Day immediately preceding the Excess Proceeds Payment
Date;
(6) that Holders shall be entitled to withdraw their election if
the Issuers receive, not later than the close of business on the second
Business Day preceding the Excess Proceeds Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of Notes the Holder delivered for purchase
and a statement that such Holder is withdrawing his election to have such
Notes purchased;
(7) that Holders whose Notes are purchased only in part shall be
issued Notes representing the unpurchased portion of the Notes
surrendered; provided that each Note purchased and each new Note issued
shall be in principal amount of $1,000 or whole multiples thereof; and
(8) the instructions that Holders must follow in order to tender
their Notes.
On or before the Excess Proceeds Payment Date, the Issuers shall (i)
accept for payment on a pro rata basis the Notes or portions thereof tendered
pursuant to the Excess Proceeds Offer, (ii) deposit with the Paying Agent money
sufficient to pay the purchase price of all Notes or portions thereof so
accepted and (iii) deliver to the Trustee the Notes so accepted, together with
an Officers' Certificate stating that the Notes or portions thereof tendered to
the Issuers are accepted for payment. The Paying Agent shall promptly mail to
each Holder of Notes so accepted payment in an amount equal to the purchase
price of such Notes, and the Trustee shall promptly authenticate and mail to
such Holders new Notes equal in principal amount to any unpurchased portion of
the Notes surrendered.
The Issuers shall make a public announcement of the results of the Excess
Proceeds Offer as soon as practicable after the Excess Proceeds Payment Date.
For the purposes of this Section 4.10, the Trustee shall act as the Paying
Agent.
Section 4.11 Limitation on Transactions With Affiliates.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into, consummate or suffer to
exist any Affiliate Transaction, except for:
(i) Affiliate Transactions that, together with all related
Affiliate Transactions, have an aggregate value of not more than $1,000,000;
provided, that (a) such transactions are conducted in good faith and on terms
that are no less favorable to the Company or the relevant Restricted Subsidiary
than those that would have been obtained in a comparable
47
transaction at such time by the Company or such Restricted Subsidiary on an
arm's-length basis from a Person that is not an Affiliate of the Company or such
Restricted Subsidiary and (b) the Company shall have delivered to the Trustee an
Officers' Certificate certifying to such effect;
(ii) Affiliate Transactions that, together with all related
Affiliate Transactions, have an aggregate value of not more than $5,000,000;
provided, that (i) a majority of the disinterested Managers determine that such
transactions are conducted in good faith and on terms that are no less favorable
to the Company or the relevant Restricted Subsidiary than those that would have
been obtained in a comparable transaction at such time by the Company or such
Restricted Subsidiary on an arm's-length basis from a Person that is not an
Affiliate of the Company or such Restricted Subsidiary and (ii) prior to
entering into such transaction the Company shall have delivered to the Trustee
an Officers' Certificate certifying to such effect; or
(iii) Affiliate Transactions for which the Company delivers to the
Trustee an opinion as to the fairness to the Company or such Restricted
Subsidiary from a financial point of view issued by an accounting, appraisal or
investment banking firm of national standing.
Notwithstanding the foregoing, the following shall be deemed not to be
Affiliate Transactions:
(a) Restricted Payments (other than payments permitted under clause (vi)
of the second paragraph of Section 4.7 hereof) permitted by Section 4.7 hereof;
(b) the Management Agreements and the Member Agreement, in each case, as
in effect on the Issue Date, without giving effect to any amendment, supplement
or modification thereof, and payment of the Management Fees thereunder;
(c) the non-exclusive licensing of any service ▇▇▇▇ or other trademarks
of the Company to an Affiliate or Affiliates of the Company; and
(d) transactions between or among the Company and any Wholly Owned
Subsidiary of the Company.
Section 4.12 Limitation on Liens.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, assume or suffer to exist any Lien on any
asset (including, without limitation, all real, tangible or intangible property)
of the Company or any Restricted Subsidiary, whether now owned or hereafter
acquired, or on any income or profits therefrom, or assign or convey any right
to receive income therefrom, except Permitted Liens.
Section 4.13 Existence.
Subject to Article 5 of this Indenture, the Issuers shall do or cause to
be done all things necessary to preserve and keep in full force and effect (i)
their respective limited liability company and corporate existence, and
corporate, partnership or other existence of each of the Subsidiaries, in
accordance with their respective organizational documents (as the same may be
48
amended from time to time) and (ii) their (and the Subsidiaries') rights
(charter and statutory), licenses (including gaming and related licenses) and
franchises; provided, that the Issuers shall not be required to preserve any
such right, license or franchise, or the corporate, partnership or other
existence of any Subsidiary, if the Board of Directors on behalf of the Company
shall determine in good faith that the preservation thereof is no longer
desirable in the conduct of the business of the Issuers and the Company's
Subsidiaries taken as a whole and that the loss thereof is not adverse in any
material respect to the Holders.
Section 4.14 Repurchase Upon Change of Control.
Upon the occurrence of a Change of Control, the Issuers shall offer to
repurchase all of the Notes then outstanding (the "Change of Control Offer") at
a purchase price equal to 101% of the aggregate principal amount thereof, plus
accrued and unpaid interest thereon and Liquidated Damages, if any, to the date
of repurchase (the "Change of Control Payment").
To the extent that the provisions of any securities laws or regulations
conflict with the provisions of this Section 4.14, the Issuers shall comply with
the applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 4.14 by virtue thereof.
Within 30 days following any Change of Control, the Issuers shall
commence the Change of Control Offer by mailing to the Trustee and each Holder a
notice, which shall govern the terms of the Change of Control Offer, and shall
state that:
(i) the Change of Control Offer is being made pursuant to this
Section 4.14 and that all Notes tendered will be accepted for payment,
(ii) the purchase price and the purchase date, which shall be a
Business Day no earlier than 30 days nor later than 45 days from the date such
notice is mailed (the "Change of Control Payment Date"),
(iii) that any Note not tendered for payment pursuant to the
Change of Control Offer shall continue to accrue interest,
(iv) that, unless the Issuers default in the payment of the Change
of Control Payment, all Notes accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest on the Change of Control Payment
Date,
(v) that any Holder electing to have Notes purchased pursuant to a
Change of Control Offer shall be required to surrender such Notes, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Notes
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the third Business Day preceding the Change of Control
Payment Date,
(vi) that any Holder shall be entitled to withdraw such election
if the Paying Agent receives, not later than the close of business on the second
Business Day preceding the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting
49
forth the name of the Holder, the principal amount of Notes such Holder
delivered for purchase, and a statement that such Holder is withdrawing his
election to have such Notes purchased,
(vii) that a Holder whose Notes are being purchased only in part
shall be issued new Notes equal in principal amount to the unpurchased portion
of the Notes surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof,
(viii) the instructions that Holders must follow in order to
tender their Notes, and
(ix) the circumstances and relevant facts regarding such Change of
Control.
On the Change of Control Payment Date, the Issuers shall, to the extent
lawful, (i) accept for payment the Notes or portions thereof tendered pursuant
to the Change of Control Offer, (ii) deposit with the Paying Agent an amount
equal to the Change of Control Payment in respect of all Notes or portions
thereof so tendered and not withdrawn, and (iii) deliver or cause to be
delivered to the Trustee the Notes so accepted, together with an Officers'
Certificate stating that the Notes or portions thereof tendered to the Issuers
are accepted for payment. The Paying Agent shall promptly mail to each Holder of
Notes so accepted payment in an amount equal to the purchase price for such
Notes, and the Trustee shall authenticate and mail (or cause to be transferred
by book entry) to each Holder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any; provided, that each such
new Note will be in the principal amount of $1,000 or an integral multiple
thereof.
The Issuers shall make a public announcement of the results of the Change
of Control Offer on or as soon as practicable after the Change of Control
Payment Date. For the purposes of this Section 4.14, the Trustee shall act as
the Paying Agent.
The Issuers shall not be required to make a Change of Control Offer upon
a Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Section 4.14 and purchases all Notes validly tendered and not withdrawn
under such Change of Control Offer.
Section 4.15 Maintenance of Properties.
The Company shall, and shall cause each of its Subsidiaries to, maintain
their properties and assets in normal working order and condition as on the date
of this Indenture (reasonable wear and tear excepted) and make all necessary
repairs, renewals, replacements, additions, betterments and improvements
thereto, as shall be reasonably necessary for the proper conduct of the business
of the Issuers and the Subsidiaries taken as a whole; provided, that nothing
herein shall prevent the Issuers or any of the Subsidiaries from discontinuing
any maintenance of any such properties if the Company determines that such
discontinuance is desirable in the conduct of the business of the Issuers and
the Subsidiaries taken as a whole.
50
Section 4.16 Maintenance of Insurance.
The Company shall, and shall cause each of its Subsidiaries to, maintain
liability, casualty and other insurance (including self-insurance consistent
with prior practice) with responsible insurance companies in such amounts and
against such risks as is in accordance with customary industry practice in the
general areas in which the Issuers and the Subsidiaries operate.
Section 4.17 Restrictions on Sale and Issuance of Subsidiary Stock.
The Company shall not sell, and shall not permit any Restricted
Subsidiary to issue or sell, any Equity Interests (other than directors'
qualifying shares) of any Restricted Subsidiary to any Person other than the
Company or a Wholly Owned Subsidiary of the Company; provided, that the Company
and its Restricted Subsidiaries may sell all (but not less than all) of the
Capital Stock of a Restricted Subsidiary owned by the Company and its Restricted
Subsidiaries if the Net Proceeds from such Asset Sale are used in accordance
with the terms of Section 4.10 hereof.
Section 4.18 Line of Business.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, engage to any substantial extent in any
line or lines of business activity other than a Related Business.
Section 4.19 Restrictions on Activities of Capital.
Capital shall not hold any material assets, become liable for any
obligations or engage in any business activities; provided, that Capital may be
a co-obligor of the Notes (including any additional Notes incurred pursuant to
Section 4.9 hereof) pursuant to the terms of this Indenture and as contemplated
by the Purchase Agreement, dated as of November 30, 2001, by and among the
Issuers, the Subsidiary Guarantors and the Initial Purchaser and, as necessary,
may engage in any activities directly related or necessary in connection
therewith.
ARTICLE 5.
SUCCESSORS
Section 5.1 When the Company May Merge, etc.
