<PAGE>
As filed with the Securities and Exchange Commission on June 3, 1996
REGISTRATION NO. 33-80655
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 3 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MOHEGAN TRIBAL GAMING AUTHORITY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S><C>
Not Applicable 7999 06-1436334
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
Roland Harris
Chairman, Management Board
67 Sandy Desert Road 67 Sandy Desert Road
Uncasville, Connecticut 06382 Uncasville, Connecticut 06382
(860) 848-0545 (860) 848-0545
(Address, including zip code, and telephone number, (Name, address, including zip code, and telephone
including area code, of Registrant's principal executive offices) number including area code, of agent for service)
</TABLE>
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COPY TO:
Lewis B. Rome, Esq.
Rome, McGuigan, Sabanosh & Klebanoff, P.C.
One State Street
Hartford, Connecticut 06103
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable after this Registration Statement becomes effective.
If any of the Securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933 check the following box: /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
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<S> <C> <C> <C> <C>
Proposed maximum Proposed maximum
Title of each class of Amount to be offering price aggregate Amount of
securities to be registered registered per unit(2) offering price(2) registration fee
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13 1/2% Senior Secured
Notes due 2002(1) $175,000,000(1) 100% $175,000,000 $60,345
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</TABLE>
(1) Includes aggregate principal amount of outstanding Series A Senior
Secured Notes and Series B Senior Secured Notes to be issued in exchange
for outstanding Series A Senior Secured Notes pursuant to the Exchange
Offer to which this Registration Statement relates.
(2) Estimated solely for purposes of calculating the registration fee.
------------
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
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<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
CROSS-REFERENCE SHEET BETWEEN ITEMS OF FORM S-1 AND THE PROSPECTUS PURSUANT
TO ITEM 501(B) OF REGULATION S-K.
<TABLE>
<CAPTION>
ITEM IN FORM S-1 LOCATION IN PROSPECTUS
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<S> <C>
1. Forepart of the Registration Statement and Outside Front
Cover Page of Prospectus. . . . . . . . . . . . . . . . . . . Cover Page of Registration
Statement; Cross Reference Sheet;
Front Cover Page
2. Inside Front and Outside Back Cover Pages of Prospectus . . . Inside Front and Outside
Back Cover Pages; Additional
Information
3. Summary Information, Risk Factors and Ratio of Earnings
to Fixed Charges. . . . . . . . . . . . . . . . . . . . . . . Prospectus Summary; Risk Factors;
Business and Property
4. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . Use of Proceeds
5. Determination of Offering Price . . . . . . . . . . . . . . . Front Cover Page; The Exchange
Offer
6. Dilution. . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
7. Selling Security Holders. . . . . . . . . . . . . . . . . . . Not Applicable
8. Plan of Distribution. . . . . . . . . . . . . . . . . . . . . Front Cover Page; The Exchange
Offer; Plan of Distribution
9. Description of Securities to be Registered. . . . . . . . . . Description of the Senior Notes
10. Interests of Named Experts and Counsel. . . . . . . . . . . . Not Applicable
11. Information With Respect to the Registrant. . . . . . . . . . Front Cover Page; Prospectus
Summary; Risk Factors; Business
and Property; Mohegan Tribe of
Indians of Connecticut
12. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities. . . . . . . . Not Applicable
</TABLE>
<PAGE>
EXPLANATORY NOTE
This Registration Statement contains two forms of prospectuses: one to be
used in connection with the Exchange Offer and one to be used in a contemplated
shelf offering of Series B Senior Notes in connection with resales by
broker/dealers. The two prospectuses are identical in all respects except that
(i) the front and back cover pages of the prospectus that would be used in the
shelf offering refer only to the Series B Senior Notes, (ii) the section of the
prospectus entitled "Plan of Distribution" that would be used in the shelf
offering refers only to sales of Series B Senior Notes to be effected by
broker/dealers and (iii) all descriptions of the Exchange Offer and of the
Series A Senior Notes would be deleted from the prospectus to be used in the
shelf offer. Each of the front and back cover pages and the prospectus section
entitled "Plan of Distribution" that would be included in the prospectus to be
used in the shelf offer, which pages are not included in the prospectus to be
used in the Exchange Offer, are marked "Alternative Prospectus Page."
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED JUNE 3, 1996
MOHEGAN TRIBAL GAMING AUTHORITY
Offer to Exchange its
13 1/2% Series B Senior Secured Notes due 2002 With Cash Flow
Participation Interest which have been registered under the
Securities Act of 1933, as amended, for any and all outstanding
13 1/2% Series A Senior Secured Notes due 2002 With Cash Flow
Participation Interest
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
JULY 12, 1996, UNLESS EXTENDED.
The Mohegan Tribal Gaming Authority (the "Authority"), an instrumentality
of the Mohegan Tribe of Indians of Connecticut (the "Tribe"), hereby offers,
upon the terms and subject to the conditions set forth in this Prospectus and
the accompanying Letter of Transmittal (the "Letter of Transmittal") to exchange
(the "Exchange Offer") $175 million aggregate principal amount of its 13 1/2%
Series B Senior Secured Notes due November 15, 2002 (the "Series B Senior
Notes"), which have been registered under the Securities Act of 1933, as amended
(the "Securities Act"), pursuant to a Registration Statement of which this
Prospectus is a part, for an equal principal amount of its outstanding 13 1/2%
Series A Senior Secured Notes due November 15, 2002 (the "Series A Senior
Notes"), which were sold on September 29, 1995 to institutional accredited
investors and qualified institutional buyers pursuant to an exemption from
registration under the Securities Act (the "Offering") and of which an aggregate
of $175 million principal amount is outstanding. The form and terms of the
Series B Senior Notes are the same as the form and terms of the Series A Senior
Notes, except that (i) the Series B Senior Notes have been registered under the
Securities Act and, therefore, will not bear legends restricting their transfer
pursuant to the Securities Act, and (ii) following consummation of the Exchange
Offer, holders of the Series B Senior Notes generally will not be entitled to
the rights of holders of the Series A Senior Notes under the Registration Rights
Agreement dated as of September 29, 1995 among the Authority and the holders of
Series A Senior Notes identified therein. See "The Exchange Offer--Registration
Rights Agreement," "--Consequences of Failure to Exchange" and "--Plan of
Distribution; Resales of the Series B Senior Notes." The Series B Senior Notes
will evidence the same debt as the Series A Senior Notes (which they will
replace) and will be issued under, and be entitled to the benefits of, the
Indenture governing the Series A Senior Notes, dated as of September 29, 1995
(the "Indenture"). The Series A Senior Notes and the Series B Senior Notes are
sometimes referred to herein collectively as the "Senior Notes." See "The
Exchange Offer" and "Description of the Senior Notes."
The Authority will accept for exchange any and all Series A Senior Notes
validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on
July 12, 1996, unless extended by the Authority in its sole discretion
(the "Expiration Date"). Tenders of the Series A Senior Notes may be withdrawn
at any time prior to the Expiration Date. The Exchange Offer is subject to
certain customary conditions. See "The Exchange Offer." THE SERIES A SENIOR
NOTES MAY BE TENDERED ONLY IN DENOMINATIONS OF $1,000 OR INTEGRAL MULTIPLES
THEREOF.
----------------
SEE "RISK FACTORS" BEGINNING ON PAGE 17 HEREIN FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY HOLDERS OF SERIES A SENIOR NOTES IN
EVALUATING THE EXCHANGE OFFER AND BY PROSPECTIVE PURCHASERS OF SERIES B SENIOR
NOTES ISSUED BY THE AUTHORITY IN THE EXCHANGE OFFER.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS JUNE __ , 1996.
<PAGE>
(COVER PAGE CONTINUED)
EXCEPT AS OTHERWISE INDICATED, CERTAIN CAPITALIZED TERMS USED IN THIS
PROSPECTUS HAVE THE MEANINGS ASSIGNED TO THEM IN THE GLOSSARY AND INDEX OF
DEFINED TERMS BEGINNING ON PAGE 134 HEREOF.
Fixed interest will be payable on the Series B Senior Notes at the
rate of 13 1/2% per annum, semi-annually in arrears on November 15 and
May 15 of each year, commencing May 15, 1996. Cash Flow Participation
Interest (as defined herein) will be payable on the Series B Senior Notes,
on each such interest payment date, in an aggregate amount equal to 5.0% of
the Authority's Cash Flow (as defined herein) for the six-month period
ending on September 30 or March 31 (each a "Semi-annual Period") most
recently completed prior to such interest payment date up to a limit,
calculated on a cumulative basis with respect to each period consisting of
two consecutive Semi-annual Periods ending on September 30, of $250 million
of the Authority's Cash Flow; PROVIDED that no Cash Flow Participation
Interest shall be payable with respect to any period prior to the earlier
of the first day the Mohegan gaming and entertainment complex being
constructed by the Authority in southeastern Connecticut (the "Mohegan Sun
Casino") commences operations and October 31, 1996. The aggregate amount of
Cash Flow Participation Interest payable in any Semi-annual Period will be
reduced pro rata for reductions in the outstanding principal amount of
Senior Notes occurring prior to the close of business on the record date
immediately preceding such payment of Cash Flow Participation Interest. The
payment of Cash Flow Participation Interest may be deferred if such payment
would cause the Authority's Fixed Charge Coverage Ratio (as defined herein)
for the four consecutive fiscal quarters last completed to be less than
2.0:1 and is subject to other limitations and restrictions described
herein.
The Series B Senior Notes will not be redeemable at the option of the
Authority prior to November 15, 1999 (except as otherwise required by any
governmental authority, commission or other agency with authority to
regulate the Mohegan Sun Casino), after which time the Series B Senior
Notes will be redeemable, in whole or in part, at the option of the
Authority at the redemption prices set forth herein plus accrued and unpaid
interest and liquidated damages, if any, to the date of redemption. Upon
the occurrence of any of certain specific events described in the Indenture
that effect (or could effect) a change of control of the Authority, each
holder of Senior Notes will have the right to require the Authority to
repurchase such holder's Senior Notes at 101% of the principal amount
thereof plus accrued and unpaid interest and liquidated damages, if any, to
the repurchase date, subject to certain limitations and restrictions
described herein. Within 120 days after the last day of each fiscal year of
the Authority, beginning with the fiscal year ending September 30, 1997,
the Authority will be required to offer to purchase, at the prices set
forth herein, outstanding Senior Notes in a principal amount equal to the
sum of (i) 50% of the Authority's Excess Cash Flow (as defined herein),
(ii) 100% of the amount of Deferred Subordinated Interest (as defined
herein) for such fiscal year and (iii) accrued and unpaid interest and
liquidated damages, if any.
The Series B Senior Notes (and any Series A Senior Notes not tendered
in the Exchange Offer) will be senior secured obligations of the Authority
and will rank PARI PASSU in right of payment with any existing and future
senior Indebtedness (as defined herein) of the Authority, including without
limitation, approximately $40 million of equipment lease financing to be
incurred by the Authority (the "Equipment Financing"). In addition, prior
to opening the Mohegan Sun Casino the Authority expects to incur
approximately $12.5 million of senior indebtedness for working capital
purposes (the "Working Capital Financing"), which may be secured by the
same collateral that secures the Senior Notes, on a PARI PASSU basis with
the Senior Notes. The Senior Notes will rank senior to all existing and
future subordinated indebtedness of the Authority, including $40 million
principal amount of Subordinated Notes due 2003 (the "Subordinated Notes")
acquired by Sun International Hotels Limited ("Sun International")
concurrently with the completion of the Offering and any additional
subordinated notes that may be issued to Sun International pursuant to the
$50 million secured completion guarantee provided by Sun International to
fund any cost overruns incurred in connection with completion of the
Mohegan Sun Casino (the "Secured Completion Guarantee"). Payment of
principal on the Subordinated Notes is subordinate to the prior payment in
full of all obligations on all of the Senior Notes, other than (i) certain
redemptions required by a Gaming Regulatory Authority if a holder is
required to be found suitable and is found unsuitable and (ii) repurchases
of Subordinated Notes using funds not accepted by holders of Senior Notes
in an Excess Cash Purchase Offer. The Series A Senior Notes are, and the
Series B Senior Notes will be, secured by note collateral consisting
primarily of a leasehold mortgage on the Mohegan Sun Casino, a security
interest in the personal property of the Mohegan Sun Casino (with certain
exceptions described herein), a pledge of certain cash collateral accounts
and an assignment of cash generated by the Mohegan Sun Casino. Additional
Indebtedness, including senior Indebtedness, may be incurred from time to
time, subject to certain restrictions.
Based on an interpretation by the staff of the Securities and Exchange
Commission (the "Commission") set forth in no-action letters issued to
third parties, the Authority believes that, except as otherwise described
<PAGE>
(COVER PAGE CONTINUED)
EXCEPT AS OTHERWISE INDICATED, CERTAIN CAPITALIZED TERMS USED IN THIS
PROSPECTUS HAVE THE MEANINGS ASSIGNED TO THEM IN THE GLOSSARY AND INDEX OF
DEFINED TERMS BEGINNNING ON PAGE 134 HEREOF.
herein, Series B Senior Notes issued pursuant to the Exchange Offer in
exchange for Series A Senior Notes may be offered for resale, resold and
otherwise transferred by any holder thereof (other than any such holder
which is an "affiliate" of the Authority within the meaning of Rule 405
under the Securities Act) without compliance with the registration and
prospectus delivery provisions of the Securities Act; PROVIDED that such
Series B Senior Notes are acquired in the ordinary course of such holder's
business and that such holder does not intend to participate and has no
arrangement or understanding with any person to participate in the
distribution of such Series B Senior Notes.
Prior to consummation of this Exchange Offer, there has been no public
market for the Series B Senior Notes (or the Series A Senior Notes). The
Series A Senior Notes are not, and the Series B Senior Notes are not
expected to be, listed on any securities exchange or authorized for trading
on the Nasdaq system. The Authority does not presently expect that an
active market for the Series B Senior Notes (or the Series A Senior Notes)
will develop. To the extent that an active market for the Series B Senior
Notes (or the Series A Senior Notes) does develop, the market value thereof
will depend on many factors, including, among other things, prevailing
interest rates, general economic conditions, the Authority's financial
condition, the construction and results of operations of the Mohegan Sun
Casino and other factors. Such conditions may cause the Series B Senior
Notes (or the Series A Senior Notes), to the extent that they are traded,
to trade at a discount. See "Risk Factors--Absence of Public Trading."
The Authority has agreed to pay the costs and expenses of the Exchange
Offer.
<PAGE>
ADDITIONAL INFORMATION
The Authority has filed with the Commission a registration statement on
Form S-1 (the "Registration Statement") under the Securities Act with respect to
the Series B Senior Notes offered hereby. This Prospectus, which is part of the
Registration Statement, does not contain all the information set forth in the
Registration Statement and the exhibits and schedules thereto, certain items of
which are omitted in accordance with the rules and regulations of the
Commission. Statements made in this Prospectus as to the contents of any
contract, agreement or other document referred to are not necessarily complete.
With respect to each such contract, agreement or other document filed as an
exhibit to the Registration Statement, reference is hereby made to such exhibit
for a more complete description of the matter involved and each such statement
shall be deemed qualified in its entirety by such reference. For further
information with respect to the Authority, the Tribe and the Series B Senior
Notes, reference is hereby made to the Registration Statement and such exhibits
and schedules filed as a part thereof, which may be inspected, without charge,
at the Public Reference Section of the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of
the Commission located at Seven World Trade Center, 13th Floor, New York, New
York 10048 and at Room 3190, Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of all or any portion of the Registration
Statement may be obtained from the Public Reference Section of the Commission,
upon payment of prescribed fees.
-------------------------------
ENFORCEABILITY OF CIVIL LIABILITIES
THE AUTHORITY, AS AN INSTRUMENTALITY OF THE TRIBE, A FEDERALLY-RECOGNIZED
INDIAN TRIBE, INTENDS TO ASSERT THE DEFENSE OF SOVEREIGN IMMUNITY IN ANY SUIT
BROUGHT WITHOUT THEIR CONSENT. ALTHOUGH THE TRIBE AND THE AUTHORITY HAVE
CONSENTED TO SUIT AND HAVE GRANTED A LIMITED WAIVER OF ANY SOVEREIGN IMMUNITY
DEFENSE THEY MAY HAVE IN CONNECTION WITH THE SENIOR NOTES, THE INDENTURE AND THE
DOCUMENTS RELATED TO THE NOTE COLLATERAL, INCLUDING SUITS AGAINST THE AUTHORITY
TO ENFORCE THE OBLIGATION TO REPAY THE SENIOR NOTES, THE TRUSTEE AND THE HOLDERS
OF THE SENIOR NOTES COULD BE PRECLUDED FROM JUDICIALLY ENFORCING THEIR RIGHTS
AND REMEDIES IF SUCH WAIVER OR CONSENT IS HELD TO BE INEFFECTIVE. THE TRIBE AND
THE AUTHORITY HAVE NOT WAIVED THE DEFENSE OF SOVEREIGN IMMUNITY WITH RESPECT TO
ANY PRIVATE CIVIL SUITS FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS.
ACCORDINGLY, THE HOLDERS OF THE SENIOR NOTES MAY NOT HAVE AN EFFECTIVE REMEDY
AGAINST THE TRIBE OR THE AUTHORITY FOR VIOLATIONS OF THE SECURITIES ACT.
IN ADDITION, THE GAMING DISPUTES COURT OF THE TRIBE HAS BEEN VESTED WITH
EXCLUSIVE JURISDICTION FOR THE TRIBE OVER DISPUTES WITH RESPECT TO THE MOHEGAN
SUN CASINO, INCLUDING ALL DISPUTES RELATING TO THE SENIOR NOTES OR THE
INDENTURE. FEDERAL COURTS MAY NOT HAVE JURISDICTION OVER DISPUTES NOT ARISING
UNDER FEDERAL LAW AND STATE COURTS MAY NOT HAVE JURISDICTION OVER DISPUTES
ARISING ON THE TRIBE'S RESERVATION. MOREOVER, FEDERAL AND STATE COURTS, UNDER
THE DOCTRINE OF COMITY AND EXHAUSTION OF REMEDIES, MAY BE REQUIRED TO DEFER TO
THE JURISDICTION OF THE GAMING DISPUTES COURT OR REQUIRE A PLAINTIFF TO EXHAUST
ITS REMEDIES IN THE GAMING DISPUTES COURT BEFORE BRINGING ANY ACTION IN A
FEDERAL OR STATE COURT.
-2-
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION APPEARING ELSEWHERE IN THIS PROSPECTUS. EXCEPT AS OTHERWISE
INDICATED, CERTAIN CAPITALIZED TERMS USED IN THIS PROSPECTUS HAVE THE MEANINGS
ASSIGNED TO THEM IN THE GLOSSARY AND INDEX OF DEFINED TERMS BEGINNING ON PAGE
132 HEREOF.
THE MOHEGAN SUN CASINO
The Mohegan Tribal Gaming Authority (the "Authority"), an instrumentality
of the Mohegan Tribe of Indians of Connecticut (the "Tribe"), is developing a
gaming and entertainment complex (the "Mohegan Sun Casino") on an approximately
240-acre site located in southeastern Connecticut (the "Site"). The Authority
has engaged Trading Cove Associates ("TCA"), an affiliate of Sun International
Hotels Limited ("Sun International"), to manage the development, construction,
operation and marketing of the Mohegan Sun Casino. The Mohegan Sun Casino,
scheduled to open in the fourth quarter of 1996, will include approximately
150,000 square feet of gaming space and is designed to accommodate approximately
3,000 slot machines and 180 table games. The Mohegan Sun Casino is expected to
commence operations with a minimum of 2,500 slot machines and 180 table games,
and will feature a 600-seat buffet, four specialty theme restaurants, a coffee
shop, a food court, several bars, an entertainment area featuring children's
recreational facilities and parking for approximately 7,500 cars. Once
completed, the Mohegan Sun Casino and the currently operating Foxwoods Resort &
Casino ("Foxwoods"), which is owned and operated by the Mashantucket Pequot
Tribe (the "Pequot Tribe"), will be the only two casinos offering slot machines
and table games in the northeastern United States that are currently legally
authorized outside of Atlantic City, New Jersey.
The Site for the Mohegan Sun Casino is located approximately one mile from
the interchange of Interstate 395 and Connecticut Route 2A (which is expected to
be widened to a four-lane expressway), just outside Montville, Connecticut, and
approximately 10 miles west of Foxwoods. As part of its integrated development
plan, the Authority is constructing a four-lane access road (with its own exit)
from Route 2A, giving patrons of the Mohegan Sun Casino direct access to
Interstate 395 and to Interstate 95, the main highway connecting Boston,
Providence and New York. The Site, together with all buildings constructed and
to be constructed thereon and improvements thereto, including the Mohegan Sun
Casino, are and will be owned by the United States in trust for the Tribe. Such
real property, and the additional parcel of land adjacent to the Site that was
acquired by the Tribe in its own name for expansion of the access road leading
to the Mohegan Sun Casino, are and will be leased by the Tribe to the Authority
under a long-term land lease.
The Mohegan Sun Casino will incorporate an historical northeastern Indian
theme which will be conveyed through architectural features and the use of
natural design elements such as timber, stone and water. Guests will enter the
Mohegan Sun Casino through one of four major entrances, each of which will be
distinguished by a separate seasonal theme--winter, spring, summer and fall--
emphasizing the importance of the seasonal changes to tribal life. The Authority
believes that the Mohegan Sun Casino's location, ease of access and unique
design, together with Sun International's development and gaming expertise,
should enable the Mohegan Sun Casino to capture a significant share of the
gaming market in the northeastern United States.
-3-
<PAGE>
MARKET
The market for the Mohegan Sun Casino will be primarily day-trip customers
from New England and New York who reside within 150 miles of the Mohegan Sun
Casino. According to market research reports, in 1994 there were approximately
2.6 million adults living within 50 miles of the Site, 10.2 million adults
within 100 miles of the Site and 21.8 million adults within 150 miles of the
Site. The metropolitan areas of Hartford, New Haven, Springfield, Worcester,
Boston and Providence are within one to two hours driving time by interstate
highway to the Mohegan Sun Casino.
The Authority believes that the success of Foxwoods supports the conclusion
that the northeastern United States is an attractive market in which to
establish a casino. Foxwoods is currently the largest gaming facility in the
United States in terms of the number of total gaming positions and, the
Authority believes, is one of the most profitable casinos in the United States.
THE MANAGER
Partners of TCA have been working with the Tribe since 1992 and assisted
the Tribe in obtaining federal recognition, negotiating a gaming compact with
the State of Connecticut and obtaining numerous governmental approvals for the
Mohegan Sun Casino. TCA's partners and their affiliates have extensive
experience in the development, construction, marketing and management of casinos
and hotels throughout the world. A wholly-owned subsidiary of Sun International
is a Managing Partner of, and owns a 50% interest in, TCA. The remaining
partners of TCA are primarily engaged in hotel management and real estate
development.
The senior management of Sun International has been actively engaged in the
gaming and lodging industries for the last 25 years. Prior to establishing Sun
International in 1993, Mr. Solomon Kerzner, the Chairman and Chief Executive
Officer of Sun International, and his management team were responsible for the
development and operation of several world-renowned resorts and casinos
including Sun City, The Lost City and The Carousel Casino and Entertainment
World (the "Carousel") in South Africa. Sun City, which was developed over a
14-year period starting in 1979, currently covers approximately 620 acres and
features four hotels with a total of 1,300 rooms and 55,000 square feet of
gaming space with 1,300 slot machines and 40 table games. Sun City caters to
approximately 2.0 million tourists annually. The most recent addition to Sun
City is The Lost City, a highly themed, $300 million destination resort based
upon a legend of a lost African civilization. The Carousel, located 65 miles
from Johannesburg, is a 500,000 square foot Victorian-themed entertainment
facility featuring 65,000 square feet of gaming space with 1,800 slot machines
and 70 table games and caters to over 4.0 million visitors annually.
In 1993, Mr. Kerzner established Sun International to acquire from Resorts
International, Inc. the Paradise Island businesses, which are located in The
Commonwealth of the Bahamas and include the Paradise Island Resort and Casino.
After acquiring these businesses, Sun International spent approximately $140
million over a seven-month period redeveloping the property into an ocean-themed
destination resort that was relaunched as the Atlantis Resort and Casino
("Atlantis"). Atlantis features 1,147 hotel rooms and 30,000 square feet of
gaming space with 800 slot machines and 75 table games. Sun International
currently owns interests in and operates nine resort and gaming facilities,
including Atlantis, four casinos in France and four hotel properties in the
Indian Ocean. On March 1, 1996, Sun International redesignated its two series
of Ordinary Shares as one series of Ordinary Shares, which trade on the New York
Stock Exchange (the "NYSE") under the symbol "SIHLF." Based upon the closing
price of its Ordinary Shares on May 1, 1996, Sun International had an equity
market capitalization of approximately $1.24 billion.
-4-
<PAGE>
In connection with the Offering, Sun International purchased $40 million of
Subordinated Notes. See "--Investment by Sun International." In addition,
subject to certain qualifications and limitations, Sun International has
undertaken to cause the Mohegan Sun Casino to be Completed (as defined herein)
and, pursuant to the Secured Completion Guarantee, has guaranteed the payment of
all project costs owing prior to such completion up to a maximum amount of
$50 million. To the extent Sun International advances funds under the Secured
Completion Guarantee, the Authority will issue to Sun International additional
subordinated notes in a principal amount equal to the funds so advanced. All
existing and future indebtedness of the Authority to Sun International is, and
will be, subordinated to Sun International's obligations under the Secured
Completion Guarantee. See "Material Agreements--Secured Completion Guarantee."
THE TRIBE AND THE AUTHORITY
The Tribe is a federally-recognized Indian tribe, whose federal recognition
became effective May 15, 1994. Although it only recently received federal
recognition, the Tribe has lived in a cohesive community since time immemorial
in what is today southeastern Connecticut. The Tribe historically has cooperated
with the United States and is proud of the fact that members of the Tribe have
fought on the side of the United States in every war from the Revolutionary War
to Desert Storm. The Tribe believes that this philosophy of cooperation
exemplifies its approach to developing the Mohegan Sun Casino. This philosophy
of cooperation, rather than confrontation, has enabled the Tribe to create a
unique alliance among local, state and federal officials to achieve its goal of
building the Mohegan Sun Casino.
The Tribe established the Authority, which has perpetual life, with
exclusive constitutional power to conduct and regulate its gaming activities.
Under the Indian Gaming Regulatory Act of 1988, as amended ("IGRA"),
federally-recognized Indian tribes are permitted to conduct casino gaming
operations on tribal land, subject to, among other things, the negotiation of a
tribal-state compact with the affected state. The Tribe and the State of
Connecticut have entered into such a compact, which has been approved by the
Secretary of the Interior (the "Mohegan Compact"). The Mohegan Compact and
related agreements require that certain payments based on slot machine revenues
be made to the State of Connecticut. Such payments, however, are not required to
be made if the State of Connecticut legalizes any gaming operation with slot
machines or other commercial casino games, other than those conducted by the
Tribe or the Pequot Tribe on tribal lands. See "Business and Property--
Competition."
SOURCES AND USES OF FUNDS
The cost of developing, constructing, equipping and opening the Mohegan Sun
Casino is expected to total approximately $312.5 million, which consists of
$300 million of project development costs and $12.5 million of initial working
capital. The estimated sources and uses of funds for the Mohegan Sun Casino
through the scheduled opening date in the fourth quarter of 1996, as revised
since the Offering to reflect updated cost estimates, are as follows (in
millions):
<TABLE>
<CAPTION>
SOURCES
-------
<S> <C>
Series A Senior Notes . . . . . . . . . . . . . . . . . $175.0
Equipment Financing (a) . . . . . . . . . . . . . . . . 40.0
Subordinated Notes (b) . . . . . . . . . . . . . . . . 40.0
Secured Completion Guarantee (c) . . . . . . . . . . . 45.0
Sources for Project Costs . . . . . . . . . . . . . . . $300.0
-5-
<PAGE>
Working Capital Financing (d) . . . . . . . . . . . . . 12.5
Total Sources. . . . . . . . . . . . . . . . . . . $312.5
------
------
USES (E)
--------
Acquisition of the Site. . . . . . . . . . . . . . . . $29.7
Construction Costs . . . . . . . . . . . . . . . . . . 176.0
Furniture, Fixtures and Equipment . . . . . . . . . . . 18.6
Gaming Equipment . . . . . . . . . . . . . . . . . . . 28.1
Capitalized Interest (f) . . . . . . . . . . . . . . . 18.8
Pre-Opening Expenses . . . . . . . . . . . . . . . . . 18.5
Organizational and Financing Fees and Expenses . . . . 10.3
Contingency (g) . . . . . . . . . . . . . . . . . . . . --
Total Project Costs . . . . . . . . . . . . . . . . . . $300.0
------
------
Initial Working Capital . . . . . . . . . . . . . . . . 12.5
Total Uses . . . . . . . . . . . . . . . . . . . . $312.5
------
------
</TABLE>
- --------------
(a) The Authority has entered into an agreement that provides for up to $40
million of equipment financing (the "Equipment Financing") representing
financing for approximately 2,500 slot machines and certain other
equipment. The Mohegan Sun Casino will be designed to accommodate an
additional 500 slot machines, which the Indenture permits to be financed
through Additional Lease Financing (as defined in the Indenture).
(b) Concurrently with the closing of the Offering, the Subordinated Notes were
purchased by Sun International for $38.3 million in cash and the exchange
of $1.7 million of outstanding indebtedness of the Authority.
(c) Sun International has provided a $50 million secured completion guarantee
(the "Secured Completion Guarantee") to fund any cost overruns. The
obligations of Sun International under the Secured Completion Guarantee are
secured by an irrevocable letter of credit in the amount of $15 million and
a pledge of 1,500,000 Ordinary Shares of Sun International. Because the
costs of constructing, equipping and opening the Mohegan Sun Casino are
expected to exceed the net proceeds of the Offering and the sale of the
Subordinated Notes and the $40 million of Equipment Financing available to
the Authority, the Authority currently anticipates that approximately $45
million will be drawn under the Secured Completion Guarantee. The Secured
Completion Guarantee is subject, however, to a number of important
qualifications, exceptions and limitations. See "Risk Factors--Limitations
Under the Secured Completion Guarantee."
(d) The Authority has entered into an agreement with a third party lender for a
$12.5 million senior working capital line of credit for the Mohegan Sun
Casino (the "Working Capital Financing"). The Indenture permits the Working
Capital Financing to be secured by the Note Collateral on a PARI PASSU
basis with the Senior Notes.
-6-
<PAGE>
(e) The Authority believes that the construction budget for the Mohegan Sun
Casino, as revised since the Offering to reflect updated cost estimates,
changes to the project and unanticipated site conditions (the "Construction
Budget"), is reasonable. The Authority has entered into a guaranteed
maximum price construction contract for the construction of the Mohegan Sun
Casino for a price not in excess of the costs set forth in the Construction
Budget. Given the risks inherent in the construction process, however,
actual construction costs may be significantly higher. See "Risk Factors--
Potential Inability to Commence Operations as Scheduled."
(f) Net of interest income anticipated to be earned on the funds in the Escrow
Account (as defined herein).
(g) Due to the availability of funds under the Secured Completion Guarantee,
no specific funds have been allocated herein as contingency.
DEVELOPMENT AND CONSTRUCTION
The Authority and TCA have developed a master plan for the Site that
integrates all major aspects of gaming and entertainment design. The master plan
places particular emphasis on creating direct highway access, providing
convenient parking, designing an attractively themed facility and developing a
variety of non-gaming entertainment amenities. Morse Diesel International
("Morse Diesel") is serving as general contractor for the Mohegan Sun Casino and
the Authority has entered into a guaranteed maximum price contract with Morse
Diesel for the construction of the Mohegan Sun Casino. Sun International, which
has substantial development experience, is overseeing the development of the
Mohegan Sun Casino. Construction of the Mohegan Sun Casino was commenced after
the closing of the Offering, at which time the Site was purchased and conveyed
to the United States in trust for the Tribe and leased to the Authority. See
"Business and Property--Design and Construction."
REGULATORY APPROVALS
A number of federal, state and tribal governmental licenses and approvals
are required to open and operate the Mohegan Sun Casino. Prior to consummation
of the Offering, the Tribe's management agreement with TCA (the "Management
Agreement") was approved by the Chairman of the National Indian Gaming
Commission (the "NIGC") and the documentation related to the Senior Notes was
approved by the Bureau of Indian Affairs of the Department of the Interior (the
"BIA"). No further approvals from the NIGC are required with respect to the
construction, financing, management and operations of the Mohegan Sun Casino;
however, the NIGC may have the authority, under certain circumstances, to
require modifications of the Management Agreement or to void the Management
Agreement if it is not being implemented in accordance with the conditions
specified upon approval or if TCA or the Authority fails to comply with
applicable laws and regulations. See "Risk Factors--Highly Regulated Industry."
Prior to opening the Mohegan Sun Casino, each of the partners of TCA and
certain employees of the Mohegan Sun Casino must be licensed by relevant tribal
and state authorities. Each of the partners of TCA has applied for and received
temporary gaming licenses from the Commissioner of Revenue Services of the State
of Connecticut. See "Risk Factors--Transkei Investigation." As each employee
who is required to be licensed is hired, the Authority or TCA will cause such
employee to apply for all required licenses.
A number of federal and state approvals are required to construct the
access roads to the Mohegan Sun Casino. The Department of Transportation of the
State of Connecticut ("DOT") or the Authority has obtained all requisite permits
and approvals for the construction of the access road from Route 2A.
-7-
<PAGE>
The Authority and TCA believe that they will be able to acquire all other
necessary licenses, permits and approvals in order to construct, open and
operate the Mohegan Sun Casino. However, no assurances can be given that any or
all of the licenses, permits and/or approvals described above will be issued or
that any or all of such licenses, permits and/or approvals will be issued
without certain conditions or restrictions that could adversely affect the
construction and operation of the Mohegan Sun Casino or the development of the
adjacent roadways. The failure to obtain any of these licenses, permits or
approvals in a timely manner may delay, restrict or prevent the Mohegan Sun
Casino from opening as contemplated herein.
-8-
<PAGE>
THE EXCHANGE OFFER
Registration Rights Agreement. . . To finance the development, construction,
equipping and opening of the Mohegan Sun
Casino, on September 29, 1995 the Authority
sold the Series A Senior Notes to Bear,
Stearns & Co. Inc. and Donaldson, Lufkin &
Jenrette Securities Corporation, as initial
purchasers (the "Initial Purchasers"), for
resale to qualified institutional buyers
and/or to certain institutional accredited
investors within the meaning of Rule 501
under the Securities Act. In connection
therewith, the Authority and the Initial
Purchasers entered into a Registration Rights
Agreement dated as of September 29, 1995 (the
"Registration Rights Agreement"), which
grants the holders of the Series A Senior
Notes certain exchange and registration
rights. The Exchange Offer made hereby is
intended to satisfy such exchange and
registration rights. Each holder who tenders
Series A Senior Notes and receives Series B
Senior Notes in exchange therefor pursuant to
the Exchange Offer shall cease to have any
further exchange or registration rights under
the Registration Rights Agreement. The
Registration Rights Agreement provides that
the Authority may be required, under certain
circumstances specified therein, in lieu of
or in addition to the foregoing, to file with
the Commission (and use its best efforts to
cause to become effective) a shelf
registration statement with respect to the
Senior Notes. Holders of Series A Senior
Notes, if any, who are not permitted, by law
or any policy of the Commission, to
participate in the Exchange Offer and who
satisfy certain other conditions will be
eligible to sell their Series A Senior Notes
pursuant to a resale prospectus when and if
filed by the Authority as part of an
amendment to the Registration Statement of
which this Prospectus is a part. See "The
Exchange Offer--Registration Rights
Agreement," "--Consequences of Failure to
Exchange" and "--Resales of the Series B
Senior Notes."
Liquidated Damages . . . . . . . . The Registration Rights Agreement obligates
the Authority to pay liquidated damages to
the holders of Senior Notes under certain
circumstances if the Authority fails to
comply with the registration requirements
thereof. Pursuant to the Registration Rights
Agreement, the Authority agreed to file a
registration statement under the Securities
Act to effect the Exchange Offer no later
than 30 days after consummation of the
Offering. As a result of the Authority's
failure to file the Registration Statement of
which this Prospectus is a part within such
30-day period and because such Registration
Statement was not declared effective by the
Commission on or before the Effectiveness
Target Date (as defined in the Registration
Rights Agreement), in connection with the
May 15, 1996, interest payment in respect
of the Senior Notes, the
-9-
<PAGE>
Authority paid to the holders of Senior Notes
an aggregate of $95,000 (which equals
approximately $0.54 per $1,000 principal
amount of Senior Notes) in liquidated
damages. As of June 5, 1996, the Authority
had accrued additional liquidated damages in
the amount of $26,250. See "--Interest
Payment Dates," "The Exchange Offer--
Registration Rights Agreement."
The Exchange Offer . . . . . . . . The Authority is offering to exchange $175
million aggregate principal amount of Series
B Senior Notes for an equal principal amount
of Series A Senior Notes. The Authority will
issue the Series B Senior Notes on the
earliest practicable date following the
Expiration Date (as defined herein).
Expiration Date. . . . . . . . . . The Exchange Offer will terminate at 5:00
p.m., New York City time, on July 12, 1996,
unless extended by the Authority in its sole
discretion (if and as extended, the
"Expiration Date").
Procedures for Tendering
Series A Senior Notes. . . . . . . Each holder of Series A Senior Notes wishing
to accept the Exchange Offer must complete,
sign and date the accompanying Letter of
Transmittal in accordance with the
instructions contained herein and therein,
and mail or otherwise deliver such Letter of
Transmittal together with the Series A Senior
Notes and any other required documentation to
the Exchange Agent (as defined herein) at the
address set forth herein. By executing the
Letter of Transmittal, a holder will make
certain representations to the Authority.
See "The Exchange Offer-Registration Rights
Agreement" and "-Procedures for Tendering."
Special Procedures for
Beneficial Owners. . . . . . . . . Any beneficial owner whose Series A Senior
Notes are registered in the name of a broker,
dealer, commercial bank, trust company or
other nominee and who wishes to tender should
contact such registered holder promptly and
instruct such registered holder to tender on
such beneficial owner's behalf. A form of
Instruction to Registered Holder from
Beneficial Owner is enclosed with this
Prospectus for the convenience of such
beneficial owners. See "The Exchange Offer--
Guaranteed Delivery Procedures."
Withdrawal Rights. . . . . . . . . Tenders may be withdrawn at any time prior to
the Expiration Date.
Acceptance of Series A Senior
Notes and Delivery of
Series B Senior Notes . . . . . . The Authority will accept for exchange any
and all Series A Senior Notes that are
properly tendered in the Exchange Offer, and
not withdrawn, prior to the Expiration Date.
The Series B
-10-
<PAGE>
Senior Notes issued pursuant to the Exchange
Offer will be delivered on the earliest
practicable date following the Expiration
Date. See "The Exchange Offer--Terms of the
Exchange Offer."
Exchange Agent . . . . . . . . . . First Fidelity Bank, n/k/a First Union Bank
of Connecticut, is serving as exchange agent
(the "Exchange Agent") in connection with the
Exchange Offer.
Federal Income
Tax Considerations . . . . . . . . The exchange of Series A Senior Notes for
Series B Senior Notes pursuant to the
Exchange Offer should not be a taxable
exchange for federal income tax purposes.
See "Material Federal Income Tax
Considerations."
SERIES B SENIOR NOTES
Securities Offered . . . . . . . . $175,000,000 in aggregate principal amount of
Series B Senior Secured Notes due 2002.
Maturity . . . . . . . . . . . . . November 15, 2002.
Fixed Interest . . . . . . . . . . 13 1/2% per annum, payable semi-annually in
arrears.
Interest Payment Dates . . . . . . May 15 and November 15, commencing May 15,
1996.
Cash Flow Participation
Interest . . . . . . . . . . . . . Cash Flow Participation Interest (as defined
herein) is payable on the Senior Notes, on
November 15 and May 15 of each year, in an
aggregate amount equal to 5.0% of the
Authority's Cash Flow (as defined herein) for
the six-month period ending on March 31 and
September 30 (each, a "Semi-annual Period")
most recently completed prior to such
interest payment date, up to a limit,
calculated on a cumulative basis with respect
to each two consecutive Semi-annual Periods
ending on September 30, of $250 million of
the Authority's Cash Flow; provided that no
Cash Flow Participation Interest shall be
payable with respect to any period prior to
the earlier of the first day the Mohegan Sun
Casino commences operations and October 31,
1996. Payment of all or a portion of any
installment of Cash Flow Participation
Interest may be deferred if (a) the payment
of such portion of Cash Flow Participation
Interest will cause the Authority's Fixed
Charge Coverage Ratio (as defined herein) for
the four consecutive fiscal quarters last
completed prior to such interest payment date
to be less than 2.0:1 on a pro forma basis
after giving effect to the assumed payment of
such Cash Flow Participation Interest but
before giving effect to any interest on the
Subordinated Notes which is then not payable
in cash and (b) the principal of the Senior
Notes corresponding
-11-
<PAGE>
to such Cash Flow Participation Interest has
not then matured and become due and payable
(at stated maturity, upon acceleration, upon
maturity of repurchase obligation or
otherwise). The aggregate amount of Cash Flow
Participation Interest payable in any
Semi-annual Period will be reduced pro rata
for reduction in the outstanding principal
amount of Senior Notes prior to the close of
business on the record date immediately
preceding such payment of Cash Flow
Participation Interest. The payment of Cash
Flow Participation Interest is subject to
certain restrictions set forth herein. See
"Description of Senior Notes--Principal,
Maturity and Interest."
No Sinking Fund. . . . . . . . . . There will be no mandatory sinking fund
payments for the Series B Senior Notes.
Mandatory Redemption . . . . . . . None.
Optional Redemption. . . . . . . . The Series B Senior Notes will not be
redeemable at the option of the Authority
prior to November 15, 1999 (except as
otherwise required by a Gaming Regulatory
Authority (as defined herein)). Thereafter,
the Series B Senior Notes will be redeemable,
in whole or in part, at the option of the
Authority at the redemption prices set forth
herein, together with accrued and unpaid
interest and liquidated damages, if any,
through the redemption date.
Security . . . . . . . . . . . . . The Series B Senior Notes will be (and the
Series A Senior Notes currently are) secured
by the Note Collateral, consisting of, among
other things (i) a first priority leasehold
mortgage (the "Leasehold Mortgage") on the
25-year ground lease from the Tribe to the
Authority with respect to the Site (the
"Lease"), (ii) a first priority security
interest in all of the Authority's furniture,
trade fixtures and equipment, accounts
receivable, general intangibles, inventory
and other personal property (other than
personal property permitted to be financed
and secured, as described elsewhere herein,
or personal property that is not permitted by
applicable law to secure the Senior Notes),
(iii) a first priority security interest in
the proceeds of the Series A Senior Notes
which will remain deposited in an escrow
account until such proceeds have been
disbursed (the "Escrow Account"), (iv) a
first priority security interest in all funds
at any time on deposit in the Replacement
Reserve Account, the Cash Maintenance Account
and the Interest and Excess Cash Flow Account
(as each is defined herein) and (v) an
assignment of material construction contracts
pursuant to which the Mohegan Sun Casino is
to be constructed. In addition, all cash
generated by the Mohegan Sun Casino will be
deposited into an account controlled by the
Trustee for the benefit of the holders of the
Senior Notes (the "Trustee") pending
distribution in accordance with the terms of
-12-
<PAGE>
the Indenture for the Senior Notes (the
"Indenture"). The payment of any management
fee to TCA and distributions to the Tribe
(other than a minimum payment of $50,000 per
month) will be subordinate to the payment of
all interest and principal then due on the
Senior Notes. The Leasehold Mortgage
excludes any interest in the fee title to the
Site, the improvements constructed or to be
constructed thereon and any rights
appurtenant to the fee title. Upon any
foreclosure of the Leasehold Mortgage, the
Trustee would succeed to the rights of the
Authority under the Lease; however,
restrictions under IGRA prohibit the use of
the Mohegan Sun Casino as a gaming facility
by any person other than the Tribe or an
instrumentality of the Tribe, such as the
Authority. Certain other limitations on the
enforcement of remedies may also make less
effective the rights of the holders of the
Senior Notes in the event of a default
thereunder. See "Risk Factors--Potential
Inability to Realize on Note Collateral" and
"Material Agreements--Leasehold Mortgage
Deed." The Authority may require the Trustee
to release portions of the Site from the lien
of the Leasehold Mortgage in order to finance
or develop amenities and other non-gaming
facilities on the Site.
Ranking. . . . . . . . . . . . . . The Series B Senior Notes will be senior
obligations of the Authority and will rank
PARI PASSU in right of payment with other
senior indebtedness that the Authority is
permitted to incur under the terms of the
Indenture, including Series A Senior Notes
not tendered in the Exchange Offer. The
Indenture prohibits the Authority from
incurring any such senior indebtedness, other
than up to $40 million of capital lease or
purchase money obligations, which includes
the Equipment Financing, and up to
$25 million of Working Capital Financing,
which may be secured by the Note Collateral
on a PARI PASSU basis with the Senior Notes.
The Senior Notes are and will be senior in
right of payment to all subordinated
indebtedness of the Authority, including the
Subordinated Notes. The Authority may not
incur aggregate development costs for the
Mohegan Sun Casino in excess of $325 million
without further prior approval of the NIGC.
Change of Control. . . . . . . . . Upon a Change of Control (as defined herein),
subject to certain limitations, each holder
of Senior Notes will have the right, at such
holder's option, to require the Authority to
repurchase such holder's Senior Notes at 101%
of the principal amount thereof plus accrued
and unpaid interest and liquidated damages,
if any, to the date of repurchase. There can
be no assurance that sufficient funds will be
available at the time a Change of Control
occurs to enable the Authority to make all
required repurchases. See "Description of
Senior
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<PAGE>
Notes--Repurchase at the Option of Holders--
Change of Control."
Excess Cash Purchase Offer . . . . Within 120 days after the last day of each
fiscal year of the Authority, beginning with
the fiscal year ending September 30, 1997,
the Authority will be required to make an
offer to purchase (an "Excess Cash Purchase
Offer") outstanding Senior Notes in an amount
equal to the sum of (i) 50% of the Excess
Cash Flow (as defined herein) for such fiscal
year, (ii) 100% of the amount of the Deferred
Subordinated Interest (as defined herein) for
such fiscal year and (iii) accrued interest
to the purchase date and liquidated damages,
if any, on such principal at the purchase
prices set forth below (expressed as a
percentage of the principal amount). To the
extent the Excess Cash Purchase Offer is not
accepted by the holders of the Senior Notes,
the Authority is required to offer to
repurchase outstanding Subordinated Notes in
such amount. See "Description of Senior
Notes--Repurchase at the Option of Holders--
Excess Cash Purchase Offer."
YEAR %
---- -----
1997 113.5
1998 112.0
1999 110.0
2000 105.0
2001 100.0
Other Offers to Purchase . . . . . Under certain circumstances, the Authority
may be required to make an offer to purchase
outstanding Senior Notes following certain
asset sales. In addition, the Authority may
be required to purchase outstanding Senior
Notes following certain events of loss. See
"Description of Senior Notes--Repurchase at
the Option of Holders--Asset Sales" and "--
Event of Loss."
Covenants. . . . . . . . . . . . . The Indenture contains restrictions on, among
other things, the making of certain payments,
the incurrence of liens, incurrence of
additional indebtedness, asset sales, the
leasing and dedication of leased property,
transactions with affiliates, mergers and
consolidations or the transfer of all or
substantially all of the Authority's assets
and business activities. See "Description of
Senior Notes--Certain Covenants."
Secured Completion Guarantee . . . The completion of the Mohegan Sun Casino and
payment of all project costs owing prior to
such completion up to an aggregate maximum
limitation of $50 million is guaranteed on a
secured basis, subject to certain important
qualifications and exceptions, by Sun
International pursuant to the Secured
Completion Guarantee. Sun International's
obligation to complete the Mohegan Sun Casino
does not take effect until
-14-
<PAGE>
and unless the net proceeds of the Offering,
the proceeds from the sale of the
Subordinated Notes and the amounts available
pursuant to the Equipment Financing and the
Working Capital Financing are insufficient to
meet the costs of acquiring the Site and
developing, constructing and opening the
Mohegan Sun Casino. In addition, Sun
International's obligations under the Secured
Completion Guarantee may be suspended as a
result of any force majeure event or other
event outside the control of the Authority or
Sun International, which makes completion of
the Mohegan Sun Casino physically impossible,
commercially impracticable or unlawful. The
Secured Completion Guarantee terminates on
September 30, 1997, or earlier upon the
occurrence of certain events. See "Material
Agreements--Secured Completion Guarantee."
To the extent Sun International advances
funds under the Secured Completion Guarantee,
the Authority will issue to Sun International
additional subordinated notes in a principal
amount equal to the funds so advanced.
The obligations of Sun International under
the Secured Completion Guarantee are secured
in part, by an irrevocable letter of credit
in the amount of $15 million, the entire
amount of which is expected to be drawn to
fund the costs of completion. See "--Sources
and Uses of Funds." In addition, Sun
International Investments Limited, the owner
of approximately 55% of Sun International's
equity shares ("SIIL"), has secured Sun
International's obligations under the Secured
Completion Guarantee with a pledge of
1,500,000 Ordinary Shares of Sun
International. Based upon the closing price
of Sun International's Ordinary Shares on the
NYSE on May 1, 1996, such shares had a market
value of approximately $64.1 million. The
share pledge will be released upon
termination of the Secured Completion
Guarantee. No assurance can be given that
funds available under the Secured Completion
Guarantee, including the collateral securing
such guarantee, will be sufficient to cover
all amounts required to complete the Mohegan
Sun Casino. In addition, the value of the
pledged shares is subject to fluctuations as
market prices change. See "Risk Factors--
Limitations Under the Secured Completion
Guarantee."
Required Deposits. . . . . . . . . The Indenture requires the Authority to
deposit cash on a monthly basis into (i) a
Cash Maintenance Account and (ii) an Interest
and Excess Cash Flow Account. Up to $6
million per year is required to be deposited
into the Cash Maintenance Account up to a
maximum deposit of $36 million. The amount
equal to the accrued interest on the Senior
Notes and the Subordinated Notes and 50% of
Excess Cash Flow is required to be deposited
into the Interest and Excess Cash Flow
-15-
<PAGE>
Account. The Interest and Excess Cash Flow
Account will fund interest payments on the
Senior Notes and any Excess Cash Purchase
Offers. In addition, pursuant to the
Management Agreement the Authority and TCA
have agreed to deposit on a monthly basis up
to an aggregate of $3 million per year into
the Replacement Reserve Account to fund
replacement capital expenditures. The cash in
each of these accounts will be collateral
security for the Senior Notes. See "Risk
Factors--Ability to Realize on Note
Collateral."
INVESTMENT BY SUN INTERNATIONAL
As a result of federal Indian gaming law prohibiting any non-Indian entity,
including TCA or its partners, from owning an equity interest in an Indian
casino, Sun International structured its investment in the Mohegan Sun Casino in
the form of a deferred interest subordinated loan. Sun International purchased,
concurrently with and as a condition to the closing of the Offering, $40 million
in aggregate principal amount of Subordinated Notes. Sun International financed
such purchase with borrowings under a bank credit agreement. If, as is
currently anticipated, Sun International is required to advance funds under the
Secured Completion Guarantee, the Authority will issue to Sun International
additional subordinated notes in a principal amount equal to the amount so
advanced.
Interest on the Subordinated Notes will be deferred and not paid in cash
until (i) at least $87.5 million in aggregate principal amount of the Senior
Notes have been retired (or offered to be retired pursuant to Excess Cash
Purchase Offers) and (ii) the Authority achieves a Fixed Charge Coverage Ratio
of at least 2.5:1 for the prior four fiscal quarters. Deferred interest on the
Subordinated Notes may be paid only if the current interest may be paid in cash
and the Authority achieves a Fixed Charge Coverage Ratio of at least 4.0:1 for
the prior four fiscal quarters. Interest may also be paid in connection with any
redemption or repurchase described below. The Subordinated Notes may not be
accelerated until all obligations under the Senior Notes have been paid in full.
Default under the Senior Notes will not of itself constitute a default under the
Subordinated Notes.
Payment of principal of the Subordinated Notes is subordinate to the prior
payment in full of all obligations on all of the Senior Notes, other than
(i) certain redemptions required by a Gaming Regulatory Authority if a holder is
required to be found suitable and is found unsuitable and (ii) repurchases of
Subordinated Notes using funds not accepted by holders of Senior Notes in an
Excess Cash Purchase Offer. See "Material Agreements--Note Purchase Agreement."
RISK FACTORS
See "Risk Factors" for a discussion of certain factors that should be
considered by holders of Series A Senior Notes in evaluating the Exchange Offer
and by prospective purchasers of Series B Senior Notes issued by the Authority
in the Exchange Offer.
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<PAGE>
RISK FACTORS
HIGH DEGREE OF LEVERAGE
At the time the Exchange Offer is consummated (or shortly thereafter), the
Authority expects to have aggregate long-term senior indebtedness of
approximately $215 million, consisting of $175 million of Senior Notes and $40
million of Equipment Financing, and aggregate long-term subordinated
indebtedness of $40 million. In addition, prior to the time the Mohegan Sun
Casino commences operations the Authority expects to incur $12.5 million of
Working Capital Financing. Based on a recently revised estimate of construction
costs, the Authority expects development, construction, equipping and opening
costs for the Mohegan Sun Casino to be approximately $312.5 million, which
exceeds the proceeds of the foregoing by $45 million and represents an increase
of approximately $52.5 million over previously estimated costs. The remaining
$45 million currently projected to be needed to complete the Mohegan Sun Casino
is expected to be provided by draws under the $50 million Secured Completion
Guarantee provided by Sun International, which will have the effect of
increasing the Authority's outstanding subordinated indebtedness by the amount
of such draws. See "--Limitations Under the Secured Completion Guarantee" and
"Material Agreements--Secured Completion Guarantee."
The Authority's high degree of leverage could have significant consequences
for the holders of the Senior Notes, including, without limitation, the
following: (i) a substantial portion of the Authority's cash flow from
operations will be dedicated to payment of such indebtedness, including payments
to the Replacement Reserve Account, the Interest and Excess Cash Flow Account
and the Cash Maintenance Account; (ii) the Authority's ability to obtain future
additional financing for working capital, capital expenditures and other
purposes may be impaired; and (iii) the Authority may be vulnerable to an
economic downturn which may hamper the Mohegan Sun Casino's ability to meet
expected operating results.
POTENTIAL INABILITY TO REALIZE ON NOTE COLLATERAL
Although the Authority's obligation to repay the Senior Notes is secured by
the Note Collateral, there are substantial restrictions on the Trustee's ability
to realize value by foreclosing on any of the Note Collateral. Under IGRA and
the rules and regulations of the NIGC, only the Tribe or a tribal
instrumentality, such as the Authority, is permitted to have a proprietary
interest in gaming operations. Consequently, if the Trustee (as the mortgagee
under the Leasehold Mortgage) were to foreclose on the Leasehold Mortgage
following an event of default under the Indenture (an "Event of Default"), the
Trustee would not be permitted to conduct, and could not assign the Lease to any
person (other than the Tribe or a tribal instrumentality) for the purpose of
conducting, gaming operations. The Trustee, however, may use the land under the
Lease, or assign the Lease to another person for value, for other commercial
purposes, subject to compliance with the terms of the Lease (including the
payment of rent thereunder). It is unlikely that such other commercial use will
produce revenues sufficient to retire any significant amounts under the Senior
Notes. Accordingly, in the event of a default under the Senior Notes and a
foreclosure by the Trustee on the Leasehold Mortgage, it is not anticipated that
sufficient funds will be available to satisfy any judgment entered against the
Authority in favor of the Trustee or the holders of the Senior Notes. In
addition, other than through the assets of the Authority, the Tribe has no
obligation for the repayment of the Senior Notes and none of the Tribe's assets,
including cash distributions paid by the Authority to the Tribe and the Tribe's
ownership interest in the Site and the Mohegan Sun Casino, will be subject to
attachment, execution or similar process for the payment of any judgment that
may be entered against the Tribe or the Authority. Any foreclosure of the
Leasehold Mortgage may subject the tenant thereof to the risk of contingent
environmental liabilities. See "--Possible Environmental Liabilities."
Furthermore, the ability of the Trustee and/or the holders of the Senior
Notes to foreclose on any of the Note Collateral, upon the occurrence of an
Event of Default or otherwise, will be subject to the provisions of the
documents governing the Note Collateral and, in certain instances, to perfection
and priority issues and to practical
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problems associated with realization of security interests. Upon the occurrence
of an Event of Default, the Trustee may deem it not to be in the best interests
of the holders of the Senior Notes to foreclose upon the Leasehold Mortgage or
other non-cash Note Collateral, thereby enabling the Mohegan Sun Casino to
continue to operate. In such event, as a practical matter, the only Note
Collateral available to the Trustee for payment to the holders of Senior Notes
would be the Replacement Reserve Account, the Cash Maintenance Account, the
Interest and Excess Cash Flow Account and such funds as may be available after
all expenses of the Mohegan Sun Casino, including any amortizing payments on the
Equipment Financing and the Working Capital Financing, and the Minimum Priority
Payment (as defined herein) have been paid. See "Description of Senior Notes--
Ranking and Security." In addition, the ability of the holders of the Senior
Notes to realize upon the Note Collateral will be dependent upon the
availability of a court or other forum with appropriate jurisdiction over the
Tribe and the Authority necessary to enforce such foreclosure rights. See "--
Difficulties in Enforcing Obligations" and "Government Regulation--Tribal Law
and Legal Systems."
The Note Collateral also will secure, on a PARI PASSU basis with the Senior
Notes, the Working Capital Financing. Even if the Trustee elects to foreclose on
the Note Collateral, the actions of the Trustee and the amount the Trustee
ultimately may realize on the Note Collateral for the benefit of the Senior Note
holders may be limited by the actions of the Working Capital Financing lender.
In addition, the Indenture permits future development on the Site, including
hotels, to be separately financed. To finance such developments, the Authority
may require the Trustee to release portions of the Leasehold Mortgage
collateral, thereby reducing the value of the Note Collateral. Such future
developments and the revenues therefrom are not expected to be collateral for
the Senior Notes. See "Description of Senior Notes--Security."
DIFFICULTIES IN ENFORCING OBLIGATIONS
The Authority, as an instrumentality of the Tribe, a federally-recognized
Indian tribe, intends to assert the defense of sovereign immunity in any suit
brought without their consent. Each of the Tribe and the Authority, however, has
consented to suit and has granted a limited waiver of any sovereign immunity
defense it may have in connection with the Senior Notes, the Indenture and the
documents related to the Note Collateral, including suits against the Authority
to enforce its obligation to repay the Senior Notes. Generally, waivers of the
defense of sovereign immunity have been held to be enforceable against Indian
tribes such as the Tribe; however, in the event that such waiver or consent is
held to be ineffective, the Trustee and the holders of the Senior Notes could be
precluded from judicially enforcing their rights and remedies. The Tribe and
the Authority, however, have not waived their sovereign immunity defense with
respect to private civil suits for violations of the federal securities laws.
Accordingly, the holders of the Senior Notes may not have any remedy against the
Tribe or the Authority for violations of federal securities laws.
The Tribe has established the Gaming Disputes Court of the Mohegan Tribe
and vested it with exclusive jurisdiction for the Tribe over disputes with
respect to the Mohegan Sun Casino, including all disputes relating to the Senior
Notes or the Indenture and all disputes or controversies related to gaming
between any person and the Authority, the Tribe or TCA. The Gaming Disputes
Court may be the only forum with jurisdiction over any suits brought against the
Tribe or the Authority. The Gaming Disputes Court has been authorized by the
Tribe's Constitution to consist of at least four judges, none of whom may be
members of the Tribe, and each of whom must be either a retired federal judge or
a Connecticut Attorney Trial Referee (who are attorneys appointed by the
Connecticut Supreme Court). Appeals of the decisions of the trial branch of the
Gaming Disputes Court are heard by the appellate branch of the Gaming Disputes
Court. Matters as to which applicable federal or state courts have jurisdiction
may be brought in such courts. However, the federal courts may not have
jurisdiction over disputes not arising under federal law, and the state courts
may not have jurisdiction over any disputes arising on the Tribe's reservation.
Moreover, the federal and state courts, under the doctrines of comity and
exhaustion of tribal remedies, may be required to defer to the jurisdiction of
the Gaming Disputes Court, or to require that any plaintiff exhaust its remedies
in the Gaming Disputes Court before bringing any action in the federal or state
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court. Thus, there may be no federal or state court forum with respect to a
dispute relating to the Senior Notes, the Indenture or documents governing or
relating to gaming. In addition, the Authority may not be a "person" under the
federal Bankruptcy Act, and, consequently, may not be able to become a debtor
under the federal bankruptcy laws. Thus, no assurance can be given that, if an
Event of Default occurs, any forum will be available to the holders of the
Senior Notes other than the Gaming Disputes Court. Because the Tribal
Constitution and the laws of the Tribe have only been recently established,
there are no guiding precedents for the interpretation of Tribal law. Any
execution of a judgment of the Gaming Disputes Court will require the
cooperation of the Tribe's officials in the exercise of their police powers.
Thus, to the extent that a judgment of the Gaming Disputes Court must be
executed on Tribal lands, the practical realization of any benefit of such a
judgment will be dependent upon the willingness and ability of the Tribal
officials to carry out such judgment.
The Tribe is permitted to amend the provisions of its Constitution that
establish the Authority and the Gaming Disputes Court with the approval of
two-thirds of the members of the Tribal Council and a ratifying vote of a
two-thirds majority of all votes cast, with at least 40% of the registered
voters of the Tribe voting. However, prior to the enactment of any such
amendment by the Tribal Council, any non-tribal party will have the opportunity
to seek a ruling from the Appellate Division of the Gaming Disputes Court that
the proposed amendment would constitute an impermissible impairment of contract.
The Tribe's Constitution prohibits the Tribe from enacting any law that would
impair the obligations of contracts entered into in furtherance of the
development, construction, operation and promotion of Gaming on Tribal lands.
Amendments to this provision of the Tribe's Constitution require the affirmative
vote of 75% of all registered voters of the Tribe. Amendment to any of such
provisions of the Tribe's Constitution could adversely affect the ability of the
holders of Senior Notes to enforce the obligations of the Authority on the
Senior Notes.
COMPETITION
The gaming industry is characterized by intense competition among entities
that, in many instances, have greater resources than will the Authority. Because
the Mohegan Sun Casino will be marketed primarily to the day- trip customer, it
expects to compete primarily with other casinos within 150 miles and, to a
lesser extent, with casinos in Atlantic City, New Jersey. Currently, Foxwoods is
the only casino in operation within 150 miles of the Site. However, Foxwoods is
located approximately 10 miles from the Site and is currently the largest gaming
facility in the United States in terms of the number of total gaming positions.
In addition, Foxwoods offers a number of amenities that the Mohegan Sun Casino
does not currently plan to offer in its initial development, including hotels
and extensive entertainment facilities. Foxwoods has been in operation for
nearly four years and the Authority believes that Foxwoods' successful operation
has enabled it to build financial resources that are currently substantially
greater than the Authority's or the Tribe's. Although the Authority believes
Foxwoods' profitability indicates that there is substantial market demand for
gaming in the northeastern United States, there can be no assurance that the
population base within 150 miles of the Site will support both Foxwoods and the
Mohegan Sun Casino.
Currently, outside of Atlantic City, New Jersey, casino gaming in the
northeastern United States may be conducted only by federally-recognized Indian
tribes operating under IGRA. In addition to the Pequot Tribe, which operates
Foxwoods, a federally-recognized tribe in Rhode Island and a
federally-recognized tribe in Massachusetts each are currently seeking to
establish gaming operations. In addition, a number of tribes in New England are
seeking federal recognition in order to establish gaming operations. The
Authority cannot predict whether any of these tribes will be successful in
establishing gaming operations, and if established, whether such gaming
operations will have a material adverse effect on the proposed operations by the
Authority.
In addition, a number of states, including Connecticut, have investigated
legalizing casino gaming by non-Indians in one or more locations. However, under
the Mohegan Compact and the tribal-state compact between the Pequot Tribe and
the State of Connecticut, and agreements related thereto, if Connecticut
legalizes any gaming operations other than pursuant to IGRA (I.E., by an Indian
tribe on Indian land) with slot machines or other
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commercial casino games, the Pequot Tribe and the Tribe will no longer be
required to make payments related to slot machine revenues. In 1995, the State
of Connecticut made a request for proposals for the possible development of a
casino in Bridgeport, Connecticut, but in November 1995, the Connecticut
legislature declined to adopt special legislation authorizing such casino
operations. The Authority is unable to predict whether the Connecticut
legislature will consider other gaming initiatives or reconsider the Bridgeport
proposal, or the ultimate outcome of any such deliberations.
Although the Mohegan Sun Casino will be dependent primarily upon gaming
customers residing within 150 miles of the Mohegan Sun Casino, the Authority
also will compete for customers with casinos in Atlantic City, New Jersey, many
of which have greater resources and greater name recognition than the Mohegan
Sun Casino.
POTENTIAL INABILITY TO COMMENCE OPERATIONS AS SCHEDULED
Construction projects such as the Mohegan Sun Casino are inherently subject
to significant development and construction risks, including, but not limited
to, labor disputes, shortages of material and skilled labor, weather
interference, unforeseen engineering problems, unforeseen environmental problems
(including asbestos, lead and hazardous waste removal), fire, natural disasters,
geological, construction, demolition, excavation, regulatory and/or equipment
problems and unanticipated cost increases, any of which could give rise to
delays or cost overruns. Such risks may be compounded by the Authority's
decision to construct the Mohegan Sun Casino utilizing an accelerated
construction schedule under which construction begins before final plans are
completed.
To reduce the risk of cost overruns, the Authority has entered into a
guaranteed maximum price contract with Morse Diesel, the general contractor, for
the construction of the Mohegan Sun Casino. The maximum price of such contract,
however, is subject to modification based upon the occurrence of certain events,
such as certain design change orders and costs associated with certain types of
construction delays, including, in certain cases, force majeure events.
Unforeseen delays in obtaining required road construction and other permits
could delay the completion of the Mohegan Sun Casino. See "--Highly Regulated
Industry." Construction in the northeastern United States is also subject to a
number of weather related risks. An earlier than expected winter, a delayed
spring, unexpected rain, storms or other bad weather may have the effect of
delaying completion and/or increasing the costs of the construction. There is no
assurance that the Mohegan Sun Casino will commence operations on schedule or
that construction costs for the Mohegan Sun Casino will not exceed budgeted
amounts. The $312.5 million estimated cost of developing, constructing,
equipping and opening the Mohegan Sun Casino exceeds the proceeds of the sale of
the Senior Notes and the Subordinated Notes and funds available or expected to
be made available pursuant to the Equipment Financing and the Working Capital
Financing. Accordingly, the Authority anticipates drawing approximately $45
million under the Secured Completion Guarantee. See "--Limitations Under
Secured Completion Guarantee" and "Material Agreements--Secured Completion
Guarantee." Failure to complete the Mohegan Sun Casino within the budget or on
schedule may have a material adverse effect on the results of operations and
financial condition of the Authority.
The Authority may not obligate itself to pay development costs in excess of
$325 million without the further consent of the NIGC. No assurance can be given
that if expenditures in excess of $325 million are required for completion of
the Mohegan Sun Casino, such NIGC consent can be obtained.
LIMITATIONS UNDER THE SECURED COMPLETION GUARANTEE
Sun International has executed the Secured Completion Guarantee under which
it has guaranteed, subject to certain important limitations, completion of the
Mohegan Sun Casino and payment of all design, construction and opening costs
prior to such completion up to a maximum aggregate amount of $50 million.
Because Sun International has given its Secured Completion Guarantee, the
Authority has not budgeted any funds as contingency in the event of a cost
overrun. To pay the revised estimated $312.5 million cost of completing
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and opening the Mohegan Sun Casino, the Authority expects to draw approximately
$45 million under the Secured Completion Guarantee. Accordingly, no
assurance can be given that funds available under the Guarantee, including
the collateral securing such guarantee, will be sufficient to cover all
amounts required to complete the Mohegan Sun Casino.
The Secured Completion Guaratee is subject to a number of important
qualifications, exceptions and limitations.
Sun International's obligation to provide funds pursuant to the Secured
Completion Guarantee does not take effect until and unless the proceeds of the
Offering, the sale of the Subordinated Notes, the Equipment Financing and the
Working Capital Financing are insufficient to meet the costs of acquiring the
Site and developing, constructing and completing the Mohegan Sun Casino. In
addition, Sun International's obligations under the Secured Completion Guarantee
are suspended during the pendency of any force majeure event (a "Force Majeure
Event"), which includes fire or other casualty; governmental preemptions in
connection with a national emergency; breakdowns, accident or other acts of God;
acts of war, insurrection, civil strife and commotion; certain failures of
supply; any enactment, promulgation or amendment of any statute, rule, order or
regulation of any legislature or governmental agency or any subdivision thereof;
any litigation not caused by Sun International, or any other event that occurs
after the date of the Secured Completion Guarantee outside of the control of the
Authority or Sun International; in each case which shall make it physically
impossible, unlawful or commercially impracticable to cause the Mohegan Sun
Casino to be completed. The legalization of casino gaming at any other location
in New England, including Bridgeport, however, will not be deemed to constitute
a Force Majeure Event. The Secured Completion Guarantee terminates upon the
earliest to occur of (i) any action by the United States Congress, the
Authority, the Tribe, the Tribe's council or any other entity of the Tribe, any
legislature that has jurisdiction or any governmental agency, the result of
which is that gaming as currently proposed to be conducted at the Mohegan Sun
Casino is substantially diminished, (ii) September 30, 1997, (iii) the time
immediately prior to the acceleration of all or any portion of the amounts due
under the Senior Notes, (iv) the Management Agreement or the Lease shall have
been terminated or become unenforceable in any material respect, (v) the Senior
Notes shall have been repaid in full and (vi) the Authority shall have
repudiated the Management Agreement. See "Material Agreements--Secured
Completion Guarantee."
The obligations of Sun International under the Secured Completion Guarantee
are secured in part by an irrevocable letter of credit in the amount of
$15 million. In addition, SIIL has secured Sun International's obligations
under the Secured Completion Guarantee with a pledge of 1,500,000 Ordinary
Shares of Sun International. As a result of the recent increases in the
Construction Budget, approximately $45 million, including the entire amount
available under the letter of credit, is expected to be drawn to fund
construction of the Mohegan Sun Casino. See "Prospectus Summary--Sources and
Uses of Funds." If, as is anticipated, the entire amount under the letter of
credit is drawn, Sun International's remaining obligations under the Secured
Completion Guarantee will be secured only by the pledged Sun International
shares. Based upon the closing price of Sun International's Ordinary Shares on
the NYSE on May 1, 1996, such shares had a market value of approximately $64.1
million. No assurance can be given as to the amount of proceeds, if any, that
the Trustee would realize upon a foreclosure and sale of such shares in order to
satisfy the obligations under the Secured Completion Guarantee. The market price
of the Sun International stock is subject to change from time to time. If the
Secured Completion Guarantee is called upon, the value of the pledged Sun
International stock may decrease as the result of Sun International's
requirement to make additional investments in the Mohegan Sun Casino or if such
shares are required to be sold to fund the Secured Completion Guarantee. The
terms of the pledge agreement provide that the Trustee may foreclose upon the
pledged shares only after obtaining a final judgment from a court of competent
jurisdiction that Sun International has breached its obligations under the
Secured Completion Guarantee. Accordingly, there may be a substantial delay in
realizing any proceeds from the share pledge. The share pledge will be released
upon termination of the Secured Completion Guarantee.
POSSIBLE ENVIRONMENTAL LIABILITIES
Under various federal, state and local environmental laws, ordinances and
regulations, a current or previous owner or operator of real estate may be
required to investigate and clean up hazardous or toxic substances or chemical
releases at such property, and may be held liable to a governmental entity or to
third parties for property damage, personal injury and for investigation and
cleanup costs incurred by such parties in
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connection with the contamination. Such laws typically impose cleanup
responsibility and liability without regard to whether the owner knew of or
caused the presence of the contaminants, and the liability under such laws has
been interpreted to be joint and several unless the harm is divisible and there
is a reasonable basis for allocation of responsibility. The costs of
investigation, remediation or removal of such substances may be substantial, and
the presence of such substances, or the failure to properly remediate such
property, may adversely affect the owner's ability to rent such property or to
borrow using such property as collateral. In addition, the owner or former
owners of a site may be subject to common law claims by third parties based on
damages and costs resulting from environmental contamination emanating from a
site.
The Site was formerly occupied by United Nuclear Corporation ("UNC"), a
naval products manufacturer of, among other things, nuclear reactor fuel
components. UNC's facility was officially decommissioned on June 8, 1994 when
the Nuclear Regulatory Commission ("NRC") confirmed that all licensable
quantities of special nuclear material ("SNM") had been removed from the Site
and that any residual SNM contamination was remediated in accordance with the
NRC approved decommissioning plan.
From 1991 through 1993, UNC commissioned an environmental consultant to
perform a series of environmental audits and reports on the Site. The
environmental audits and soil sampling programs detected, among other things,
volatile organic chemicals, heavy metals and fuel hydrocarbons in the soil and
groundwater. Extensive remediation of contaminated soils and additional
investigations were completed. By letter dated March 20, 1995, the State of
Connecticut Department of Environmental Protection approved the remediation
report for the Site.
Although the Site currently meets all applicable federal, state and local
remediation requirements, no assurance can be given that the various
environmental reports or any other existing environmental studies with respect
to the Site revealed all environmental liabilities, that any prior owners or
tenants of the Site did not create any material environmental condition not
known to the Authority, that future laws, ordinances or regulations will not
impose any material environmental liability, or that a material environmental
condition does not otherwise exist on the Site. Future remediation may be
necessary if excavation and construction exposes contaminated soil which has
otherwise been deemed isolated and not subject to cleanup requirements.
Certain federal, state and local laws, regulations and ordinances govern
the removal, encapsulation or disturbance of asbestos-containing materials
("ACMs") when such materials are in poor condition or in the event of building
remodeling, renovation or demolition. Such laws may impose liability for release
of ACMs and may entitle third parties to seek recovery from owners or operators
of real properties for personal injury associated with ACMs. In December 1994
UNC hired an asbestos contractor who removed all exposed asbestos insulations.
In addition, it is contemplated that ACMs will be removed as part of the
construction of the Mohegan Sun Casino. However, no assurance can be given that
additional future asbestos removal will not be necessary.
UNCERTAINTY OF FUTURE OPERATING RESULTS
The Mohegan Sun Casino is a development stage entity that has not commenced
operations and, accordingly, is subject to all of the risks inherent in the
establishment of a new business enterprise. Although the Authority has engaged
the management services of TCA, a partnership whose partners have substantial
experience in the development and management of resorts and gaming facilities,
the ability of the Authority to meet its debt service obligations will be
entirely dependent upon the future financial performance of the Mohegan Sun
Casino, which is subject to financial, economic, political, competitive,
regulatory and other factors, many of which are beyond its control. While the
Authority expects that its operating cash flow will be sufficient to cover its
expenses, including interest costs, there can be no assurance with respect
thereto. If the Authority is unable to generate sufficient cash flow, it could
be required to reduce or delay planned capital expenditures, dispose of certain
assets, and/or seek to restructure some or all of its debt. There can be no
assurance that any of these alternatives could be effected, if at all, on
satisfactory terms.
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HIGHLY REGULATED INDUSTRY
Gaming on Indian land is regulated by federal, state and tribal governments
and may be adversely affected by changes in the law. There is currently
legislation proposed in the United States Congress to place a moratorium on new
Indian casinos. If such legislation passes before the Mohegan Sun Casino is
completed and if such legislation does not exclude projects under construction,
such legislation would have a material adverse effect on the ability of the
Authority to repay the Senior Notes. There is also legislation proposed in the
United States Congress to modify other provisions of IGRA and future litigation
may be expected to challenge the constitutionality of the Act as it presently
exists. See "Government Regulation--The Indian Gaming Regulatory Act of 1988."