Neither Issuer shall consolidate or merge with or into (regardless of
whether such Issuer is the surviving corporation), or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its properties
or assets (determined on a consolidated basis for the Company and its Restricted
Subsidiaries) in one or more related transactions to, any other Person, unless:
(i) such Issuer is the surviving Person or the Person formed by or
surviving any such consolidation or merger (if other than such Issuer) or to
which such sale, assignment, transfer, lease, conveyance or other disposition
has been made is a corporation
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organized and existing under the laws of the United States of America, any state
thereof or the District of Columbia;
(ii) the Person formed by or surviving any such consolidation or
merger (if other than such Issuer) or the Person to which such sale, assignment,
transfer, lease, conveyance or other disposition has been made assumes all the
Obligations of such Issuer, pursuant to a supplemental indenture and in a form
reasonably satisfactory to the Trustee, under the Notes, this Indenture, the
Security Documents and the Registration Rights Agreement;
(iii) immediately after giving effect to such transaction on a pro
forma basis, no Default or Event of Default exists;
(iv) such transaction would not result in the loss or suspension
or material impairment of any Gaming License unless a comparable replacement
Gaming License is effective prior to or simultaneously with such loss,
suspension or material impairment; and
(v) such Issuer, or any Person formed by or surviving any such
consolidation or merger, or to which such sale, assignment, transfer, lease,
conveyance or other disposition has been made, (A) has Consolidated Net Worth
(immediately after the transaction but prior to any purchase accounting
adjustments resulting from the transaction) equal to or greater than the
Consolidated Net Worth of such Issuer immediately preceding the transaction and
(B) will be permitted, at the time of such transaction and after giving pro
forma effect thereto as if such transaction had occurred at the beginning of the
applicable four-quarter period, to incur at least $1.00 of additional
Indebtedness pursuant to the Interest Coverage Ratio test set forth in Section
4.9 hereof.
The Issuers shall deliver to the Trustee prior to the consummation of any
proposed transaction an Officers' Certificate to the foregoing effect, an
Opinion of Counsel, stating that all conditions precedent to the proposed
transaction provided for in this Indenture have been complied with and a written
statement from a firm of independent public accountants of established national
reputation reasonably satisfactory to the Trustee stating that the proposed
transaction complies with clause (v).
For purposes of this Section 5.1, the transfer of all or substantially
all of the properties and assets of one or more Subsidiaries of the Company,
which properties and assets, if held by the Company instead of such
Subsidiaries, would constitute all or substantially all of the properties and
assets of the Company on a consolidated basis, shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Company.
Notwithstanding the foregoing clause (v), the Company may reorganize as a
corporation or other business entity in accordance with the procedures
established in this Article 5, provided that (x) such transaction is solely for
the purpose of such reorganization and not for the purpose of evading this
provision or any other provision of this Indenture and not in connection with
any other transaction, and (y) prior to such reorganization, the Company has
delivered to the Trustee an Opinion of Counsel confirming that (i) the Holders
will not recognize income, gain or loss for Federal income tax purposes as a
result of the reorganization and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as
52
would have been the case if such reorganization had not occurred, and (ii) the
Company will not recognize income, gain or loss for Federal and state income tax
purposes as a result of the reorganization.
Section 5.2 Successor Substituted.
In the event of any transaction (other than a lease or a transfer of less
than all of the Issuers' assets) contemplated by Section 5.1 hereof in which
neither of the Issuers is the surviving Person, the successor formed by such
consolidation or into or with which the applicable Issuer is merged or to which
such transfer is made, or formed by such reorganization, as the case may be,
shall succeed to, and be substituted for, and may exercise every right and power
of, such Issuer, and such Issuer shall be discharged from its Obligations under
this Indenture, the Security Documents, the Notes and the Registration Rights
Agreement with the same effect as if such successor Person had been named as
such Issuer herein or therein. The Trustee shall have the right to require any
such Person to ensure, by executing and delivering appropriate instruments and
Opinions of Counsel, that the Trustee continues to hold a first priority Lien on
all Collateral for the benefit of the Holders.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.1 Events of Default.
Each of the following is an "Event of Default":
(1) The Issuers default in the payment of interest on any Note
when the same becomes due and payable and the Default continues for a
period of 30 days;
(2) The Issuers default in the payment of principal (or premium,
if any) on any Note when the same becomes due and payable at maturity,
upon redemption, by acceleration, or otherwise;
(3) the Issuers default in the performance of or breaches the
provisions of Section 4.10 or 4.14 or Article 5 hereof;
(4) either of the Issuers or any Subsidiary Guarantor fails to
comply with any of its other agreements or covenants in, or provisions
of, the Notes or this Indenture and the Default continues for 60 days
after written notice thereof has been given to the Issuers by the Trustee
or to the Issuers and the Trustee by the Holders of at least 25% in
aggregate principal amount of the then outstanding Notes, such notice to
state that it is a "Notice of Default";
(5) default under (after giving effect to any applicable grace
periods or any extension of any maturity date) any mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness by the Issuers or any Restricted
Subsidiary (or the payment of which is guaranteed by the Issuers or any
Restricted Subsidiary), whether such Indebtedness or guaranty now exists
or is created after the Issue Date, if (A) either (1) such default
results from the failure to
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pay principal of or interest on such Indebtedness or (2) as a result of
such default the maturity of such Indebtedness has been accelerated, and
(B) the principal amount of such Indebtedness, together with the
principal amount of any other such Indebtedness with respect to which
such a payment default (after the expiration of any applicable grace
period or any extension of the maturity date) has occurred, or the
maturity of which has been so accelerated, exceeds $5,000,000 in the
aggregate;
(6) a final non-appealable judgment or judgments for the payment
of money (other than judgments as to which a reputable insurance company
has accepted full liability) is or are entered by a court or courts of
competent jurisdiction against the Issuers or any Restricted Subsidiary
and such judgment or judgments remain undischarged, unbonded or unstayed
for a period of 60 days after entry, provided that the aggregate of all
such judgments exceeds $5,000,000;
(7) intentionally omitted;
(8) the cessation of a material portion of the gaming operations
of the Company and its Subsidiaries, taken as a whole, for more than 60
days, except as a result of an Event of Loss;
(9) any revocation, suspension, expiration (without previous or
concurrent renewal) or loss of any Gaming License for more than 60 days
other than as a result of any Asset Sale made in accordance with the
provisions of this Indenture or any voluntary relinquishment that is, in
the judgment of the Managers, both desirable in the conduct of the
business of the Company and its Subsidiaries, taken as a whole, and not
disadvantageous to the Holders in any material respect;
(10) any failure to comply with (after giving effect to any
applicable grace periods) any material agreement or covenant in, or
material provision of, any Security Document;
(11) any breach or waiver of any provision of the Member
Agreement;
(12) either of the Issuers or any Subsidiary Guarantor, pursuant
to or within the meaning of any Bankruptcy Law:
(b) commences a voluntary case,
(c) consents to the entry of an order for relief against it in an
involuntary case,
(d) consents to the appointment of a Custodian of it or for all or
substantially all of its property,
(e) makes a general assignment for the benefit of its creditors, or
(f) admits in writing its inability to pay debts as the same become due;
and
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(13) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(a) is for relief against either of the Issuers or any Subsidiary
Guarantor in an involuntary case,
(b) appoints a Custodian of either of the Issuers or any Subsidiary
Guarantor or for all or substantially all of their property, or
(c) orders the liquidation of either of the Issuers or any Subsidiary
Guarantor,
and such order or decree remains unstayed and in effect for 60 days.
The Issuers shall, upon becoming aware of any Default or Event of
Default, deliver to the Trustee a statement specifying such Default or Event of
Default and what action the Issuers are taking or propose to take with respect
thereto.
Section 6.2 Acceleration.
Subject to the terms of the Intercreditor Agreement, if an Event of
Default (other than an Event of Default specified in clause (12) or (13) of
Section 6.1 hereof) occurs and is continuing, the Trustee by written notice to
the Issuers, or the Holders of at least 25% in principal amount of the then
outstanding Notes by written notice to the Issuers and the Trustee, may declare
the unpaid principal of and any accrued interest on all the Notes to be due and
payable. Upon such declaration the principal and interest shall be due and
payable immediately. If an Event of Default specified in clause (12) or (13) of
Section 6.1 hereof occurs, all outstanding Notes shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.
Section 6.3 Other Remedies.
If an Event of Default occurs and is continuing, subject to the terms of
the Intercreditor Agreement, the Trustee may pursue any available remedy (under
this Indenture or otherwise) to collect the payment of principal or interest on
the Notes to enforce the performance of any provision of the Notes, this
Indenture or the Security Documents.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or constitute a waiver of
or acquiescence in the Event of Default. All remedies are cumulative to the
extent permitted by law.
Section 6.4 Waiver of Past Defaults.
Holders of a majority of the aggregate principal amount of the then
outstanding Notes, by written notice to the Trustee, may on behalf of the
Holders of all of the Notes (a) waive any existing Default or Event of Default
and its consequences under this Indenture except a continuing Default or Event
of Default in the payment of interest on, or the principal of,
55
any Note or a Default or an Event of Default with respect to any covenant or
provision which cannot be modified or amended without the consent of the Holder
of each outstanding Note affected, and/or (b) rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal or
interest that has become due solely because of the acceleration) have been cured
or waived. Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 6.5 Control by Majority.
The Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
it. However, the Trustee may refuse to follow any direction that conflicts with
law or this Indenture, that the Trustee determines may be unduly prejudicial to
the rights of other Holders, or that may involve the Trustee in personal
liability.
Section 6.6 Limitation on Suits.
A Holder may pursue a remedy with respect to this Indenture or the Notes
only if:
(a) the Holder gives to the Trustee written notice of a continuing Event
of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability or
expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another Holder or
to obtain a preference or priority over another Holder.
Section 6.7 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal and interest on the Note, on or
after the respective due dates expressed in the Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of the Holder.
56
Section 6.8 Collection Suit by Trustee.
If an Event of Default specified in Section 6.1(1) or (2) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Issuers for the whole amount of
principal and interest remaining unpaid on the Notes and interest on overdue
principal (and premium, if any) and, to the extent lawful, interest on overdue
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
Section 6.9 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Issuers (or any
other obligor under the Notes), their creditors or their property and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.7 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.7 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders of the Notes
may be entitled to receive in such proceeding whether in liquidation or under
any plan of reorganization or arrangement or otherwise. Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
Section 6.10 Priorities.
Subject to the terms of the Intercreditor Agreement, if the Trustee
collects any money pursuant to this Article, it shall pay out the money in the
following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.7, including payment of all compensation, expense and liabilities
incurred, and all advances made, by the Trustee and the costs and expenses of
collection;
Second: to Holders for amounts due and unpaid on the Notes for principal
and interest, ratably, without preference or priority of any kind, according to
the amounts due and payable on the Notes for principal and interest,
respectively;
57
Third: without duplication, to Holders for any other Obligations owing to
the Holders under the Notes or this Indenture; and
Fourth: to the Issuers or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders.
Section 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.6, or a suit by Holders of more than 10% in principal
amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
Section 7.1 Duties of Trustee.