In addition, from time to time, various governmental officials have proposed to
tax casino gaming or to otherwise restrict or limit casino gaming. No assurance
can be given that such legislation or other legislation in the future will not
have a material adverse effect on the operations or the proposed operations of
the Mohegan Sun Casino. In addition, under federal law, gaming on Indian land is
dependent on the permissibility under state law of certain forms of gaming or
similar activities. If the State of Connecticut were to make various forms of
gaming illegal or against public policy, then such action may have an adverse
effect on the ability of the Authority to conduct gaming. Connecticut currently
permits, among other things, a state lottery, Jai-Alai fronton betting and
off-track betting parlors. The Authority believes that Connecticut is unlikely
to make gaming against public policy due to the amount of payments derived from
gaming activities currently being received by the State.
The NIGC approved the Management Agreement on September 29, 1995 and no
further approvals from the NIGC are required with respect to the construction,
financing, management and operations of the Mohegan Sun Casino; however, the
NIGC retains jurisdiction to require modifications of or to void a previously
approved agreement to the extent the NIGC receives information indicating that
such agreement is not being implemented in accordance with the conditions
specified upon approval (which may include environmental standards) or if the
parties thereto fail to comply with applicable laws and regulations. In
addition, any renewal and extension of term of the Management Agreement will
require further approval of the NIGC. The Authority does not expect that it or
the Tribe will incur material liability to TCA in the event the NIGC exercises
its limited authority to re-review the Management Agreement or if legislative
changes are enacted that affect the terms of the Management Agreement; however,
the NIGC's modification or voiding of the Management Agreement, or the failure
of the NIGC to approve any renewal or extension of the same, could have a
material adverse effect on the results of operations of the Mohegan Sun Casino.
Prior to opening the Mohegan Sun Casino, each of the partners of TCA and
certain employees of the Mohegan Sun Casino must be licensed by relevant tribal
and state authorities. Each of the partners of TCA has applied for and received
temporary gaming licenses from the Commissioner of Revenue Services of the State
of Connecticut. As each employee who is required to be licensed is hired, the
Authority or TCA will cause such employee to apply for all required licenses.
A number of federal and state approvals are required to construct the
access roads to the Mohegan Sun Casino. DOT or the Authority has obtained all
requisite permits and approvals for the construction of the access road off of
Route 2A. During a special session of the Connecticut State Senate held to
consider the approval of a gaming facility in Bridgeport, Connecticut, which was
to be owned and operated by the Pequot Tribe, the Tribe testified before the
Connecticut Senate Public Safety Committee that, if the Bridgeport Casino
project were approved, the Authority would no longer be required to make slot
revenue payments to the State of Connecticut. Shortly after the Tribe's
testimony, it was reported in certain Connecticut newspapers that officials of
the State of Connecticut disagreed with the Tribe's position and had stated that
regulatory approvals required for the construction of the Mohegan Sun Casino may
be delayed. The Connecticut State Senate rejected the Bridgeport casino project
on November 16, 1995. Although the Authority has received from the State of
Connecticut substantially all of the permits required to construct the Mohegan
Sun Casino and adjacent roadways as planned, there can be no assurance that any
of such permits will not be revoked or that any additional permits that may be
required will be granted in a timely manner.
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The Authority and TCA believe that they will be able to acquire all other
necessary licenses, permits and approvals in order to construct, open and
operate the Mohegan Sun Casino. However, no assurances can be given that any or
all of the licenses, permits and/or approvals described above will be issued or
that any or all of such licenses, permits and/or approvals will be issued
without certain conditions or restrictions that could adversely affect the
construction and operation of the Mohegan Sun Casino or the development of the
adjacent roadways. The failure to obtain any of these licenses, permits or
approvals in a timely manner may delay, restrict or prevent the Mohegan Sun
Casino from opening as contemplated herein. See "Government Regulation."
LACK OF EXPERIENCED PERSONNEL
The Authority anticipates that approximately 4,000 full time employees will
be required to operate the Mohegan Sun Casino. Although the Authority and TCA
believe that they will be able to attract and train qualified individuals to
operate the Mohegan Sun Casino, there is no assurance that they will be able to
do so. In addition, the Authority and TCA will be obligated to give preference
in hiring first to qualified members of the Tribe (and qualified spouses and
children of members of the Tribe), and second to members of other Indian tribes.
There is no assurance that the Authority will be able to hire qualified
individuals satisfying such criteria. If the Authority is able to hire qualified
individuals satisfying these criteria, the costs of hiring such individuals
could be significantly higher than if the Authority was not bound by these
hiring criteria. See "Material Agreements--Management Agreement."
RELIANCE UPON TCA
The Mohegan Sun Casino's profitability will be largely dependent upon the
efforts and skills of TCA, which has exclusive responsibility for developing,
marketing and managing the Mohegan Sun Casino. No assurance can be given that
the operating results achieved by Sun International or the other partners of TCA
in their other projects will be achieved by the Mohegan Sun Casino.
TRANSKEI INVESTIGATION
Shortly after the Connecticut legislature declined to adopt special
legislation authorizing casino operations in Bridgeport, the Connecticut press
reported that Connecticut Governor Rowland had made statements questioning the
suitability of Sun International and Mr. Solomon Kerzner, its Chairman and Chief
Executive Officer, to hold a gaming license in Connecticut and to participate in
the management of the Mohegan Sun Casino. Such statements were based on
matters that occurred in 1986 in the Transkei, a former "tribal homeland" that
was regarded by South Africa as an independent country but not recognized by the
international community, relating to an alleged improper payment of $450,000
made to George Matanzima, then Prime Minister of the Transkei, who was
overthrown by a military coup in 1988. Prior to the press report, the Transkei
matter had been disclosed to the Tribe and the Authority, the NIGC and the
Connecticut State Police and, following an investigation, the NIGC and the Tribe
approved Sun International and Mr. Kerzner as a partner in TCA. In addition,
the State of Connecticut issued to Mr. Kerzner a temporary gaming license as
part of its ordinary licensing procedures.
In April 1994, as part of South Africa's new constitutional process, the
Transkei was reincorporated into South Africa and the Attorney General of the
Transkei is now an official of the South African judicial system. In October
1995, Mr. Kerzner, although not officially notified, learned that the Attorney
General of the Transkei had requested that the South African police investigate
the 1986 payment. A recent report of the investigating police officer, made
available to the attorneys for the companies involved in accordance with South
African law, states that, in allowing the payment to be made, Mr. Kerzner acted
without any personal benefit in an effort to protect what Mr. Kerzner believed
to be legitimate rights of the companies involved, which rights were being
threatened by Matanzima. The police report also describes Matanzima's action as
being tantamount to commercial extortion. It has recently been reported in the
press that the same South African police officer in charge of the investigation
stated that the Attorney General of the Transkei had decided that Mr. Kerzner
will not
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be charged but that one of the companies in which Mr. Kerzner was chairman and
chief executive officer at the time may be charged with infringing provisions of
the Transkei penal code. Sun International has no interests in such company.
Despite such reports, until the case is officially closed, the Authority is
unable to predict the ultimate outcome of this matter.
The Transkei events, which occurred nearly 10 years ago, have not affected
the ability of Sun International or Mr. Kerzner to be licensed in the
jurisdictions in which Sun International operates. After disclosure to all
applicable licensing authorities of the facts surrounding the Transkei matter,
and following investigations, Sun International and Mr. Kerzner were issued and
currently hold gaming licenses in The Bahamas and France, and companies in
southern Africa of which Mr. Kerzner has been chairman and chief executive
officer, including Sun Bop, hold gaming licenses in South Africa, including the
Transkei region. Although at this time the Transkei matter has not affected the
licensing qualifications of Mr. Kerzner or Sun International, no assurance can
be given that Mr. Kerzner's or Sun International's licensing qualifications,
including with respect to the Mohegan Sun Casino, will not be affected in the
future. Any adverse change in Mr. Kerzner's or Sun International's licensing
qualifications could have a material adverse affect on the operations of the
Mohegan Sun Casino.
LACK OF PUBLIC MARKET FOR THE SECURITIES
The Senior Notes are the Authority's first issuance of securities, have no
established trading market and may not be widely distributed. Pursuant to the
Exchange Offer, the Authority is offering to exchange freely tradeable
registered Series B Senior Notes for the outstanding Series A Senior Notes, but
the Authority does not intend to apply to list either the Series A Senior Notes
or the Series B Senior Notes on any stock exchange or for quotation through the
National Association of Securities Dealers Automated Quotation System. The
Senior Notes are expected to be eligible for trading in the Private Offering,
Resale and Trading through Automatic Linkages market. There can be no
assurance, however, that a trading market for the Senior Notes will develop or
will provide liquidity to the holders thereof. Historically, the market for
non-investment grade debt has been subject to disruptions that have caused
substantial volatility in the prices of securities similar to the Senior Notes.
There can be no assurance that, if a market for the Senior Notes were to
develop, such a market would not be subject to similar disruptions. See "The
Exchange Offer--Registration Rights Agreement."
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THE EXCHANGE OFFER
REGISTRATION RIGHTS AGREEMENT
To finance the development, construction, equipping and opening of the
Mohegan Sun Casino, the Authority on September 29, 1995 sold the Series A Senior
Notes to Bear, Stearns & Co. Inc. and Donaldson, Lufkin & Jenrette Securities
Corporation, as Initial Purchasers, for resale to qualified institutional buyers
and/or to certain institutional accredited investors within the meaning of Rule
501 under the Securities Act. In connection therewith, the Authority and the
Initial Purchasers entered into a Registration Rights Agreement which grants the
holders of the Series A Senior Notes certain exchange and registration rights.
Pursuant to the Registration Rights Agreement, the Authority agreed to file with
the Commission a registration statement under the Securities Act with respect to
an offer to exchange the Series B Senior Notes for the Series A Senior Notes
(the "Exchange Offer Registration Statement") no later than 30 days following
the date of the Registration Rights Agreement (the "Closing Date"), to use its
best efforts to cause such registration statement to become effective under the
Securities Act at the earliest possible time, but in no event later than 120
days after the Closing Date and, upon effectiveness of such registration
statement, to commence the Exchange Offer and use its best efforts to issue, on
or prior to the expiration of 30 business days following the date on which the
Exchange Offer Registration Statement is declared effective by the Commission,
Series B Senior Notes in exchange for all Series A Senior Notes properly
tendered in the Exchange Offer and not withdrawn. The Authority also agreed to
include in this Prospectus certain information necessary to allow a broker-
dealer who holds Series A Senior Notes that were acquired for its own account as
a result of market-making activities or other ordinary course trading activities
(other than Series A Senior Notes acquired directly from the Authority) to
exchange such Series A Senior Notes pursuant to the Exchange Offer and to
satisfy the prospectus delivery requirements in connection with resales of
Series B Senior Notes received by such broker-dealer in the Exchange Offer and
to maintain the effectiveness of the Exchange Offer Registration Statement for
such purposes for one year. See "Plan of Distribution."
In addition, the Authority agreed, pursuant to the Registration Rights
Agreement, to file a shelf registration statement (the "Shelf Registration
Statement") pursuant to Rule 415 under the Securities Act (which may be an
amendment to the Exchange Offer Registration Statement of which this Prospectus
is a part), registering for resale (i) any Series A Senior Notes held by persons
who are not permitted by law or any policy of the Commission to participate in
the Exchange Offer, (ii) any Series B Senior Notes acquired in the Exchange
Offer by any holder who must comply with the Prospectus delivery requirements of
the Securities Act in connection with the resales of such Series B Senior Notes
and for which this Prospectus is not appropriate or available for such resales
by such holder or (iii) any Series A Senior Notes held by a broker-dealer which
were acquired directly from the Authority or one of its affiliates. To
participate in such a shelf registration, any such holder of Senior Notes must
furnish to the Authority, in writing, within 20 business days after receipt of a
request therefor, such information specified in Item 507 of Regulation S-K under
the Securities Act. The Authority agreed to file with the Commission the Shelf
Registration Statement (which may be an amendment to the Exchange Offer
Registration Statement of which this Prospectus is a part) no later than 30 days
after receipt of notice from a holder described above that a Shelf Registration
Statement is required and to use its best efforts to keep such Shelf
Registration Statement continually effective, supplemented and amended to the
extent necessary to ensure that it is available for resales of Senior Notes for
a period of at least three years following the Closing Date.
If (i) the Authority fails to file any of the registration statements
required by the Registration Rights Agreement on or before the date specified
for such filing, (ii) any of such registration statements is not declared
effective by the Commission on or prior to the date specified for such
effectiveness (the "Effectiveness Target Date"), (iii) the Authority fails to
consummate the Exchange Offer within 30 business days after the Effectiveness
Target Date with respect to the Exchange Offer Registration Statement or (iv)
the Shelf Registration Statement or the Exchange Offer Registration Statement is
declared effective but thereafter ceases to be effective or usable
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for its intended purpose without being succeeded immediately by a post
effective amendment to such registration statement that cures such failure
and that is itself declared effective within a five business day period (each
such event referred to in clauses (i) through (iv) above, a "Registration
Default"), the Authority has agreed to pay as liquidated damages to each
holder of Senior Notes to which such registration statement or amendment
relates, for the first 90-day period immediately following the occurrence of
such failure, an amount equal to $.05 per week per $1,000 principal amount of
Series A Senior Notes constituting the Senior Notes held by such holder for
each week or portion thereof that such Registration Default continues. The
amount of liquidated damages increases by an additional $.05 per week per
$1,000 principal amount of Series A Senior Notes constituting the Senior
Notes held by such holder for each subsequent 90-day period until the
applicable registration statement or amendment is declared effective or again
becomes effective, as the case may be, up to a maximum amount of liquidated
damages of $.50 per week per $1,000 principal amount of Series A Senior Notes
constituting the Senior Notes held by such holder. As a result of the
Authority's failure to file the Registration Statement of which this
Prospectus is a part within 30 days after the Closing Date and because such
Registration Statement was not declared effective by the Commission on or
before the Effectiveness Target Date, in connection with the May 15, 1995
interest payment in respect of the Senior Notes, the Authority was obligated
to pay to the holders of Senior Notes an aggregate of $95,000 in liquidated
damages (which equals approximately $0.54 per $1,000 principal amount of
Senior Notes). As of June 5, 1996, the Authority had accrued additional
liquidated damages in the amount of $26,250. Additional liquidated damages
will be payable in the event the Authority fails to consummate the Exchange
Offer within 30 days after the effectiveness of the Exchange Offer
Registration Statement. Accrued liquidated damages will be paid by the
Authority on November 15, 1996, the next date on which interest on the Senior
Notes becomes due and payable. A copy of the Registration Rights Agreement
has been filed as an exhibit to the Exchange Offer Registration Statement of
which this Prospectus is a part.
This Prospectus covers the offer and sale of the Series B Senior Notes
pursuant to the Exchange Offer made hereby and the resale of Series B Senior
Notes received in the Exchange Offer by any broker-dealer who holds Series A
Senior Notes acquired for its own account as a result of market-making
activities or other trading activities (other than Series A Senior Notes
acquired directly from the Authority or one of its affiliates).
Except as set forth above, after consummation of the Exchange Offer,
holders of Senior Notes will have no registration or exchange rights under the
Registration Rights Agreement. See "-Consequences of Failure to Exchange," and
"-Resales of the Series B Senior Notes."
CONSEQUENCES OF FAILURE TO EXCHANGE
Series A Senior Notes which are not exchanged for Series B Senior Notes
pursuant to the Exchange Offer and are not included in a resale prospectus
which, if required, may be filed as part of an amendment to the Registration
Statement of which this Prospectus is a part, will remain restricted securities.
Accordingly, such Series A Senior Notes may be resold (i) to the Authority (upon
redemption thereof or otherwise), (ii) so long as the Series A Senior Notes are
eligible for resale pursuant to Rule 144A, to a person whom the seller
reasonably believes is a "qualified institutional buyer" within the meaning of
Rule 144A under the Securities Act, purchasing for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or other transfer is being made in reliance on Rule 144A, (iii)
in an offshore transaction in accordance with Regulation S under the Securities
Act, (iv) pursuant to an exemption from registration in accordance with Rule 144
(if available) under the Securities Act, (v) in reliance on another exemption
from the registration requirements of the Securities Act, or (vi) pursuant to an
effective registration statement under the Securities Act, in each case in
accordance with any applicable securities laws of any state of the United States
and subject to certain requirements of the registrar or co-registrar being met,
including receipt by the registrar or co-registrar of a certification and (in
the case of (v)) an opinion of counsel reasonably acceptable to the Authority
and the registrar.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in the Prospectus
and in the accompanying Letter of Transmittal, the Authority will accept any and
all Series A Senior Notes validly tendered and not withdrawn
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prior to the Expiration Date. The Authority will issue $1,000 principal amount
of Series B Senior Notes in exchange for each $1,000 principal amount of
outstanding Series A Senior Notes accepted in the Exchange Offer. Holders may
tender some or all of their Series A Senior Notes pursuant to the Exchange
Offer; however, the Series A Senior Notes may be tendered only in integral
multiples of $1,000 principal amount.
The form and terms of the Series B Senior Notes are the same as the form
and terms of the Series A Senior Notes except that (i) the Series B Senior Notes
have been registered under the Securities Act and therefore will not bear
legends restricting their transfer pursuant to the Securities Act, and (ii)
except as otherwise described above, holders of the Series B Senior Notes will
not be entitled to the rights of holders of Series A Senior Notes under the
Registration Rights Agreement. The Series B Senior Notes will evidence the same
debt as the Series A Senior Notes (which they replace) and will be issued under,
and be entitled to the benefits of, the Indenture, which governs all of the
Senior Notes.
As of the date of this Prospectus, $175 million in aggregate principal
amount of Series A Senior Notes were outstanding. Solely for reason of
administrative convenience (and for no other purpose), the Authority has fixed
the close of business on the effective date of this prospectus, 1996 as the
record date for the Exchange Offer for purposes of determining the persons to
whom this Prospectus and the Letter of Transmittal will be mailed initially.
Only a registered holder of Series A Senior Notes (or such holder's legal
representative or attorney-in-fact) as reflected on the records of the Trustee
under the Indenture may participate in the Exchange Offer. There will be no
fixed record date for determining registered holders of the Series A Senior
Notes entitled to participate in the Exchange Offer.
Holders of the Series A Senior Notes do not have any appraisal or
dissenters' rights in connection with the Exchange Offer under either the Stock
Corporation Act of the State of Connecticut or the Indenture. The Authority
intends to conduct the Exchange Offer in accordance with the applicable
requirements of the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations of the Commission thereunder.
The Authority shall be deemed to have accepted validly tendered Series A
Senior Notes when, as and if the Authority has given oral or written notice
thereof to the Exchange Agent. The Exchange Agent will act as agent for the
tendering holders of the Series A Senior Notes for the purposes of receiving the
Series B Senior Notes from the Authority.
If any tendered Series A Senior Notes are not accepted for exchange because
of an invalid tender, the occurrence of certain other events set forth herein or
otherwise, certificates for any such unaccepted Series A Senior Notes will be
returned, without expense, to the tendering holder thereof as promptly as
practicable after the Expiration Date.
Holders who tender Series A Senior Notes in the Exchange Offer will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the Letter of Transmittal, transfer taxes with respect to the exchange of the
Series A Senior Notes pursuant to the Exchange Offer. The Authority will pay
all charges and expenses, other than certain applicable taxes, in connection
with the Exchange Offer. See "-Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
July 12, 1996, unless the Authority, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended.
In order to extend the Exchange Offer, the Authority will notify the
Exchange Agent of any extension by oral or written notice and will make a public
announcement thereof, each prior to 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date.
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The Authority reserves the right, in its sole discretion, (i) to delay
accepting any Series A Senior Notes, (ii) to extend the Exchange Offer, (iii) if
any of the conditions set forth below under "-Conditions of the Exchange Offer"
shall not have been satisfied, to terminate the Exchange Offer, by giving oral
or written notice of such delay, extension or termination to the Exchange Agent,
or (iv) to amend the terms of the Exchange Offer in any manner. Any such delay
in acceptance, extension, termination or amendment will be followed as promptly
as practicable by a public announcement thereof. If the Exchange Offer is
amended in a manner determined by the Authority to constitute a material change,
the Authority will promptly disclose such amendment by means of a prospectus
supplement that will be distributed to the registered holders of the Series A
Senior Notes, and the Authority will extend the Exchange Offer for a period of
five to 10 business days, as required by law, depending upon the significance of
the amendment and the manner of disclosure to the registered holders, if the
Exchange Offer would otherwise expire during such five to 10 business day
period.
Without limiting the manner in which the Authority may choose to make
public announcement of any delay, extension, termination or amendment of the
Exchange Offer, the Authority shall not have an obligation to publish,
advertise, or otherwise communicate any such public announcement, other than by
making a timely release thereof to the Dow Jones News Service.
PROCEDURES FOR TENDERING
Only a registered holder of the Series A Senior Notes may tender such
Series A Senior Notes in the Exchange Offer. To tender in the Exchange Offer, a
holder must complete, sign and date the Letter of Transmittal, have the
signatures thereon guaranteed if required by the Letter of Transmittal, and mail
or otherwise deliver such Letter of Transmittal to the address set forth below
under "-Exchange Agent" for receipt by the Exchange Agent prior to the
Expiration Date. In addition, either (i) certificates for such Series A Senior
Notes must be received by the Exchange Agent from Holders of Definitive Notes
along with the Letter of Transmittal, or (ii) a timely confirmation of a book-
entry transfer (a "Book-Entry Confirmation") of such Series A Senior Notes, if
such procedure is available, into the Exchange Agent's account at The Depository
Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures
for book-entry transfer described below, must be received by the Exchange Agent
prior to the Expiration Date, or (iii) the holder must comply with the
guaranteed delivery procedures described below. To be tendered effectively, the
Letter of Transmittal and all other required documents must be received by the
Exchange Agent at the address set forth below under "-Exchange Agent" prior to
the Expiration Date.
The tender by a holder will constitute an agreement between such holder and
the Authority in accordance with the terms and subject to the conditions set
forth herein and in the Letter of Transmittal.
THE METHOD OF DELIVERY OF THE SERIES A SENIOR NOTES AND THE LETTER OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE
ELECTION AND RISK OF THE HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED
THAT HOLDERS USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT
BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR SERIES A SENIOR NOTES
SHOULD BE SENT TO THE AUTHORITY. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS,
DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE
TRANSACTION FOR SUCH HOLDERS.
Any beneficial owner whose Series A Senior Notes are registered in the name
of a broker, dealer, commercial bank, trust company or other nominee and who
wishes to tender should contact the registered holder promptly and instruct such
registered holder to tender on such beneficial owner's behalf. See the
"Instruction to Registered Holder from Beneficial Owner" included with the
Letter of Transmittal. If such beneficial owner wishes to tender on such
owner's own behalf, such owner must, prior to completing and executing the
Letter of Transmittal and delivering such owner's Series A Senior Notes, either
make appropriate arrangements to register
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ownership of the Series A Senior Notes in such beneficial owner's name or obtain
properly completed bond powers from the registered holder. The transfer of
registered ownership may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by an Eligible Institution (as defined below)
unless the Series A Senior Notes tendered pursuant thereto are tendered (i) by a
registered holder who has not completed the box entitled "Special Delivery
Instructions" on the Letter of Transmittal, or (ii) for the account of an
Eligible Institution. In the event that signatures on a Letter of Transmittal
or a notice of withdrawal, as the case may be, are required to be guaranteed,
such guarantee must be by a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15
under the Exchange Act (each an "Eligible Institution").
If the Letter of Transmittal is signed by a person other than the
registered holder of any Series A Senior Notes listed therein, such Series A
Senior Notes must be endorsed or accompanied by a properly completed bond power,
signed by such registered holder as such registered holder's name appears on
such Series A Senior Notes, with signatures guaranteed by an Eligible
Institution.
If the Letter of Transmittal or any Series A Senior Notes or bond powers
are signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and evidence satisfactory
to the Authority of their authority to so act must be submitted with the Letter
of Transmittal.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of tendered Series A Senior Notes will be
determined by the Authority in its sole discretion, which determination will be
final and binding. The Authority reserves the absolute right to reject any and
all Series A Senior Notes not properly tendered or any Series A Senior Notes the
Authority's acceptance of which would, in the opinion of counsel for the
Authority, be unlawful. The Authority also reserves the right to waive any
defects, irregularities or conditions of tender as to particular Series A Senior
Notes. The Authority's interpretation of the terms and conditions of the
Exchange Offer (including the instructions in the Letter of Transmittal) will be
final and binding on all parties. Unless waived, any defects or irregularities
in connection with tenders of the Series A Senior Notes must be cured within
such time as the Authority shall determine. Although the Authority intends to
notify holders of defects or irregularities with respect to tenders of the
Series A Senior Notes, neither the Authority, the Exchange Agent nor any other
person shall incur any liability for failure to give such notification. Tenders
of the Series A Senior Notes will not be deemed to have been made until such
defects or irregularities have been cured or waived. Any Series A Senior Notes
that are not validly tendered and as to which the defects or irregularities have
not been cured or waived, or if Series A Senior Notes are submitted in a
principal amount greater than the principal amount of Series A Senior Notes
being tendered by such tendering holder, such unaccepted or non-exchanged Series
A Senior Notes will be returned by the Exchange Agent to the tendering holders
(or, in the case of Series A Senior Notes returned by book-entry transfer into
the Exchange Agent's account at the Book-Entry Transfer Facility pursuant to the
book-entry transfer procedures described below, such unaccepted or non-exchanged
Series A Senior Notes will be credited to an account maintained with such Book-
Entry Transfer Facility), unless otherwise provided in the Letter of
Transmittal, as soon as practicable following the Expiration Date.
By tendering, each registered holder will be deemed to represent to the
Authority that, among other things, (i) the Series B Senior Notes to be acquired
by the holder and any beneficial owner(s) of the Series A Senior Notes
("Beneficial Owner(s)") in connection with the Exchange Offer are being acquired
by the Holder and such Beneficial Owner(s) in the ordinary course of business of
the holder and any Beneficial Owner(s), (ii) the holder and each Beneficial
Owner are not participating, do not intend to participate, and have no
arrangement or understanding with any person to participate, in a distribution
of the Series B Senior Notes, (iii) the holder and each Beneficial Owner
acknowledge and agree that (x) any person participating in the Exchange Offer
for the
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purpose of distributing the Series B Senior Notes must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with a secondary resale transaction with respect to the Series B
Senior Notes acquired by such person and cannot rely on the position of the
Staff of the Commission set forth in no-action letters that are discussed herein
under "-Resales of the Series B Senior Notes," and (y) any broker-dealer that
receives Series B Senior Notes for its own account in exchange for Series A
Senior Notes pursuant to the Exchange Offer must deliver a prospectus in
connection with any resale of such Series B Senior Notes and, by so
acknowledging, the holder or Beneficial Owner shall not be deemed to admit that,
by delivering a prospectus, it is an "underwriter" within the meaning of the
Securities Act, (iv) neither the holder nor any Beneficial Owner is an
"affiliate" of the Authority as defined under Rule 405 of the Securities Act,
except as otherwise disclosed to the Authority in writing, and (v) the holder
and each Beneficial Owner understands that a secondary resale transaction
described in clause (iii) above should be covered by an effective registration
statement containing the selling security holder information required by Item
507 of Regulation S-K of the Commission. The Authority has no obligation to
register any of the Series B Senior Notes under the Securities Act in connection
with any such resale thereof.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect
to the Series A Senior Notes at the Book-Entry Transfer Facility, for purposes
of the Exchange Offer, within two business days after the date of this
Prospectus, and any financial institution that is a participant in the Book-
Entry Transfer Facility's system may make book-entry delivery of Series A Senior
Notes by causing the Book-Entry Transfer Facility to transfer such Series A
Senior Notes into the Exchange Agent's account at the Book-Entry Transfer
Facility in accordance with such Book-Entry Transfer Facility's procedures for
transfer. However, although delivery of Series A Senior Notes may be effected
through book-entry transfer at the Book-Entry Transfer Facility, the Letter of
Transmittal, with any required signature guarantees and any other documents,
must be transmitted to and received by the Exchange Agent at the address set
forth below under "-Exchange Agent" on or prior to the Expiration Date or the
guaranteed delivery procedures described below must be complied with.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Series A Senior Notes and (i) whose Series
A Senior Notes are not immediately available, or (ii) who cannot deliver their
Series A Senior Notes, the Letter of Transmittal or any other required documents
to the Exchange Agent prior to the Expiration Date, may effect a tender if:
(1) The tender is made through an Eligible Institution;
(2) Prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by mail or hand delivery) setting forth the name and
address of the holder, the certificate number(s) of such Series A Senior
Notes and the principal amount of the Series A Senior Notes being tendered,
stating that the tender is being made thereby and guaranteeing that, within
five business days after the Expiration Date, the Letter of Transmittal
together with the certificate(s) representing the Series A Senior Notes (or
a Book-Entry Confirmation) and any other documents required by the Letter
of Transmittal will be delivered by the Eligible Institution to the
Exchange Agent; and
(3) Such properly completed and executed Letter of Transmittal, as
well as the certificate(s) representing all tendered Series A Senior Notes
in proper form for transfer (or a Book-Entry Confirmation) and all other
documents required by the Letter of Transmittal are received by the
Exchange Agent within five business days after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their Series A Senior Notes according to the
guaranteed delivery procedures set forth above.
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WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Series A Senior Notes may
be withdrawn at any time prior to the Expiration Date.
To withdraw Series A Senior Notes previously tendered in the Exchange
Offer, a written or facsimile transmission notice of withdrawal must be received
by the Exchange Agent at its address set forth herein prior to the Expiration
Date. Any such notice of withdrawal must (i) specify the name of the person
having deposited the Series A Senior Notes to be withdrawn (the "Depositor"),
(ii) identify the Series A Senior Notes to be withdrawn (including the
certificate number or numbers and principal amount of such Series A Senior
Notes), and (iii) be signed by the holder in the same manner as the original
signature on the Letter of Transmittal by which such Series A Senior Notes were
tendered (including any required signature guarantees). All questions as to the
validity, form and eligibility (including time of receipt) of such notices will
be determined by the Authority in its sole discretion, which determination shall
be final and binding on all parties. Any Series A Senior Notes so withdrawn
will be deemed not to have been validly tendered for purposes of the Exchange
Offer and no Series B Senior Notes will be issued with respect thereto unless
the Series A Senior Notes so withdrawn are properly retendered prior to the
Expiration Date. Properly withdrawn Series A Senior Notes may be retendered by
following one of the procedures described above under "-Procedures for
Tendering" at any time prior to the Expiration Date.
Any Series A Senior Notes which have been tendered but which are not
accepted for exchange due to the rejection of the tender due to uncured defects
or the prior termination of the Exchange Offer, or which have been validly
withdrawn, will be returned to the holder thereof (unless otherwise provided in
the Letter of Transmittal), as soon as practicable following the Expiration Date
or, if so requested in the notice of withdrawal, promptly after receipt by the
Authority of notice of withdrawal without cost to such holder.
CONDITIONS OF THE EXCHANGE OFFER
Notwithstanding any other term of the Exchange Offer, the Authority shall
not be required to accept for exchange, or exchange the Series B Senior Notes
for any Series A Senior Notes, and may terminate the Exchange Offer as provided
herein before the acceptance of such Series A Senior Notes, if:
(a) any action or proceeding is instituted or threatened in any court
or by or before any governmental agency with respect to the Exchange Offer
which, in the reasonable judgment of the Authority, might materially impair
the ability of the Authority to proceed with the Exchange Offer or
materially impair the contemplated benefits of the Exchange Offer to the
Authority, or any material adverse development has occurred in any existing
action or proceeding with respect to the Authority; or
(b) any change, or any development involving a prospective change, in
the business or financial affairs of the Authority has occurred which, in
the reasonable judgment of the Authority, might materially impair the
ability of the Authority to proceed with the Exchange Offer or materially
impair the contemplated benefits of the Exchange Offer to the Authority; or
(c) any law, statute, rule or regulation is proposed, adopted or
enacted, which, in the reasonable judgment of the Authority, might
materially impair the ability of the Authority to proceed with the Exchange
Offer or materially impair the contemplated benefits of the Exchange Offer
to the Authority; or
(d) any governmental approval has not been obtained, which approval
the Authority, in its reasonable discretion, shall deem necessary for the
consummation of the Exchange Offer as contemplated hereby.
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All of the foregoing conditions must be satisfied or (other than the receipt of
any governmental approvals described in clause (d) above) waived prior to
consummation of the Exchange Offer. If the Authority determines that any of the
foregoing conditions are not satisfied, the Authority may (i) refuse to accept
any Series A Senior Notes and return all tendered Series A Senior Notes to the
tendering holders, (ii) extend the Exchange Offer and retain all Series A Senior
Notes previously tendered, subject however, to the rights of holders to withdraw
such Series A Senior Notes (see "--Withdrawal of Tenders") or (iii) waive such
unsatisfied conditions with respect to the Exchange Offer (to the extent it may
lawfully do so) and accept all validly tendered Series A Senior Notes which have
not been withdrawn. If any waiver described in the foregoing clause (iii)
constitutes a material change to the Exchange Offer, the Authority will promptly
disclose such waiver by means of a prospectus supplement that will be
distributed to the registered holders and will extend the Exchange Offer for a
period of five to 10 business days, depending upon the significance of the
change and the manner of disclosure to the registered holders, if the Exchange
Offer would otherwise expire during such five to 10 business day period.
EXCHANGE AGENT
First Fidelity Bank, n/k/a First Union Bank of Connecticut, has been
appointed as Exchange Agent for the Exchange Offer. Questions and requests for
assistance, requests for additional copies of this Prospectus or of the Letter
of Transmittal and requests for Notices of Guaranteed Delivery and other
documents should be directed to the Exchange Agent addressed as follows:
First Union Bank of Connecticut
10 State House Square
Hartford, Connecticut 06103-3698
Attn: W. Jeffrey Kramer
Vice President, Corporate Trust
In addition, questions and requests may be directed to the Exchange Agent
by telephone at (860) 247-1353 or by facsimile at (860) 247-1356.
FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Authority. The
principal solicitation is being made by mail; however, additional solicitation
may be made by telegraph, telephone or in person by authorized representatives
of the Authority and its affiliates.
The Authority has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers or others
soliciting acceptance of the Exchange Offer. The Authority, however, will pay
the Exchange Agent reasonable out-of-pocket expenses in connection therewith.
The expenses to be incurred in connection with the Exchange Offer will
be paid by the Authority and are estimated in the aggregate to be
approximately $220,000. Such expenses include fees and expenses of the
Exchange Agent and Trustee, accounting and legal fees and printing costs,
among others.
The Authority will pay all transfer taxes, if any, applicable to the
exchange of the Series A Senior Notes pursuant to the Exchange Offer. If,
however, a transfer tax is imposed for any reason other than the exchange of the
Series A Senior Notes pursuant to the Exchange Offer, then the amount of any
such transfer taxes (whether imposed on the registered holder or any other
persons) will be payable by the tendering holder.
ACCOUNTING TREATMENT
The carrying value of the Series A Senior Notes is not expected to be
materially different from the fair value of the Series B Senior Notes at the
time of the exchange. Accordingly, no gain or loss for accounting
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<PAGE>
purposes will be recognized by the Authority. The expenses of the Exchange
Offer will be amortized over the term of the Series B Senior Notes.
RESALES OF THE SERIES B SENIOR NOTES
With respect to resales of the Series B Senior Notes, based on an
interpretation by the staff of the Commission set forth in no-action letters
issued to third parties, the Authority believes that, except as described below,
a holder (other than a person that is an "affiliate" of the Authority within the
meaning of Rule 405 under the Securities Act) who exchanges Series A Senior
Notes for Series B Senior Notes in the ordinary course of business and who is
not participating, does not intend to participate, and has no arrangement or
understanding with any person to participate, in the distribution of the Series
B Senior Notes will be allowed to resell the Series B Senior Notes to the public
without further registration under the Securities Act and without delivering to
the purchasers of the Series B Senior Notes a prospectus that satisfies the
requirements of Section 10 thereof. However, if any holder acquires Series B
Senior Notes in the Exchange Offer with the intention or for the purpose of
distributing, or participating in a distribution of, the Series B Senior Notes,
such holder cannot rely on the position of the staff of the Commission
enunciated in EXXON CAPITAL HOLDINGS CORPORATION (available May 13, 1988) or
similar no-action letters and, in the absence of an exemption therefrom, must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with a secondary resale transaction. Accordingly,
such a secondary resale transaction should be covered by an effective
registration statement containing the information with respect to the selling
holder that is required by Item 507 of Regulation S-K. The Authority has no
obligation to register any of the Series B Senior Notes under the Securities Act
in connection with any such resale thereof.
As contemplated by the no-action letters described above and the
Registration Rights Agreement, each holder participating in the Exchange Offer
is required to represent to the Authority in the Letter of Transmittal that (i)
the Series B Senior Notes are being acquired by the holder in the ordinary
course of business, (ii) the holder is not participating, does not intend to
participate, and has no arrangement or understanding with any person to
participate, in a distribution of the Series B Senior Notes, and (iii) the
holder acknowledges that if such holder participates in the Exchange Offer with
the intention or for the purpose of distributing the Series B Senior Notes, such
holder must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with a secondary resale of the Series B Senior
Notes and cannot rely on the above no-action letters.
Notwithstanding the registration of the Series B Senior Notes in the
Exchange Offer, holders who are "affiliates," as defined under Rule 405 of the
Securities Act, of the Authority may publicly offer for sale or resell Series B
Senior Notes only in compliance with the provisions of Rule 144 under the
Securities Act, excluding the two-year holding period imposed by Rule 144(d), or
another available exemption from registration. At the date of this Prospectus,
none of the registered holders of the Series A Senior Notes was believed by the
Authority to be such an "affiliate."
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<PAGE>
USE OF PROCEEDS
The Exchange Offer is intended to satisfy certain of the Authority's
obligations under the Registration Rights Agreement and the Authority will not
receive any cash proceeds from the issuance of the Series B Senior Notes offered
hereby. In consideration for issuing the Series B Senior Notes as contemplated
in this Prospectus, the Authority will receive in exchange Series A Senior Notes
in like principal amount, the form and terms of which are identical in all
material respects to the form and terms of the Series B Senior Notes, except as
otherwise described herein under "The Exchange Offer -- Terms of the Exchange
Offer." The Series A Senior Notes surrendered in exchange for the Series B
Senior Notes will be retired and canceled and cannot be reissued. Accordingly,
the issuance of the Series B Senior Notes will not result in any increase in the
indebtedness of the Authority. Proceeds from the sale of the privately placed
Series A Senior Notes have been and will be used to acquire the Site, to
develop, construct, equip and open the Mohegan Sun Casino and to pay related
fees and expenses.
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<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Authority as of
March 31, 1996 and as adjusted to give effect to the Equipment Financing and the
Working Capital Financing.
<TABLE>
<CAPTION>
MARCH 31, 1996
ACTUAL AS ADJUSTED
(IN MILLIONS) (IN MILLIONS)
------------- -------------
<S> <C> <C>
Restricted Cash . . . . . . . . . . . . . . . . $134.4 $186.9(a)
------------- -------------
------------- -------------
Senior Notes (b) . . . . . . . . . . . . . . . 175.0 175.0
Equipment Financing . . . . . . . . . . . . . -- 40.0
Working Capital Financing (c) . . . . . . . . . -- 12.5
------------- -------------
Total Senior Debt . . . . . . . . . . 175.0 227.5
Subordinated Notes (d) . . . . . . . . . . . . 40.0 84.7
Other Long-Term Debt . . . . . . . . . . . . . .3 .3
------------- -------------
Total Capitalization . . . . . . . . $215.3 $312.5
------------- -------------
------------- -------------
</TABLE>
- -------------------
(a) Reflects the estimated cash balance after giving effect to the Equipment
Financing and the Working Capital Financing. The net proceeds of the
Offering and of the issuance of the Subordinated Notes, less amounts
expended through the date of this Prospectus, are currently held in an
Escrow Account pending disbursement. The Authority has arranged for the
Working Capital Financing to be available prior to the opening of the
Mohegan Sun Casino. See note (c) below.
(b) See "Description of the Senior Notes" for further description of the terms
and conditions of the Senior Notes.
(c) The Authority has signed a commitment letter with a third party lender for
the Working Capital Financing.
(d) Adjusted amount gives effect to the anticipated issuance of additional
subordinated notes in connection with the anticipated draw of
approximately $45 million under the Secured Completion Guarantee to fund
recent estimated cost increases in the Construction Budget. See "Material
Agreements--Note Purchase Agreement" for a description of the terms and
conditions of the Subordinated Notes.
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<PAGE>
THE MANAGER
TRADING COVE ASSOCIATES
The Authority has engaged TCA, a Connecticut general partnership, to manage
the development, construction, operation and marketing of the Mohegan Sun
Casino. Partners of TCA have been working with the Tribe since 1992 and assisted
the Tribe in obtaining federal recognition, negotiating the Mohegan Compact with
the State of Connecticut and obtaining numerous governmental approvals for the
Mohegan Sun Casino. TCA's partners and their affiliates have extensive
experience in the development, construction, marketing and management of casinos
and resorts throughout the world. The two managing partners of TCA are (i) Sun
Cove Limited, a wholly-owned subsidiary of Sun International, which owns 50% of
TCA, and (ii) LMW Investments, Inc., an entity controlled by Len Wolman. See "--
Management of TCA." LMW Investments, Inc. and the other partners of TCA are
primarily engaged in hotel management and real estate development.
MANAGEMENT OF TCA AND SUN INTERNATIONAL
TCA, drawing upon the gaming and resort expertise of Sun International and
its other partners, has assembled an experienced management team to oversee the
development and operation of the Mohegan Sun Casino. TCA's management team, led
by Mr. Solomon Kerzner (see "--Certain Information Regarding Sun International
Hotels Limited"), includes:
John R. Allison, 48 -- Executive Vice President--Chief Financial Officer of
Sun International. Mr. Allison joined SII in December 1987 as Chief
Financial Officer--Southern African operations and served in this position
until February 1994. Prior to joining SII, he was the Group Financial
Director of Kimberly-Clark (South Africa) Limited for four years. He is a
fellow of the Institute of Chartered Accountants in England and Wales and a
member of the South African Institute of Chartered Accountants.
Kevin DeSanctis, 42 -- Executive Vice President; President--Gaming of Sun
International. Mr. DeSanctis recently joined Sun International. Prior to
joining Sun International, Mr. DeSanctis served as Executive Vice President
and Chief Operating Officer of Hemmeter Enterprises since April 1994. From
1991 to 1994 Mr. DeSanctis served as President and Chief Operating Officer
of the Trump Plaza Hotel and Casino. From August 1989 to February 1991,
Mr. DeSanctis served as Vice President of Casino Operations of The Mirage
Hotel and Casino in Las Vegas, Nevada. Prior to August 1989, Mr. DeSanctis
served in various positions in the casino industry.
William Katz, 44 -- Executive Vice President--Project Development of Sun
International. Mr. Katz joined Sun International in September 1994 as Vice
President--Project Development for Americas & Caribbean. From 1993 to
September 1994, Mr. Katz was Operations Manager for Beauchamp Construction
Company, Coral Gables, Florida. From 1991 to 1993, Mr. Katz was Project
Executive for Morse Diesel International, Fort Lauderdale, Florida. From
1989 to 1991, Mr. Katz was Project Executive for Stoltz, Inc, Miami,
Florida.
Howard B. Kerzner, 32 -- Executive Vice President--Corporate Development of
Sun International. Mr. Kerzner joined Sun International in September 1992
as Director--Corporate Development. Previously Mr. Kerzner worked for
Lazard Freres & Co. from September 1991 to 1992. Prior to that time
Mr. Kerzner worked for the First Boston Corporation. Mr. Howard Kerzner is
Mr. Solomon Kerzner's son.
Len Wolman, 40 -- President and Chief Executive Officer of Waterford Hotel
Group, Inc. and founder of LMW Investments, Inc. Mr. Wolman joined
Waterford in 1986 when the company had only one
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<PAGE>
property under management. Currently, Waterford has eighteen properties
under management in nine states. Waterford currently operates franchises
with Marriott, Sheraton, Choice and Hospitality Franchise Systems. Prior
to operating Waterford Hotel Group, Mr. Wolman gained experience with major
operators including Westin, Hyatt, Four Seasons and Holiday Inn.
CERTAIN INFORMATION REGARDING SUN INTERNATIONAL HOTELS LIMITED
BACKGROUND OF THE MANAGEMENT OF SUN INTERNATIONAL
The senior management of Sun International has been actively engaged in the
gaming and lodging industries over the past 25 years. Mr. Solomon Kerzner, the
Chairman and Chief Executive Officer of Sun International, founded South
Africa's two largest hotel and resort companies and became involved in the
gaming industry in 1977.
In 1969, Mr. Kerzner established Southern Sun Hotels Limited ("Southern
Sun") which grew from six properties in 1969 to 29 properties by 1983. Southern
Sun's properties included resorts, city hotels, and casino resorts primarily in
southern Africa and the Indian Ocean.
In 1983, Mr. Kerzner began to focus primarily on the casino and resort
industry and established Sun International Limited to acquire Southern Sun's two
gaming operations in southern Africa and three resort hotels in the Indian Ocean
(subsequently, such interests were transferred into Sun International
Incorporated ("SII")). SII manages 27 casino resorts in southern Africa and for
the year ended June 30, 1994 the company generated revenues of approximately
$540 million and consolidated net income of approximately $125 million. The
commercial success of SII is reflected in the strong financial performance of
Sun Bop, the publicly-traded corporation that owns 12 casino resorts in South
Africa including Sun City, The Lost City and the Carousel.
Mr. Kerzner and his management team have been responsible for the
development of a number of world renowned resort hotel and casino properties. In
1979, Mr. Kerzner pioneered the concept of the total gaming resort that would
appeal to all market segments by developing Sun City. Sun City was designed to
cater to a broad public market by offering gaming entertainment and a wide
variety of non-gaming entertainment experiences. Sun City was developed in a
remote area approximately 100 miles northwest of Johannesburg, South Africa.
Today, Sun City covers some 620 acres and attracts over 2.0 million visitors
annually. The facilities at Sun City include: four hotels with approximately
1,300 rooms; two Gary Player designed 18-hole golf courses; an entertainment
center that includes a 6,000-seat indoor Superbowl and Africa's largest
convention facility; a 46-acre man-made lake for watersports; and approximately
55,000 square feet of gaming space with 1,300 slot machines and 40 table games.
In 1992, Sun City was expanded to include The Lost City. TCA believes that
The Lost City, a $300 million development, is one of the best examples of the
ability and talent of Mr. Kerzner's management team to develop and construct a
highly themed and unique resort. The Lost City is a recreation of a forgotten
African civilization that has been recently rediscovered. The Lost City covers
approximately 60 acres and at its center includes The Palace, a 350-room luxury
hotel. The resort also includes a jungle in which over one million trees were
transplanted, the Valley of the Waves, which includes a wave pool, adventure
rides and sand beaches, and a bridge that intermittently rumbles to simulate an
earthquake.
In 1993, Mr. Kerzner established Sun International to acquire from Resorts
International, Inc. the Paradise Island businesses, including the Paradise
Island Resort and Casino. In May 1995, Sun International became Mr. Kerzner's
primary vehicle for the development and establishment of gaming and resort
operations. Sun International currently owns interests in and operates nine
resorts and gaming facilities, including Atlantis, four casinos in France and
four hotels properties in the Indian Ocean.
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<PAGE>
SUN INTERNATIONAL PROPERTIES
PARADISE ISLAND. Sun International acquired its properties on Paradise
Island, located in the Bahamas, in May 1994 and has completed an approximately
$140 million redevelopment program to create the 1,147-room Atlantis Resort and
Casino, which is a themed resort based upon the wonders of the ocean. In
addition to refurbishing the guest rooms and redeveloping and extending the
common areas, a 14-acre salt water marine life habitat was created that
showcases over 100 species of marine life, waterfalls, lagoons, adventure walks
and a walk-through clear acrylic tunnel submerged in a predator lagoon. The
gaming facility at Atlantis includes a 30,000 square foot casino with 75 table
games and 800 slot machines. The fast-tracked redevelopment plan was
substantially completed by the end of 1994 after only seven months of
construction. Results to date have exceeded management's expectation with
average occupancy and room rates of 85% and $125, respectively, for the first
six months of 1995, as compared to 74% and $87, respectively, for the first six
months of 1994.
In addition to Atlantis, Sun International owns the Ocean Club Golf &
Tennis Resort, a luxury resort with 71 guest rooms, villas and cabanas that was
completely renovated in the redevelopment program, an 18-hole championship golf
course, and Paradise, a 100-room hotel catering to value conscious tourists.
FRANCE. Sun International owns an equity interest in, and pursuant to a
technical services agreement assists in the management of, four casinos in
France in the cities of Nice, Cassis, Carry-le-Rouet and Chamonix that cater
primarily to the local market. These casinos operate a total of approximately
520 slot machines and 53 table games.
INDIAN OCEAN. Sun International owns an equity interest in, and manages,
four hotels on the islands of Mauritius and the Comores located in the Indian
Ocean. These resorts cater primarily to European tourists in the mid-priced to
luxury segments. In total, Sun International currently manages 825 rooms in the
Indian Ocean under long-term management contracts. Two new hotels with 589
additional rooms which Sun International will manage are under construction.
Both hotels are scheduled to open during 1996.
OWNERSHIP OF SUN INTERNATIONAL
Sun International is a Bahamian corporation formed in 1993 that is publicly
traded in the United States (NYSE:SIHLF). Approximately 55% of Sun International
is owned by SIIL, a private holding company in which each of Caledonia
Investments plc, Safmarine & Rennies Holdings Limited and a trust for the
Kerzner family controls approximately a one-third interest. An aggregate of
approximately 5% of Sun International is owned by certain funds managed by
Fidelity Management and Research Company and by Oaktree Capital Management, LLC.
At May 1, 1996, the closing price on the NYSE for Sun International Ordinary
Shares was $42 3/4 per share. At such prices, Sun International had an equity
market capitalization of approximately $1.24 billion. Equity market
capitalization, however, is subject to fluctuation as market prices change.
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<PAGE>
SUN INTERNATIONAL FINANCIAL RESULTS
The following table presents selected consolidated financial data for
Sun International as of and for the year ended June 30, 1993, the six months
ended December 31, 1993, the two years ended December 31, 1994 and 1995 and
the three months ended March 31, 1995 and 1996. Such data has been derived
from consolidated financial statements of Sun International that have been
audited by Arthur Andersen LLP, independent certified public accountants.
Notwithstanding the inclusion in this Prospectus of selected Sun
International financial statements in connection with the Secured Completion
Guarantee, neither the Authority nor Sun International believes that such
information enhances a potential investor's understanding of the merits and
risks of participating in the Exchange Offer. Although Sun International has
provided the Secured Completion Guarantee, it is not an obligor or guarantor
of the Senior Notes. No assurance can be given that the operating results
achieved by Sun International, or the other partners of TCA, will be achieved
by the Mohegan Sun Casino.
<TABLE>
<CAPTION>
YEAR SIX MONTHS YEAR ENDED THREE MONTHS ENDED
ENDED ENDED DECEMBER 31, MARCH 31,
JUNE 30, DECEMBER 31, ----------- ---------
1993 1993 1994(1) 1995(2) 1995 1996
---- ---- ------- ------- ---- ----
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C>
SELECTED OPERATING DATA:
Gross Revenues . . . . . . . . . . . . . . . . 0 3,141 79,957 223,214 56,961 66,768
Operating Expenses . . . . . . . . . . . . . . 21 2,449 96,181 190,950 46,923 55,019
Operating Income (loss) . . . . . . . . . . . (21) 692 (19,441) 22,990 10,038 11,749
Net Income (loss)(3) . . . . . . . . . . . . . (727) 967 (16,475) 18,359 8,435 12,817
Earnings (loss) per share of Class A and
B Common Stock, before accretion of
redemption value(4) . . . . . . . . . . . . -- -- (1.06) 0.87 -- --
Earnings (loss) per share of Class A and
B Common Stock, after accretion of (0.08) 0.11 (1.12) 0.79 0.45 0.52
redemption value(4) . . . . . . . . . . . .
Average number of shares outstanding(4). . . . 8,852 8,852 15,482 21,194 18,852 24,851
<CAPTION>
THREE MONTHS
ENDED
DECEMBER 31, MARCH 31,
----------- --------
1994(1) 1995(2) 1995 1996
------- ------- ------- -------
(in thousands)
<S> <C> <C> <C> <C>
SELECTED BALANCE SHEET DATA:
Current Assets . . . . . . . . . . . . 57,610 41,959 45,395 190,595
Noncurrent Assets . . . . . . . . . . 259,065 328,468 281,053 328,968
Current Liabilities . . . . . . . . . 85,135 55,120 76,390 42,428
Noncurrent Liabilities . . . . . . . . 75,000 116,153 81,283 1,049
Redeemable Common Stock (5). . . . . . 62,020 63,543 62,936 --
Total Shareholders' Equity (5) . . . . 94,520 135,611 106,389 476,086
</TABLE>
- -------------------
(1) Sun International completed the refurbishment and redevelopment program on
Paradise Island in December 1994. As a result, the financial data for
fiscal year 1994 are not comparable to the financial data for fiscal year
1995.
(2) On May 1, 1995, Sun International purchased from SIIL substantially all of
SIIL's businesses and business opportunities. The purchase was treated as a
reorganization of entities under common control and, as such, was accounted
for in a manner similar to a pooling of interests. Accordingly, the
financial information set forth herein has been restated to include the
results of SIIL's businesses for the period presented.
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<PAGE>
(3) Included in Net Income for fiscal year 1995 is a non-recurring gain of
$900,000 resulting from the sale of Paradise Island Airlines.
(4) All share and per share information has been restated to reflect a two-for-
one stock split effected on October 31, 1995.
(5) On March 1, 1996, Sun International redesignated its two series of
Ordinary Shares as one series of Ordinary Shares and sold 8,440,000
shares in a public offering.
Sun International financed its purchase of the Subordinated Notes by
borrowing funds under a bank credit agreement.
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<PAGE>
BUSINESS AND PROPERTY
THE MOHEGAN SUN CASINO
The Authority, an instrumentality of the Tribe with perpetual life, is
developing the Mohegan Sun Casino, a gaming and entertainment complex on the
approximately 240-acre Site located in southeastern Connecticut. The Mohegan Sun
Casino is expected to open in the fourth quarter of 1996. Once completed, the
Mohegan Sun Casino and the currently operating Foxwoods, which is owned and
operated by the Pequot Tribe, will be the only two casinos offering slot
machines and table games in the northeastern United States that are currently
legally authorized outside of Atlantic City, New Jersey.
The Mohegan Sun Casino is being constructed on a wooded site overlooking
the Thames River. The historical northeastern Indian theme will be conveyed
through architectural features and the use of natural design elements such as
timber, stone and water. The Mohegan Sun Casino will be separated into four
themed quadrants, each of which will have its own unique entrance and will be
designed to reflect a separate seasonal theme-winter, spring, summer and fall-
emphasizing the importance of the seasonal changes to tribal life. The
approximately 625,000 square foot facility will include approximately 150,000
square feet of gaming space, and is designed to accommodate approximately 3,000
slot machines and 180 table games. The Mohegan Sun Casino is expected to
commence operations with a minimum of 2,500 slot machines and 180 table games.
The quality and variety of the food service will be a hallmark of the
Mohegan Sun Casino which will include a 600-seat buffet, four specialty theme
restaurants, a coffee shop and a large food court. Multiple full service and
floor service bars will be located throughout the facility. For non-gaming
entertainment, the Mohegan Sun Casino will offer a children's recreation area
and child care facilities.
Parking at the Mohegan Sun Casino will be provided through surface parking
spaces and underground valet parking spaces, totalling approximately 7,500
spaces. Traffic will enter the grounds via a newly constructed four-lane access
road to Route 2A and will be directed to the valet parking drop-off zones or to
the self-park surface lots which will be connected to the main building by
shuttle bus service. A separate loading and parking area will be established for
bus groups.
The Site for the Mohegan Sun Casino, located approximately one mile from
the interchange of I-395 and Connecticut Route 2A (which is expected to be
widened to a four-lane expressway), is just outside Montville, Connecticut,
approximately 10 miles west of Foxwoods. As part of its integrated development
plan, the Authority will construct a four-lane access road (with its own exit)
from Route 2A, giving patrons of the Mohegan Sun Casino direct access to
Interstate 395 and Interstate 95, the main highway connecting Boston, Providence
and New York.
The Authority and TCA have developed a master plan for the Site that
integrates all major aspects of gaming and entertainment design. The master plan
places particular emphasis on creating direct highway access, providing
convenient parking, designing an attractively themed facility and developing a
variety of non-gaming entertainment amenities. The Authority believes that the
Mohegan Sun Casino's location, ease of access and unique design, together with
the development, marketing and gaming expertise of Sun International, should
enable the Mohegan Sun Casino to capture a significant share of the gaming
market in the northeastern United States.
MARKET
The market for the Mohegan Sun Casino will be primarily day-trip customers
from New England and New York who reside within 150 miles of the Mohegan Sun
Casino. According to market research reports, in 1994 there were approximately
2.6 million adults living within 50 miles of the Site, 10.2 million adults
within 100 miles of the Site and 21.8 million adults within 150 miles of the
Site. The metropolitan areas of Hartford,
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<PAGE>
New Haven, Springfield, Worcester, Boston and Providence are within one to two
hours driving time by interstate highway to the Mohegan Sun Casino. New York
City is approximately three hours driving time from the Site. Access from Long
Island, New York is available through passenger and vehicle ferry to New London,
Connecticut, which is approximately 20 miles from the Mohegan Sun Casino.
MARKETING STRATEGY
The Authority intends to employ a comprehensive marketing program to
establish the Mohegan Sun Casino as a premier entertainment facility for the
entire family. The Mohegan Sun Casino will seek to distinguish itself by
emphasizing a uniquely themed gaming environment, a superior food experience in
a variety of settings, ease of access and attention to personal service.
The Authority believes that its primary target market will be adults living
within 100 miles (or approximately one to two hours driving time) and
secondarily, the population living between 100 and 150 miles (or approximately
two to three hours driving time) of the Mohegan Sun Casino, which includes most
of the New York City and Boston metropolitan areas. The Authority does not
intend to market heavily to visitors outside its primary target market unless it
expands the Mohegan Sun Casino to include lodging facilities.
Consistent with its emphasis on the day-trip market, the Authority expects
to organize regular bus routes and private limousine service to the major
metropolitan areas in its vicinity to attract gaming patrons at all levels of
play. Although the Mohegan Sun Casino will seek to accommodate premium
high-stakes players, it does not initially expect to spend significant resources
targeting the more demanding and costly premium player market.
The Authority expects that it will seek to create market awareness and
customer loyalty through a wide variety of activities that will include: public
relations programs, print and broadcast advertisements, direct mail promotions,
slot players clubs, bus stop signage and billboard signage. In addition to the
fun and excitement of casino action, the Authority expects to promote superior
customer service and the quality and value of its food offerings to attract
repeat patrons. Also, the Authority expects to promote the Mohegan Sun Casino
through special events to be held from time to time at the Mohegan Sun Casino.
DESIGN AND CONSTRUCTION
Initial phases of the construction of the Mohegan Sun Casino are underway
at the Site. The Site was formerly a manufacturing facility operated by UNC and
will be substantially redeveloped, with many of the existing buildings
(consisting of 350,000 square feet) to be renovated and incorporated into the
approximately 625,000 square foot complex. The Site will also include indoor
valet parking and surface parking for a total of approximately 7,500 cars, tour
bus parking and unloading zones, and access roads, including a four-lane direct
access road from the Mohegan Sun Casino to Route 2A. Although the plan for the
Mohegan Sun Casino does not currently call for any lodging facilities, there is
ample room on the 240-acre site for hotels and other entertainment amenities.
The Site, together with all buildings constructed or to be constructed thereon
and improvements thereto, including the Mohegan Sun Casino, are and will be
owned by the United States in trust for the Tribe. Such real property, and the
additional parcel of land adjacent to the Site that was acquired by the Tribe in
its own name for expansion of the access road leading to the Mohegan Sun Casino,
are and will be leased by the Tribe to the Authority under a long-term land
lease. See "Material Agreements--Land Lease."
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<PAGE>
PROJECT DEVELOPMENT
The Authority and TCA have assembled an experienced team of architectural,
design and construction firms to develop and build the Mohegan Sun Casino.
Pursuant to agreements between TCA and the Authority, TCA will coordinate and
supervise the conceptual planning, design and construction of the Mohegan Sun
Casino. See "Material Agreements--Development Agreement" and "--Management
Agreement." TCA will rely heavily upon Sun International's demonstrated
expertise in designing and developing casino resorts.
Morse Diesel is serving as the general contractor for the Mohegan Sun
Casino and the Authority has entered into a guaranteed maximum price contract
with Morse Diesel for the construction of the Mohegan Sun Casino. Construction
of the Mohegan Sun Casino is expected to be completed by the fourth quarter of
1996. TCA's partners have demonstrated an ability to successfully fast-track
their own respective projects. Sun International's management team built the
$300 million Lost City project in only 26 months and substantially completed the
$140 million reconstruction of Atlantis in only seven months, despite the fact
that the hotel remained open throughout the reconstruction period.
The following is a brief description of the design, construction and
engineering professionals selected to assist in the development and construction
of the Mohegan Sun Casino:
MORSE DIESEL INTERNATIONAL has been selected as the general contractor for
the Mohegan Sun Casino. Founded in 1936, Morse Diesel is a leading construction
firm in the northeastern United States. Morse Diesel has successfully completed
world class projects including the Sears Tower and the United Center (the arena
for the Chicago Bulls and Chicago Blackhawks) in Chicago, the Philadelphia
Convention Center and the Marriott Marquis in New York City.
DESIMONE, CHAPLIN AND DOBRYN CONSULTING ENGINEERS, P.C. ("DCD") has been
selected as the structural engineer for the Mohegan Sun Casino. DCD has provided
structural engineering services to architects, owners and developers for over 25
years. DCD's major casino projects include the Crystal Palace and the Paradise
Island Hotel & Casino in The Bahamas, and the Sands Hollywood Hotel and Casino
and Trump Plaza in Atlantic City. Since 1969, DCD has been involved in the
construction of over 25 major hotels including the Embassy Suites Hotel and the
Sheraton New Yorker in New York City.
LEHR ASSOCIATES CONSULTING ENGINEERS ("LEHR") has been selected to provide
mechanical/electrical/plumbing and fire/life protection design services for the
Mohegan Sun Casino. LEHR has provided such services for over 25 years, including
in connection with the Atlantis Resort and Casino project on Paradise Island.
LEHR's other casino projects include Bally's Park Place and Casino Hotel, the
Dunes Hotel and Casino, Resorts International, the Sands Hotel and Casino, the
Tropicana Hotel and Casino and Trump's Castle Hotel and Casino, all in Atlantic
City. LEHR has received several awards for engineering excellence, and numerous
members of LEHR have been published in leading engineering publications and are
recognized as technical experts in their respective disciplines.
BRENNAN BEER GORMAN has been selected to coordinate the architectural
design of the Mohegan Sun Casino. Major recent projects include the Barclay's
Bank headquarters in New York City, the new Jakarta Stock Exchange complex and
the Peninsula hotel complex in Bangkok, Thailand. Recent hotel renovations by
Brennan Beer Gorman include the Ritz Carlton in Washington, D.C., the St. Regis
Hotel, the Essex House and Sherry Netherland hotels in New York City.
ROCKWELL ARCHITECTURE, PLANNING AND DESIGN, P.C. ("Rockwell") has been
selected to coordinate the interior design of the Mohegan Sun Casino. Led by
David Rockwell, Rockwell is well known for its innovative entertainment
architecture, and has been the recipient of numerous awards. Rockwell's client
list includes: The Walt Disney Company, Planet Hollywood, Giorgio Armani, CBS,
Loews Hotels, McDonald's, Marvel Comics,
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Sony Theaters and Caesars Palace. High profile restaurant and club designs
include: the Monkey Bar and Restaurant, Nobu, Vong, The Whiskey at the Paramount
Hotel and Tatou, all in New York, as well as most of the Planet Hollywood
restaurants worldwide. Rockwell has also been involved in major
mixed-use/entertainment projects including: New York City's Forty-Second Street
Development Project, the World Trade Center Plaza Competition, Disney BoardWalk
at Walt Disney World, Kids' Place and the proposed Caesars Forum III, both in
Las Vegas.
DAVID JACOBSEN ASSOCIATES, PA ("DJA") has been selected to design the
layout of the casino. DJA has been servicing the gaming industry with
architectural design since 1956--beginning with The New Frontier in Las Vegas.
DJA provided architectural and interior design services to all but two of the
casino hotels in Atlantic City. DJA has completed 60 casino, casino-hotel and
riverboat/dockside projects including Trump's Castle Hotel and Casino, Trump
Plaza Hotel and Casino, Sands Hotel and Casino, in Atlantic City, and Circus,
Caesars Palace, and the Cal-Neva Lodge in Nevada.
EDWARD D. STONE, JR. AND ASSOCIATES ("EDSA") has been selected to provide
landscape planning for the Mohegan Sun Casino. Formed in 1960, EDSA is one of
the leading planning and landscape architectural firms in the world, and has
been recognized with more than 120 awards for its design excellence and
environmental sensitivity. EDSA has extensive experience in the design of
resort, hotel and golf community developments in the United States and
internationally including: the Atlantis Resort and Casino in The Bahamas, the
Grand Cypress Resort in Florida, the Four Seasons Resort in Nevis, the Hyatt
Regency Aruba Resort and Casino, El Conquistador in Puerto Rico, and the PGA
Resort Community in Florida.
CLOSE, JENSEN & MILLER ("CJM") has been selected as the civil engineers for
the design of the roadways leading from I-395 to the Mohegan Sun Casino, as well
as the layout of the parking facilities. CJM has provided a wide scope of
professional consulting services in civil engineering design, land survey and
planning since 1926 and its specialties include site design, roadway engineering
and traffic and structural design. CJM has served the DOT as Consulting Liaison
Engineers for review and management of bridge repair and replacement projects
since 1983.
REGULATORY APPROVALS
A number of federal, state and tribal governmental licenses and approvals
are required to open and operate the Mohegan Sun Casino.
Prior to opening the Mohegan Sun Casino, each of the partners of TCA and
certain employees of the Mohegan Sun Casino must be licensed by relevant tribal
and state authorities. Each of the partners of TCA has applied for and received
temporary gaming licenses from the Commissioner of Revenue Services of the State
of Connecticut. As each employee who is required to be licensed is hired, the
Authority or TCA will cause such employee to apply for all required licenses.
See "Risk Factors--Transkei Investigation."
A number of federal and state approvals are required to construct the
access roads to the Mohegan Sun Casino. DOT or the Authority has obtained all
requisite permits and approvals for the construction of the access road off of
Route 2A. During a special session of the Connecticut State Senate held to
consider the approval of a gaming facility in Bridgeport, Connecticut, which was
to be owned and operated by the Pequot Tribe, the Tribe testified before the
Connecticut Senate Public Safety Committee that, if the Bridgeport Casino
project were approved, the Authority would no longer be required to make slot
revenue payments to the State of Connecticut. Shortly after the Tribe's
testimony, it was reported in certain Connecticut newspapers that officials of
the State of Connecticut disagreed with the Tribe's position and had stated that
regulatory approvals required for the construction of the Mohegan Sun Casino may
be delayed. The Connecticut State Senate rejected the Bridgeport casino project
on November 16, 1995. Although the Authority has obtained from the State of
Connecticut substantially all of the permits required to complete construction
of the Mohegan Sun Casino as planned, there
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can be no assurance that any of such permits will not be revoked or that any
additional permits that may be required will be granted in a timely manner.
The Authority and TCA believe that they will be able to acquire all other
necessary licenses, permits and approvals in order to construct, open and
operate the Mohegan Sun Casino. However, no assurances can be given that any or
all of the licenses, permits and/or approvals described above will be issued or
that any or all of such licenses, permits and/or approvals will be issued
without certain conditions or restrictions that could adversely affect the
construction and operation of the Mohegan Sun Casino or the development of the
adjacent roadways. The failure to obtain any of these licenses, permits or
approvals in a timely manner may delay, restrict or prevent the Mohegan Sun
Casino from opening as contemplated herein.
COMPETITION
The gaming industry is characterized by intense competition among entities
that, in many instances, have greater resources than will the Authority. Because
the Mohegan Sun Casino will be marketed primarily to the day-trip customer, it
expects to compete primarily with other casinos within 150 miles, and to a
lesser extent, with casinos in Atlantic City, New Jersey. The Authority
believes the Mohegan Sun Casino will compete with other gaming entities on the
basis of its superior location, with direct access to a heavily trafficked state
highway as well as the main highway connecting Boston, Providence and New York,
and its unique tribal and "seasonal" atmosphere. Currently, Foxwoods is the
only casino in operation within 150 miles of the Site. However, Foxwoods is
located approximately 10 miles from the Site and is the largest gaming facility
in the United States in terms of the number of total gaming positions. In
addition, Foxwoods offers a number of amenities that the Mohegan Sun Casino does
not currently plan to offer in its initial development, including hotels and
extensive entertainment facilities. Foxwoods has been in operation for nearly
four years and the Authority believes that Foxwoods' successful operation has
enabled it to build financial resources that are currently substantially greater
than the Authority's or the Tribe's.
Currently, outside of Atlantic City, New Jersey, casino gaming in the
northeastern United States may be conducted only by federally-recognized Indian
tribes operating under IGRA. In addition to the Pequot Tribe, which operates
Foxwoods, a federally-recognized tribe in Rhode Island and a
federally-recognized tribe in Massachusetts are each currently seeking to
establish gaming operations. In addition, a number of tribes in New England are
seeking federal recognition in order to establish gaming operations. The
Authority cannot predict whether any of these tribes will be successful in
establishing gaming operations, and if established, whether such gaming
operations will have a material adverse effect on the proposed operations by the
Authority.
In addition, a number of states, including Connecticut, have investigated
legalizing casino gaming by non-Indians in one or more locations. However, under
the Mohegan Compact and the tribal-state compact between the Pequot Tribe and
the State of Connecticut, and agreements related thereto, if Connecticut
legalizes any gaming operations other than pursuant to IGRA (I.E., by an Indian
tribe on Indian land) with slot machines or other commercial casino games, the
Pequot Tribe and the Tribe will no longer be required to make payments related
to slot machine revenues. In 1995, the State of Connecticut made a request for
proposals for the possible development of a casino in Bridgeport, Connecticut,
but in November 1995, the Connecticut legislature declined to adopt special
legislation authorizing such casino operations. The Authority is unable to
predict whether the Connecticut legislature will reconsider the Bridgeport
proposal, or whether and when it may consider other gaming initiatives.
Although the Mohegan Sun Casino will be dependent primarily upon gaming
customers residing within 150 miles of the Mohegan Sun Casino, the Authority
also will compete for customers with casinos in Atlantic City, New Jersey, many
of which have greater resources and greater name recognition than the Mohegan
Sun Casino.
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EMPLOYEES; TRAINING
As of April 1, 1996, the Authority had approximately 60 employees, all of
whom have administrative or managerial responsibilities. When the Mohegan Sun
Casino commences operations, approximately 4,000 full-time employees will be
required. Pursuant to its Management Agreement with the Authority, TCA will be
solely responsible for recruiting and training the Authority's employees to
operate the Mohegan Sun Casino. In recruiting personnel, TCA is obligated to
give preference, first to qualified members of the Tribe (and qualified spouses
and children of members of the Tribe) and second to members of other Indian
tribes. TCA believes that it will be able to hire and train employees in order
to operate the Mohegan Sun Casino and that the relative proximity of Atlantic
City will enable it to find a large pool of trained and licensable employees to
fill all skilled and operating management positions. See "Material Agreements--
Management Agreement."
TCA will develop and implement training programs to teach Mohegan Sun
Casino employees necessary technical skills as well as to instill a commitment
to the highest levels of service in the industry. TCA will utilize Sun
International's established training programs to train Mohegan Sun Casino
employees, thereby ensuring adherence to the high quality standards that prevail
in Sun International's casino resorts.
LEGAL PROCEEDINGS
Neither the Tribe nor the Authority is a party to any pending material
litigation.
ENVIRONMENTAL MATTERS
Under various federal, state and local environmental laws, ordinances and
regulations, a current or previous owner or operator of real estate may be
required to investigate and clean up hazardous or toxic substances or chemical
releases at such property, and may be held liable to a governmental entity or to
third parties for property damage, personal injury and for investigation and
cleanup costs incurred by such parties in connection with the contamination.
Such laws typically impose cleanup responsibility and liability without regard
to whether the owner knew of or caused the presence of the contaminants, and the
liability under such laws has been interpreted to be joint and several unless
the harm is divisible and there is a reasonable basis for allocation of
responsibility. The costs of investigation, remediation or removal of such
substances may be substantial. In addition, the owner or former owners of a site
may be subject to common law claims by third parties based on damages and costs
resulting from environmental contamination emanating from a site.
The Site was formerly occupied by UNC, a naval products manufacturer of,
among other things, nuclear reactor fuel components. UNC's facility was
officially decommissioned on June 8, 1994 when the NRC confirmed that all
licensable quantities of SNM had been removed from the Site and that any
residual SNM contamination was remediated in accordance with the NRC approved
decommissioning plan.
From 1991 through 1993, UNC commissioned an environmental consultant to
perform a series of environmental audits and reports on the Site. The
environmental audits and soil sampling programs detected, among other things,
volatile organic chemicals, heavy metals and fuel hydrocarbons in the soil and
groundwater.
The Connecticut Department of Environmental Protection (the "DEP") reviewed
the environmental audits and reports and established cleanup goals to achieve
direct exposure criteria for residential use of the Site (the most conservative
cleanup levels) and to eliminate sources of groundwater contamination. In
December 1994, the DEP approved UNC's November 1994 Remedial Plan which
determined that although the groundwater beneath the Site was contaminated, it
met the applicable groundwater criteria given the classification of the
groundwater under the Site, and as such, groundwater remediation was
unnecessary. The November 1994 Remedial Plan also determined that certain soils
contained contamination in excess of the clean-up criteria, requiring soil
remediation. Extensive remediation of contaminated soils and additional
investigation were completed to achieve the DEP's cleanup criteria and
demonstrate that the remaining soils complied with applicable cleanup criteria.
The
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Permitting, Enforcement and Remediation division of the DEP Bureau of Water
Management has reviewed and approved the cleanup activities at the Site. By
letter dated March 20, 1995, the DEP approved the remediation report for Site.
Although the Site currently meets all applicable federal, state and local
remediation requirements, no assurance can be given that the various
environmental reports or any other existing environmental studies with respect
to the Site revealed all environmental liabilities, that any prior owners or
tenants of the Site did not create any material environmental condition not
known to the Authority, that future laws, ordinances or regulations will not
impose any material environmental liability, or that a material environmental
condition does not otherwise exist on the Site. Future remediation may be
necessary if excavation and construction exposes contaminated soil which has
otherwise been deemed isolated and not subject to cleanup requirements. In
addition, if after new construction a building is within fifteen feet of the
water table, ventilation equipment may be necessary, given the present levels of
contamination in the groundwater.
As part of the DEP's approval, UNC must continue to perform post-closure
groundwater monitoring at the Site to insure the adequacy of the cleanup. This
long term groundwater monitoring is not expected to require mitigation other
than maintaining existing monitoring wells. UNC is financially responsible for
the post-closure groundwater monitoring and such monitoring should not interfere
with the development and enjoyment of the Site.
The Phase I Reports did locate several underground storage tanks ("USTs")
and above the ground storage tanks ("ASTs") on the Site. By June 1995 all but
two ASTs had been removed, and such remaining ASTs are exempt from state and
federal regulations because of use and size. Some of the USTs were cleaned,
decontaminated and removed in compliance with state and federal laws. Other USTs
were abandoned in place or are believed to have been removed during prior
construction on the Site. Investigation did not locate any leaking USTs.
There is one federal and state permitted solid waste landfill located
within one-half mile of the Site. The landfill has only been in operation since
1993 and is permitted to accept ash disposal. The landfill is somewhat
upgradient from the Site, so if contaminants from the landfill were to reach
groundwater, such contaminants could migrate to the Site.
Certain federal, state and local laws, regulations and ordinances govern
the removal, encapsulation or disturbance of asbestos-containing materials
("ACMs") when such materials are in poor condition or in the event of building
remodeling, renovation or demolition. Such laws may impose liability for release
of ACMs and may provide the right for third parties to seek recovery from owners
or operators of real properties for personal injury associated with ACMs. In
December 1994, UNC hired an asbestos contractor who removed all exposed asbestos
insulations. In addition, it is contemplated that ACMs will be removed as part
of the construction of the Mohegan Sun Casino. However no assurance can be given
that additional future asbestos removal will not be necessary. See "Business and
Property--Design and Construction."
The DEP is currently in the process of drafting newly proposed soil
remediation standards and ground water quality standards and criteria (the
"Clean-up Standard Regulations"). In the past, the DEP has made remedial
decisions on a case-by-case basis with the goal of eliminating or minimizing
sources of pollution, eliminating risks to human health, and restoring water
quality consistent with the Water Quality Standards. The Clean-up Standard
Regulations are meant to codify those same standards and goals to make the
clean-up process as clear and predictable as possible.
The Site has been the subject of extensive environmental investigations for
both nuclear material and non-nuclear contaminants including, among other
things, volatile organic chemicals, heavy metals and fuel hydrocarbons in the
soil and groundwater. Substantial remediation of the Site was completed from
1991 until January 1995. According to the data gathered in the Phase III
Environmental Site Assessment Remediation Report dated January 1995, as amended
March 1995, (the "Phase III Assessment") which was commissioned by UNC,
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remediation is complete and is consistent with the most recent February 16, 1995
draft proposal for the Connecticut Clean-up Standard Regulations. However, no
assurance can be given that the Phase III Report or any other existing
environmental studies with respect to the Project Site reveal all environmental
liabilities, or that future laws, ordinances or regulations, including but not
limited to the currently proposed Clean-up Standard Regulations, will not impose
any material environmental liability, or that a material environmental condition
does not otherwise exist as to the Site.
In June 1995 the Tribe and TCA commissioned a Draft Environmental
Assessment of the Mohegan Sun Casino ("Environmental Assessment"). The
Environmental Assessment concludes that for EPA Clean Air Act general SIP
conformity purposes, emissions from the Mohegan Sun Casino are projected to be
below the DE MINIMIS level of 50 tons/year for nitrogen oxides ("NOx") or
volatile organic compounds ("VOCs") and accordingly, should not cause
significant air quality impacts. The Environmental Assessment's projection is
based in part on the Tribe's and TCA's pollution prevention plans and ability to
obtain emission reduction credits to offset emissions. Connecticut Light and
Power Company has indicated to the Tribe that it has sufficient Nox emission
credits that it will make available to the Tribe to offset emissions related to
the Mohegan Sun Casino.
In addition to federal, state and local laws relating to hazardous or toxic
substances, construction and proposed operation of the Mohegan Sun Casino must
comply with the National Environmental Policy Act ("NEPA"). A provision of NEPA,
42 U.S.C. Section 4332(2)(C), requires that, prior to taking any federal action
that may significantly affect the quality of the human environment, the
responsible federal agency must prepare an environmental impact statement
("EIS") describing and quantifying, to the extent possible, such affects. NEPA
applies to the construction and proposed operation of the Mohegan Sun Casino
because of the NIGC and the BIA approvals required in connection therewith. See
"Government Regulation--NIGC and BIA Approvals." An EIS is not required,
however, if the responsible federal agency, based on an environmental
assessment, issues a "Finding of No Significant Impact" ("FONSI"). On September
29, 1995, the NIGC and the BIA jointly issued a FONSI with respect to the
construction and operation of the Mohegan Sun Casino.
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MOHEGAN TRIBE OF INDIANS OF CONNECTICUT
GENERAL
The Mohegan Tribe of Indians of Connecticut is a federally-recognized
Indian tribe, whose federal recognition became effective May 15, 1994. The Tribe
currently has approximately 1,100 members. Although it only recently received
federal recognition, the Tribe has lived in a cohesive community since time
immemorial in what is today southeastern Connecticut. The Tribe historically has
cooperated with the United States and is proud of the fact that members of the
Tribe have fought on the side of the United States in every war from the
Revolutionary War to Desert Storm. The Tribe believes that this philosophy of
cooperation exemplifies its approach to developing the Mohegan Sun Casino.
Although the Tribe is a sovereign entity, it has sought to work with, and
gain the support of, local communities in establishing the Mohegan Sun Casino.
For example, the Tribe gave up its claim to extensive tracts of land that have
been guaranteed by various treaties in consideration for certain agreements in
the Mohegan Compact. As a result, local residents and businesses whose property
values had been clouded by this dispute were able to gain clear title to their
property. In addition, the Tribe has been sensitive to the concerns of the local
community in developing the Mohegan Sun Casino. This philosophy of cooperation,
rather than confrontation, has enabled the Tribe to build a unique alliance
among local, state and federal officials to achieve its goal of building the
Mohegan Sun Casino.
In addition to the Tribe's beneficial interest in the Site, the Tribe also
owns a 0.40 acre parcel, which is the site of the Mohegan Church (the "Church
Parcel"), and a parcel of land adjacent to the Site to be used for the expansion
of the access road leading to the Mohegan Sun Casino. The Church Parcel is the
only remnant of the Tribe's original reservation, a reservation which was
acknowledged and set apart for the Tribe by the Crown Colony of Connecticut and
subsequently by the State of Connecticut, through a series of official actions
beginning in 1638.
GOVERNANCE OF THE TRIBE
The Tribe's Constitution, as amended on April 12, 1996, provides for the
governance of the Tribe by a Tribal Council (the "Council"), consisting of nine
members, and a Council of Elders (the "Elders"), consisting of seven members.
All members of the Council and the Elders serve terms of five years. On
February 22, 1992, Chief Ralph Sturges was elected to the position of Lifetime
Chief of the Tribe. On October 20, 1995, Chief Sturges resigned from the
Council but he remains Lifetime Chief of the Tribe, a traditional religious and
ceremonial position. Roland Harris has been elected to succeed Chief Sturges as
Council Chair. A special election was held following Chief Sturges's
resignation from the Council to fill the vacancy created by his resignation.
The legislative and executive powers of the Tribe are vested in the
Council. The members of the Council are elected by the registered voters of the
Tribe and must be at least 21 years of age prior to the date of the election.
The powers of the Council are set forth in the Tribe's Constitution, as amended,
and include the legislative and executive powers to establish a departmental
structure for the executive branch and to establish governmental sub-divisions
and agencies and delegate appropriate powers to such subdivisions and agencies.
The terms of each of the Council members ends on October 5, 2000. Presently the
members of the Council are as follows:
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TRIBAL COUNCIL
NAME AGE
---- ---
Mark Brown . . . . . . . . . . . . . . . . . . . . . . 38
Jayne Fawcett . . . . . . . . . . . . . . . . . . . . . 59
Carlisle Fowler . . . . . . . . . . . . . . . . . . . . 66
Courtland Fowler . . . . . . . . . . . . . . . . . . . 68
Roland Harris . . . . . . . . . . . . . . . . . . . . . 55
Loretta Roberge . . . . . . . . . . . . . . . . . . . . 64
Maynard Strickland . . . . . . . . . . . . . . . . . . 51
Shirley Walsh . . . . . . . . . . . . . . . . . . . . . 48
Glen R. LaVigne . . . . . . . . . . . . . . . . . . . . 35
The Tribe's Council of Elders presently consists of six elected members,
each of whom is a registered voter of the Tribe, is at least 55 years of age and
was elected by the registered voters of the Tribe. The seventh member of the
present Elders was appointed by the Tribal Council. In the future, all seven
members of the Elders will be elected by registered voters of the Tribe and will
be required to be at least 55 years of age. Any case or controversy arising
under the Tribe's Constitution must be submitted to the Elders for
determination, except those matters which relate to the Mohegan Sun Casino,
including the Senior Notes, which are required to be submitted to the Gaming
Disputes Court. The decision of the Elders on such matters is final. The Elders
are not permitted to issue advisory opinions. The term of each of the Elders
expires on October 2, 1998. Presently, the members of the Elders are as follows:
COUNCIL OF ELDERS
NAME AGE
---- ---
Pauline Brown . . . . . . . . . . . . . . . . . . . . . 66
Carlton Eichelberg . . . . . . . . . . . . . . . . . . 65
Everett Eichelberg . . . . . . . . . . . . . . . . . . 61
Melissa Fawcett . . . . . . . . . . . . . . . . . . . . 35
Margaret LaVigne . . . . . . . . . . . . . . . . . . . 65
Dorothy Long . . . . . . . . . . . . . . . . . . . . . 68
Laurence Schultz . . . . . . . . . . . . . . . . . . . 63
MOHEGAN TRIBAL GAMING AUTHORITY
On July 15, 1995, the Tribe established the Mohegan Tribal Gaming
Authority. The Mohegan Constitution provides that the Authority shall
exercise all governmental and proprietary powers of the Tribe over all
gaming-related development. The Gaming Ordinance of the Tribe, under which
the Authority was established, obligates the Authority, among other things,
to (i) distribute its net revenues as provided by the Indenture, the
Management Agreement and related agreements and (ii) to the extent the
Authority has residual net income after making the distributions required by
subclause (i) above, provide a fair return to the Tribe (as determined by the
Authority in its sole discretion) on the Tribe's investment, consistent with
the development and operation of a legal and profitable Gaming Enterprise
(which is defined to include the Mohegan Sun Casino and any and all other
gaming related developments), the terms of any applicable management or
financing agreements and, when practical, with the employment of members of
the Tribe in the operation of the Gaming Enterprise. In addition, for so
long as any Senior Notes are outstanding, the Indenture restricts the
Authority's discretion to use or distribute funds held by it or for its
benefit, except as expressly provided therein or in the Collateral Documents.
The Indenture covenants prohibit the Authority from making any payment or
distribution to the Tribe (or any agency or instrumentality thereof) or any
general distribution to members of the Tribe (other than payments expressly
permitted by the Indenture) unless and until all distributions required by
subclause (i) above have been made and the Authority is not, and upon making
such distribution will not be, in default under the Indenture.
The Authority has two major functions. The first, delegated to the
Authority's Management Board (the "Management Board"), is to direct the
development, operation, management, promotion and construction of the gaming
enterprise and all related development. The Management Board consists of the
nine members of the Council. Presently, the members of the Authority's
Management Board are the same as the members of the Council. The Management
Board also selects tribal representatives to a Business Board which oversees the
business aspects of the gaming operation (the "Business Board"). The Business
Board is established under the Management Agreement and consists of two members
appointed by the Tribe and two members appointed by TCA.
Although the Management Agreement gives TCA the exclusive right and
obligation to develop, manage, operate and maintain Class III gaming at the
Mohegan Sun Casino, ultimate management authority over gaming operations is
vested in the Authority and the Tribe. The Management Agreement also contains
numerous
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restrictions on TCA's independent authority. TCA is required to operate the
Mohegan Sun Casino in compliance with all tribal legal requirements and other
applicable laws and TCA and all of its executive officers must be licensed by
the Tribe pursuant to the Tribal Gaming Ordinance. General oversight
responsibility and decision-making authority with respect to certain key
business matters are delegated specifically to the Business Board.
Additionally, certain responsibilities delegated to TCA are subject to the prior
approval of the Authority (E.G., selection of a General Manager and adoption of
the operating and capital budgets for the Mohegan Sun Casino).
The second major function of the Authority is to regulate gaming. The
Management Board appoints an independent Director of Regulation to ensure the
integrity of the gaming operation through the promulgation and enforcement of
appropriate regulation. The Director of Regulation serves at the pleasure of the
Management Board and employs a staff that is responsible for performing
background investigation into gaming license applicants. The Director is
responsible for issuance and revocation of gaming licenses.
EXECUTIVE OFFICERS AND MEMBERS OF THE MANAGEMENT BOARD
The following table provides information as of April 9, 1996 with respect
to each of (i) the executive officers of the Authority and (ii) the members of
the Management Board.
Name Age Position
---- --- --------
Roland Harris . . . . . . . 55 Chairman and member, Management Board
Jayne Fawcett . . . . . . . 59 Vice Chairman and member, Management Board
William J. Valardo . . . . 41 Executive Vice President and General
Manager
George T. Papanier . . . . 38 Senior Vice President and Chief Financial
Officer
Mitchell Grossinger Etess . 38 Senior Vice President, Marketing
Carlisle Fowler . . . . . . 66 Treasurer and member, Management Board
Loretta Roberge . . . . . . 64 Corresponding Secretary and member,
Management Board
Shirley Walsh . . . . . . . 48 Recording Secretary and member, Management
Board
Mark Brown . . . . . . . . 38 Member, Management Board
Courtland Fowler . . . . . 68 Member, Management Board
Maynard Strickland . . . . 51 Member, Management Board
Glen R. LaVigne . . . . . . 35 Member, Management Board
Roland Harris has been Chairman and a member of the Management Board since
October 1995. Mr. Harris is the founder and president of the firm Harris and
Clark, Inc.--Civil Engineers, Land Surveyors & Land Planners, which has
performed services for the Authority. See "--Certain Relationships and Related
Party Transactions." Mr. Harris has served as First Selectman and CEO of the
Town of Griswold, Connecticut and also as its Planning and Zoning Commissioner.
He has served as Deputy Chief of the Griswold Fire Department and as Fire
Marshall and Inspector of the Town of Griswold. Prior to assuming the
Chairmanship of the Management
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Board, Mr. Harris served as the Tribal Planner. In addition to his duties as
Chairman, Mr. Harris also is a member of the Business Board and Director of the
Tribe's Housing Authority.
Jayne Fawcett has been Vice Chairman of the Management Board since December
1995 and a member of the Management Board since July 15, 1995. Ms. Fawcett
worked as a social worker for the State of Connecticut in 1987 and recently
retired from teaching after 27 years of service. Ms. Fawcett was Chairman of
the Constitutional Review Board from 1992 to 1993. In addition, she serves as
an alternate on the Business Board and oversees the Tribe's public relations.
Ms. Jayne Fawcett is the mother of Melissa Fawcett, who is serving on the
Constitutional Review Board.
William J. Valardo has been Executive Vice President, General Manager of
the Authority since October 1995 and has 20 years of experience in gaming
operations. Prior to his employment with the Authority, Mr. Valardo was Chief
Operating Officer for River City, a riverboat gaming joint venture in New
Orleans, Louisiana. From 1991 to 1994, Mr. Valardo served as Senior Vice
President, Casino Operations at Trump Plaza Hotel and Casino in New Jersey. Mr.
Valardo opened the Mirage in Las Vegas and was Vice President, Table Games from
1989 to 1991. Mr. Valardo also worked as Assistant Casino Manager and Pit
Manager for Caesars Tahoe and Caesars Palace.
George T. Papanier, who has been Senior Vice President Finance and the
Chief Financial Officer of the Authority since October 1995, has 17 years of
experience in the casino and hotel industry. Prior to joining the Authority,
Mr. Papanier worked for Hemmeter Enterprises from November 1994 to July 1995 as
its Vice President of Operations and prior thereto was Vice President of Finance
for Trump Plaza Hotel and Casino. Mr. Papanier also held various financial
management positions at Bally's Grand, Golden Nugget and Sands Hotel and Casino.
Mr. Papanier is a certified public accountant.
Mitchell Grossinger Etess has been Senior Vice President, Marketing since
November 1995 and has 16 years experience in the casino and hotel industry.
Prior to his employment with the Authority, Mr. Etess was Vice President at
Players Island and, from 1989 to 1994, was Senior Vice President of Marketing
and Hotel Operations at Trump Plaza Hotel and Casino. Prior thereto, Mr. Etess
held various management positions in the casino and hotel industry.
Carlisle Fowler has been the Treasurer and a member of the Management Board
since July 15, 1995 and has been active in the Tribe's government for over 20
years. Prior to his retirement in 1989, Mr. Fowler was an electronics
technician for the State of Connecticut and operated his own electronics
business. Mr. Fowler serves on the Business Board and on the Finance Committee
of the Management Board. Mr. Carlisle Fowler is the brother of Mr. Courtland
Fowler.
Loretta Roberge has been Corresponding Secretary and a member of the
Management Board since July 15, 1995. Mrs. Roberge has served as a
paraprofessional at the Mohegan School for 24 years, working with children with
special needs. Active in the Tribe's community all her life, Mrs. Roberge
previously served as secretary of the Management Board. She presently chairs the
Finance Committee, co-chairs the Glad and Sad Committee and is a member of the
Cemetery Committee of the Tribe. Mrs. Loretta Roberge is the sister of Ms.
Margaret LaVigne, who is serving on the Constitutional Review Board.
Shirley Walsh has been the Recording Secretary of the Management Board
since October 1995 and has been a member of the Management Board since July 15,
1995. Mrs. Walsh has worked for the Tribe in various capacities for almost four
years. Prior to that time, she was employed for 13 years by a local certified
public accountant. Mrs. Walsh chaired the Tribe's Election Committee from 1994
to 1995 and serves on the Bingo, Glad and Sad and the Wigwam Committees of the
Tribe.
Mark Brown has been a member of the Management Board since October 1995 and
serves as the security liaison for the Council. Prior to joining the Council,
he served as a law enforcement officer for eight years. Mr.
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Brown worked with the Tribe's historian during the period in which the Tribe was
working to obtain federal recognition and also served on the Constitutional
Review Board from 1993 to 1994. Mr. Brown is the son of Ms. Pauline Brown, who
is serving on the Constitutional Review Board. Mr. Brown has co-chaired the
Tribe's Wigwam Committee for the past two years and also serves on its Cemetery
Committee.
Courtland Fowler has been a member of the Management Board since July 15,
1995 and was a major contributor to the cultural research that led to the
federal recognition of the Tribe. Mr. Fowler continues to lend his expertise to
the Cultural Resources Department. Mr. Fowler was previously employed as a
chemical operator and assistant foreman at Pfizer until his retirement in 1990.
He has served as Vice Chairman of the Management Board, as a member of the
Constitutional Review Board and as a member of the Tribe's Cemetery Committee.
Mr. Fowler also was on the committee that drafted the first constitution of the
Tribe. Mr. Courtland Fowler is the brother of Mr. Carlisle Fowler.
Maynard Strickland has been a member of the Management Board since October
1995. During the past 20 years, Mr. Strickland owned and operated several
restaurants in Norwich, Connecticut and in Florida. Mr. Strickland is actively
engaged in developing the Tribe's bingo facility to be housed in the Mohegan Sun
Casino. Mr. Strickland was born and raised in the Tribe community, continuing a
long family tradition of tribal involvement.
Glenn R. LaVigne has been a member of the Management Board since January
1996. Mr. LaVigne has been employed by the Town of Montville, Connecticut since
1979 and oversees building and maintenance for Montville's seven municipal
buildings. Mr. Glenn LaVigne is the son of Ms. Margaret LaVigne, who is serving
on the Constitutional Review Board.
EXECUTIVE COMPENSATION
During the Authority's fiscal year ended September 28, 1995, Chief Ralph
Sturges served as the Chairman of the Management Board, in a capacity similar in
many respects to chief executive officer of the Authority. Neither Chief
Sturges nor any other person who served during fiscal 1995 as an executive
officer of the Authority received compensation from the Authority for such
period. Roland Harris currently serves as the Chairman of the Management
Board and also serves as an executive officer of the Tribe and as a member of
the Tribal Council. Mr. Harris receives compensation from the Tribe for the
performance of his duties on behalf of the Tribe; however, Mr. Harris
currently receives no remuneration from the Authority. After the Mohegan Sun
Casino commences operations, the Authority may compensate Mr. Harris for
services he performs for the Authority although there are no current
arrangements or undertakings regarding any such compensation.
Each of George Pappanier, Senior Vice President and Chief Financial
Officer, and William Valardo, Executive Vice President and General Manager,
is receiving a salary from the Authority equal to $150,000 and $275,000 per
year, respectively. No written employment contract exists between the
Authority and either of Messrs. Pappanier or Volardo and the Authority does
not currently contemplate entering into any such contract with either of
these individuals.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
On October 7, 1995, the Authority entered into an agreement pursuant to
which Harris and Clark, Inc. agreed to provide surveyance, civil engineering and
professional design services to the Authority for fees not to exceed $344,430.
Roland Harris, Chairman of the Management Board of the Authority, is the founder
and president of the Harris and Clark, Inc. As of December 31, 1995, the
Authority had paid approximately $202,000 in fees to Harris and Clark, Inc.
pursuant to such agreement. The Authority believes that the terms and
conditions of this transaction are no less favorable than the Authority could
have obtained at that time from unaffiliated third parties.
GAMING DISPUTES COURT
On July 20, 1995, the Council enacted a Tribal Ordinance creating the
Gaming Disputes Court (the "Gaming Disputes Court"). The Gaming Disputes Court
is composed of a trial and an appellate branch. A single judge presides over
cases at the trial level. Trial court decisions can be appealed to the appellate
branch where they will be heard by a panel of three judges, one of whom will be
the Chief Judge, and none of whom shall have presided over the case below.
Decisions of the appellate branch are final and no further appeal is available
in the Gaming Disputes Court.
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The Mohegan Constitution and the tribal ordinance establishing the Gaming
Dispute Court give the Court exclusive jurisdiction for the Tribe over all
disputes related to gaming on the Site. This includes jurisdiction over all
disputes or controversies related to gaming between any person or entity and the
Authority, the Tribe, or TCA. The Gaming Disputes Court has jurisdiction over
all disputes arising out of the Authority's regulatory powers, including
licensing actions. By ordinance, the Tribe has adopted the substantive law of
the State of Connecticut as the applicable law of the Gaming Dispute Court. The
Tribe has also adopted all of Connecticut's rules of civil and appellate
procedure, professional and judicial conduct to govern the Gaming Disputes
Court.
Judges of the Gaming Disputes Court are chosen by the Tribal Council from a
publicly available list of eligible retired federal judges and Connecticut
Attorney Trial Referees appointed by the Chief Justice of the Connecticut
Supreme Court pursuant to Connecticut General Statute 52-434(a)(4), all of whom
must remain licensed to practice law in the State of Connecticut. Judges are
appointed sequentially from the list as cases are filed with the clerk of the
Gaming Disputes Court. The Chief Judge of the Gaming Disputes Court, who serves
as the Gaming Disputes Court's administrative superintendent, is chosen by the
Tribal Council from the list of eligible judges and serves a five-year term.
Judges of the Gaming Disputes Court are subject to discipline and removal for
cause pursuant to the rules of the Gaming Disputes Court. The Chief Judge is
vested with the sole authority to revise the rules of the Gaming Disputes Court.
Judges are compensated by the Tribal Council at an agreed rate of pay
commensurate with their duties and responsibilities and such rate cannot be
diminished during a judge's tenure.
The present members of the Gaming Disputes Court are:
Neal Ossen, Chief Judge (acting) . . . Partner, Ossen & Murphy, Attorney
Trial Referee, District of Hartford;
member of panel of Bankruptcy
trustees, District of Connecticut,
Chairman, Division C, National
Conference of Commissioners on Uniform
State Laws. Professional practice of
27 years with emphasis in commercial
litigation and bankruptcy.
T. Steven Bliss, Judge . . . . . . . . Of counsel to Resha, Smith & Goldberg,
P.C., Attorney Trial Referee, Danbury
Judicial District. Professional
practice of 25 years with emphasis in
general litigation.
Carl E. Cella, Judge . . . . . . . . . Partner, Cella McKeon & Williams, P.C.
Attorney Trial Referee, District of
New Haven; Professional practice of 30
years with emphasis on property,
casualty and personal injury
litigation.
Robert R. Petrucelli, Judge. . . . . . Partner, Palmesi, Kaufman, Goldstein
and Petrucelli, P.C., Attorney Trial
Referee, District of Fairfield; Panel
of Arbitrators to American Arbitration
Association; Professional practice of
35 years with emphasis in general
civil litigation and commercial law.
Mark J. Rosen, Judge . . . . . . . . . Partner, Zeisler & Zeisler, Attorney
Trial Referee, District of Fairfield.
Author of nine books in the areas of
collection, foreclosure, replevin and
secured creditor's rights.
Professional practice of 20 years with
emphasis in commercial litigation,
commercial workouts and administrative
law and proceedings.
The Tribe has constitutionally authorized the Authority to stipulate for
judgment before the Gaming Disputes Court, and to bind the Tribe and the
Authority thereby. Under this power, the Authority has stipulated
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for judgment before the Gaming Disputes Court for the enforcement of the
remedies in the Indenture. Under the Constitution of the Tribe, that stipulation
is the law of the Tribe.
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GOVERNMENT REGULATION
GENERAL
In addition to a variety of generally applicable state and federal laws
governing business operations, the Authority is also subject to extensive
regulation by special federal, state and tribal laws and regulations applicable
to commercial relationships with Indians generally, as well as Indian gaming and
the management and financing of Indian casinos. In addition, the Authority is
regulated by federal and state laws and regulations applicable to the gaming
industry generally and to the distribution of gaming equipment. The following
description of the regulatory environment in which gaming takes place and in
which the Authority will operate is intended to be a summary and is not intended
to be a complete recitation of all applicable law. Moreover, because the
regulatory environment is dynamic and evolving, it is impossible to predict how
certain provisions will be ultimately interpreted or how they may affect the
Authority. Changes in such laws or regulations could have a material adverse
impact on the Authority's operations. See "Risk Factors."
TRIBAL LAW AND LEGAL SYSTEMS
APPLICABILITY OF STATE AND FEDERAL LAW. Federally-recognized Indian tribes
are independent governments, subordinate to the United States, with sovereign
powers, except as those powers may have been limited by treaty or by the United
States Congress. The power of Indian tribes to enact their own laws to regulate
gaming derives from the exercise of tribal sovereignty. Indian tribes maintain
their own governmental systems and often their own judicial systems. Indian
tribes have the right to tax persons and enterprises conducting business on
Indian lands, and also have the right to require licenses, and to impose other
forms of regulations and regulatory fees on persons and businesses operating on
their lands.
Absent the consent of the Tribe or the United States Congress, the laws of
the State of Connecticut do not apply to the Tribe or the Authority. Under the
federal law that recognizes the Tribe, the Tribe consented to the extension of
Connecticut criminal law and Connecticut state traffic controls over the Site.
WAIVER OF SOVEREIGN IMMUNITY; JURISDICTION; EXHAUSTION OF TRIBAL REMEDIES.
Indian tribes generally enjoy sovereign immunity from unconsented suit similar
to that of the states and the United States. In order for an Indian tribe (or an
agency or instrumentality of an Indian tribe, such as the Authority) to be
subject to suit (other than by the United States), the tribe must have
effectively waived its sovereign immunity with respect to the matter in dispute.
Further, in most commercial disputes with Indian tribes, the jurisdiction of the
federal courts, which are courts of limited jurisdiction, may be difficult or
impossible to obtain. A commercial dispute is unlikely to present a federal
question, and some courts have ruled that an Indian tribe as a party is not a
citizen of any state for purposes of establishing diversity jurisdiction in the
federal courts. State courts may also lack jurisdiction over suits brought by
non-Indians against Indian tribes in Connecticut. The remedies available against
an Indian tribe also depend, at least in part, upon the rules of comity
requiring initial exhaustion of remedies of tribal tribunals and, as to some
judicial remedies, the tribe's consent to jurisdictional provisions contained in
the disputed agreements. The United States Supreme Court has held that where a
tribal court exists, the jurisdiction in that forum must first be exhausted
before any dispute can be properly heard by federal courts which would otherwise
have jurisdiction. Where a dispute as to the existence of jurisdiction in the
tribal forum exists, the tribal court must first rule as to the limits of its
own jurisdiction.
In connection with the Offering, the Tribe agreed, and has constitutionally
granted the Authority the power, to waive its sovereign immunity, and the
Authority has agreed to waive its sovereign immunity, for the limited purpose of
any suit by the Trustee under the Indenture or, as to the Authority, under
certain circumstances by the holders of the Senior Notes to enforce repayment of
the Senior Notes. The Tribe also adopted a constitutional restraint against any
action by the Tribe or its officers which impairs contractual obligations. In
the
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event that such waiver of sovereign immunity is held to be ineffective, the
Trustee and the Note holders could be precluded from judicially enforcing their
rights and remedies against the Tribe or the Authority. In the event that the
waiver of the rule requiring exhaustion of tribal remedies is held to be
ineffective, the Trustee and the Note holders could be subjected to substantial
delay, cost and expense while seeking such remedies in the Gaming Disputes Court
or other tribunals of the Tribe. In addition, unless the decisions of the Gaming
Disputes Court or other tribunals of the Tribe violate applicable state or
federal law, there might be no effective right to appeal such decisions in state
or federal court.
THE INDIAN GAMING REGULATORY ACT OF 1988
REGULATORY AUTHORITY. The terms and conditions of the Management
Agreement, as well as the operation of casinos and of all gaming on Indian land,
are subject to the Indian Gaming Regulatory Act of 1988, 25 U.S.C. 2701 ET SEQ.
("IGRA").
IGRA is administered by the National Indian Gaming Commission ("NIGC"), an
independent agency, within the U.S. Department of Interior, exercising primary
federal regulatory responsibility over Indian gaming. The NIGC has exclusive
authority to issue regulations governing tribal gaming activities, approve
tribal ordinances for regulating Class II and Class III Gaming (as described
below), approve management agreements for gaming facilities, conduct
investigations, and generally monitor tribal gaming. Certain responsibilities
under IGRA (such as the approval of per capita distribution plans to tribal
members, and the approval of transfer of lands into trust status for gaming) are
retained by the BIA. The BIA also has responsibility to review and approve land
leases and other agreements relating to Indian lands. See "--BIA Approvals."
Criminal enforcement is the exclusive responsibility of the United States
Department of Justice, except to the extent such enforcement responsibility is
shared with the State of Connecticut under the Mohegan Compact and under the
federal law that recognizes the Tribe.
The NIGC is empowered to inspect and audit all Indian gaming facilities, to
conduct background checks on all persons associated with Indian gaming, to hold
hearings, issue subpoenas, take depositions, adopt regulations and assess fees
and impose civil penalties for violations of IGRA. IGRA also provides for
federal criminal penalties for illegal gaming on Indian land and for theft from
Indian gaming facilities.
In 1993, the NIGC published rules implementing certain provisions of IGRA.
These rules govern, among other things, the submission and approval of tribal
gaming ordinances or resolutions, and require an Indian tribe to have the sole
proprietary interest in and responsibility for the conduct of any gaming.
Tribes are required to issue gaming licenses only under articulated
standards, to conduct or commission financial audits of their gaming
enterprises, to perform or commission background investigations for primary
management officials and key employees, and to maintain facilities in a manner
that adequately protects the environment and the public health and safety. The
1993 rules also set out a review procedure for tribal licensing of all gaming
operation employees. Reporting requirements applicable to tribes are
articulated, requiring the report of specified information, including that
derived from background investigations, to the NIGC.
TRIBAL ORDINANCES. Under IGRA, except to the extent otherwise provided in
a tribal-state compact, Indian tribal governments have primary regulatory
authority over Class III Gaming on land within the tribe's jurisdiction.
Therefore, the Authority's gaming operations, and persons engaged in gaming
activities, are guided by and subject to the provisions of the Tribe's
ordinances and regulations regarding gaming.
IGRA requires that the NIGC review tribal gaming ordinances, and authorizes
the NIGC to approve such ordinances only if they meet certain requirements
relating to (i) the ownership, security, personnel background, recordkeeping,
and auditing of a tribe's gaming enterprises; (ii) the use of the revenues from
such gaming; and
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(iii) the protection of the environment and the public health and safety. The
Tribe adopted its gaming ordinance on July 24, 1994, and the NIGC approved the
gaming ordinance on November 8, 1994.
CLASSES OF GAMING. IGRA classifies games that may be conducted on Indian
lands into three categories. "Class I Gaming" includes social games solely for
prizes of minimal value, or traditional forms of Indian gaming engaged in by
individuals as part of, or in connection with, tribal ceremonies or
celebrations. "Class II Gaming" includes bingo, pulltabs, lotto, punch boards,
tip jars, instant bingo, and certain other games similar to bingo, if those
games are played at the same location as bingo is played. "Class III Gaming"
includes all other forms of gaming, such as slot machines, video casino games
(E.G., video slots, video blackjack and video poker), so-called "table games"
(E.G., blackjack, craps, roulette), and other commercial gaming (E.G., sports
betting and parimutuel wagering).
Class I Gaming on Indian lands is within the exclusive jurisdiction of the
Indian tribes and is not subject to the provision of IGRA. Class II Gaming is
permitted on Indian lands if (i) the state in which the Indian lands lies
permits such gaming for any purpose by any person, organization or entity;
(ii) the gaming is not otherwise specifically prohibited on Indian lands by
federal law; (iii) the gaming is conducted in accordance with a tribal ordinance
or resolution which has been approved by the NIGC; (iv) an Indian tribe has sole
proprietary interest and responsibility for the conduct of gaming; (v) the
primary management officials and key employees are tribally licensed; and
(vi) several other requirements are met. Class III Gaming is permitted on Indian
lands if the conditions applicable to Class II Gaming are met and, in addition,
the gaming is conducted in conformance with the terms of a written agreement
between the tribal government and the government of the state within whose
boundaries the tribe's lands lie (a "Tribal-State Compact").
TRIBAL-STATE COMPACTS. IGRA requires states to negotiate in good faith
with Indian tribes that seek to enter into Tribal-State Compacts for the conduct
of Class III Gaming. Such Tribal-State Compacts may include provisions for the
allocation of criminal and civil jurisdiction between the state and the Indian
tribe necessary for the enforcement of such laws and regulations, taxation by
the Indian tribe of such activity in amounts comparable to those amounts
assessed by the state for comparable activities, remedies for breach, standards
for the operation of such activity and maintenance of the gaming facility,
including licensing, and any other subjects that are directly related to the
operation of gaming activities. The terms of Tribal-State Compacts vary from
state to state; however, Tribal-State Compacts within one state tend to be
substantially similar. Tribal-State Compacts usually specify the types of
permitted games, establish technical standards for video gaming machines, set
maximum and minimum machine payout percentages, entitle the state to inspect
casinos, require background investigations and licensing of casino employees,
and may require the tribe to pay a portion of the state's expenses for
establishing and maintaining regulatory agencies. Some Tribal-State Compacts are
for set terms, while others are for indefinite duration. The Mohegan Compact was
entered into in May 1994 and was approved by the Secretary of the Interior on
December 14, 1994, does not have a specific term and will remain in effect until
terminated by written agreement of both parties, or the provisions are modified
as a result of a change in applicable law. See "Risk Factors--Highly Regulated
Industry."
Tribal-State Compacts have been the subject of litigation in several
states, including Alabama, California, Florida, Kansas, Michigan, Mississippi,
New Mexico, New York, Oklahoma, Oregon, Rhode Island, South Dakota, Wisconsin
and Washington. Among the issues litigated is the constitutionality of the
provision of IGRA which entitles tribes to sue in federal court to force states
to negotiate Tribal-State Compacts. The Supreme Court has recently ruled, in
SEMINOLE TRIBE OF FLORIDA V. FLORIDA, 116 S. Ct. 114 (1996), that Congress lacks
the power to abrogate state immunity to permit tribes to sue in federal court to
enforce the compacting requirements of IGRA. While, on a similar basis, a
federal district court in Washington previously held the Class III provisions of
IGRA to be unconstitutional, that decision was never subject to appellate review
and the constitutionality of the IGRA survives the Supreme Court decision
unimpaired, except that tribes may not avail themselves of the provision to sue
unconsenting states to secure a compact. On April 15, 1996, the Supreme Court
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disposed of the remaining cases consistently with the SEMINOLE decision, and
without further addressing the IGRA provisions. To the extent that they have
jurisdiction to do so, appellate courts in the Ninth and Tenth Circuits may
address the same issues on remand from the Supreme Court, and future litigation
may be expected to call into question the constitutionality of IGRA, either in
whole or in part, in view of the partial invalidity of the remedial scheme.
There has also been litigation challenging the authority of governors,
under state law, to enter into Tribal-State Compacts. Federal courts have upheld
the authority of the governors of Louisiana and Mississippi to enter into
compacts, while the highest state courts of New Mexico, Kansas and Rhode Island
have held that the governors of those states did not have authority to enter
into such compacts without the consent or authorization of the legislatures of
those states. In the New Mexico, Kansas and Rhode Island cases, the courts held
that compacting is a legislative function under the respective state
constitutions. The court in a second New Mexico case has held that state law
does not permit casino-style gaming.
In Connecticut, there has been no litigation challenging the governor's
authority to enter into the Mohegan Compact. If such a suit were filed, however,
the Authority does not believe that the precedent in New Mexico or Kansas cases
would apply. On May 18, 1994, the Connecticut Attorney General issued a formal
opinion that concluded that "existing [state] statutes provide the Governor with
the authority to negotiate and execute the . . . [Mohegan] Compact". The
Attorney General therefore declined to follow the Kansas case. In addition, the
United States Court of Appeals for the Second Circuit Court has held, in a case
brought by the Pequot Tribe, that Connecticut law authorizes casino gaming.
After execution of the Mohegan Compact in May 1994, the Connecticut Legislature
passed a law to require future gaming compacts to be approved by the
legislature, but that law does not apply to previously executed compacts such as
the Mohegan Compact.
The Authority's operation of gaming is subject to the requirements and
restrictions contained in the Mohegan Compact. The Mohegan Compact authorizes
the Tribe to conduct most forms of Class III Gaming.
POSSIBLE CHANGES IN FEDERAL LAW. Several bills have been introduced in
Congress which would amend IGRA. To this date, no such bill has passed either
house of Congress. If IGRA were amended, the amendment could change the
governmental structure and requirements within which the Tribe could conduct
gaming.
NIGC AND BIA APPROVALS
The Authority will construct and operate the Mohegan Sun Casino on lands
held in trust for the Tribe by the United States of America, which are leased by
the Tribe to the Authority. Such leases, and modifications or amendments to such
lease, must be and were approved by the BIA pursuant to 25 U.S.C. Section 415
and 25 C.F.R. Section 162. In addition, 25 U.S.C. Section 81 ("Section 81"), a
federal statute originally passed in 1871, requires that all contracts "by any
person with any tribe of Indians" which are "relative to their lands" must be
approved by the Secretary of the Interior. The remedies pursuant to Section 81
enable the federal courts to find agreements which violate this statute to be
void AB INITIO, and to grant full restitution of all amounts paid to the
non-Indian party by the tribe.
Prior to the passage of IGRA, the BIA took the position that management
contracts for Indian gaming facilities did not require BIA approval.
Nevertheless, beginning in the early 1980s federal courts held that gaming
management contracts did require such approval, and several such agreements were
set aside by federal courts because they lacked approval. In 1988, with the
passage of IGRA, the approval of gaming management agreements and collateral
agreements between Indian tribes and gaming managers became the province of the
NIGC, but the BIA continues to have some residual Section 81 jurisdiction. The
full scope of required review and approval pursuant to this statute is not fully
or precisely defined. The regulations and guidelines which the NIGC and the BIA
use to interpret their respective responsibilities regarding Section 81 are
incomplete and
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evolving. Both Section 81 and IGRA have been the subject of litigation and may
be subject to further judicial or legislative interpretation.
CONSTRUCTION PERMITS FOR THE MOHEGAN SUN CASINO AND ROADWAYS
STATE TRAFFIC COMMISSION
The Site lies northwest of Connecticut Route 2A. The Authority will
construct an interchange off of Connecticut Route 2A for access to the Mohegan
Sun Casino. The Site lies to the east of Connecticut Route 32. Sandy Desert
Road, a town road, extends from Route 32 approximately 1,000 feet to the Site.
The Authority will construct an extension of Sandy Desert Road through the Site
to connect the same to the Route 2A interchange.
The interchange primarily traverses land owned or controlled by the DOT.
The extension of Sandy Desert Road will bisect the Site and cross other adjacent
land owned by an affiliate of the Tribe. That portion of the extension of Sandy
Desert Road which is adjacent to but not on the Site will not be a part of the
Tribe's reservation. Portions of Sandy Desert Road up to the Site will be used
and maintained as a part of the Montville municipal road system, and the
interchange will be used and maintained as a part of the state road systems.
The Tribe has received a permit ("STC Permit") from the State Traffic
Commission of the State of Connecticut ("STC") for the construction of the
interchange off of Connecticut Route 2A and for the extension of Sandy Desert
Road. The STC Permit requires that the developer construct a number of
improvements to existing roads, including establishing a full interchange on
Route 2A, and widening a portion of Route 2A from two-lanes to four-lanes with a
median divided highway.
The STC Permit also requires the Authority to review various traffic
operations after opening of the Mohegan Sun Casino and to submit a report to the
STC summarizing the results. If the STC determines that operational deficiencies
exist as a result of the added traffic from the Mohegan Sun Casino, the
Authority may be required to mitigate such operational deficiencies as
determined by the STC.
Prior to performing any work within the state highway right of way, an
encroachment permit must be obtained from the DOT. The Authority has obtained
such encroachment permit.
ENVIRONMENTAL PROTECTION
The State of Connecticut is required under the federal Clean Air Act to
develop and submit to the United States Environmental Protection Agency ("EPA")
a State Implementation Plan ("SIP") which outlines measures needed to achieve
attainment of federal ambient air quality standards by certain required dates.
The State of Connecticut has submitted a SIP which is under review by the EPA.
The Tribe must also comply with the requirements of the federal Clean Air
Act. The Tribe has committed to conform with the SIP as such requirements would
apply to similar activities conducted elsewhere in the State of Connecticut. The
DEP has confirmed that such conformity with the SIP would satisfy the Tribe's
obligations under the Clean Air Act, provided that the EPA approves the SIP.
In addition to the SIP, DEP evaluates the potential direct emissions from a
facility. New emission sources must meet new source performance standards. A
permit is required if total emissions could reach certain minimum levels. New
source owners must apply even if no permit will be required. Total emissions at
the Mohegan Sun Casino are not expected to reach the minimum levels. However,
the Authority will apply for such permit as required.
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Finally, in order to construct the new access road off of a state highway,
a developer is required to obtain a permit if the indirect air quality impacts
are expected to be "significant." The indirect air quality impacts of the
Mohegan Sun Casino are not expected to be "significant," and, accordingly, no
such permit should be required.
The Tribe must also comply with the requirements of the federal Clean Water
Act. Any person whose activity may result in any discharge into navigable water,
including wetlands and watercourses, and natural and manmade ponds, must obtain
a permit and/or a certification that the discharge is consistent with the Clean
Water Act. The Authority has preliminarily determined that all discharges will
be consistent with the Clean Water Act, and believes that such certification
and/or permit will be issued.
Neither the shoreline nor the tidal wetlands on or adjacent to the Site are
expected to be negatively impacted by construction and operation of the Mohegan
Sun Casino. However, because the Site is located within 1,000 feet of tidal
wetlands, the Tribe must comply with the Connecticut Coastal Area Management
Program as part of its federal compliance with the Federal Coastal Zone
Management Act. The Authority expects that construction of the Mohegan Sun
Casino will comply with applicable policies and will have no adverse impacts to
coastal resources.
In order to construct the interchange off of Route 2A and the extension of
Sandy Desert Road, the Authority will be required to comply with the Connecticut
Coastal Area Management Program and the federal Clean Water Act, including the
regulations promulgated under the National Pollution Discharge Elimination
System. Such compliance is confirmed by the DEP through the issuance of permits
pursuant to the DEP's regulations. The Authority believes that all such permits
will be timely issued to the DOT or the Authority.
No assurances can be given that any or all of the permits and/or approvals
described above will be issued or that any or all of such permits and/or
approvals will be issued without certain conditions or restrictions that could
adversely affect the construction and operation of the Mohegan Sun Casino or the
development of the adjacent roadways. It was reported in certain Connecticut
newspapers that officials of the State of Connecticut had stated that regulatory
approvals required for the construction of the Mohegan Sun Casino may be
delayed. See "Business and Property--Regulatory Approvals." Although the
Authority has received from the State of Connecticut substantially all of the
permits required to construct the Mohegan Sun Casino and adjacent roadways as
planned, there can be no assurance that any of such permits will not be revoked
or that any additional permits that may be required will be granted in a timely
manner.
LICENSING
Prior to opening the Mohegan Sun Casino, each of the partners of TCA and
certain employees of the Mohegan Sun Casino must be licensed by relevant tribal
and state authorities. Each of the partners of TCA has applied for and received
temporary gaming licenses from the Commissioner of Revenue Services of the State
of Connecticut. As each employee who is required to be licensed is hired, the
Authority or TCA will cause such employee to apply for all required licenses.
See "Risk Factors--Transkei Investigation."
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MATERIAL AGREEMENTS
The following discussion summarizes significant terms of certain material
agreements to which the Tribe and the Authority are parties. This summary does
not purport to be complete and is qualified in its entirety by reference to each
of the agreements described herein, copies of which will be made available upon
request without charge by writing to the Authority at 67 Sandy Desert Road,
Uncasville, CT 06382, Telecopy: (860) 848-0545, attn: Roland Harris and Carlisle
Fowler, Business Board Members, and Chief Ralph Sturges. Capitalized terms used
but not otherwise defined herein shall have the meaning ascribed to such terms
in the agreement being described (unless otherwise indicated).
TRIBAL-STATE MOHEGAN COMPACT
Presently, the Tribe is not engaged in any gaming activities. The Tribe and
the State of Connecticut entered into The Mohegan Tribe--State of Connecticut
Gaming Mohegan Compact (the "Mohegan Compact") to authorize and regulate
Class III Gaming operations on lands owned by the Tribe. The Mohegan Compact is
substantively similar to the agreement governing Class III Gaming of the Pequot
Tribe in the State of Connecticut. The Mohegan Compact provides, among other
things, that:
(1) The Tribe agrees to submit all gaming-related operation and
development to the regulation of the State of Connecticut Gaming Commission, in
order to attempt to insure the fair and honest operation of gaming activities
and to maintain the integrity of all activities conducted in regard to Class III
gaming. The Tribe further agrees to adopt certain standards of operation and
management of all gaming operations and to regulate the same through a Tribal
gaming agency.
(2) The Tribe may conduct, on the Site, games of chance, including:
Blackjack, Poker, Dice, Money-Wheels, Roulette, Baccarat, Chuck-a-Luck, Pai Gow,
Over and Under, Horse Race Game, Acey-ducey, Beat the Dealer, Bouncing Ball,
Slot Machines, video facsimile games and Pari-mutuel betting.
(3) Law enforcement matters relating to Class III Gaming activities will
be under the jurisdiction of the State of Connecticut and the Tribe.
(4) All gaming employees will obtain and maintain a gaming license issued
by the State of Connecticut gaming agency. Documentation relating to personal
and family history, personal and business references, criminal convictions,
business activities, financial affairs, gaming industry experience, gaming
school education and general education, as well as photographs and fingerprints,
will be submitted to the State of Connecticut gaming agency. State and federal
criminal record checks will be conducted on all applicants.
(5) Any enterprise providing gaming services or gaming equipment to the
Tribe will be required to hold a current valid registration issued by the State
of Connecticut gaming agency.
(6) The State of Connecticut will annually assess the Tribe for the costs
attributable to its regulation of the Tribe's gaming operations and for the
provision of law enforcement in accordance with the Mohegan Compact.
(7) The Tribe shall have each of its Class III Gaming operations audited
on an annual basis by an independent certified public accountant and shall
include any additional procedures required by the State of Connecticut gaming
agency, such additional procedures to be performed at the sole expense of the
State of Connecticut gaming agency.
(8) In order to beneficially effect health and safety, the Tribe shall
enact fire, building, sanitary and health ordinances and regulations no less
rigorous than laws and regulations of the State of Connecticut.
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(9) Service of alcoholic beverages within any gaming facility will be
subject to regulation by the State of Connecticut.
(10) The Tribe waived any defense which it may have by virtue of sovereign
immunity in respect to any action in United States District Court to enforce the
Mohegan Compact.
In addition, the Tribe and the State of Connecticut entered into a
memorandum of understanding (the "Memorandum") setting forth certain matters
regarding the implementation of the Mohegan Compact. The Memorandum provides
that:
(1) So long as there is no change in state law to permit the operation of
slot machines or other commercial casino games by any other person (other than
the Pequot Tribe under IGRA), the Tribe will contribute to the State of
Connecticut on a monthly basis a sum equal to twenty-five percent (25%) of gross
operating revenues derived from the slot machines operated by the Tribe, which
amount shall be reduced by the amounts set forth in (2) and (3) hereof.
(2) The payment of the State of Connecticut is to be reduced by $5,000,000
in the second year of the Tribe's gaming operations, by $2,500,000 in the third
year of the Tribe's gaming operations, and by $2,500,000 in the fourth year of
the Tribe's gaming operations. This represents the settlement of the land claims
of the Tribe.
(3) The Tribe's payment is to be reduced by $3,000,000 in the first year
following the completed transfer of Fort Shantok State Park to the United States
to be held in trust for the Tribe.
(4) For each fiscal year commencing July 1, the minimum contribution of
the Tribe to the State of Connecticut shall be the LESSER of (a) thirty percent
(30%) of gross revenues from slot machines, or (b) the greater of
(i) twenty-five percent (25%) of gross revenues from slot machines or
(ii) $80,000,000.
On December 5, 1994, the Secretary of the Interior approved the Mohegan
Compact in accordance with the IGRA.
AGREEMENT WITH THE TOWN OF MONTVILLE
As a part of its review of the Tribe's land in trust application to the
BIA, the United States Secretary of the Interior (the "Secretary of the
Interior") reviewed the impact on the State as well as local authorities of
accepting the land in trust. In order to minimize the impact to the Town of
Montville (the "Town") resulting from the removal of the land to be taken into
trust from the Town's tax rolls and jurisdiction, on June 16, 1994, the Tribe
and the Town entered into an agreement (the "Town Agreement"), whereby the Tribe
agreed to pay to the Town an annual payment of $500,000 derived from gaming
revenues and a one-time payment of $3,000,000 towards improvements in the Town's
water system. The annual payment is payable commencing one year after the
commencement of slot machine gaming activities; the one-time payment is payable
one year after the commencement of slot machine gaming activities. In addition,
the Town Agreement provides that the Tribe will use and compensate the Town
accordingly for the Town's disposal system and the Town's wastewater collection
and treatment system, and that the Tribe will cooperate with the Town in its
development regarding traffic patterns and planning and zoning issues. Finally,
the Town Agreement provides that the Tribe will make payments in lieu of taxes
to the Town on lands that the Tribe may acquire outside of the currently
contemplated 700-acre reservation.
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LAND LEASE
LEASED PROPERTY; TERM. The Tribe and the Authority have entered into a
land lease (the "Lease"), pursuant to which the Tribe leases to the Authority
certain land located in the Town of Montville, Connecticut (the "Leased
Property"), which land is held by the United States of America in trust for the
Tribe, and all buildings, improvements and related facilities (E.G., the Mohegan
Sun Casino and related developments) constructed or installed on the Leased
Property during the term of the Lease (collectively, the "Improvements"). The
Lease also covers an additional parcel of land adjacent to the Site that is held
by the Tribe in its own name (and is not part of the Tribe's reservation) and
was acquired for expansion of the access road leading to the Mohegan Sun Casino.
Upon the termination of the Lease, the Authority will be required to surrender
to the Tribe possession of the Improvements, excluding any equipment, furniture,
trade fixtures or other personal leased property which may be removed by the
Authority in accordance with the terms of the Lease.
The initial term of the Lease is for 25 years. Provided that the Authority
is not in default under the Lease, the Authority has the right to extend the
term of the Lease for one additional 25-year term upon notice to the Tribe not
more than two years, nor less than one year, prior to the expiration of the
initial term. All terms and conditions of the Lease (excluding the Authority's
option to extend the term of the Lease) will remain in effect during any
extended term thereof.
Subject to the provisions of any Permitted Mortgage, the Tribe has the
right to terminate the Lease as to any portion of the Leased Property, provided
that such released portion shall not be used to conduct any gaming operations.
RENT; EXPENSES; DEFAULT. Under the terms of the Lease, the Authority is
required to pay to the Tribe annual rent in the amount of $1.00. In the event
the Authority assigns its interest in the Lease to the Tribe (assuming the Tribe
subsequently fails to merge its lessee and lessor interests under the Lease) or
to any other instrumentality of the Tribe, the Lease and this annual rent
obligation would remain in effect. For any period when the Tribe or another
agency or instrumentality of the Tribe is not the tenant under the Lease (for
example, upon the foreclosure of the Leasehold Mortgage by the Trustee), the
annual rent would increase to 8% of the tenant's gross revenues from the
premises, payable monthly in arrears, based on the gross revenues of the prior
month.
The Lease is a "net" lease; accordingly, the Authority is responsible for
the payment of all costs of owning, operating, constructing, maintaining,
repairing, replacing and insuring the Leased Property, including, without
limitation, the payment of all taxes, fees, assessments or other charges which
may be levied against the Leased Property or the Authority's interest therein by
the Tribe or any other governmental authority. The Tribe has agreed that it will
not impose any new or additional taxes, fees, assessments or other charges on
the Leased Property or the Authority other than those specified in the Lease or
non-discriminatory charges for utilities or other governmental services supplied
by the Tribe to the Leased Property or the Authority. The Mohegan Constitution
includes a provision prohibiting the impairment of contracts.
The Authority will be in default of its obligations under the Lease upon
any (i) failure to pay when due any amount required to be paid by the Authority
under the Lease (except for any amount for which the Authority will indemnify
the Tribe under the terms of the Lease), which failure continues for 30 days
after written notice thereof from the Tribe to the Authority and any Permitted
Mortgagee (as defined in the Lease), (ii) failure to observe or perform any
other covenant or obligation of the Authority under the Lease excluding certain
obligations under the Lease, which failure continues for 60 days (or such other
longer period as may be reasonably required to cure such default) after written
notice from the Tribe to the Authority and any Permitted Mortgagee; or (iii)
pledge, encumbrance or conveyance by the Authority of its interest in the Lease
in violation of the terms of the Lease. Notwithstanding the foregoing, the
Authority will not be in default under the Lease
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if, in connection with any good faith dispute, it deposits funds in escrow or
obtains a bond that prevents any foreclosure of the leasehold estate.
USE OF LEASED PROPERTY. Under the Lease, the Authority may use the Leased
Property solely for the construction and operation of the Resort (as defined in
the Indenture), unless prior approval is obtained from the Tribe for any
proposed alternative use. Similarly, no construction or alteration of any
building or improvement located on the Leased Property by the Authority may be
made unless complete and final plans and specifications therefor have been
approved by the Tribe. Following foreclosure of any mortgage on the Authority's
interest under the Lease (including the Leasehold Mortgage) or any transfer of
such interest to the holder of such mortgage in lieu of foreclosure, the Leased
Property may be used for any lawful purposes, subject only to applicable codes
and governmental regulations.
Under the Lease, the Authority has the obligation to construct and maintain
access roads required to permit reasonable access to the Leased Property and the
non-exclusive right to construct, install, maintain, repair, replace, use and
operate the same. The Authority also has the right to acquire, construct,
install, maintain, repair, replace, use and operate such electric power, water,
sanitary and storm sewer and other utilities reasonably required for the
development and operation of the Leased Property subject to the approval of the
Secretary of the Interior or to the extent required by law, which utilities must
be designed and constructed in accordance with plans approved by the Tribe. The
Tribe has the non-exclusive right to operate and use access roads and utilities
constructed or installed by the Authority (and to construct, install and grant
easements with respect to access roads and utilities to serve other property of
the Tribe, including areas of the Leased Property not occupied or retained by
the Authority as to which the Lease is terminated), provided that such use,
operation, construction or installation does not unreasonably interfere with the
Authority's use of the Leased Property. In addition, the Tribe has certain entry
and inspection rights with respect to the Leased Property and the activities
thereon and the option to perform the obligations of the Authority under the
Lease if the Authority fails to do so after reasonable prior notice to the
Authority and all Permitted Mortgagees.
PERMITTED MORTGAGES AND RIGHTS OF PERMITTED MORTGAGEES; ASSIGNMENT;
AMENDMENT OF LEASE. The Authority may not mortgage, pledge or otherwise
encumber its leasehold estate in the Leased Property except through a Permitted
Mortgage. Under the Lease, a "Permitted Mortgage" is defined to include the
Leasehold Mortgage securing the obligations of the Authority under the Senior
Notes and the Trustee for the Senior Notes is a Permitted Mortgagee. See "--
Leasehold Mortgage Deed." A Permitted Mortgage also includes any other mortgage
granted by the Authority that provides, among other things, that (i) the Tribe
has the right to notice of, and to cure, any default of the Authority
thereunder, (ii) the Tribe has the right to prior notice of the Permitted
Mortgagee's intention to foreclose on such Permitted Mortgage and the right to
purchase such mortgage in lieu of any foreclosure, and (iii) such Permitted
Mortgage is subject and subordinate to any and all access and utility easements
granted by the Tribe under the Lease.
As provided in the Lease, Permitted Mortgagees have the right, but not the
obligation, without the Tribe's consent, to (i) cure any default of the
Authority within any applicable cure period under the Lease, (ii) acquire and
convey, transfer, assign and exercise any right, remedy or privilege of the
Authority under the Lease or applicable law in accordance with the provisions of
the applicable Permitted Mortgage, and (iii) rely on any provisions of the Lease
that are for the benefit of Permitted Mortgagees. In addition, the Tribe has
agreed that it will provide notice of any default by the Authority of its
obligations under the Lease to each Permitted Mortgagee so as to allow, but not
require, the Permitted Mortgagee to cure such default within 60 days following
such notice in the name, and on behalf, of the Authority. Provided that current
payments are made to the Tribe under the Lease during such 60-day period, the
Tribe may not terminate the Lease. Any payment or performance by a Permitted
Mortgagee in accordance with the foregoing provisions will not be construed as
an agreement by such Permitted Mortgagee to assume personal liability under the
Lease (except to the extent that a Permitted Mortgagee actually becomes the
lessee under the Lease); however, in the event that a Permitted Mortgagee
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transfers the leasehold estate to a third party purchaser, then such purchaser
shall be required to assume personal liability under the Lease and the Permitted
Mortgagee shall automatically be released from all liability thereunder.
Under the Lease, the Tribe and the Secretary of the Interior have consented
to the assignment and transfer by the Authority of its interest in the Lease to
any Permitted Mortgagee pursuant to (i) a foreclosure by any Permitted
Mortgagee, (ii) a transfer in lieu of foreclosure, (iii) the exercise of any
right or remedy granted by the applicable Permitted Mortgage or (iv) any
purchase by a third party at a foreclosure or other sale. Any Permitted
Mortgagee who, after a default by the Authority under the terms of a Permitted
Mortgage, succeeds to the Authority's interest under the Lease shall have the
right to assign or sublet the Leased Property without obtaining the consent of
the Tribe or the Secretary of the Interior; in the alternative, prior to any
foreclosure or transfer in lieu of foreclosure of the Authority's interest under
the Lease, any Permitted Mortgagee, upon notice to the Tribe, shall have the
right to take possession of and sublease all or any part of the Leased Property
for the account of the Authority and to exercise, in the name of the Authority,
the rights and privileges of the Authority under the Lease. Following any
assignment of the Authority's interest under the Lease by a Permitted Mortgagee,
any assignee shall be required to assume the Authority's obligations under the
Lease and the Permitted Mortgagee shall automatically be released from all
liability, if any, under the Lease. In no event, however, shall any Permitted
Mortgagee (or any assignee, sublessee, purchaser or transferee of any Permitted
Mortgagee) be permitted to transfer any interest in the Lease or its leasehold
interest in the Leased Property to any person or entity engaged by the Tribe or
the Authority to manage a gaming enterprise under IGRA.
Except as provided in the Lease and subject to any restrictions of any
Permitted Mortgage, the Authority may not assign or transfer all or any part of
its interest under the Lease without the prior consent of the Tribe. The
Authority may, however, without obtaining the consent of the Tribe or the
Secretary of the Interior, sublease all or any portion of the Leased Property to
any entity that is, directly or indirectly, owned or controlled by the Tribe.
Pursuant to the terms of the Lease, any material amendments to the Lease
are subject to the prior written approval of each Permitted Mortgagee. In
addition to changes in the rental rate and the term of the Lease, material
amendments also include changes in the circumstances that trigger a termination
of the Lease or any other change which materially and adversely affects the
rights of any Permitted Mortgagee thereunder or the value of the Leased
Property. The Tribe and the Authority have agreed to execute any further
amendments to the Lease that may be reasonably required by a Permitted Mortgagee
or a prospective mortgagee to carry out the provisions of the Lease. The Tribe
has agreed that, so long as any Permitted Mortgage remains outstanding with
respect to the Leased Property, it will not without the prior written consent of
the Permitted Mortgagee (i) accept any surrender of the Leased Property or
termination of the Lease, whether voluntary or involuntary, or upon a failure of
any condition of the Lease, or (ii) exercise, or accept the exercise of, any
right or option of the Authority to terminate the Lease or to purchase the
Tribe's reversionary interest thereunder. The requirement that the Tribe obtain
the consent of each Permitted Mortgagee in connection with the foregoing
matters, however, shall not apply to the Tribe's assertion of its rights upon a
default by the Authority under the Lease. Furthermore, the Tribe has agreed
that, so long as any Permitted Mortgage remains outstanding with respect to the
Leased Property, it will not (i) terminate the Lease nor the Authority's right
to possession of the Leased Property, (ii) exercise any right of re-entry,
(iii) take possession of and/or relet the Leased Property or any portion
thereof, or (iv) enforce any other right or remedy which may materially and
adversely affect the rights of any Permitted Mortgagee under the applicable
Permitted Mortgage, unless such Permitted Mortgagee has failed to cure the
Authority's defaults under the Lease.
COMPLIANCE WITH LAW; INSURANCE; INDEMNIFICATION. The Authority has agreed
to comply with all applicable tribal and governmental laws, regulations, codes
and ordinances applicable to its use and occupancy of the Leased Property. The
Tribe has agreed that it will not impose any additional requirements that would
materially and adversely affect the Authority's use of the Leased Property for
the purposes contemplated by the Lease. During the term of the Lease, the
Authority is responsible for maintaining, repairing and replacing the
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Leased Property and all Improvements thereon and ensuring that the same is in
good, safe and habitable condition. The Authority also is required to maintain
"all-risk" property insurance in an amount equal to the full replacement value
of all Improvements located on the Leased Property and comprehensive general
liability insurance against claims for injury, death or property damage
occurring in or on the Leased Property with a combined single limit of $2
million per occurrence, together with an umbrella policy of liability insurance
providing additional coverage of at least $5 million per occurrence. All
insurance policies maintained by the Authority are required to name the Tribe
and any Permitted Mortgagee as additional insureds and loss payees, as
appropriate. In addition, such policies must be in form and substance reasonably
satisfactory to the Tribe and such Permitted Mortgagees and may not be cancelled
or modified without 30 days' prior notice thereto. Subject to the terms of any
Permitted Mortgage, which terms are subject to approval by the Tribe, all
insurance proceeds received as a result of damage or destruction shall be
applied first to cost of restoration of any Improvements located on the Leased
Property, with the remainder, if any, payable to the Authority or to any
Permitted Mortgagee, to the extent required by such Permitted Mortgage.
The Authority has agreed to indemnify and hold harmless the Tribe, its
members, officers, agents and employees against all liability, claims,
obligations, suits, damages, penalties, costs, charges and expenses (including
attorneys' fees) that may be imposed upon the Tribe or such individuals by
reason of (i) any work or things done in, on or about the Leased Property and/or
any Improvement located thereon, (ii) any use, nonuse, possession, occupation,
condition, operation or maintenance of the Leased Property and/or Improvements
located thereon, (iii) any negligence on the part of the Authority or any of its
agents, contractors, employees, subtenants, licensees or invitees, (iv) any
accident, injury or damage to any person or property occurring in, on or about
the Leased Property and/or any Improvements located thereon; (v) the failure of
the Authority to perform or comply with the terms and conditions of the Lease;
and (vi) any tax attributable to the execution, delivery of recording of the
Lease or any modification thereof. In the event that any action or proceeding is
brought against the Tribe and/or any indemnified individual in connection with
any of the foregoing, the Authority will have the obligation to protect and
defend the Tribe and/or such indemnified individual at its sole expense and by
counsel reasonably satisfactory to the Tribe.
DISPUTE RESOLUTION AND CONSENT TO SUIT. The Lease expressly provides that
the Tribe has not consented to the enforcement, levy or any other execution of
any judgment for money or other damages against any assets of the Tribe, except
that the Tribe and the Authority have each consented to the enforcement and
execution of any judgment, whether obtained as the result of judicial,
administrative or arbitration proceedings, against any assets of the Authority,
in connection with any judicial, administrative or arbitration proceeding
commenced for the purposes of interpreting or enforcing the obligations of the
Tribe or the Authority pursuant to the Lease. Subject to the foregoing
limitation, each of the Tribe and the Authority has waived sovereign immunity
from unconsented suit, whether pursuant to a judicial, administrative or
arbitration proceeding, to permit the commencement, maintenance and enforcement
of any action, brought by any person with standing to maintain such action, to
enforce or interpret the terms of the Lease and to enforce or execute any
judgment resulting therefrom. The Tribe and the Authority have agreed that
during any dispute, controversy or claim arising out of the Lease, the Authority
shall remain in possession of the Leased Property and the Tribe and the
Authority shall continue their performance of the terms of the Lease. In
addition, the Tribe and the Authority have agreed that, during the pendency of
any such dispute, controversy or claim, the Authority shall be entitled to
injunctive relief so as permit the Authority to maintain possession of the
Leased Property in the event of any threatened eviction in connection therewith.
LEASEHOLD MORTGAGE DEED
NOTE COLLATERAL. The Authority has executed an Open-End Construction--
Permanent Leasehold Mortgage Deed, Assignment of Leases and Rents and Security
Agreement (the "Mortgage") in favor of the Trustee whereby the Authority has
granted to the Trustee a first priority lien on (i) the Lease, (ii) the
Authority's leasehold interest in the Leased Property, the Improvements now or
hereafter constructed on the Leased Property and all rights,
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privileges, benefits, easements, rights of way, and other appurtenances
benefitting the Leased Property (the "Appurtenant Rights") under the Lease,
(iii) all other right, title, interest and claim of the Authority under the
Lease, and (iv) all goods, furnishings, equipment, trade fixtures, inventory,
supplies, building and other construction materials and other personal property
constituting a part of or used in connection with the operation of the business
on the Leased Property (the "Personal Property").
Additionally, the Authority has granted to the Trustee a first priority
lien on (i) all insurance proceeds, condemnation proceeds and other proceeds
relative to the disposition of the foregoing, (ii) all leases, subleases,
licenses, concessions, and other space agreements for any portion of the Leased
Property or the Improvements (the "Space Leases"), (iii) all maps, plans,
specifications, surveys, studies, tests, reports, data and drawings relating to
the development of the Leased Property, (iv) all licenses, permits, variances,
special permits, franchises, certificates, rulings, approvals, waivers, orders,
rights and agreements from governmental authorities relating to the Leased
Property, EXCLUDING Gaming Permits, (v) all monies or other property arising
from or used in connection with the Authority's operation of the Leased
Property, and (vi) all accounts receivable and other benefits from the Leased
Property. For purposes of the Mortgage, a "Gaming Permit" is defined as any
license, franchise, permit or other authorization on the date of the Indenture
required to own, lease, operate or otherwise conduct casino gaming at the Leased
Property, which cannot be mortgaged, pledged or assigned as security for the
obligations of the Authority under IGRA, the regulations of all applicable
gaming authorities and other applicable laws.
The Mortgage expressly excludes any interest in (i) the fee title and
reversionary interest of the United States and the Tribe in the Leased Property,
the Improvements, and the Appurtenant Rights, and (ii) any Personal Property, to
the extent that the Authority is permitted to enter into a financing agreement
for such Personal Property under the Indenture and such financing agreement
prohibits the Authority from maintaining a security interest in the Personal
Property covered thereby but only while the debt evidenced by such financing
agreement remains unsatisfied.
Nothing contained in the Mortgage shall be construed to authorize the
Trustee to conduct gaming operations on the Leased Property. Further, nothing
contained in the Mortgage shall be construed to grant to the Trustee any
interest in any manager's interest in any management agreement for the operation
of all or any portion of the Leased Property.
GENERAL COVENANTS AND WARRANTIES. The Authority warrants, represents
and/or covenants to the Trustee as to the following matters:
(1) The Authority shall pay and perform all obligations under the
Indenture, the Mortgage or any other document related thereto.
(2) The Authority represents and warrants to the Trustee as follows:
(a) the Authority is the owner of the leasehold interest under the Lease
and is the owner of the Personal Property, has the right and authority to grant
the Mortgage, and that the collateral subject to the Mortgage is free and clear
of any encumbrances except for Permitted Encumbrances;
(b) the Authority is not bound by any indenture, contract or agreement, or
governmental, judicial or administrative restriction which prohibits the
execution, delivery or performance of the obligations under the Indenture, the
Mortgage or any other document related thereto;
(c) the Indenture, the Mortgage and other documents related thereto have
been duly authorized executed and delivered by the Authority;
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(d) all applicable rules and regulations affecting the Leased Property
permit the use and occupancy thereof for Class II and Class III Gaming and
related purposes, and the Authority has obtained the necessary consents, permits
and licenses to operate the Improvements for said purposes; and
(e) the Trustee may peaceably and quietly enjoy the collateral in
accordance with the Mortgage, neither the Authority nor any affiliate of the
Authority is insolvent or subject to any bankruptcy or similar proceedings, all
costs related to construction of the improvements and acquisition of the
Personal Property is or shall be paid when due, the Authority shall conduct its
operations so as not to lose any right to conduct gaming operations at the
Leased Property, no material part of the collateral has been damaged, destroyed,
condemned or abandoned, and each representation and warranty in the Senior
Notes, the Indenture, the Mortgage and any other document related thereto is
true and correct in all material respects.
(3) The Mortgage constitutes a security agreement, and the Authority
grants to the Trustee a security interest in the Personal Property.
(4) The Authority shall not commit waste on the Leased Property and shall
cause the Leased Property to be maintained and in compliance with applicable
governmental regulations.
(5) The Authority shall pay all taxes (not including income taxes of the
Trustee), assessments and other governmental charges on the Leased Property
before the same become delinquent and shall pay any mechanics statutory or other
lien on the Leased Property; provided that the Authority shall have the right to
contest in good faith the imposition of any such governmental charges or the
validity of any such lien.
(6) The Authority shall maintain insurance as required by the Indenture,
and any proceeds of insurance shall be disbursed as provided in the Indenture.
(7) The Authority shall pay all utilities charges and other service fees
for the Leased Property.
(8) If the Authority fails to observe any of the foregoing, the Trustee
shall have the option to perform the same at the Authority's expense.
(9) Except as permitted by the Indenture, the Authority shall not permit
any sale, transfer or encumbrance of the Lease or the Personal Property without
the prior written consent of the Trustee, not to be unreasonably withheld or
delayed.
(10) The Authority assigns to the Trustee the Space Leases now or hereafter
entered into, and the Authority shall perform all obligations of the Authority
under the Space Leases and shall cause the lessees under such Space Leases to
perform all obligations of such lessees under such Space Leases.
(11) The Authority shall not permit hazardous substances to be placed on
the Leased Property, except for incidental storage or use of hazardous
substances in the ordinary course of the Authority's business and in compliance
with applicable environmental regulations.
(12) The Authority shall indemnify and hold the Trustee harmless from any
loss due to a default by the Authority under the Mortgage, any construction on
the Leased Property, any negligence by the Authority or any injury to any person
on the Leased Property or any adjacent property, except if the same results
directly from the gross negligence or willful misconduct of the Trustee.
(13) The Authority shall comply with all obligations of the Authority under
the Lease, and, upon any default of the Authority thereunder, the Trustee may
perform such obligations at the Authority's expense.
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(14) In the event of bankruptcy of the Authority, the Authority shall not
elect to terminate or permit termination of the Lease without the Trustee's
consent.
TAKING OF LEASED PROPERTY. In the event of condemnation of the Authority's
interest in the Leased Property, the proceeds of any such condemnation shall be
disbursed in accordance with the Indenture.
DEFAULT AND REMEDIES. An Event of Default, as defined under the Indenture,
constitutes an Event of Default under the Mortgage. Upon an Event of Default,
the entire indebtedness secured by the Mortgage may be accelerated, and the
Trustee has the right to pursue any of the following remedies:
(1) The Trustee may foreclose on the Mortgage in the manner provided by
the laws of the State of Connecticut, may have a receiver appointed to operate
and manage the Leased Property and collect the revenues, and may exercise all
rights of a secured creditor under the Uniform Commercial Code as adopted by the
laws of the State of Connecticut.
(2) The Trustee may take possession of the Leased Property and operate the
Leased Property or may, with or without taking possession, receive all revenues
from the Leased Property and apply the same to costs of the Trustee, operating
expenses and the indebtedness secured by the Mortgage.
(3) The Trustee shall, have the right to sell or otherwise dispose of the
Authority's leasehold interest and the Personal Property in a commercially
reasonable manner and apply the proceeds thereof to the indebtedness secured by
the Mortgage.
(4) The Trustee may specifically enforce any of the provisions of the
Mortgage.
Nothing contained in the Mortgage permits the Trustee to transfer the
Authority's leasehold interest to any manager of the gaming enterprise in
violation of IGRA, or authorize any sale or other disposition of the fee title
or reversionary interest of the United States in the Leased Property, the
Improvements or the Appurtenant Rights.
The Authority has waived any constitutional or statutory rights to notice
and hearing before any sale or other disposition of the collateral. Further, the
Authority has acknowledged that the rights, powers and remedies of the Trustee
under the Mortgage are cumulative and may be exercised concurrently or
separately.
Upon any such disposition of the Authority's leasehold interest or of the
Personal Property, the proceeds shall be used first to pay costs incurred in
connection with such disposition, second to pay the indebtedness secured by the
Mortgage, and third to pay any balance to the Authority.
RIGHTS OF THE TRIBE. If an Event of Default occurs, the Trustee shall not
have the right to accelerate the indebtedness, to foreclose the mortgage or to
dispose of the collateral unless the Trustee shall have provided the Tribe with
notice of such default under the Lease and provided the Tribe with an
opportunity to cure such default within sixty (60) days (or if such default
cannot with diligence be cured within such sixty day period, within a reasonable
time) thereafter. Such limitation shall not apply to a monetary default by the
Authority, provided that the Trustee shall provide the Tribe with notice of such
monetary default and any payment made by the Tribe on behalf of the Authority
shall be accepted by the Trustee as if it had been made by the Authority.
Before the Trustee may foreclose the mortgage or dispose of the collateral,
the Trustee must provide the Tribe with the notice and opportunity to cure as
provided above and provide the Tribe with notice of intent to foreclose this
Mortgage or dispose of the collateral and allow a period of sixty (60) days
within which the Tribe shall have the right (but not the obligation) to purchase
the Senior Notes, the Indenture, the Mortgage and all other documents executed
and deliver in connection therewith for an amount equal to the outstanding
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indebtedness; provided that such purchase shall be consummated within ninety
(90) days after such notice of intent to foreclose the Mortgage or dispose of
the collateral is given to the Authority.
PARTIAL RELEASE OF LEASED PROPERTY. Provided that no Event of Default has
occurred and is continuing under the Indenture and subject to certain conditions
set forth therein, the Authority may require the Trustee to release the lien of
the Mortgage as to a portion of the Leased Property, provided that, no such
released portion of the Leased Property shall be used to conduct any gaming
operations.
MISCELLANEOUS. The Mortgage shall be governed by and interpreted in
accordance with federal law (to the extent applicable) and the law of the Tribe,
and to the extent required to supplement applicable federal law and tribal law,
the substantive laws of the State of Connecticut (except its choice of law
rules and except that the Trustee's rights and remedies set forth in the
Mortgage and the lien of the Mortgage shall in any event be lawful and
enforceable in accordance with the terms thereof).
The Mortgage is subject and subordinate to any and all access and utility
easements granted by the Tribe pursuant to the Lease, and the Trustee shall
execute such additional documents to confirm such subordination as shall be
reasonably required by the Authority.
The liability of the officers, agents and employees of the Authority shall
be limited to the extent provided in the Indenture. The Authority waives
sovereign immunity from unconsented suit to interpret or enforce the provisions
of the Mortgage.
To the extent permitted by applicable law, the Authority waives the right
to trial by jury in any action arising out of the Senior Notes, the Indenture,
the Mortgage or any other documents executed in connection therewith.
The Tribe, as landlord under the Lease, has consented to the Mortgage.