(1) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as
a prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs.
(2) Except during the continuance of an Event of Default:
(a) The duties of the Trustee shall be determined solely by
the express provisions of this Indenture, and the Trustee need
perform only those duties that are specifically set forth in this
Indenture and the Security Documents, and no others, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee.
(b) In the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Indenture and the Security Documents.
However, the Trustee shall examine the certificates and opinions
to determine whether or not they conform to the requirements of
this Indenture and the Security Documents (but need not confirm or
investigate the accuracy of mathematical calculations or other
facts stated therein).
(3) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
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(a) This paragraph does not limit the effect of paragraph
(2) of this Section.
(b) The Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the
pertinent facts.
(c) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with
a direction received by it pursuant to Section 6.5.
(4) Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to
paragraphs (1), (2) and (3) of this Section.
(5) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee may
refuse to perform any duty or exercise any right or power unless it
receives security and indemnity satisfactory to it against any loss,
liability or expense.
(6) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the
Issuers. Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(7) The Trustee is hereby authorized and directed to enter into
the Intercreditor Agreement upon execution thereof by the other parties
thereto.
Section 7.2 Rights of Trustee.
(1) The Trustee may conclusively rely upon any document believed
by it to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in the
document.
(2) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The
Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on such Officers' Certificate or Opinion of
Counsel. The Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete
authorization and protection from liability in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(3) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with
due care.
(4) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within
its rights or powers conferred upon it by this Indenture.
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(5) Unless otherwise specifically provided in this Indenture or
the Security Documents, any demand, request, direction or notice from the
Issuers shall be sufficient if signed by an Officer of each of the
Issuers, on behalf of the Issuers.
(6) Except with respect to Section 4.1, the Trustee shall have no
duty to inquire as to the performance of the Issuers' covenants in
Article 4 hereof. In addition, the Trustee shall not be deemed to have
knowledge of any Default or Event of Default except (i) any Event of
Default occurring pursuant to Sections 6.1(1), 6.1(2) and 4.1, or (ii)
any Default or Event of Default of which the Trustee shall have received
written notification or obtained actual knowledge.
(7) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture, unless such Holders
shall have offered to the Trustee security or indemnity satisfactory to
the Trustee against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction.
(8) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any 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, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney at the sole
cost of the Company and shall incur not liability or additional liability
of any kind by reason of such inquiry or investigation.
(9) The Trustee shall not be deemed to have notice of any Default
or Event of Default unless a Responsible Officer of the Trustee has
actual knowledge thereof or unless written notice of any event which in
fact such a default is received by the Trustee at the Corporate Trust
Office of the Trustee, and such notice references the Securities and this
Indenture.
(10) The rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in
each of its capacities hereunder, and each agent, custodian and other
Person employed to act hereunder.
(11) The Trustee may request that the Company deliver and
Officers' Certificate setting forth the names of individuals and/or
titles of officers authorized at such time to take specified actions
pursuant to this Indenture, which Officer's Certificate may be signed by
any person authorized to sign an Officers' Certificate, including any
person specified as so authorized in any such certificate previously
delivered and not superseded.
Section 7.3 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Issuers or an Affiliate of
the Issuers with the
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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. The
Trustee is also subject to Sections 7.10 and 7.11.
Section 7.4 Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture, the Security Documents or the
Notes or as to the adequacy of the security for the Notes, it shall not be
accountable for the Issuers' use of the proceeds from the Notes or any money
paid to the Issuers or upon the Issuers' direction under any provision hereof,
it shall not be responsible for the use or application of any money received by
any Paying Agent other than the Trustee and it shall not be responsible for any
statement or recital herein or any statement in the Notes or any other document
in connection with the sale of the Notes or pursuant to this Indenture other
than its certificate of authentication.
Section 7.5 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if the
Trustee has knowledge thereof (within the meaning of Section 7.2(6)), the
Trustee shall mail to the Holders a notice of the Default or Event of Default
within 90 days after it occurs. 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 of the Notes.
Section 7.6 Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, the Trustee shall mail to the Holders a brief report
dated as of such reporting date that complies with TIA ss. 313(a) (but if no
event described in TIA ss. 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA ss. 313(b). The Trustee shall also transmit by mail all
reports as required by TIA ss. 313(c).
Commencing at the time this Indenture is qualified under the TIA, a copy
of each report at the time of its mailing to the Holders shall be filed with the
Commission and each stock exchange on which the Notes are listed. The Issuers
shall promptly notify the Trustee when the Notes are listed on any stock
exchange or any delisting thereof.
At the express written direction of the Company and at the Company's
expense, the Trustee will provide any Gaming Authority with:
(i) copies of all notices, reports and other written
communications that the Trustee gives to Holders;
(ii) a list of all of the Holders promptly after the original
issuance of the Notes and periodically thereafter if the Company so directs in
writing;
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(iii) notice of any Default or Event of Default under this
Indenture, any acceleration of the Indebtedness evidenced hereby, the
institution of any legal actions or proceedings before any court or governmental
authority in respect of a Default or Event of Default hereunder;
(iv) notice of the removal or resignation of the Trustee within
five Business Days of the effectiveness thereof;
(v) notice of any transfer or assignment of rights, by the Issuers
or any Guarantor, under this Indenture known to the Trustee within five Business
Days thereof; and
(vi) a copy of any amendment to the Notes or this Indenture within
five Business Days of the effectiveness thereof.
Subject to Section 7.1 and Section 7.2 hereof, to the extent requested by
the Company in writing and at the Company's expense, the Trustee shall cooperate
with any Gaming Authority in order to provide such Gaming Authority with such
information and documentation as may be reasonably available to the Trustee and
as may be requested in writing by such Gaming Authority and as otherwise
permitted by applicable law.
Section 7.7 Compensation and Indemnity.
The Issuers shall pay to the Trustee from time to time such compensation
for its acceptance of this Indenture and services hereunder as the Issuers and
the Trustee may from time to time agree in writing. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Issuers shall reimburse the Trustee promptly upon request for all
reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel, except such disbursements, advances and expenses as may be attributable
to its negligence or bad faith.
Except as set forth below, the Issuers shall indemnify the Trustee and
its officers, directors, agents and employees against any and all losses,
liabilities or expenses incurred by it without negligence or bad faith on its
part arising out of or in connection with the acceptance or administration of
its duties under this Indenture and the Security Documents, including the costs
and expenses of enforcing this Indenture or the Security Documents against the
Issuers and defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder. The
Trustee shall notify the Issuers promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Issuers shall not relieve the
Issuers of their obligations hereunder. The Issuers shall defend the claim and
the Trustee shall cooperate in the defense. In the event that, in the reasonable
opinion of the Trustee, a conflict of interest or conflicting defenses would
arise in connection with the representation of the Issuers and the Trustee by
the same counsel, the Trustee may have separate counsel and the Issuers shall
pay the reasonable fees and expenses of such counsel. The Issuers need not pay
for any settlement made without its consent, which consent shall not be
unreasonably withheld.
The obligations of the Issuers under this Section 7.7 shall survive the
satisfaction and discharge of this Indenture.
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To secure the Issuers' payment obligations in this Section 7.7, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal of (and
premium, if any) and interest on particular Notes. Such Lien shall survive the
satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(12) or (13) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 7.8 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.8.
The Trustee may resign at any time and be discharged from the trust
hereby created by so notifying the Issuers. The Holders of a majority in
principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Issuers. The Issuers may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property;
(d) the Trustee becomes incapable of acting; or
(e) the Trustee is found unsuitable or unqualified by any Gaming
Authority.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Issuers shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Issuers.
If any Gaming Authority requires the Trustee to be approved, licensed or
qualified and the Trustee fails or declines to do so, such approval, license or
qualification shall be obtained upon the request of, and at the expense of, the
Company, unless the Trustee declines to do so in its sole discretion, in which
case the Trustee shall be replaced in accordance with this Section 7.8, or, if
the Trustee's relationship with the Company may, in the Company's discretion,
jeopardize any material Gaming License or franchise or right or approval granted
thereto, the Trustee shall resign, and, in addition, the Trustee may, at its
option, resign if the Trustee in its sole discretion determines not to be so
approved, licensed or qualified.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuers or the
Holders of at least 10% in principal
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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 and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to the
Holders. The retiring Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee, provided that all sums owing to the Trustee
hereunder have been paid and subject to the Lien provided for in Section 7.7.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the
Issuers' obligations under Section 7.7 hereof shall continue for the benefit of
the retiring Trustee, and the Issuers shall pay to any such replaced or removed
Trustee all amounts owed under Section 7.7 upon such replacement or removal.
Section 7.9 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation or
banking association, the successor corporation without any further act shall be
the successor Trustee.
Section 7.10 Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that shall (a) be a
corporation organized and doing business under the laws of the United States of
America or of any state thereof or of the District of Columbia authorized under
such laws to exercise corporate trustee power, (b) be subject to supervision or
examination by Federal or state or the District of Columbia authority, and (c)
have a combined capital and surplus of at least $100,000,000 as set forth in its
most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA ▇▇.▇▇. 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee is subject to TIA
ss. 310(b); provided, however, that there shall be excluded from the operations
of TIA ss. 310(b)(1) any indenture or indentures under which other securities,
or certificates of interest or participation in other securities, of the Issuers
are outstanding, if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
Section 7.11 Preferential Collection of Claims Against Issuers.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein. The
provisions of TIA ss. 311 shall apply to the Issuers, as obligors on the Notes.
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ARTICLE 8.
DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.1 Discharge; Option to Effect Legal Defeasance or Covenant Defeasance.
This Indenture shall cease to be of further effect (except that the
Issuers' and the Subsidiary Guarantors' obligations under Section 7.7 and the
Trustee's and the Paying Agent's obligations under Sections 8.6 and 8.7 shall
survive) when all outstanding Notes theretofore authenticated and issued have
been delivered (other than destroyed, lost or stolen Notes that have been
replaced or paid) to the Trustee for cancellation and the Issuers or the
Subsidiary Guarantors have paid all sums payable hereunder. In addition, the
Issuers may elect at any time to have Section 8.2 or Section 8.3, at the
Issuers' option, of this Indenture applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
Section 8.2 Legal Defeasance and Discharge.
Upon the Issuers' exercise under Section 8.1 hereof of the option
applicable to this Section 8.2, except as set forth below, the Issuers and the
Subsidiary Guarantors shall be deemed to have been discharged from their
respective obligations with respect to all outstanding Notes on the date the
conditions set forth below are satisfied (hereinafter, "Legal Defeasance").