DEVELOPMENT AGREEMENT
GENERAL. The Tribe and TCA have entered into an Amended and Restated
Gaming Facility Construction and Development Agreement (the "Development
Agreement") providing for the design, construction, furnishing and site
development of the Mohegan Sun Casino by TCA. The Tribe has assigned its rights
and obligations in this agreement to the Authority. TCA and the Authority have
consented to this assignment.
EXCLUSIVE RIGHTS OF TCA; CONDITIONS TO TCA'S OBLIGATION. Subject to
certain design and budget approval rights retained by the Authority and the
Management Board under the Development Agreement, the Authority has granted to
TCA the exclusive right to design, engineer, construct, furnish and develop the
Mohegan Sun Casino and any related facilities that are owned by the Authority.
The obligation of TCA to perform under the Development Agreement is conditioned
upon the satisfaction of certain conditions including, without limitation,
(i) NIGC and/or BIA approval (as appropriate) of the Development Agreement, the
Management Agreement (as hereinafter defined), the Indenture, the Senior Notes,
the Subordinated Notes, the Note Purchase Agreement (as hereinafter defined) and
any other related collateral agreements requiring such approval(s); (ii) the
ownership of the site designated for the development of the Mohegan Sun Casino
by the United States in trust for the Tribe and the Tribe's control thereof; and
(iii) the receipt by TCA of all required governmental licenses. Under the
Development Agreement, the date five days following the date upon which these
and certain other conditions and obligations of the Authority and TCA have been
satisfied is designated as the "Effective Date," and TCA and the Authority have
each agreed to use its best efforts to satisfy all such conditions and
obligations as of the earliest possible date.
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BUSINESS BOARD. Under the Development Agreement, certain decision-making
authority and oversight duties are delegated to a board comprised of an equal
number of representatives of the Authority and TCA (the "Business Board"). The
Business Board is responsible for various matters, including, without
limitation, the selection of architects and/or engineers (the "Architect"), the
selection of one or more contractors and/or construction managers, the
establishment of design, construction and furnishing budgets, and the
procurement of trade fixtures, furnishings and equipment ("Furnishings"). In
addition, the Business Board is responsible for establishing a program
implementing TCA's and the Authority's objectives, schedule requirements and
design criteria with respect to the Mohegan Sun Casino.
CONSTRUCTION BUDGETS; FUNDING REQUIREMENTS; COST OVERRUNS. With the
assistance of the Architect, the Business Board is responsible for the
preparation of budgets for the design, construction and furnishing of the
Mohegan Sun Casino, which will be subject to the approval of the Management
Board. This budget is subject to revision from time to time by TCA, in its
capacity as Manager under the Management Agreement (as hereinafter defined) and
with prior notice to the Management Board, to reflect unpredicted significant
changes or events or to include significant, additional or unanticipated
expenses. Business Board approval is required, however, for any individual or
cumulative budget modification that constitutes an increase of 5% or more over
the approved budget for any specific design package. In addition, the
Authority's representatives on the Business Board may require Management Board
approval of any other budget adjustment that varies from the terms of the
Development Agreement.
TCA has agreed to assist the Authority in obtaining from one or more third
parties funding necessary for the design, construction, equipping, start-up and
working capital costs of the Mohegan Sun Casino. All funds, including, without
limitation, proceeds from the issuance of the Senior Notes and the Subordinated
Notes, will be deposited in a development account designated exclusively for
satisfying the Authority's and TCA's obligations under design and construction
agreements with third parties and to cover related costs, including the lease or
purchase costs of furnishings, consulting fees, supplies, utility costs,
landscaping, parking, curb cuts, access enhancements, off-site road
improvements, architectural and engineering fees, TCA's attorneys' fees and
closing costs. The Authority has agreed to make available from the proceeds of
such financing funds to cover the initial working capital requirements for the
Mohegan Sun Casino.
The Authority and TCA have estimated that the total costs for development
and construction of the Mohegan Sun Casino will be $275 million. Under the
Development Agreement, if there are any cost overruns related to the
construction of the Mohegan Sun Casino, TCA has agreed to assist the Authority
in borrowing additional funds necessary to finance such overruns, up to a
maximum of $325 million.
DESIGN PHASE--ARCHITECT SELECTION; PLANS AND SPECIFICATIONS. The
Development Agreement provides that the construction of the Mohegan Sun Casino
is divided into two phases: a "Design Phase" and a "Construction Phase." The
Design Phase consists of the engagement of the Architect, the preparation of
design, construction, and furnishings budgets, preliminary program evaluation,
design development and the approval of final detailed plans and specifications
(the "Plans and Specifications"). Within 30 days following the Effective Date
TCA, with the approval of the Business Board, will select one or more Architects
to design the Mohegan Sun Casino and the Management Board, or its designees,
must approve the form of the contract with any Architect selected for the
project, who will then be employed and directly compensated by the Authority.
The Authority has agreed to assign to TCA its responsibilities under any
architectural and/or engineering agreements to allow TCA to directly supervise
and administer directly the duties of the Architect and/or engineer thereunder.
Adjustments to budgets in excess of five percent require the approval of the
Business Board.
The Development Agreement provides that the design and construction of the
Mohegan Sun Casino must comply with all federal and Connecticut statutes and
regulations that otherwise would apply if the Mohegan Sun Casino was located
outside the jurisdictional boundaries of the Tribe.
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CONSTRUCTION PHASE--CONTRACTOR SELECTION AND PREFERENCE; TCA OVERSIGHT.
The Construction Phase consists of the selection of one or more contractors and
subcontractors and the commencement and completion of construction. Following
TCA's review of proposals from prospective contractors, the Business Board is
authorized to negotiate and award contracts to one or more qualified applicants
of its choosing. All contractors will be engaged and paid directly by the
Authority. In addition, the Development Agreement requires subcontractors to be
selected in accordance with certain provisions of the Management Agreement,
which requires, among other things, that employment preference be given to
members of the Tribe, their spouses and children, and business entities
controlled by members of the Tribe, who or which, in TCA's opinion, possess
sufficient skills and competence.
TCA will be responsible for the administration and supervision of all
contracts and agreements with contractors and will act as the Authority's
representative, with full power and authority to act on behalf of the Authority,
in connection with any such contracts that are approved by the Business Board.
Specifically, TCA will be responsible for control and charge of all persons
performing work on the site of the Mohegan Sun Casino, inspecting the progress
of construction, determining completion dates and reviewing contractor payment
requests submitted to the Authority. The Authority, subject to the direction and
approval of the Business Board, will make progress payments to the contractors.
All contractors will be required to warrant that their construction is free of
defects and constructed in a workmanlike manner for a period of at least one
year from the date of completion and TCA will have the authority to reject any
work that does not comply with the applicable contracts.
EMPLOYMENT PREFERENCE. The Development Agreement requires that, with
respect to all job categories relating to development and construction of the
Mohegan Sun Casino, recruiting, training and employment preference be given to
members of the Tribe, their spouses and their children who, in TCA's opinion,
possess sufficient skills and competence. Thereafter, secondary preference must
be given to qualified members of other federally-recognized Indian tribes. TCA
has agreed to use its best efforts to assist members of the Tribe and their
spouses and children in obtaining necessary skills to qualify for available
positions.
FURNISHINGS. Furnishings for the Mohegan Sun Casino will be purchased by
the Authority from vendors selected by the Business Board or leased on terms
arranged by TCA and approved by the Business Board. TCA has agreed to use good
business practices and, where appropriate, competitive bidding with respect to
the procurement of Furnishings.
TERMINATION AND DEFAULT; DISPUTES. Each party has the right to terminate
the Development Agreement in the event that a default or failure to perform any
material duty or obligation by the other party thereunder remains uncured for at
least 20 days following notice to such party of such breach or failure to
perform. In addition, each party may terminate the Development Agreement
pursuant to applicable provisions of the Management Agreement. In the event of a
dispute between the parties or the termination of the Development Agreement
and/or any related agreement, the Authority and TCA may pursue any remedy
available under the Management Agreement. See "--Management Agreement--
Termination and Default."
MANAGEMENT AGREEMENT
GENERAL. To provide for the management of the Mohegan Sun Casino, the
Tribe and TCA have entered into the Amended and Restated Gaming Facility
Management Agreement (the "Management Agreement"), pursuant to which the Tribe
has retained and engaged TCA on an exclusive, independent contractor basis, to
develop, operate, manage and maintain the Mohegan Sun Casino. The Tribe has
assigned its rights and obligations in this agreement to the Authority. The
Authority and TCA have consented to this assignment. The term of the Management
Agreement is seven years, subject to a one time option for a buyout by the
Authority effective on the last day of the 60th month following the first full
month of operations (the "Buyout Option"). In order to exercise the Buyout
Option, the Authority must (i) fully pay and satisfy certain outstanding
indebtedness, including all indebtedness under the Senior Notes and the
Subordinated Notes, (ii) give notice of
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its intent to exercise the option not more than 90 and not less than 30 days
prior to the last day of the 60th month after opening of the Mohegan Sun Casino,
(iii) enter into discussion with TCA to determine the option price on
commercially reasonable terms, (iv) execute and deliver to TCA a full release of
all of TCA's obligations under, and claims, whether asserted or unasserted,
liquidated or contingent, arising in connection with, the Management Agreement
and (v) pay all amounts otherwise due TCA pursuant to the Management Agreement.
Under the Management Agreement, the Authority has granted to TCA the
exclusive right and obligation to develop, manage, operate and maintain the
Mohegan Sun Casino and all other related facilities that are owned by the
Authority. The Management Agreement is not assignable by either party without
the prior consent of the other party. Pursuant to the terms of the Management
Agreement, the Authority and TCA have agreed that neither party may establish or
operate any other gaming facility within the states of Connecticut or Rhode
Island without first obtaining the consent of the other party, which consent may
not be unreasonably withheld. In addition, TCA has agreed to use its best
efforts to promote and manage the Casino and the Authority has agreed that,
except as required by law, it will not adopt any amendments to its gaming
ordinances that would adversely affect TCA's right to operate and maintain the
Mohegan Sun Casino. The Management Agreement provides that neither the
Authority nor any of its agents, affiliates or representatives will impose any
taxes, fees, assessments or other charges on payments of any debt service to TCA
or any lender, on the Mohegan Sun Casino or the revenues therefrom or on the
management fee payable to TCA thereunder and, if any such tax is imposed, TCA
has the right to obtain compensation from the Authority in equal amount to the
amount of the tax.
BUSINESS BOARD. Under the Management Agreement, certain decision-making
authority and oversight duties are delegated to a committee comprised of an
equal number of representatives of the Authority and of TCA (the "Business
Board"). Actions by the Business Board require the unanimous approval of its
members or their respective designees. The Authority and TCA have agreed that,
in the event that the Business Board is unable to reach a mutual decision or
compromise, any disputes will be submitted to summary arbitration before a
single arbitrator who shall render a decision within 48 hours of submission of
the dispute.
MANAGEMENT DUTIES AND RELATED OBLIGATIONS OF TCA. The Management Agreement
provides that TCA will be responsible for the day-to-day management, operation
and maintenance of the Mohegan Sun Casino, including the establishment of
operating days and hours. The Management Agreement authorizes TCA to select a
general manager ("General Manager") to fulfill its responsibilities thereunder.
Any General Manager selected by TCA is subject to approval by the Authority, by
resolution of the Management Board or its designee, and may be removed at the
Authority's request, by resolution of the Management Board and with the consent
of TCA, which consent may not be unreasonably withheld. As manager of the
Mohegan Sun Casino, TCA has agreed to operate the facility in compliance with
all Tribal legal requirements and other applicable laws and that TCA and all of
TCA's executive officers shall be licensed by the Tribe pursuant to the Tribe's
Gaming Ordinance.
Under the Management Agreement, the Tribe may not unreasonably withhold,
withdraw, qualify or condition such licenses. The enabling resolution which
approved the Management Agreement and was approved by the Tribal Council,
provides that the Management Agreement itself is the law of the Tribe and is
enforceable according to its terms. The Tribal Constitution includes a provision
which forbids any action by the Tribal Council or any officer of the Tribe which
impairs contractual obligations.
The Management Agreement provides that TCA shall have the authority,
through the General Manager, to enter into contracts for the operation of the
Mohegan Sun Casino on behalf of the Authority. Any contracts that require annual
expenditures in excess of $25,000 or that are entered into with affiliates of
TCA must be approved by the Business Board. With respect to contracts for the
supply of goods and services, TCA is required to give preference to members of
the Tribe, their spouses and children, and business entities controlled by Tribe
members. In addition, TCA has agreed to assist the Authority in obtaining
funding necessary for the operation of the Mohegan Sun Casino and will be
responsible for the marketing, advertisement and promotion thereof.
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Pursuant to the Management Agreement, TCA will be responsible for the
security and surveillance at the Mohegan Sun Casino. The parties have agreed
that the Authority will have 24-hour access to the entire Mohegan Sun Casino,
including all security and surveillance facilities and records. In addition, TCA
will be responsible for maintaining, on behalf of the Authority, adequate
insurance coverage for the Mohegan Sun Casino, including "all risk," general
commercial liability, workers' compensation, employer liability and such other
policies of insurance as the Business Board may reasonably request from time to
time. All such policies will name TCA as an additional insured party and/or loss
payee to the extent provided in the Management Agreement.
TCA will have the right to sell alcoholic beverages and tobacco products at
the Mohegan Sun Casino in accordance with the Mohegan Compact and Tribal legal
requirements. The Tribe does not presently have enabling legislation necessary
to permit retail sale of alcoholic beverages but the parties expect that such
legalization will be approved and that TCA will be permitted to include service
of alcoholic beverages within the Mohegan Sun Casino. Furthermore, the Tribe has
agreed that such enabling legislation will provide for the sale of alcoholic
beverages to the maximum extent permitted under the Mohegan Compact.
TCA will be responsible for bringing, defending or settling any legal claim
brought against TCA or the Authority in connection with the operation of the
Mohegan Sun Casino. However, the Business Board will have the right to approve
the retention of legal counsel and, in the event such proceeding poses
substantial risk to the operation of the Mohegan Sun Casino, such proceedings
will be supervised by the Business Board with notice to and consultation with
the Management Board.
MOHEGAN SUN CASINO EMPLOYEES; EMPLOYMENT PREFERENCE. Pursuant to the
Management Agreement, TCA will have the exclusive responsibility and authority
to select, retain, train and discharge all employees hired to perform services
at the Mohegan Sun Casino; however, all employees will be employees of the
Authority and not TCA. The Authority will have the right to select inspectors,
who will be responsible for verifying the daily gross revenues of the Mohegan
Sun Casino and who will report directly to the Authority. Subject to the
approval of the Management Board, TCA will also have the right to engage its own
employees and the employees of its affiliates to provide services for the
Mohegan Sun Casino; however, neither TCA nor any of its officers, employees or
partners will be entitled to receive wages or other monetary compensation for
such services under the Management Agreement.
In order to maximize the benefits enjoyed by the Tribe, members of the
Tribe will be given preference in recruiting, employment and training with
respect to all job categories in connection with the operation of the Mohegan
Sun Casino, including management positions. Pursuant to the terms of the
Management Agreement, however, no member or employee of the government of the
Authority may be employed without a waiver by the Authority and such federal
agencies as may be required by law. TCA has agreed to conduct applicable
background investigations with respect to each applicant for employment at the
Mohegan Sun Casino.
TCA will have the sole responsibility for determining whether a prospective
employee possesses necessary skills for any position and the level of
compensation to be paid to such individual. In addition, TCA has agreed to
establish standardized personnel policies and procedures, including a job
classification system with salary levels and scales, which will be subject to
approval by the Management Board and include a grievance procedure to promote
fair and uniform standards for members of the Tribe employed at the Mohegan Sun
Casino. TCA has agreed that any discharge, demotion or discipline of employees
will be conducted in accordance with such policies and procedures.
OPERATING AND CAPITAL BUDGETS; REPLACEMENT RESERVE FUND. Prior to the
first date that the Mohegan Sun Casino is substantially complete and open to the
public (the "Commencement Date") and 60 days prior the commencement of each
fiscal year thereafter, TCA must submit to the Management Board, for its
approval, a detailed proposed operating budget for the facility. Under the
Management Agreement, TCA is required to meet with the Management Board to
discuss the proposed budget and the Management Board is obligated to review
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the budget on a line-by-line basis. The Management Board may not unreasonably
withhold or delay its approval of a budget proposed by TCA and the Management
Agreement establishes specific procedures and time limits for the Management
Board to object to any budget submitted for its approval. In the event that TCA
and the Management Board are unable to agree on one or more budget items, the
Management Agreement provides for arbitration of the disputed item(s), in the
case of the initial budget, and a carry over of the prior fiscal year's
allocation (with adjustments for inflation), in the case of subsequent annual
budgets. Upon notice to the Management Board, TCA will have the right to revise
the budget and/or reallocate budgeted items from time to time to reflect any
unpredicted significant changes, variables or events, or to include significant,
additional, unanticipated items of expense. Any increase in planned expenditures
of more than 5% of the amount budgeted for any profit center of the Mohegan Sun
Casino will require approval of the Business Board, and the Authority's
representative(s) to the Business Board may require written approval of the
Authority for any budget modification that varies from the terms of the
Management Agreement.
In addition to an annual operating budget, TCA is required to submit, not
less than 45 days prior to the commencement of each fiscal year, a recommended
capital budget for furnishings, equipment and ordinary capital replacement items
required to operate the Mohegan Sun Casino in accordance with sound business
practices. The approval and dispute resolution provisions applicable to capital
budgets are the same as those for operating budgets. TCA will be responsible
for the design and installation of all capital replacement items, and the
Authority has agreed to expend such amounts as are necessary to maintain the
Mohegan Sun Casino in compliance with all legal requirements and to correct any
emergency conditions. In addition, the Authority has agreed to authorize such
funds as are necessary to comply with the capital renovation and improvement
programs recommended by the Business Board to maintain first class standards at
the Mohegan Sun Casino and maintain its competitiveness.
Pursuant to the terms of the Management Agreement, TCA will be required to
establish a replacement reserve fund (the "Reserve Fund"), which may be used to
pay any approved budgeted capital expenditures. Any portion of a Reserve Fund
which remains unused at the end of any fiscal year will be carried forward to
the following year. Each of TCA and the Authority will be required to make
monthly contributions to the Reserve Fund at the rate of 60% from the Authority
and 40% from TCA up to a combined total of $3 million per year from both
parties. Deposits by the Authority to the Reserve Fund will be deemed capital
expenditures and will not reduce amounts distributable as Net Revenues; however,
deposits made by TCA will reduce Net Revenues payable to TCA under the
Management Agreement. In addition, proceeds from the sale of capital items no
longer needed for the operation of the Mohegan Sun Casino and insurance proceeds
received in reimbursement for items previously paid for out of the Reserve Fund
will be deposited into the Reserve Fund. In the event that the Reserve Fund is
insufficient to cover replacements authorized to be paid out of such fund, TCA
may, in its discretion, advance funds necessary to cover such insufficiency and
will be entitled to reimbursement therefor. See "--Management Fee; Reimbursement
and Disbursement."
BANK ACCOUNTS AND ACCOUNTING PROCEDURES; INSPECTION BY AUTHORITY. Under
the Management Agreement, the Business Board is authorized to establish such
bank accounts, for the benefit of the Authority, as TCA shall deem necessary for
the operation of the Mohegan Sun Casino. The accounts are also subject to the
terms of the Indenture, which provides for the establishment of a security
interest in the accounts, and requires that the accounts be opened in the name
of the Trustee designated pursuant to the Indenture. The Management Agreement
provides for the establishment of depositary and disbursement accounts and
authorizes TCA to pay from the disbursement accounts such funds as are necessary
to cover the operating expenses of the Mohegan Sun Casino, debt service payments
under the Senior Notes, the Indenture, the Development Agreement and fees
payable to TCA under the Management Agreement. TCA may not make any cash
disbursements from the depositary accounts, except for disbursements of cash
prizes from a cash contingency reserve fund and petty cash fund established in
accordance with the terms of the Management Agreement. In addition, TCA will be
responsible for the installation of internal systems for the monitoring of all
funds, which systems will be subject to approval by the Business Board and
review by the Authority. The Authority is entitled to appoint an inspector, who
will
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have the right to inspect and oversee such internal control systems at all times
and will have full access to the "hard count" (I.E., coins and tokens) and "soft
count" (I.E., non-coin revenues and credits) rooms as well as to the
closed-circuit television system required to be installed by TCA to monitor the
cash-handling activities at the Mohegan Sun Casino.
The Management Agreement requires TCA to maintain, in accordance with
generally accepted accounting principles, books and records reflecting the
operations of the Mohegan Sun Casino and to prepare monthly, quarterly and
annual statements for the Authority. An annual audit of the Mohegan Sun Casino
will be conducted by a nationally-recognized independent certified public
accounting firm with experience in the casino industry. In addition, the
Authority's inspector, or any other authorized agent of the Authority, will have
an unlimited right to inspect such books and supporting business records.
MANAGEMENT FEE; REIMBURSEMENT AND DISBURSEMENT. Subject to the priorities
described below and in accordance with the required Reserve Fund contributions,
the Management Agreement authorizes TCA to pay itself a monthly management fee.
The annual fee is calculated in three tiers based upon Net Revenues set forth
below (in thousands):
<TABLE>
<CAPTION>
I II III
REVENUES IN TIER I REVENUES IN TIERS I &
------------------ ---------------------
40% OF NET REVENUES PLUS 35% OF NET II PLUS 30% OF NET
------------------- --------------- ------------------
UP TO REVENUES BETWEEN REVENUES ABOVE
----- ---------------- --------------
<S> <C> <C> <C>
Year 1 . . . . . . . . . . . . . $50,546 $50,547-$63,183 $63,183
Year 2 . . . . . . . . . . . . . $73,115 $73,116-$91,394 $91,394
Year 3 . . . . . . . . . . . . . $91,798 $91,799-$114,747 $114,747
Year 4 . . . . . . . . . . . . . $95,693 $95,694-$119,616 $119,616
Year 5 . . . . . . . . . . . . . $104,107 $104,108-$130,134 $130,134
Year 6 (subject to Buyout Option) $114,335 $114,336-$142,919 $142,919
Year 7 (subject to Buyout Option) $130,944 $130,945-$163,680 $163,680
</TABLE>
The monthly management fee payments are calculated against 1/12th of the
annual projections, and then adjusted annually within 60 days of the close of
the fiscal year. This annual adjustment might or might not have a material
effect on cash flow. As defined in the Management Agreement, "Net Revenues" of
the Mohegan Sun Casino means all revenues of any nature generated directly or
indirectly from operations of the facility ("Gross Revenues") less operating
expenses and certain specified categories of revenue, such as income from any
financing or refinancing, taxes or charges received from patrons on behalf of
and remitted to a governmental entity, proceeds from the sale of capital assets,
insurance proceeds and interest on the Reserve Fund. Net Revenues also include
Net Gaming Revenues, which are equal to the amount of the "net win" from
Class III Gaming operations (I.E., the difference between gaming wins and
losses) less all gaming-related operational expenses (excluding the management
fee). Within 25 days after the end of each calendar month, TCA is required to
calculate and report to the Authority, the Gross Revenues, operating expenses
and Net Revenues.
Class II Gaming conducted at the Mohegan Sun Casino is not subject to the
Management Agreement; the Agreement does not provide for TCA to manage any
Class II Gaming or to share in any Class II Gaming revenues.
As and when received by TCA, all revenues from Mohegan Sun Casino
operations are required to be deposited in the bank account established under
the Management Agreement and to be disbursed, for and on behalf of the
Authority, on a monthly basis to cover operating expenses and required deposits
to the Reserve Funds. In addition, TCA will be required to reserve additional
funds each month, in excess of any required minimum balances established by the
Business Board to cover working capital costs, sufficient to cover operating and
other costs that are not paid on a monthly basis, such as insurance premiums.
See "--Operating and Capital
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Budgets; Replacement Reserve Fund" and "--Bank Accounts and Accounting
Procedures; Inspection by the Authority."
Under the Management Agreement, Net Revenues (less any amount reasonably
required to maintain a cash contingency reserve fund for the payment of cash
prizes) are required to be disbursed, to the extent due and payable and earned,
in the following order of priority:
(1) $50,000 shall be paid each month to the Authority as a "Minimum
Priority Payment," chargeable against the Authority's distribution of Net
Revenues. In the event that Net Revenues for any given month are less than the
Minimum Priority Payment, TCA will be required to fund any deficiency and will
be entitled to reimbursement therefor in subsequent months. Minimum Priority
Payments shall be made for any month during which any gaming is conducted, even
if only for part of a month. No Minimum Priority Payment will be required to be
made for any month during which gaming at the Mohegan Sun Casino is suspended or
terminated for the full month.
(2) current principal and other payments, including sinking funds or any
required deposit to the Cash Maintenance Account or the Interest and Excess Cash
Flow Account (exclusive of interest, which is paid as an operating expense) due
on the Senior Notes, the Indenture or the Subordinated Notes;
(3) recoupment payment to the Manager for funds advanced in prior periods
and reimbursement of amounts advanced by TCA (including any Minimum Priority
Payment deficiencies funded by TCA pursuant to Item (1), above; all such funds
are charged without interest against the Authority's share of Net Revenues);
(4) deposits to the Reserve Fund by the Authority and TCA; and
(5) payment of the Management Fee to TCA.
All remaining Net Revenues, if any, and cash shall be distributed to the
Authority, subject to restrictions on distributions to the Authority in the
Indenture. In the event of liquidation all disbursements will be subordinate to
repayment of the Senior Notes. The Management Agreement provides that the
holders of the Senior Notes are expressly recognized as third party
beneficiaries for purposes of enforcing this provision of the Management
Agreement.
The Management Agreement provides that if any person or entity with a
financial interest in, or management responsibility for, the Management
Agreement is formally indicted, or if a comparable criminal action is initiated
in any United States Federal or State Court, or in any foreign court or other
comparable jurisdiction, then such person or entity (i) shall not be permitted
to exercise any management or other control over the gaming operation of the
Mohegan Sun Casino or over TCA, (ii) shall have his or its financial proceeds
from the Management Agreement placed in escrow (which escrowed amounts shall be
retained by TCA and not transmitted to any intermediate person or entity) until
such indictment or other action is finally resolved and (iii) if convicted of
any misdemeanor involving gaming or any felony, shall forfeit all of his or its
interest in the Management Agreement and any proceeds placed in escrow pursuant
to the foregoing clause (ii).
LIENS; TAXES. Under the Management Agreement, the Authority and TCA have
represented and warranted to the other that it will not act in any way to cause
any party, other than TCA or the holders of the Senior Notes to become a
lienholder of the Leased Property or the Mohegan Sun Casino, or to allow any
party to obtain any such interest under the Management Agreement without the
prior consent of TCA or the Authority, as the case may be, and, if required, the
United States. In addition, the Authority and TCA have agreed to keep the Leased
Property and the Mohegan Sun Casino free and clear of any liens, whether
resulting from the construction of the facilities or otherwise.
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The parties have agreed that in the event that any government attempts to
impose taxes upon any party to the Management Agreement or upon the property or
operations of the Mohegan Sun Casino or the Leased Property, the Business Board
may elect unanimously to resist such attempt on behalf of such party or entity
through appropriate legal proceedings. The costs of such proceedings and any tax
or other payment required to be made will be treated as an operating expense
under the Management Agreement. The Authority has agreed not to impose any
taxes, fees, assessments or other charges (i) on payments of any debt service to
TCA or any other lender furnishing financing to the Mohegan Sun Casino, and
(ii) on the salaries, benefits or dividends paid to any of TCA's partners,
officers, employees or affiliates or any employees of the Mohegan Sun Casino.
The Management Agreement provides that the Authority shall have the right,
however, to assess license fees that reflect reasonable regulatory costs
incurred by the Authority.
RELATIONSHIP BETWEEN THE AUTHORITY AND TCA. Under the Management
Agreement, TCA expressly covenants that it will not unduly interfere in or
attempt to improperly influence the internal governmental affairs of the
Authority. Furthermore, TCA has agreed that it will not make any payments or
gifts of services, except for gifts of nominal value, to any member of the
government or other official of the Authority or their relatives (an "Authority
Official"). In addition, TCA may not offer any promotional allowances (E.G.,
complimentary meals, drinks, accommodations or gaming tokens) to any member of
the Authority's government. Similarly, no officer of the Authority or family
member of any officer or member of the Authority may be employed at the Mohegan
Sun Casino without a written waiver by the Authority and, if required under
applicable law, the NIGC or other applicable government agency. Furthermore, no
Authority Official may have any direct or indirect interest in the Mohegan Sun
Casino greater than the interest of any other member of the Authority, except
for minimal equity ownership in TCA, its partners, parents, subsidiaries or
affiliates. Pursuant to the Management Agreement, TCA has agreed to guarantee
to the Authority payment of 40% of the amount of the outstanding balance of the
indebtedness of the Authority for Project Costs. This obligation to guarantee
will be met to the extent of any participation by the Manager or any of its
affiliates in the Subordinated Notes and the Secured Completion Guarantee. This
guarantee is for sole benefit of the Authority and is not for the benefit of any
holder of the Senior Notes.
DAMAGE, CONDEMNATION OR IMPOSSIBILITY OF THE ENTERPRISE. In the event that
the Mohegan Sun Casino is damaged or destroyed, taken by condemnation (or sold
under threat thereof), or if gaming at the Mohegan Sun Casino is legally
prohibited, the Management Agreement provides that TCA will have certain options
with respect to the continuation of gaming operations under the Management
Agreement. First, TCA will have the option to retain its obligations under the
Management Agreement and commence or recommence the operation of the Mohegan Sun
Casino if, at some point during the term of the Management Agreement,
commencement or recommencement is legally and commercially feasible.
Second, if the Mohegan Sun Casino is damaged, destroyed or condemned, and
the Business Board elects to apply insurance or condemnation proceeds to the
repair or replacement thereof, TCA may elect within 60 days to reconstruct such
facility. In the event that the insurance or condemnation proceeds are
insufficient to fund such reconstruction, TCA may, at its option, elect to
provide additional funds to finance the reconstruction, subject to the approval
of the Authority, the BIA and the NIGC, as appropriate. Such funds will
constitute a loan to the Authority, will be secured by the revenues of the
Mohegan Sun Casino and will not be subject to the limitations set forth in the
Development Agreement. See "--Development Agreement; Construction Budget;
Funding Requirements; Cost Overruns." Alternatively, if the Business Board
elects not to apply the insurance or condemnation proceeds to the reconstruction
of the Mohegan Sun Casino, such proceeds will be applied first to amounts due
under the Senior Notes, second, to the Subordinated Notes and other outstanding
indebtedness, third, to any undistributed Net Revenues and, fourth, to the
Authority and TCA in accordance with their respective interests.
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TCA will have the option to use the Mohegan Sun Casino for any other
business purposes reasonably incidental to a Class III Gaming facility. In the
event that the Mohegan Sun Casino is to be used for any purpose other than
gaming, TCA and the Business Board will need to obtain all approvals necessary
under applicable law.
In the event of the failure of the Mohegan Sun Casino to produce a
Management Fee for a period of six consecutive months, or the cessation of
gaming on the Leased Property, the Management Agreement provides that TCA will
have the right to terminate its obligations. Following such termination, TCA
will remain entitled to undistributed Net Revenues in accordance with the terms
of the terminated Management Agreement. However, in the event that TCA elects
not to terminate, it will have the right, with the approval of the Business
Board, to take whatever actions are necessary to reduce operating expenses of
the Mohegan Sun Casino, during such period. In addition, during any period of
cessation of operation of the Mohegan Sun Casino, the term of the Management
Agreement will be deemed to have been tolled and the expiration date of the term
thereof will be accordingly extended.
TERMINATION AND DEFAULT. Each party has the right to terminate the
Management Agreement for cause, which includes, without limitation, a default or
failure by the other party to perform any material duty or obligation that
remains uncured for at least 60 days following notice to such party of such
breach or failure to perform. In addition, the Authority may terminate the
Management Agreement if TCA has its gaming license withdrawn as a result of the
conviction of any director or officer of TCA for a criminal felony or
misdemeanor offense directly related to the performance of TCA's duties under
such agreement. In the event that the Management Agreement is terminated for
cause, regardless of which party is at fault, the parties will be entitled to
retain all funds previously disbursed to them under the agreement and the
Authority shall retain title to the Mohegan Sun Casino. Following such
termination, TCA shall have the right to receive its share of all accrued and
unpaid Net Revenues and will continue to have the right to repayment of unpaid
principal and interest under the Subordinated Notes owned by it, pursuant to the
terms thereof.
The Management Agreement may also be terminated in the event that any
change in law renders the operation of the Mohegan Sun Casino unlawful. For a
description of TCA's rights in the event of such a termination. See "--Damage,
Condemnation or Impossibility of the Enterprise." Similarly, TCA has the right
to terminate the Management Agreement in the event that any Tribal, federal or
state authority fails to approve, or objects to, the performance by TCA of its
obligations under such agreement or if TCA's performance would jeopardize any
licenses or approvals previously obtained by TCA.
WAIVER OF TRIBAL SOVEREIGN IMMUNITY; ARBITRATION. Under the Management
Agreement, the Authority has waived sovereign immunity for the purposes of
permitting, compelling or enforcing arbitration and to be sued by TCA in any
court of competent jurisdiction for the purposes of compelling arbitration or
enforcing any arbitration or judicial award arising out of the Management
Agreement, the Indenture, the Senior Notes, the Secured Completion Guarantee and
any collateral agreements or other obligations (including the Subordinated
Notes), the Gaming Ordinance of the Tribe or decisions of the Authority. The
parties have agreed that all disputes and claims arising out of the Management
Agreement or the Tribe's Gaming Ordinance will be submitted to binding
arbitration, which shall be the sole remedy of the parties and that punitive
damages may not be awarded to either party by any arbitrator. The Authority's
waiver of immunity is limited to enforcement of money damages from undistributed
or future Net Revenues of the Mohegan Sun Casino (or, under certain conditions,
net revenues of other gaming operations of the Authority); Funds earned and paid
over to the Authority as the Authority's share of Net Revenues prior to any
judgement or award are not subject to the waiver and would not be available for
levy pursuant to any judgement or award.
SECURED COMPLETION GUARANTEE
GENERAL. Sun International has executed the Secured Completion Guarantee,
in favor of the Trustee, whereby Sun International has irrevocably guaranteed
the obligations of the Authority to complete construction
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of the Mohegan Sun Casino up to a maximum obligation of $50 million. Sun
International's obligations under the Secured Completion Guarantee, which are
described below, are hereinafter referred to collectively as the "Guaranteed
Obligations."
GUARANTEED OBLIGATIONS. Sun International has guaranteed (i) the
obligations of the Authority to complete construction of the Mohegan Sun Casino
in accordance with the terms of the Indenture and the Disbursement and Escrow
Agreement and to cause the Mohegan Sun Casino to be Completed (as defined below)
and (ii) the payment of all "Amounts Required for Completion" (as defined below)
payable by the Authority in connection with work or services performed or goods
or materials delivered or other Guaranteed Obligations that accrued on or prior
to the earlier of the date on which the Mohegan Sun Casino first becomes
Completed or the occurrence of a Terminating Event (as defined below) under the
Secured Completion Guarantee. Under the Secured Completion Guarantee "Amounts
Required for Completion" include, without limitation, (v) all regularly
scheduled payments of principal and interest on any indebtedness (other than the
Senior Notes), (w) all regularly scheduled payments of interest (but not
principal) due on the Senior Notes, (x) all costs and cost overruns of
construction and completion of the Mohegan Sun Casino (E.G., costs of labor,
materials, equipment and supplies, taxes, utilities, assessments, insurance and
maintenance expenses), (y) all operating costs of the Authority, and (z) all
other amounts or funds required to cause the Mohegan Sun Casino to be Completed.
The Guaranteed Obligations of Sun International specifically include the
payment, satisfaction or discharge of all liens (other than those permitted
under the Indenture) that may be imposed upon the Mohegan Sun Casino or any
related property and the defense and indemnification of the Trustee and the
holders of the Senior Notes against all such liens.
Sun International's Guaranteed Obligations continue until the earlier of
the Mohegan Sun Casino being Completed or the occurrence of a Terminating Event.
Under the Secured Completion Guarantee, the Mohegan Sun Casino will be deemed
"Completed" when all liens (other than those permitted under the Indenture or
which relate to amounts disputed by Sun International) relating to the
construction of the Mohegan Sun Casino have been paid, the Trustee has received
a certificate from the general contractor and project architect for the Mohegan
Sun Casino (or other mutually acceptable independent construction expert)
certifying that the Mohegan Sun Casino is complete in all material respects in
accordance with the plans therefor and in compliance with all applicable laws,
ordinances, and regulations with respect to the physical structure, health and
safety, environmental and hazardous materials, fire, equipment, security and
physical operating requirements of the Mohegan Sun Casino, and the Mohegan Sun
Casino is in a condition to receive guests in the ordinary course of business. A
"Terminating Event" under the Secured Completion Guarantee includes (i) any
Congressional, Tribal or other governmental action that results in a substantial
diminution of the gaming operations proposed to be conducted at the Mohegan Sun
Casino, (ii) September 30, 1997 (iii) the date immediately prior to the
acceleration of amounts due on the Senior Notes, (iv) the repayment of the
Senior Notes in full, (v) the termination or unenforceability, in any material
respect, of the Management Agreement or the Lease, or (vi) the termination or
repudiation of the Management Agreement by the Authority. The legalization of
casino gaming at any other location in New England, including Bridgeport,
however, will not be deemed to constitute a Terminating Event.
Sun International is obligated to perform under the Secured Completion
Guarantee regardless of whether the Authority is individually or jointly and
severally liable for the Guaranteed Obligations or whether recovery against the
Authority is or may become barred by any statute of limitations, sovereign
immunity or for any other reason. However, Sun International is liable for the
Guaranteed Obligations only in the event, and to the extent, that funds are not
available for the payment thereof under the Disbursement and Escrow Agreement.
See "Description of Senior Notes--Disbursement and Escrow Agreement."
ENFORCEMENT OF SECURED COMPLETION GUARANTEE; PROCEDURES FOR COMPLETION. If
the Authority (i) fails or neglects to complete construction of the Mohegan Sun
Casino (including the furnishing and fixturing thereof) in the manner specified
in the Indenture and the Disbursement and Escrow Agreement, free of all liens
(other than those permitted under the Indenture or which relate to disputed
amounts), (ii) fails in any other manner to prosecute with diligence and
continuity the construction and completion of the Mohegan Sun Casino, (iii) is
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unable to satisfy any condition required to receive disbursement under, or
violates any covenant in, the Disbursement and Escrow Agreement, such that the
Mohegan Sun Casino cannot become Completed with funds held therefor, or (iv) is
subject to a termination of its right to receive funds from the Escrow Account,
then Sun International will be required, at its sole cost, to perform the
Guaranteed Obligations within 30 days following written notice from the Trustee,
until the Mohegan Sun Casino is Completed or the occurrence of a Terminating
Event. Upon the occurrence of a force majeure event, such as fire, war, strike
or any other event outside Sun International's control that makes it physically
impossible, unlawful or commercially impracticable to cause the Mohegan Sun
Casino to be Completed (a "Force Majeure Event"), Sun International's Guaranteed
Obligations will be suspended until such time as the Force Majeure Event is
removed. During any such suspension period, Sun International has agreed to use
reasonable commercial efforts to effect the removal of the Force Majeure Event
to the extent that it may be removed or affected by the actions of Sun
International.
In addition, in the event that Sun International fails to perform the
Guaranteed Obligations, the Trustee may, at its option and in its sole
discretion, elect to undertake completion of the construction of the Mohegan Sun
Casino or to foreclose, judicially or nonjudicially, on all or any portion of
the Note Collateral. In either case, the Trustee may recover from Sun
International the costs of enforcing such rights, including reasonable
attorneys' fees. Pursuant to the terms of the Secured Completion Guarantee, the
Trustee's rights to complete construction of the Mohegan Sun Casino or to
recover damages against Sun International are the sole and exclusive remedies of
the Trustee against Sun International and are independent and not exclusive of
any other rights or remedies available to the Trustee or the holders of the
Senior Notes against the Authority. Similarly, any alteration by the Trustee or
the holders of the Senior Notes of the Guaranteed Obligations with respect to
the Authority (including the modification of the Disbursement and Escrow
Agreement or the addition or release of other guarantors of the Guaranteed
Obligations) shall not affect the Guaranteed Obligations of Sun International.
The Guaranteed Obligations are also secured, in part, by an irrevocable
letter of credit in the amount of $15 million. The Trustees may draw upon the
letter of credit if (i) Sun International fails to pay any SIHL Guaranteed
Amount (as defined in the Disbursement and Escrow Agreement) after such amount
becomes due and payable and 30 days after notice to Sun International and
(ii) Sun International fails to pay any amount required to cause the Mohegan Sun
Casino to become Completed (as certified by a professional architect) after such
amount becomes due and 30 days after notice to Sun International. Any amounts
drawn upon shall be deposited into the Escrow Account and disbursed pursuant to
the Disbursement and Escrow Agreement and the Secured Completion Guarantee.
In the event that there is a dispute between the Authority and any
contractor, subcontractor, supplier, vendor or any other person providing goods
or services in connection with the amount owed to such person, Sun International
has agreed to allocate and reserve from Available Funds under the Disbursement
and Escrow Agreement an amount that it reasonably believes will be sufficient to
settle such dispute. In the event that the settlement of such dispute requires
expenditures in excess of the amount reserved therefor plus any unallocated
reserves, Sun International has guaranteed the payment in full of such disputed
amount. Sun International is required to pay any of such disputed amounts when
the dispute is resolved or if necessary to prevent a foreclosure, seizure,
closure or work or supply stoppage caused by the disputing party.
SUBORDINATION; NOTES TO EVIDENCE AMOUNTS PAID UNDER SECURED COMPLETION
GUARANTEE. All existing and future indebtedness of the Authority to Sun
International is, or will be, subordinated to the Guaranteed Obligations of Sun
International. Any payments to Sun International by the Authority in violation
of the Secured Completion Guarantee are required to be held by Sun International
in trust for the Trustee and must either be paid over to the Trustee or applied
against the Guaranteed Obligations.
Any amounts paid or advanced by Sun International under the Secured
Completion Guarantee shall be deemed a loan by Sun International to the
Authority and will be evidenced by additional subordinated notes, which shall be
promptly issued by the Authority in the principal amount of the amount so paid
or advanced. Such
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additional subordinated notes will bear interest at an annual rate of the prime
rate announced from time to time by Chemical Bank plus one percent. The
Authority will be obligated to repay, with interest, any payments or advances
made by Sun International under the Secured Completion Guarantee (whether or not
such amounts are actually evidenced by additional subordinated notes) pursuant
to the terms and conditions set forth in the Note Purchase Agreement (as defined
herein). As such, any amounts paid or advanced by Sun International to the
Authority under the Secured Completion Guarantee will be subordinated to the
prior payment in full of the obligations under the Senior Notes in accordance
with the terms and conditions of the Note Purchase Agreement for the
Subordinated Notes. See "--Note Purchase Agreement."
BANKRUPTCY. Pursuant to the Secured Completion Guarantee, Sun
International has agreed that, so long as any Guaranteed Obligations are owed to
the Trustee, it will not, without the consent of the Trustee, commence, either
individually or with others, any bankruptcy, insolvency or reorganization
proceeding against the Authority. Sun International's Guaranteed Obligations may
not be altered or limited by any proceeding, voluntarily or involuntarily,
involving the bankruptcy, reorganization, insolvency, receivership, liquidation
or arrangement of the Authority or by any defense which the Authority may have
by reason thereof. The Authority, however, may not be subject to the federal
bankruptcy laws. See "Risk Factors--Difficulties in Enforcing Obligations."
COLLATERAL. SIIL secured Sun International's obligations under the Secured
Completion Guarantee with a pledge of 1,500,000 Ordinary Shares of Sun
International. Based upon the closing price of Sun International Ordinary Shares
on the NYSE on May 1, 1996, such shares had a market value of approximately
$64.1 million. No assurance can be given, however, as to the amount of
proceeds, if any, that the Trustee would realize upon a foreclosure and sale of
such shares in order to satisfy the obligations under the Secured Completion
Guarantee. The terms of the pledge agreement provide that the Trustee may
foreclose upon the pledged shares only after obtaining a final judgment from a
court of competent jurisdiction that Sun International has breached its
obligations under the Secured Completion Guarantee. Accordingly, there may be
substantial delay in realizing any proceeds from the share pledge. The share
pledge will be released upon termination of the Secured Completion Guarantee.
Sun International has agreed to provide certain registration rights to the
Trustee in order to permit the Trustee to sell the pledged shares. On March 1,
1996, Sun International redesignated its two series of Ordinary Shares, Series A
and Series B, as one series of Ordinary Shares.
NOTE PURCHASE AGREEMENT
GENERAL. Pursuant to a Note Purchase Agreement (the "Note Purchase
Agreement"), entered into between the Authority and Sun International, the
Authority issued and sold to Sun International $40,000,000 aggregate principal
amount of Subordinated Notes at an aggregate purchase price equal to 100% of the
principal amount thereof, approximately $38.3 million of which is payable in
cash and the balance of which is payable by the exchange of amounts owed by the
Authority to TCA. The Subordinated Notes are subordinate in right of payment to
the Senior Notes. The Authority may issue additional subordinated notes from
time to time in principal amounts equal to advances made by Sun International
under the Secured Completion Guarantee. The following summary sets forth the
material terms and provisions of the Note Purchase Agreement.
INTEREST. Except for Subordinated Notes, if any, issued to evidence
indebtedness of the Authority to Sun International under the Secured Completion
Guarantee, each Subordinated Note bears interest at the rate of 15% per annum of
the principal amount then outstanding from the Issuance Date to the date of
payment of such principal amount of such Subordinated Note. Each Subordinated
Note issued to evidence indebtedness under the Secured Completion Guarantee will
bear interest at the rate per annum then most recently announced by Chemical
Bank of New York as its prime rate at New York, New York plus 1%, which rate
shall be set and revised at intervals of six months. Installments of interest
become due and payable semi-annually in arrears on each May 15 and November 15
to the holders of record at the close of business on the preceding April 30 or
October 31. Additionally, installments of accrued and unpaid interest will
become due and payable with respect to any principal amount of the Subordinated
Notes that matures (whether at stated maturity, upon acceleration, upon
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maturity of repurchase obligation, upon repurchase or otherwise) upon such
maturity of such principal amount of the Subordinated Notes. Interest on the
Subordinated Notes is computed on the basis of a 360-day year, consisting of
twelve 30-day months. Each installment of interest is calculated to accrue from
and include the most recent date to which interest has been paid or provided for
(or from and including the Issuance Date if no installment of interest has been
paid) to, but not including, the date of payment.
Interest in respect of the most recently ended semi-annual period shall be
deferred unless (i) $87.5 million in aggregate principal amount of Senior Notes
have been repurchased or retired (for purposes of such determination, the
aggregate principal amount of Senior Notes offered to be repurchased in any
Senior Note repurchase offer shall be deemed to have been repurchased, whether
or not such amount was properly tendered pursuant to such repurchase offer) and
(ii) the Authority's Fixed Charge Coverage Ratio for the four full fiscal
quarters last ended is equal to or greater than 2.5 to 1 and no deferred cash
flow Participation Interest on the Senior Notes remains unpaid. Deferred
interest shall continue to be deferred unless (and then only to the extent)
current interest may be paid in cash and the Authority's Coverage Ratio for the
four full fiscal quarters last ended (calculated as if such accrued interest
payable were the oldest interest accrued and was added to Interest Expense for
such period if not already included therein) is equal to or greater than 4.0 to
1. Notwithstanding the foregoing, all accrued and unpaid interest shall be
payable in cash on the interest payment dates and shall not be deferred if the
Authority has paid in full all obligations under the Senior Notes and the
Indenture and the same shall have been discharged. Notwithstanding anything
herein to the contrary, installments of accrued or deferred and unpaid interest
shall become due and payable (and shall not be further deferred) with respect to
any principal amount of Subordinated Notes that matures (whether at stated
maturity, upon acceleration, upon maturity of repurchase obligation or
otherwise) upon the maturity of such principal amount of Subordinated Notes. The
term "Fixed Charge Coverage Ratio" shall have the same meaning as set forth in
the Indenture.
The Subordinated Notes are payable both as to principal and interest at the
office or agency of the Authority maintained for such purpose within the City
and State of New York or, at the option of the Authority, payment of interest
may be made by check mailed to the holders of the Subordinated Notes at their
respective addresses set forth in the register of holders of Subordinated Notes.
Until otherwise designated by the Authority, its office or agency in New York is
the office of the Trustee maintained for such purpose. The Subordinated Notes
were issued in registered form, without coupons, and in denominations of $1,000
and integral multiples thereof.
USE OF PROCEEDS. Under the terms of the Note Purchase Agreement, the
Authority is obligated to use the proceeds from the sale of the Subordinated
Notes to (i) finance a loan to the Tribe for the acquisition of the real
property on which the Mohegan Sun Casino will be built, (ii) for any use
permitted under the Indenture, and (iii) to pay fees and expenses in connection
with the uses described in clauses (i) and (ii). The Authority deposited the
proceeds from the sale of the Subordinated Notes (other than any portion of such
net proceeds used immediately to acquire the Site) in the Escrow Account
established in connection with the sale of the Senior Notes and will disburse
such proceeds only in accordance with the terms of the Disbursement and Escrow
Agreement. See "Description of Senior Notes--Disbursement and Escrow Agreement".
SUBORDINATION. The Subordinated Notes rank subordinate in right of payment
to the prior payment of all obligations related to the Senior Notes and PARI
PASSU or senior to all other subordinated indebtedness of the Authority.
Payments of interest on the Subordinated Notes may be made only if at the time
of such payment, no Default or Event of Default exists and is continuing with
respect to the Senior Notes. No payment of principal of or premium, if any, on
the Subordinated Notes may be made, and no Subordinated Notes may be
repurchased, redeemed or otherwise retired, until all obligations in respect of
the Senior Notes under the Indenture have been paid in full, except that
(i) payments of principal and premium, if any, and interest on Subordinated
Notes tendered in connection with a Change of Control offer may be made if the
Authority has fulfilled all obligations in respect of a Change of Control offer
with respect to the Senior Notes and no other Default or Event of Default has
occurred and is continuing under the Indenture, (ii) payments of principal and
premium, if any, and interest
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on the Subordinated Notes to be redeemed in the circumstances described in the
second paragraph under "--Optional Redemption of Subordinated Notes by
Authority" may be made if no Default or Event of Default has occurred and is
continuing under the Indenture and (iii) payments of principal and premium, if
any, and interest on Subordinated Notes tendered in connection with a Remaining
Excess Cash Purchase Offer if no Default or Event of Default has occurred and is
continuing under the Indenture. See "--Remaining Excess Cash Purchase Offer."
Upon any payment or distribution of the assets of the Authority to
creditors in a total or partial liquidation or dissolution of the Authority,
holders of the Senior Notes shall be entitled to receive payment in full of all
obligations in respect of the Senior Notes before the holders of the
Subordinated Notes shall receive any payment in respect of the Subordinated
Notes. If the payment of the Subordinated Notes is accelerated because of an
Event of Default under the Note Purchase Agreement, the Authority and the
holders of the Subordinated Notes are required to promptly notify holders of the
Notes of such acceleration and the Authority may not pay the Subordinated Notes
until five days after such notice is received and, thereafter, may pay the
Subordinated Notes only if the Note Purchase Agreement otherwise permits the
payment at that time. In the event that any distributions are made to the
holders of the Subordinated Notes in violation of the Note Purchase Agreement,
the holders of the Subordinated Notes shall be obligated to hold such
distributions, in trust, for the benefit of the holders of the Senior Notes and
pay over such amounts to the holders of the Senior Notes as their interests may
appear.
MANDATORY REDEMPTION. The Authority is not be required to make a mandatory
redemption or sinking fund payments with respect to the Subordinated Notes.
OPTIONAL REDEMPTION OF SUBORDINATED NOTES BY AUTHORITY. Under the Note
Purchase Agreement, the Authority may make an optional redemption of the
Subordinated Notes; however, such redemption may be made only after the Senior
Notes have been paid in full. Subject to the foregoing, the Authority may redeem
the Subordinated Notes at a price equal to 100% of the principal amount thereof
plus all accrued and unpaid interest on the unpaid principal to the date of
redemption. Any redemption of the Subordinated Notes, whether in whole or in
part, must be made in accordance with procedures set forth in the Note Purchase
Agreement.
Notwithstanding the foregoing, in the event that any holder or beneficial
owner of the Subordinated Notes is found unsuitable, or refuses or is unable to,
within 30 days after being asked to do so by the applicable gaming regulatory
authority, become licensed or qualified under any applicable gaming laws
requiring such holder or beneficial owner of the Subordinated Notes to be so
licensed, qualified or suitable in order for the Authority to maintain any
gaming license or franchise, then, the Authority shall have, at its option, the
right (i) to require such holder or beneficial owner to dispose of such holder's
or beneficial owner's Subordinated Notes or (ii) to call for the redemption of
the Subordinated Notes of such holder or beneficial owner at a redemption price
equal to the lesser of the outstanding principal balance of such Subordinated
Notes or the price at which such holder or beneficial owner paid to acquire such
Subordinated Notes (in each case together with accrued and unpaid interest to
the date of redemption). Redemption of the Subordinated Notes pursuant to the
foregoing circumstances, however, may not be made if any Event of Default has
occurred and is continuing under the Indenture.
OFFER TO REPURCHASE SUBORDINATED NOTES UPON CHANGE OF CONTROL. Upon any
Change of Control and subject to certain priority rights of the holders of the
Senior Notes, the Authority is required to purchase all of the outstanding
Subordinated Notes at a purchase price equal to 101% of the aggregate principal
thereof plus accrued and unpaid interest to the purchase date; provided,
however, the Authority is not required to repurchase the Subordinated Notes if
(i) an event deemed to be a Change of Control ceases to exist prior to the
closing of such offer or (ii) if on or before the 120th day after the Change of
Control, which Change of Control arises under either clause (iv) or (v) of the
definition thereof, the Manager (as defined herein) is replaced (or the
Authority is using its best efforts to effect such a replacement) with a Person
with experience and reputation comparable to Sun International. Any offer to
repurchase the Subordinated Notes may be made by the Authority only after
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a repurchase offer has been made to the holders of the Senior Notes. A "Change
of Control" as defined in the Note Purchase Agreement has the same meaning as
under the Indenture. See "Description of Senior Notes--Certain Definitions."
CASH MAINTENANCE ACCOUNT; SECURITY INTEREST. The Authority is obligated to
make monthly deposits into the Cash Maintenance Account as provided for under
the Indenture. See "Description of Senior Notes--Mandatory Cash Maintenance
Account."
Under the Note Purchase Agreement, the Authority is required to grant and
maintain a perfected first priority security interest in favor of the Trustee
for the ratable benefit of the holders of the Senior Notes and a perfected,
second priority security interest for the ratable benefit of the holders of the
Subordinated Notes in all amounts in, or investments constituting amounts in,
the Cash Maintenance Account. The second priority security interest of the
holders of the Subordinated Notes, however, does not impair or prevent the
Authority from transferring amounts in the Cash Maintenance Account to the
holders of the Senior Notes in accordance with the terms of the Indenture, free
and clear of such second priority security interest. Upon full repayment of the
Senior Notes, the perfected, second priority security interest shall
automatically become, and the Authority is required to take all acts to assure,
a perfected, first priority security interest in favor of the holders of the
Subordinated Notes. Furthermore, if an Event of Default has occurred and is
continuing under the Note Purchase Agreement and the Senior Notes have been paid
in full, then, the holders of the Subordinated Notes will have the right, among
other things, to direct any investments in the Cash Maintenance Account and to
apply any cash or investments therein to the payment of principal and interest
on the Subordinated Notes.
REMAINING EXCESS CASH PURCHASE OFFER. To the extent that the aggregate
purchase price of Senior Notes tendered pursuant to any Excess Cash Purchase
Offer required to be made pursuant to the Indenture is less than the Excess Cash
Purchase Amount with respect thereto, the Authority has agreed to make an offer
to the holders of the Subordinated Notes to purchase the maximum principal
amount of Subordinated Notes that is an integral multiple of $1,000 that may be
purchased with the Remaining Excess Cash Flow (as defined in the Note Purchase
Agreement) at an offer price in cash equal to the principal amount of the
Subordinated Notes to be purchased plus accrued and unpaid interest. In the
event that more Subordinated Notes are tendered than are required to be
purchased by the Authority, the Authority will purchase Subordinated Notes pro
rata from each tendering holder. Any Remaining Excess Cash Flow not used to
repurchase Subordinated Notes in accordance with the foregoing may be used by
the Authority for general purposes.
LIMITATIONS ON INCURRENCE OF INDEBTEDNESS. Under the Note Purchase
Agreement, the Authority has agreed that the total outstanding principal balance
of indebtedness of the Authority shall not exceed an aggregate of $270 million,
plus Subordinated Notes issued thereunder and issued to evidence indebtedness
incurred pursuant to the Secured Completion Guarantee. The total indebtedness of
the Authority permitted to be outstanding at any one time shall be reduced from
time to time. In addition, the Authority has agreed that the principal amount of
any indebtedness incurred by the Authority to refinance other outstanding
indebtedness will not exceed the principal amount of such refinanced
indebtedness and, in the event refinancing indebtedness is issued to refinance
the Senior Notes or any portion thereof, such refinancing indebtedness shall
have a Weighted Average Life to Maturity not less than that of the Senior Notes.
See "Description of Senior Notes--Limitations on Incurrence of Indebtedness."
CERTAIN OTHER COVENANTS OF THE AUTHORITY. Under the Note Purchase
Agreement, the Authority has made certain other covenants with respect to the
repayment of the Subordinated Notes and the conduct of its business during the
period which such Subordinated Notes remain outstanding that are substantially
similar to the covenants made by the Authority under the Indenture. See
"Description of Senior Notes--Certain Covenants."
EVENTS OF DEFAULT. Under the Note Purchase Agreement, Events of Default
include the following:
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(i) a default by the Authority for 30 days in payment of any interest due
on the Subordinated Notes (such due date shall take into account any interest
payments entitled to be deferred by the Authority under the Note Purchase
Agreement);
(ii) default by the Authority in the payment of the principal of or
premium, if any, on any Subordinated Notes when due;
(iii) failure by the Authority to observe or perform any other covenant,
representation, warranty or agreement under the Note Purchase Agreement or the
Subordinated Notes that continues for 90 days after written notice to holders of
at least 25% of the principal amount of the Subordinated Notes; and
(iv) certain events of bankruptcy and insolvency of the Authority.
If an Event of Default (other than certain events with respect to bankruptcy,
insolvency and reorganization) shall occur and be continuing, then the holders
of 25% of the aggregate principal amount of the Subordinated Notes outstanding
may declare by written notice to the Authority the principal amount of the
Subordinated Notes to be due and payable immediately; provided, however, that no
such declaration may be made unless all obligations under the Senior Notes and
the Indenture have been paid in full and discharged. If an Event of Default with
respect to certain events of bankruptcy or insolvency occurs and all obligations
under the Senior Notes and the Indenture have been paid in full and discharged,
then all outstanding Subordinated Notes will become due and payable without any
act on the part of any holder of Subordinated Notes.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE. The Note Purchase Agreement
contains legal defeasance and covenant defeasance provisions that are
substantially similar to those under the Indenture. See "Description of Senior
Notes--Legal Defeasance and Covenant Defeasance."
EQUIPMENT FINANCING
The Authority has entered into an agreement with Sodek Gaming, Inc. which
provides for up to $40 million of financing for the acquisition by the Authority
of certain equipment, including gaming equipment. The agreement provides that
amounts borrowed for the acquisition of equipment will bear interest, commencing
o the date of delivery of the equipment, at a rate of prime plus two-percent.
Amounts borrowed under the financing will be payable over 48 months, commencing
30 days after the Mohegan Sun Casino commences operations. The Construction
Budget currently allocates $40 million, the full amount available under the
agreement, for the acquisition of equipment.
WORKING CAPITAL FINANCING
The Authority has signed a commitment letter with a third party lender for
$12.5 million of Working Capital Financing. In the event that the Authority
requires additional working capital, the Indenture permits up to $25 million in
Working Capital Financing, which may be secured by the Note Collateral on a PARI
PASSU basis with the Senior Notes. Pursuant to the Secured Completion
Guarantee, Sun International is required to arrange or provide financing in the
event the Authority is unable to arrange or provide the Working Capital
Financing from a third party lender.
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DESCRIPTION OF SENIOR NOTES
GENERAL
The Series A Senior Notes were, and the Series B Senior Notes will be,
issued pursuant to the Indenture between the Authority, First Fidelity Bank,
n/k/a First Union Bank of Connecticut, as trustee (the "Trustee"), and the Tribe
for certain limited purposes stated therein. The terms of the Senior Notes
include those stated in the Indenture and the Collateral Documents and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), as in effect on the date of the Indenture.
The Senior Notes are subject to all such terms, and Holders of the Senior Notes
are referred to the Indenture, the Collateral Documents and the Trust Indenture
Act for a statement thereof. The following summary of certain provisions of the
Indenture and the Collateral Documents does not purport to be complete and is
qualified in its entirety by reference to the Indenture and the Collateral
Documents, including the definitions therein of certain terms used below. A copy
of the form of Indenture and of each of the Collateral Documents is available
from the Authority as described under "--Additional Information." The
definitions of certain terms used in the following summary are set forth below
under "--Certain Definitions." Capitalized terms that are used but not otherwise
defined in this section of the Prospectus have the meanings assigned them in the
Indenture.
RANKING AND SECURITY
The Series A Senior Notes are, and the Series B Senior Notes will be,
ranked senior in right of payment to all Subordinated Indebtedness of the
Authority and will rank PARI PASSU in right of payment with the Working Capital
Financing and the Equipment Financing.
The Series A Senior Notes are, and the Series B Senior Notes will be,
secured by a first lien on the Note Collateral (which also will secure the
Working Capital Financing) owned by the Authority whether such Note Collateral
is now owned or hereafter acquired and such first liens on Note Collateral will
be subject to Permitted Liens. The Note Collateral includes, without limitation,
all of the assets, with certain exceptions, comprising the Resort including the
leasehold interest of the Authority in the Resort (other than certain assets to
the extent such assets are permitted to be financed by Indebtedness permitted to
be incurred pursuant to the covenant entitled "Limitations on Incurrence of
Indebtedness" and such Indebtedness is permitted to be secured pursuant to the
covenant entitled "Liens" pursuant to clauses (i), (v) and (viii) of the
definition of "Permitted Liens").
Real property pledged as security may be subject to known and unknown
environmental risks. Under the federal Comprehensive Environmental Response
Compensation and Liability Act ("CERCLA"), as amended, for example, a secured
lender may be held liable, in certain limited circumstances, for the costs of
remediating a release of or preventing a threatened release of hazardous
substances at a mortgaged property.
Under CERCLA, a person "who, without participating in the management of
a facility, holds indicia of ownership primarily to protect his security
interest" is not a property owner, and thus not a responsible person under
CERCLA. Lenders have seldom been held liable under CERCLA. The lenders who have
been found liable have generally been found to have been sufficiently involved
in the mortgagor's operations so that they have "participated in the management
of the borrower." CERCLA does not specify the level of actual participation in
management. There is currently no controlling authority on this matter.
The Trustee may appoint one or more collateral agents, who may be delegated
any one or more of the duties or rights of the Trustee under the Collateral
Documents or which are specified in any Collateral Documents.
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PRINCIPAL, MATURITY AND INTEREST
The Series A Senior Notes are, and the Series B Senior Notes will be,
secured obligations of the Authority, limited in aggregate principal amount to
$175 million and will mature on November 15, 2002.
Each Senior Note bears interest at the rate of 13 1/2% per annum of the
principal amount then outstanding (the "Fixed Interest") from the Issuance Date
to the date of payment of such principal amount of such Senior Note.
Installments of Fixed Interest become due and payable semi-annually in arrears
on each November 15 and May 15 of each year to the Holders of record at the
close of business on the preceding November 1 or May 1. Additionally,
installments of accrued and unpaid Fixed Interest become due and payable with
respect to any principal amount of the Senior Notes that matures (whether at
stated maturity, upon acceleration, upon maturity of repurchase obligation or
otherwise) upon such maturity of such principal amount of the Senior Notes.
Fixed Interest on the Series A Senior Notes is, and the Series B Senior Notes
will be, computed on the basis of a 360-day year, consisting of twelve 30-day
months. Each installment of Fixed Interest is or will be calculated to accrue
from and including the most recent date to which Fixed Interest has been paid or
provided for (or from and include the Issuance Date if no installment of Fixed
Interest has been paid) to, but not including, the date of payment.
In addition, the Senior Notes bear Cash Flow Participation Interest,
calculated as described below, from the Commencement Date to the date of payment
of the Senior Notes. Installments of accrued or deferred Cash Flow Participation
Interest accrued through the Accrual Period (as defined herein) last ended
become due and payable semi-annually on each November 15 and May 15 after the
Commencement Date to the Holders of record at the close of business on the
preceding November 1 or May 1; PROVIDED THAT no Cash Flow Participation Interest
is payable with respect to any period prior to the earlier of the first day the
Resort commences operations and October 31, 1996. Additionally, all installments
of accrued or deferred Cash Flow Participation Interest become due and payable
(and may not be further deferred) with respect to any principal amount of the
Senior Notes that matures (whether at stated maturity, upon acceleration,
maturity of repurchase obligation or otherwise) upon such maturity of such
principal amount of the Senior Notes.
The Authority, at its option, may defer payment of all or a portion of any
installment of Cash Flow Participation Interest then otherwise due if, and only
to the extent that, (a) the payment of such portion of Cash Flow Participation
Interest will cause the Authority's Fixed Charge Coverage Ratio for the four
consecutive fiscal quarters last completed prior to such interest payment date
to be less than 2.0:1 on a pro forma basis after giving effect to the assumed
payment of such Cash Flow Participation Interest but before giving effect to any
interest on the Subordinated Notes which is then not payable in cash and (b) the
principal of the Senior Notes corresponding to such Cash Flow Participation
Interest has not then matured and become due and payable (at stated maturity,
upon acceleration, upon maturity of repurchase obligation or otherwise). Cash
Flow Participation Interest that is deferred shall become due and payable on the
earlier of (i) the next succeeding interest payment date on which such Cash Flow
Participation Interest is not permitted to be deferred, and (ii) upon the
maturity of the corresponding principal of the Senior Notes (whether at stated
maturity, upon acceleration, upon maturity of repurchase obligation or
otherwise). No interest will accrue on any Cash Flow Participation Interest
deferred and which has not yet become due and payable. To the extent permitted
by law, interest will accrue on overdue Fixed Interest or Cash Flow
Participation Interest at the same rate as the Fixed Interest plus one percent
(1%) per annum.
Each installment of Cash Flow Participation Interest is calculated to
accrue (an "Accrual Period") from, but not including, the most recent date to
which Cash Flow Participation Interest has been paid or provided for or through
which Cash Flow Participation Interest had been calculated and deferred (or from
and including the Commencement Date if no installment of Cash Flow Participation
Interest has been paid, provided for or deferred) to, and including, either
(a) the last day of the next Semi-annual Period if the corresponding principal
of the Senior Notes has not become due and payable or (b) the date of payment if
the corresponding principal of the
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Senior Notes has become due and payable (whether at stated maturity, upon
acceleration, upon maturity of repurchase obligation or otherwise). With respect
to each Accrual Period, Cash Flow Participation Interest accrues daily on the
principal of each Senior Note outstanding during such period as follows (except
with respect to the Initial Period): (i) for each day during each month that
ends during such Accrual Period and which month ends at least 25 days prior to
the date of payment, an amount equal to 1/30 of the Monthly Cash Flow
Participation Interest on the Senior Note for such month until all of such
Monthly Cash Flow Participation Interest on the Senior Note is accrued (and all
of such month's Monthly Cash Flow Participation Interest on the Senior Note
shall be accrued by the last day of such month) and (ii) for any day in any
remaining period, 1/30 of the prior month's Monthly Cash Flow Participation
Interest on the Senior Note; provided, however, that additional Cash Flow
Participation Interest ceases accruing on any outstanding principal of the
Senior Note until the next succeeding September 30, if on any day, the Cash Flow
Participation Interest on such principal amount of the Senior Note accrued since
the immediately preceding September 30 (excluding any deferred Cash Flow
Participation Interest accrued prior to such September 30) exceeds the product
of $250 million times such principal amount of the Senior Note divided by
$175,000,000. With respect to any principal amount of the Senior Notes during
the Initial Period, the Cash Flow Participation Interest accrues daily in the
amount of 1/180 of the Cash Flow Participation Interest for such principal in
the next succeeding Semi-annual Period.
Any reference in this Prospectus to "accrued and unpaid interest" on the
Senior Notes includes the amount of Fixed Interest, unpaid Cash Flow
Participation Interest and Liquidated Damages, if any, due and payable thereon.
"CASH FLOW PARTICIPATION INTEREST" means, as of any payment date, Cash Flow
Participation Interest on the Senior Notes accrued through the Accrual Period
last ended (including any Accrual Period that ends on such payment date) and any
Cash Flow Participation Interest previously accrued and the payment of which has
been permitted to be deferred.
"COMMENCEMENT DATE" means the earlier of (i) October 31, 1996 and (ii) the
first day that the Resort becomes Operating.
"FIXED CHARGE COVERAGE RATIO" means with respect to any Person for any
period, the ratio of the Cash Flow of such Person for such period to the Fixed
Charges of such Person for such period.
"INITIAL PERIOD" means the period, if any, beginning on the Commencement
Date and ending on the day prior to the first day that the Resort becomes
Operating.
"MONTHLY CASH FLOW PARTICIPATION INTEREST" means , with respect to any
month and any principal amount of the Senior Notes, the product of 5.0% of the
Authority's Cash Flow for such month times a fraction, the numerator of which is
the principal amount outstanding on the Senior Notes and the denominator of
which is $175,000,000.
"SEMI-ANNUAL PERIOD" means each period that begins on April 1 and ends on
the next succeeding September 30 or each period that begins on October 1 and
ends on the next succeeding March 31.
The Senior Notes are payable as to principal, premium, if any, interest
(including Cash Flow Participation Interest, if any), and Liquidated Damages at
the office or agency of the Authority maintained for such purpose within the
City and State of New York or, at the option of the Authority, payment of
interest (including Cash Flow Participation Interest, if any), may be made by
check mailed to the Holders of the Senior Notes at their respective addresses
set forth in the register of Holders of Senior Notes. Until otherwise designated
by the Authority, its office or agency in New York is the office of the Trustee
maintained for such purpose. The Series A Senior Notes were, and the Series B
Senior Notes will be, issued in registered form, without coupons, and in
denominations of $1,000 and integral multiples thereof
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NO SINKING FUND
There will be no mandatory sinking fund payments for the Senior Notes.
MANDATORY REDEMPTION
The Authority is not required to make mandatory redemptions prior to
maturity with respect to the Senior Notes.
OPTIONAL REDEMPTION
Except as described below, the Senior Notes are not redeemable at the
Authority's option prior to November 15, 1999. From and after November 15, 1999,
the Authority shall have the option to redeem the Senior Notes, in whole or in
part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below, plus
accrued and unpaid interest (including Cash Flow Participation Interest and
Liquidated Damages, if any), thereon to the applicable redemption date, if
redeemed during the twelve (12)-month period beginning on November 15 of the
years indicated below:
YEAR %
---- -----
1999 . . . . . . . . . . . . . . . . . . . . . . . . . . 110.0
2000 . . . . . . . . . . . . . . . . . . . . . . . . . . 105.0
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0
Notwithstanding any other provision of the Indenture, if any Gaming
Regulatory Authority requires that a Holder or beneficial owner of the Senior
Notes must be licensed, qualified or found suitable under any applicable gaming
laws in order to maintain any gaming license or franchise of the Authority under
any applicable gaming laws, and the Holder or beneficial owner fails to apply
for a license, qualification or finding of suitability within 30 days after
being requested to do so by such Gaming Regulatory Authority (or such lesser
period that may be required by such Gaming Regulatory Authority) or if such
Holder or beneficial owner is not so licensed, qualified or found suitable, the
Authority shall have the right, at its option:
(1) to require such Holder or beneficial owner to dispose of such
Holder's or beneficial owner's Senior Notes within 30 days of receipt of such
finding by the applicable Gaming Regulatory Authority (or such earlier date as
may be required by the applicable Gaming Regulatory Authority); or
(2) to call for redemption of the Senior Notes of such Holder or
beneficial owner at a redemption price equal to the lesser of the principal
amount thereof or the price at which such Holder or beneficial owner acquired
the Senior Notes, together with, in either case, accrued and unpaid interest
(including Cash Flow Participation Interest and Liquidated Damages, if any), to
the earlier of the date of redemption or, the date of the finding of
unsuitability by such Gaming Regulatory Authority, which may be less than 30
days following the notice of redemption if so ordered by such Gaming Regulatory
Authority.
In connection with any such redemption, and except as may be required by a
Gaming Regulatory Authority, the Authority shall comply with the procedures
contained in the Indenture for redemptions of the Senior Notes. Under the
Indenture, the Authority is not required to pay or reimburse any Holder of the
Senior Notes or beneficial owner of Senior Notes who is required to apply for
any such license, qualification or finding of suitability for the costs of the
licensure or investigation for such qualification or finding of suitability.
Such expenses will, therefore, be the obligation of such Holder or beneficial
owner. See "Government Regulation."
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REPURCHASE AT THE OPTION OF HOLDERS
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, the Authority will make an
offer to purchase all or any part (equal to $1,000 or an integral multiple
thereof) of the Senior Notes pursuant to the offer described below (the "Change
of Control Offer") at a price in cash (the "Change of Control Payment") equal to
101% of the aggregate principal amount thereof, plus accrued and unpaid interest
(including Cash Flow Participation Interest) and Liquidated Damages, if any, to
the date of purchase. The Authority shall not be required to make such an offer
to purchase (i) if the Change of Control event ceases prior to the closing of
such offer or (ii) if on or before the 120th day after the Change of Control,
which Change of Control arises under either clause (iv) or (v) of the definition
thereof, the Manager is replaced (or the Authority is using its best efforts to
effect such a replacement) with a Person with experience and reputation
comparable to Sun International. To effect any Change of Control Offer, the
Authority will mail a notice to each Holder with the following information:
(1) a Change of Control Offer is being made pursuant to Section 4.16 of
the Indenture, the length of time the offer will remain open and that all Senior
Notes properly tendered pursuant to such Change of Control Offer will be
accepted for payment;
(2) the Offer Amount, the purchase price and the purchase date, which
will be no earlier than 30 days nor later than 60 days from the date such notice
is mailed, except as may be otherwise required by applicable law (the "Change of
Control Payment Date");
(3) any Senior Note not properly tendered or accepted for payment will
remain outstanding and continue to accrue interest (including Cash Flow
Participation Interest, if any);
(4) unless the Authority defaults in the payment of the Change of Control
Payment, all Senior Notes accepted for payment pursuant to the Change of Control
Offer will cease to accrue interest after the Change of Control Payment Date;
(5) Holders electing to have any Senior Notes purchased pursuant to a
Change of Control Offer will be required to surrender the Senior Notes, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the Senior
Notes completed, to the Authority, a depositary, if appointed by the Authority,
or a 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;
(6) Holders will be entitled to withdraw their tendered Senior Notes and
their election to require the Authority to purchase the Senior Notes, PROVIDED,
HOWEVER, that the Authority, the depositary or the Paying Agent receives, not
later than the close of business on the last day of the Offer Period, a
telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of Senior Notes tendered for purchase, and a
statement that such Holder is withdrawing his tendered Senior Notes and his
election to have such Senior Notes purchased; and
(7) that Holders whose Senior Notes are being purchased only in part will
be issued new Senior Notes equal in principal amount to the unpurchased portion
of the Senior Notes surrendered, which unpurchased portion must be equal to
$1,000 in principal amount or an integral multiple thereof.
The Authority will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws or regulations are applicable in connection with the repurchase
of the Senior Notes pursuant to a Repurchase Offer.
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On the Change of Control Payment Date, the Authority will, to the extent
permitted by law:
(1) accept for payment all Senior Notes or portions thereof properly
tendered pursuant to the Change of Control Offer;
(2) deposit with the paying agent an amount equal to the aggregate Change
of Control Payment in respect of all Senior Notes or portions thereof so
tendered; and
(3) deliver, or cause to be delivered, to the Trustee for cancellation
the Senior Notes so accepted together with an Officers' Certificate stating that
such Notes or portions thereof have been tendered to and purchased by the
Authority.
The paying agent will promptly mail to each Holder of Senior Notes the
Change of Control Payment for such Senior Notes, and the Trustee will promptly
authenticate and mail to each holder a new Senior Note equal in principal amount
to any unpurchased portion of the Senior Notes surrendered, if any, PROVIDED,
HOWEVER, that each such new Senior Note will be in a principal amount of $1,000
or an integral multiple thereof. The Authority will publicly announce the
results of the Change of Control Offer on or as soon as practicable after the
Change of Control Payment Date.
The source of funds for any repurchase of Senior Notes upon a Change of
Control will be the Authority's cash or cash generated from operations or other
sources, including borrowings, sales of assets or Capital Stock. However, there
can be no assurance that sufficient funds will be available at the time of any
Change of Control to make any required repurchases. Any failure by the Authority
to repurchase Senior Notes tendered pursuant to a Change of Control Offer will
be deemed an Event of Default.
ASSET SALES
The Indenture provides that the Authority will not cause, make or suffer to
exist an Asset Sale, unless:
(1) the Authority receives consideration at the time of such Asset Sale
at least equal to the fair market value of the assets sold or otherwise disposed
of; and
(2) at least 85% of such consideration is in the form of cash; PROVIDED,
HOWEVER, that the Authority will not be permitted to make any Asset Sale of Key
Project Assets.
Within 180 days after the Authority's receipt of the Net Proceeds of any
Asset Sale, the Authority may apply the Net Proceeds from such Asset Sale to
either:
(1) an investment in the Principal Business or in tangible long-term
assets used or useful in the Principal Business; or
(2) to permanently reduce Indebtedness that is not Subordinated
Indebtedness.
Pending the final application of any such Net Proceeds, such Net Proceeds
shall be pledged to the Trustee as security for the Senior Notes. Any Net
Proceeds from the Asset Sale that are not invested as provided in the first
sentence of this paragraph will be deemed to constitute "Excess Proceeds." When
the aggregate amount of Excess Proceeds exceeds $5.0 million, the Authority
shall make an offer to all Holders of Senior Notes (an "Asset Sale Offer") to
purchase the maximum principal amount of Notes, that is an integral multiple of
$1,000, that may be purchased out of the Excess Proceeds at an offer price in
cash in an amount equal to 100% of the principal amount thereof, plus accrued
and unpaid interest (including Cash Flow Participation Interest) and Liquidated
Damages, if any, to the date fixed for the closing of such offer, in accordance
with the procedures set forth in
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the Indenture. The Authority will commence an Asset Sale Offer with respect to
Excess Proceeds within 10 Business Days after the date that Excess Proceeds
exceeds $5.0 million by mailing the notice required pursuant to the terms of the
Indenture. To the extent that the aggregate amount of Senior Notes properly
tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, such
remaining Excess Proceeds shall be released to the Authority, subject to the
terms of the Cash Collateral Accounts Pledge and Security Agreement, and the
Authority may use any such remaining Excess Proceeds for any lawful purpose. If
the aggregate principal amount of Senior Notes surrendered by Holders thereof
exceeds the amount of Excess Proceeds, the Trustee shall select the Senior Notes
to be purchased in the manner described under the caption "Selection and Notice"
below. Upon completion of any such Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero. The Indenture will also require the Authority
to grant to the Trustee, on behalf of the Holders of the Senior Notes, a first
priority lien on any properties or assets acquired with the Net Proceeds of any
such Asset Sale on the terms set forth in the Indenture and the Collateral
Documents.
EVENT OF LOSS
The Indenture provides that within 360 days after any Event of Loss with
respect to Note Collateral with a fair market value (or replacement cost, if
greater) in excess of $500,000, the Authority may apply the Net Loss Proceeds
from such Event of Loss to the rebuilding, repair, replacement or construction
of improvements to the Resort, with no concurrent obligation to make any
purchase of any Senior Notes, provided that:
(1) the Authority delivers to the Trustee within 45 days of such Event of
Loss a written opinion from a reputable architect that the Resort with at least
the Minimum Facilities can be rebuilt, repaired, replaced, or constructed and
Operating within 360 days of such Event of Loss and that, with respect to any
Event of Loss that occurs on or prior to September 30, 1997, such rebuilding,
repair, replacement or construction of improvements can be rebuilt, repaired,
replaced or constructed and Operating on or prior to September 30, 1997;
(2) an Officer's Certificate certifying that the Authority has available
from Net Loss Proceeds or cash or sufficient funds on hand to complete such
rebuilding, repair, replacement or construction; and
(3) the Net Loss Proceeds is less than $50 million.
Any Net Loss Proceeds from an Event of Loss that are not reinvested or are
not permitted to be reinvested as provided above will be deemed "Excess Loss
Proceeds." When the aggregate amount of "Excess Loss Proceeds" exceeds $50.0
million, the Authority shall make an offer to all Holders of Senior Notes (an
"Event of Loss Offer") to purchase the maximum principal amount of Senior Notes,
that is an integral multiple of $1,000, that may be purchased out of the Excess
Loss Proceeds at an offer price in cash in an amount equal to 100% of the
principal amount thereof, plus accrued and unpaid interest (including Cash Flow
Participation Interest and Liquidated Damages), if any, to the date fixed for
the closing of such offer, in accordance with the procedures set forth in the
Indenture. To the extent that the aggregate amount of Senior Notes tendered
pursuant to an Event of Loss Offer is less than the Excess Loss Proceeds, such
remaining Excess Loss Proceeds shall be released to the Authority, subject to
the terms of the Cash Collateral Accounts Pledge and Security Agreement, and the
Authority may use any such remaining Excess Loss Proceeds so released for any
lawful purpose. If the aggregate principal amount of Senior Notes surrendered by
Holders thereof exceeds the amount of Excess Loss Proceeds, the Trustee shall
select the Senior Notes to be purchased in the manner described under the
caption "Selection and Notice" below. Upon completion of any such Event of Loss
Offer, the amount of Excess Loss Proceeds shall be reset at zero. Pending any
permitted rebuilding, repair or construction or the completion of any Excess
Loss Offer, the Authority shall pledge to the Trustee as additional Note
Collateral any Net Loss Proceeds or other cash on hand required for such
permitted rebuilding, repair or construction pursuant to the terms of the
Leasehold Mortgage. Such pledged funds will be released to the Authority to pay
for such permitted rebuilding, repair or construction or such Event of Loss
Offer pursuant to the terms of the Leasehold Mortgage. The Indenture also
requires the Authority to grant to the Trustee, on behalf of the Holders of the
Senior Notes, a first priority lien
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on any properties or assets rebuilt, repaired or constructed with such Net Loss
Proceeds on the terms set forth in the Indenture and the Collateral Documents.
The Indenture also provides that with respect to any Event of Loss pursuant
to clause (D) of the definition of "Event of Loss" that has a fair market value
(or replacement cost, if greater) in excess of $2.0 million, the Authority will
be required to receive consideration at least:
(1) equal to the fair market value (as determined by an Independent
Financial Advisor) of the assets subject to an Event of Loss; and
(2) 85% of which is in the form of cash or Cash Equivalents; PROVIDED,
HOWEVER, that the amount of:
(a) any liabilities (as shown on the Authority's most recent balance
sheet or in the notes thereto) of the Authority (other than liabilities that are
by their terms expressly subordinated to the Senior Notes), that are assumed by
the transferee of any such assets and
(b) any notes or other obligations received by the Authority from such
transferee that are converted by the Authority into cash (to the extent of the
cash received) within 10 Business Days following the closing of such sale of the
assets subject to such Event of Loss,
shall be deemed to be cash only for purposes of satisfying this item 2 and
for no other purpose.
The Indenture also provides that with respect to any Event of Loss with
respect to Note Collateral with a fair market value (or replacement cost, if
greater) of $500,000 or less, the Net Loss Proceeds therefrom shall be released
to the Authority.
EXCESS CASH PURCHASE OFFER
The Indenture provides that within 120 days after each fiscal year end of
the Authority, beginning with the fiscal year that first ends on September 30,
1997, the Authority shall make an offer to all Holders of Senior Notes (the
"Excess Cash Purchase Offer") to purchase the maximum principal amount of Senior
Notes that is an integral multiple of $1,000 at an offer price equal to the
percentage of such principal amount set forth below, plus accrued and unpaid
interest to the date of payment (the "Excess Cash Offer Price") that may be
purchased with the sum of (i) 50% of the Excess Cash Flow in respect of the
fiscal year then ended (or if the amount of Excess Cash Flow for such period is
less than $2.0 million and is greater than zero, then the Excess Cash Flow shall
be deemed zero, or if the amount of Excess Cash Flow for such period is less
than zero, the amount of such negative amount), (ii) the amount of Deferred
Subordinated Interest for such fiscal year and (iii) accrued and unpaid interest
(including Cash Flow Participation Interest), if any, to the date fixed for the
closing of such Excess Cash Purchase Offer on such principal (collectively the
amounts under clauses (i) and (ii), the "Excess Cash Purchase Amount").
YEAR %
---- -----
1997 . . . . . . . . . . . . . . . . . . . . . . . . . . 113.5
1998 . . . . . . . . . . . . . . . . . . . . . . . . . . 112.0
1999 . . . . . . . . . . . . . . . . . . . . . . . . . . 110.0
2000 . . . . . . . . . . . . . . . . . . . . . . . . . . 105.0
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0
The Excess Cash Purchase Offer is required to remain open for 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law. Upon the expiration of such period,
the Authority will apply the Excess Cash Purchase Amount to the purchase of all
Senior
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Notes tendered at the Excess Cash Offer Price. If less than all the Senior Notes
tendering in such Excess Cash Purchase Offer are required to be purchased by the
Authority, the Authority will purchase Senior Notes pro rata from each tendering
Holder in accordance with the principal amount of indebtedness properly
tendered. To the extent that the aggregate principal amount of Senior Notes
properly tendered pursuant to any Excess Cash Purchase Offer is less than the
Excess Cash Purchase Amount with respect thereto, the Authority is required to
make an offer to purchase Subordinated Notes from the holders thereof. See
"Subordinated Note Purchase Agreement--Remaining Excess Cash Purchase Offer".
SELECTION AND NOTICE
If less than all of the Senior Notes are to be purchased in an Asset Sale
Offer, Event of Loss Offer or Excess Cash Purchase Offer or redeemed at any
time, selection of Senior Notes for purchase or redemption will be made by the
Trustee in compliance with the requirements of the principal national securities
exchange, if any, on which the Senior Notes are listed, or, if the Senior Notes
are not so listed, on a PRO RATA basis, by lot or by such other method as the
Trustee considers fair and appropriate (and in such manner as complies with
applicable legal requirements), PROVIDED, that no Senior Notes of $1,000 or less
shall be purchased or redeemed in part.
The Authority shall mail, by first class mail, postage prepaid, at least 30
but not more than 60 days before the purchase or redemption date, a notice of
purchase or redemption to each Holder of Senior Notes to be purchased or
redeemed at such Holder's registered address. If any Senior Note is to be
purchased or redeemed in part only, any notice of purchase or redemption that
relates to such Senior Note shall state the portion of the principal amount
thereof that has been or is to be purchased or redeemed.
A new Senior Note in principal amount equal to the unpurchased or
unredeemed portion of any Senior Note purchased or redeemed in part will be
issued in the name of the Holder thereof upon cancellation of the original
Senior Note. On and after the purchase or redemption date unless the Authority
defaults in payment of the purchase or redemption price, interest shall cease to
accrue on Senior Notes or portions thereof purchased or called for redemption.
CERTAIN COVENANTS
USE OF PROCEEDS
The Indenture provides that the Authority use the net proceeds from the
sale of the Series A Senior Notes and the net proceeds from the sale of the
Subordinated Notes (to the extent provided in the Indenture), only for Permitted
Proceed Uses. The Authority caused the net proceeds from the sale of the Series
A Senior Notes and the net proceeds from the sale of the Subordinated Notes to
be deposited into the Escrow Account and such net proceeds will be disbursed
only in accordance with the Disbursement and Escrow Agreement. See "Material
Agreements--Disbursement and Escrow Agreement."
CONSTRUCTION
The Indenture provides that the Authority cause construction of the Resort,
including the furnishing, fixturing and equipping thereof, to be prosecuted with
diligence and continuity in a good and worker-like manner substantially in
accordance with the Plans and within the Construction Budget.
GAMING LICENSES
The Indenture provides that the Authority use its best efforts to obtain
and retain in full force and effect at all times all Gaming Licenses necessary
for the operation of the Resort, PROVIDED, THAT, if in the course of the
exercise of its governmental or regulatory functions the Authority is required
to suspend or revoke any consent,
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permit or license or close or suspend any operation of any part of the Resort as
a result of any noncompliance with law, the Authority use its best efforts to
promptly and diligently correct such noncompliance or replace any personnel
causing such noncompliance so that the Resort will be opened and fully
Operating.
The Authority shall file with the Trustee and provide Holders of Senior
Notes, promptly after receipt by the Authority, any Notice of Violation, Order
of Temporary Closure, or Assessment of Civil Fines, from the NIGC pursuant to 25
C.F.R. Part 573 or 575 (or any successor provision) and any Notice of Non-
Compliance issued by, or cause of action commenced by, the State of Connecticut
under Section 13 of the Compact (or any successor provision).
RESTRICTED PAYMENTS
The Indenture provides that the Authority shall not directly or indirectly:
(i) purchase, redeem, defease, or otherwise acquire or retire for value
any Subordinated Indebtedness of the Authority or make any interest payment on
the Subordinated Notes;
(ii) make any payment or distribution to the Tribe (or any other agency,
instrumentality or political subunit thereof) or make any general distribution
to the members of the Tribe;
(iii) make any Management Fee payment or pay any other management or
similar fee to the Manager or its affiliates;
(iv) make any payment in respect of repayment or reimbursement of any
obligations under the Secured Completion Guarantee; or
(v) make any Restricted Investment
(all such payments and other actions set forth in clauses (i) through (v)
above being collectively referred to as "Restricted Payments"), unless, such
Restricted Payment is:
(a) a monthly payment of the Minimum Priority Payment to the Tribe in an
amount not to exceed $50,000 per month pursuant to the terms of the Gaming
Facility Management Agreement in effect on the Issuance Date;
(b) a monthly payment of a Management Fee to TCA in respect of the Net
Revenues of the prior month pursuant to the terms of the Management Agreement in
effect on the Issuance Date, which fee may not be greater than that provided by
Section 6.4 of such Management Agreement and any management fee in respect of
any commercial activity not covered by the Management Agreement (provided that
all such fees shall be after paying all Operating Expenses, the Minimum Priority
Payment, any required deposit in the Cash Maintenance Account and the Interest
and Excess Cash Flow Account and replacement reserve deposits);
(c) a monthly payment to the Tribe in respect of the Net Revenues for the
prior month, which payment shall not exceed the amount payable to the Tribe
pursuant to Section 6.4 of the Management Agreement in effect on the Issuance
Date and any Net Revenues from commercial activities not covered under the
Management Agreement (provided that all such payments shall be after
(i) payments of amounts required by the Management Agreement to be paid prior to
payments to the Tribe (other than the Minimum Priority Payment), and
(ii) without limiting the generality of clause (i), payments of Operating
Expenses, the Minimum Priority Payment, required deposits in the Cash
Maintenance Account, the Interest and Excess Cash Flow Account, and Replacement
Reserve Account, Management Fees and required payments on the Subordinated Notes
permitted by the Indenture;
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(d) payment of interest on the Subordinated Notes in accordance with the
terms of the Subordinated Notes as in effect on the issuance date of the
Indenture;
(e) redemption of the Subordinated Notes pursuant to the requirements of
any gaming law as provided for in the Note Purchase Agreement in effect on the
Issuance Date;
(f) an annual purchase, redemption, defeasance or retirement of any
Subordinated Indebtedness to be paid no earlier than the day after any required
payment to the Holders of the Senior Notes in respect of any Excess Cash
Purchase Offer has been made, in an amount equal to the Excess Cash Purchase
Amount offered to the Holders of the Senior Notes under the covenant entitled
"Excess Cash Purchase Offer" in respect of such year and not accepted by such
Holders at a price not to exceed 100% of the principal amount thereof and
accrued and unpaid interest;
(g) an annual payment to the Tribe to be paid no earlier than the day
after any required payment has been made to the Holders of the Senior Notes in
respect of any Excess Cash Flow Offer (or, if no such offer is required to be
made in respect of any year, no earlier than May 1 of the next succeeding year),
in an amount not to exceed the amount of the Excess Cash Purchase Amount for the
prior year, PROVIDED such amount was (i) first offered to the Holders of the
Senior Notes under the covenant entitled "Excess Cash Purchase Offer," and not
accepted by the Holders of the Senior Notes and, to the extent not accepted by
the Holders of the Senior Notes, was offered to the holders of the Subordinated
Notes under clause (f) of this covenant and not accepted by them, or (ii) not
required to be offered to the Holders of the Senior Notes under the covenant
entitled "Excess Cash Purchase Offer"; or
(h) Restricted Investments in Resort Support Entities after the Resort
becomes Operating, not to exceed $2.0 million in the aggregate outstanding at
any one time; provided that such amounts correspondingly reduce the
distributions under foregoing clauses (a), (b) or (c);
PROVIDED, that at the time of, and after giving effect to, any Restricted
Payment permitted under clauses (b), (c), (g) or (h), no Payment Default shall
have occurred and be continuing or would occur as a consequence thereof or any
Blockage Period be in effect for any Payment Blockage Notice; and PROVIDED,
FURTHER that at the time of and after giving effect to, any Restricted Payment
permitted under clause (d), (e) or (f), no Default or Event of Default shall
have occurred and be continuing or would occur as a consequence thereof.
For purposes of determining the amount of Restricted Investments
outstanding at any time, all Restricted Investments shall be valued at their
fair market value at the time made (in each case as determined in good faith by
the Authority's Management Board), and no adjustments shall be made for
subsequent changes in fair market value.
LIMITATIONS ON INCURRENCE OF INDEBTEDNESS
The Indenture provides that the Authority shall not, directly or
indirectly, create, incur, issue, assume, guaranty or otherwise become directly
or indirectly liable with respect to (collectively, "incur" and correlatively,
an "incurrence" of) any Indebtedness (including Acquired Indebtedness);
PROVIDED, HOWEVER, that the Authority may incur Indebtedness if:
(i) the Fixed Charge Coverage Ratio for the Authority's most recently
ended four full fiscal quarters for which internal financial statements are
available immediately preceding the date of such incurrence would have been at
least 2.50 to 1 if the date on which such Indebtedness is incurred is on or
prior to November 15, 1997, 2.75 to 1 if such date is after November 15, 1997
and on or prior to November 15, 1999 and 3.00 to 1 thereafter, in each case
determined on a pro forma basis (including a pro forma application of the net
proceeds
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therefrom), as if the additional Indebtedness had been incurred and application
of proceeds had occurred at the beginning of such four-quarter period;
(ii) such Indebtedness is expressly subordinated in right of payment to
the Senior Notes; and
(iii) such Indebtedness does not have a Weighted Average Life to Maturity
less than the Weighted Average Life to Maturity of the Senior Notes.
The foregoing limitations shall not apply to:
(a) the incurrence by the Authority of Indebtedness and letters of credit
for working capital purposes (with letters of credit being deemed to have a
principal amount equal to the maximum potential liability of the Authority under
the related reimbursement or other similar agreement) in an aggregate principal
amount not to exceed at any one time $25.0 million less any amount that is a
permanent reduction in principal for purposes of calculating Excess Cash Flow
which may be secured by a pari passu lien on the Note Collateral;
(b) the incurrence by the Authority of Indebtedness represented by the
Senior Notes and the Subordinated Notes or the incurrence of Subordinated
Indebtedness to evidence advances under the Secured Completion Guarantee
pursuant to the terms thereof;
(c) the incurrence by the Authority of Indebtedness represented by
Capital Lease Obligations or purchase money obligations; PROVIDED, that:
(A) the Authority may not incur Indebtedness with a principal amount
in excess of $40.0 million pursuant to this clause (c);
(B) the proceeds are used for the purpose of financing all or any
part of the purchase or lease of personal property or equipment used in the
business of the Authority;
(C) the term of any Indebtedness incurred pursuant to this clause
(c) at the time of incurrence is not less than four years; and
(D) the Weighted Average Life to Maturity of all Indebtedness
incurred pursuant to this clause (c) at the time of incurrence is not less
than two years;
(d) the incurrence by the Authority of Indebtedness the proceeds of which
are used to develop, design or construct a hotel or hotels with at least 200
rooms as part of the Resort; provided however, that the aggregate principal
amount of such Indebtedness (excluding any portion thereof that is original
issue discount) does not exceed $35.0 million; and provided that such
Indebtedness is not secured by any Note Collateral;
(e) the incurrence by the Authority of Indebtedness (the "Refinancing
Indebtedness") issued in exchange for, or the proceeds of which are used to
extend, refinance, renew, replace, or refund Indebtedness referred to in the
first paragraph of this covenant or in clauses (b), (c), (d) or (e), PROVIDED,
HOWEVER, that:
(A) the principal amount of such Refinancing Indebtedness shall not
exceed the principal amount of Indebtedness so extended, refinanced,
renewed, replaced, substituted or refunded (plus the amount of reasonable
expenses incurred and any premium paid in connection therewith or the
amount of any original issue discount),
(B) the Refinancing Indebtedness shall, if applicable, be subordinate
in right and priority of payment to the Senior Notes on terms at least as
favorable to the Holders of Senior Notes as those
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contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, substituted or refunded, and
(C) the Refinancing Indebtedness shall have a Weighted Average Life
to Maturity equal to or greater than the Weighted Average Life to Maturity
of the Indebtedness being extended, refinanced, renewed, replaced,
substituted or refunded; and
(f) Hedging Obligations that are incurred for the purpose of fixing or
hedging interest rate risk with respect to any floating rate Indebtedness that
is permitted by the terms of the Indenture to be outstanding.
The Indenture also provides that if this covenant authorizes the
incurrence of any Indebtedness that may be secured by a Pari Passu Lien on the
Note Collateral, the Trustee is authorized to enter into an intercreditor
agreement with the holder of such pari passu Indebtedness (the "Pari Passu
Debtholder") upon the request of the Authority that provides to the effect of at
least the following:
(a) the Lien of the Trustee on the Note Collateral shall be equal in
priority (regardless of the time or method of attachment or perfection) to the
Lien in favor of, or for the benefit of, such Pari Passu Debtholder for the sum
of (1) a principal amount of Indebtedness not to exceed the principal amount
permitted by the Indenture to be secured by a Pari Passu Lien and (2) any other
Obligations in respect of such principal amount of pari passu Indebtedness;
(b) such intercreditor agreement is solely for the purpose of
establishing the relative interests of the Pari Passu Debtholder and the Trustee
and the Holders of Senior Notes and is not for the benefit of any other party;
(c) the Trustee, so long as the principal amount of the outstanding
Senior Notes is greater than the principal amount outstanding on such pari passu
Indebtedness, shall have the sole right to take, enforce or exercise any right
or remedy, to take or exercise any action or election or to refrain from taking
or exercising any action with respect to any of the Note Collateral or the
Collateral Documents; and so long as the principal amount of the outstanding
Senior Notes is greater than the principal amount outstanding on such pari passu
Indebtedness, the Pari Passu Debtholder shall not, and shall not permit any of
its representatives to, take, enforce or exercise any right or remedy, to take
or exercise any action or election or to refrain from taking or exercising any
action with respect to any of the Note Collateral or any of its collateral or
security documents with respect to any of the Note Collateral; provided, that
the Pari Passu Debtholder may take or exercise any action or election or refrain
from taking or exercising any action with respect to any collateral that is not
Note Collateral or under any document that does not apply to the Note
Collateral; and provided, further, that the Trustee shall have no duty or
obligation to any Pari Passu Debtholder in taking or exercising any action or
election or in refraining from taking or exercising any action with respect to
any of the Note Collateral or the Collateral Documents;
(d) each of the Trustee and the Pari Passu Debtholder agree that any
money or funds realized with respect to the Note Collateral in connection with
the enforcement or exercise of any right or remedy with respect to any Note
Collateral following the acceleration of the Senior Notes shall be distributed
as follows: First, to the payment of all reasonable expenses in connection with
the collection, realization or administration of such funds or the exercise of
rights or remedies; Second, to each holder of Indebtedness secured by a Pari
Passu Lien on the Note Collateral, a proportion of such remaining money or funds
in the same proportion as the total outstanding obligations so secured held by
such holder bears to the total outstanding obligations so secured until all such
secured obligations have been paid in full; and Third, to the Authority or to
whosoever may be lawfully entitled to receive the same as a court of competent
jurisdiction may direct;
(e) the Trustee agrees that any amounts in the Cash Collateral Accounts
in the name of the Trustee shall be held for the ratable benefit of the Holders
of the Senior Notes and the Pari Passu Debtholders; and
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(f) each of the Trustee, the Holders of Senior Notes and the Pari Passu
Debtholders shall have the right to alter or amend their respective agreements
and documents with the Authority or the Tribe in accordance with their terms and
to release any Note Collateral from their respective Liens in accordance with
the terms of their respective agreements.
LIENS
The Indenture provides that the Authority will not directly or indirectly
create, incur, assume or suffer to exist any Lien, except Permitted Liens, on
any asset owned as of the Issuance Date or thereafter acquired by the Authority
or any income or profits therefrom, or assign or convey any right to receive
income therefrom.
LIQUIDATION OR DISSOLUTION
The Indenture provides that the Authority shall not sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its properties
or assets in one or more transactions. The Authority shall not consolidate or
merge with or into any other Person.
TRANSACTIONS WITH AFFILIATES
The Indenture provides that the Authority shall not sell, lease, transfer
or otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make any contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, the
Tribe, the Management Company or any Affiliate of the Tribe or of the Management
Company (each of the foregoing, an "Affiliate Transaction"), unless:
(i) such Affiliate Transaction is on terms that are no less favorable to
the Authority than those that would have been obtained in a comparable
transaction by the Authority with an unrelated Person and
(ii) the Authority delivers to the Trustee:
(a) with respect to any Affiliate Transaction involving aggregate
payments in excess of $2.0 million, a resolution adopted by a majority of
the disinterested members of the Management Board approving such Affiliate
Transaction and set forth in an Officers' Certificate certifying that such
Affiliate Transaction complies with clause (i) above and
(b) with respect to any Affiliate Transaction involving aggregate
payments in excess of $5.0 million, a written opinion as to the fairness of
such Affiliate Transaction to the Authority from a financial point of view
issued by an Independent Financial Advisor with assets in excess of $1.0
billion.
The foregoing provisions shall not apply to the following: (i) Restricted
Payments permitted by the covenant of the Indenture entitled "Restricted
Payments" (ii) the Development and Construction Agreement or the Management
Agreement in effect on the Issuance Date or (iii) any management agreement for
any commercial operations not covered by the Management Agreement that does not
provide for any compensation to the Manager greater than 40% of Net Revenues
from such operations and which provides that such fees are subordinated to the
payment of the Senior Notes to the same extent as the Management Agreement
provides.
LINE OF BUSINESS
The Indenture provides that for so long as any Senior Notes are
outstanding, the Authority shall not engage in any business or activity other
than the Principal Business.
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RESTRICTIONS ON LEASING AND DEDICATION OF LEASED PROPERTY
The Indenture provides that the Authority shall not lease, sublease, or
grant a license, concession or other agreement to occupy, manage or use any
Note Collateral owned or leased by the Authority (each, a "Lease
Transaction"), other than the following Lease Transactions; PROVIDED that:
(1) no Default or Event of Default has occurred or is continuing
immediately after entering into such Lease Transaction (or immediately after
any extension or renewal of such Lease Transaction made at the option of the
Authority) and
(2) no gaming or casino operations may be conducted on any Note
Collateral that is the subject of such Lease Transaction other than by the
Authority:
(a) the Authority may enter into a Lease Transaction with respect to
any space on or within the Resort with any Person, PROVIDED that:
(i) such Lease Transaction will not interfere with, impair or
detract from the operations of the Resort and will, in the opinion of
the Authority, enhance the value and operations of the Resort;
(ii) such Lease Transaction is at a fair market rent (in light
of other similar or comparable prevailing commercial transactions)
and contains such other terms such that the Lease Transaction, taken
as a whole, is commercially reasonable and fair to the Authority in
light of prevailing or comparable transactions in other casinos,
hotels, attractions or shopping venues; and
(iii) such Lease Transaction complies with all applicable
law, including obtaining any consent of the BIA, if required;
(b) the Authority and the Tribe may enter into the Lease;
(c) the Authority may enter into a management or operating agreement
with respect to any Note Collateral, including any hotel (other than any
Note Collateral or space used for any casino or gaming operations) with
any Person; PROVIDED that:
(i) the manager or operator has experience in managing or
operating similar operations;
(ii) such management or operating agreement is on commercially
reasonable and fair terms to the Authority; and
(iii) such management or operating agreement is terminable
without penalty to the Authority upon no more than 90 days written
notice; and
(d) the Authority may enter into the Management Agreement and any
hotel management agreement with the Manager; PROVIDED THAT the
compensation to the Manager does not exceed 40% of the Net Revenues of
such operation and that such fees are subordinate to the payment of the
Senior Notes to the same extent as provided in the Management Agreement.
The Trustee shall enter into a leasehold non-disturbance agreement with
respect to any Lease Transaction permitted under clause (a) above, in the
event that the Trustee, on behalf of the Holders of Senior Notes, forecloses
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or takes possession of any Note Collateral. Such an agreement shall provide,
among other things, that any action taken with respect to any Note
Collateral, including any sale of Note Collateral, will be subject to the
terms of the Lease Transaction and will permit the lessee to cure certain
defaults under such Lease Transaction. No Lease Transaction may provide that
the Authority may subordinate its leasehold or fee interest to any lessee or
any financing party of any lessee.
CASH MAINTENANCE ACCOUNT
The Indenture provides that the Authority shall deposit into the Cash
Maintenance Account on a monthly basis, 1/12 of the amounts set forth below
for each year indicated plus any amounts deferred from any prior month
pursuant to the next paragraph, no later than 25 days after the end of such
calendar month:
YEAR AMOUNT
---- ------
1997 $6,000,000
1998 $6,000,000
1999 $6,000,000
2000 $6,000,000
2001 $6,000,000
2002 thereafter, such amount necessary to
keep at least $36,000,000 in the Cash
Maintenance Account.
To the extent that any amount required to be deposited into the Cash
Maintenance Account in any month exceeds the Cash Available for Cash
Maintenance Account for the prior month, then the deposit of such excess
amount may be deferred until the next succeeding month or months in which the
Cash Available for Cash Maintenance Account is sufficient. Amounts in the
Cash Maintenance Account may be withdrawn by the Trustee and applied for any
purpose set forth under the caption "Authorization of Receipt of Funds by the
Trustee Under the Collateral Documents."
The Authority has established the Cash Maintenance Account with an
Eligible Institution, which initially is the Trustee. Any amounts deposited
into the Cash Maintenance Account may be invested only in Cash or Cash
Equivalents. Provided that no Event of Default has occurred and is
continuing, the Authority may, from time to time, direct the investment of
the funds in the Cash Maintenance Account in Cash Equivalents. The Cash
Maintenance Account and any investments constituting funds thereof shall be
in the name of the Trustee for the ratable benefit of the Holders of the
Senior Notes. The Authority has granted and shall maintain a perfected, first
priority security interest in favor of the Trustee for the ratable benefit of
the Holders and a perfected, second priority security interest for the
ratable benefit of the holders of the Subordinated Notes in all amounts in,
or investments constituting amounts in, the Cash Maintenance Account. If an
Event of Default has occurred and is continuing, notwithstanding the second
priority security interest in favor of the holders of the Subordinated Notes,
the Trustee shall have the authority to direct any investments in the Cash
Maintenance Account, liquidate or sell any investments therein, to take
possession of any cash or investments therein and to hold such amounts as
additional Note Collateral, apply any such cash or investments to the payment
of principal and interest on the Senior Notes, maintain, repair or otherwise
protect the Note Collateral or the other rights of the Holders of the Senior
Notes or to take any other appropriate action or remedy.
Upon repayment in full of all obligations under the Senior Notes and the
Indenture and the discharge of the Indenture, if any amount of principal or
interest on the Subordinated Notes is then outstanding and unpaid, the
perfected second priority security interest in favor of the holders of the
Subordinated Notes shall become (and the Authority and the Trustee shall take
all action necessary to cause it to become) a perfected, first priority
security interest for the ratable benefit of the holders of the Subordinated
Notes to secure the obligations of the Authority under the Subordinated
Notes. If the Subordinated Notes have been discharged and paid in full, then
such amounts in the Cash Maintenance Account shall be returned to the
Authority or to whomsoever a court of competent jurisdiction may so direct.
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INTEREST AND EXCESS CASH FLOW ACCOUNT
The Indenture provides that the Authority deposit into the Interest and
Excess Cash Flow Account on a monthly basis the amount of fixed interest
accrued during the prior month on the Senior Notes, 50% of the Excess Cash
Flow for the prior month on the Senior Notes and 100% of all Deferred
Subordinated Interest for the prior month and the amount of Cash Flow
Participation Interest accrued for the prior month. The Authority shall
establish the Interest and Excess Cash Flow Account with an Eligible
Institution. Any amounts deposited into the Interest and Excess Cash Flow
Account may be invested only in Cash or Cash Equivalents. Provided that no
Event of Default has occurred and is continuing, the Authority may, from time
to time, direct the investment of the funds in the Interest and Excess Cash
Flow Account in Cash Equivalents. The Interest and Excess Cash Flow Account
and any investments constituting funds thereof shall be in the name of the
Trustee for the ratable benefit of the Holders of the Senior Notes and may be
withdrawn by the Trustee or upon the request of the Authority to (i) pay
interest on the Senior Notes, (ii) make an Excess Cash Purchase Offer, and
(iii) with respect to amounts deposited in respect of Excess Cash Flow, make
payments or expenditures that reduce Excess Cash Flow. Funds in the Interest
and Excess Cash Flow Account which were to be withdrawn to make an Excess
Cash Purchase Offer but which are not accepted in such an offer may be used
by the Authority as provided under the caption "Restricted Payments." The
Authority shall grant and maintain a perfected, first priority security
interest in favor of the Trustee for the ratable benefit of the Holders in
all amounts in, or investments constituting amounts in, the Interest and
Excess Cash Flow Account. If an Event of Default has occurred and is
continuing, the Trustee shall have the authority to direct any investments in
the Interest and Excess Cash Flow Account, liquidate or sell any investments
therein, or to take possession of any cash or investments therein and to hold
such amounts as additional Note Collateral, apply any such cash or
investments to the payment of principal and interest on the Senior Notes,
maintain, repair or otherwise protect the Note Collateral or the other rights
of the Holders of the Senior Notes or to take any other appropriate action or
remedy.
Upon repayment in full of all obligations under the Senior Notes and the
Indenture and the discharge of the Indenture, if any amount of principal or
interest on the Subordinated Notes is then outstanding and unpaid, the
amounts in the Interest and Excess Cash Flow Account shall be disbursed to an
escrow agent or trustee selected by the holders of the Subordinated Notes,
and reasonably acceptable to the Authority, as collateral to secure the
obligations of the Authority under the Subordinated Notes. If the
Subordinated Notes have been discharged and paid in full, then such amounts
in the Interest and Excess Cash Flow Account shall be returned to the
Authority or to whomsoever a court of competent jurisdiction may so direct.
MAINTENANCE OF INSURANCE
The Indenture provides that, until the Senior Notes have been paid in
full, the Authority shall maintain insurance with responsible carriers
against such risks and in such amounts as is customarily carried by similar
businesses with such deductibles, retentions, self insured amounts and
coinsurance provisions as are customarily carried by similar businesses of
similar size, including, without limitation, property and casualty, and shall
have provided insurance certificates evidencing such insurance to the Trustee
prior to the Issuance Date and shall hereafter provide such certificates
prior to the anniversary or renewal date of each such policy, which
certificate shall expressly state the expiration date for each policy listed.
The Authority shall furnish or cause to be furnished certified copies of the
policies.
Customary insurance coverage shall be deemed to include the following:
(i) workers' compensation insurance to the extent required to comply
with all applicable state, territorial, or United States laws and
regulations, or the laws and regulations of any other applicable jurisdiction;
(ii) comprehensive general liability insurance with minimum limits of $10
million;
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(iii) umbrella or bumbershoot liability insurance providing excess
liability coverages over and above the foregoing underlying insurance
policies up to a minimum limit of $50 million; and
(iv) property insurance protecting the property against loss or damage
by fire, lightning, windstorm, tornado, water damage, vandalism, riot,
earthquake, civil commotion, malicious mischief, hurricane, and such other
risks and hazards as are from time to time covered by an "all-risk" policy or
a property policy covering "special" causes of loss (such insurance shall
provide coverage of not less than 100% of actual replacement value (as
determined at each policy renewal based on the F.W. Dodge Building Index or
some other recognized means) of any improvements and with a deductible no
greater than $500,000 (other than earthquake insurance, for which the
deductible may be up to 10% of such replacement value)).
All insurance required under the Indenture (except workers'
compensation) shall name the Authority and the Trustee as additional
insureds, with losses in excess of $1 million payable jointly to the
Authority and the Trustee (unless a Default or Event of Default has occurred
and is then continuing, in which case all losses are payable solely to the
Trustee), with no recourse against the Trustee for the payment of premiums,
deductibles, commissions or club calls, and for at least 30 days notice of
cancellation. All such losses in excess of $1 million shall be deposited in
the Event of Loss Account to be established pursuant to Section 10.12 of the
Indenture and shall be pledged to the Trustee until released in accordance
with the terms of the applicable Collateral Document. All such insurance
policies shall be issued by carriers having an A.M. Best & Company, Inc.
rating of "A" or higher and a financial size category of not less than XII,
or if such carrier is not rated by A.M. Best & Company, Inc., having the
financial stability and size deemed appropriate by an opinion from a
reputable insurance broker. The Authority shall deliver to the Trustee on the
Issuance Date and each anniversary thereafter a certificate of an insurance
agent stating that the insurance policies obtained by the Authority comply
with this covenant and the related applicable provisions of the Collateral
Documents.
LIMITATION ON STATUS AS INVESTMENT COMPANY
The Indenture prohibits the Authority from being required to register as
an "investment company" (as that term is defined in the Investment Company
Act of 1940, as amended), or from otherwise becoming subject to regulation
under the Investment Company Act of 1940.
COLLATERAL DOCUMENTS
The Indenture provides that the Authority will not amend, waive or
modify, or take or refrain from taking any action that has the effect of
amending, waiving or modifying, any provision of the Collateral Documents,
the Management Agreement or the Note Purchase Agreement to the extent that
such amendment, waiver, modification or action could have an adverse effect
on the rights of the Trustee or the Holders; PROVIDED, that:
(i) the Note Collateral may be released or modified as expressly provided
in the Indenture and in the Collateral Documents;
(ii) the Construction Budget may be amended as expressly provided in the
Disbursement and Escrow Agreement;
(iii) the Indenture, the Management Agreement and any of the Collateral
Documents may be otherwise amended, waived or modified as set forth under the
caption "Amendment, Supplement and Waiver" in the Indenture;
(iv) the Note Purchase Agreement may be amended in accordance with its
terms, provided such amendments do not:
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(a) cause or permit any principal, interest or premium on the
Subordinated Notes to be paid or to become due and payable at any time
earlier than such would become paid or due and payable without such
amendment;
(b) amend any terms of the subordination of the Subordinated Notes;
or
(c) amend any provision included therein expressly for the benefit
of the Senior Notes; and
(v) the Management Agreement may be amended with the consent of the
NIGC; PROVIDED THAT such amendment does not adversely affect the economic
rights of the Holders of the Senior Notes.
FURTHER ASSURANCES
The Indenture provides that the Authority will do, execute, acknowledge,
deliver, record, re-record, file, re-file, register and re-register, any and
all such further acts, deeds, conveyances, security agreements, mortgages,
assignments, estoppel certificates, financing statements and continuations
thereof, termination statements, notices of assignment, transfers,
certificates, assurances and other instruments as may be required from time
to time in order (i) to carry out more effectively the purposes of the
Collateral Documents, (ii) to subject to the Liens created by any of the
Collateral Documents any of the properties, rights or interests required to
be encumbered thereby, (iii) to perfect and maintain the enforceability
validity, effectiveness and priority of any of the Collateral Documents and
the Liens intended to be created thereby, and (iv) to better assure, convey,
grant, assign, transfer, preserve, protect and confirm to the Trustee any of
the rights granted or now or hereafter intended by the parties thereto to be
granted to the Trustee, the Holders of the Senior Notes or under any other
instrument executed in connection therewith or granted to the Authority under
the Collateral Documents or under any other instrument executed in connection
therewith.
REPORTS
Under the terms of the Indenture, notwithstanding that the Authority may
not be subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Authority will file with the SEC all information, documents
and reports specified in Section 13 or 15(d) of the Exchange Act.
Under the terms of the Indenture, the Authority has agreed to file with
the Trustee and provide Holders of Senior Notes, within 15 days after the
Authority files the same with the SEC, copies of its annual reports and of
the information, documents and other reports (or copies of such portions of
any of the foregoing as the SEC may by rule or regulation prescribe) which
the Authority would be required to file with the SEC pursuant to Section 13
or 15(d) of the Exchange Act. Notwithstanding that the Authority may not be
required to remain subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act or otherwise report on an annual and quarterly
basis on forms provided for such annual and quarterly reporting pursuant to
rules and regulations promulgated by the SEC, the Indenture requires the
Authority to continue to file with the SEC and provide the Trustee and
Holders of Senior Notes with, without cost to each such holder:
(i) within 90 days after the end of each fiscal year, annual reports on
Form 10-K (or any successor or comparable form) containing the information
required to be contained therein (or required in such successor or comparable
form);
(ii) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year, reports on Form 10-Q (or any successor or
comparable form); and
(iii) promptly from time to time after the occurrence of an event
required to be therein reported, such other reports on Form 8-K (or any
successor or comparable form) containing the information required to be
contained therein (or required in any successor or comparable form);
PROVIDED, HOWEVER, that the Authority shall not be so obligated to file such
reports with the SEC if the SEC does not permit such filings.
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The Authority has also agreed to include in such reports the anticipated
completion date of the Resort and, in the case of quarterly reports, the Cash
Flow Participation Interest paid, the Cash Flow Participation Interest
Accrual amount and Cash Flow with respect to the most recently ended fiscal
quarter of the Authority, and in the case of annual reports, the audited Cash
Flow Participation Interest paid, the Cash Flow Participation Interest
Accrual amount and audited Cash Flow for the most recently ended fiscal year
and for each of the Semi-annual Periods ending in such fiscal year. The
Authority will in all cases, without cost to each recipient, provide copies
of such information to the Holders of the Senior Notes and, if they are not
permitted to file such reports with the SEC, shall make available such
information to prospective purchasers and to securities analysts and
broker-dealers upon their request.
The Authority has also agreed to file with the Trustee and provide to
Holders of Senior Notes, within 15 days after it files them with the NIGC,
copies of all reports which the Authority is required to file with the NIGC
pursuant to 25 C.F.R. Part 514.
Not later than the date of filing any quarterly or annual report, the
Authority has agreed to deliver to the Trustee an Officers' Certificate
stating that each Restricted Payment made in the prior fiscal quarter was
permitted and setting forth the basis upon which the calculations required by
the covenant in the Indenture relating to "Restricted Payments" were
computed, which calculations may be based upon the Authority's latest
available financial statements.
SECURITY
The Series A Senior Notes are, and the Series B Senior Notes will be,
secured by a first lien on the Note Collateral (which also will secure the
Working Capital Financing) owned by the Authority, whether now owned or
hereafter acquired, subject to Permitted Liens, which include, without
limitation, all of the assets comprising the Resort (other than any assets
which if pledged, hypothecated or given as collateral security would require
the Trustee or a holder or beneficial holder of the Senior Notes to be
licensed, qualified or found suitable and other than certain assets to the
extent such assets are permitted to be financed by Indebtedness permitted to
be incurred pursuant to the covenant in the Indenture entitled "Limitation on
Incurrence of Indebtedness" and such Indebtedness is permitted to be secured
pursuant to the covenant entitled "Liens" pursuant to clause (ii), (iii),
(ix) or (xi) of the definition of "Permitted Liens").
So long as no Event of Default has occurred and be continuing, and
subject to certain terms and conditions in the Indenture and the Collateral
Documents, the Authority is entitled to use the Note Collateral in a manner
consistent with normal business practices. Upon the occurrence and during the
continuance of an Event of Default, the Trustee may sell the Note Collateral
or any part thereof in accordance with the terms of the Collateral Documents.
All funds distributed under the Collateral Documents and received by the
Trustee for the benefit of the Holders of the Senior Notes shall be
distributed by the Trustee in accordance with the provisions of the Indenture.
Under the terms of the Collateral Documents, the Trustee may determine
the circumstances and manner in which the Note Collateral shall be disposed
of, including, but not limited to, the determination of whether to release
all or any portion of the Note Collateral from the Liens created by the
Collateral Documents and whether to foreclose on the Note Collateral
following an Event of Default. Subject to certain additional provisions set
forth in the Indenture, the Note Collateral may be released from the Lien and
security interest created by the Indenture and the Collateral Documents at
any time or from time to time upon the request of the Authority pursuant to
an Officers' Certificate certifying that all terms for release and conditions
precedent under the Indenture and under any applicable Collateral Document
have been met and specifying
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(i) the identity of the Note Collateral to be released and
(ii) the provision of the Indenture which authorizes such release.
The Trustee shall release (at the sole cost and expense of the Authority):
(i) Note Collateral that is the subject of an Asset Sale or that is
sold, transferred or otherwise disposed of (other than any Asset Sale to the
Tribe or any Affiliate of the Tribe); PROVIDED, such transaction is or will
be in accordance with provisions of the Indenture or the applicable
Collateral Document, including, without limitation, the requirement that the
net proceeds from such transaction or Asset Sale are or will be applied in
accordance with the Indenture;
(ii) Note Collateral that is condemned, seized or taken by the power of
eminent domain or otherwise confiscated pursuant to an Event of Loss;
PROVIDED that the Net Loss Proceeds, if any, from such Event of Loss are or
will be applied in accordance with the covenant described above under "Event
of Loss";
(iii) Note Collateral which may be released with the consent of
Holders of Senior Notes pursuant to the amendment provisions of the Indenture;
(iv) all Note Collateral (except as provided in the discharge and
defeasance provisions of the Indenture and, in particular, the funds in the
trust fund described in such provisions and any funds in any accounts
established under the caption "Cash Funds Pledge") upon discharge or
defeasance of the Indenture in accordance with the discharge and defeasance
provisions thereof;
(v) all Note Collateral upon the payment in full of all obligations of
the Authority with respect to the Senior Notes;
(vi) any amounts in the Cash Maintenance Account, Interest and Excess
Cash Flow Account, Net Receipts Accounts or any other cash or Cash
Equivalents held as security for the Senior Notes may be released in
accordance with the Indenture, the Cash Collateral Accounts Pledge and
Security Agreement or any other relevant Collateral Document; and
(vii) Note Collateral under the Leasehold Mortgage may be released
in accordance with the terms thereof.
The Indenture provides that the Net Proceeds of all Asset Sales and the
Net Loss Proceeds of all Events of Loss of assets constituting Note
Collateral (other than Permitted Investments), as well as Excess Proceeds, be
promptly and without any commingling deposited with the Trustee in a Cash
Collateral Account subject to a lien in favor of the Trustee for the benefit
of the Holders of the Senior Notes unless and until applied as permitted
under the covenant described under "Asset Sales" or "Events of Loss," as the
case may be. The Trustee shall release to the Authority any Excess Proceeds
or Excess Loss Proceeds, as the case may be, that remain after making an
offer to purchase the Senior Notes in compliance with the covenant described
under "Asset Sales" or "Events of Loss," as the case may be. Amounts so paid
to the Trustee shall be invested or released in accordance with the
provisions of the Indenture.
DISBURSEMENT AND ESCROW AGREEMENT
Pursuant to a Disbursement and Escrow Agreement entered into between the
Authority, the Trustee, First Fidelity Bank, n/k/a First Union Bank of
Connecticut (the "Escrow Agent"), the Manager, Sun International and Chicago
Title Insurance Company (the "Disbursement Agent"), the Authority has placed
all of the net proceeds of the Offering together with the net proceeds from
the sale of the Subordinated Notes (to the extent provided below) into the
Escrow Account, to be held in escrow and invested in cash or Cash Equivalents
by the Escrow Agent until needed from time to time to fund the construction
of the Resort pursuant to the terms of the Disbursement and Escrow Agreement.
All such funds will be held in the Escrow Account until disbursed in
accordance with a detailed line-item Construction Budget. To the extent any
net proceeds of the sale of Subordinated Notes remain subsequent to the
acquisition of the land on which the Resort will be constructed, such net
proceeds will be placed in the Escrow Account. Subject to certain exceptions
set forth in the Disbursement and Escrow Agreement, the Disbursement Agent
will authorize the disbursement of funds from the Escrow Account only upon
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the satisfaction of the disbursement conditions set forth in the Disbursement
and Escrow Agreement. Such conditions generally include that the Manager, on
behalf of the Authority, deliver a certificate certifying as to, among other
things, the application of the funds to be disbursed, the conformity of
construction undertaken to date with the plans and specifications, the
expectation that the Resort will be Operating by October 31, 1996, lien
releases and title insurance policies assuming that the Resort continues to
be subject only to Permitted Liens, if applicable, the accuracy of the
Construction Budget, the sufficiency of remaining funds to complete the
Resort within each line item allocation, compliance with line item budget
allocations taking into account allocations for contingencies and the absence
of an Event of Default under the Indenture and the satisfaction of certain
other conditions to disbursement set forth in the Disbursement and Escrow
Agreement. Such other conditions generally include, among other things, the
delivery of certificates by the project manager and the project architects, a
review by an independent third party of prior disbursements, an absence of an
event of default under the Disbursement and Escrow Agreement and the delivery
of certain other documents to the Disbursement Agent. In addition, prior to
any disbursements from the Escrow Account subsequent to the initial
disbursement, certain additional disbursement conditions will be required to
be satisfied by the Authority. Such additional conditions generally include
that the Disbursement Agent receive a title commitment or other satisfactory
assurances with respect to the condition of title to the Resort and that the
Disbursement Agent receive certain information relating to the contractors
who have worked on the Resort and lien releases from such contractors, if
appropriate.
The Disbursement and Escrow Agreement also provides that the
Construction Budget may be amended from time to time under certain
circumstances set forth therein. The Construction Budget may be amended only
upon the satisfaction of certain conditions set forth in the Disbursement and
Escrow Agreement. Such conditions generally include that the Authority
deliver a certificate certifying as to the reasonable necessity of the
amendment; the availability of funding to pay costs represented by any line
item increase; the continued reasonableness of the Construction Budget;
conformity with plans and specifications; the expectation that the Resort
will be Operating by October 31, 1996; the sufficiency of remaining funds to
complete the Resort within the line item allocations, including allocations
for contingencies; the absence of an Event of Default under the Indenture;
and certain other conditions if the unallocated reserve is zero. In addition,
prior to any amendment to the Construction Budget, certain additional
conditions will be required to be satisfied by the Authority. Such additional
conditions generally include that the Authority submit the proposed amendment
in writing and identify with particularity the availability of funds to pay
for any increased line item and the delivery of certificates to the
Disbursement Agent by the project manager and the project architects. In
addition, the Disbursement and Escrow Agreement will provide that
construction line items may only be reduced upon evidence of the occurrence
of certain savings and that unallocated reserves may be reduced by allocation
to other line items.
In addition, the Disbursement and Escrow Agreement provides that if any
funds remain in the Escrow Account on the date the Resort is Operating (which
shall have occurred on or before October 31, 1996) and the Resort shall have
generated at least $10 million of Cash Flow in one fiscal quarter, the
Disbursement Agent shall, upon the direction of the Authority, direct the
Escrow Agent, subject to certain exceptions set forth in the Disbursement and
Escrow Agreement, to disburse all remaining funds, if any, in the Escrow
Account to any account or accounts specified by the Authority.
The Disbursement and Escrow Agreement also provides that an event of
default shall exist thereunder if any of the following shall occur:
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(i) an Event of Default occurs and is continuing under the Indenture;
(ii) the project manager or project architect is unable to deliver the
certificates required to be delivered pursuant to the Disbursement and Escrow
Agreement and such failure continues for a period of 30 days;
(iii) the independent third party reviewing prior disbursements
reports an exception or such independent third party fails to deliver a
report within a certain amount of days after each disbursement request and
such failure continues for a period of 30 days;
(iv) any representation, warranty, certification or statement by the
Authority, project manager or project architect in the Disbursement and
Escrow Agreement or any certificate required to be delivered therein is
untrue in any material respect on the date given or made and such
untruthfulness continues for a period of 30 days;
(v) if at any time the amount remaining in the Escrow Account plus
certain other funds is less than the amount required in the Construction
Budget to cause the Resort to be Operating on or before October 31, 1996 and
such deficiency continues for a period of 30 days; and
(vi) the Authority fails to deliver certain other documents required by
the Disbursement and Escrow Agreement and such failure continues for a period
of 30 days.
Subject to certain exceptions set forth in the Disbursement and Escrow
Agreement and an amount up to $10.0 million to preserve the collateral and to
fund minimum operating expenses, if an event of default exists thereunder,
the Disbursement Agent is not permitted to authorize the disbursement of
funds from the Escrow Account.
The Authority will be deemed to have expended all remaining proceeds
from the Equity Contribution prior to expending any proceeds from the
Offering. All funds in the Escrow Account are pledged as security for the
repayment of the Senior Notes and under certain circumstances the funds in
the Escrow Account will be used to offer to redeem a portion of the Senior
Notes.
EVENTS OF DEFAULT AND REMEDIES
The Indenture provides that each of the following constitutes an Event of
Default:
(i) the Authority defaults in payment when due and payable, upon
maturity, redemption or otherwise, of principal or premium, if any, on the
Senior Notes;
(ii) the Authority defaults for 30 days or more in the payment when due
of interest (including Cash Flow Participation Interest) and Liquidated
Damages, if any on the Senior Notes; PROVIDED, that payments of Cash Flow
Participation Interest that are permitted to be deferred as provided in the
Senior Notes shall not become due for this purpose until such payment is
required to be made pursuant to the terms of the Senior Notes;
(iii) failure by the Authority to comply, within the applicable cure
periods, if any, with the covenants and provisions described under the
captions "Offer to Repurchase Upon Change of Control," "Excess Cash Purchase
Offer," "Restricted Payments," "Asset Sales," "Events of Loss," "Use of
Proceeds," "Limitations on Incurrence of Indebtedness," "Governmental
Existence" or "Liquidation or Dissolution";
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(iv) the Authority or the Tribe (with respect to its obligations
hereunder) fails to observe or perform any other covenant, representation,
warranty or other agreement in the Indenture, the Notes or the Collateral
Documents for 60 days after written notice to the Authority by the Trustee or
to the Authority and the Trustee from Holders of at least 25% in principal
amount of the Senior Notes then outstanding;
(v) the Lease ceases to be in full force and effect or the Authority
defaults in the performance of any covenant set forth in the Lease, the
Leasehold Mortgage or any of the other Collateral Documents (which default is
not waived or cured);
(vi) a default occurs under any mortgage, indenture or instrument under
which there is issued or by which there is secured or evidenced any
Indebtedness for money borrowed by the Authority or the payment of which is
guaranteed by the Authority, whether such Indebtedness or guarantee now
exists, or is created after the Issuance Date, which default:
(a) is caused by a failure to pay when due principal of or premium,
if any, or interest on such Indebtedness prior to the expiration of the
grace period provided in such Indebtedness (a "Payment Cross-Default"); or
(b) results in the acceleration of such Indebtedness prior to its
express maturity or would constitute a default in the payment of such
issue of Indebtedness at final maturity of such issue and, in each case,
the principal amount of such Indebtedness, together with the principal
amount of any other such Indebtedness under which a Payment Cross-Default
then exists or with respect to which the maturity thereof has been so
accelerated or which has not been paid at maturity, aggregates $7.5
million or more;
(vii) the entry of final judgments against the Authority aggregating
in excess of $7.5 million, which final judgments remain unpaid, undischarged
and unstayed for a period of more than 60 days;
(viii) breach by the Authority of any representation or warranty set
forth in the Lease or the Leasehold Mortgage or any of the Collateral
Documents, or the repudiation by the Authority of its obligations under, or
any judgment or decree by a court or governmental agency of competent
jurisdiction declaring the unenforceability of, the Lease or any of the
Collateral Documents for any reason that would materially impair the benefits
to the Trustee or the Holders of the Senior Notes thereunder;
(ix) certain events of bankruptcy or insolvency with respect to the
Authority;
(x) revocation, termination, suspension or other cessation of
effectiveness of any Gaming License which results in the cessation or
suspension of gaming operations for a period of more than 90 consecutive days
at the Resort;
(xi) cessation of gaming operations for a period of more than 90
consecutive days at the Resort (other than as a result of a casualty loss)
after the Resort becomes Operating; or
(xii) cessation of gaming operations for a period of more than 180
consecutive days as a result of a casualty loss after the Resort becomes
Operating except if the Authority is diligently pursuing reconstruction and
opening of the Resort.
The Trustee shall mail to the Holders of the Senior Notes notice of any
Default or Event of Default known to the Trustee within 90 days after such
Default or Event of Default occurs.
If any Event of Default (other than by reason of bankruptcy or
insolvency) occurs and is continuing, the Trustee or the Holders of at least
25% in principal amount of the then outstanding Senior Notes may declare the
principal, premium, if any, interest (including all Cash Flow Participation
Interest accrued or deferred), Liquidated Damages and any other monetary
obligations on all the Senior Notes to be due and payable immediately.
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Notwithstanding the foregoing, in the case of an Event of Default arising
from certain events of bankruptcy or insolvency, with respect to the
Authority, all the principal, premium, if any, interest (including all Cash
Flow Participation Interest accrued or deferred) and other monetary
obligations on all outstanding Senior Notes will become due and payable
without further action or notice. Holders of the Senior Notes may not enforce
the Indenture or the Senior Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in principal amount of
the then outstanding Senior Notes may direct the Trustee in its exercise of
any trust or power, including the exercise of any remedy under the Collateral
Documents. The Trustee may withhold from Holders of Senior Notes notice of
any continuing Default or Event of Default (except a Default or Event
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. In addition, the Trustee shall have
no obligation to accelerate the Senior Notes if in the best judgment of the
Trustee acceleration is not in the best interest of the Holders of the Senior
Notes.
In the case of any Event of Default occurring on or after November 15,
1999 by reason of any willful action (or inaction) taken (or not taken) by or
on behalf of the Authority with the intention of avoiding payment of the
premium that the Authority would have had to pay if the Authority then had
elected to redeem the Senior Notes pursuant to the optional redemption
provisions of the Indenture, then, upon acceleration of the Senior Notes, an
equivalent premium shall also become and be immediately due and payable to
the extent permitted by law. If an Event of Default occurs prior to November
15, 1999, by reason of any willful action (or inaction) taken (or not taken)
by or on behalf of the Authority with the intention of avoiding the
prohibition on redemption of the Senior Notes prior to such date, then upon
acceleration of the Senior Notes, an additional premium shall also become and
be immediately due and payable in an amount, for each of the years beginning
on November 15th of the years set forth below, as set forth below (expressed
as a percentage of the principal amount that would otherwise be due but for
the provisions of this sentence):
YEAR %
---- -----
1995 . . . . . . . . . . . . . . . . . . . . . . . . . . 113.5
1996 . . . . . . . . . . . . . . . . . . . . . . . . . . 113.5
1997 . . . . . . . . . . . . . . . . . . . . . . . . . . 113.5
1998 . . . . . . . . . . . . . . . . . . . . . . . . . . 112.0
1999 . . . . . . . . . . . . . . . . . . . . . . . . . . 110.0
The Holders of a majority in aggregate principal amount of the Senior
Notes then outstanding by notice to the Trustee may on behalf of the Holders
of all of the Senior Notes waive any existing Default or Event of Default and
its consequences under the Indenture except a continuing Default or Event of
Default in the payment of interest (including Cash Flow Participation
Interest) on, premium, if any, or the principal of the Senior Notes.
Specific rights and remedies of the Trustee under the Collateral
Documents include the right of the Trustee or the appropriate Person under
federal or state law to sell the Note Collateral and to apply the net
proceeds to the Indebtedness evidenced by the Senior Notes in accordance with
the terms of the Indenture and the Collateral Documents. The Collateral
Documents will generally provide for the application of the internal laws of
the Tribe and/or the State of Connecticut, while the Indenture and the Senior
Notes will provide, with certain exceptions, for the application of the
internal laws of the State of New York. There is no certainty regarding
whether New York or Mohegan tribal law would be applied by any court with
respect to the enforcement of remedies under the Senior Notes, the Indenture,
or the Collateral Documents.
The right of the Trustee to realize upon and sell the Note Collateral is
likely to be significantly impaired by applicable bankruptcy and insolvency
laws if a proceeding under such laws were commenced in respect of the
Authority or any Guarantor. Such laws may impose limitations or prohibitions
on the exercise of rights and remedies under the Collateral Documents for a
substantial or indefinite period of time.
The Indenture provides that, following an Event of Default that permits
the taking of possession of the Resort by the Trustee on the appointment of a
receiver pursuant to the Leasehold Mortgage (or after such action is taken),
the Trustee shall be authorized to recommend that the Authority retain one or
more experienced operators of casinos to manage the casino located at the
Resort on behalf of the Holders of the Senior Notes; PROVIDED, HOWEVER, THAT
any such operator shall have all necessary legal qualifications (including
without limitation all Gaming Licenses and approvals of the NIGC and the
Tribe to manage the casino located at the Resort).
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Due to restrictions upon gaming activities on tribal lands, however, the
Trustee may incur delays or possibly frustration in its effort to operate or
to sell all or a portion of the Note Collateral. Operators of gaming
facilities on tribal lands are required to be licensed and are required by
applicable Gaming Regulatory Authorities to file applications, be
investigated and be found suitable. Only the Tribe may operate gaming
activities. Such requirements for governmental approval may delay or preclude
a sale of the Note Collateral to a potential buyer at a foreclosure sale or
sales. This may effectively limit the number of potential bidders and may
delay such sales, either of which could adversely affect the sale price of
the Note Collateral. Moreover, the gaming industry could become subject to
different or additional regulations during the term of the Senior Notes,
which could further adversely affect the practical rights and remedies that
the Trustee would have upon the occurrence of an Event of Default.
The Authority is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Authority is required,
within five Business Days, upon becoming aware of any Default or Event of
Default or any default under any document, instrument or agreement
representing Indebtedness of the Authority, to deliver to the Trustee a
statement specifying such Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND MEMBERS
Neither the Tribe nor any officer or office holder, employee, agent,
representative, or member of the Authority or the Tribe, as such, shall have
any liability for any obligations of the Authority under the Senior Notes,
the Indenture or the Collateral Documents, as applicable, or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Senior Note waives and releases all such
liability, which waivers and releases are part of the consideration for
issuance of the Senior Notes. To the extent such waivers and releases purport
to waive liabilities under the federal securities laws, however, they are
void under the Securities Act.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The obligations of the Authority under the Indenture (other than certain
obligations) will terminate and the Note Collateral will be released upon
payment in full of all of the Senior Notes. The Authority may, at its option
and at any time, elect to have all of its obligations discharged with respect
to the outstanding Senior Notes ("Legal Defeasance") and cure all then
existing Events of Default except for:
(i) the rights of Holders of outstanding Senior Notes to receive
payments in respect of the principal of, premium, if any, and interest
(including Cash Flow Participation Interest, if any) on such Senior Notes
when such payments are due;
(ii) the Authority's obligations with respect to the Senior Notes
concerning issuing temporary Senior Notes, registration of Senior Notes,
mutilated, destroyed, lost or stolen Senior Notes and the maintenance of an
office or agency for payment and money for security payments held in trust;
(iii) the rights, powers, trusts, duties and immunities of the
Trustee, and the Authority's obligations in connection therewith; and
(iv) the Legal and Covenant Defeasance provisions of the Indenture.
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In addition, the Authority may, at its option and at any time, elect to
have the obligations of the Authority released with respect to certain
covenants that are described in the Indenture ("Covenant Defeasance") and
thereafter any omission to comply with such obligations shall not constitute
a Default or Event of Default with respect to the Senior Notes. In the event
Covenant Defeasance occurs, certain events (not including non-payment,
bankruptcy, receivership, rehabilitation and insolvency events) described
under "Events of Default" will no longer constitute an Event of Default with
respect to the Senior Notes. In addition, the Note Collateral will be
released upon Covenant Defeasance or Legal Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(i) the Authority must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders of the Senior Notes, 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 as evidenced by a certificate delivered to the
Trustee, to pay the principal of, premium, if any, and interest (including
the maximum amount payable as Cash Flow Participation Interest, if any) due
on the outstanding Senior Notes on the stated maturity date or on the
applicable redemption date, as the case may be, of such principal, premium,
if any, or interest (including Cash Flow Participation Interest, if any) on
the outstanding Senior Notes on the stated maturity or on the applicable
redemption date, as the case may be and the Authority must specify whether
the Senior Notes are being defeased to maturity or to a particular redemption
date;
(ii) in the case of Legal Defeasance, the Authority shall have delivered
to the Trustee an opinion of counsel in the United States reasonably
acceptable to the Trustee confirming that, subject to customary assumptions
and exclusions:
(a) the Authority has received from, or there has been published by,
the United States Internal Revenue Service a ruling; or
(b) since the Issuance Date of the Indenture, there has been a
change in the applicable U.S. federal income tax law, in either case to
the effect that, and based thereon such opinion of counsel in the United
States shall confirm that, subject to customary assumptions and
exclusions, the Holders of the outstanding Senior Notes will not
recognize income, gain or loss for U.S. federal income tax purposes as a
result of such Legal Defeasance and will be subject to U.S. federal
income tax on the same amounts, in the same manner and at the same times
as would have been the case if such Legal Defeasance had not occurred;
(iii) in the case of Covenant Defeasance, the Authority shall have
delivered to the Trustee an opinion of counsel in the United States
reasonably acceptable to the Trustee confirming that, subject to customary
assumptions and exclusions, the Holders of the outstanding Senior Notes will
not recognize income, gain or loss for U.S. federal income tax purposes as a
result of such Covenant Defeasance and will be subject to U.S. federal income
tax on the same amounts, in the same manner and at the same times as would
have been the case if such Covenant Defeasance had not occurred;
(iv) no Default or Event of Default shall have occurred and be
continuing with respect to certain Events of Default on the date of such
deposit;
(v) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under any material agreement
or instrument (other than the Indenture) to which the Authority is a party or
by which the Authority is bound;
(vi) the Authority shall have delivered to the Trustee an opinion of
counsel to the effect that, after the 91st day following the deposit and as
of the date of such opinion and subject to customary assumptions and
exclusions following the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally under any applicable United
States, law;
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(vii) the Authority shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Authority with the
intent of defeating, hindering, delaying or defrauding any creditors of the
Authority or others; and
(viii) the Authority shall have delivered to the Trustee an Officers'
Certificate and an opinion of counsel in the United States (which opinion of
counsel may be subject to customary assumptions and exclusions) each stating
that all conditions precedent provided for or relating to the Legal
Defeasance or the Covenant Defeasance, have been complied with.
AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided in the next three succeeding paragraphs, the
Indenture, the Senior Notes or the Collateral Documents may be amended or
supplemented with the consent of the Holders of at least a majority in
principal amount of the Senior Notes then outstanding (including consents
obtained in connection with a tender offer or exchange offer for Senior
Notes), provided that any required governmental approval is obtained,
including that of the NIGC and subject to certain provisions in the
Indenture, any existing Default or Event of Default (other than a Default or
Event of Default in the payment of the principal of, premium, if any, or
interest (including Cash Flow Participation Interest, if any) on the Senior
Notes, except a payment default resulting from an acceleration that has been
rescinded) or compliance with any provision of the Indenture or the Senior
Notes may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Senior Notes (including consents
obtained in connection with a tender offer or exchange offer for Senior
Notes).
Without the consent of each holder of Senior Notes affected, an
amendment or waiver may not (with respect to any Senior Notes held by a
non-consenting holder of Senior Notes):
(i) reduce the principal amount of Senior Notes whose Holders must
consent to an amendment, supplement or waiver;
(ii) reduce the principal of or change the fixed maturity of any
Senior Note or alter or waive the provisions with respect to the redemption of
the Senior Notes (provided, however, that the term "redemption" does not apply
to any provision with respect to any Repurchase Offer);
(iii) reduce the rate of or change the time for payment of interest,
(including Cash Flow Participation Interest) and Liquidated Damages, on any
Senior Note;
(iv) waive a Default or Event of Default in the payment of principal
of, premium, if any, or interest (including Cash Flow Participation Interest and
Liquidated Damages, if any) on the Senior Notes (except a rescission of
acceleration of the Senior Notes by the Holders of at least a majority in
aggregate principal amount of the then outstanding Senior Notes and a waiver
of the payment default that resulted from such acceleration);
(v) make any Senior Note payable in money other than that stated in
the Senior Notes;
(vi) make any change in the provisions of the Indenture relating to
waivers of past monetary Defaults or the rights of Holders of Senior Notes to
receive payments of principal of or premium, if any, or interest (including
Cash Flow Participation Interest), if any on the Senior Notes;
(vii) release all or substantially all of the Note Collateral from
the Lien of the Indenture or the Collateral Documents; or
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(viii) make any change in the provisions with respect to "Waiver of
Past Defaults" or "Rights of Holders of Senior Notes to Receive Payment" or
the foregoing amendment and waiver provisions.
Without the consent of Holders of at least 662.3% of the outstanding
principal amount of the Senior Notes, the Authority may not amend, alter or
waive the provisions with respect to "Offer to Repurchase Upon Change of
Control."
Notwithstanding the foregoing, without the consent of any Holder of
Senior Notes, and provided that any required governmental approval, including
that of the NIGC, is obtained, the Authority and the Trustee together may
amend or supplement the Indenture, the Senior Notes, the Management Agreement
or the Collateral Documents to:
(i) cure any ambiguity, defect or inconsistency;
(ii) provide for uncertificated Senior Notes in addition to or in
place of certificated Senior Notes;
(iii) comply with the covenants of the Authority or the Tribe in the
Indenture;
(iv) to make any change that would provide any additional rights or
benefits to the Holders of the Senior Notes, or that does not adversely
affect the legal rights under the Indenture of any such holder;
(v) comply with requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act; or
(vi) enter into additional or supplemental Collateral Documents.
CONCERNING THE TRUSTEE
The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of the Authority, to obtain payment of claims in
certain cases, or to realize on certain leased property received in respect
of any such claim as security or otherwise. The Trustee will be permitted to
engage in other transactions; however, if it acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign.
The Holders of a majority in principal amount of the then outstanding
Senior Notes have the right to direct the time, method and place of
conducting any proceeding for exercising any remedy, available to the
Trustee, subject to certain exceptions. The Indenture provides that in case
an Event of Default shall occur (which shall not be cured), the Trustee will
be required, in the exercise of its power, to use the degree of care of a
prudent person in the conduct of his own affairs. Subject to such provisions,
the Trustee is under no obligation to exercise any of its rights or powers
under the Indenture at the request of any holder of Senior Notes, unless such
holder shall have offered to the Trustee security and indemnity satisfactory
to it against any loss, liability or expense.
GOVERNING LAW
The Indenture and the Senior Notes are subject to certain exceptions,
governed by and construed in accordance with the internal laws of the State
of New York, without regard to the choice of law rules thereof. The
Collateral Documents are governed, subject to certain exceptions, by the laws
of the Tribe.
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ADDITIONAL INFORMATION
Any Holder of the Senior Notes may obtain a copy of the Indenture and
the Collateral Documents without charge by writing to the Authority at 67
Sandy Desert Road, Uncasville, Connecticut 06382, Attention: Roland Harris
and Carlisle Fowler, Business Board Members, and Chief Ralph Sturges.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture.
Reference is made to the Indenture for a full disclosure of all such terms,
as well as any other capitalized terms used herein for which no definition is
provided.
"ACQUIRED INDEBTEDNESS" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person
merged with or into such specified Person, including Indebtedness incurred in
connection with, or in contemplation of, such other Person merging with or
into such specified Person and (ii) Indebtedness encumbering any asset
acquired by such specified Person.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or
otherwise; PROVIDED, HOWEVER, that for purposes of the covenant entitled
"Transactions with Affiliates," beneficial ownership of 10% or more of the
voting securities of a Person shall be deemed to be control.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"ASSET SALE" means the sale, conveyance, transfer or other disposition
(whether in a single transaction or a series of related transactions) of
property or assets (including by way of a sale and leaseback) of the
Authority (each referred to in this definition as a "disposition") other than
(i) a disposition of inventory or other goods held for sale or disposition in
the ordinary course of business, (ii) any disposition that is a Restricted
Payment permitted under the covenant entitled "Restricted Payments" or that
is a dividend or distribution permitted under the covenant entitled
"Restricted Payments" or any Investment that is not prohibited thereunder or
any disposition of cash or Cash Equivalents, (iii) any single disposition, or
related series of dispositions, of assets with an aggregate fair market value
of less than $500,000, (iv) any Event of Loss and (v) any lease or sublease
permitted as described under the covenant entitled "Restrictions on Leasing
and Dedication of Leased Property." It is acknowledged that the Authority is
prohibited from making an Asset Sale of Key Project Assets.
"AUTHORITY" means the Mohegan Tribal Gaming Authority together with any
subdivision, agency, subunit or Subsidiary thereof and any successor and
assignee thereto.
"BOARD OF DIRECTORS" means, as the context requires, the Management
Board of the Authority or any authorized committee of the Management Board of
the Authority.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL LEASE OBLIGATION" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized and reflected as a liability
on the balance sheet in accordance with GAAP.
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"CAPITAL STOCK" means with respect to any Person, any and all shares,
interests, participations, rights or other equivalents (however designated)
in the profits or losses of such Person, including, (i) if such Person is a
partnership, partnership interests (whether general or limited) and any other
interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, such
partnership or (ii) with respect to the Authority, any interest,
participation in the profits and losses of the Authority or its business
other than fees paid to the Manager under the Management Agreement, amounts
paid to the state of Connecticut under the Compact or the memorandum of
understanding thereunder, Cash Flow Participation Interest on the Senior
Notes, or any fees for goods and services provided to the Authority in the
ordinary course of business and which is measured by revenues or income.
"CASH AVAILABLE FOR CASH MAINTENANCE ACCOUNT" means, with respect to any
period, the Cash Flow of the Authority for such period less (i) Interest
Expense of the Authority for such period (ii) principal payments on
Indebtedness of the Authority made in respect of such period (other than
pursuant to an Excess Cash Purchase Offer) and (iii) Minimum Priority
Payments to the Tribe for such period; Cash Available for Cash Maintenance
Account shall be calculated without any deduction for deposits into the Cash
Maintenance Account or deposits in respect of Excess Cash Flow into the
Interest and Excess Cash Flow Account.
"CASH COLLATERAL ACCOUNTS PLEDGE AND SECURITY AGREEMENT" means the Cash
Collateral Accounts Pledge Agreement among the Trustee, the Authority and the
Manager dated as of the Issuance Date.
"CASH EQUIVALENTS" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than six months from the date of acquisition, (iii) certificates of
deposit and eurodollar time deposits with maturities of six months or less
from the date of acquisition, bankers' acceptances with maturities not
exceeding six months and overnight bank deposits, in each case with any
commercial bank having capital and surplus in excess of $300 million, (iv)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (ii) and (iii) entered into with
any financial institution meeting the qualifications specified in clause
(iii) above, (v) commercial paper rated A-1 or the equivalent thereof by
Moody's Investors Service, Inc. or Standard & Poor's Ratings Group and in
each case maturing within one year after the date of acquisition and (vi)
investment funds investing solely in securities of the types described in
clauses (ii) - (v) above.