Following such Legal Defeasance, (a) the Issuers shall be deemed to have paid
and discharged the entire indebtedness outstanding hereunder, and this Indenture
shall cease to be of further effect as to all outstanding Notes and Subsidiary
Guarantees, and (b) the Issuers and the Subsidiary Guarantors shall be deemed to
have satisfied all other of their respective obligations under the Notes, the
Subsidiary Guarantee and this Indenture (and the Trustee, on demand of and at
the expense of the Issuers, shall execute proper instruments acknowledging the
same), except for the following which shall survive until otherwise terminated
or discharged hereunder:
(i) the rights of Holders to receive payments in respect of the
principal of, premium, if any, and interest (and Liquidated Damages, if any) on
such Notes when such payments are due from the trust described in Section 8.5;
(ii) the Issuers' obligations under Sections 2.4, 2.6, 2.7, 2.10,
4.2, 8.5, 8.6 and 8.7 hereof; and
(iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Issuers' and the Subsidiary Guarantors' obligations in
connection therewith.
Subject to compliance with the provisions of this Article 8, the Company may
exercise its option under this Section 8.2 notwithstanding the prior exercise of
its option under Section 8.3 hereof.
Section 8.3 Covenant Defeasance.
Upon the Issuers' exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, the Issuers and the Subsidiary Guarantors shall
be released from their respective obligations under the covenants contained in
Sections 4.3, 4.4, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.14, 4.15, 4.16, 4.17,
4.18, 4.19 and Article 5 hereof on and after the date the conditions set forth
below are satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall
thereafter be
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deemed not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder. Following such Covenant Defeasance, (a)
neither the Issuers nor any Subsidiary Guarantor need comply with, and none of
them shall have any liability in respect of, any term, condition or limitation
set forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document, but,
except as specified above, the remainder of this Indenture, the Notes and the
Subsidiary Guarantee shall be unaffected thereby, and (b) Sections 6.1(3)
through 6.1(10) hereof shall not constitute Events of Default with respect to
the Notes.
Section 8.4 Conditions to Legal Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 8.2 or 8.3 hereof to the outstanding Notes:
(i) the Issuers shall irrevocably have deposited or caused to be
deposited with the Trustee, in trust, for the benefit of the Holders, cash in
U.S. dollars, non-callable Government Securities, or a combination thereof, in
such amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of, premium, if
any, and interest on the outstanding Notes on the stated maturity or on the
applicable redemption date, as the case may be, and the Issuers shall specify
whether the Notes are being defeased to maturity or to a particular redemption
date;
(ii) in the case of Legal Defeasance, the Issuers shall have
delivered to the Trustee an Opinion of Counsel confirming that (A) the Issuers
have received from, or there has been published by, the Internal Revenue Service
a ruling or (B) since the Issue Date, there has been a change in the applicable
Federal income tax law, in either case to the effect that, and based thereon
such Opinion of Counsel shall confirm that, the Holders will not recognize
income, gain or loss for Federal income tax purposes as a result of such Legal
Defeasance and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;
(iii) in the case of Covenant Defeasance, the Issuers shall have
delivered to the Trustee an Opinion of Counsel confirming that the Holders will
not recognize income, gain or loss for Federal income tax purposes as a result
of such Covenant Defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such Covenant Defeasance had not occurred;
(iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit);
(v) such Legal Defeasance or Covenant Defeasance will not result
in a breach or violation of, or constitute a default under any material
agreement or instrument (other than this Indenture) to which the Issuers or any
of the Subsidiaries is a party or by which the Issuers or any of the
Subsidiaries is bound;
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(vi) the Issuers shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Issuers with the intent
of preferring the Holders over the other creditors of the Issuers with the
intent of defeating, hindering, delaying or defrauding creditors of the Issuers
or others; and
(vii) the Issuers shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating, subject to certain factual
assumptions and bankruptcy and insolvency exceptions, that all conditions
precedent provided for in this Indenture relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
Section 8.5 Deposited Cash and U.S. Government Obligations to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.6 hereof, all cash and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this Section 8.5, the "Paying Agent")
pursuant to Section 8.4 hereof in respect of the outstanding Notes shall be held
in trust and applied by the Paying Agent, in accordance with the provisions of
such Notes and this Indenture, to the payment, either directly or through any
other Paying Agent as the Trustee may determine, to the Holders of such Notes of
all sums due and to become due thereon in respect of principal, premium, if any,
and interest (and Liquidated Damages, if any).
The Issuers shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 8.4 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of outstanding Notes.
Section 8.6 Repayment to the Issuers.
(a) The Trustee or the Paying Agent shall deliver or pay to the Issuers
from time to time upon the request of the Issuers any cash or U.S. Government
Obligations held by it as provided in Section 8.4 hereof which in the opinion of
a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.4(i) hereof), are in excess of the amount thereof that
would then be required to be deposited to effect an equivalent Legal Defeasance
or Covenant Defeasance.
(b) Any cash and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee or any Paying Agent, or then held by the
Issuers, in trust for the payment of the principal of, premium, if any, or
interest (and Liquidated Damages, if any) on any Note and remaining unclaimed
for two years after such principal, and premium, if any, or interest has become
due and payable shall be paid to the Issuers on their request; and the Holder of
such Note shall thereafter look only to the Issuers for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money
shall thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, shall at the expense of the
Issuers cause to be published once, in the New York Times
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and The Wall Street Journal (national edition), notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such notification or publication, any unclaimed balance
of such money then remaining will be repaid to the Issuers.
Section 8.7 Reinstatement.
If the Trustee or Paying Agent is unable to apply any cash or U.S.
Government Obligations in accordance with Section 8.2 or 8.3 hereof, as the case
may be, of this Indenture by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, or if any event occurs at any time in the period ending on the 91st
day after the date of deposit pursuant to Section 8.2 or 8.3 hereof which event
would constitute an Event of Default under Section 6.1 (12) or (13) had Legal
Defeasance or Covenant Defeasance, as the case may be, not occurred, then the
Issuers' and the Subsidiary Guarantors' obligations under this Indenture and the
Notes shall be revived and reinstated as though no deposit had occurred pursuant
to Section 8.2 or 8.3 hereof until such time as the Trustee or Paying Agent is
permitted to apply such money in accordance with Section 8.2 or 8.3 hereof, as
the case may be; provided, however, that, if the Issuers make any payment of
principal of, premium, if any, or interest (and Liquidated Damages, if any) on
any Note following the reinstatement of its obligations, the Issuers shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the cash or U.S. Government Obligations held by the Trustee or Paying
Agent.
ARTICLE 9.
AMENDMENTS
Section 9.1 Without Consent of Holders.
The Issuers, the Subsidiary Guarantors and the Trustee may amend or
supplement this Indenture, the Notes and the Security Documents, without the
consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in place
of certificated Notes;
(3) to comply with Article 5 and Section 10.13 hereof;
(4) to make any change that would provide any additional rights or
benefits to the Holders or that does not adversely affect the legal
rights of any Holder under this Indenture or under the Notes;
(5) to comply with requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA;
(6) to release any Subsidiary Guarantee of the Notes permitted to
be released under Section 10.8 hereof; or
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(7) to comply with the requirements of the Trustee and the
Depositary (including its nominees) with respect to transfers of
beneficial interests in the Notes.
Upon the request of the Issuers, accompanied by a resolution of the Board
of Directors of each of the Issuers authorizing the execution of any such
supplemental indenture or amendment, and upon receipt by the Trustee of the
documents described in Section 9.6 hereof required or requested by the Trustee,
the Trustee shall join with the Issuers in the execution of any supplemental
indenture or amendment authorized or permitted by the terms of this Indenture
and shall make any further appropriate agreements and stipulations which may be
therein contained, but the Trustee shall not be obligated to enter into such
supplemental indenture or amendment that affects its own rights, duties or
immunities under this Indenture or otherwise.
Section 9.2 With Consent of Holders.
(a) Subject to Sections 6.4 and 6.7 hereof, the Issuers and the Trustee,
as applicable, may amend, or waive any provision of, this Indenture or the
Notes, with the written consent of the Holders of at least a majority of the
aggregate principal amount of the then outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for Notes).
(b) Upon the request of the Issuers, accompanied by a resolution of the
Board of Directors of each of the Issuers authorizing the execution of any such
supplemental indenture or amendment, and upon filing with the Trustee of
evidence satisfactory to the Trustee of the consent of the Holders as aforesaid,
and upon receipt by the Trustee of the documents described in Section 9.6
hereof, the Trustee shall join with the Issuers in the execution of such
supplemental indenture or amendment unless such supplemental indenture or
amendment affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such supplemental indenture.
(c) It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed supplemental
indenture or amendment, but it shall be sufficient if such consent approves the
substance thereof.
(d) After a supplemental indenture or amendment under this Section 9.2
becomes effective, the Issuers shall mail to the Holders of each Note affected
thereby a notice briefly describing the amendment or waiver. Any failure of the
Issuers to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture, amendment
or waiver.
(i) Notwithstanding any other provision hereof, without the
consent of each Holder affected, an amendment or waiver under this Section 9.2
may not (with respect to any Notes held by a non-consenting Holder):
(ii) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
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(iii) reduce the principal of, or the premium (including, without
limitation, redemption premium) on, or change the fixed maturity of, any Note;
alter the provisions with respect to the payment on redemption of the Notes; or
alter the price at which repurchases of the Notes may be made pursuant to
Section 4.10 or 4.14 hereof, after the Asset Sale or Change of Control,
respectively, has occurred;
(iv) reduce the rate of or change the time for payment of interest
on any Note;
(v) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Notes (except a rescission
of acceleration of the Notes by the Holders of a majority in aggregate principal
amount of the Notes and a waiver of the payment default that resulted from such
acceleration);
(vi) make any Note payable in money other than that stated in the
Notes;
(vii) make any change in Section 6.4 or 6.7 hereof or in this
Section 9.2;
(viii) waive a redemption payment with respect to any Note in a
redemption made pursuant to Article 3 hereof; or
(e) adversely affect the contractual ranking of the Notes or Subsidiary
Guarantees.
(f) Notwithstanding any other provision hereof, without the consent of
the Holders of not less than two-thirds in aggregate principal amount of the
Notes at the time outstanding, the Issuers, the Subsidiary Guarantors and the
Trustee may not amend or supplement the Security Documents, or waive or modify
the rights of the Holders thereunder or the provisions of this Indenture
relating thereto.
Section 9.3 Compliance with Trust Indenture Act.
If, at the time of an amendment to this Indenture or the Notes, this
Indenture shall be qualified under the TIA, every amendment to this Indenture or
the Notes shall be set forth in a supplemental indenture that complies with the
TIA as then in effect.
Section 9.4 Revocation and Effect of Consents.