"CASH FLOW" means, with respect to any Person for any period, the Net
Revenue of such Person for such period, plus (a) an amount equal to any
extraordinary loss plus any net loss realized in connection with an Asset
Sale (to the extent such losses were deducted in computing such Net Revenue),
plus (b) provision for taxes based on income or profits of such Person for
such period, to the extent such provision for taxes was used in computing
such Net Revenue, plus (c) Interest Expense of such Person for such period,
plus (d) Depreciation and Amortization Expense of such Person for such period
to the extent such depreciation and amortization were deducted in computing
such Net Revenue, in each case, as determined in accordance with GAAP.
"CASH FLOW PARTICIPATION INTEREST" means as of any payment date, Cash
Flow Participation Interest on the Senior Notes accrued through the Accrual
Period last ended (including any Accrual Period that ends on such payment
date) and any Cash Flow Participation Interest previously accrued and the
payment of which has been permitted to be deferred.
"CASH MAINTENANCE ACCOUNT" means the cash collateral account required to
be established by the covenant entitled "Mandatory Cash Maintenance Account"
and the provision entitled "Cash Funds Pledge."
"CHANGE OF CONTROL" means the occurrence of any of the following: (i)
the Authority ceases to be a wholly-owned unit, instrumentality or
subdivision of the government of the Tribe, (ii) the Authority ceases to have
the exclusive legal right to operate gaming operations of the Tribe, (iii)
the Authority fails to retain in full force and effect at all times all
material governmental consents, permits or legal rights necessary for the
operation of the Resort and such failure continues for a period of 90
consecutive days, (iv) TCA or any other entity in which Sun International
owns, directly or indirectly, at least 50% of the Capital Stock ceases to be
the manager of the Resort or fails to hold any material governmental consent
or permit required to manage the Resort and such failure continues for a
period of 90 consecutive days or (v) Sun International fails to own, directly
or indirectly, at least 50% of the Capital Stock of the Manager.
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"COLLATERAL AGENT" means any person appointed by the Trustee as a
collateral agent hereunder.
"COLLATERAL DOCUMENTS" means, collectively, the Leasehold Mortgage, Cash
Collateral Accounts Pledge and Security Agreement, Disbursement and Escrow
Agreement, Secured Completion Guarantee or any other agreements, instruments,
financing statements or other documents that evidence, set forth or limit the
Lien of the Trustee in the Note Collateral.
"COMMENCEMENT DATE" means the earlier of (i) October 31, 1996 and (ii)
the first day that the Resort becomes Operating.
"COMPACT" means the tribal-state Compact entered into between the Tribe
and the State of Connecticut pursuant to the Indian Gaming Regulatory Act of
1988, PL 100-497, 25 U.S.C. 2701 ET SEQ. as the same may, from time to time,
be amended, or such other Compact as may be substituted therefor.
"COMPLETED" means, with respect to the Resort, the first time that (i)
all Liens (other than Permitted Liens or Liens which relate to Disputed
Amounts (as defined in the Secured Completion Guarantee) guaranteed by the
Guarantor (as defined in the Secured Completion Guarantee) under Section 2.5
of the Secured Completion Guarantee) relating to the construction of the
Resort have been paid, (ii) the general contractor and the project architect
for the Resort, or an independent construction expert appointed by the
Guarantor and acceptable to the Trustee, shall have delivered a certificate
to the Trustee certifying that the Resort is complete in all material
respects in accordance with the Plans therefor and in compliance with all
applicable laws, ordinances and regulations (including gaming laws,
ordinances and the Compact requirements) with respect to the physical
structure, health and safety, environmental and hazardous materials, fire,
equipment, security and physical operating (gaming and other) requirements of
the Resort, and (iii) the Resort is in a condition (including installation of
furnishings, fixtures and equipment sufficient for the Minimum Facilities and
provision of adequate initial operating capital including all operating
supplies, sufficient coin for the slot machines, sufficient operating cash
for the other games and trained employees (or sufficient funds to hire and
train such employees) so that the Resort is fit to receive guests in the
ordinary course of business.
"CONSTRUCTION BUDGET" means itemized schedules setting forth on a line
item basis all of the costs (including financing costs) estimated to be
incurred in connection with the financing, design, development, construction,
equipping and opening of the Resort, as such schedules are delivered to the
Disbursement and Escrow Agents as of the Issuance Date and as amended from
time to time in accordance with the Disbursement and Escrow Agreement.
"DEFAULT" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"DEFERRED SUBORDINATED INTEREST" means any interest on Subordinated
Indebtedness that is not currently payable in cash or that is not permitted
to be paid in cash under the governing agreements, including any amortization
of original issue discount.
"DEPRECIATION AND AMORTIZATION EXPENSE" means with respect to any Person
for any period, the total amount of depreciation and amortization expense and
other noncash charges (excluding any noncash item that represents an accrual,
reserve or amortization of a cash expenditure for a future period and
excluding non-cash Interest Expense) of such Person for such period as
defined in accordance with GAAP.
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"DEVELOPMENT AND CONSTRUCTION AGREEMENT" means the Amended and Restated
Gaming Facility Development and Construction Agreement between the Tribe and
the Manager, substantially in the form delivered to the Trustee on the
Issuance Date.
"DISBURSEMENT AND ESCROW AGREEMENT" means the Disbursement and Escrow
Agreement among the Authority, the Trustee, First Fidelity Bank (n/k/a First
Union Bank of Connecticut), as Escrow Agent, the Manager, Sun International
and Chicago Title Insurance Company, as Disbursement Agent, substantially in
the form delivered to the Trustee on the Issuance Date. See "Material
Agreements--Disbursement and Escrow Agreement."
"DOLLARS" and "$" mean lawful money of the United States of America.
"ELIGIBLE INSTITUTION" means (i) the Trustee, (ii) an Affiliate of the
Trustee or (iii) a commercial banking institution that is federally chartered
or organized under the laws of the State of Connecticut, is not Affiliated
with or chartered by the Tribe, has combined capital and surplus in excess of
$500 million, conducts banking operations in the State of Connecticut and
whose debt is rated "A" (or higher) according to Standard & Poor's Ratings
Group or Moody's Investors Service, Inc.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that
is convertible into, or exchangeable for, Capital Stock).
"ESCROW ACCOUNT" shall have the meaning set forth in the Disbursement
and Escrow Agreement.
"ESCROW AGENT" shall have the meaning set forth in the Disbursement and
Escrow Agreement.
"EVENT OF LOSS" means, with respect to any property or asset (tangible
or intangible, real or personal), any of the following: (i) any loss,
destruction or damage of such property or asset; (ii) any institution of any
proceedings for the condemnation or seizure of such property or asset or for
the exercise of any right of eminent domain; (iii) any actual condemnation,
seizure or taking by exercise of the power of eminent domain or otherwise of
such property or asset, or confiscation of such property or asset or the
requisition of the use of such property or asset; or (iv) any settlement in
lieu of clause (ii) or (iii) above.
"EXCESS CASH FLOW" means, with respect to any period, an amount equal to
the Cash Flow of the Authority for such period, less (i) all Management Fees
accrued for such period (whether or not distributed), (ii) principal payments
on Indebtedness of the Authority during such period (other than principal
payments (a) pursuant to an Excess Cash Purchase Offer, (b) which are funded
from the proceeds of Indebtedness permitted to be incurred under the
Indenture or (c) on the Working Capital Financing that do not permanently
reduce indebtedness under the Working Capital Financing), (iii) the
Authority's share of deposits into the Replacement Reserve Account (but not
more than $1.8 million per fiscal year) commencing with the first full fiscal
year after the commencement of operations of the Resort, (iv) all other
capital expenditures not funded from the Replacement Reserve Account (but not
more than $5.0 million per fiscal year), (v) any amounts set aside in the
Cash Maintenance Account for such fiscal period, (vi) Interest Expense of the
Authority for such period and (vii) taxes, if any, payable to the federal
government or the State of Connecticut.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
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"EXCHANGE OFFER" means the registration by the Authority under the
Securities Act of the Series B Senior Notes pursuant to a registration
statement pursuant to which the Authority is obligated to offer the holders
of all outstanding Transfer Restricted Securities the opportunity to exchange
all such outstanding Transfer Restricted Securities held by such holders for
Series B Senior Notes in an aggregate principal amount equal to the aggregate
principal amount of the Transfer Restricted Securities tendered in such
exchange offer by such holders.
"FIXED CHARGE COVERAGE RATIO" means, with respect to any Person for any
period, the ratio of the Cash Flow of such Person for such period to the
Fixed Charges of such Person for such period. In the event that the Authority
incurs, assumes, guarantees or redeems any Indebtedness (other than revolving
credit borrowings) subsequent to the commencement of the period for which the
Fixed Charge Coverage Ratio is being calculated but prior to the event for
which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, guarantee or
redemption of Indebtedness as if the same had occurred at the beginning of
the applicable four-quarter period. For purposes of making the computation
referred to above, acquisitions, dispositions and discontinued operations (as
determined in accordance with GAAP) that have been made by the Authority,
including all mergers, consolidations and dispositions, during the
four-quarter reference period or subsequent to such reference period and on
or prior to the Calculation Date shall be calculated on a pro forma basis
assuming that all such acquisitions, dispositions, discontinued operations,
mergers, consolidations (and the reduction of any associated fixed charge
obligations resulting therefrom) had occurred on the first day of the
four-quarter reference period.
"FIXED CHARGES" means, with respect to any Person for any period, the
sum of (i) the Interest Expense of such Person for such period and (ii) the
Interest Expense of such Person that was capitalized during such period, and
(iii) to the extent not included above, any Interest Expense on Indebtedness
of another Person that is Guaranteed by the referent Person or secured by a
lien on assets of the referent Person (whether or not such Guarantee or lien
is called upon).
"FIXED INTEREST" means, interest at the rate of 13 1/2% per annum of the
principal amount of the Senior Notes.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant
segment of the accounting profession.
"GAMING" means any and all activities defined as Class II or Class III
Gaming under IGRA or authorized under the Compact.
"GAMING DISPUTES COURT" means the Gaming Disputes Court of the Tribe, as
established pursuant to Article XIII, Section 2 of the Tribe's Constitution.
"GAMING ENTERPRISE" means any commercial enterprise of the Authority,
including, without limitation, any hotel or hotel resort property, any gaming
operation, any restaurant or other entertainment or other commercial
enterprise.
"GAMING FACILITY MANAGEMENT AGREEMENT" means that certain Amended and
Restated Gaming Facility Management Agreement between the Tribe and the
Manager dated August 30, 1995 which shall be assigned by the Tribe to the
Authority on or before the Issuance Date. See "Material
Agreements--Management Agreement."
"GAMING LICENSE" means every license, franchise or other authorization
required to own, lease, operate or otherwise conduct gaming activities of the
Tribe or the Authority including without limitation, all such licenses
granted under the Tribal Gaming Ordinance, and the regulations promulgated
pursuant thereto, and other applicable federal, state, foreign or local laws.
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"GAMING REGULATORY AUTHORITY" means any agency, authority, board,
bureau, commission, department, office or instrumentality of any nature
whatsoever of the United States or foreign government, any state, province or
any city or other political subdivision, whether now or hereafter existing,
or any officer or official thereof, including without limitation, any
division of the Authority or any other agency with authority to regulate any
gaming operation (or proposed gaming operation) owned, managed or operated by
the Tribe or the Authority.
"GOVERNMENT SECURITIES" means securities that are (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, HOWEVER, 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.
"GROSS REVENUES" means all revenues of any nature derived directly or
indirectly by the Authority, including without limitation, gaming revenues,
interest earned on bank accounts, food and beverage sales and other rental or
receipts from lessees, sublessees, licensees and concessionaires (but not the
gross receipts of such lessees, sublessees, licensees or concessionaires) and
revenue recorded for promotional allowances, determined in accordance with
GAAP consistently applied.
"GUARANTEE" means a guarantee (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.
"HEDGING OBLIGATIONS" means, with respect to any Person, the obligations
of such Person under (i) currency exchange or interest rate swap agreements,
currency exchange or interest rate cap agreements and currency exchange or
interest rate collar agreements and (ii) other agreements or arrangements
designed to protect such Person against fluctuations in currency exchange or
interest rates.
"HOLDER" means a Person in whose name a Senior Note is registered.
"IGRA" means the Indian Gaming Regulatory Act of 1988, PL100-497, U.S.C.
2701 ET SEQ. as same may, from time to time, be amended.
"INDEBTEDNESS" means, with respect to any Person, (i) any indebtedness
of such Person, whether or not contingent (a) in respect of borrowed money,
including accrued and unpaid Cash Flow Participation Interest, (b) evidenced
by bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof), (c) representing the balance
deferred and unpaid of the purchase price of any property (including Capital
Lease Obligations), except any such balance that constitutes an accrued
expense or trade payable, or (d) representing any Hedging Obligations, if and
to the extent any of the foregoing indebtedness (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of
such Person prepared in accordance with GAAP, (ii) to the extent not
otherwise included, any obligation by such Person to be liable for, or to
pay, as obligor, guarantor or otherwise, on the Indebtedness of another
Person (other than by endorsement of negotiable instruments for collection in
the ordinary course of business) and (iii) to the extent not otherwise
included, Indebtedness of another Person secured by a Lien on any asset of
such Person (whether or not such Indebtedness is assumed by such Person).
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"INDEPENDENT FINANCIAL ADVISOR" means an accounting, appraisal or
investment banking firm of nationally recognized standing that is, in the
judgment of the Management Board, (i) qualified to perform the task for which
it has been engaged and (ii) disinterested and independent with respect to
the Authority and each Affiliate of the Authority.
"INITIAL PERIOD" means the period, if any, beginning on the Commencement
Date and ending on the day prior to the first day that the Resort becomes
Operating.
"INTEREST AND EXCESS CASH FLOW ACCOUNT" means the Interest and Excess
Cash Flow Account established under the covenant entitled "Interest and
Excess Cash Flow Account" and the provision entitled "Cash Funds Pledge."
"INTEREST EXPENSE" means, with respect to any period, the sum of (i)
interest expense of such Person for such period, whether paid or accrued, to
the extent such expense was deducted in computing Net Revenue (including,
without limitation, Cash Flow Participation Interest on the Senior Notes,
amortization of original issue discount and deferred financing fees, non-cash
interest payments, the interest component of any deferred payment
obligations, the interest component of Capital Lease Obligations, and net
payments (if any) pursuant to Hedging Obligations, excluding amortization of
deferred financing fees), (ii) capitalized interest of such Person for such
period, whether paid or accrued, to the extent such expense was deducted in
computing Net Revenue and (iii) commissions, discounts and other fees and
charges paid or accrued with respect to letters of credit and bankers'
acceptance financing.
"INVESTMENTS" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the form of loans
(including Guarantees), advances or capital contributions (excluding
commission, travel and similar advances to officers and employees made in the
ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities and all
other items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP.
"ISSUANCE DATE" means the closing date for the sale and original
issuance of the Series A Senior Notes.
"KEY PROJECT ASSETS" means (i) the Lease and any real property or
interest in real property held in trust for the Tribe by the United States,
(ii) any improvements to the leasehold estate under the lease or such real
property and (iii) any business records of the Authority or the Tribe.
"LEASE" means the Land Lease between the Tribe and the Authority,
substantially in the form delivered to the Trustee on the Issuance Date, as
the same may be amended in accordance with the terms thereof and of the
Indenture. See "Material Agreements--Land Lease."
"LEASEHOLD MORTGAGE" means that certain Open-End Construction-Permanent
Leasehold Mortgage Deed, Assignment of Leases and Rents and Security
Agreement, executed by the Authority to encumber certain property in favor of
the Trustee, for the ratable benefit of the Holders of Senior Notes, as the
same may be amended in accordance with the terms thereof and of the
Indenture. See "Material Agreements--Leasehold Mortgage Deed."
"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 on the Senior
Notes are authorized by law, regulation or executive order to remain closed.
If a payment date is a Legal Holiday at a place of payment, payment may be
made at that place on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue on the interest that was due for the intervening
period.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
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"LIQUIDATED DAMAGES" means all liquidated damages then owing pursuant to
Section 5 of the Registration Rights Agreement.
"MANAGEMENT AGREEMENT" means the Amended and Restated Gaming Facility
Management Agreement or any successor management agreement thereto.
"MANAGEMENT BOARD" means the Management Board of the Authority or any
authorized committee of the Management Board of the Authority, as applicable.
"MANAGEMENT COMPANY" or "MANAGER" means TCA or a successor permitted
pursuant to the Indenture.
"MANAGEMENT FEE" means the Management Fee under the Management Agreement.
"MINIMUM FACILITIES" means, with respect to the Resort, at least 2,500
operating slot machines, 150 operating table games, operating restaurants
with 1,200 seats, 5,000 usable parking spaces, adequate access to the local
highway system and all banking, coin, security and other ancillary equipment
and facilities necessary to operate the Resort on a 24 hour per day, seven
days a week basis.
"MINIMUM PRIORITY PAYMENT" has the meaning set forth in the Gaming
Facility Management Agreement.
"MONTHLY CASH FLOW PARTICIPATION INTEREST" means, with respect to any
month and any principal amount of the Senior Notes, the product of 5% of the
Authority's Cash Flow for such month times a fraction, the numerator of which
is the principal amount outstanding of the Senior Notes and the denominator
of which is $175,000,000.
"NET LOSS PROCEEDS" means the aggregate cash proceeds received by the
Authority in respect of any Event of Loss, including, without limitation,
insurance proceeds, condemnation awards or damages awarded by any judgment,
net of the direct costs in recovery of such proceeds (including, without
limitation, legal, accounting, appraisal and insurance adjuster fees) and any
taxes paid or payable as a result thereof.
"NET PROCEEDS" means the aggregate cash proceeds received by the
Authority in respect of any Asset Sale, net of the direct costs relating to
such Asset Sale (including, without limitation, legal, accounting and
investment banking or brokerage fees, and sales commissions), and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions), amounts required to be applied to the repayment of Indebtedness
secured by a Lien (other than the Senior Notes) on the asset or assets that
are the subject of such Asset Sale and any reserve for adjustment in respect
of the sale price of such asset or assets.
"NET RECEIPTS ACCOUNT" means the Depository Account established pursuant
to the Management Agreement.
"NET REVENUE" means the sum of Net Revenue From Gaming Operations plus
Net Revenue From Other Operations.
"NET REVENUE FROM GAMING OPERATIONS" means Gross Gaming Revenue (Win)
(as defined in the Gaming Facility Management Agreement) from Class III
Gaming, less all Class III gaming related Operating Expenses (excluding any
Management Fee) determined in accordance with GAAP consistently applied.
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"NET REVENUE FROM OTHER OPERATIONS" means gross revenues of the
Authority from all sources other than Gaming, such as food and beverage,
entertainment and retail, less all related Operating Expenses, excluding any
related Management Fee payable to the Manager and less the retail value of
Promotional Allowances (as defined in the Management Agreement) plus gross
revenues from Class II gaming operations less any Class II gaming related
Operating Expenses determined in accordance with GAAP consistently applied
and less the following revenues actually received by the Authority and
included in gross revenues: (i) any gratuities or service charges added to a
customer's bill; (ii) any credits or refunds made to customers, guests or
patrons; (iii) any sums and credits received by the Authority for lost or
damaged merchandise; (iv) any sales, excise, gross receipt, admission,
entertainment, tourist or other taxes or charges (or assessments equivalent
thereto, or payments made in lieu thereof) which are received from patrons
and passed on to a governmental or quasi-governmental entity; (v) any
proceeds from the sale or other disposition of furnishings and equipment or
other capital assets; (vi) any fire and extended coverage insurance proceeds
other than for business interruption; (vii) any condemnation awards other
than for temporary condemnation; (viii) any proceeds of financing or
refinancing; and (ix) any interest on the Replacement Reserve Fund (as
defined in the Management Agreement), all determined in accordance with GAAP
consistently applied, and 25 U.S.C. Section 2703(9).
"NIGC" means the National Indian Gaming Commission.
"NOTE COLLATERAL" means (i) the Escrow Account, the Replacement Reserve
Account, the Cash Maintenance Account, the Net Receipts Account, the Interest
and Excess Cash Flow Account and any and all other accounts at any time
identified as Collateral in any Collateral Document, all funds at any time on
deposit in any such account, all investments of any such funds and all
interest and dividends thereon, and (ii) all other assets, now owned or
hereafter acquired, of the Authority defined as Collateral in any Collateral
Document or the Indenture, which will initially include the Gross Revenues
and other cash referred to in the provision entitled "Cash Funds Pledge," the
leasehold interest and all personal property owned by the Authority with
certain exceptions, but shall specifically exclude the land held in trust for
the Tribe by the United States, and excluding any real property interest
therein, including the buildings, improvements and fixtures thereon, other
than the leasehold interest pursuant to the Lease.
"OBLIGATIONS" means any principal, premium, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"OFFERING" means the Offering of the Senior Notes by the Authority.
"OFFICER" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice President of such Person and, in the
case of the Authority, shall include members of the Management Board.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf of the
Authority by two Officers of the Authority, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Authority that meets the requirements of
Section 12.05 of the Indenture.
"OPERATING" means, with respect to the Resort, the first time that (i)
all Gaming Licenses have been granted and have not been revoked or suspended,
(ii) all Liens (other than Liens created by the Collateral Documents or
Permitted Liens) related to the construction of the Resort have been paid or,
if payment is not yet due or if such payment is contested in good faith by
the Authority, sufficient funds remain in the Collateral Account to discharge
such Liens, (iii) the general contractor and the architect of the Resort
shall have delivered a certificate to the Trustee certifying that the Resort
is complete in all material respects in accordance with the Plans therefor
and all applicable building laws, ordinances and regulations, (iv) the Resort
is in a condition (including installation of furnishings, fixtures and
equipment) to receive guests in the ordinary course of business, and (v)
gaming and other operations in accordance with applicable law are open to the
general public and are being conducted at the Resort with respect to at least
the Minimum Facilities for such Resort.
"OPERATING EXPENSES" means all operating expenses of the Authority with
respect to any commercial enterprise, determined in accordance with GAAP
consistently applied. Operating Expenses shall include, without limitation:
(i) all accrued interest expense (whether or not distributed and whether or
not deposited, including deposits into the Interest and Excess Cash Flow
Account) with respect to the Senior Notes and the Subordinated Notes; (ii)
depreciation and amortization and (iii) any bond premium under the Indenture.
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"OWNERSHIP INTEREST" means, with respect to any Person, Capital Stock of
such Person or any interest which carries the right to elect or appoint any
members of the Management Board or the Board of Directors or other executive
office of such Person.
"PARI PASSU LIEN" means a Lien on the Note Collateral that ranks pari
passu with the Lien of the Trustee for the ratable benefit of the Holders
pursuant to any arrangement in form and substance satisfactory to the Trustee
that provides that the Trustee, (i) has the sole authority to exercise any
remedy or right with respect to the Note Collateral, (ii) shall be required
to act in respect of any remedy or right with respect to the Note Collateral
or under the Collateral Documents only upon the direction of the holders of a
majority of the principal amount of the Indebtedness secured by the Note
Collateral, and (iii) does not act as trustee, fiduciary or agent, and shall
have no duty to act for the benefit of any holder of any Indebtedness so
secured (other than the Senior Notes).
"PAYMENT DEFAULT" means (i) any failure to pay when due, any principal,
premium or interest on the Senior Notes, whether at stated maturity, upon
acceleration, upon redemption or in connection with a Repurchase Offer, in
each case, without giving effect to any grace period, or (ii) any failure to
deposit any required amounts into the Cash Maintenance Account or in the
Interest and Excess Cash Flow Account.
"PERMITTED INVESTMENTS" means (a) any Investments in Cash Equivalents;
and (b) other Investments in any Person that do not exceed in the aggregate
$50,000 at any time outstanding.
"PERMITTED LIENS" means (i) Liens to secure Indebtedness permitted by
the terms of the Indenture under clause (d) of the second paragraph of the
covenant entitled "Limitations on Incurrence of Indebtedness" on the hotel
assets (excluding any lien on the fee title and the reversionary interest of
the United States and the Tribe in the Premises, the Improvements and the
Appurtenant Rights as such terms are defined in the Leasehold Mortgage) or
revenues financed by such Indebtedness or on after acquired personal property
or intangibles used in connection with such hotel; (ii) Liens in favor of the
Tribe representing the ground lessor's interest under the Lease; (iii) Liens
on property existing at the time of acquisition thereof by the Authority;
PROVIDED, that such Liens were in existence prior to the contemplation of
such acquisition; (iv) Liens to secure the performance of statutory
obligations, surety or appeal bonds, performance bonds or other obligations
of a like nature incurred in the ordinary course of business; (v) Liens to
secure Indebtedness (including capital lease obligations) permitted by the
Indenture, covering only the assets acquired with such Indebtedness; (vi)
Liens existing on the date of the Indenture; (vii) Liens for taxes,
assessments or governmental charges or claims that are not yet delinquent or
that are being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded; PROVIDED, HOWEVER that any reserve or
other appropriate provision as shall be required in conformity with GAAP
shall have been made therefor; (viii) Liens securing Indebtedness permitted
under Section 4.09(e) of the Indenture; PROVIDED THAT such Liens are no more
extensive than the liens securing the Indebtedness so extended, refinanced,
renewed, replaced or refunded thereby; (ix) Liens incurred in the ordinary
course of business of the Authority with respect to obligations that do not
exceed $250,000 at any one time outstanding and that (a) are not incurred in
connection with the borrowing of money or the obtaining of advances or credit
(other than trade credit in the ordinary course of business) and (b) do not
in the aggregate materially detract from the value of the property and
materially impair the use thereof in the operation of business by the
Authority; and (x) Pari Passu Liens on the Note Collateral to secure
indebtedness permitted by clause (a) of the second paragraph of the covenant
described under the caption "Limitations on the Incurrence of Indebtedness";
provided, however, it is acknowledged that Permitted Liens will not include
any Lien on the land held in trust for the Tribe by the United States or any
real property interest therein, including the buildings, improvements and
fixtures, other than the leasehold interest pursuant to the Lease, or which
will give the Holder thereof a proprietary interest in any gaming activity as
prohibited by Section 11(b)(2)(A) of IGRA.
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"PERMITTED PROCEED USES" means (i) to fund interest (including Cash Flow
Participation Interest, if any) payments on the Senior Notes, (ii)
repurchases of Senior Notes pursuant to an Asset Sale Offer, a Change of
Control Offer, an Excess Cash Purchase Offer or an Event of Loss Offer, (iii)
Project Costs relating to the Resort in accordance with the Disbursement and
Escrow Agreement, and (iv) the repayment of amounts advanced to or paid on
behalf of the Tribe or the Authority for (a) any fees and expenses in
connection with obtaining and retaining any Gaming Licenses necessary to
conduct gaming operations at the Resort, (b) the equipping of the Resort in
accordance with the Disbursement and Escrow Agreement, and (c) administrative
and operating expenses of the Authority and/or the Tribe necessary to
develop, construct, and begin operations at the Resort, including without
limitation, pre-opening expenses and initial working capital or bankroll.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"PLANS" means all drawings, plans and specifications prepared by or on
behalf of the Authority, as the same may be amended or supplemented from time
to time, and, if required, submitted to and approved by the appropriate
Gaming Regulatory Authorities, which describe and show the Resort and the
labor and materials necessary for construction thereof.
"PRINCIPAL BUSINESS" means the Class II and Class III casino Gaming (as
such terms are defined in IGRA) and resort business and any activity or
business incidental, directly related or similar thereto, or any business or
activity that is a reasonable extension, development or expansion thereof or
ancillary thereto, including any hotel, entertainment, recreation or other
activity or business designed to promote, market, support, develop, construct
or enhance the casino gaming and resort business operated by the Authority.
"PROJECT COSTS" means, (i) all costs of developing, designing,
constructing, equipping and furnishing the Resort, including costs related to
land acquisition, professional services, pre-opening costs and initial
operating capital, (ii) all start-up and operating costs of the Authority
until the Resort becomes Completed, and (iii) all financing fees and
expenses, interest payments and any scheduled principal prior to the date the
Resort becomes Completed, provided that all Project Costs shall be allocated
in accordance with GAAP, consistently applied.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement,
dated as of the Issuance Date, by and among the Authority and the other
parties named on the signature pages thereof, substantially in the form
delivered to the Trustee on the Issuance Date.
"REPLACEMENT RESERVE ACCOUNT" means a deposit account established,
maintained and controlled by the Trustee and designated by the Authority and
TCA as the Reserve Account established pursuant to Section 4.12 of the Gaming
Facility Management Agreement.
"RESORT" means the multi-amenity gaming and entertainment resort
proposed to be constructed in Montville, Connecticut as described in this
Prospectus as set forth in the Plans, as the Plans may be amended pursuant to
the Indenture and the Collateral Documents, but excluding (i) any obsolete
personal property or real property improvement determined by the Authority to
be no longer useful or necessary to the operations or support of the Resort
(other than Key Project Assets) and (ii) any equipment leased from a third
party in the ordinary course of business.
"RESORT SUPPORT ENTITY" means any Person who provides goods or services
to the Resort or whose operations are ancillary to, in support of, or useful
to the operations of the Resort.
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"RESTRICTED INVESTMENT" means any Investment other than a Permitted
Investment.
"SEC" means the Securities and Exchange Commission.
"SECURED COMPLETION GUARANTEE" means the completion guarantee of Sun
International substantially in the form delivered to the Trustee on the
Issuance Date.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SEMI-ANNUAL PERIOD" means each period that begins on April 1 and ends
on the next succeeding September 30 or each period that begins on October 1
and ends on the next succeeding March 31.
"SENIOR NOTES" means, collectively, the Series A Senior Notes and, when
issued under the Exchange Offer, the Series B Senior Notes.
"SERIES A SENIOR NOTES" means the Authority's Series A Senior Secured
Notes due November 15, 2002 to be issued pursuant to the Indenture.
"SERIES B SENIOR NOTES" means the Authority's Series B Senior Secured
Notes due November 15, 2002 to be issued pursuant to the Indenture or in the
Exchange Offer.
"SUBORDINATED INDEBTEDNESS" means the Indebtedness evidenced by the
Subordinated Notes and any other Indebtedness of the Authority which is
expressly by its terms subordinated in right of payment to the Senior Notes.
"SUBORDINATED NOTES" means the Subordinated Notes due 2003 issued by the
Authority pursuant to the Note Purchase Agreement dated as of the Issuance
Date between the Authority and Sun International.
"SUBSIDIARY" means (i) any instrumentality or subdivision or subunit of
the Authority that has a separate legal existence or status or whose property
and assets would not be bound by the terms of the Indenture or the Collateral
Documents or (ii) with respect to any Person, any corporation, association or
other business entity of which more than 50% of the total voting power of
shares of Capital Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of such Person or a
combination thereof. The Tribe and any other instrumentality of the Tribe
that is not also an instrumentality of the Authority shall not be a
Subsidiary of the Authority.
"SUN INTERNATIONAL" means Sun International Hotels Limited, a Bahamian
corporation or any of its affiliates.
"TCA" means Trading Cove Associates, a Connecticut general partnership.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which the Indenture is qualified
under the TIA.
"TRANSFER RESTRICTED SECURITIES" means securities that bear or are
required to bear the legend set forth in Section 2.06 of the Indenture.
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"TRIBAL GAMING ORDINANCE" means the ordinance and any amendments
thereto, and all related or implementing ordinances, including without
limitation, the Gaming Authority Ordinance, enacted on July 15, 1995 which
are enacted by the Tribe to authorize and regulate gaming on the Mohegan
Reservation pursuant to IGRA.
"TRIBE" means the Mohegan Tribe of Indians of Connecticut, a sovereign
tribe recognized by the United States of America pursuant to 25 C.F.R.
Section 83.
"TRUSTEE" means the party named as such above until a successor replaces
it in accordance with the applicable provisions of the Indenture and
thereafter means the successor serving thereunder.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness, at any date, the number of years obtained by dividing (a) the
sum of the products obtained by multiplying (x) the amount of each then
remaining installment, sinking fund, serial maturity or other required
payments of principal, including payment at final maturity, in respect
thereof, by (y) the number of years (calculated to the nearest one-twelfth)
that will elapse between such date and the making of such payment, by (b) the
then outstanding principal amount of such Indebtedness, as the case may be.
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MATERIAL FEDERAL INCOME TAX CONSEQUENCES
The following description is a general summary of the principal federal
income tax matters of general application relating to the Exchange Offer.
Such description is based upon the current provisions of the Internal Revenue
Code of 1986, as amended (the "Code"), applicable Treasury regulations,
judicial authority and administrative rulings and practice. The statements
of law and legal conclusions contained herein are based on the opinion of
Neal, Gerber & Eisenberg, special tax counsel to the Authority. There can be
no assurance that the Internal Revenue Service (the "IRS") will not take a
contrary view, and no ruling from the IRS has been or will be sought.
Legislative, judicial or administrative changes or interpretations may occur
that could alter or modify the statements and conclusions set forth herein.
Any such changes or interpretations may or may not be retroactive and could
affect the tax consequences to the Senior Note holders participating in the
Exchange Offer.
The following summary is for general information only. The tax treatment
of a Senior Note holder may vary depending upon its particular situation.
Certain Senior Note holders (including insurance companies, tax-exempt
organizations, financial institutions or broker-dealers, foreign corporations
and persons who are not citizens or residents of the United States) may be
subject to special rules not discussed below. EACH HOLDER OF THE SENIOR
NOTES IS URGED TO CONSULT ITS TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX
CONSEQUENCES OF SUCH HOLDER'S EXCHANGING SERIES A SENIOR NOTES FOR SERIES B
SENIOR NOTES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, OR
FOREIGN TAX LAWS.
EXCHANGE OF SERIES B SENIOR NOTES FOR SERIES A SENIOR NOTES
The exchange of Series B Senior Notes for Series A Senior Notes pursuant
to the Exchange Offer should not be treated as an "exchange" for federal
income tax purposes because the Series B Senior Notes should not be
considered to differ materially in kind or extent from the Series A Senior
Notes. Rather, the Series B Senior Notes received in the Exchange Offer by a
holder of Series A Senior Notes should be treated as a continuation of the
Series A Senior Notes in the hands of such holder. As a result, there should
be no federal income tax consequences to holders electing to exchange Series
A Senior Notes for Series B Senior Notes pursuant to the Exchange Offer. If,
however, such transactions were treated as an "exchange" for federal income
tax purposes, the transaction should constitute a recapitalization for
federal income tax purposes. Under the rules applicable to
recapitalizations, holders of Series A Senior Notes exchanging such Senior
Notes for Series B Senior Notes generally should not recognize any gain or
loss upon such exchange.
LIQUIDATED DAMAGES
The Liquidated Damages described under "The Exchange Offer--Registration
Rights Agreement" should be taxable to the holder of Senior Notes as ordinary
income in accordance with the such holder's method of accounting for tax
purposes. The IRS, however, may take a different position, which could affect
the timing and amount of a holder's income.
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PLAN OF DISTRIBUTION
This Prospectus may be used by the Initial Purchasers and/or certain
broker-dealers in connection with offers and sales of the Senior Notes in
market-making transactions in the over-the-counter market at negotiated
prices related to prevailing market prices at the time of sale. The Initial
Purchasers and/or such broker-dealers may act as principal or agent in such
transactions.
The Authority has been advised that it is the position of the staff of
the Commission that any broker-dealer that receives Series B Senior Notes for
its own account pursuant to the Exchange Offer in exchange for Series A
Senior Notes acquired by such broker-dealer as a result of market-making or
other trading activities must deliver a prospectus in connection with any
resale of such Series B Senior Notes. The Authority agrees that for a period
of one year after the Expiration Date, it will ensure that this Prospectus,
as it may be amended or supplemented from time to time, meets the
requirements of the Securities Act and is available to any broker-dealer for
use in connection with any such resale of such Series B Senior Notes (other
than a resale of an unsold allotment relating to the original placement of
the Series A Senior Notes).
The Authority will not receive any proceeds from any sale of Series B
Senior Notes by broker-dealers. Series B Senior Notes received by
broker-dealers for their own account pursuant to the Exchange Offer may be
sold from time to time at prices determined at the time of sale directly to
purchasers or to or through brokers or dealers who may receive compensation
in the form of commissions or concessions from any such broker-dealer and/or
the purchasers of any such Series B Senior Notes. Any broker-dealer that
resells Series B Senior Notes that were received by it for its own account
pursuant to the Exchange Offer and any broker or dealer that participates in
a distribution of such Series B Senior Notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of Series B Senior Notes and any commission or concessions
received by any such persons may be deemed to be underwriting compensation
under the Securities Act. The Letter of Transmittal states that by
delivering a prospectus, a broker-dealer will be not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act.
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LEGAL MATTERS
Certain legal matters regarding the validity of the Series B Senior
Notes will be passed upon for the Authority by Rome, McGuigan, Sabanosh &
Klebanoff, P.C., Hartford, Connecticut, and by Hobbs, Straus, Dean & Walker,
Washington, D.C. Certain tax matters will be passed upon by Neal, Gerber &
Eisenberg, Chicago, Illinois, special tax counsel to the Authority.
INDEPENDENT ACCOUNTANTS
The balance sheet of the Authority included in this Prospectus and
Registration Statement has been audited by Arthur Andersen LLP, independent
certified public accountants, as indicated in their report with respect
thereto.
AVAILABLE INFORMATION
The Authority is not currently subject to the periodic reporting and
other informational requirements of the Exchange Act. The Authority has
agreed that, whether or not it is required to do so by the rules and
regulations of the Commission, for so long as any of the Senior Notes remain
outstanding, it will furnish to the holders of the Senior Notes and file with
the Commission (unless the Commission will not accept such a filing) (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 the
Authority were required to file such forms, including a "Management's
Discussion and Analysis of Results of Operations and Financial Condition"
and, with respect to the annual information only, a report thereon by the
Authority's certified independent accountants and (ii) all reports that would
be required to be filed with the Commission on Form 8-K if the Authority were
required to file such reports. In addition, for so long as any of the Senior
Notes remain outstanding, the Authority has agreed to make available to any
prospective purchaser of the Senior Notes or beneficial owner of the Senior
Notes in connection with any sale thereof the information required by Rule
144A(d)(4) under the Securities Act.
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GLOSSARY AND INDEX OF DEFINED TERMS
Accrual Period: The period during which each installment of
Cash Flow Participation Interest is calculated
to accrue, which is defined under the
Indenture as the period from, but not
including, the most recent date to which Cash
Flow Participation Interest has been paid or
provided for or through which Cash Flow
Participation Interest had been calculated and
deferred (or from and including the earlier of
October 31, 1996 or the first day the Mohegan
Sun Casino commences operations, if no
installment of Cash Flow Participation
Interest has been paid, provided for or
deferred) to and including, either (i) the
last day of the next Semi-annual Period, if
the corresponding principal of the Senior
Notes has not become due and payable, or
(ii) the date of payment, if the corresponding
principal of the Senior Notes has become due
and payable (whether at stated maturity, upon
acceleration, upon maturity of repurchase
obligation or otherwise).
Amounts Required for Amounts required to cause the Mohegan Sun
Completion: Casino to be Completed, including, without
limitation, (i) all regularly scheduled
payments of principal and interest on any
indebtedness (other than the Senior Notes),
(ii) all regularly scheduled payments of
interest (but not principal) due on the Senior
Notes, (iii) all costs and cost overruns of
construction (E.G., costs of labor, materials,
equipment and supplies, taxes, utilities,
assessments, insurance and maintenance
expenses), (iv) all operating costs of the
Authority, and (v) all other amounts or funds
required.
BIA: Bureau of Indian Affairs of the Department of
the Interior.
Business Board: Each of two different advisory and oversight
boards established under each of the
Development Agreement and the Management
Agreement which, in the case of the Management
Agreement, consists of two members appointed
by the Authority and two members appointed by
TCA and, in the case of the Development
Agreement, consists of an equal number of
representatives of the Authority and TCA.
Cash Flow: With respect to a specified period, the Net
Revenue for such period, plus (i) an amount
equal to any extraordinary loss plus any net
loss realized in connection with an Asset Sale
(to the extent such losses were deducted in
computing such Net Revenue), plus
(ii) provision for taxes based on income or
profits for such period, to the extent such
provision for taxes was used in computing such
Net Revenue, plus (iii) Interest Expense for
such period, plus (iv) Depreciation and
Amortization Expense for such period to the
extent such depreciation and amortization were
deducted in computing such Net Revenue, in
each case, as determined in accordance with
GAAP.
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Cash Flow Participation As of any payment date, Cash Flow Participation
Interest: Interest on the Senior Notes accrued through the
Accrual Period last ended (including any Accrual
Period that ends on such payment date) plus any
Cash Flow Participation Interest previously accrued
and with respect to which payment has been
permitted to be deferred.
Cash Maintenance The account established by the Authority
Account: pursuant to the Indenture into which the
Authority is obligated to deposit up to $6
million per year, up to a maximum deposit at
any time of $36 million, which amount may be
applied by the Trustee, upon an event of
default under the Indenture, to satisfy the
Authority's obligations under the Senior
Notes.
Change of Control: The occurrence of any of the following:
(i) the Authority ceases to be a wholly-owned
unit, instrumentality or subdivision of the
government of the Tribe, (ii) the Authority
ceases to have the exclusive legal right to
operate gaming operations of the Tribe,
(iii) the Authority fails to retain in full
force and effect at all times all material
governmental consents, permits or legal rights
necessary for the operation of the Mohegan Sun
Casino and such failure continues for a period
of 90 consecutive days, (iv) TCA or any other
entity in which Sun International owns,
directly or indirectly, at least 50% of the
capital stock ceases to be the manager of the
Mohegan Sun Casino or fails to hold any
material governmental consent or permit
required to manage the Mohegan Sun Casino and
such failure continues for a period of 90
consecutive days or (v) Sun International
fails to own, directly or indirectly, at least
50% of the Capital Stock of TCA.
Change of Control Offer: An offer required to be made by the Authority
upon a Change of Control to purchase all or
any part (equal to $1,000 or an integral
multiple thereof) of the Senior Notes at a
price in cash equal to 101% of the aggregate
principal amount thereof, plus accrued and
unpaid interest (including Cash Flow
Participation Interest) and Liquidated
Damages, if any, to the date of purchase. The
Authority shall not be required to make such
an offer to purchase (i) if the Change of
Control event ceases prior to the closing of
such offer or (ii) if on or before the 120th
day after the Change of Control, which Change
of Control arises under either clause (iv) or
(v) of the definition thereof, TCA is replaced
as the manager (or the Authority is using its
best efforts to effect such a replacement)
with a Person with experience and reputation
comparable to Sun International.
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Completed: With respect to the Mohegan Sun Casino, the
first time that (i) all liens (other than
Permitted Liens or Liens which relate to
Disputed Amounts (as defined in the Secured
Completion Guarantee) guaranteed by Sun
International under Section 2.5 of the Secured
Completion Guarantee) relating to the
construction of the Mohegan Sun Casino have
been paid, (ii) the general contractor and the
project architect for the Mohegan Sun Casino,
or an independent construction expert
appointed by the Sun International and
acceptable to the Trustee, shall have
delivered a certificate to the Trustee
certifying that the Mohegan Sun Casino is
complete in all material respects in
accordance with the plans therefor and in
compliance with all applicable laws,
ordinances and regulations (including gaming
laws, ordinances and the Mohegan Compact
requirements) with respect to the physical
structure, health and safety, environmental
and hazardous materials, fire, equipment,
security and physical operating (gaming and
other) requirements of the Mohegan Sun Casino,
and (iii) the Mohegan Sun Casino is in a
condition (including installation of
furnishings, fixtures and equipment sufficient
for the Minimum Facilities and provision of
adequate initial operating capital including
all operating supplies, sufficient coin for
the slot machines, sufficient operating cash
for the other games and trained employees (or
sufficient funds to hire and train such
employees) so that the Mohegan Sun Casino is
fit to receive guests in the ordinary course
of business.
Deferred Subordinated Any interest on Subordinated Indebtedness that
Interest: is not currently payable in cash or that is
not permitted to be paid in cash under the
governing agreements.
DEP: Department of Environmental Protection of the
State of Connecticut.
DOT: Department of Transportation of the State of
Connecticut.
Equipment Financing: The up to $40 million of vendor or third party
financing to be incurred by the Authority with
respect to certain equipment, including gaming
equipment, for use at the Mohegan Sun Casino,
which will be senior secured obligations of
the Authority and will rank PARI PASSU in
right of payment with any existing and future
senior Indebtedness of the Authority.
Escrow Account: The account established by the Escrow Agent
pursuant to Section 2 of the Disbursement and
Escrow Agreement dated as of September 29,
1995 into which all of the net proceeds of the
issuance of the Series A Senior Notes were
deposited, pending disbursement by the Escrow
Agent in accordance with the terms thereof.
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Event of Loss: With respect to any property or asset
(tangible or intangible, real or personal),
any of the following: (i) any loss,
destruction or damage of such property or
asset; (ii) any institution of any proceedings
for the condemnation or seizure of such
property or asset or for the exercise of any
right of eminent domain; (iii) any actual
condemnation, seizure or taking by exercise of
the power of eminent domain or otherwise of
such property or asset, or confiscation of
such property or asset or the requisition of
the use of such property or asset; or (iv) any
settlement in lieu of clause (ii) or
(iii) above.
Event of Loss Purchase An offer made by the Authority following an
Offer: Event of Loss to all holders of Senior Notes
to purchase the maximum principal amount of
Senior Notes that is an integral multiple of
$1,000 and that may be purchased out of Excess
Loss Proceeds in excess of $50 million at an
offer price in cash in an amount equal to 100%
of the principal amount thereof, plus accrued
and unpaid interest (including Cash Flow
Participation Interest and Liquidated
Damages), if any, to the date fixed for the
closing of such offer, in accordance with the
procedures set forth in the Indenture.
Excess Cash Flow: The Cash Flow of the Authority for a specified
period, less (i) all management fees to be
paid to TCA under the Management Agreement
that have accrued for such period (whether or
not distributed), (ii) principal payments on
Indebtedness of the Authority during such
period (other than principal payments
(a) pursuant to an Excess Cash Purchase Offer,
(b) which are funded from the proceeds of
Indebtedness permitted to be incurred under
the Indenture or (c) on the Working Capital
Financing that do not permanently reduce
indebtedness under the Working Capital
Financing), (iii) the Authority's share of
deposits into the Replacement Reserve Account
(but not more than $1.8 million per fiscal
year) commencing with the first full fiscal
year after the commencement of operations of
the Mohegan Sun Casino, (iv) all other capital
expenditures not funded from the Replacement
Reserve Account (but not more than
$5.0 million per fiscal year), (v) any amounts
set aside in the Cash Maintenance Account for
such fiscal period, (vi) interest expense of
the Authority for such period, whether paid,
accrued or capitalized, and (vii) taxes, if
any, payable to the federal government or the
State of Connecticut.
Excess Cash Purchase The offer required to be made by the Authority
Offer: within 120 days after the last day of each
fiscal year of the Authority, beginning with
the fiscal year ending September 30, 1997, to
purchase outstanding Senior Notes in an amount
equal to the sum of (i) 50% of the Excess Cash
Flow for such fiscal year, (ii) 100% of the
amount of the Deferred Subordinated Interest
for such fiscal year and (iii) accrued
interest to the purchase date and Liquidated
Damages, if any, on such principal at the
purchase prices set forth in the Indenture
(which are expressed as a percentage of the
principal amount).
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Excess Loss Proceeds: Any net proceeds from an Event of Loss with
respect to Note Collateral that has a fair
market value (or replacement cost, if greater)
in excess of $500,000 that are not within, 360
days after any such Event of Loss, applied by
the Authority (or are not permitted to be
applied) to the rebuilding, repair,
replacement or construction of improvements to
the Mohegan Sun Casino. To the extent that
the aggregate amount of Senior Notes tendered
pursuant to an Event of Loss Offer is less
than the Excess Loss Proceeds, such remaining
Excess Loss Proceeds shall be released to the
Authority, subject to the terms of the Cash
Collateral Accounts Pledge and Security
Agreement, and the Authority may use any such
remaining Excess Loss Proceeds so released for
any lawful purpose.
Exchange Agent: First Fidelity Bank, n/k/a First Union Bank of
Connecticut, as exchange agent in connection
with the Exchange Offer.
Exchange Offer: The offer by the Authority to exchange $175
million aggregate principal amount of Series B
Senior Notes for an equal principal amount of
Series A Senior Notes.
Expiration Date: The termination date for the Exchange Offer,
which shall be 5:00 p.m., New York City time,
July 12, 1996 unless extended by the Authority
in its sole discretion, being the date prior to
which Series A Senior Notes must be validly
tendered and not withdrawn in order to be
accepted by the Authority for exchange.
Fixed Charge Coverage With respect to a specified period, the ratio
Ratio: of the Cash Flow for such period to the Fixed
Charges for such period. In the event that the
Authority incurs, assumes, guarantees or
redeems any Indebtedness (other than revolving
credit borrowings) subsequent to the
commencement of the period for which the Fixed
Charge Coverage Ratio is being calculated but
prior to the event for which the calculation
of the Fixed Charge Coverage Ratio is made
(the "Calculation Date"), then the Fixed
Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence,
assumption, guarantee or redemption of
Indebtedness as if the same had occurred at
the beginning of the applicable four-quarter
period. For purposes of making the computation
referred to above, acquisitions, dispositions
and discontinued operations (as determined in
accordance with GAAP) that have been made by
the Authority, including all mergers,
consolidations and dispositions, during the
four-quarter reference period or subsequent to
such reference period and on or prior to the
Calculation Date shall be calculated on a pro
forma basis assuming that all such
acquisitions, dispositions, discontinued
operations, mergers, consolidations (and the
reduction of any associated fixed charge
obligations resulting therefrom) had occurred
on the first day of the four-quarter reference
period.
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Fixed Interest: Interest at the rate of 13 1/2% per annum of
the principal amount of the Senior Notes then
outstanding from the date of issuance of
Senior Notes to the date of payment of such
principal amount of such Senior Note. Fixed
Interest on the Series A Senior Notes is, and
the Series B Senior Notes will be, computed on
the basis of a 360-day year, consisting of
twelve 30-day months.
Gaming Regulatory Any agency, authority, board, bureau,
Authority: commission, department, office or
instrumentality of any nature whatsoever of
the United States or foreign government, any
state, province or any city or other political
subdivision, whether now or hereafter
existing, or any officer or official thereof,
including without limitation, any division of
the Authority or any other agency with
authority to regulate any gaming operation (or
proposed gaming operation) owned, managed or
operated by the Tribe or the Authority.
IGRA: The Indian Gaming Regulatory Act of 1988, as
amended.
Indebtedness: With respect to any Person, (i) any
indebtedness of such Person, whether or not
contingent (a) in respect of borrowed money,
including accrued and unpaid Cash Flow
Participation Interest, (b) evidenced by
bonds, notes, debentures or similar
instruments or letters of credit (or
reimbursement agreements in respect thereof),
(c) representing the balance deferred and
unpaid of the purchase price of any property
(including capital lease obligations), except
any such balance that constitutes an accrued
expense or trade payable, or (d) representing
any hedging obligations, if and to the extent
any of the foregoing indebtedness (other than
letters of credit and hedging obligations)
would appear as a liability upon a balance
sheet of such Person prepared in accordance
with GAAP, (ii) to the extent not otherwise
included, any obligation by such Person to be
liable for, or to pay, as obligor, guarantor
or otherwise, on the Indebtedness of another
Person (other than by endorsement of
negotiable instruments for collection in the
ordinary course of business) and (iii) to the
extent not otherwise included, Indebtedness of
another Person secured by a lien on any asset
of such Person (whether or not such
Indebtedness is assumed by such Person).
Indenture: The Indenture governing the Senior Notes,
dated as of September 29, 1995.
Initial Purchasers: Bear, Stearns & Co. Inc. and Donaldson, Lufkin
& Jenrette Securities Corporation,
collectively, as the initial purchasers on
September 29, 1995 of the Series A Senior
Notes.
Interest and Excess Cash The account established by the Authority
Flow Account: pursuant to the Indenture into which the
Authority is required to deposit, on a monthly
basis, an amount equal to the accrued interest
on the Senior Notes and the Subordinated Notes
and 50% of Excess Cash Flow, which amounts
will be used to pay interest on the Senior
Notes and fund Excess Cash Purchase Offers.
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Liquidated Damages: Monetary damages the Authority is obligated to
pay to the holders of Senior Notes under
certain circumstances if the Authority fails
to comply with the registration requirements
of the Registration Rights Agreement.
Minimum Priority Payment: The $50,000 minimum monthly payment required
to be made by TCA to the Authority under the
Management Agreement, which payment is
chargeable against the Authority's share of
Net Revenue and is required to be made to the
Authority for any month during which any
gaming is conducted at the Mohegan Sun Casino.
Net Receipts Account: The depository account established pursuant to
the Management Agreement into which TCA is
required to deposit, on a daily basis, all
cash collected from the operation of the
Mohegan Sun Casino.
Net Revenues: As used in the Management Agreement, the
amount of the gross revenues of the Mohegan
Sun Casino less operating expenses and certain
specified categories of revenue, such as
income from any financing or refinancing,
taxes or charges received from patrons on
behalf of and remitted to a governmental
entity, proceeds from the sale of capital
assets, insurance proceeds and interest on the
Replacement Reserve Account. Net Revenues
also include Net Gaming Revenues, which are
equal to the amount of the "net win" from
Class III Gaming operations (I.E., the
difference between gaming wins and losses)
less all gaming-related operational expenses
(excluding the management fee).
NIGC: The National Indian Gaming Commission, an
independent governmental agency within the
U.S. Department of Interior exercising primary
federal regulatory responsibility over Indian
gaming.
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Note Collateral: All of collateral that, pursuant to the terms
of the Indenture, secures the Authority's
obligations under the Senior Notes (and may
secure the Working Capital Financing),
consisting primarily of: (i) the Escrow
Account, the Replacement Reserve Account, the
Cash Maintenance Account, the Net Receipts
Account, the Interest and Excess Cash Flow
Account and any and all other accounts at any
time identified as Collateral in the
Indenture, the Disbursement and Escrow
Agreement or any collateral document related
thereto, all funds at any time on deposit in
any such account, all investments of any such
funds and all interest and dividends thereon,
and (ii) a first priority leasehold mortgage
(the "Leasehold Mortgage") on the 25-year
ground lease from the Tribe to the Authority
with respect to the Site (the "Lease"), (ii) a
first priority security interest in all of the
Authority's furniture, trade fixtures and
equipment, accounts receivable, general
intangibles, inventory and other personal
property (other than personal property
permitted to be financed and secured, as
described elsewhere herein, or personal
property that is not permitted by applicable
law to secure the Senior Notes), (iii) a first
priority security interest in the proceeds of
the Series A Senior Notes which remain on
deposit in the Escrow Account and (iv) an
assignment of material construction contracts
pursuant to which the Mohegan Sun Casino is to
be constructed.
Offering: The offer and sale by the Initial Purchasers
on September 29, 1995 of the Series A Senior
Notes to institutional accredited investors
and qualified institutional buyers.
Person: Any individual, corporation, partnership,
joint venture, association, joint-stock
company, trust, unincorporated organization,
government or any agency or political
subdivision thereof or any other entity.
Replacement Reserve The account established pursuant to the
Account: Management Agreement into which the Authority
and TCA have agreed to deposit, on a monthly
basis, up to an aggregate of $3 million per
year, which amount will be used to fund
replacement capital expenditures for the
Mohegan Sun Casino.
Senior Notes: Collectively, the 13 1/2% Series A Senior
Secured Notes of the Authority due November
15, 2002 and the 13 1/2% Series B Senior Notes
of the Authority due November 15, 2002, which
have been registered under the Securities Act
of 1933, as amended.
Secured Completion The $50 million secured completion guarantee
Guarantee: given by Sun International pursuant to that
Secured Completion Guarantee dated September
29, 1995 in favor of the Trustee, to fund any
cost overruns incurred by the Authority in
connection with constructing, equipping and
opening the Sun Mohegan Casino, which
guarantee is secured by a $15 million
irrevocable letter of credit and a pledge of
1,500,000 Ordinary Shares of Sun
International.
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Semi-annual Period: Each period that begins on April 1 and ends on
the next succeeding September 30 or each
period that begins on October 1 and ends on
the next succeeding March 31.
Subordinated Notes: The $40 million principal amount of
Subordinated Notes due 2003 issued by the
Authority to Sun International pursuant to
that certain Note Purchase Agreement dated as
of September 29, 1995, together with any
additional subordinated notes that may be
issued by the Authority to Sun International
pursuant to the Secured Completion Guarantee.
Subordinated Indebtedness: Indebtedness evidenced by the Subordinated
Notes and any other Indebtedness of the
Authority which is expressly by its terms
subordinated in right of payment to the Senior
Notes.
Terminating Event: Any event that terminates Sun International's
Obligations under the Secured Completion
Guarantee, including (i) any Congressional,
Tribal or other governmental action that
results in a substantial diminution of the
gaming operations proposed to be conducted at
the Mohegan Sun Casino, (ii) September 30,
1997 (iii) the date immediately prior to the
acceleration of amounts due on the Senior
Notes, (iv) the repayment of the Senior Notes
in full, (v) the termination or
unenforceability, in any material respect, of
the Management Agreement or the Lease, or
(vi) the termination or repudiation of the
Management Agreement by the Authority.
Trustee: First Fidelity Bank, n/k/a First Union Bank of
Connecticut, as trustee under the Indenture,
and any successor serving thereunder.
Working Capital Financing: The approximately $12.5 million of third party
financing to be incurred by the Authority,
prior to opening the Mohegan Sun Casino, for
working capital purposes. In the event the
Authority requires additional working capital,
the Indenture permits up to $25 million in
Working Capital Financing, which will be
senior secured obligations of the Authority
and will rank PARI PASSU in right of payment
with any existing and future senior
Indebtedness of the Authority.
-142-
<PAGE>
INDEX OF DEFINED TERMS
The following terms are defined on the page of the Prospectus indicated
directly opposite such term:
<TABLE>
<CAPTION>
Defined Term Page No.
- ------------ --------
<S> <C>
Accrual Period . . . . . . . . . . . . . . . . . . . . . . . . . . 89
ACMs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Affiliate Transaction . . . . . . . . . . . . . . . . . . . . . .. 101
Appurtenant Rights . . . . . . . . . . . . . . . . . . . . . . . . 68
Architect . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 72
Asset Sale Offer . . . . . . . . . . . . . . . . . . . . . . . . . 93
ASTs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Atlantis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Authority Official . . . . . . . . . . . . . . . . . . . . . . . . 79
Beneficial Owner(s) . . . . . . . . . . . . . . . . . . . . . . .. 30
the BIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 7
Book-Entry Confirmation . . . . . . . . . . . . . . . . . . . . .. 29
Book-Entry Transfer Facility . . . . . . . . . . . . . . . . . . . 29
Business Board (pursuant to the Development Agreement) . . . . . . 72
Business Board (pursuant to the Management Agreement) . . . . . .. 51
Buyout Option . . . . . . . . . . . . . . . . . . . . . . . . . .. 73
Calculation Date . . . . . . . . . . . . . . . . . . . . . . . . . 121
Carousel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
CERCLA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Change of Control Payment Date . . . . . . . . . . . . . . . . . . 92
Change of Control Payment . . . . . . . . . . . . . . . . . . . .. 92
Change of Control Offer . . . . . . . . . . . . . . . . . . . . .. 92
Church Parcel . . . . . . . . . . . . . . . . . . . . . . . . . .. 50
CJM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 45
Clean-up Standard Regulations . . . . . . . . . . . . . . . . . .. 48
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
the Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
Commencement Date . . . . . . . . . . . . . . . . . . . . . . .. . 75
the Commission . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Construction Budget . . . . . . . . . . . . . . . . . . . . . . .. 7
</TABLE>
-143-
<PAGE>
<TABLE>
<CAPTION>
Defined Term Page No.
- ------------ --------
<S> <C>
Council . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 50
Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . .. 114
DCD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 44
DEP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 47
Depositor . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 32
Development Agreement . . . . . . . . . . . . . . . . . . . . . .. 71
Disbursement Agent . . . . . . . . . . . . . . . . . . . . . . . . 108
DJA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 45
DOT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 7
EDSA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Effectiveness Target Date . . . . . . . . . . . . . . . . . . . .. 26
EIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 49
Elders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Eligible Institution . . . . . . . . . . . . . . . . . . . . . . . 30
Environmental Assessment . . . . . . . . . . . . . . . . . . . . . 49
Equipment Financing . . . . . . . . . . . . . . . . . . . . . . .. Prospectus outside
front cover page
Escrow Account . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Event of Loss Offer . . . . . . . . . . . . . . . . . . . . . . .. 94
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . 17
Excess Cash Offer Price . . . . . . . . . . . . . . . . . . . . .. 95
Excess Cash Purchase Amount . . . . . . . . . . . . . . . . . . .. 95
Excess Cash Purchase Offer . . . . . . . . . . . . . . . . . . . . 14
Excess Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . 93
Exchange Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Exchange Offer Registration Statement . . . . . . . . . . . . . .. 26
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Expiration Date . . . . . . . . . . . . . . . . . . . . . . . . .. Prospectus outside
front cover page
Fixed Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 89
FONSI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 49
Force Majeure Event . . . . . . . . . . . . . . . . . . . . . . .. 21
Foxwoods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Furnishings . . . . . . . . . . . . . . . . . . . . . . . . . . .. 72
</TABLE>
-144-
<PAGE>
<TABLE>
<CAPTION>
Defined Term Page No.
- ------------ --------
<S> <C>
Gaming Disputes Court . . . . . . . . . . . . . . . . . . . . . .. 54
General Manager . . . . . . . . . . . . . . . . . . . . . . . . .. 74
Gross Revenue . . . . . . . . . . . . . . . . . . . . . . . . . .. 77
IGRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . .. Prospectus outside
front cover page
Initial Purchasers . . . . . . . . . . . . . . . . . . . . . . . . 9
IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 130
Lease Transaction . . . . . . . . . . . . . . . . . . . . . . . .. 102
Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 12
Leased Property . . . . . . . . . . . . . . . . . . . . . . . . .. 64
Leasehold Mortgage . . . . . . . . . . . . . . . . . . . . . . . . 12
Legal Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . 113
LEHR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Letter of Transmittal . . . . . . . . . . . . . . . . . . . . . .. Prospectus outside
front cover page
Management Agreement . . . . . . . . . . . . . . . . . . . . . . . 7
Management Board . . . . . . . . . . . . . . . . . . . . . . . . . 51
Memorandum . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Mohegan Sun Casino . . . . . . . . . . . . . . . . . . . . . . . . Prospectus outside
front cover page (ii)
Mohegan Compact . . . . . . . . . . . . . . . . . . . . . . . . .. 5
Morse Diesel . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
NEPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
the NIGC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Note Purchase Agreement . . . . . . . . . . . . . . . . . . . . .. 83
NOx . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 49
NRC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 22
Pari Passu Debtholder . . . . . . . . . . . . . . . . . . . . . .. 99
Payment Cross-Default . . . . . . . . . . . . . . . . . . . . . .. 111
</TABLE>
-145-
<PAGE>
<TABLE>
<CAPTION>
Defined Term Page No.
- ------------ --------
<S> <C>
Personal Property . . . . . . . . . . . . . . . . . . . . . . . .. 68
Phase III Assessment . . . . . . . . . . . . . . . . . . . . . . . 48
Plans and Specifications . . . . . . . . . . . . . . . . . . . . . 72
Refinancing Indebtedness . . . . . . . . . . . . . . . . . . . . .. 99
Registration Default . . . . . . . . . . . . . . . . . . . . . . .. 27
Registration Statement . . . . . . . . . . . . . . . . . . . . . .. 2
Registration Rights Agreement . . . . . . . . . . . . . . . . . . . 9
Reserved Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . 97
Rockwell . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 44
Secretary of the Interior . . . . . . . . . . . . . . . . . . . . . 63
Section 81 . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 59
Secured Completion Guarantee . . . . . . . . . . . . . . . . . . .. Prospectus outside
front cover page (ii)
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . .. Prospectus outside
front cover page
Semi-Annual Period. . . . . . . . . . . . . . . . . . . . . . . . . Prospectus outside
front cover page (ii)
Senior Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . Prospectus outside
front cover page
Series A Senior Notes . . . . . . . . . . . . . . . . . . . . . . . Prospectus outside
front cover page
Series B Senior Notes . . . . . . . . . . . . . . . . . . . . . . . Prospectus outside
front cover page
Shelf Registration Statement. . . . . . . . . . . . . . . . . . . . 26
SII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SIIL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 15
SNM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Southern Sun . . . . . . . . . . . . . . . . . . . . . . . . . . .. 38
Space Leases . . . . . . . . . . . . . . . . . . . . . . . . . . .. 68
STC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
STC Permit . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 60
Subordinated Notes . . . . . . . . . . . . . . . . . . . . . . . .. Prospectus outside
front cover page (ii)
</TABLE>
-146-
<PAGE>
<TABLE>
<CAPTION>
Defined Term Page No.
- ------------ --------
<S> <C>
Sun International . . . . . . . . . . . . . . . . . . . . . . . . . Prospectus outside
front cover page (ii)
TCA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
the Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . Prospectus outside
front cover page
the Pequot Tribe. . . . . . . . . . . . . . . . . . . . . . . . . . 3
the Tribe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prospectus outside
front cover page
the NYSE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
the Offering . . . . . . . . . . . . . . . . . . . . . . . . . . .. Prospectus outside
front cover page
Town. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Town Agreement . . . . . . . . . . . . . . . . . . . . . . . . . .. 63
Tribal-State Compact . . . . . . . . . . . . . . . . . . . . . . .. 58
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . 88
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
UNC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
USTs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 48
VOCs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 49
Working Capital Financing . . . . . . . . . . . . . . . . . . . . . Prospectus outside
front cover page
</TABLE>
-147-
<PAGE>
INDEX TO FINANCIAL STATEMENTS
MOHEGAN TRIBAL GAMING AUTHORITY
PAGE
----
Independent Auditors' Report. . . . . . . . . . . . . . . F-2
Balance Sheet . . . . . . . . . . . . . . . . . . . . . . F-3
Notes to Balance Sheet. . . . . . . . . . . . . . . . . . F-4
F-1
<PAGE>
[Letterhead of Arthur Andersen LLP]
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Tribal Council
Mohegan Tribe of Indians of Connecticut:
We have audited the accompanying balance sheet of the Mohegan Tribal Gaming
Authority (a development stage entity) as of March 31, 1996. This financial
statement is the responsibility of the Authority's management. Our
responsibility is to express an opinion on this financial statement based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the balance sheet is free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in that balance sheet. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall balance sheet
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of the Mohegan Tribal Gaming
Authority as of March 31, 1996, in conformity with generally accepted
accounting principles.
/s/ Arthur Andersen LLP
Hartford, Connecticut
April 25, 1996
F-2
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
BALANCE SHEET
AS OF MARCH 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS LIABILITIES
<S> <C> <C> <C>
RESTRICTED CASH $134,437 ACCOUNTS PAYABLE $ 17,450
-------- CONSTRUCTION RETAINAGE 3,306
ACCRUED INTEREST 15,039
CURRENT PORTION OF LONG-TERM DEBT 21
CAPITALIZED PROPERTY COSTS:
Deferred lease cost 29,260
Leasehold interest under construction 73,661 SENIOR NOTES 175,000
Equipment 1,105
--------
104,026
-------- OTHER LONG-TERM DEBT 321
OTHER ASSETS: SUBORDINATED NOTES 40,000
Pre-opening costs 3,437
Deferred financing costs 8,537
Organizational costs 700
-------- COMMITMENTS AND CONTINGENCIES
12,674 (Note 5)
-------- --------
Total Assets $251,137 Total Liabilities $251,137
======== ========
</TABLE>
The accompanying notes are an integral part of this balance sheet.
F-3
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
NOTES TO BALANCE SHEET
MARCH 31, 1996
1. GENERAL INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
THE AUTHORITY -
The Mohegan Tribal Gaming Authority (the "Authority"), established on July
15, 1995, is an instrumentality of the Mohegan Tribe of Indians of
Connecticut (the "Tribe"). The Authority intends to develop a gaming and
entertainment facility (the "Mohegan Casino"). The Authority's year-end
will be September 30.
The Tribe and the Authority have entered into a land lease ("Lease")
pursuant to which the Tribe is leasing to the Authority certain land
located in southeastern Connecticut on which the Mohegan Casino is being
constructed (the "Site"). The Site is a portion of a parcel of land that
has been acquired and held in trust for the Tribe by the United States of
America, with the Tribe retaining perpetual rights to the use of the Site.
See Note 3.
The Tribe established the Authority with the exclusive power to conduct
and regulate gaming activities for the Tribe. Under the Indian Gaming
Regulatory Act of 1988, as amended ("IGRA"), federally recognized Indian
tribes are permitted to conduct full-scale casino gaming operations on
tribal-land, subject to, among other things, the negotiation of a tribal
state compact with the affected state. The Tribe and the State of
Connecticut have entered into such a compact (the "Compact") that has been
approved by the Secretary of the Interior.
The Authority has engaged Trading Cove Associates ("TCA") to manage the
development, construction and operation of the Mohegan Casino. TCA is
50% owned by a subsidiary of Sun International Hotels Limited ("Sun
International"). The remaining partners of TCA are hotel and real estate
developers and operators located primarily in the northeastern United
States.
The Authority is financing the development of the Mohegan Casino with the
proceeds of the sale of senior notes, subordinated notes and equipment
financing, as described in Note 2. The total cost of development and
construction of the Mohegan Casino and working capital is estimated to be
$312.5 million, of which $300 million has been obtained as of the balance
sheet date. If additional financing is not obtained, the Authority will
draw funds under the Secured Completion Guarantee (the "Guarantee")
provided by Sun International. The Guarantee provides that, subject to
certain qualifications, Sun International will provide up to $50 million
to fund any cost overruns incurred in connection with the construction,
development, equipping and opening of the Mohegan Casino. The Guarantee
terminates on September 30, 1997, or if certain other criteria are met as
agreed upon by the Authority and
F-4
<PAGE>
Sun International. Any draws on the Guarantee will be evidenced by
additional subordinated notes issued by the Authority to Sun
International. These additional subordinated notes will bear interest
at the prime rate plus 1% and be payable under the same terms as the
subordinated notes discussed in Note 2.
DEVELOPMENT STAGE ENTERPRISE -
The Authority is classified as a Development Stage enterprise as defined
by Statement of Financial Accounting Standards No. 7.
CASH -
Included in cash is approximately $130 million held in escrow as required
by the Senior Notes (see Note 2). Disbursements from the escrow account
can only occur upon submission of a disbursement request (as defined) to
the Escrow Agent, and such funds disbursed can only be used for payment of
costs and expenses as contemplated in the original or amended budgets as
referred to in the Disbursement and Escrow Agreement.
CAPITALIZED PROPERTY COSTS -
Capitalized property costs consist of deferred lease costs related to the
payment made by the Authority on behalf of the Tribe for the acquisition
of the Site (see Note 3), leasehold interest costs which represent costs
incurred through the balance sheet date for the construction of the
Mohegan Casino (see Note 3) and equipment (primarily furniture and
computers) that are being used in connection with the pre-opening
activities of the Authority. Upon the commencement of operations, these
costs will be depreciated or amortized, as applicable, on a straight-line
basis over the following estimated useful lives:
Deferred lease cost 50 years
Leasehold interest cost 40 years
Equipment 5-7 years
DEFERRED LEASE COSTS -
Deferred lease costs consist of the following (000's):
Acquisition cost of the site $23,385
Acquisition cost of additional
parcels (note 2) 5,875
The Site and the additional parcels were acquired from third parties
unrelated to the Tribe or the Authority. The Authority will not be
reimbursed by the Tribe for these payments.
OTHER ASSETS -
Other assets consist of pre-opening, deferred financing and organization
costs. Pre-opening costs are mainly payroll and related benefits and
general office overhead incurred through the balance sheet date. Deferred
financing costs have been incurred in connection with obtaining the senior
notes and the subordinated
F-5
<PAGE>
notes. Organization costs represent primarily legal costs incurred in the
organization of the Authority. Beginning on the opening date of the
Mohegan Casino, these costs will be amortized on a straight-line basis over
the following estimated useful lives:
Pre-opening costs 12 months
Deferred financing costs 7 years
Organization costs 5 years
2. DEBT:
The Authority has issued $175 million in Senior Notes due 2002 (the
"Senior Notes") with fixed interest payable at a rate of 13-1/2%
per annum and Cash Flow Participation Interest (as defined) in an
aggregate amount of 5.0% of the Authority's Cash Flow (as defined) up to a
limit, during any two consecutive semi-annual periods, ending
September 30, of $250 million of the Authority's Cash Flow. Fixed
interest is payable semi-annually commencing May 15, 1996. No Cash
Flow Participation Interest shall be payable with respect to any period
prior to the earlier of the first day the Mohegan Casino commences
operations or October 31, 1996. The aggregate amount of Cash Flow
Participation Interest payable will be reduced pro rata for reductions
in outstanding principal amount of Senior Notes. The payment of Cash Flow
Participation Interest may be deferred if the Authority's Fixed Charge
Coverage Ratio (as defined) is less than 2 to 1. The Senior Notes are
redeemable at set prices as set forth in the Senior Notes after November
15, 1999 at the option of the Authority. Upon the occurrence of certain
events (as specified in the Indenture for the Senior Notes) each holder
of Senior Notes can require the Authority to repurchase the Notes at
prices specified in the Senior Notes. Beginning with fiscal year ending
September 30, 1997, the Authority will be required, under certain
circumstances, to offer to purchase, at set prices, certain amounts of
Senior Notes then outstanding.
The Authority has obtained $40 million of subordinated financing from Sun
International in the form of two notes. These notes bear interest at 15%
per year, paid semi-annually and are due in 2003; however, these notes
cannot be paid until the Senior Notes have been paid in full.
The Authority has also obtained a commitment for gaming equipment financing
of up to $40 million from Sodek Gaming, Inc. The terms of this agreement
provides for an interest rate of 2% over prime, commencing from the date of
delivery of the equipment. Principal payments will be over 48 months
commencing 30 days after full use of the Mohegan Casino has commenced.
The above described debt is secured by substantially all the assets of the
Authority.
The Tribe has acquired an additional parcel of land adjacent to the Site
("Additional Parcel") that will be used to expand the access road to the
Mohegan Casino. The lease between the Tribe and the Authority, with
respect to The Site, has been amended to include
F-6
<PAGE>
the Additional Parcel. The annual rent under the Lease remains at $1.00
(see Note 3), but the Authority has made the initial downpayment of
$250,000 and assumed the promissory note ($350,000) with respect to the
Additional Parcel. The terms of the promissory note provide for monthly
payments of principal and interest (8%) of $4,246 commencing on January 1,
1996, with a final payment due on December 1, 2005. This promissory note
is secured by a mortgage on the Additional Parcel.
Repayments of debt for the next five years and thereafter follows:
Year Ending
September 30, Amount
--------------- --------
(000's)
1996 $ 21
1997 25
1998 23
1999 21
2000 18
Thereafter 215,234
--------
$215,342
========
The ability of the Authority to meet its debt service requirements will be
entirely dependent upon the completion and future successful performance
of the Mohegan Casino, which is subject to financial, economic, political,
competitive, and other factors, many of which are beyond the Authority's
control.
3. LEASE AGREEMENT:
As discussed in Note 1, the Authority has entered into the Lease with the
Tribe with respect to the Site. The initial term of the Lease is 25 years,
with an option to extend the term for an additional 25 years provided that
the Authority is not in default under the Lease. The Lease also provides
that all improvements constructed on the Site will become the property of
the Tribe and subject to the Lease. The Lease is a net Lease requiring
that the Authority be responsible for all costs of operating,
constructing, maintaining, repairing, replacing and insuring the leased
property, plus paying the Tribe an annual rent of $1.00. In addition to
the rent, the Authority has used the proceeds from the issuance of the
Subordinated Notes, described in Note 2, to acquire the Site on behalf of
the Tribe. Due to these payments and other terms of the Lease described
above, expenditures made by the Authority in connection with the
acquisition of the Site and the Additional Parcel have been recorded as
deferred lease costs and related improvements have been reflected as
leasehold interests for financial reporting purposes. The deferred lease
costs will be amortized on a straight-line basis over the term of the
Lease, plus the option period (a total of 50 years). The leasehold
interest will be amortized on a straight-line basis over the estimated
life of the buildings (40 years).
F-7
<PAGE>
4. INCOME TAXES:
The Tribe is an "Indian Tribal Government" within the meaning of sections
7701(a)(40) and 7871 of the Internal Revenue Code of 1986, as amended. As
such, the Authority has tax-exempt status with respect to federal and state
income and certain excise taxes.
5. COMMITMENTS AND CONTINGENCIES:
The Tribe, by itself and acting through the Authority, and TCA have
entered into an Amended and Restated Gaming Facility Development and
Construction Agreement ("the Construction Agreement") providing for the
design, construction, furnishing and site development of the Mohegan
Casino by TCA. The total cost of the Mohegan Casino, as outlined in the
Construction Agreement, is not to exceed $325 million. The Tribe has
assigned its rights and obligations in the Agreement to the Authority.
The Tribe has entered into a seven-year Amended and Restated Gaming
Facility Management Agreement ("the Management Agreement") with TCA to
provide for the management of the Mohegan Casino. Under the terms of the
Management Agreement, the Tribe has granted TCA the exclusive right and
obligation to develop, manage, operate and maintain the Mohegan Casino and
all other related facilities that are owned by the Tribe or any of its
instrumentalities. The Management Agreement authorizes TCA to pay itself a
monthly management fee from the Mohegan Casino's net revenues. The
management fee under the Management Agreement is expressed as a percentage
of net revenues, which ranges from 30% to 40%, depending on the level of
the net revenues generated by the Mohegan Casino. The Tribe has assigned
its rights in and delegated its obligations under the Agreement to the
Authority.
The Tribe's Compact with the State of Connecticut stipulates that a portion
of the revenues earned on slot machines will be paid to the State of
Connecticut. For each twelve-month period commencing July 1, 1995 the
minimum contribution of the Tribe to the State of Connecticut shall be the
lesser of (a) 30% of gross revenues from slot machines, or (b) the greater
of (i) 25% of gross revenues from slot machines or (ii) $80,000,000. These
payments will not be required if the State of Connecticut legalizes any
other gaming operations with slot machines to be operated in the State of
Connecticut (other than on certain Indian lands). No payments have been
made or are due as of the balance sheet date. When such payments become
payable, they will be reflected as operating expenses of the Authority.
The Tribe has entered into an agreement with the Town of Montville,
Connecticut (the "Town") pursuant to which the Tribe has agreed to pay to
the Town (i) an annual payment of $500,000 to compensate the Town for the
financial impact of removing the Site from the Town's tax rolls and
jurisdiction and (ii) a one-time fee of $3 million to make improvements to
the Town's water system, which improvements are necessitated by the
development and operation of the Mohegan Casino. The one time payment is
due and the annual payments commence one year after the commencement of
slot machine gaming activities.
F-8
<PAGE>
It is anticipated that these payments will be made by the Authority on
behalf of the Tribe. When that occurs, the one-time fee of $3,000,000 for
the improvement of the Town's water system will be capitalized as part of
leasehold interest (see Note 3), while the annual payments of $500,000 will
be treated as operating expenses of the Authority since they are effectively
in lieu of property taxes that would be the responsibility of the Authority
under the Lease. It is not anticipated that the Tribe will reimburse the
Authority for these payments.
F-9
<PAGE>
[ALTERNATIVE PROSPECTUS PAGE]
MOHEGAN TRIBAL GAMING AUTHORITY
13 1/2% SERIES B SENIOR SECURED NOTES DUE 2002
WITH CASH FLOW PARTICIPATION INTEREST
This Prospectus may be used by certain broker-dealers (collectively, the
"broker-dealers") in connection with offers and sales of 13 1/2% Series B Senior
Secured Notes Due 2002 With Cash Flow Participation Interest (the "Series B
Senior Notes") that were received by such broker-dealers for their own accounts
pursuant to an exchange offer in exchange for 13 1/2% Series A Senior Secured
Notes due 2002 With Cash Flow Participation Interest that were acquired by such
broker-dealers as a result of market-making or other trading activities. The
Mohegan Tribal Gaming Authority will not receive any proceeds from the sale of
Series B Senior Notes.
------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 17 HEREIN FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF SERIES B SENIOR
NOTES.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------------------
The date of this Prospectus is June __, 1996.
<PAGE>
[ALTERNATIVE PROSPECTUS PAGE]
PLAN OF DISTRIBUTION
This Prospectus may be used by certain broker-dealers (collectively, the
"broker-dealers") in connection with offers and sales of 13 1/2% Series B Senior
Secured Notes Due 2002 With Cash Flow Participation Interest (the "Series B
Senior Notes") that were received by such broker-dealers for their own accounts
in exchange for 13 1/2% Series A Senior Secured Notes due 2002 With Cash Flow
Participation Interest that were acquired by such broker-dealers as a result of
market-making or other trading activities (the "Exchange Offer"). The Mohegan
Tribal Gaming Authority will not receive any proceeds from the sale of Series B
Senior Notes.
Series B Senior Notes received by a broker-dealer for its own account
pursuant to the Exchange Offer may be sold by such broker-dealer from time to
time at prices determined at the time of sale directly to purchasers or to or
through brokers or dealers who may receive compensation in the form of
commissions or concessions from any such broker-dealer and/or the purchasers of
any such Series B Senior Notes. Any broker-dealer that resells Series B Senior
Notes that were received by it for its own account pursuant to the Exchange
Offer and any broker or dealer that participates in a distribution of such
Series B Senior Notes may be deemed to be an "underwriter" within the meaning of
the Securities Act and any profit on any such resale of Series B Senior Notes
and any commission or concessions received by any such persons may be deemed to
be underwriting compensation under the Securities Act. By delivering a
prospectus, a broker-dealer will be not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
<PAGE>
[ALTERNATIVE PROSPECTUS PAGE]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
No dealer, salesman or other person has been authorized to give any
information or to make any representation in connection with the Series B Senior
Notes other than those contained in this Prospectus, and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Authority. This Prospectus does not constitute an offer to sell or the
solicitation of any offer to buy any security other than those to which it
relates, nor does it constitute an offer to sell, or the solicitation of any
offer to buy, to any person in any jurisdiction in which such offer or
solicitation is not authorized, or in which the person making such offer or
solicitation is not qualified to do so, or to any person to whom it is unlawful
to make such offer or solicitation. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of the Authority since the date
hereof or that the information contained herein is correct as of any time
subsequent to the date hereof.
------------
TABLE OF CONTENTS
Page
----
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
The Manager. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Business and Property. . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Mohegan Tribe of Indians of
Connecticut. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Government Regulation. . . . . . . . . . . . . . . . . . . . . . . . . . 55
Material Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Description of Senior Notes. . . . . . . . . . . . . . . . . . . . . . . 87
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . 129
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
Independent Accountants. . . . . . . . . . . . . . . . . . . . . . . . . 130
Available Information. . . . . . . . . . . . . . . . . . . . . . . . . . 130
Glossary and Index of Defined Terms. . . . . . . . . . . . . . . . . . . 131
Index to Financial Statements. . . . . . . . . . . . . . . . . . . . . . F-1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MOHEGAN TRIBAL
GAMING AUTHORITY
13 1/2% SERIES B SENIOR SECURED
NOTES DUE 2002 WITH CASH
FLOW PARTICIPATION INTEREST
-------------------
PROSPECTUS
-------------------
June __, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Set forth below is an estimate (except the Commission registration fee) of
the fees and expenses payable by the registrant in connection with the issuance
and distribution of the Series B Senior Notes.
Securities and Exchange Commission
registration fee. . . . . . . . . . . . . . . . . . . . . . . . . .$ 60,345
Legal fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000
Accountants' fees . . . . . . . . . . . . . . . . . . . . . . . . . 69,353
Trustee's fees. . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500
Blue sky qualification fees and expenses. . . . . . . . . . . . . . 6,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,802
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . .$220,000
Item 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
All current and former officers, employees and members of the Authority
are entitled to be indemnified by the Authority pursuant to Section 7 of
Mohegan Tribal Ordinance No. 95-7/15-1, the ordinance that established the
Authority, "against reasonable expenses actually and necessarily incurred by
that person in connection with the defense of any action, suit or proceeding
in which that person is made a party by reason of being, or having been, such
officer, employee or member of the Authority." Indemnification is not
available in the event of an adjudication of liability for negligence or
misconduct in the performance of duty or for actions beyond the scope of
employment. The Authority also may reimburse such persons for the reasonable
costs of settlements of actions, suits or proceedings (so long as such
settlements do not involve findings of neglect, misconduct or ultra vires
acts) deemed by the Management Board to be in the best interests of the
Authority.
Item 15. RECENT SALES OF UNREGISTERED SECURITIES
On September 29, 1995, the Authority issued and sold $175,000,000
aggregate principal amount of Series A Senior Notes on the terms set forth
elsewhere in this Registration Statement. The Series A Senior Notes were
sold to Bear, Stearns & Co. Inc. and Donaldson, Lufkin & Jenrette Securities
Corporation, as initial purchasers (collectively, the "Initial Purchasers"),
for resale to qualified institutional buyers in reliance on Rule 144A under
the Securities Act and to a limited number of institutional accredited
investors within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act. The aggregate offering price for the sale of the Series A
Senior Notes to the Initial Purchasers was $175,000,000, and the Authority
paid an aggregate of $5,250,000 to the Initial Purchasers in discounts and
commissions.
II-1
<PAGE>
Concurrently with the sale of the Series A Senior Notes, the Authority
sold to Sun International $40 million principal amount of subordinated notes
due 2003 (the "Subordinated Notes"). The Subordinated Notes were sold at an
aggregate purchase price equal to the principal amount thereof and the
Authority did not pay any broker fees or commissions in connection therewith.
The Authority has committed to issue additional subordinated notes to Sun
International in principal amount equal to the amount of funds provided by
Sun International, if any, pursuant to the Secured Completion Guarantee, but
not to exceed an aggregate of $50 million.
The Series A Senior Notes and the Subordinated Notes are the only
securities sold by the Authority within the past three years that were not
registered under the Securities Act.
Item 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) EXHIBITS.
See attached Exhibit Index.
(b) FINANCIAL STATEMENT SCHEDULES.
See attached Index to Financial Statement Schedules.
Item 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information
in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unissued at
the termination of the Exchange Offer.
II-2
<PAGE>
(b) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions described under Item 14 above, or
otherwise, the registrant has been advised that in, the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted against the registrant by such director,
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THE MOHEGAN TRIBAL GAMING AUTHORITY HAVE DULY CAUSED THIS AMENDMENT NO. 3 TO
THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE TOWN OF MONTVILLE, STATE OF CONNECTICUT, ON
JUNE 3, 1996.
MOHEGAN TRIBAL GAMING AUTHORITY
By: /s/ Roland Harris
------------------------------------------
Roland Harris
Chairman, Management Board, Duly Authorized
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS AMENDMENT NO. 3 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED ON JUNE 3,
1996 BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED.
Signature Title
/s/ Mark Brown
- ----------------------------------- Member, Management Board
Mark Brown
/s/ Jayne Fawcett
- ----------------------------------- Vice Chair and Member, Management
Jayne Fawcett Board
/s/ Carlisle Fowler
- ----------------------------------- Treasurer and Member, Management
Carlisle Fowler Board
/s/ Courtland Fowler
- ----------------------------------- Member, Management Board
Courtland Fowler
/s/ Roland Harris
- ----------------------------------- Chairman and Member, Management
Roland Harris Board (Principal Executive
Officer)
/s/ Glenn R. LaVigne
- ----------------------------------- Member, Management Board
Glenn R. LaVigne
/s/ Loretta Roberge
- ----------------------------------- Corresponding Secretary and
Loretta Roberge Member, Management Board
II-4
<PAGE>
Signature Title
/s/ Maynard Strickland
- ----------------------------------- Member, Management Board
Maynard Strickland
/s/ Shirley Walsh
- ----------------------------------- Recording Secretary and
Shirley Walsh Member, Management Board
/s/ George Papanier
- ----------------------------------- Senior Vice President, Chief
George Papanier Financial Officer (Principal
Financial and Accounting
Officer)
II-5
<PAGE>
EXHIBIT INDEX
EXHIBIT SEQ.
NO. DESCRIPTION PAGE NO.
3.1 Constitution of the Mohegan Tribe of Indians of
Connecticut (the "Tribe") ratified by Tribal
vote on April 12, 1996
*3.2 Ordinance No. 95-7/15-1 of the Tribe for Gaming
on Tribal Lands, enacted on July 20, 1995
4.1 Indenture dated as of September 29, 1995 among
the Mohegan Tribal Gaming Authority of the Tribe
(the "Authority"), the Tribe and First Fidelity
Bank, as trustee
*4.2 Purchase Agreement dated September 21, 1995
among Bear, Stearns & Co. Inc. and Donaldson,
Lufkin & Jenrette Securities Corporation
(collectively, the "Initial Purchasers"), the
Authority and the Tribe
*4.3 Registration Rights Agreement dated as of
September 29, 1995 among the Authority and the
initial Purchasers
*5.1 Opinion of Hobbs, Straus, Dean & Walker, counsel
to the Authority, regarding the validity of the
Series B Senior Notes
*5.2 Opinion of Rome McGuigan, Sabanosh & Klebanoff,
P.C., counsel to the Authority, regarding the
validity of the Series B Senior Notes
*8.1 Opinion of special tax counsel to the Authority
regarding certain tax matters
*10.1 The Mohegan Tribe--State of Connecticut Gaming
Mohegan Compact between the Tribe and the State
of Connecticut (the "Compact")
*10.2 Agreement dated April 25, 1994 between the Tribe
and the State of Connecticut resolving certain
land claims (the "Resolution Agreement")
*10.3 Memorandum of Understanding dated April 25, 1994
between the Tribe and the State of Connecticut
regarding implementation of the Compact and the
Resolution Agreement
*10.4 Agreement between the Tribe and the Town of
Montville, Connecticut
10.5 Land Lease dated September 29, 1995 between the
Tribe and the Authority; Amendment of Land Lease
dated September 29, 1995
10.6 Open-End Construction--Permanent Leasehold
Mortgage Deed, Assignment of Leases and Rents
and Security Agreement dated as of September 29,
1995 between the Tribe and First Fidelity Bank,
as trustee
*10.7 Amended and Restated Gaming Facility Development
and Construction Agreement dated September 1,
1995 between the Tribe and Trading Cove
Associates ("TCA")
*10.8 Amended and Restated Gaming Facility Management
Agreement dated August 30, 1995 between the
Tribe and TCA
*10.9 Secured Completion Guarantee dated as of
September 29, 1995 by Sun International Hotels
Limited ("Sun") in favor of First Fidelity Bank,
as trustee
*10.10 Note Purchase Agreement dated as of September
29, 1995 between the Authority and Sun
- -----------------
*Previously filed.
E-1
<PAGE>
EXHIBIT SEQ.
NO. DESCRIPTION PAGE NO.
10.11 Cash Collateral Accounts Pledge and Security
Agreement dated as of September 29, 1995 among
First Fidelity Bank, as trustee, TCA, Sun, the
Authority and the Tribe
*10.12 Disbursement and Escrow Agreement dated as of
September 29, 1995 among First Fidelity Bank, as
escrow agent, Chicago Title Insurance Company,
as disbursement agent, First Fidelity Bank, as
trustee, TCA, Sun and the Authority
*10.13 Pledge Agreement dated September 29, 1995
between Sun International Investments Limited
and First Fidelity Bank
24.1 Consent of Independent Public Accountants of the
Authority
*24.2 Consent of counsel to the Authority (included in
Exhibits 5.1 and 5.2)
*24.3 Consent of special tax counsel to the Authority
(included in Exhibit 8.1)
25.1 Statement of Eligibility of Trustee on Form T-1
*27.1 Article 5 Financial Data Schedule
*99 Form of Letter of Transmittal
- -----------------
*Previously filed.
E-2
<PAGE>
CONSTITUTION
OF
THE MOHEGAN TRIBE OF INDIANS OF CONNECTICUT
PREAMBLE
We, The Mohegan Tribe of Indians of Connecticut, answerable to our
ancestors, in order to secure to ourselves and our descendants the management of
our own affairs as a sovereign American Indian Nation, to ensure the maintenance
of our basic human rights, to exercise our sovereign rights as a federally
recognized Indian tribe, including the right of self-determination and self-
governance, and to promote the general welfare of The Mohegan People, do hereby
establish, adopt and proclaim this Constitution.
ARTICLE I - NAME
The name of this organization shall be The Mohegan Tribe of Indians of
Connecticut (hereinafter "The Mohegan Tribe" or "The Tribe") and the members
thereof shall be known as The Mohegan Nation.
ARTICLE II - POWERS
The powers of The Mohegan Tribe shall include all of the inherent sovereign
rights and powers of an independent, indigenous sovereign nation.
ARTICLE III - JURISDICTION
SECTION 1. The jurisdiction of The Mohegan Tribe shall extend to all
lands presently owned or leased by The Tribe, all trust lands of The Tribe, all
lands hereinafter acquired by the Tribe, and all lands over which The Tribe has
regulatory authority.
SECTION 2. The Tribe's jurisdiction shall extend to:
(a) all persons who are currently enrolled as members of The Tribe;
(b) all persons who make application to become enrolled as members of The
Tribe prior to June 30, 1996, as provided in this Constitution and The Tribal
Enrollment Ordinance, who are subsequently accepted as members of The Tribe; and
(c) all other persons who may lawfully be subject to The Tribe's
jurisdiction.
<PAGE>
ARTICLE IV - GOVERNING BODIES
SECTION 1. The Mohegan Tribe shall be governed by The Mohegan People,
and represented by a Tribal Council, consisting of nine tribal members, and a
Council of Elders, consisting of seven tribal members, unless and until said
number of members is increased through the enactment of a joint ordinance;
approved by a majority of the Tribal Council and a majority of the Council of
Elders.
SECTION 2. Except as provided for in Article VIII, members of the
Tribal Council and Council of Elders shall serve for five-year terms.
SECTION 3. Meetings of the Tribal Council shall be held and conducted
as follows:
(a) The Tribal Council shall hold regular meetings which shall be called
by the Chair or upon written request of a majority of the members of the Tribal
Council then in office.
(b) Five (5) members of the Tribal Council then in office shall constitute
a quorum for the transaction of any tribal business, and a majority of a quorum
may make decisions except for those requiring a higher vote under this
Constitution.
(c) In conducting its business, the Tribal Council shall be governed by
such rules as it may, in its discretion, adopt.
SECTION 4. The Officers of the Tribal Council shall be elected in the
following manner: At the first regular meeting following each election, the
Tribal Council shall elect from among the membership of the Tribal Council a
Chair, a Vice-Chair, a Recording Secretary, a Corresponding Secretary, and a
Treasurer. Those members who are elected to these positions shall have those
additional powers and duties as are hereinafter enumerated.
SECTION 5. Meetings of the Council of Elders shall be held and
conducted as follows:
(a) The Council of Elders shall hold regular meetings which shall be
called by the Chair or upon written request of a majority of the members of the
Elders then in office.
(b) Five (5) members of the Elders then in office shall constitute a
quorum for the transaction of any tribal business, and a majority of a quorum
may make decisions except for those requiring a higher vote under this
Constitution.
(c) In conducting its business, the Elders shall be governed by such rules
as it may, in its discretion, adopt.
2
<PAGE>
SECTION 6. The Officers of the Council of Elders shall be elected in
the following manner: At the first regular meeting following each election, the
Elders shall elect from among the membership of the Council of Elders, a Chair,
a Vice-Chair, a Secretary, and a Treasurer. Those Elders who are elected to
these positions shall have those additional powers and duties as are hereinafter
enumerated.
SECTION 7. The members of the Tribal Council and the members of the
Council of Elders shall receive a compensation for their services.
SECTION 8. The members of the Tribal Council and the members of the
Council of Elders shall also be bonded, when legally required and/or deemed
advisable, and the cost of such bonds shall be borne by The Tribe. The amount
of the bonds shall be determined by the Tribal Council immediately upon adoption
of this Constitution.
ARTICLE V - MEMBERSHIP
SECTION 1. The membership of The Mohegan Tribe/Mohegan Nation shall
consist of the following persons:
(a) All living persons whose name or ancestor's name appears on the tribal
roll, as of federal recognition by the United States of America on May 15, 1994.
(b) All persons who become enrolled with the Tribe, pursuant to compliance
with The Tribal Membership/Enrollment Ordinance, by June 30, 1996.
(c) All descendants of persons who are currently enrolled with The Tribe,
and all descendants of persons who become enrolled with The Tribe pursuant to
Article V, Section 1(b).
SECTION 2. The persons identified in this Article V, section 1, shall
not be deprived of membership without their consent. Such a person may,
however, be stripped of all rights and privileges attained by him or her as a
result of his or her membership with The Mohegan Tribe, as provided for in The
Tribal Enrollment Ordinance.
SECTION 3. No person shall be entitled to become a member of The
Mohegan Tribe if his or her name is listed on the official roll of any other
tribe of American Indians. Additionally, any person whose name is listed on the
official roll of any other tribe of American Indians after he or she becomes a
member of The Mohegan Tribe of Indians may be stripped of all rights and
privileges attained by him or her as a result of his or her membership with
3
<PAGE>
The Mohegan Tribe, as provided for in The Tribal Enrollment Ordinance.
SECTION 4. Any person found to have committed fraud in attaining
membership status with The Mohegan Tribe, including but not limited to the
submission of falsified documents, shall have his or her "membership" deemed
void and of no force and effect, as of the date that said status was previously
conferred.
ARTICLE VI - ELECTIONS
SECTION 1. In order to qualify for and seek election to a position on
the Tribal Council, a person:
(a) Must be at least 21 years of age prior to the date of the election;
(b) Must be a registered voting member of The Tribe in good standing;
(c) Must not have been convicted of any violation of The Tribal Election
Ordinance; and
(d) Must not have been convicted of either a felony or a misdemeanor
involving moral integrity, such as forgery or bribery.
(e) Subsection (d) of Article VI, Section 1 may be waived by a majority
vote of the Council of Elders.
SECTION 2. In order to qualify for seek election to a position on the
Council of Elders, a person:
(a) Must be at least 55 years of age prior to the date of the election;
(b) Must be a registered voting member of The Tribe in good standing;
(c) Must not have been convicted of any violation of The Tribal Election
Ordinance; and
(d) Must not have been convicted of either a felony or misdemeanor
involving moral integrity, such as forgery or bribery.
(e) Subsection (d) of Article VI, Section 2 may be waived by a majority
vote of the Council of Elders.
SECTION 3. The current members of the Tribal Council and Council of
Elders shall serve until five years have expired from the dates they became
seated, respectively. Regular elections for the Tribal Council and Council of
Elders shall be held on the last
4
<PAGE>
Sunday in August, and the newly elected members of each body shall take office
on the first Monday in October following the respective elections.
ARTICLE VII - VOTING
SECTION 1. Any member of The Mohegan Tribe who attains the age of
eighteen (18) shall be entitled to become a registered voter, pursuant to the
procedures set forth in The Tribal Election Ordinance, and shall be entitled to
vote in the next tribal election.
SECTION 2. In each tribal election, every registered voting member
shall be entitled to cast one vote for each elective position available.
SECTION 3. All elections shall be by secret ballot and absentee ballots
shall be allowed for registered voters. No votes in a tribal election, however,
may be cast by proxy.
ARTICLE VIII - VACANCIES AND REMOVAL FROM OFFICE
SECTION 1. If a vacancy occurs among the members of either the Tribal
Council or the Council of Elders, and less than three months remain of the term
of the vacating member, the Tribal Council shall appoint a successor to such
position, who shall serve until the next regular tribal election when a
subsequent successor is duly elected and seated.
SECTION 2. If a vacancy occurs among the members of either the Tribal
Council or the Council of Elders, and more than three months remain of the term
of the vacating member, the Tribal Council shall cause to be held within sixty
days a special tribal election for the purpose of filling the vacancy.
SECTION 3. Where any member of the Tribal Council or the Council of
Elders, during the term for which he or she is elected or appointed:
(a) violates the provisions of this Constitution;
(b) is convicted of a felony or misdemeanor involving moral integrity,
such as forgery or bribery; or
(c) is absent from three consecutive regular meetings of the Tribal
Council or the Council of Elders, unless such absence has been excused for good
cause;
he or she shall be subject to removal from office by action of the Tribal
Council or the Council of Elders, provided that such removal
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shall be effective only after reasonable notice of the charges, an opportunity
for the subject member to be heard, and upon approval by a majority of the
members of the Council of Elders.
SECTION 4. Any member of the Tribal Council or Council of Elders who is
elected for a five-year term shall be removed from office if, at least three
months prior to the expiration of his or her term, a recall election is held and
a majority of the voters vote for removal of said person. The Tribal Council
and/or the Council of Elders shall hold a recall election within sixty (60) days
of its receipt of a recall petition bearing the signatures of at least forty
percent (40%) of the registered voters in The Tribe, accompanied by a cover
letter bearing the notarized signatures of at least three sponsors who are
members of The Tribe and who are registered to vote in tribal elections. Said
petition shall also be filed in accordance with any other procedures established
by the Tribal Council and Council of Elders.
SECTION 5. The following rules shall govern the removal and/or vacancy
of the Officers of the Tribal Council:
(a) If a vacancy occurs in the office of Chair, Vice-Chair, Recording
Secretary, Corresponding Secretary or Treasurer, such vacancy may be filled by
the Tribal Council through a subsequent election of one of its members to the
office.
(b) The Tribal Council may remove the Chair, Vice-Chair, Recording
Secretary, Corresponding Secretary and/or Treasurer from office for cause, by a
two-thirds (2/3) vote of the members of the Tribal Council then in office; the
Tribal Council may not, however, terminate or affect an officer's status as a
member of the Tribal Council through such action. The Tribal Council shall
prescribe in the Tribal Election Ordinance the specific methods by which removal
from such offices may be carried out.
SECTION 6. The following rules shall govern the removal and/or vacancy
of the Officers of the Council of Elders:
(a) If a vacancy occurs in the office of Chair, Vice-Chair, Secretary or
Treasurer, such vacancy may be filled by the Council of Elders through a
subsequent election of one of its members to the office.
(b) The Council of Elders may remove the Chair, Vice-Chair, Secretary
and/or Treasurer from office for cause by a two-thirds (2/3) vote of the members
of the Council of Elders then in office; the Council of Elders may not, however,
terminate or affect an officer's status as member of the Council of Elders
through such action. The Council of Elders shall prescribe in The Tribal
Election Ordinance the specific methods by which removal from such offices nay
be carried out.
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ARTICLE IX - POWERS AND DUTIES OF THE TRIBAL COUNCIL
SECTION 1. All legislative and executive powers of The Mohegan Tribe
not granted to the Council of Elders shall be vested in the Tribal Council and
shall be exercised in accordance with this Constitution and laws of the United
States applicable to Indian tribes, provided, that legislative and executive
actions taken prior to the effective date of this Constitution shall remain in
effect unless and until changed by the subsequent action of the Trial Council or
until any such action expires of its own terms.
SECTION 2. The powers of the Tribal Council shall include all executive
and legislative powers reasonable and necessary to achieve the tribal goals
recited in the Preamble hereof, and shall further specifically include, but not
be limited to, the following powers:
(a) To negotiate with and to approve or disapprove contracts or agreements
with tribal, foreign, federal, state, or local governments, with private persons
or with corporate bodies;
(b) To approve or disapprove any sale, disposition, lease or encumbrance
of tribal lands, interests in land, tribal funds or other tribal assets or
resources with or without advertisement for any period not in excess of the
period provided for by federal law;
(c) To establish procedures for the conduct of all tribal government and
business operations except where elsewhere precluded in this Constitution;
(d) To advise the Secretary of the Interior with regard to all
appropriation estimates of the Department of the Interior which are submitted
for the benefit of The Mohegan Tribe of Indians of Connecticut prior to the
submission of such estimates to the Office of Management and Budget or to
Congress;
(e) To employ and pay legal counsel for The Mohegan Tribe, subject to the
approval of the Secretary of the Interior to the extent that such approval is
required by federal law;
(f) No appropriate available tribal funds for the benefit of the Tribe;
(g) To approve or disapprove operating budgets submitted by the Tribal
Chair;
(h) To review the budget submitted annually by the Council of Elders and,
in the event that said budget is approved by a majority of the members of the
Tribal Council, to allocate the funds called for by said budget;
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(i) To approve or disapprove allocations or disbursements of tribal funds
(or grant or contract funds under the administrative control of The Tribe) not
specifically appropriated or authorized in a budget approved by the Tribal
Council;
(j) To establish and enforce rules, consistent with applicable federal
statutes and the applicable regulations of the Secretary of the Interior, for
the management of tribal lands, including but not limited to, the making and
revocation of assignments, and the disposition of timber, oil, and mineral
resources;
(k) To create, or to provide by ordinance for the creation of
organizations, including public and private corporations, for any lawful
purpose, which may be nonprofit or profit-making, and to regulate the activities
of such organizations by ordinance;
(l) To promote and protect the health, peace, morals, education, and
general welfare of The Tribe and its members;
(m) To borrow money from any source whatsoever without limit as to amount,
and on such terms and conditions and for such consideration and periods of time
as the Tribal Council shall determine; to use all funds thus obtained to promote
the welfare and betterment of The Tribe and its members; to finance tribal
enterprises; or to lend money thus borrowed;
(n) to establish and enforce all ordinances governing tribal members,
including, but not limited to, ordinances regarding tribal elections, ordinances
establishing the civil and criminal jurisdiction of The Mohegan Tribal Court
System, ordinances delineating the civil and criminal laws of The Mohegan Tribe,
and ordinances providing for the maintenance of law, order, and the
administration of justice within The Mohegan Indian Reservation;
(o) To establish a tribal court system, defining the powers and duties of
that court system;
(p) To regulate wholesale, retail, commercial or industrial activities on
tribal lands;
(q) To establish a basic departmental structure for the executive branch
of the tribal government; and to establish governmental sub-divisions and
agencies and delegate appropriate powers to such subdivisions and agencies;
(r) To establish policies relating to tribal economic affairs and
enterprises in accordance with this Constitution;
(s) To levy and collect taxes and raise revenue to meet with needs of The
Tribe or to support tribal government operations;
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(t) To pass any ordinances and resolutions necessary or incidental to the
exercise of any of the foregoing powers and duties; to waive the sovereign
immunity of The Tribe subject to such limitations and restrictions on the extent
and enforcement thereof as the Tribal Council may determine; and to adopt and to
do such acts of a governmental and/or public nature as are not prohibited by
applicable laws or by this Constitution.
SECTION 3. The powers and duties of the Chair of the Tribal Council
shall include, but not be limited to, the following:
(a) To serve as the chief executive officer of The Tribe and as head of
the executive branch of the tribal government;
(b) To carry out the policies established by the Tribal Council through
its passage of any ordinances and resolutions necessary or incidental to the
exercise of any of the powers and duties enumerated in Article IX above, and to
be accountable to the Council to see that said policies are faithfully executed;
(c) To negotiate, execute and carry out contracts or agreements with
tribal, foreign, federal, state, and local governments, private persons, or
corporate bodies, provided, that such contracts and agreements shall not be
valid unless and until approved by the Tribal Council;
(d) To manage, administer and direct the operation of tribal programs,
activities, and services and to report to the Tribal Council the status of each
program at least annually;
(e) To direct the preparation of budgets, budget estimates and financial
reports for submission to or at the direction of the Tribal Council;
(f) To assure the proper receipt, deposit, disbursement, and accounting of
all funds (or funds under control of The Tribe) consistent with this
Constitution and such policies as may be established by the Tribal Council;
(g) To provide for the protection and maintenance of the property,
equipment, and official records of The Tribe;
(h) To provide for enforcement of the rules, regulations, and ordinances
enacted by the Tribal Council;
(i) To preside over the meetings of the Tribal Council; and
(j) To exercise such additional powers as are necessary or incidental to
the performance of the powers and duties enumerated above.
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SECTION 4. In the absence of the Chair, it shall be the Vice-Chair's
duty and responsibility to preside over the Tribal Council meetings. The
Vice-Chair of the Tribal Council shall assist the Chair when called upon to do
so and shall maintain a current list of members of The Mohegan Tribe.
SECTION 5. The Recording Secretary shall ensure that a full and
complete record of all transactions of the Tribal Council and Tribal meetings
are kept, and shall submit promptly to the Chair all copies of the minutes,
resolutions adopted, and ordinances passed at all meetings of the Tribal
Council.
SECTION 6. The Corresponding Secretary shall be responsible for all
correspondence issued by the Tribal Council, and shall be responsible for
communicating all appropriate information from the Tribal Council to other
members of The Mohegan Tribe and/or to the Tribal Administration.
SECTION 7. The Treasurer shall cause to be audited all tribal funds and
accounts at least once per year, and at such other times as requested by the
Tribal Council or by any other lawful authority, and shall be the custodian of
the liquid assets of The Mohegan Tribe. Additionally:
(a) Unless otherwise provided, the Treasurer and Chair shall sign and
approve all disbursements of tribal funds or grant or contract funds under the
administrative control of The Tribe.
(b) The Treasurer shall be included in the membership of any committee
established by the Tribal Council, at least insofar as budgetary and financial
matters are concerned.
SECTION 8. The Tribal Council may authorize the formation of committees
to carry out its duties, as it deems necessary and proper. A committee of the
Tribal Council shall be defined as a body of one or more persons appointed or
elected by the Tribal Council to consider or investigate or take action in
regards to those matters assigned to it by the Tribal Council. Tribal Council
committees are subordinate to the Tribal Council, who shall delegate authority
to each committee at its discretion, and who shall define the duties, membership
and quorum for each committee.
ARTICLE X - POWERS & DUTIES OF THE COUNCIL OF ELDERS
SECTION 1. All judicial review powers of The Mohegan Tribe not
exercised by the Gaming Disputes Court shall be vested in the Council of Elders,
and in such subordinate commissions and/or courts as the Tribal Council may from
time to time ordain and establish. The Council of Elders shall exercise its
judicial review powers in accordance with this Constitution and the laws of the
United States applicable to Indian tribes, provided that
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judicial actions taken prior to the effective date of this Constitution shall
remain in effect unless and until changed by the subsequent action of the
Council of Elders or until any such action expires of its own terms.
SECTION 2. The powers of the Council of Elders shall include all
judicial review powers reasonable and necessary to achieve the tribal goals
recited in the Preamble hereof, and shall further specifically include, but not
be limited to, the following powers:
(a) To rule over cases and controversies arising under this Constitution
and arising under all laws of The Mohegan Tribe, but not to issue advisory
opinions or decisions in cases which are moot;
(b) To appoint from within their body member(s) to serve in the capacity
of "Justice of the Peace";
(c) To provide traditional Mohegan names to tribal members;
(d) To appoint and define all religious and ceremonial positions,
including but not limited to the Medicine Person, Chief or Sachem, Pipe Carrier,
Tribal Historian, Sagamores, Nonners, Fire Keepers, etc.; the persons so
appointed to said positions shall act under the supervision of, and subject to
the removal by, the Council of Elders, and shall fulfill their respective duties
in accordance with traditional Mohegan customs and traditions;
(e) To advise the Tribal Council in all matters related to tribal culture;
(f) To allocate within its budget the amounts deemed necessary for the
advice and assistance of legal counsel, and to exercise its discretion in
determining when to seek the advice and assistance of said counsel;
(g) To appropriate available tribal funds for the benefit of the Tribe, up
to the amount allocated by the Tribal Council in the annual budget of the
Council of Elders;
(h) To establish and enforce rules of tribal custom, consistent with
applicable federal statutes and the applicable regulations of the Secretary of
the Interior, for the management of tribal society, including but not limited
to, the conduct of tribal ceremonies and rituals;
(i) to promote and protect the health, peace, morals, and general welfare
of The Tribe and its members, and to establish traditional policies regarding
education of tribal members;
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(j) To establish and enforce ordinances governing tribal membership and
enrollment;
(k) to recommend and submit for a vote, as it deems necessary and wise,
amendments to this Constitution, as prescribed in Article XVI and XVII; and
(l) To entertain recommendations from other tribal members regarding
amendments to this Constitution, and to submit said recommendations to a tribal
vote, as prescribed in Article XVI and Article XVII.
SECTION 3. The powers and duties of the Chair of the Council of Elders
shall include, but not be limited to, the following powers:
(a) To carry out the policies established by the Council of Elders through
its passage of any ordinances and resolutions necessary or incidental to the
exercise of any of the powers and duties enumerated in Article X above, and to
be accountable to the Council of Elders to see that said policies are faithfully
executed;
(b) To manage, administer and direct the operation of tribal cultural
programs, activities, and services and to report to the Tribal Council the
status of each program at least annually;
(c) To direct the preparation of budgets, budget estimates and financial
reports for submission to or at the direction of the Tribal Council;
(d) To assure the proper receipt, deposit, disbursement, and accounting of
all funds (or funds under control of The Tribe) consistent with this
Constitution and such policies as may be established by the Council of Elders;
(e) To provide for the protection and maintenance of the property,
equipment, and official records of the Council of Elders;
(f) to provide for enforcement of the rules, regulations, and ordinances
enacted by the Council of Elders;
(g) To preside over the meetings of the Council of Elders, and
(h) To exercise such additional powers as are necessary or incidental to
the performance of the powers and duties enumerated above.
SECTION 4. In the absence of the Chair, it shall be the Vice-Chair's
duty and responsibility to preside over the meetings
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of the Council of Elders. The Vice-Chair of the Council of Elders shall also
assist the Chair when called upon to do so.
SECTION 5. The Council of Elders may authorize the formation of
committees to carry out its duties, as it deems necessary and proper. A
committee of the Council of Elders shall be defined as a body of one or more
persons appointed or elected by the Elders to consider or investigate or take
action in regards to those matters assigned to it by the Elders. Committees of
the Council of Elders are subordinate to the Council of Elders, who shall
delegate authority to each committee at its discretion, and who shall define the
duties, membership and quorum for each committee.
ARTICLE XI - INDIVIDUAL RIGHTS OF TRIBAL MEMBERS
SECTION 1. The Mohegan Tribe, in exercising its powers of
self-government, shall make no law inconsistent with The Indian Civil Rights Act
of 1968 (25 U.S.C. Sections 1301-1303; 82 Stat. 77), which requires that the
Tribe not:
(a) Make or enforce any law prohibiting the free exercise of religion, or
abridging the freedom of speech, or of the press, or the right of the people
peaceably to assemble and to petition for a redress of grievances;
(b) Violate the right of the people to be secure in their persons, houses,
papers, and effects against unreasonable searches and seizures, nor issue
warrants, but upon probable cause, supported by oath or affirmation, and
particularly describing the place to be searched and the person or thing to be
seized;
(c) Subject any person for the same offense to be twice put in jeopardy;
(d) Compel any person in any criminal case to be a witness against
himself;
(e) Take any private property for a public use without just compensation;
(f) Deny to any person in a criminal proceeding the right to a speedy and
public trial, to be informed of the nature and cause of the accusation, to be
confronted with the witnesses against him; to have compulsory process for
obtaining witnesses in his favor; and, at his own expense, to have the
assistance of counsel for his defense;
(g) Require excessive bail, impose excessive fines, inflict cruel and
unusual punishments, and in no event impose for conviction of any one offense
any penalty or punishment greater
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than imprisonment for a term of one (1) year or a fine of $5,000.00, or both;
(h) Deny to any person within its jurisdiction the equal protection of its
laws or deprive any person of liberty or property without the process of law;
(i) Pass any bill of attainder or ex post facto law;
(j) Deny to any person accused of any offense punishable by imprisonment,
the right, upon request, to a trial by jury of not less than six persons; or
(k) Prohibit any person from testing the legality of his detention, by
order of The Mohegan Tribal Court, by petitioning for a writ of habeas corpus in
a court of the United States.
SECTION 2. In the event that the Indian Civil Rights Act of 1968 is
amended in the future, the Tribal Council may, through legislative action,
provide that said amendment shall be deemed a part of this Constitution without
the need to adopt formal amendments to this Constitution.
ARTICLE XII - RIGHT TO PETITION
SECTION 1. The members of The Tribe reserve to themselves the power to
propose ordinances and resolutions and to enact or reject the same at the polls
independent of the Tribal Council upon petition of thirty-five (35) of the
registered voters within seven (7) days of such action.
SECTION 2. Forty percent (40%) of the registered voters shall (a) have
the right by petition to initiate and propose amendments to this Constitution
and to propose ordinances and resolutions; and (b) have the right by petition to
force the conduct of a referendum on any subject of concern to the members of
The Tribe, excepting the question of recall of the elected tribal officials
which shall be governed by the provisions of Article VIII.
SECTION 3. Upon receipt of a petition for an initiative or referendum
election, the Tribal Council shall, after ascertaining that forty percent (40%)
of the registered voters have signed the petition, cause to be held an election
on the question within sixty days of receipt of said petition.
SECTION 4. Any measure referred to the tribal members by initiative or
by referendum shall take effect and be in force when approved by a majority of
the votes cast in such election.
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SECTION 5. Referendum or initiative petitions filed under this Article
shall be accompanied by a cover letter bearing the notarized signatures of at
least three sponsors who are members of The Tribe and who are registered to vote
in tribal elections, and filed in accordance with any other procedures
established by the Tribal Council.
ARTICLE XIII - TRIBAL GAMING AUTHORITY AMENDMENT
SECTION 1. Creation of Gaming Authority. All governmental and
proprietary powers of The Mohegan Tribe over the development, construction,
operation, promotion, financing, regulation and licensing of gaming, and any
associated hotel, associated resort or associated entertainment facilities, on
tribal lands (collectively, "Gaming") shall be exercised by the Tribal Gaming
Authority, provided that such powers shall be within the scope of authority
delegated by the Tribal Council to the Tribal Gaming Authority under the
ordinance establishing the Tribal Gaming Authority. Leases and other
encumbrances grated by the Tribal Gaming Authority for Gaming development and
financing shall be deemed to be for governmental purposes and may be for periods
not to exceed 50 years. The Tribal Council shall, by ordinance, establish the
Tribal Gaming Authority, which shall oversee, regulate, prudently hold and
manage all of the Gaming assets of The Mohegan Tribe. The Tribal Gaming
Authority shall have the power to grant a limited waiver of sovereign immunity
as to Gaming matters, to contracts relating to Gaming, to the revenues of the
Tribal Gaming Authority, to the assets within the control of the Tribal Gaming
Authority, and as otherwise authorized by the Tribal Council, but shall have no
such right as to other tribal revenues, assets or powers. Nothing contained in
this Section shall limit the power of the Tribal Council to waive the sovereign
immunity of The Mohegan Tribes to Gaming or other matters, or with respect to
other tribal revenues or assets. The Tribal Gaming Authority shall have the
power to enter into contractual relationships which bind The Mohegan Tribe,
provided that such contracts shall be within the scope of authority delegated by
the Tribal Council to the Tribal Gaming Authority. Contracts of the Tribal
Gaming Authority shall be the law of The Mohegan Tribe and shall be specifically
enforceable in accordance with their terms. To the extent that tribal law does
not otherwise govern a dispute, the Gaming Disputes Court may apply relevant
provisions of Connecticut law. The Tribal Gaming Authority shall have the
authority to submit disputes to arbitration. The Tribal Gaming Authority shall
have the authority to stipulate for judgment before the Gaming Disputes court
created by Section 2 of this Article. Any stipulation for judgment made by the
Tribal Gaming Authority shall be binding on The Mohegan Tribe, the Tribal Gaming
Authority and upon the Gaming Disputes Court, provided that such stipulation is
within the scope of authority delegated by the Tribal Council to the Tribal
Gaming Authority. The Gaming Disputes Court shall grant the relief so
stipulated upon
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a finding that all conditions for granting such relief expressly set forth in
such stipulation have been met.
SECTION 2. Creation of Gaming Disputes Court. The Tribal Council shall
establish by ordinance, the Gaming Disputes Court, which shall be composed of a
Trial Branch and an Appellate Branch. Exclusive jurisdiction for the Tribe over
disputes arising out of or in connection with the Gaming, the actions of the
Tribal Gaming Authority, or contracts entered into by The Mohegan Tribe or the
Tribal Gaming Authority in connection with Gaming, including without limitation,
disputes arising between any person or entity and the Tribal Gaming Authority,
including customers, employees, or any gaming manager operating under a gaming
management agreement with the Tribal Gaming Authority, or any person or entity
which may be in privity with such persons or entities as to Gaming matters shall
be vested in the Gaming Disputes Court. Notwithstanding the provisions of
Article X of this Constitution, the Gaming Disputes Court shall also have
exclusive jurisdiction to determine all controversies arising under this
Constitution which in any way relate to Gaming.
2.1 Procedures. The Gaming Disputes Court shall have the power to enact
reasonable rules of procedure. The Gaming Disputes Court may, in its
discretion, receive evidence and adjudicate controversy de novo. All
proceedings of the Gaming Disputes Court shall be conducted in the state of
Connecticut, and shall be open to the public, absent a finding that justice
otherwise requires.
2.2 Remedies. Nothing in this Article XIII shall preclude or modify the
effect of any arbitration mechanism or other dispute resolution mechanism in any
agreement otherwise within the jurisdiction of the Gaming Disputes Court. The
Gaming Disputes Court shall have full jurisdiction and authority to compel
arbitration, to enforce any arbitration order or other dispute resolution
mechanism provision and to mandate any remedy which the Gaming Disputes Court
finds justice may require. All findings and orders of the Gaming Disputes Court
shall be in writing. In the event that either party to a contract which
provides for arbitration seeks an order from the Gaming Disputes Court to compel
such arbitration, the Gaming Disputes Court shall not review the merits of the
dispute, but shall order the parties to arbitrate; all questions of the
enforceability of the agreement to arbitrate, or an obligation to arbitrate the
dispute in question, being for the arbitrators to decide.
2.3 Appointment of Judges. The Tribal Council shall appoint the Judges of
the Gaming Disputes Court. The Tribal Council shall, within thirty days of the
adoption of this Article XIII, appoint a minimum number of four Judges for the
Gaming Disputes Court. At any time said number of judges falls below four, the
Tribal Council shall within thirty days, appoint such additional judges as
necessary to restore the minimum number to four judges. If the
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Tribal Council fails to restore the minimum pool of four within said thirty
days, the remaining Judges shall appoint the judges necessary to restore the
number to four judges. All judges shall be selected from a publicly available
list of eligible retired federal judges or Connecticut Attorney Trial Referees
duly appointed by the Chief Justice of the Connecticut Supreme Court pursuant to
Connecticut General Statute Section 52-434(a)(4), as amended from time to time,
who remain licensed and qualified to practice law in the State of Connecticut,
each of whom:
(a) Has never been convicted of a felony or any gaming offense;
(b) Is not a member of the Tribal Council, or a relative of any such
member by blood, marriage, or operation of law;
(c) Is of sound mind, trustworthy, and of good moral character;
(d) Is able to determine in what cases he or she will be disqualified and
is willing to disqualify himself or herself;
(e) Is capable of carrying out the duties of the office, including staff
administration and supervision; and
(f) Is willing to commit, upon public oath of affirmation, to uphold this
Constitution and to fairly and partially adjudicate all matters before the
Gaming Disputes Court.
2.4 Appeals. Appeals from any decision of the Trial Branch shall be heard
by three Judges in the Appellate Branch, Decisions of the Appellate Branch shall
be final. There shall be no further right of appeal within the Tribal Court.
2.5 Compensation. Judges of the Gaming Disputes Court shall be
compensated by the Tribal Council in amounts appropriate to the duties and
responsibilities of the office, which compensation shall not be diminished
during a judge's continuation in office. The Gaming Disputes Court shall have
the power to take appropriate action to enforce this subsection.
2.6 Recall and Discipline. After appointment, Judges of the Gaming
Disputes Court shall be subject to discipline and removal for cause pursuant to
the Rules of the Court.
SECTION 3. Amendments. Amendments of the ordinances establishing the
Tribal Gaming Authority and the Gaming Disputes Court shall require the vote of
two-thirds of the members of the Tribal Council, ratified by a two-thirds
majority of all votes cast, with at least 40% registered voters voting, in a
special tribal meeting called for that purpose by the Tribal Chair. Prior to
the enactment of any such amendment by the Tribal Council, any
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non-tribal party shall have the opportunity to seek a ruling of the Appellate
Division of the Gaming Disputes Court that the proposed amendment would
constitute an impermissible impairment of contract.
Notwithstanding the provisions of Articles XVI and XVII, amendments to this
Article XIII shall require a two-thirds majority of all votes cast, with at
least 40% registered voters voting, in a special election called for that
purpose by the Tribal Chair. Prior to the adoption of any such constitutional
amendment, any non-tribal party shall have the opportunity to seek a ruling of
the Appellate Division of the Gaming Disputes Court that the proposed amendment
would constitute an impermissible impairment of contract.
Notwithstanding any other provision of this Constitution, amendments to
subsection 2.3 of Article XIII and to Article XIV shall require the affirmative
vote of 75% of all registered voters of The Mohegan Tribe.
This Section 3 shall have no force or effect during any period in which no
indenture or other contract binding on The Tribe or the Tribal Gaming Authority
is outstanding or in effect which recites that it is entered into in reliance on
this Section 3.
SECTION 4. Indian Civil Rights Act. Nothing in this Article XIII or
any other provisions of this Constitution, or any other provision of Tribal Law
shall foreclose or limit any right any person may otherwise have to bring an
action in a court of competent jurisdiction to protect a right or seek a remedy
otherwise available pursuant to the Indian Civil Rights Act, 25 U.S.C. Section
1301 et seq.
ARTICLE XIV - NON-IMPAIRMENT OF CONTRACTS
The Tribe shall enact no law impairing the obligations of contracts entered
into in furtherance of development, construction, operation, and promotion of
Gaming on tribal lands. Neither the Tribal Council nor any committee, agency,
board or other official body, and no officer or official of The Tribe shall, by
exercise of the police power or otherwise, act to modify, amend, or in any
manner impair the obligations of contracts entered into by the Tribal Council or
the Tribal Gaming Authority or other parties in furtherance of the financing,
development, construction, operation, or promotion of Gaming on tribal lands
without the written consent of the non-tribal parties to such contract. Any
such action or attempted action shall be void ab initio. (Const. Amd.,
7-15-95).
ARTICLE XV - REPEAL AND SAVINGS CLAUSE
In the event that any sentence, paragraph, section, or article of this
Constitution is subsequently held invalid by a court of
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competent jurisdiction, the remainder of this Constitution shall remain valid
and in full force and effect.
ARTICLE XVI - ADOPTION
Except as provided for in Article XIII and Article XIV, this Constitution
shall take effect if and when adopted by a majority of all votes cast, where at
least thirty percent (30%) of the registered voters of The Tribe have voted, in
a special election called for that purpose by the Tribal Chair.
ARTICLE XVII - AMENDMENT
Except as provided for in Article XIII and Article XIV, this Constitution
may be amended in the same manner as that set forth in Article XVI, provided
that the Chair of the Tribal Council shall call an election to amend the
Constitution as requested by the Council of Elders.
Ratified by Tribal Vote April 12, 1996
19
<PAGE>
Execution Copy
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
MOHEGAN TRIBAL GAMING AUTHORITY
ISSUER
$175,000,000
Series A and Series B
Senior Secured Notes due 2002
_____________________________
INDENTURE
Dated as of September 29, 1995
_________________
Mohegan Tribal Gaming Authority of the
Mohegan Tribe of Indians of Connecticut
Mohegan Tribe of Indians of Connecticut
First Fidelity Bank
Trustee
- -C- COPYRIGHT 1995 BY THE MOHEGAN TRIBAL GAMING AUTHORITY, TRADING COVE
ASSOCIATES AND SUN INTERNATIONAL HOTELS LIMITED. REPRODUCTION OF THE MATERIAL
HEREIN OR SUBSTANTIAL QUOTATION OF ITS PROVISIONS WITHOUT PERMISSION VIOLATES
THE COPYRIGHT LAWS OF THE UNITED STATES AND WILL BE SUBJECT TO LEGAL
PROSECUTION.
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS.
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE*
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
310 (a)(1). . . . . . . . . . . . . . . . . . . . 7.10
(a)(2). . . . . . . . . . . . . . . . . . . . 7.10
(a)(3). . . . . . . . . . . . . . . . . . . . N.A.
(a)(4). . . . . . . . . . . . . . . . . . . . N.A.
(a)(5). . . . . . . . . . . . . . . . . . . . 7.10
(b) . . . . . . . . . . . . . . . . . . . . . 7.10
(c) . . . . . . . . . . . . . . . . . . . . . N.A.
311 (a) . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . N.A.
312 (a) . . . . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . . 11.03
(c) . . . . . . . . . . . . . . . . . . . . . 11.03
313 (a) . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(1). . . . . . . . . . . . . . . . . . . . 10.03
(b)(2). . . . . . . . . . . . . . . . . . . . 7.07
(c) . . . . . . . . . . . . . . . . . . . . . 7.06
. . . . . . . . . . . . . . . . . . . . . . . 11.02
(d) . . . . . . . . . . . . . . . . . . . . . 7.06
314 (a) . . . . . . . . . . . . . . . . . . . . . 4.03
. . . . . . . . . . . . . . . . . . . . . . . 11.02
(b) . . . . . . . . . . . . . . . . . . . . . 10.02
(c)(1). . . . . . . . . . . . . . . . . . . . 11.04
(c)(2). . . . . . . . . . . . . . . . . . . . 11.04
(c)(3). . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . 10.03
. . . . . . . . . . . . . . . . . . . . . . . 10.04
. . . . . . . . . . . . . . . . . . . . . . . 10.05
(e) . . . . . . . . . . . . . . . . . . . . . 11.05
(f) . . . . . . . . . . . . . . . . . . . . . N.A.
315 (a) . . . . . . . . . . . . . . . . . . . . . 7.01
(b) . . . . . . . . . . . . . . . . . . . . . 7.05
. . . . . . . . . . . . . . . . . . . . . . . 11.02
(c) . . . . . . . . . . . . . . . . . . . . . 7.01
(d) . . . . . . . . . . . . . . . . . . . . . 7.01
(e) . . . . . . . . . . . . . . . . . . . . . 6.11
316 (a)(last sentence). . . . . . . . . . . . . . 2.09
(a)(1)(A) . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . 6.04
(a)(2). . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . 6.07
(c) . . . . . . . . . . . . . . . . . . . . . 2.12
317 (a)(1). . . . . . . . . . . . . . . . . . . . 6.08
(a)(2). . . . . . . . . . . . . . . . . . . . 6.09
i
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(b) . . . . . . . . . . . . . . . . . . . . . 2.04
318 (a) . . . . . . . . . . . . . . . . . . . . . 11.01
(b) . . . . . . . . . . . . . . . . . . . . . N.A.
(c) . . . . . . . . . . . . . . . . . . . . . 11.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
ii
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . 1
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Other Definitions . . . . . . . . . . . . . . . .17
Section 1.03. Incorporation by Reference of Trust
Indenture Act . . . . . . . . . . . . . . . . . .17
Section 1.04. Rules of Construction . . . . . . . . . . . . . .18
ARTICLE 2
THE NOTES . . . . . . . . . . . . .18
Section 2.01. Form and Dating . . . . . . . . . . . . . . . . .18
Section 2.02. Execution and Authentication. . . . . . . . . . .19
Section 2.03. Registrar and Paying Agent. . . . . . . . . . . .20
Section 2.04. Paying Agent to Hold Money in Trust . . . . . . .20
Section 2.05. Holder Lists. . . . . . . . . . . . . . . . . . .21
Section 2.06. Transfer and Exchange . . . . . . . . . . . . . .21
Section 2.07. Replacement Notes . . . . . . . . . . . . . . . .27
Section 2.08. Outstanding Notes . . . . . . . . . . . . . . . .28
Section 2.09. Treasury Notes. . . . . . . . . . . . . . . . . .28
Section 2.10. Temporary Notes . . . . . . . . . . . . . . . . .28
Section 2.11. Cancellation. . . . . . . . . . . . . . . . . . .29
Section 2.12. Defaulted Interest. . . . . . . . . . . . . . . .29
Section 2.13. Record Date . . . . . . . . . . . . . . . . . . .29
ARTICLE 3
OFFERS TO PURCHASE OR REDEMPTION. . . . . . . .29
Section 3.01. Notices to Trustee. . . . . . . . . . . . . . . .29
Section 3.02. Selection of Notes to Be Purchased or Redeemed. .30
Section 3.03. Notice of Redemption. . . . . . . . . . . . . . .31
Section 3.04. Effect of Notice of Redemption. . . . . . . . . .31
Section 3.05. Deposit of Purchase or Redemption Price . . . . .31
Section 3.06. Notes Purchased or Redeemed in Part . . . . . . .32
Section 3.07. Optional Redemption . . . . . . . . . . . . . . .32
Section 3.08. Redemption Pursuant to Gaming Law . . . . . . . .32
Section 3.09. Mandatory Redemption. . . . . . . . . . . . . . .33
Section 3.10. Repurchase Offers . . . . . . . . . . . . . . . .33
ARTICLE 4
COVENANTS . . . . . . . . . . . . .35
Section 4.01. Payment of Notes. . . . . . . . . . . . . . . . .35
Section 4.02. Maintenance of Office or Agency . . . . . . . . .35
Section 4.03. Reports . . . . . . . . . . . . . . . . . . . . .36
Section 4.04. Compliance Certificate. . . . . . . . . . . . . .37
Section 4.05. Taxes . . . . . . . . . . . . . . . . . . . . . .37
Section 4.06. Stay, Extension and Usury Laws. . . . . . . . . .38
Section 4.07. Restricted Payments . . . . . . . . . . . . . . .38
i
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Section 4.08. Mandatory Cash Maintenance Account. . . . . . . .40
Section 4.09. Limitations on Incurrence of Indebtedness . . . .41
Section 4.10. Asset Sales . . . . . . . . . . . . . . . . . . .42
Section 4.11. Event of Loss . . . . . . . . . . . . . . . . . .43
Section 4.12. Transactions with Affiliates. . . . . . . . . . .44
Section 4.13. Liens . . . . . . . . . . . . . . . . . . . . . .45
Section 4.14. Line of Business. . . . . . . . . . . . . . . . .45
Section 4.15. Governmental Existence. . . . . . . . . . . . . .45
Section 4.16. Offer to Repurchase Upon Change of Control. . . .45
Section 4.17. Registration Rights . . . . . . . . . . . . . . .45
Section 4.18. Use of Proceeds . . . . . . . . . . . . . . . . .46
Section 4.19. Disbursement and Escrow Agreement . . . . . . . .46
Section 4.20. Gaming Licenses.. . . . . . . . . . . . . . . . .47
Section 4.21. Construction. . . . . . . . . . . . . . . . . . .47
Section 4.22. Maintenance of Insurance. . . . . . . . . . . . .47
Section 4.23. Limitation on Status as Investment Company. . . .48
Section 4.24. Collateral Documents. . . . . . . . . . . . . . .48
Section 4.25. Further Assurances. . . . . . . . . . . . . . . .49
Section 4.26. Interest and Excess Cash Flow Account . . . . . .49
Section 4.27. Restrictions on Leasing and Dedication
of Property . . . . . . . . . . . . . . . . . . .49
Section 4.28. Excess Cash Purchase Offer. . . . . . . . . . . .50
Section 4.29. Ownership Interests in the Authority. . . . . . .51
Section 4.30. Limitation of Creation of Subsidiaries. . . . . .51
ARTICLE 5
SUCCESSORS . . . . . . . . . . . . .52
Section 5.01. Liquidation or Dissolution. . . . . . . . . . . .52
ARTICLE 6
DEFAULTS AND REMEDIES . . . . . . . . . .52
Section 6.01. Events of Default . . . . . . . . . . . . . . . .52
Section 6.02. Acceleration. . . . . . . . . . . . . . . . . . .54
Section 6.03. Other Remedies. . . . . . . . . . . . . . . . . .55
Section 6.04. Waiver of Past Defaults . . . . . . . . . . . . .55
Section 6.05. Control by Majority . . . . . . . . . . . . . . .55
Section 6.06. Limitation on Suits . . . . . . . . . . . . . . .56
Section 6.07. Rights of Holders of Notes to Receive Payment . .56
Section 6.08. Collection Suit by Trustee. . . . . . . . . . . .56
Section 6.09. Trustee May File Proofs of Claim. . . . . . . . .56
Section 6.10. Priorities. . . . . . . . . . . . . . . . . . . .57
Section 6.11. Undertaking for Costs . . . . . . . . . . . . . .57
Section 6.12. Management of Casinos . . . . . . . . . . . . . .58
ARTICLE 7
TRUSTEE. . . . . . . . . . . . . .58
Section 7.01. Duties of Trustee . . . . . . . . . . . . . . . .58
Section 7.02. Rights of Trustee . . . . . . . . . . . . . . . .59
Section 7.03. Individual Rights of Trustee. . . . . . . . . . .60
Section 7.04. Trustee's Disclaimer. . . . . . . . . . . . . . .60
Section 7.05. Notices of Defaults . . . . . . . . . . . . . . .60
ii
<PAGE>
Section 7.06. Reports by Trustee to Holders of the Notes. . . .60
Section 7.07. Compensation and Indemnity. . . . . . . . . . . .61
Section 7.08. Replacement of Trustee. . . . . . . . . . . . . .62
Section 7.09. Successor Trustee by Merger, etc. . . . . . . . .63
Section 7.10. Eligibility; Disqualification . . . . . . . . . .63
Section 7.11. Preferential Collection of Claims
Against Company . . . . . . . . . . . . . . . . .64
iii
<PAGE>
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE . . . . . 64
Section 8.01. Option to Effect Legal Defeasance
or Covenant Defeasance. . . . . . . . . . . . . .64
Section 8.02. Legal Defeasance and Discharge. . . . . . . . . .64
Section 8.03. Covenant Defeasance . . . . . . . . . . . . . . .65
Section 8.04. Conditions to Legal or Covenant Defeasance. . . .65
Section 8.05. Deposited Money and Government Securities to be
Held in Trust; Other Miscellaneous Provisions . .67
Section 8.06. Repayment to Authority. . . . . . . . . . . . . .67
Section 8.07. Reinstatement . . . . . . . . . . . . . . . . . .68
Section 8.08. Note Collateral . . . . . . . . . . . . . . . . .68
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER. . . . . . . .68
Section 9.01. Without Consent of Holders of Notes . . . . . . .68
Section 9.02. With Consent of Holders of Notes. . . . . . . . .69
Section 9.03. Compliance with Trust Indenture Act . . . . . . .70
Section 9.04. Revocation and Effect of Consents . . . . . . . .71
Section 9.05. Notation on or Exchange of Notes. . . . . . . . .71
Section 9.06. Trustee to Sign Amendments, etc . . . . . . . . .71
ARTICLE 10
COLLATERAL AND SECURITY. . . . . . . . . .71
Section 10.01. Security . . . . . . . . . . . . . . . . . . . .71
Section 10.02. Recording and Opinions . . . . . . . . . . . . .72
Section 10.03. Release of Note Collateral . . . . . . . . . . .73
Section 10.04. Protection of the Trust Estate . . . . . . . . .74
Section 10.05. Certificates of the Authority. . . . . . . . . .75
Section 10.06. Certificates of the Trustee. . . . . . . . . . .75
Section 10.07. Authorization of Actions to Be Taken
by the Trustee Under the Collateral Documents. .75
Section 10.08. Authorization of Receipt of Funds by
the Trustee Under the Collateral Documents . . .76
Section 10.09. Termination of Security Interest . . . . . . . .76
Section 10.10. Cooperation of Trustee . . . . . . . . . . . . .76
Section 10.11. Collateral Agent . . . . . . . . . . . . . . . .77
Section 10.12. Cash Funds Pledge. . . . . . . . . . . . . . . .77
ARTICLE 11
COVENANTS OF THE TRIBE . . . . . . . . . .78
Section 11.01. Covenants of the Tribe . . . . . . . . . . . . .78
ARTICLE 12
MISCELLANEOUS . . . . . . . . . . . .80
Section 12.01. Trust Indenture Act Controls . . . . . . . . . .80
Section 12.02. Notices. . . . . . . . . . . . . . . . . . . . .81
Section 12.03. Communication by Holders of Notes with
Other Holders of Notes . . . . . . . . . . . . .82
Section 12.04. Certificate and Opinion as to Conditions
Precedent. . . . . . . . . . . . . . . . . . . .83
Section 12.05. Statements Required in Certificate or Opinion. .83
iv
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Section 12.06. Rules by Trustee and Agents. . . . . . . . . . .83
Section 12.07. Dispute Resolution and Consent to Suit . . . . .83
Section 12.08. No Personal Liability of Directors,
Officers, Employees and Stockholders . . . . . .85
Section 12.09. Governing Law. . . . . . . . . . . . . . . . . .86
Section 12.10. No Adverse Interpretation of Other Agreements. .86
Section 12.11. Successors . . . . . . . . . . . . . . . . . . .86
Section 12.12. Severability . . . . . . . . . . . . . . . . . .86
Section 12.13. Counterpart Originals. . . . . . . . . . . . . .86
Section 12.14. Table of Contents, Headings, Etc . . . . . . . .86
v
<PAGE>
EXHIBITS
Exhibit A-1 Form of Senior Secured Note (Series A)
A-2 Form of Senior Secured Note (Series B)
Exhibit B Certificate to be delivered upon exchange or registration
of transfer of Notes
vi
<PAGE>
INDENTURE dated as of September 29, 1995 among the Mohegan
Tribal Gaming Authority of the Mohegan Tribe of Indians of
Connecticut (the "Authority"), First Fidelity Bank, as trustee (the
"Trustee"), and the Mohegan Tribe of Indians of Connecticut (the
"Tribe") for the limited purposes stated in Articles 11 and 12
hereof and Section 4.29.
This Indenture is entered into on reliance of the provisions
of Article XIII, Section 3 of the Tribe's Constitution as in effect
on the date of this Indenture.
The Authority, the Trustee and the Tribe (to the limited
extent specified herein) agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of the
Series A and Series B Senior Secured Notes due 2002 (the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"ACCRUAL PERIOD" shall have the meaning specified in paragraph
1 of the Notes.
"ACQUIRED INDEBTEDNESS" means, with respect to any specified
Person, (i) Indebtedness of any other Person existing at the time
such other Person merged with or into such specified Person,
including Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into such
specified Person and (ii) Indebtedness encumbering any asset
acquired by such specified Person.
"AFFILIATE" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person. For
purposes of this definition, "control" (including, with correlative
meanings, the terms "controlling," "controlled by" and "under
common control with"), as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by
agreement or otherwise, PROVIDED, HOWEVER, that for purposes of
Section 4.12 only, beneficial ownership of 10% or more of the
voting securities of a Person shall be deemed to be control.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"ASSET SALE" means the sale, conveyance, transfer or other
disposition (whether in a single transaction or a series of related
transactions) of property or assets (including by way of a sale and
leaseback) of the Authority (each referred to in this definition as
a "disposition") other than (a) a disposition of inventory or other
goods held for sale or disposition in the ordinary course of
business, (b) any disposition that is a Restricted Payment
permitted under Section 4.07 hereof or any Investment that is not
prohibited thereunder or any disposition of cash or Cash
Equivalents, (c) any single disposition, or related series of
dispositions, of assets with an aggregate fair market value of less
than $500,000, (d) any Event of Loss and (e) any lease or sublease
permitted as described
1
<PAGE>
under Section 4.27 hereof. It is acknowledged that the Authority is
prohibited from making an Asset Sale of Key Project Assets.
"AUTHORITY" means the Mohegan Tribal Gaming Authority together
with any subdivision, agency, subunit or Subsidiary thereof and any
successor and assignee thereto.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar
federal, state or tribal law or ordinance for the relief of
debtors.
"BOARD OF DIRECTORS" means, as the context requires, the
Management Board of the Authority or any authorized committee of
the Management Board of the Authority.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL LEASE OBLIGATION" means, at the time and
determination thereof is to be made, the amount of the liability in
respect of a capital lease that would at such time be required to
be capitalized and reflected as a liability on the balance sheet in
accordance with GAAP.
"CAPITAL STOCK" means with respect to any Person, any and all
shares, interests, participations, rights or other equivalents
(however designated) in the profits or losses of such Person,
including, (i) if such Person is a partnership, partnership
interests (whether general or limited) and any other interest or
participation that confers on a Person the right to receive a share
of the profits and losses of, or distributions of assets of, such
partnership or (ii) with respect to the Authority, any interest or
participation in the profits or losses of the Authority or its
business other than fees paid to the Manager under the Management
Agreement, amounts paid to the State of Connecticut under the
Compact or the memorandum of understanding thereunder, Cash Flow
Participation Interest on the Notes, or any fees for goods and
services provided to the Authority in the ordinary course of
business and which is measured by revenues or income.
"CASH AVAILABLE FOR CASH MAINTENANCE ACCOUNT" means, with
respect to any period, the Cash Flow of the Authority for such
period less (i) Interest Expense of the Authority for such period,
(ii) principal payments on Indebtedness of the Authority made in
respect of such period (other than pursuant to an Excess Cash
Purchase Offer) and (iii) Minimum Priority Payments to the Tribe
for such period; Cash Available for Cash Maintenance Account shall
be calculated without any deduction for deposits into the Cash
Maintenance Account or deposits in respect of Excess Cash Flow into
the Interest and Excess Cash Flow Account.
"CASH COLLATERAL ACCOUNTS PLEDGE AND SECURITY AGREEMENT" means
the Cash Collateral Accounts Pledge Agreement among the Trustee,
the Authority and the Manager dated as of the Issuance Date.
"CASH EQUIVALENTS" means (i) United States dollars, (ii)
securities issued or directly and fully guaranteed or insured by
the United States government or any agency or instrumentality
thereof having maturities of not more than six months from the date
of acquisition, (iii) certificates of deposit and eurodollar time
deposits with maturities of six months or less from the date of
acquisition, bankers' acceptances with maturities not
2
<PAGE>
exceeding six months and overnight bank deposits, in each case with any
commercial bank having capital and surplus in excess of $300 million, (iv)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (ii) and (iii) entered into with
any financial institution meeting the qualifications specified in clause
(iii) above, (v) commercial paper rated A-1 or the equivalent thereof by
Moody's Investors Service, Inc. or Standard & Poor's Ratings Group and in
each case maturing within one year after the date of acquisition and (vi)
investment funds investing solely in securities of the types described in
clauses (ii) - (v) above.
"CASH FLOW" means, with respect to any Person for any period,
the Net Revenue of such Person for such period, plus (a) an amount
equal to any extraordinary loss plus any net loss realized in
connection with an Asset Sale (to the extent such losses were
deducted in computing such Net Revenue), plus (b) provision for
taxes based on income or profits of such Person for such period, to
the extent such provision for taxes was used in computing such Net
Revenue, plus (c) Interest Expense of such Person for such period,
plus (d) Depreciation and Amortization Expense of such Person for
such period to the extent such depreciation and amortization were
deducted in computing such Net Revenue, in each case, as determined
in accordance with GAAP.
"CASH FLOW PARTICIPATION INTEREST" shall have the meaning
specified in paragraph 1 of the Notes.
"CASH FLOW PARTICIPATION INTEREST ACCRUAL" means, at any time,
the total amount of Cash Flow Participation Interest on the Notes
accrued and unpaid through and as of such time.
"CASH MAINTENANCE ACCOUNT" means the cash collateral account
required to be established by Sections 4.08 and 10.12.
"CHANGE OF CONTROL" means the occurrence of any of the
following: (i) the Authority ceases to be a wholly-owned unit,
instrumentality or subdivision of the government of the Tribe, (ii)
the Authority ceases to have the exclusive legal right to operate
gaming operations of the Tribe, (iii) the Authority fails to retain
in full force and effect at all times all material governmental
consents, permits or legal rights necessary for the operation of
the Resort and such failure continues for a period of 90
consecutive days, (iv) TCA or any other entity in which Sun
International owns, directly or indirectly, at least 50% of the
Capital Stock ceases to be the Manager of the Resort or fails to
hold any material governmental consent or permit required to manage
the Resort and such failure continues for a period of 90
consecutive days or (v) Sun International fails to own, directly or
indirectly, at least 50% of the Capital Stock of the Manager.
"COLLATERAL AGENT" means any person appointed by the Trustee
as a collateral agent hereunder.
"COLLATERAL DOCUMENTS" means, collectively, the Leasehold
Mortgage, Cash Collateral Accounts Pledge and Security Agreement,
Disbursement and Escrow Agreement, Secured Completion Guarantee or
any other agreements, instruments, financing statements or other
documents that evidence, set forth or limit the Lien of the Trustee
in the Note Collateral.
3
<PAGE>
"COMMENCEMENT DATE" shall have the meaning specified in
paragraph 1 of the Notes.
"COMPACT" means the tribal-state Compact entered into between
the Tribe and the State of Connecticut pursuant to the Indian
Gaming Regulatory Act of 1988, PL 100-497, 25 U.S.C. 2701 ET SEQ.
as the same may, from time to time, be amended, or such other
Compact as may be substituted therefor.
"COMPLETED" means, with respect to the Resort, the first time
that (i) all Liens (other than Permitted Liens or Liens which
relate to Disputed Amounts (as defined in the Secured Completion
Guarantee) guaranteed by the Guarantor (as defined in the Secured
Completion Guarantee) under Section 2.5 of the Secured Completion
Guarantee) relating to the construction of the Resort have been
paid, (ii) the general contractor and the project architect for the
Resort, or an independent construction expert appointed by the
Guarantor and acceptable to the Trustee, shall have delivered a
certificate to the Trustee certifying that the Resort is complete
in all material respects in accordance with the Plans therefor and
in compliance with all applicable laws, ordinances and regulations
(including gaming laws, ordinances and the Compact requirements)
with respect to the physical structure, health and safety,
environmental and hazardous materials, fire, equipment, security
and physical operating (gaming and other) requirements of the
Resort, and (iii) the Resort is in a condition (including
installation of furnishings, fixtures and equipment sufficient for
the Minimum Facilities and provision of adequate initial operating
capital) including all operating supplies, sufficient coin for the
slot machines, sufficient operating cash for the other games and
trained employees (or sufficient funds to hire and train such
employees) so that the Resort is fit to receive guests in the
ordinary course of business.
"CONSTRUCTION BUDGET" means itemized schedules setting forth
on a line item basis all of the costs (including financing costs)
estimated to be incurred in connection with the financing, design,
development, construction, equipping and opening of the Project, as
such schedules are delivered to the Disbursement Agent and Escrow
Agent as of the Issuance Date and as amended from time to time in
accordance with the Disbursement and Escrow Agreement.
"CONTINUING PAYMENT DEFAULT NOTICE" means a written statement
(a "Payment Default Notice") signed by the Authority or by the
Trustee or by Holders of at least 25% in principal amount of the
then outstanding Notes and received by the Trustee, to the effect
that a Payment Default has occurred and is continuing; such Payment
Default Notice shall cease to be a Continuing Payment Default
Notice when the Trustee subsequently receives either (i) a written
statement, signed by the Person or Persons that signed such Payment
Default Notice or by Holders of at least 25% in principal amount of
the then outstanding Notes or by the Trustee, to the effect that
such Payment Default has been cured by payment in cash of the full
amount due or (ii) a certified copy of a final and nonappealable
order of the Gaming Disputes Court or other court of competent
jurisdiction, finding and declaring that such Payment Default
either did not occur or has been cured by payment in cash of the
full amount due and that such Payment Default Notice has expired.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the
address of the Trustee specified in Section 12.02 hereof or such
other address as to which the Trustee may give notice to the Tribe
or the Authority.
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"DEFAULT" means any event that is or with the passage of time
or the giving of notice or both would be an Event of Default.
"DEFERRED SUBORDINATED INTEREST" means any interest on
Subordinated Indebtedness that is not currently payable in cash or
that is not permitted to be paid in cash under the governing
agreements, including any amortization of original issue discount.
"DEFINITIVE NOTES" means Notes that are in the form of the
Notes attached hereto as Exhibit A-1, that do not include the
information called for by footnotes 1 and 2 thereof.
"DEPOSITORY" means, with respect to the Notes issuable or
issued in whole or in part in global form, the Person specified in
Section 2.03 hereof as the Depository with respect to the Notes,
until a successor shall have been appointed and become such
pursuant to the applicable provision of this Indenture, and,
thereafter, "Depository" shall mean or include such successor.
"DEPRECIATION AND AMORTIZATION EXPENSE" means with respect to
any Person for any period, the total amount of depreciation and
amortization expense and other noncash charges (excluding any
noncash item that represents an accrual, reserve or amortization of
a cash expenditure for a future period and excluding non cash
Interest Expense) of such Person for such period as defined in
accordance with GAAP.
"DEVELOPMENT AND CONSTRUCTION AGREEMENT" means the Gaming
Facility Construction and Development Agreement between the Tribe
and the Manager, substantially in the form delivered to the Trustee
on the Issuance Date.