Until a supplemental indenture, an amendment or waiver becomes effective,
a consent to it by a Holder of a Note is a continuing consent by the Holder and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. A supplemental indenture, amendment or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
The Issuers may fix a record date for determining which Holders must
consent to such supplemental indenture, amendment or waiver. If the Issuers fix
a record date, the record
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date shall be fixed at (i) the later of 30 days prior to the first solicitation
of such consent or the date of the most recent list of Holders furnished to the
Trustee prior to such solicitation pursuant to Section 2.5, or (ii) such other
date as the Issuers shall designate.
Section 9.5 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about a supplemental
indenture, amendment or waiver on any Note thereafter authenticated. The Issuers
in exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment or waiver.
Section 9.6 Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment or supplemental indenture authorized
pursuant to this Article 9 if the amendment does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing or refusing to sign such
amendment or supplemental indenture, the Trustee shall be entitled to receive,
if requested, an indemnity reasonably satisfactory to it and to receive and,
subject to Section 7.1, shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that such amendment
or supplemental indenture is authorized or permitted by this Indenture and
applicable gaming laws, that it is not inconsistent herewith and therewith, and
that it shall be valid and binding upon the Issuers in accordance with its
terms. The Issuers may not sign an amendment or supplemental indenture until the
Board of Directors of each of the Issuers approves it.
ARTICLE 10.
COLLATERAL AND SECURITY AND GUARANTY
Section 10.1 Collateral Documents.
The due and punctual payment of the principal and premium, if any, of,
and interest on, the Notes when and as the same shall be due and payable,
whether on an interest payment date, at maturity, by acceleration, repurchase,
redemption or otherwise, interest on the overdue principal of and interest (to
the extent permitted by law), if any, on the Notes and performance of all other
Obligations under this Indenture, the Notes, the Security Documents and the
Registration Rights Agreement, shall be secured as provided in the Security
Documents.
The Issuers shall, and shall cause each of the Restricted Subsidiaries
to, do or cause to be done all such acts and things as may be necessary or
proper, or as may be required by the provisions of the Security Documents, to
assure and confirm to the Trustee the security interest in the Collateral
contemplated hereby and by the Security Documents, as from time to time
constituted, so as to render the same available for the security and benefit of
this Indenture and of the Notes secured hereby, according to the intent and
purposes herein and therein expressed. The Issuers shall, and shall cause each
of the Restricted Subsidiaries to, take, upon request of the Trustee, any and
all actions required to cause the Security Documents to create and
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maintain, as security for the Obligations under this Indenture, the Notes, the
Security Documents and the Registration Rights Agreement, valid and enforceable,
perfected (except as expressly provided herein or therein) Liens in and on all
the Collateral, in favor of the Trustee, superior to and prior to the rights of
all third Persons, and subject to no other Liens, other than as provided herein
and therein; provided, that the Trustee's Lien securing the Collateral may be
subordinated pursuant to the terms of the Intercreditor Agreement to a Lien
securing Indebtedness outstanding pursuant to Section 4.9(a) hereof, but only to
the extent provided in the Intercreditor Agreement.
The Issuers shall, and shall cause each of the Restricted Subsidiaries
to, use all reasonable efforts to obtain all requisite consents to enable such
Issuers or Restricted Subsidiary to provide a Lien on any license (other than
any Gaming License), contract or agreement to which such Issuer or Restricted
Subsidiary that is an Excluded Asset described in clause (iii) of the definition
of "Excluded Assets."
Section 10.2 Additional Collateral.
The Company shall, and shall cause each of the Subsidiary Guarantors to,
grant to the Trustee a valid security interest in all property and assets of the
Company and such Subsidiary Guarantors, other than Excluded Assets, whether
owned on the Issue Date or thereafter acquired, and to execute and deliver all
documents and opinions and to take all action necessary or desirable to perfect
and protect such a security interest in favor of the Trustee, subject only to
Permitted Liens.
Section 10.3 Opinions.
The Issuers shall furnish to the Trustee within three months after each
anniversary of the Issue Date, an Opinion of Counsel, dated as of such date,
stating either that (i) in the opinion of such counsel, all action has been
taken with respect to the recording, registering, filing, re-recording,
re-registering and refiling of all supplemental indentures, financing
statements, continuation statements or other instruments of further assurance as
is necessary to maintain the Liens of the Security Documents and reciting the
details of such action, subject to customary assumptions and exclusions or (ii)
in the opinion of such Counsel, no such action is necessary to maintain such
Liens, which Opinion of Counsel also shall state what actions it then believes
are necessary to maintain the effectiveness of such liens during the next year,
subject to customary assumptions and exclusions.
Section 10.4 Release of Collateral.
(a) Collateral shall be released from the Liens created by the Security
Documents from time to time at the sole cost and expense of the Issuers:
(i) upon payment in full of the Notes and all other Obligations
under this Indenture, the Notes, the Security Documents and the Registration
Rights Agreement then due and owing,
(ii) unless an Event of Default shall have occurred and be
continuing, upon the (A) sale or other disposition of such Collateral pursuant
to an Asset Sale made in accordance with Section 4.10 hereof, (B) sale or other
disposition of such Collateral meeting the
72
conditions of (b)(1) of the definition of Asset Sale, or (C) transfer or
exchange of such Collateral in the ordinary course of business,
(iii) upon the written consent of the Holders of not less than
two-thirds of the aggregate principal amount of the then outstanding Notes
(including consents obtained in connection with a tender offer or exchange offer
for Notes),
(iv) as required pursuant to the terms of the Intercreditor
Agreement, or
(v) upon a Legal Defeasance;
provided, that the Trustee shall not release any Lien on any Collateral unless
and until it shall have received an Officers' Certificate certifying that all
conditions precedent hereunder have been met and such other documents required
by Section 10.5 hereof. Upon compliance with the above provisions, the Trustee
shall execute, deliver or acknowledge any necessary or proper instruments of
termination, satisfaction or release to evidence the release of any Collateral
permitted to be released pursuant to this Indenture or the Security Documents.
(b) The release of any Collateral from the terms of the Security
Documents shall not be deemed to impair the security under this Indenture in
contravention of the provisions hereof and of the Security Documents if and to
the extent the Collateral is released pursuant to the terms of this Indenture
and the Security Documents.
Section 10.5 Certificates of the Issuers.
The Issuers shall furnish to the Trustee, prior to each proposed release
of Collateral, all documents required by TIA ss. 314(d). The Trustee may, to the
extent permitted by Sections 7.1 and 7.2 hereof, accept as conclusive evidence
of compliance with the foregoing provisions the appropriate statements contained
in such instruments. Any certificate or opinion required by TIA ss. 314(d) may
be made by an Officer of each of the Issuers, except in cases where TIA ss.
314(d) requires that such certificate or opinion be made by an independent
engineer, appraiser or other expert within the meaning of TIA ss. 314(d).
Section 10.6 Authorization of Actions to be Taken by the Trustee Under the
Security Documents.
Subject to the terms of the Intercreditor Agreement, the Trustee may, in
its sole discretion and without the consent of the Holders, on behalf of the
Holders, take all actions it deems necessary or appropriate in order to (a)
enforce any of the terms of the Security Documents and (b) collect and receive
any and all amounts payable in respect of the Obligations of the Issuers and the
Subsidiary Guarantors hereunder and under the Notes, the Security Documents and
the Registration Rights Agreement. Subject to the terms of the Intercreditor
Agreement, the Trustee shall have the power to institute and to maintain such
suits and proceedings as it may deem expedient to prevent any impairment of the
Collateral by any acts that may be unlawful or in violation of the Security
Documents or this Indenture, and such suits and proceedings as the Trustee may
deem expedient to preserve or protect its interest and the interests of the
Holders in the Collateral (including power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative or
other
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governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment, rule or order
would impair the security interest hereunder or be prejudicial to the interests
of the Holders or the Trustee).
Section 10.7 Authorization of Receipt of Funds by the Trustee Under the Security
Documents.
The Trustee is authorized to receive any funds for the benefit of the
Holders distributed under the Security Documents, and to make further
distributions of such funds to the Holders according to the provisions of this
Indenture and the Security Documents.
Section 10.8 Subsidiary Guarantee.
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, subject to Section 10.10 hereof, each Subsidiary
Guarantor, jointly and severally, hereby unconditionally guarantees (such
guarantees, together with further guarantees granted from time to time pursuant
to Section 10.13, being the "Subsidiary Guarantee") to each Holder and the
Trustee irrespective of the validity or enforceability of this Indenture, the
Notes, the Security Documents, the Registration Rights Agreement or the
Obligations of the Issuers hereunder or thereunder: (i) the due and punctual
payment of the principal and premium, if any, of, and interest on, the Notes
(including, without limitation, interest after the filing of a petition
initiating any proceedings referred to in clause (12) or (13) of Section 6.1
hereof), whether at maturity or on an interest payment date, by acceleration,
call for redemption or otherwise; (ii) the due and punctual payment of interest
on the overdue principal and premium, if any, of, and interest on, the Notes, if
lawful; (iii) the due and punctual payment and performance of all other
Obligations of the Issuers under the Notes, this Indenture, the Security
Documents and the Registration Rights Agreement, all in accordance with the
terms set forth herein and in the Notes, the Security Documents and the
Registration Rights Agreement; and (iv) in case of any extension of time of
payment or renewal of any Notes or any of such other Obligations hereunder or
under the Notes, the Security Documents or the Registration Rights Agreement,
the due and punctual payment or performance thereof in accordance with the terms
of the extension or renewal, whether at stated maturity, by acceleration or
otherwise.
Failing payment when due by the Issuers of any amount so guaranteed for
whatever reason, the Subsidiary Guarantors shall be jointly and severally
obligated to pay the same immediately.
Each Subsidiary Guarantor hereby agrees that (i) its obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes, this Indenture, the Security Documents, the
Registration Rights Agreement or the Obligations of the Issuers hereunder or
thereunder, the absence of any action to enforce the same, any waiver or consent
by any Holder with respect to any provisions hereof or thereof, any releases of
Collateral, any amendment of this Indenture, the Notes or Security Documents,
any delays in obtaining or realizing upon or failures to obtain or realize upon
Collateral, the recovery of any judgment against either of the Issuers or any of
the Subsidiaries, any action to enforce the same, or any other circumstance that
might otherwise constitute a legal or equitable discharge or defense of a
guarantor and (ii) this Subsidiary Guarantee will not be discharged except by
74
complete performance of the Obligations of the Issuers under the Notes, this
Indenture, the Security Documents and the Registration Rights Agreement.
Each Subsidiary Guarantor hereby agrees that it shall not be entitled to
and irrevocably waives (i) diligence, presentment, demand of payment, filing of
claim with a court in the event of insolvency or bankruptcy of either of the
Issuers, any Subsidiary Guarantor, any other Subsidiary or any other obligor
under the Notes, any right to require a proceeding first against the applicable
Issuer, any Subsidiary Guarantor, any other Subsidiary or any other obligor
under this Indenture, the Notes or the Security Documents, protest, notice and
all demands whatsoever, (ii) any right of subrogation, reimbursement,
exoneration, contribution or indemnification in respect of any Obligations
guaranteed hereby and (iii) any claim or other rights that it may now or
hereafter acquire against the Issuers or any of the Subsidiaries that arise from
the existence or performance of its Obligations under this Subsidiary Guarantee,
including, without limitation, any right to participate in any claim or remedy
of a Holder against the Issuers or any of the Subsidiaries or any Collateral
that a Holder now has or hereafter acquires, whether or not such claim, remedy
or right arises in equity or under contract, statute or common law, by any
payment made hereunder or otherwise, and including, without limitation, the
right to take or receive from the Issuers or any of the Subsidiaries, directly
or indirectly, in cash or other property, by setoff or in any other manner,
payment or security on account of such claim or other rights.
If any Holder or the Trustee is required by any court or otherwise to
return to the Issuers, any Subsidiary Guarantor, any other Subsidiary of the
Issuers or any other obligor under this Indenture, the Notes or the Security
Documents, trustee, liquidator, or other similar official, any amount paid by
the Issuers, any Subsidiary Guarantor, any other Subsidiary of the Issuers or
any other obligor under this Indenture, the Notes or the Security Documents to
the Trustee or such Holder, this Subsidiary Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect.
Each Subsidiary Guarantor agrees that, as between the Subsidiary
Guarantors, on the one hand, and the Holders and the Trustee, on the other hand,
(i) the maturity of the Obligations guaranteed hereby may be accelerated as
provided in Section 6.2 for the purposes of this Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration as to the Issuers of the Obligations guaranteed hereby, and (ii) in
the event of any declaration of acceleration of those Obligations as provided in
Section 6.2, those Obligations (whether or not due and payable) will forthwith
become due and payable by each of the Subsidiary Guarantors for the purpose of
this Subsidiary Guarantee.
Section 10.9 Execution and Delivery of Subsidiary Guarantee.
To evidence the Subsidiary Guarantee set forth in Section 10.8, the
Issuers and each Subsidiary Guarantor hereby agrees that (a) a notation of such
Subsidiary Guarantee substantially as set forth on Exhibit C hereto shall be
endorsed on each Note authenticated and delivered by the Trustee, (b) such
endorsement shall be executed on behalf of each Subsidiary Guarantor by its
Chairman of the Board, President, Chief Financial Officer, Chief Operating
Officer, Treasurer, Secretary or any Vice President and (c) a counterpart
signature page to this Indenture shall be executed on behalf of each Subsidiary
Guarantor by its Chairman of the
75
Board, President or one of its Vice Presidents and attested to by another
officer acknowledging such Subsidiary Guarantor's agreement to be bound by the
provisions hereof and thereof.
Each Subsidiary Guarantor hereby agrees that its Subsidiary Guarantee set
forth in Section 10.8 shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Subsidiary Guarantee.
If an officer whose signature is on this Indenture no longer holds that
office at the time the Trustee authenticates the Notes on which a Subsidiary
Guarantee is endorsed, the Subsidiary Guarantee shall nevertheless be valid.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Subsidiary Guarantee set forth
in this Indenture on behalf of the Subsidiary Guarantor.
Section 10.10 Limitation on Subsidiary Guarantor's Liability.
Each Subsidiary Guarantor and by its acceptance hereof each Holder hereby
confirms that it is the intention of all such parties that the guarantee by such
Subsidiary Guarantor pursuant to its Subsidiary Guarantee not constitute a
fraudulent transfer or conveyance for purposes of any Federal or state law. To
effectuate the foregoing intention, the Holders and the Subsidiary Guarantors
hereby irrevocably agree that the Obligations of each Subsidiary Guarantor under
its Subsidiary Guarantee shall be limited to the maximum amount as will, after
giving effect to all other contingent and fixed liabilities of such Subsidiary
Guarantor and to any collections from or payments made by or on behalf of any
other Subsidiary Guarantor in respect of the Obligations of such other
Subsidiary Guarantor under its Subsidiary Guarantee, result in the Obligations
of such Subsidiary Guarantor under the Subsidiary Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under Federal or state law or
render a Subsidiary Guarantor insolvent.
Section 10.11 Rights under the Subsidiary Guarantee.
(a) No payment by any Subsidiary Guarantor pursuant to the provisions
hereof shall entitle such Subsidiary Guarantor to any payment out of any
Collateral or give rise to any claim of the Subsidiary Guarantors against the
Trustee or any Holder.
(b) Each Subsidiary Guarantor waives notice of the issuance, sale and
purchase of the Notes and notice from the Trustee or the Holders from time to
time of any of the Notes of their acceptance and reliance on this Subsidiary
Guarantee.
(c) No set-off, counterclaim, reduction or diminution of any obligation
or any defense of any kind or nature (other than performance by the Subsidiary
Guarantors of their obligations hereunder) that any Subsidiary Guarantor may
have or assert against the Trustee or any Holder shall be available hereunder to
such Subsidiary Guarantor.
(d) Each Subsidiary Guarantor shall pay all costs, expenses and fees,
including all reasonable attorneys' fees, that may be incurred by the Trustee in
enforcing or
76
attempting to enforce the Subsidiary Guarantee or protecting the rights of the
Trustee or the Holder, if any, in accordance with this Indenture.
Section 10.12 Primary Obligations.
The Obligations of each Subsidiary Guarantor hereunder shall constitute a
guaranty of payment and not of collection. Each Subsidiary Guarantor agrees that
it is directly liable to each Holder hereunder, that the Obligations of each
Subsidiary Guarantor hereunder are independent of the Obligations of the Issuers
or any other Subsidiary Guarantor, and that a separate action may be brought
against each Subsidiary Guarantor, whether such action is brought against the
Issuers or any other Subsidiary Guarantor or whether the Issuers or any other
Subsidiary Guarantor is joined in such action. Each Subsidiary Guarantor agrees
that its liability hereunder shall be immediate and shall not be contingent upon
the exercise or enforcement by the Trustee or the Holders of whatever remedies
they may have against the Issuers or any other Subsidiary Guarantor, or the
enforcement of any lien or realization upon any security Trustee may at any time
possess. Each Subsidiary Guarantor agrees that any release that may be given by
the Trustee or the Holders to the Issuers or any other Subsidiary Guarantor
shall not release such Subsidiary Guarantor.
Section 10.13 Guarantee by Subsidiary.
The Company shall cause (i) each Restricted Subsidiary that is formed or
acquired after the date hereof and (ii) each Subsidiary that becomes a
Restricted Subsidiary after the date hereof, in each case concurrently
therewith, to (i) become a Subsidiary Guarantor hereunder and execute and
deliver to the Trustee a Subsidiary Guarantee in the form of Exhibit C attached
hereto and a supplemental indenture in form reasonably satisfactory to the
Trustee pursuant to which such Restricted Subsidiary shall unconditionally
guarantee all of the Issuers' Obligations as set forth in Section 10.8 of this
Indenture; and (ii) execute a Security Agreement (substantially in the form of
the Security Agreement entered into on the Issue Date) and other Security
Documents necessary or reasonably requested by the Trustee to grant the Trustee
a valid, enforceable, perfected Lien on the Collateral described therein,
subject only to Liens permitted under Section 4.12; and (iii) cause such
Restricted Subsidiary to deliver to the Trustee an Opinion of Counsel, in form
reasonably satisfactory to the Trustee, that (i) such Security Agreement,
supplemental indenture and Subsidiary Guarantee have been duly authorized,
executed and delivered by such Restricted Subsidiary and (ii) such Security
Agreement, this Indenture and such Subsidiary Guarantee constitute a legal,
valid, binding and enforceable obligation of such Restricted Subsidiary, subject
to customary assumptions and exceptions, including for bankruptcy, fraudulent
transfer and equitable principles.
Each Note issued after the date of execution by any Subsidiary Guarantor
of a Subsidiary Guarantee shall be endorsed with a form of Subsidiary Guarantee
that has been executed by such Subsidiary Guarantor. However, the failure of any
Note to have endorsed thereon a Subsidiary Guarantee executed by such Subsidiary
Guarantor shall not affect the validity or enforceability of such Subsidiary
Guarantee against such Subsidiary Guarantor.
77
Section 10.14 Release of Subsidiary Guarantors.
If all of the Capital Stock of any Subsidiary Guarantor is sold by the
Company or any of its Subsidiaries to a Person (other than the Company or any of
its Subsidiaries) in a transaction that complies with the terms of this
Indenture and the Net Proceeds from such Asset Sale are used in accordance with
Section 4.10, then such Subsidiary Guarantor will be released and discharged
from all of its Obligations under its Subsidiary Guarantee of the Notes and this
Indenture.
Section 10.15 Gaming Law and Liquor Law Considerations.
(a) The Trustee acknowledges, understands and agrees that the Gaming Laws
and Liquor Laws may impose certain licensing or transaction approval
requirements prior to the exercise of the rights and remedies granted to it
under this Indenture with respect to the Collateral subject to the Gaming Laws
and Liquor Laws.
(b) If any consent under the Gaming Laws and Liquor Laws is required in
connection with the taking of any of the actions which may be taken by the
Trustee in the exercise of its rights hereunder, then the Issuers agree to use
their reasonable best efforts to secure such consent and to cooperate with the
Trustee in obtaining any such consent. Upon the occurrence and during the
continuation of any Event of Default, the Issuers shall promptly execute and/or
cause the execution of all applications, certificates, instruments and other
documents and papers that the Trustee may be required to file in order to obtain
any necessary approvals under the Gaming Laws and Liquor Laws, and if the
Issuers fail or refuse to execute such documents, the Trustee or the clerk of
the court with jurisdiction may execute such documents on behalf of the Issuers.
ARTICLE 11.
MISCELLANEOUS
Section 11.1 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA ss. 318(c), the imposed duties shall control.
Section 11.2 Notices.
Any notice or communication by the Issuers or the Trustee to the others
is duly given if in writing and delivered in Person or mailed by first-class
mail (registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the others' addresses:
78
If to the Issuers:
c/o Majestic Investor Holdings, LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇▇ Companies, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Trustee:
The Bank of New York
▇ ▇▇▇▇ ▇▇▇▇▇/▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
The Issuers or the Trustee by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; upon receipt, if deposited in the mail, postage prepaid; when
answered back, if telexed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery. All notices and communications to the
Trustee shall be deemed to have been duly given only if actually received by the
Trustee.
Any notice or communication to a Holder shall be mailed by first-class
mail, certified or registered, return receipt requested, to his address shown on
the register kept by the Registrar. Failure to mail a notice or communication to
a Holder or any defect in it shall not affect its sufficiency with respect to
other Holders.
If a notice communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Issuers mails a notice or communication to Holders, it shall mail
a copy to the Trustee and each Agent at the same time.
79
Section 11.3 Communication by Holders with Other Holders .
Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Issuers, the
Trustee, the Registrar and any other person shall have the protection of TIA ss.
312(c).
Section 11.4 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuers to the Trustee to take any
action under this Indenture, the Issuers shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.5) stating that, in the opinion of the signers, all conditions
precedent and covenants, if any, provided for in this Indenture relating to the
proposed action have been complied with; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 11.5)
stating that, in the opinion of such counsel, all such conditions precedent and
covenants have been complied with.
Section 11.5 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA ss. 314(a)(4)) shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been complied with,
provided that with respect to matters of fact, an Opinion of Counsel may rely
upon an Officers' Certificate or a certificate of a public official.
Section 11.6 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
80
Section 11.7 Legal Holidays.
If a payment date is a Legal Holiday at a place of payment, payment may
be made at that place on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period.
Section 11.8 No Recourse Against Others.
No director, member, manager, officer, employee, incorporator,
stockholder or controlling person of the Issuers or any Subsidiary Guarantor, as
such, shall have any liability for any obligations of the Issuers or any
Subsidiary Guarantor under the Notes, this Indenture, the Security Documents or
the Registration Rights Agreement or for any claim based on, in respect of, or
by reason of such obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability. The waiver and release shall be part of
the consideration for the issuance of the Notes and the Subsidiary Guarantee.
Notwithstanding the foregoing, nothing in this provision shall be construed as a
waiver or release of any claims under the Federal securities laws. Further,
notwithstanding the foregoing, nothing in this provision shall, or shall be
construed in any way to, modify the rights or obligations of either of the
Issuers or any of the Subsidiary Guarantors as an Issuer or Subsidiary
Guarantor, respectively.
Section 11.9 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED, INTERPRETED AND THE RIGHTS OF THE
PARTIES DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, INCLUDING,
WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE LAWS AND RULES 327(b). THE ISSUERS
HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY NEW YORK STATE COURT
SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT
SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. THE ISSUERS IRREVOCABLY
WAIVE, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW,
TRIAL BY JURY AND ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE ISSUERS IRREVOCABLY CONSENT, TO
THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TO THE SERVICE
OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO THE ISSUERS AT THEIR ADDRESS SET FORTH HEREIN, SUCH SERVICE TO
BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF ANY PURCHASER TO
81
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE ISSUERS IN ANY OTHER JURISDICTION.
Section 11.10 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Issuers or any of the Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
Section 11.11 Successors.
All agreements of the Issuers and any Subsidiary Guarantors in this
Indenture and the Notes shall bind their respective successors. All agreements
of the Trustee in this Indenture shall bind its successor.
Section 11.12 Severability.
In case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Section 11.13 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 11.14 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof and shall in no way modify or
restrict any of the terms or provisions hereof.
(Signature pages follow.)
82
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Indenture as of the date first written above.
THE ISSUERS:
MAJESTIC INVESTOR HOLDINGS, LLC
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: Manager
MAJESTIC INVESTOR CAPITAL CORP.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
THE SUBSIDIARY GUARANTORS:
▇▇▇▇▇▇ NEVADA GAMING, LLC
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇ MISSISSIPPI GAMING, LLC
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: Manager
▇▇▇▇▇▇ COLORADO GAMING, LLC
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: Manager
2
THE BANK OF NEW YORK, as Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
3
EXHIBIT A
(Face of Security)
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST
COMPANY (THE "DEPOSITARY") TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DEPOSITARY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR
SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.]1
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE
WHICH IS TWO YEARS (OR SUCH OTHER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER
RULE 144(k) UNDER THE SECURITIES ACT AS PERMITTING RESALES OF RESTRICTED
SECURITIES BY NON-AFFILIATES WITHOUT RESTRICTION) AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH EITHER OF THE ISSUERS OR
ANY AFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR
OF THIS SECURITY) (THE "RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO THE
ISSUERS, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THIS SECURITY IS ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A UNDER THE SECURITIES ACT, (D) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1),
(2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS' AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D)
OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING
CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE AND IN EACH CASE IN
ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY U.S. STATE OR ANY OTHER
APPLICABLE JURISDICTION. THE HOLDER OF THIS SECURITY AGREES THAT IT WILL DELIVER
TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
---------------
1 This paragraph should be included only if the Note is issued in global
form.
A-1
MAJESTIC INVESTOR HOLDINGS, LLC
MAJESTIC INVESTOR CAPITAL CORP.
11.653% SENIOR SECURED NOTE
DUE 2007
NO. 1 $152,632,000
CUSIP NO.
Majestic Investor Holdings, LLC, a Delaware limited liability company
(the "Company"), and Majestic Investor Capital Corp., a Delaware corporation
("Capital" and, together with the Company, the "Issuers"), as obligors, for
value received promise to pay to Cede & Co. or registered assigns, the principal
sum of One Hundred Fifty Two Million Six Hundred Thirty Two Thousand Dollars on
November 30, 2007. Interest Payment Dates: May 31 and November 30 and on the
maturity date. Record Dates: May 15 and November 15 (whether or not a Business
Day).
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
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IN WITNESS WHEREOF, the Issuers have caused this Note to be signed
manually or by facsimile by their duly authorized officers.
Dated:
MAJESTIC INVESTOR HOLDINGS, LLC
By:
----------------------------------------
Name:
Title:
MAJESTIC INVESTOR CAPITAL CORP.
By:
----------------------------------------
Name:
Title:
Trustee's Certificate of Authentication:
Dated:
This is one of the Notes referred to in the within-mentioned Indenture:
The Bank of New York, as Trustee
By:
---------------------------
Authorized Signatory
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(Back of Security)
11.653% SENIOR SECURED NOTE
DUE 2007
1. Interest. Majestic Investor Holdings, LLC, a Delaware limited
liability company (the "Company"), and Majestic Investor Capital Corp., a
Delaware corporation ("Capital" and, together with the Company, the "Issuers"),
as obligors, promise to pay interest on the principal amount of this Note at the
rate and in the manner specified below.
The Issuers shall pay, in cash, interest on the principal amount of this
Note, at the rate of 11.653% per annum. The Issuers shall pay interest
semi-annually on May 31 and November 30 of each year, and on the maturity date,
commencing on May 31, 2002, or if any such day is not a Business Day, on the
next succeeding Business Day (each an "Interest Payment Date").
Interest shall be computed on the basis of a 360-day year consisting of
twelve 30-day months. Interest shall accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the Issue Date. To
the extent lawful, the Issuers shall pay interest on overdue principal at the
rate of 1% per annum in excess of the then applicable interest rate on the
Notes; the Issuers shall pay interest on overdue installments of interest
(without regard to any applicable grace periods) at the same rate to the extent
lawful.
2. Method of Payment. The Issuers shall pay interest on the Notes (except
defaulted interest) to the Persons who are registered Holders of Notes at the
close of business on the record date next preceding the Interest Payment Date,
even if such Notes are cancelled after such record date and on or before such
Interest Payment Date. The Holder must surrender this Note to a Paying Agent to
collect principal payments. The Issuers shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. The Issuers may pay principal and interest
by check to a Holder's registered address.
3. Paying Agent and Registrar. Initially, the Trustee shall act as Paying
Agent and Registrar. The Issuers may change any Paying Agent, Registrar or
co-registrar without notice to any Holder. Subject to certain exceptions, the
Company or any of its Subsidiaries may act in any such capacity.
4. Indenture. The Issuers issued the Notes under an Indenture dated as of
December 6, 2001 (the "Indenture") among the Issuers, the Subsidiary Guarantors
named therein and the Trustee. The terms of the Notes include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (the "TIA") (15 U.S. Code ▇▇.▇▇. 77aaa-77bbbb) as in
effect on the date of the Indenture until such time as the Indenture is
qualified under the TIA and thereafter as in effect on the date the Indenture is
so qualified. The Notes are subject to all such terms, and Holders are referred
to the Indenture and the TIA for a statement of such terms. The terms of the
Indenture shall govern any inconsistencies between the Indenture and the Notes.
Terms not otherwise defined herein shall have the meanings
A-4
assigned in the Indenture. The aggregate principal amount of Notes that may be
authenticated and delivered under the Indenture is unlimited.
5. Optional Redemption. Except as set forth in Sections 3.7(b) and 3.8 of
the Indenture, the Notes are not redeemable at the Issuers' option prior to
November 30, 2005. Thereafter, the Notes shall be subject to redemption at the
option of the Issuers, in whole or in part, at the redemption prices (expressed
as percentages of principal amount) set forth below plus accrued and unpaid
interest thereon and Liquidated Damages, if any, to the applicable date of
redemption, if redeemed during the 12-month period beginning on November 30 of
the years indicated below:
Year Percentage
---- ----------
2005 . 105.827%
2006 and thereafter 100.000%
Notwithstanding the foregoing, at any time or from time to time prior to
November 30, 2004, the Issuers may redeem, at their option, up to 35% of the
aggregate principal amount of the Notes then outstanding at a redemption price
of 111.653% of the principal amount thereof, plus accrued and unpaid interest
thereon and Liquidated Damages, if any, through the applicable date of
redemption, with the Net Cash Proceeds of one or more Qualified Equity
Offerings; provided, that (a) such redemption shall occur within 60 days of the
date of closing of such Qualified Equity Offering and (b) at least 65% of the
aggregate principal amount of Notes issued on or after the Issue Date remains
outstanding immediately after giving effect to each such redemption.
6. Mandatory Redemption. There shall be no mandatory redemption of the
Notes (other than a Required Regulatory Redemption).
7. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Issuers may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Registrar and the Issuers need not exchange or
register the transfer (i) of any Note or portion of a Note selected for
redemption or (ii) of any Notes for a period of 15 days before a selection of
Notes to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.
8. Persons Deemed Owners. The registered Holder of a Note may be treated
as its owner for all purposes, subject to the provisions of the Indenture with
respect to the record dates for the payment of interest.
9. Amendments and Waivers. Subject to certain exceptions, the Indenture
or the Notes may be amended with the written consent of the Holders of at least
a majority in principal amount of the then outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for Notes), and any
existing Default or Event of Default (except certain payment defaults) may be
waived with the consent of the Holders of a majority in
A-5
principal amount of the then outstanding Notes (including consents obtained in
connection with a tender offer or exchange offer for Notes). Without the consent
of any Holders, the Indenture, the Notes and the Security Documents, may be
amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for assumption of the Issuers' obligations to the Holders in the case of
a merger or consolidation, to provide for uncertificated Notes in addition to or
in place of certificated Notes, to make any change that would provide any
additional rights or benefits to the Holders of the Notes, or that does not
adversely affect the legal rights hereunder or under the Indenture or the
Security Documents of any Holder, to release any Subsidiary Guarantee of the
Notes permitted to be released under the terms of the Indenture, to comply with
requirements of the Commission in order to effect or maintain the qualification
of the Indenture under the TIA, or to comply with the requirements of the
Trustee and the Depositary (including its nominees) with respect to transfers of
beneficial interests in the Notes. Notwithstanding the foregoing, without the
consent of not less than two-thirds in aggregate principal amount of the Notes
at the time outstanding, the Issuers, the Subsidiary Guarantors and the Trustee
may not amend or supplement the Security Documents, or waive or modify the
rights of the Holders thereunder or the provisions of the Indenture relating
thereto.
10. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the then outstanding Notes may declare by written notice to the
Issuers and the Trustee all the Notes to be due and payable immediately, except
that in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, all outstanding Notes become due and payable
immediately without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. The Trustee may
require security and indemnity satisfactory to it before it enforces the
Indenture or the Notes. Subject to certain limitations, Holders of a majority in
principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Issuers must furnish an annual compliance
certificate to the Trustee.
11. Trustee Dealings with Issuers. The Trustee under the Indenture, in
its individual or any other capacity, may make loans to, accept deposits from,
and perform services for the Issuers or their Affiliates, and may otherwise deal
with the Issuers or their Affiliates, as if it were not Trustee.
12. No Recourse Against Others. No director, member, manager, officer,
employee, incorporator, stockholder or controlling person of the Issuers or any
Subsidiary Guarantor, as such, shall have any liability for any obligations of
the Issuers or any Subsidiary Guarantor under the Notes, the Indenture, the
Security Documents or the Registration Rights Agreement or for any claim based
on, in respect of, or by reason of such obligations or their creation. Each
Holder by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for the issuance of the Notes and the
Subsidiary Guarantees. Notwithstanding the foregoing, nothing in this provision
shall be construed as a waiver or release of any claims under the Federal
securities laws.
13. Authentication. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
A-6
14. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
15. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuers have caused
CUSIP numbers to be printed on the Notes and has directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
16. Governing Law. This Note and the Indenture shall be construed,
interpreted and the rights of the parties determined in accordance with the laws
of the State of New York, including, without limitation, Sections 5-1401 and
5-1402 of the New York General Obligations Law and New York Civil Practice Laws
and Rules 327(b).
17. [Holders' Compliance with Registration Rights Agreement. Each Holder
of a Note, by its acceptance thereof, acknowledges and agrees to the provisions
of the Registration Rights Agreement, dated as of December 6, 2001, among the
Issuers and the parties named on the signature page thereof (the "Registration
Rights Agreement"), including but not limited to the obligations of the Holders
with respect to a registration and the indemnification of the Issuers and the
Initial Purchaser (as defined therein) to the extent provided therein.](2)
The Issuers shall furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to: Majestic Investor Holdings, LLC, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Operating and Financial Officer.
----------
2 This paragraph should only be included in the Series A Notes.
A-7
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint______________________________
agent to transfer this Note on the books of the Issuers. The agent may
substitute another to act for him.
Date:____________________
Your Signature:____________________
(Sign exactly as your name appears
on the face of this Note)
Your Tax ID Number:____________________
Signature Guarantee*
-----------------
*NOTICE: The signature must be guaranteed by an institution which is a member of
one of the following recognized signature guarantee programs:
(1) The Securities Transfer Agent Medallion Program (STAMP);
(2) The New York Stock Exchange Medallion Program (MSP);
(3) The Stock Exchange Medallion Program (SEMP).
A-8
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Note purchased by
the Issuers pursuant to Section 4.10 or Section 4.14 of the Indenture, as the
case may be, state the amount you elect to have purchased (if all, write "ALL"):
$______________
Date:____________________
Your Signature:____________________
(Sign exactly as your name appears
on the face of this Note)
Your Tax ID Number:____________________
Signature Guarantee*
------------
*NOTICE: The signature must be guaranteed by an institution which is a
member of one of the following recognized signature guarantee
programs:
(1) The Securities Transfer Agent Medallion Program (STAMP);
(2) The New York Stock Exchange Medallion Program (MSP);
(3) The Stock Exchange Medallion Program (SEMP).
A-9
SCHEDULE OF EXCHANGES OF DEFINITIVE NOTES(3)
The following exchanges of a part of this Global Note for Definitive
Notes have been made:
Principal Amount
Amount of decrease in Amount of increase in of this Global Note Signature of
Principal Amount Principal Amount following such authorized officer
Date of Exchange of this Global Note of this Global Note decrease (or increase) of Trustee
-------------------- --------------------- --------------------- ---------------------- ------------------
---------------
3 This Schedule should be included only if the Note is issued in global
form.
A-10
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF NOTES
Re: [Series A] [Series B] 11.653% Senior Secured Notes due 2007 (the "Notes")
of Majestic Investor Holdings, LLC and Majestic Investor Capital Corp.
This Certificate relates to $______ principal amount of Notes held in
*[ ] book-entry or *[ ] definitive form by _______________________ (the
"Transferor").
The Transferor, by written order, has requested the Trustee:
[ ] to deliver in exchange for its beneficial interest in the Global Note
held by the depositary, a Note or Notes in definitive, registered form of
authorized denominations and an aggregate principal amount equal to its
beneficial interest in such Global Note (or the portion thereof indicated
above); or
[ ] to exchange or register the transfer of a Note or Notes. In connection
with such request and in respect of each such Note, the Transferor does
hereby certify that Transferor is familiar with the Indenture relating to
the above captioned Notes and, the transfer of this Note does not require
registration under the Securities Act of 1933, as amended (the
"Securities Act") because such Note:
[ ] is being acquired for the Transferor's own account, without transfer;
[ ] is being transferred pursuant to an effective registration statement;
[ ] is being transferred to a "qualified institutional buyer" (as defined
in Rule 144A under the Securities Act), in reliance on such Rule 144A;
[ ] is being transferred pursuant to an exemption from registration in
accordance with Rule 904 under the Securities Act;**
[ ] is being transferred pursuant to Rule 144 under the Securities Act;** or
[ ] is being transferred pursuant to another exemption from the registration
requirements of the Securities Act (explain:_____________________________
_________________________________________________________________________
_________________________________________________________________________
____________________________________________________________________ ).**
___________________________________
[INSERT NAME OF TRANSFEROR]
By: ___________________________________
Date:
* Check applicable box.
** If this box is checked, this certificate must be accompanied by an
opinion of counsel to the effect that such transfer is in compliance with
the Securities Act.
B-1
EXHIBIT C
FORM OF GUARANTEE
GUARANTEE
For good and valuable consideration received from the Issuers by the
undersigned (hereinafter referred to as the "Subsidiary Guarantors," which term
includes any successor or additional Subsidiary Guarantors), the receipt and
sufficiency of which is hereby acknowledged, subject to Section 10.10 of the
Indenture, each Subsidiary Guarantor, jointly and severally, hereby
unconditionally guarantees, irrespective of the validity or enforceability of
the Indenture, the Notes, the Security Documents, the Registration Rights
Agreement or the Obligations thereunder, (a) the due and punctual payment of the
principal and premium, if any, of and interest on the Notes (including, without
limitation, interest after the filing of a petition initiating any proceedings
referred to in Section 6.1(12) or (13) of the Indenture), whether at maturity or
on an interest payment date, by acceleration, call for redemption or otherwise,
(b) the due and punctual payment of interest on the overdue principal and
premium, if any, of and interest, if any, on the Notes, if lawful, (c) the due
and punctual payment and performance of all other Obligations under such
documents, all in accordance with the terms set forth in the Indenture, the
Notes, the Security Documents and the Registration Rights Agreement, and (d) in
case of any extension of time of payment or renewal of any Notes or any of such
other Obligations thereunder or under the Indenture, the Security Documents or
the Registration Rights Agreement, the due and punctual payment or performance
thereof in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise.
No director, member, manager, officer, employee, incorporator,
stockholder or controlling person of the Subsidiary Guarantor, as such, shall
have any liability under this Subsidiary Guarantee for any obligations of the
Subsidiary Guarantor under the Notes, the Indenture, the Security Documents or
the Registration Rights Agreement or for any claim based on, in respect of, or
by reason of, such obligations or their creation. Each Holder of the Notes by
accepting a Note waives and releases all such liability.
SUBSIDIARY GUARANTOR:
By:
-----------------------------------------
Name:
Title:
▇-▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇-▇
EXHIBIT E
FORM OF SECURITY AGREEMENT
E-1
EXHIBIT F
FORM OF TRADEMARK SECURITY AGREEMENT
F-1
CROSS-REFERENCE TABLE*Trust Indenture
Act Section Indenture Section
----------- -----------------
310(a)(1)......................................................................................................7.10
(a)(2)......................................................................................................7.10
(a)(3)......................................................................................................N.A.
(a)(4)......................................................................................................N.A.
(a)(5)......................................................................................................7.10
(b)....................................................................................................7.8; 7.10
(c).........................................................................................................N.A.
311(a).........................................................................................................7.11
(b).........................................................................................................7.11
(c).........................................................................................................N.A.
312(a)..........................................................................................................2.5
(b).........................................................................................................11.3
(c).........................................................................................................11.3
313(a)..........................................................................................................7.6
(b)(1).......................................................................................................7.6
(b)(2).......................................................................................................7.6
(c)..........................................................................................................7.6
(d)..........................................................................................................7.6
314(a)..........................................................................................................7.6
(b).........................................................................................................N.A.
(c)(1)......................................................................................................11.4
(c)(2)......................................................................................................11.4
(c)(3)......................................................................................................N.A.
(d).........................................................................................................N.A.
(e).........................................................................................................11.5
(f).........................................................................................................N.A.
315(a).......................................................................................................7.1(2)
(b)..........................................................................................................7.5
(c).......................................................................................................7.1(1)
(d).......................................................................................................7.1(3)
(e).........................................................................................................6.11
316(a)(last sentence)...........................................................................................2.9
(a)(1)(A)....................................................................................................6.5
(a)(1)(B)....................................................................................................6.4
(a)(2)......................................................................................................N.A.
(b)..........................................................................................................9.2
(c)..........................................................................................................9.4
317(a)(1).......................................................................................................6.8
(a)(2).......................................................................................................6.9
(b)..........................................................................................................2.4
318(a).........................................................................................................11.1
(b).........................................................................................................N.A.
(c).........................................................................................................11.1
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
A-2