"DISBURSEMENT AND ESCROW AGREEMENT" means the Disbursement and
Escrow Agreement among the Authority, the Trustee, First Fidelity
Bank, as Escrow Agent, the Manager, Sun International, and Chicago
Title Insurance Company, Disbursement Agent, substantially in the
form delivered to the Trustee on the Issuance Date.
"DOLLARS" and "$" mean lawful money of the United States of
America.
"ELIGIBLE INSTITUTION" means (a) the Trustee, (b) an affiliate
of the Trustee or (c) a commercial banking institution that is
federally chartered or organized under the laws of the State of
Connecticut, is not affiliated with or chartered by the Tribe, has
combined capital and surplus in excess of $500 million, conducts
banking operations in the State of Connecticut, and whose debt is
rated "A" (or higher) according to Standard & Poor's Ratings Group
or Moody's Investors Service, Inc.
"EQUITY INTERESTS" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any
debt security that is convertible into, or exchangeable for,
Capital Stock).
"ESCROW ACCOUNT" shall have the meaning set forth in the
Disbursement and Escrow Agreement.
"ESCROW AGENT" shall have the meaning set forth in the
Disbursement and Escrow Agreement.
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"EVENT OF LOSS" means, with respect to any property or asset
(tangible or intangible, real or personal), any of the following:
(A) any loss, destruction or damage of such property or asset; (B)
any institution of any proceedings for the condemnation or seizure
of such property or asset or for the exercise of any right of
eminent domain; (C) any actual condemnation, seizure or taking by
exercise of the power of eminent domain or otherwise of such
property or asset, or confiscation of such property or asset or the
requisition of the use of such property or asset; or (D) any
settlement in lieu of clause (B) or (C) above.
"EXCESS CASH FLOW" means, with respect to any period, an
amount equal to the Cash Flow of the Authority for such period,
less (i) all Management Fees accrued for such period (whether or
not distributed), (ii) principal payments on Indebtedness of the
Authority during such period (other than principal payments (a)
pursuant to an Excess Cash Purchase Offer or (b) which are funded
from the proceeds of Indebtedness permitted to be incurred under
the Indenture or (c) on the Working Capital Financing that do not
permanently reduce Indebtedness under the Working Capital
Financing), (iii) the Authority's share of deposits into the
Replacement Reserve Account (but not more than $1.8 million per
fiscal year) commencing with the first full fiscal year after the
commencement of operations of the Resort, (iv) all other capital
expenditures not funded from the Replacement Reserve Account or
from the proceeds of Indebtedness permitted to be incurred under
the Indenture (but not more than $5.0 million per fiscal year), (v)
any amounts set aside in the Cash Maintenance Account for such
fiscal period, (vi) Interest Expense of the Authority for such
period and (vii) taxes, if any, payable to the federal government
or the State of Connecticut.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXCHANGE OFFER" means the registration by the Authority under
the Securities Act of the Series B Notes pursuant to a registration
statement pursuant to which the Authority is obligated to offer the
Holders of all outstanding Transfer Restricted Securities the
opportunity to exchange all such outstanding Transfer Restricted
Securities held by such Holders for Series B Notes in an aggregate
principal amount equal to the aggregate principal amount of the
Transfer Restricted Securities tendered in such exchange offer by
such Holders.
"FIXED CHARGE COVERAGE RATIO" means, with respect to any
Person for any period, the ratio of the Cash Flow of such Person
for such period to the Fixed Charges of such Person for such
period. In the event that the Authority incurs, assumes,
guarantees or redeems any Indebtedness (other than revolving credit
borrowings) subsequent to the commencement of the period for which
the Fixed Charge Coverage Ratio is being calculated but prior to
the event for which the calculation of the Fixed Charge Coverage
Ratio is made (the "Calculation Date"), then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect to such
incurrence, assumption, guarantee or redemption of Indebtedness as
if the same had occurred at the beginning of the applicable four-
quarter period. For purposes of making the computation referred to
above, acquisitions, dispositions and discontinued operations (as
determined in accordance with GAAP) that have been made by the
Authority, including all mergers, consolidations and dispositions,
during the four-quarter reference period or subsequent to such
reference period and on or prior to the Calculation Date shall be
calculated on a pro forma basis assuming that all such
acquisitions, dispositions, discontinued operations, mergers,
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consolidations (and the reduction of any associated fixed charge
obligations resulting therefrom) had occurred on the first day of
the four-quarter reference period.
"FIXED CHARGES" means, with respect to any Person for any
period, the sum of (a) the Interest Expense of such Person for such
period, (b) the Interest Expense of such Person that was
capitalized during such period, and (c) to the extent not included
above, any Interest Expense on Indebtedness of another Person that
is Guaranteed by the referent Person or secured by a lien on assets
of the referent Person (whether or not such Guarantee or lien is
called upon).
"FIXED INTEREST" shall have the meaning specified in paragraph
1 of the Notes.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the
accounting profession.
"GAMING" means any and all activities defined as Class II or
Class III Gaming under the IGRA or authorized under the Compact.
"GAMING DISPUTES COURT" means the Gaming Disputes Court of the
Tribe, as established pursuant to Article XIII, Section 2 of the
Tribe's Constitution.
"GAMING ENTERPRISE" means any commercial enterprise of the
Authority, including, without limitation, any hotel or hotel resort
property, any gaming operation, any restaurant or other
entertainment or other commercial enterprise.
"GAMING FACILITY MANAGEMENT AGREEMENT" means that certain
Amended and Restated Gaming Facility Management Agreement between
the Tribe and the Manager dated August ___, 1995, which shall be
assigned by the Tribe to the Authority on or before the Issuance
Date.
"GAMING LICENSE" means every license, franchise or other
authorization required to own, lease, operate or otherwise conduct
gaming activities of the Tribe or the Authority including without
limitation, all such licenses granted under the Tribal Gaming
Ordinance, and the regulations promulgated pursuant thereto, and
other applicable federal, state, foreign or local laws.
"GAMING REGULATORY AUTHORITY" means any agency, authority,
board, bureau, commission, department, office or instrumentality of
any nature whatsoever of the United States or foreign government,
any state, province or any city or other political subdivision,
whether now or hereafter existing, or any officer or official
thereof, including without limitation, any division of the
Authority or any other agency with authority to regulate any gaming
operation (or proposed gaming operation) owned, managed or operated
by the Tribe or the Authority.
"GLOBAL NOTE" means a Note that contains the paragraph
referred to in footnote 1 and the additional schedule referred to
in footnote 2 to the form of the Note attached hereto as Exhibit
A-1.
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"GOVERNMENT SECURITIES" means securities that are (a) direct
obligations of the United States of America for the timely payment
of which its full faith and credit is pledged or (b) obligations of
a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the timely payment
of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case,
are not callable or redeemable at the option of the issuer thereof,
and shall also include a depository receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act of 1933, as
amended), as custodian with respect to any such Government Security
or a specific payment of principal of or interest on any such
Government Security held by such custodian for the account of the
holder of such depository receipt; PROVIDED, that (except as
required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the
Government Security or the specific payment of principal of or
interest on the Government Security evidenced by such depository
receipt.
"GROSS REVENUES" means all revenues of any nature derived
directly or indirectly by the Authority, including without
limitation, gaming revenues, interest earned on bank accounts, food
and beverage sales and other rental or receipts from lessees,
sublessees, licensees and concessionaires (but not the gross
receipts of such lessees, sublessees, licensees or concessionaires)
and revenue recorded for promotional allowances, determined in
accordance with GAAP consistently applied.
"GUARANTEE" means a guarantee (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.
"HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person under (i) currency exchange or interest
rate swap agreements, currency exchange or interest rate cap
agreements and currency exchange or interest rate collar agreements
and (ii) other agreements or arrangements designed to protect such
Person against fluctuations in currency exchange or interest rates.
"HOLDER" or "NOTEHOLDER" means a Person in whose name a Note
is registered.
"IGRA" means the Indian Gaming Regulatory Act of 1988,
PL100-497, 25 U.S.C. 2701 ET SEQ. as the same may, from time to
time, be amended.
"INDEBTEDNESS" means, with respect to any Person, (a) any
indebtedness of such Person, whether or not contingent (i) in
respect of borrowed money, including accrued and unpaid Cash Flow
Participation Interest, (ii) evidenced by bonds, notes, debentures
or similar instruments or letters of credit (or reimbursement
agreements in respect thereof), (iii) representing the balance
deferred and unpaid of the purchase price of any property
(including Capital Lease Obligations), except any such balance that
constitutes an accrued expense or trade payable, or (iv)
representing any Hedging Obligations, if and to the extent any of
the foregoing indebtedness (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance
sheet of such Person prepared in accordance with GAAP, (b) to the
extent not otherwise included, any obligation by such Person to be
liable for, or to pay, as obligor, guarantor or otherwise, on the
Indebtedness
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of another Person (other than by endorsement of negotiable instruments for
collection in the ordinary course of business) and (c) to the extent not
otherwise included, Indebtedness of another Person secured by a Lien on any
asset of the referent Person (whether or not such Indebtedness is assumed by
such referent Person).
"INDENTURE" means this Indenture, as amended or supplemented
from time to time.
"INDEPENDENT FINANCIAL ADVISOR" means an accounting, appraisal
or investment banking firm of nationally recognized standing that
is, in the judgment of the Management Board, (i) qualified to
perform the task for which it has been engaged and (ii)
disinterested and independent with respect to the Authority and
each Affiliate of the Authority.
"INITIAL PERIOD" shall have the meaning specified in the
paragraph 1 of the Notes.
"INTEREST AND EXCESS CASH FLOW ACCOUNT" means the Interest and
Excess Cash Flow Account established under Sections 4.26 and 10.12
hereof.
"INTEREST EXPENSE" means, with respect to any period, the sum
of (a) interest expense of such Person for such period, whether
paid or accrued, to the extent such expense was deducted in
computing Net Revenue (including, without limitation, Cash Flow
Participation Interest on the Notes, amortization of original issue
discount and deferred financing fees, non-cash interest payments,
the interest component of any deferred payment obligations, the
interest component of Capital Lease Obligations, and net payments
(if any) pursuant to Hedging Obligations, excluding amortization of
deferred financing fees), (b) capitalized interest of such Person
for such period, whether paid or accrued, to the extent such
expense was deducted in computing Net Revenue and (c) commissions,
discounts and other fees and charges paid or accrued with respect
to letters of credit and bankers' acceptance financing.
"INVESTMENTS" means, with respect to any Person, all
investments by such Person in other Persons (including Affiliates)
in the form of loans (including Guarantees), advances or capital
contributions (excluding commission, travel and similar advances to
officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities and all other items that are
or would be classified as investments on a balance sheet prepared
in accordance with GAAP.
"ISSUANCE DATE" means the closing date for the sale and
original issuance of the Notes.
"KEY PROJECT ASSETS" means (i) the Lease and any real property
or interest in real property held in trust for the Tribe by the
United States, (ii) any improvements to the leasehold estate under
the Lease or such real property and (iii) any business records of
the Authority or the Tribe.
"LEASE" means the Land Lease between the Tribe and the
Authority, substantially in the form delivered to the Trustee on
the Issuance Date, as the same may be amended in accordance with
terms hereof and thereof.
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"LEASEHOLD MORTGAGE" means that certain Open-End Construction -
Permanent Leasehold Mortgage Deed, Assignment of Leases and Rents and
Security Agreement, executed by the Authority to encumber certain property in
favor of the Trustee, for the ratable benefit of the Holders of Notes, as the
same may be amended in accordance with terms hereof and thereof.
"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 on the Notes are authorized by law, regulation or executive
order to remain closed. If a payment date is a Legal Holiday at a
place of payment, payment may be made at that place on the next
succeeding day that is not a Legal Holiday and no interest shall
accrue on the interest that was due for the intervening period.
"LIEN" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in
respect of such asset, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or
other title retention agreement, any lease in the nature thereof,
any option or other agreement to sell or give a security interest
in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"LIQUIDATED DAMAGES" means all liquidated damages then owing
pursuant to Section 5 of the Registration Rights Agreement.
"MANAGEMENT AGREEMENT" means the Amended and Restated Gaming
Facility Management Agreement or any successor management agreement
thereto.
"MANAGEMENT BOARD" means the Management Board of the Authority
or any authorized committee of the Management Board of the
Authority, as applicable.
"MANAGEMENT COMPANY" or "MANAGER" means TCA or a successor
permitted pursuant to this Indenture.
"MANAGEMENT FEE" means the management fee under the Management
Agreement.
"MAXIMUM CASH FLOW PARTICIPATION INTEREST" shall have the
meaning specified in paragraph 1 of the Notes.
"MINIMUM FACILITIES" means, with respect to the Resort, at
least 2,500 operating slot machines, 150 operating table games,
operating restaurants with 1,200 seats, 5,000 usable parking
spaces, and all banking, coin, security and other ancillary
equipment and facilities necessary to operate the Project on a 24
hour per day, seven days a week basis.
"MINIMUM PRIORITY PAYMENT" has the meaning set forth in the
Management Agreement in effect on the Issuance Date.
"NET LOSS PROCEEDS" means the aggregate cash proceeds received
by the Authority in respect of any Event of Loss, including,
without limitation, insurance proceeds, condemnation awards or
damages awarded by any judgment, net of the direct costs in
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recovery of such proceeds (including, without limitation, legal,
accounting, appraisal and insurance adjuster fees) and any taxes
paid or payable as a result thereof.
"NET PROCEEDS" means the aggregate cash proceeds received by
the Authority in respect of any Asset Sale, net of the direct costs
relating to such Asset Sale (including, without limitation, legal,
accounting and investment banking or brokerage fees, and sales
commissions), and any relocation expenses incurred as a result
thereof, taxes paid or payable as a result thereof (after taking
into account any available tax credits or deductions), amounts
required to be applied to the repayment of Indebtedness secured by
a Lien (other than the Notes) on the asset or assets that are the
subject of such Asset Sale and any reserve for adjustment in
respect of the sale price of such asset or assets.
"NET RECEIPTS ACCOUNT" means the Depository Account
established pursuant to the Management Agreement.
"NET REVENUE" means the sum of Net Revenue From Gaming
Operations plus Net Revenue From Other Operations.
"NET REVENUE FROM GAMING OPERATIONS" means Gross Gaming
Revenue (Win) (as defined in the Gaming Facility Management
Agreement) from Class III gaming, less all Class III gaming related
Operating Expenses (excluding any Management Fee) determined in
accordance with GAAP consistently applied.
"NET REVENUE FROM OTHER OPERATIONS" means Gross Revenues of
the Authority from all sources other than gaming, such as food and
beverage, entertainment and retail, less all related Operating
Expenses, excluding any related management fee payable to the
Manager and less the retail value of Promotional Allowances (as
defined in the Management Agreement), plus gross revenues from
Class II gaming operations less any Class II gaming related
Operating Expenses determined in accordance with GAAP consistently
applied and less the following revenues actually received by the
Authority and included in Gross Revenues: (i) any gratuities or
service charges added to a customer's bill; (ii) any credits or
refunds made to customers, guests or patrons; (iii) any sums and
credits received by the Authority for lost or damaged merchandise;
(iv) any sales, excise, gross receipt, admission, entertainment,
tourist or other taxes or charges (or assessments equivalent
thereto, or payments made in lieu thereof) which are received from
patrons and passed on to a governmental or quasi-governmental
entity; (v) any proceeds from the sale or other disposition of
furnishings and equipment or other capital assets; (vi) any fire
and extended coverage insurance proceeds other than for business
interruption; (vii) any condemnation awards other than for
temporary condemnation; (viii) any proceeds of financing or
refinancing; and (ix) any interest on the Replacement Reserve Fund
(as defined in the Management Agreement), all determined in
accordance with GAAP consistently applied, and 25 U.S.C.
Section 2703(9).
"NIGC" means the National Indian Gaming Commission.
"NOTES" means, collectively, the Series A Notes and, when
issued under the Exchange Offer, the Series B Notes.
"NOTE COLLATERAL" means (i) the Escrow Account, the
Replacement Reserve Account, the Cash Maintenance Account, the Net
Receipts Account, the Interest and
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Excess Cash Flow Account and any and all other accounts at any time
identified as Collateral in any Collateral Document, all funds at any
time on deposit in any such account, all investments of any such funds
and all interest and dividends thereon, and (ii) all other assets, now
owned or hereafter acquired, of the Authority defined as Collateral in
any Collateral Document or this Indenture, which will initially include
the Gross Revenues and other cash referred to in Section 10.12, the
leasehold interest and all personal property owned by the Authority with
certain exceptions, but shall specifically exclude the land held in
trust for the Tribe by the United States, and excluding any real
property interest therein, including the buildings, improvements and
fixtures thereon, other than the leasehold interest pursuant to the
Lease.
"NOTE CUSTODIAN" means First Fidelity Bank, as custodian with
respect to the Notes in global form, or any successor entity
thereto.
"OBLIGATIONS" means any principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and
other liabilities payable under the documentation governing any
Indebtedness.
"OFFERING" means the Offering of the Notes by the Authority.
"OFFICER" means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer, the Treasurer, any
Assistant Treasurer, the Controller, the Secretary or any Vice
President of such Person and, in the case of the Authority, shall
include members of the Management Board.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf
of the Authority by two Officers of the Authority, one of whom must
be the principal executive officer, the principal financial
officer, the treasurer or the principal accounting officer of the
Authority that meets the requirements of Section 12.05 hereof.
"OPERATING" means, with respect to the Resort, the first time
that (i) all Gaming Licenses have been granted and have not been
revoked or suspended, (ii) all Liens (other than Liens created by
the Collateral Documents or Permitted Liens) related to the
construction of the Resort have been paid or, if payment is not yet
due or if such payment is contested in good faith by the Authority,
sufficient funds remain in the Collateral Account to discharge such
Liens, (iii) the general contractor and the architect of the Resort
shall have delivered a certificate to the Trustee certifying that
the Resort is complete in all material respects in accordance with
the Plans therefor and all applicable building laws, ordinances and
regulations, (iv) the Resort is in a condition (including
installation of furnishings, fixtures and equipment) to receive
guests in the ordinary course of business, and (v) gaming and other
operations in accordance with applicable law are open to the
general public and are being conducted at the Resort with respect
to at least the Minimum Facilities for such Resort.
"OPERATING EXPENSES" means all operating expenses of the
Authority with respect to any commercial enterprise, determined in
accordance with GAAP consistently applied. Operating Expenses
shall include, without limitation: (i) all accrued interest
expense (whether or not distributed and whether or not deposited,
including deposits into the Interest and Excess Cash Flow Account)
with respect to the Notes and the Subordinated
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Notes; (ii) depreciation and amortization and (iii) any bond premium
under this Indenture.
"OPINION OF COUNSEL" means an opinion from legal counsel, that
meets the requirements of Section 12.05 hereof. The counsel may be
an employee of or counsel to the Authority or the Trustee.
"OWNERSHIP INTEREST" means, with respect to any Person,
Capital Stock of such Person or any interest which carries the
right to elect or appoint any members of the Management Board or
the Board of Directors or other executive office of such Person.
"PARI PASSU LIEN" means a Lien on the Note Collateral that
ranks PARI PASSU with the Lien of the Trustee for the ratable
benefit of the Holders pursuant to any arrangement in form and
substance satisfactory to the Trustee that provides that the
Trustee, (i) has the sole authority to exercise any remedy or right
with respect to the Note Collateral, (ii) shall be required to act
in respect of any remedy or right with respect to the Note
Collateral or under the Collateral Documents only upon the
direction of the holders of a majority of the principal amount of
the Indebtedness secured by the Note Collateral, and (iii) does not
act as trustee, fiduciary or agent, and shall have no duty to act
for the benefit, of any holder of any Indebtedness so secured
(other than the Senior Notes).
"PAYMENT DEFAULT" means (i) any failure to pay when due, any
principal, premium or interest on the Notes, whether at stated
maturity, upon acceleration, upon redemption or in connection with
a Repurchase Offer, in each case, without giving effect to any
grace period, or (ii) any failure to deposit any required amounts
into the Cash Maintenance Account or in the Interest and Excess
Cash Flow Account.
"PERMITTED INVESTMENTS" means (a) any Investments in Cash
Equivalents; and (b) other Investments in any Person that do not
exceed in the aggregate $50,000 at any time outstanding.
"PERMITTED LIENS" means (i) Liens to secure Indebtedness
permitted by the terms of the Indenture under clause (d) of Section
4.09 on the hotel assets or revenues financed by such Indebtedness
or on after acquired personal property or intangibles used in
connection with such hotel; (ii) Liens in favor of the Tribe
representing the ground lessor's interest under the Lease; (iii)
Liens on property existing at the time of acquisition thereof by
the Authority, PROVIDED that such Liens were in existence prior to
the contemplation of such acquisition; (iv) Liens to secure the
performance of statutory obligations, surety or appeal bonds,
performance bonds or other obligations of a like nature incurred in
the ordinary course of business; (v) Liens to secure Indebtedness
(including capital lease obligations) permitted by clause (c) of
the second paragraph of Section 4.09 hereof, covering only the
assets acquired with such Indebtedness; (vi) Liens existing on the
date of the Indenture; (vii) Liens for taxes, assessments or
governmental charges or claims that are not yet delinquent or that
are being contested in good faith by appropriate proceedings
promptly instituted and diligently concluded, PROVIDED that any
reserve or other appropriate provision as shall be required in
conformity with GAAP shall have been made therefor; (viii) Liens
securing Indebtedness permitted under Section 4.09(e) provided that
such Liens are no more extensive than the Liens securing the
Indebtedness so extended, refinanced, renewed, replaced or refunded
thereby; (ix) Liens incurred in the ordinary course of business of
the Authority with respect to obligations
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that do not exceed $250,000 at any one time outstanding and that (a) are
not incurred in connection with the borrowing of money or the obtaining
of advances or credit (other than trade credit in the ordinary course of
business) and (b) do not in the aggregate materially detract from the
value of the property and materially impair the use thereof in the
operation of business by the Authority; and (x) Pari Passu Liens on the
Note Collateral to secure Indebtedness permitted by clause (a) to
Section 4.09. provided, however, it is acknowledged that Permitted Liens
will not include any Lien on the land held in trust for the Tribe by the
United States or any real property interest therein, including the
buildings, improvements and fixtures, other than the leasehold interest
pursuant to the Lease, or which will give the holder thereof a
proprietary interest in any gaming activity as prohibited by Section
11(b)(2)(A) of IGRA.
"PERMITTED PROCEED USES" means (i) the funding of interest
(including Cash Flow Participation Interest, if any) payments on
the Notes, (ii) repurchases of Notes pursuant to an Asset Sale
Offer, a Change of Control Offer, an Excess Cash Purchase Offer or
an Event of Loss Offer, (iii) Project Costs relating to the Resort
in accordance with the Disbursement and Escrow Agreement, and (iv)
the repayment of amounts advanced to or paid on behalf of the Tribe
or the Authority for (A) any fees and expenses in connection with
obtaining and retaining any Gaming Licenses necessary to conduct
gaming operations at the Resort, (B) the equipping of the Resort in
accordance with the Disbursement and Escrow Agreement, and (C)
administrative and operating expenses of the Authority and/or the
Tribe necessary to develop, construct, and begin operations at the
Resort, including without limitation, pre-opening expenses and
initial working capital or bankroll.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision
thereof or any other entity.
"PLANS" means all drawings, plans and specifications prepared
by or on behalf of the Authority, as the same may be amended or
supplemented from time to time, and, if required, submitted to and
approved by the appropriate Gaming Regulatory Authorities, which
describe and show the Resort and the labor and materials necessary
for construction thereof.
"PRINCIPAL BUSINESS" means the Class II and Class III casino
gaming (as such terms are defined in IGRA) and resort business and
any activity or business incidental, directly related or similar
thereto, or any business or activity that is a reasonable
extension, development or expansion thereof or ancillary thereto,
including any hotel, entertainment, recreation or other activity or
business designed to promote, market, support, develop, construct
or enhance the casino gaming and resort business operated by the
Authority.
"PRIOR SEMIANNUAL PERIOD" shall have the meaning specified in
paragraph 1 of the Notes.
"PROJECT" means the Resort.
"PROJECT COSTS" means, (i) all costs of developing, designing,
constructing, equipping and furnishing the Resort, including costs
related to land acquisition, professional services, pre-opening
costs and initial operating capital, (ii) all start-up and
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operating costs of the Authority until the Resort becomes
Completed, and (iii) all financing fees and expenses, interest
payments and any scheduled principal prior to the date the Resort
becomes Completed; provided that all Project Costs shall be
allocated in accordance with GAAP, consistently applied.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of the Issuance Date, by and among the
Authority and the other parties named on the signature pages
thereof, substantially in the form delivered to the Trustee on the
Issuance Date.
"REPLACEMENT RESERVE ACCOUNT" means a deposit account
established, maintained and controlled by the Trustee and
designated by the Authority and TCA as the Reserve Account
established pursuant to Section 4.12 of the Gaming Facility
Management Agreement.
"RESORT" means the multi-amenity gaming and entertainment
resort proposed to be constructed in Montville, Connecticut as
described in the Authority's Offering Memorandum dated September
___, 1995, as set forth in the Plans, as the Plans may be amended
pursuant to this Indenture and the Collateral Documents, but
excluding (i) any obsolete personal property or real property
improvement determined by the Authority to be no longer useful or
necessary to the operations or support of the Resort (other than
Key Project Assets) and (ii) any equipment leased from a third
party in the ordinary course of business.
"RESORT SUPPORT ENTITY" means any Person who provides goods or
services to the Resort or whose operations are ancillary to, in
support of, or useful to the operations of the Resort.
"RESPONSIBLE OFFICER," when used with respect to the Trustee,
means any officer within the Corporate Trust Administration of the
Trustee (or any successor group of the Trustee) or any other
officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"RESTRICTED INVESTMENT" means any Investment other than a
Permitted Investment.
"SEC" means the Securities and Exchange Commission.
"SECURED COMPLETION GUARANTEE" means the completion guarantee
of Sun International substantially in the form delivered to the
Trustee on the Issuance Date.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SEMIANNUAL PERIOD" shall have the meaning specified in
paragraph 1 of the Notes.
"SERIES A NOTES" means the Authority's Series A Senior Secured
Notes due November 15, 2002 to be issued pursuant to this
Indenture.
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"SERIES B NOTES" means the Authority's Series B Senior Secured
Notes due November 15, 2002 to be issued pursuant to this Indenture
in the Exchange Offer.
"SUBORDINATED INDEBTEDNESS" means the Indebtedness evidenced
by the Subordinated Notes and any other Indebtedness of the
Authority which is expressly by its terms subordinated in right of
payment to the Notes.
"SUBORDINATED NOTES" means the Subordinated Notes due 2003
issued by the Authority pursuant to the Note Purchase Agreement
dated as of the Issuance Date between the Authority and Sun
International.
"SUBSIDIARY" means (i) any instrumentality or subdivision or
subunit of the Authority that has a separate legal existence or
status or whose property and assets would not be bound by the terms
of this Indenture or the Collateral Documents or (ii) with respect
to any Person, any corporation, association or other business
entity of which more than 50% of the total voting power of shares
of Capital Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries
of such Person or a combination thereof. The Tribe and any other
instrumentality of the Tribe that is not also an instrumentality of
the Authority shall not be a Subsidiary of the Authority.
"SUN INTERNATIONAL" means Sun International Hotels Limited, a
Bahamian corporation or any of its affiliates.
"TCA" means Trading Cove Associates, a Connecticut general
partnership.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is
qualified under the TIA.
"TRANSFER RESTRICTED SECURITIES" means securities that bear or
are required to bear the legend set forth in Section 2.06 hereof.
"TRIBAL GAMING ORDINANCE" means the ordinance and any
amendments thereto, and all related or implementing ordinances,
including without limitation, the Gaming Authority Ordinance
enacted on July 15, 1995, which are enacted by the Tribe to
authorize and regulate gaming pursuant to IGRA.
"TRIBE" means the Mohegan Tribe of Indians of Connecticut, a
sovereign tribe recognized by the United State of America pursuant
to 25 C.F.R. Section 83.
"TRUSTEE" means the party named as such above until a
successor replaces it in accordance with the applicable provisions
of this Indenture and thereafter means the successor serving
hereunder.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing
(a) the sum of the products obtained by multiplying (x) the amount
of each then remaining installment, sinking fund, serial maturity
or other required payments of principal, including payment at final
maturity, in respect thereof, by (y) the number of years
(calculated to the nearest one-twelfth) that
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will elapse between such date and the making of such payment, by (b) the
then outstanding principal amount of such Indebtedness, as the case may
be.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
- ---- ------------
"Affiliate Transaction" . . . . . . . . . . . . . . . . . . . .4.12
"Asset Sale Offer". . . . . . . . . . . . . . . . . . . . . . .4.10
"Blockage Period" . . . . . . . . . . . . . . . . . . . . . . .4.07
"Cash Collateral Account" . . . . . . . . . . . . . . . . . . 10.12
"Change of Control Offer" . . . . . . . . . . . . . . . . . . .4.16
"Change of Control Payment" . . . . . . . . . . . . . . . . . .4.16
"Covenant Defeasance" . . . . . . . . . . . . . . . . . . . . .8.03
"Event of Default". . . . . . . . . . . . . . . . . . . . . . .6.01
"Event of Loss Offer" . . . . . . . . . . . . . . . . . . . . .4.11
"Excess Loss Proceeds". . . . . . . . . . . . . . . . . . . . .4.11
"Excess Proceeds" . . . . . . . . . . . . . . . . . . . . . . .4.10
"Excess Cash Purchase Amount" . . . . . . . . . . . . . . . . .4.28
"Excess Cash Purchase Offer". . . . . . . . . . . . . . . . . .4.28
"Incur" . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.09
"Lease Transaction" . . . . . . . . . . . . . . . . . . . . . .4.27
"Legal Defeasance". . . . . . . . . . . . . . . . . . . . . . .8.02
"Offer Amount". . . . . . . . . . . . . . . . . . . . . . . . .3.10
"Offer Period". . . . . . . . . . . . . . . . . . . . . . . . .3.10
"Paying Agent". . . . . . . . . . . . . . . . . . . . . . . . .2.03
"Payment Blockage Notice" . . . . . . . . . . . . . . . . . . .4.07
"Payment Cross Default" . . . . . . . . . . . . . . . . . . . .6.01
"Purchase Date" . . . . . . . . . . . . . . . . . . . . . . . .3.10
"Refinancing Indebtedness". . . . . . . . . . . . . . . . . . .4.09
"Registrar" . . . . . . . . . . . . . . . . . . . . . . . . . .2.03
"Repurchase Offer". . . . . . . . . . . . . . . . . . . . . . .3.10
"Restricted Payments" . . . . . . . . . . . . . . . . . . . . .4.07
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this
Indenture.
The following TIA terms used in this Indenture have the
following meanings:
"INDENTURE SECURITIES" means the Notes;
"INDENTURE SECURITY HOLDER" means a Holder of a Note;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the
Trustee;
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"OBLIGOR" on the Notes means the Authority, and any successor
obligor upon the Notes as the case may be.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC
rule under the TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP and any accounting term
with respect to any Person shall be determined on a consolidated
or combined basis of such Person and all of its Subsidiaries, in
accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) provisions apply to successive events and transactions;
(6) references to sections of or rules under the Securities
Act or the Exchange Act shall be deemed to include substitute,
replacement of successor sections or rules adopted by the SEC from
time to time;
(7) the term "redeem" and the correlative terms "redemption"
and "redeemed" shall not include any Repurchase Offer; and
(8) unless otherwise expressly provided, the term "interest"
shall include all Fixed Interest, Cash Flow Participation Interest
or Liquidated Damages, if any.
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING.
The Series A Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1
hereto which is incorporated in and made a part of this Indenture.
Subject to Section 2.07 hereof, the Series A Notes shall be in an
aggregate principal amount of $175,000,000; PROVIDED, that in the
event Series B Notes are issued hereunder pursuant to the Exchange
Offer, the principal amount of Series A Notes shall be reduced by
the principal amount of Series B Notes so issued. The Series B
Notes, when and if issued, and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-2
hereto which is incorporated in and made a part of this Indenture.
Subject to Section 2.07 hereof, the Series B Notes shall be in a
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principal amount of $175,000,000 LESS the principal amount of
Series A Notes that are not exchanged for Series B Notes in the
Exchange Offer. The Notes may have notations, legends or
endorsements required by law, stock exchange rule, agreements to
which the Authority is subject or usage. Each Note shall be dated
the date of its authentication. The Notes shall be in
denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture
and the Authority and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and
to be bound thereby. The Tribe expressly agrees to the terms and
conditions of Section 4.29 and Articles 11 and 12 and to be bound
thereby.
The Series A Notes will initially be issued in global form,
substantially in the form of Exhibit A-1 (including footnotes 1 and
2, thereto), except for those Series A Notes that will be issued in
definitive form in the name of various institutional accredited
investors. The Series B Notes also will initially be issued in
global form, substantially in the form of Exhibit A-2 (including
footnotes 1 and 2, thereto), except for those Series B Notes that
will be issued in definitive form in the name of various
institutional accredited investors. Such Global Notes shall be
registered in the name of the Depositary for such Global Notes or
the nominee of such Depositary and shall be delivered by the
Trustee to such Depositary or pursuant to such Depositary's
instructions. So long as the Depositary or its nominee is the
registered owner of such Global Notes it will be deemed the sole
owner and holder of such Global Notes for all purposes hereunder
and under such Global Notes. Neither the Authority nor the Trustee
will have any responsibility or liability for any aspect of the
records relating to or payments made by the Depositary on account
of beneficial interests in such Global Notes. Such Global Notes
shall represent such of the outstanding Notes as shall be specified
therein and each shall provide that it shall represent the
aggregate amount of outstanding Notes from time to time endorsed
thereon and that the aggregate principal amount of outstanding
Notes represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions and
repurchases. Any endorsement of a Global Note to reflect the
amount of any increase or decrease in the principal amount of
outstanding Notes represented thereby shall be made by the Trustee
or the Notes Custodian, at the direction of the Trustee, in
accordance with instructions given by the Holder thereof as
required by Section 2.06 hereof.
Subject to the terms and conditions of this Indenture, payment
of the principal of and any interest on any Note, as the case may
be, in global or definitive form shall be made to the Holder
thereof.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers of the Authority shall sign the Notes for the
Authority by manual or facsimile signature. The Authority's seal
shall be reproduced on the Notes and may be in facsimile form.
If an Officer whose signature is on a Note no longer holds
that office at the time a Note is authenticated, the Note shall
nevertheless be valid.
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A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive
evidence that the Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Authority
signed by two Officers of the Authority, authenticate Notes for
original issue up to the aggregate principal amount stated in
Section 2.01 of this Indenture. The aggregate principal amount of
Notes outstanding at any time may not exceed such amount except as
provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to
the Authority 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 authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as an Agent to
deal with the Authority or an Affiliate of the Authority.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Authority shall maintain an office or agency where Notes
may be presented for registration of transfer or for exchange
("REGISTRAR") and an office or agency where Notes may be presented
for payment ("PAYING AGENT"). The Registrar shall keep a register
of the Notes and of their transfer and exchange. The Authority 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
Authority may change any Paying Agent or Registrar without notice
to any Holder. The Authority shall notify the Trustee in writing
of the name and address of any Agent not a party to this Indenture.
If the Authority fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The
Authority may act as Paying Agent or Registrar.
The Authority initially appoints the Depository Trust Company
("DTC") to act as Depository with respect to the Global Notes.
The Authority initially appoints the Trustee to act as the
Registrar and Paying Agent and for service of notices and demands
in connection with the Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Authority shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in
trust for the benefit of Holders or the Trustee all money held by
the Paying Agent for the payment of principal, premium or
Liquidated Damages, if any, or interest (including Cash Flow
Participation Interest, if any) on the Notes, and will notify the
Trustee of any Default by the Authority 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 Authority at
any time may require a Paying Agent to pay all money held by it to
the Trustee. Upon payment over to the Trustee, the Paying Agent
(if other than the Authority or an Affiliate) shall have no further
liability for the money. If the Authority acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit
of the Holders all money held by it as Paying Agent
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provided, however, that such trust fund shall be invested in Permitted
Investments until used. Upon any bankruptcy or reorganization
proceedings relating to the Authority, the Trustee shall serve as Paying
Agent for the Notes.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the
names and addresses of all Holders and shall otherwise comply with
TIA Section 312(a). If the Trustee is not the Registrar, the Authority
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 of Notes and the Authority shall otherwise comply with
TIA Section 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES. When
Definitive Notes are presented by a Holder to the Registrar with a
request:
(x) to register the transfer of the Definitive Notes; or
(y) 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,
HOWEVER, that the Definitive Notes presented or surrendered for register
of transfer or exchange:
(i) shall be 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
(ii) in the case of a Definitive Note that is a Transfer Restricted
Security, such request shall be accompanied by the following
additional information and documents, as applicable:
(A) if such Transfer 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 from such Holder (in substantially the form of
Exhibit B hereto); or
(B) if such Transfer Restricted Security is being transferred
to a "qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in accordance with Rule 144A under
the Securities Act or pursuant to an exemption from
registration in accordance with Rule 144 or Rule 904 under
the Securities Act or pursuant to an effective registration
statement under the Securities Act, a certification to that
effect from such Holder (in substantially the form of Exhibit
B hereto); or
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(C) if such Transfer Restricted Security is being transferred
in reliance on another exemption from the registration
requirements of the Securities Act, a certification to that
effect from such Holder (in substantially the form of
Exhibit B hereto) and an Opinion of Counsel from such Holder
or the transferee reasonably acceptable to the Authority and
to 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 not be exchanged for a
beneficial interest in a Global Note except upon satisfaction of
the requirements set forth below. Upon receipt by the Trustee of
a Definitive Note, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Trustee,
together with:
(i) if such Definitive Note is a Transfer Restricted
Security, a certification from the Holder thereof (in
substantially the form delivered to the Trustee on the
Issuance Date) to the effect that such Definitive Note is
being transferred by such Holder to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act) in
accordance with Rule 144A under the Securities Act; and
(ii) whether or not such Definitive Note is a
Transfer Restricted Security, written instructions from the
Holder thereof directing the Trustee to make, or to direct the
Note Custodian to make, an endorsement on the Global Note to
reflect an increase in the aggregate principal amount of the
Notes represented by the Global Note,
in which case the Trustee shall cancel such Definitive Note in accordance
with Section 2.11 hereof and cause, or direct the Note Custodian to cause, in
accordance with the standing instructions and procedures existing between the
Depository and the Note Custodian, the aggregate principal amount of Notes
represented by the Global Note to be increased accordingly. If no Global
Notes are then outstanding, the Authority shall issue and, upon receipt of an
authentication order in accordance with Section 2.02 hereof, 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 Depository, in accordance with this Indenture
and the procedures of the Depository 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.
(i) Any Person having a beneficial interest in a Global
Note may upon request exchange such beneficial interest for a
Definitive Note. Upon receipt by the Trustee of written
instructions or such other form of instructions as is customary
for the Depository, from the Depository or its nominee on behalf
of any Person having a beneficial interest in a Global Note, and,
in the case of a Transfer Restricted Security, the
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following additional information and documents (all of
which may be submitted by facsimile):
(A) if such beneficial interest is being transferred to the
Person designated by the Depository as being the beneficial
owner, a certification to that effect from such Person (in
substantially the form of Exhibit B hereto); or
(B) if such beneficial interest is being transferred to a
"qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in accordance with Rule 144A under
the Securities Act or pursuant to an exemption from
registration in accordance with Rule 144 or Rule 904 under
the Securities Act or pursuant to an effective registration
statement under the Securities Act, a certification to that
effect from the transferor (in substantially the form of
Exhibit B hereto); or
(C) 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 from the
transferor (in substantially the form of Exhibit B hereto)
and an Opinion of Counsel from the transferee or transferor
reasonably acceptable to the Authority and to the Registrar
to the effect that such transfer is in compliance with the
Securities Act,
in which case the Trustee or the Note Custodian, at the direction
of the Trustee, shall, in accordance with the standing instructions
and procedures existing between the Depository and the Note
Custodian, cause the aggregate principal amount of Global Notes to
be reduced accordingly and, following such reduction, the Authority
shall execute and, upon receipt of an authentication order in
accordance with Section 2.02 hereof, the Trustee shall authenticate
and deliver to the transferee a Definitive Note in the appropriate
principal amount.
(ii) Definitive Notes issued in exchange for a beneficial interest in a
Global Note pursuant to this Section 2.06(d) shall be registered in
such names and in such authorized denominations as the Depository,
pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. The Trustee shall deliver
such Definitive Notes to the Persons in whose names such Notes are
so registered.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL NOTES.
Notwithstanding any other provision of this Indenture (other than
the provisions set forth in subsection (f) of this Section 2.06),
a Global Note may not be transferred as a whole except by the
Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository
or by the Depository or any such nominee to a successor Depository
or a nominee of such successor Depository.
(f) AUTHENTICATION OF DEFINITIVE NOTES IN ABSENCE OF
DEPOSITORY. If at any time:
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(i) the Depository for the Notes notifies the Authority
that the Depository is unwilling or unable to continue as
Depository for the Global Notes and a successor Depository for
the Global Notes is not appointed by the Authority within 90 days
after delivery of such notice; or
(ii) the Authority, at its sole discretion, notifies the
Trustee in writing that it elects to cause the issuance of
Definitive Notes under this Indenture,
then the Authority shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.02 hereof, authenticate and
deliver, Definitive Notes in an aggregate principal amount equal to the
principal amount of the Global Notes in exchange for such Global Notes.
(g) LEGENDS.
(i) Except as permitted by the following paragraphs (ii)
and (iii), each Note certificate evidencing Global Notes and
Definitive Notes (and all Notes issued in exchange therefor or
substitution thereof) shall bear legends in substantially the
following form:
"THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5
OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND THE NOTE EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER
OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION PROVIDED BY RULE 144A UNDER THE
SECURITIES ACT. THE HOLDER OF THE NOTE EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE TRIBE AND THE AUTHORITY THAT (A)
SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (1) (a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED
STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
OF COUNSEL IF THE AUTHORITY SO REQUESTS), (2) TO THE AUTHORITY
OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN
EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE NOTE
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (1)
ABOVE."
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(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer 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:
(A) in the case of any Transfer Restricted Security that is a
Definitive Note, the Registrar shall permit the Holder
thereof to exchange such Transfer Restricted Security for a
Definitive Note that does not bear the legend set forth in
(i) above and rescind any restriction on the transfer of
such Transfer Restricted Security; and
(B) in the case of any Transfer Restricted Security represented
by a Global Note, such Transfer Restricted Security shall not
be required to bear the legend set forth in (i) above, but
shall continue to be subject to the provisions of Section
2.06(c) hereof; PROVIDED, HOWEVER, that with respect to any
request for an exchange of a Transfer Restricted Security
that is represented by a Global Note for a Definitive Note
that does not bear the legend set forth in (i) 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 (such
certification to be substantially in the form of Exhibit
B hereto).
(iii) Notwithstanding the foregoing, upon consummation of the Exchange
Offer, the Authority shall issue and, upon receipt of an
authentication order in accordance with Section 2.02 hereof, the
Trustee shall authenticate Series B Notes in exchange for Series
A Notes accepted for exchange in the Exchange Offer, which Series
B Notes shall not bear the legend set forth in (i) above, and the
Registrar shall rescind any restriction on the transfer of such
Notes, in each case unless the Holder of such Series A Notes is
either (A) a broker-dealer, (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 Holding Company.
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such
time as all beneficial interests in Global Notes have been
exchanged for Definitive Notes, redeemed, repurchased or cancelled,
all Global Notes shall be returned to or retained and cancelled by
the Trustee in accordance with Section 2.11 hereof. At any time
prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for Definitive Notes, redeemed, repurchased or
cancelled, the principal amount of Notes represented by such Global
Note shall be reduced accordingly and an endorsement shall be made
on such Global Note, by the Trustee or the Notes Custodian, at the
direction of the Trustee, to reflect such reduction.
(i) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and exchanges, the Authority
shall execute and the Trustee shall authenticate Definitive Notes
and Global Notes at the Registrar's request.
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(ii) No service charge shall be made to a Holder for any registration
of transfer or exchange, but the Authority may require apyment of
a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 3.07, 4.10, 4.16 and
9.05 hereto).
(iii) The Registrar shall not be required to register the transfer of or
exchange any Note selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part.
(iv) All Definitive Notes and Global Notes issued upon any registration
of transfer or exchange of Definitive Notes or Global Notes shall
be the valid obligations of the Authority, 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.
(v) The Authority shall not be required:
(A) to issue, to register the transfer of or to 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 3.02 hereof and ending at the close of business on
the day of selection; or
(B) to register the transfer of or to exchange any Note so
selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part; or
(C) to register the transfer of or to exchange a Note between
a record date and the next succeeding interest payment date.
(vi) Prior to due presentment for the registration of a transfer of any
Note, the Trustee, any Agent and the Authority may deem and treat
the Person in whose name any Note is registered as the absolute
owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes, and neither the Trustee,
any Agent nor the Authority shall be affected by notice to the
contrary.
(vii) The Trustee shall authenticate Definitive Notes and Global Notes
in accordance with the provisions of Section 2.02 hereof.
(J) 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:
(i) the Authority shall present the Trustee with an Officers'
Certificate certifying the following:
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(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 which are represented by a Global Note and
the principal amount of Series A Notes properly tendered in
the Exchange Offer which are represented by Definitive Notes
(together with such 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.
(ii) The Trustee, upon receipt of such Officers' Certificate and a
written order signed by two Officers of the Authority shall
authenticate (A) a Global Note for Series B Notes in principal
amount equal to the 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.
(iii) The Trustee shall deliver such Global Note for Series B Notes to
the Notes Custodian who shall deliver to the Trustee the Global
Note for the Series A Notes for cancellation pursuant to Section
2.11, or if the principal amount of the Global Note for the
Series B Notes is less than the principal amount of the Global
Note for the Series A Notes, the Trustee shall direct the Notes
Custodian to make an endorsement on such Global Note for Series A
Notes indicating a reduction in the principal amount represented
thereby.
(iv) The Trustee shall deliver such Definitive Notes for Series B Notes
to the Holders thereof as indicated in such Officers' Certificate.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or the
Authority and the Trustee receive evidence to their satisfaction of
the destruction, loss or theft of any Note, the Authority shall
issue and the Trustee, upon the written order of the Authority
signed by two Officers of the Authority, shall authenticate a
replacement Note if the Trustee's requirements are met. If
required by the Trustee or the Authority, an indemnity bond must be
supplied by the Holder that is sufficient in the judgment of the
Trustee and the Authority to protect the Authority, the Trustee,
any Agent and any authenticating agent from any loss that any of
them may suffer if a Note is replaced. The Authority may charge
for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the
Authority and shall be entitled to all of the benefits of this
Indenture equally and proportionately with all other Notes duly
issued hereunder.
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SECTION 2.08. 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, and those described in this
Section 2.08 as not outstanding. Except as set forth in Section
2.09 hereof, a Note does not cease to be outstanding because the
Authority or an Affiliate of the Authority holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it
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 4.01 hereof, it ceases to be outstanding and interest
(including Cash Flow Participation Interest, if any) on it ceases
to accrue.
If the Paying Agent (other than the Authority or an Affiliate
thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after
that date such Notes shall be deemed to be no longer outstanding
and shall cease to accrue interest (including Cash Flow
Participation Interest, if any).
SECTION 2.09. 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 Authority, the Tribe or by any Person directly
or indirectly controlling or controlled by or under direct or
indirect common control with the Authority or the Tribe, shall be
considered as though not outstanding, except that for the purposes
of determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent, only Notes that a Trustee
knows are so owned shall be so disregarded. Notwithstanding the
foregoing, Notes that are to be acquired by the Authority or an
Affiliate of the Authority pursuant to an exchange offer, tender
offer or other agreement shall not be deemed to be owned by the
Authority or an Affiliate of the Authority until legal title to
such Notes passes to the Authority or Affiliate of the Authority as
the case may be.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Authority
may prepare and the Trustee shall authenticate temporary Notes upon
a written order of the Authority signed by two Officers of the
Authority. Temporary Notes shall be substantially in the form of
definitive Notes but may have variations that the Authority
considers appropriate for temporary Notes and as shall be
reasonably acceptable to the Trustee. Without unreasonable delay,
the Authority shall prepare and the Trustee shall authenticate
definitive Notes in exchange for temporary Notes.
Until such exchange, Holders of temporary Notes shall be
entitled to all of the benefits of this Indenture.
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SECTION 2.11. CANCELLATION.
The Authority 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 destroy cancelled Notes
(subject to the record retention requirement of the Exchange Act),
unless the Authority directs cancelled Notes to be returned to it.
The Authority may not issue new Notes to replace Notes that it has
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
Authority, unless by a written order, signed by two Officers of the
Authority, the Authority shall direct that cancelled Notes be
returned to it.
SECTION 2.12. DEFAULTED INTEREST.
If the Authority defaults in a payment of interest (including
Cash Flow Participation Interest, if any) on the Notes, the
Authority shall pay the defaulted interest (including Cash Flow
Participation Interest, if any), in any lawful manner plus, to the
extent lawful, interest payable on the defaulted interest, to the
Persons who are Holders on a subsequent special record date, in
each case at the rate provided in the Notes and in Section 4.01
hereof. The Authority shall notify the Trustee in writing of the
amount of such defaulted interest proposed to be paid on each Note
and the date of the proposed payment. The Authority shall fix or
cause to be fixed each such special record date and payment date,
PROVIDED that no such special record date shall be less than 10
days prior to the related payment date for such defaulted interest.
At least 15 days before the special record date, the Authority (or,
upon the written request of the Authority, the Trustee in the name
and at the expense of the Authority) shall mail or cause to be
mailed to Holders a notice that states the special record date, the
related payment date and the amount of such interest (including
Cash Flow Participation Interest, if any) to be paid.
SECTION 2.13. RECORD DATE.
The record date for purposes of determining the identity of
Holders entitled to vote or consent to any action by vote or
consent authorized or permitted under this Indenture shall be
determined as provided in TIA Section 316(c).
ARTICLE 3
OFFERS TO PURCHASE OR REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE.
If the Authority elects to redeem Notes pursuant to the
optional redemption provisions of Section 3.07 hereof, it shall
furnish to the Trustee, at least 35 days but not more than 60 days
before a redemption date, an Officers' Certificate setting forth
(i) the Section of this Indenture pursuant to which the redemption
shall occur, (ii) the redemption date, (iii) the principal amount
of Notes to be redeemed and (iv) the redemption price.
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If the Authority is required to make an offer to purchase
Notes pursuant to the provisions of Section 4.10, 4.11, 4.16 or
4.28, it shall furnish to the Trustee, at least 35 days before the
scheduled purchase date, an Officers' Certificate setting forth (i)
the Section of this Indenture pursuant to which the offer to
purchase shall occur, (ii) the offer's terms, (iii) the purchase
price, (iv) the principal amount of the Notes to be purchased, and
(v) further setting forth a statement to the effect that (a) the
Authority has made an Asset Sale and there are Excess Proceeds
aggregating more than $5.0 million and the amount of such Excess
Proceeds, (b) the Authority has suffered an Event of Loss and there
are Excess Loss Proceeds aggregating more than $5.0 million and the
amount of such amount of the Excess Loss Proceeds, (c) a Change of
Control has occurred or (d) the amount that is equal to 50% of the
Excess Cash Flow plus 100% of the Deferred Subordinated Interest
for the fiscal year then ended, if applicable.
SECTION 3.02. SELECTION OF NOTES TO BE PURCHASED OR REDEEMED.
If less than all of the Notes are to be purchased in an Asset
Sale Offer, Event of Loss Offer or Excess Cash Purchase Offer or
redeemed at any time, the Trustee shall select the Notes to be
purchased or redeemed among the Holders of the Notes 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 in accordance
with any other method the Trustee considers fair and appropriate.
In the event of partial purchase or partial redemption in the
manner provided above, the particular Notes to be purchased or
redeemed shall be selected, unless otherwise provided herein, not
less than 30 nor more than 60 days prior to the purchase or
redemption date by the Trustee from the outstanding Notes not
previously purchased or called for redemption. In the event that
less than all of the Notes properly tendered in an Asset Sale
Offer, Event of Loss Offer or Excess Cash Purchase Offer are to be
purchased, the particular Notes to be purchased shall be selected
promptly upon the expiration of such Asset Sale Offer, Event of
Loss Offer, or Excess Cash Purchase Offer.
The Trustee shall promptly notify the Authority in writing of
the Notes selected for purchase or redemption and, in the case of
any Note selected for partial purchase or redemption, the principal
amount thereof to be purchased or redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of
$1,000; except that if all of the Notes of a Holder are to be
purchased or redeemed, the entire outstanding amount of Notes held
by such Holder, even if not a multiple of $1,000, shall be
purchased or redeemed. Except as provided in the preceding
sentence, provisions of this Indenture that apply to Notes
purchased or called for redemption also apply to portions of Notes
purchased or called for redemption.
In the event the Authority is required to make an Excess Cash
Purchase Offer, an Asset Sale Offer, a Change of Control Offer, or
an Event of Loss Offer pursuant to Section 4.10, 4.11, 4.16 or 4.28
hereof, respectively, and the amount of money in the Cash
Maintenance Account or the Collateral Account or the amount of
Excess Cash Flow, Excess Proceeds or Excess Loss Proceeds, as the
case may be, to be applied to such purchase would result in the
purchase of a principal amount of Notes which is not evenly
divisible by $1,000, the Trustee shall promptly refund to the
Authority the portion of such money in the Cash Maintenance Account
or the amount of Excess Cash Flow, Excess Proceeds or Excess Loss
Proceeds, as the case may be, that is not necessary to purchase the
immediately lesser principal amount of Notes that is so divisible.
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SECTION 3.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption
date, the Authority shall mail or cause to be mailed, by first
class mail, a notice of redemption to each Holder whose Notes are
to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes
in principal amount equal to the unredeemed portion shall be
issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(f) that, unless the Authority defaults in making such
redemption payment, interest on Notes called for redemption ceases
to accrue on and after the redemption date;
(g) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are
being redeemed; and
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or
printed on the Notes.
At the Authority's request, the Trustee shall give the notice
of redemption in the Authority's name and at its expense; PROVIDED,
HOWEVER, that the Authority shall have delivered to the Trustee, at
least 45 days prior to the redemption date, an Officers'
Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as
provided in the preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section
3.03 hereof, Notes called for redemption become irrevocably due and
payable on the redemption date at the redemption price. A notice
of redemption may not be conditional.
SECTION 3.05. DEPOSIT OF PURCHASE OR REDEMPTION PRICE.
On or prior to any purchase date with respect to an offer to
purchase the Notes required hereunder or redemption date, the
Authority shall deposit with the Trustee or with the Paying Agent
money sufficient to pay the purchase or redemption price of, and
accrued and unpaid interest, if any, on all Notes to be purchased
or redeemed on that
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date. The Trustee or the Paying Agent shall promptly return to the
Authority any money deposited with the Trustee or the Paying Agent
by the Authority in excess of the amounts necessary to pay the
purchase or redemption price of, and accrued and unpaid interest,
if any, on, all Notes to be purchased or redeemed.
If the Authority complies with the provisions of the preceding
paragraph, on and after the purchase or redemption date, interest
shall cease to accrue on the Notes or the portions of Notes
purchased or called for redemption. If a Note is purchased or
redeemed on or after an interest record date but on or prior to the
related interest payment date, then any accrued and unpaid interest
shall be paid to the Person in whose name such Note was registered
at the close of business on such record date. If any Note tendered
for purchase or called for redemption shall not be so paid upon
surrender for such tender or redemption because of the failure of
the Authority to comply with the preceding paragraph, interest
shall be paid on the unpaid principal, from the purchase or
redemption date until such principal is paid, and to the extent
lawful on any interest not paid on such unpaid principal, in each
case at the rate provided in the Notes and in Section 4.01 hereof.
SECTION 3.06. NOTES PURCHASED OR REDEEMED IN PART.
Upon surrender of a Note that is purchased or redeemed in
part, the Authority shall issue and, upon the Authority's written
request, the Trustee shall authenticate for the Holder at the
expense of the Authority a new Note equal in principal amount to
the unpurchased or unredeemed portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
Except as set forth in Section 3.08 hereof, the Authority
shall not have the option to redeem the Notes pursuant to this
Section 3.07 prior to November 15, 1999. From and after November
15, 1999, the Authority shall have the option to redeem the Notes,
in whole or in part, at the redemption prices (expressed as
percentages of principal amount) set forth in the chart immediately
below the first paragraph of paragraph 5 of the Notes, plus accrued
and unpaid interest, if any, to the applicable redemption date, if
redeemed during the twelve-month period beginning on November 15 of
the years indicated in such chart.
Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. REDEMPTION PURSUANT TO GAMING LAW.
(a) Notwithstanding any other provisions of this Article 3, if
any Gaming Regulatory Authority requires that a Holder or
beneficial owner of the Notes must be licensed, qualified or found
suitable under any applicable gaming laws in order to maintain any
gaming license or franchise of the Authority under any applicable
gaming laws, and the Holder or beneficial owner fails to apply for
a license, qualification or finding of suitability within 30 days
after being requested to do so by such Gaming Regulatory Authority
(or such lesser period that may be required by such Gaming
Regulatory Authority) or if such Holder or beneficial owner is not
so licensed, qualified or found suitable, the Authority has the
right, at its option, (i) to require such Holder or
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beneficial owner to dispose of such Holder's or beneficial
owner's Notes within 30 days of receipt of such finding by the
applicable Gaming Regulatory Authority (or such earlier date as
may be required by the applicable Gaming Regulatory Authority) or
(ii) to call for redemption of the Notes of such Holder or
beneficial owner at a redemption price equal to the lesser of the
principal amount thereof or the price at which such Holder or
beneficial owner acquired the Notes, together with, in either
case, accrued and unpaid interest, if any, to the earlier of the
date of redemption or, the date of the finding of unsuitability
by such Gaming Regulatory Authority, which may be less than 30 days
following the notice of redemption if so ordered by such Gaming
Regulatory Authority.
(b) In connection with any redemption pursuant to this Section
3.08, and except as may be required by a Gaming Regulatory
Authority, the Authority shall be required to comply with Sections
3.01 through 3.06 hereof.
(c) The Authority shall not be required to pay or reimburse
any Holder or beneficial owner of Notes who is required to apply
for any such license, qualification or finding of suitability for
the costs of the licensure or investigation for such qualification
or finding of suitability. Such expenses shall be the obligation
of such Holder or beneficial owner.
SECTION 3.09. MANDATORY REDEMPTION.
The Authority shall not be required to make mandatory
redemption or sinking fund payments prior to maturity with respect
to the Notes.
SECTION 3.10. REPURCHASE OFFERS.
In the event that, pursuant to Section 4.10, 4.11, 4.16 or
4.28 hereof, the Authority shall be required to commence an offer
to all Holders to purchase Notes (a "REPURCHASE OFFER"), it shall
follow the procedures specified below.
The Repurchase Offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to
the extent that a longer period is required by applicable law (the
"OFFER PERIOD"). No later than five Business Days after the
termination of the Offer Period (the "PURCHASE DATE"), the
Authority shall purchase at the Purchase Price (as determined in
accordance with Section 4.10, 4.11, 4.16 or 4.28 hereof, as the
case may be) the principal amount of Notes required to be purchased
pursuant to Section 4.10, 4.11, 4.16 or 4.28 hereof, as the case
may be (the "OFFER AMOUNT"), or, if less than the Offer Amount has
been properly tendered, all Notes properly tendered in response to
the Repurchase Offer. Payment for any Notes so purchased shall be
made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date
and on or before the related interest payment date, any accrued and
unpaid interest, if any, shall be paid to the Person in whose name
a Note is registered at the close of business on such record date,
and no additional interest shall be payable to Holders who tender
Notes pursuant to the Repurchase Offer.
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Upon the commencement of a Repurchase Offer, the Authority
shall send, by first class mail, a notice to the Trustee and each
of the Holders, with a copy to the Trustee. The notice shall
contain all instructions and materials necessary to enable such
Holders to tender Notes pursuant to the Repurchase Offer. The
Repurchase Offer shall be made to all Holders. The notice, which
shall govern the terms of the Repurchase Offer, shall state:
(a) that the Repurchase Offer is being made pursuant to this
Section 3.10 and Section 4.10, 4.11, 4.16 or 4.28 hereof, as the
case may be, and the length of time the Repurchase Offer shall
remain open;
(b) the Offer Amount, the purchase price and the Purchase
Date;
(c) that any Note not properly tendered or accepted for
payment shall continue to accrue interest;
(d) that, unless the Authority defaults in making such
payment, any Note accepted for payment pursuant to the Repurchase
Offer shall cease to accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to
any Repurchase Offer shall be required to surrender the Note, with
the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Note completed, to the Authority, a depositary, if
appointed by the Authority, or a Paying Agent at the address
specified in the notice at least three days before the Purchase
Date;
(f) that Holders shall be entitled to withdraw their tendered
Notes and their election if the Authority, the depositary or the
Paying Agent, as the case may be, receives, not later than the
expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase and
a statement that such Holder is withdrawing his tendered Notes and
his election to have such Note purchased; and
(g) that, if the aggregate principal amount of Notes
surrendered by Holders exceeds the Offer Amount, the Notes shall
be selected for purchase pursuant to the terms of Section 3.02
hereof, and that Holders whose Notes were purchased only in part
shall be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered.
On or before the Purchase Date, the Authority shall, to the
extent lawful, accept for payment, pursuant to the terms of Section
3.02 hereof, the Offer Amount of Notes or portions thereof properly
tendered pursuant to the Repurchase Offer, or if less than the
Offer Amount has been properly tendered, all Notes properly
tendered, and shall deliver to the Trustee an Officers' Certificate
stating that such Notes or portions thereof were accepted for
payment by the Authority in accordance with the terms of this
Section 3.10. The Authority, the Depository or the Paying Agent,
as the case may be, shall promptly (but in any case not later than
five days after the Purchase Date) mail or deliver to each
tendering Holder an amount equal to the purchase price of the Notes
properly tendered by such Holder and accepted by the Authority for
purchase, and the Authority shall promptly issue a new Note, and
the Trustee, upon written request from the
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Authority shall authenticate and mail or deliver such new Note to
such Holder, in a principal amount equal to any unpurchased portion
of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Authority to the Holder
thereof. The Authority shall publicly announce the results of the
Repurchase Offer on the Purchase Date.
Other than as specifically provided in this Section 3.10, any
purchase pursuant to this Section 3.10 shall be made pursuant to
the provisions of Sections 3.01 through 3.06 hereof to the extent
applicable.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Authority shall pay or cause to be paid the principal of,
premium, if any, and interest on the Notes on the dates and in the
manner provided in the Notes. Principal, premium, if any, and
interest shall be considered paid on the date due if the Paying
Agent, if other than the Authority, holds as of 10:00 a.m. Eastern
Time on the due date money deposited by the Authority in
immediately available funds and designated for and sufficient to
pay all principal, premium, if any, and interest then due.
The Authority 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 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Authority shall maintain in the Borough of Manhattan, the
City of New York, an office or agency (which may be an office of
the Trustee or an affiliate of the Trustee, Registrar or co
- -registrar) where Notes may be surrendered for registration of
transfer or for exchange and where notices and demands to or upon
the Authority in respect of the Notes and this Indenture may be
served. The Authority 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 Authority 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 Authority may also from time to time designate one or more
other offices or agencies where the Notes may be presented or
surrendered for any or all such purposes and may from time to time
rescind such designations; PROVIDED, HOWEVER, that no such
designation or rescission shall in any manner relieve the Authority
of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Authority
shall give prompt written notice to the Trustee of any such
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designation or rescission and of any change in the location of any
such other office or agency.
The Authority hereby designates the Corporate Trust Office of
the Trustee as one such office or agency of the Authority in
accordance with Section 2.03.
SECTION 4.03. REPORTS.
Notwithstanding that the Authority may not be subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act,
the Authority will file with the SEC all information, documents and
reports specified in Section 13 or 15(d) of the Exchange Act.
The Authority shall file with the Trustee and provide Holders
of Notes, within 15 days after it files them with the SEC, copies
of its annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the
SEC may by rule or regulation prescribe) which the Authority would
be required to file with the SEC pursuant to Section 13 or 15(d) of
the Exchange Act. Notwithstanding that the Authority may not be
required to remain subject to the reporting requirements of Section
13 or 15(d) of the Exchange Act or otherwise report on an annual
and quarterly basis on forms provided for such annual and quarterly
reporting pursuant to rules and regulations promulgated by the SEC,
the Authority shall be required to continue to file with the SEC
and provide the Trustee and Holders with, without cost to each
holder, (a) within 90 days after the end of each fiscal year,
annual reports on Form 10-K (or any successor or comparable form)
containing the information required to be contained therein (or
required in such successor or comparable form); (b) within 45 days
after the end of each of the first three fiscal quarters of each
fiscal year, reports on Form 10-Q (or any successor or comparable
form); and (c) promptly from time to time after the occurrence of
an event required to be therein reported, such other reports on
Form 8-K (or any successor or comparable form) containing the
information required to be contained therein (or required in any
successor or comparable form); PROVIDED, HOWEVER, that the
Authority shall not be so obligated to file such reports with the
SEC if the SEC does not permit such filings. The Authority shall
also include in such reports the anticipated completion date of the
Resort and, in the case of quarterly reports, the Cash Flow
Participation Interest paid, the Cash Flow Participation Interest
Accrual amount and Cash Flow with respect to the most recently
ended fiscal quarter of the Authority, and in the case of annual
reports, the audited Cash Flow Participation Interest paid, the
Cash Flow Participation Interest Accrual amount and audited Cash
Flow for the most recently ended fiscal year and for each of the
Semiannual Periods ending in such fiscal year. The Authority will
in all cases, without cost to each recipient, provide copies of
such information to the Holders of the Notes and, if they are not
permitted to file such reports with the SEC, shall make available
such information to prospective purchasers and to securities
analysts and broker-dealers upon their request.
The Authority shall file with the Trustee and provide Holders
of Notes, within 15 days after it files them with the NIGC, copies
of all reports which the Authority is required to file with the
NIGC pursuant to 25 C.F.R. Part 514 (or any successor provision).
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SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Authority shall deliver to the Trustee, within 90 days
after the end of each fiscal year, an Officers' Certificate stating
that a review of the activities of the Authority during the
preceding fiscal year has been made under the supervision of the
signing Officers of the Authority with a view to determining
whether the Authority and each obligor on the Notes and this
Indenture is in compliance with this Indenture and each Collateral
Document and further stating, (i) as to each such Officer signing
such certificate, that to the best of his or her knowledge the
Authority and each such obligor is in compliance with each and
every covenant contained in this Indenture and each Collateral
Document and is not in default in the performance or observance of
any of the terms, provisions and conditions of this Indenture or
any Collateral Document (or, if a Default or Event of Default shall
exist, describing all such Defaults or Events of Default of which
he or she may have knowledge and what action the Authority or such
obligor, as the case may be, is taking or proposes to take with
respect thereto) and that to the best of his or her knowledge no
event has occurred that remains in existence by reason of which
payments on account of the principal of or interest (including Cash
Flow Participation Interest, if any) on the Notes is prohibited or
if such event exists, a description of the event and what action
the Authority or such obligor, as the case may be, is taking or
proposes to take with respect thereto and (ii) the amount of Excess
Cash Flow for such fiscal year and whether the Authority is
required to make an Excess Cash Purchase Offer pursuant to Section
4.28 hereof.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public
Accountants, the year-end financial statements delivered pursuant
to Section 4.03(a) above shall be accompanied by a written
statement of the Authority's independent public accountants (who
shall be a firm of established national reputation) that in making
the examination necessary for certification of such financial
statements, nothing has come to their attention that would lead
them to believe that the Authority is in violation of any
provisions of Article Four or Article Five hereof or, if any such
violation exists, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be
liable directly or indirectly to any Person for any failure to
obtain knowledge of any such violation.
(c) The Authority shall, so long as any of the Notes are
outstanding, deliver to the Tribe and the Trustee, within five
Business Days upon any Officer becoming aware of any Default or
Event of Default or any event of default under any document,
instrument or agreement representing Indebtedness of the Authority,
an Officers' Certificate specifying such Default or Event of
Default and what action the Authority is taking or proposes to take
with respect thereto.
(d) Immediately upon the Resort becoming Operating, the
Authority shall deliver promptly to the Trustee an Officers'
Certificate which shall state that (i) the Resort is Operating and
(ii) the date on which the Resort became Operating.
SECTION 4.05. TAXES.
The Authority shall pay, prior to delinquency, all material
taxes, assessments, and governmental levies except such as are
contested in good faith and by appropriate
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proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Authority covenants (to the extent that it may lawfully do
so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any
stay, extension or usury law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the
performance of this Indenture; and the Authority (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 4.07. RESTRICTED PAYMENTS.
The Authority shall not directly or indirectly: (i) purchase,
redeem, defease, or otherwise acquire or retire for value any
Subordinated Indebtedness of the Authority or make any interest
payment on the Subordinated Notes; (ii) make any payment or
distribution to the Tribe or any other agency, instrumentality or
political subunit of the Tribe or make any general distribution to
the members of the Tribe; (iii) make any Management Fee payment or
pay any other management or similar fee to the Manager or its
affiliates; (iv) make any payment in respect of repayment or
reimbursement of any obligations under the Secured Completion
Guarantee; or (v) make any Restricted Investment (all such payments
and other actions set forth in clauses (i) through (v) above being
collectively referred to as "Restricted Payments"), unless such
Restricted Payment is:
(a) a monthly payment of the Minimum Priority Payment to the
Tribe in an amount not to exceed $50,000 per month pursuant to the
terms of the Gaming Facility Management Agreement in effect on the
Issuance Date;
(b) a monthly payment of a Management Fee to the Manager in
respect of the Net Revenues of the prior month pursuant to the
terms of the Management Agreement in effect on the Issuance Date,
which Management Fee may not be payable in an amount greater than
that provided in Section 6.4 of such Management Agreement and any
management fee in respect of any commercial activity not covered
under the Management Agreement (provided, that all such management
fees shall be after paying all Operating Expenses, the Minimum
Priority Payment, any required deposit in the Cash Maintenance
Account and the Interest and Excess Cash Flow Account and
replacement reserve deposits);
(c) a monthly payment to the Tribe in respect of the Net
Revenues for the prior month, which payment shall not exceed the
amount payable to the Tribe pursuant to Section 6.4 of the
Management Agreement in effect on the Issuance Date and any Net
Revenues from commercial activities not covered under the
Management Agreement; (provided, that all such payments shall be
after (i) paying all other amounts required under the Management
Agreement to be paid prior to the payment of any amounts to the
Tribe (other than the Minimum Priority Payment), and (ii), without
limiting the
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generality of clause (i), paying all Operating Expenses, the
Minimum Priority Payment, any required deposit in the Cash
Maintenance Account and the Interest and Excess Cash Flow Account,
replacement reserve deposits, Management Fees and required payments
on Subordinated Notes permitted by this Indenture);
(d) the payment of interest on the Subordinated Notes in
accordance with the terms of the Subordinated Notes as in effect on
the Issuance Date;
(e) the redemption of the Subordinated Notes pursuant to the
requirements of any gaming law as provided for in the Note Purchase
Agreement for the Subordinated Notes in effect on the Issuance
Date;
(f) an annual purchase, redemption, defeasance or retirement
of any Subordinated Indebtedness to be paid no earlier than the day
after any required payment has been made to the Holders of the
Notes in respect of any Excess Cash Purchase Offer in an amount not
to exceed the amount of the Excess Cash Purchase Amount offered to
the Noteholders under Section 4.28 in respect of such year and not
accepted by such Holders, at a price not to exceed 100% of the
principal amount thereof and accrued and unpaid interest;
(g) an annual payment to the Tribe to be paid no earlier than
the day after any required payment has been made to the Holders of
the Notes in respect of any Excess Cash Purchase Offer (or, if no
such offer is required to be made in respect of any year, no
earlier than May 1 of the next succeeding year), in an amount not
to exceed the amount of the Excess Cash Purchase Amount for the
prior year, PROVIDED such amount was (i) first offered to the
Holders of the Notes under Section 4.28 and not accepted by the
Holders of the Notes and to the extent not accepted by the Holders
of the Notes, and, to the extent not accepted by the Holders of the
Notes, was offered to the holders of the Subordinated Notes under
clause (f) of this Section 4.07 and not accepted by them, or (ii)
not required to be offered to the Holders of the Notes under
Section 4.28; or
(h) Restricted Investments in Resort Support Entities after
the Resort becomes Operating, not to exceed $2.0 million in the
aggregate outstanding at any one time and provided that such
amounts correspondingly reduce the distributions under clause (a),
(b) or (c);
PROVIDED, that at the time of, and after giving effect to, any
Restricted Payment permitted under clauses (b), (c), (g) or (h), no
Payment Default shall have occurred and be continuing or would
occur as a consequence thereof or any Blockage Period be in effect
for any Payment Blockage Notice; and PROVIDED, FURTHER that at the
time of and after giving effect to, any Restricted Payment
permitted under clause (d), (e) or (f), no Default or Event of
Default shall have occurred and be continuing or would occur as a
consequence thereof.
Upon the occurrence of any Event of Default (other than a
Payment Default), subject to the next paragraph, the Trustee or the
holders of at least 25% in aggregate principal amount of the Notes
may deliver a notice (a "Payment Blockage Notice") to the Authority
pursuant to Section 12.02, which notice shall state that such
notice is a Payment Blockage Notice under Section 4.07 of the
Indenture, the date of such notice, and the Event or Events of
Default giving rise to such notice. Upon delivery of such Payment
Blockage Notice, no Restricted Payment (other than the payment of
the
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Minimum Priority Payment) may be made during the 180 consecutive
day period after delivery of such notice (the "Blockage Period")
unless (x) such notice is rescinded by the holders of at least a
majority in aggregate principal amount of the Notes or (y) such
Event or Events of Default giving rise to such Payment Blockage
Notice have been cured or waived and no other Event of Default has
occurred and is continuing.
Payment Blockage Notices may not be issued so that any
Blockage Period extends for more than 180 days in any 360 day
period with respect to the same event or occurrence giving rise to
any Event or Events of Default.
Restricted Payments not paid as a result of any Blockage
Period shall accrue, and such Restricted Payments may be paid at
any time thereafter if permitted by the terms of this Indenture and
when no Payment Default shall have occurred and be continuing and
no Blockage Period is in effect.
For purposes of determining the amount of Restricted
Investments outstanding at any time, all Restricted Investments
shall be valued at their fair market value at the time made (in
each case as determined in good faith by the Authority's Board of
Directors), and no adjustments shall be made for subsequent changes
in fair market value.
Not later than the date of filing any quarterly or annual
report, the Authority shall deliver to the Trustee an Officers'
Certificate stating that each Restricted Payment made in the prior
fiscal quarter was permitted and setting forth the basis upon which
the calculations required by this Section 4.07 were computed, which
calculations may be based upon the Authority's latest available
financial statements.
SECTION 4.08. CASH MAINTENANCE ACCOUNT.
Subject to the provisions of the next paragraph, commencing
with respect to January 1997, the Authority shall deposit into the
Cash Maintenance Account established pursuant to Section 10.12 on
a monthly basis, 1/12 of the amounts set forth below for each year
indicated plus any amounts deferred from any prior month pursuant
to the next paragraph no later than 25 days after the end of such
calendar month:
Year Amount
---- -------
1997 $6,000,000
1998 $6,000,000
1999 $6,000,000
2000 $6,000,000
2001 $6,000,000
2002 thereafter, such amount necessary to keep
at least $36,000,000 in the Cash
Maintenance Account.
To the extent that any amount required to be deposited into
the Cash Maintenance Account in any month exceeds the Cash
Available for Cash Maintenance Account for the prior month, then
the deposit of such excess amount may be deferred until the next
succeeding month or months in which the Cash Available for Cash
Maintenance Account is sufficient. Amounts in the Cash Maintenance
Account may be withdrawn by the Trustee and applied for any purpose
set forth in Section 10.08.
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SECTION 4.09. LIMITATIONS ON INCURRENCE OF INDEBTEDNESS.
The Authority shall not, directly or indirectly, create,
incur, issue, assume, guaranty or otherwise become directly or
indirectly liable with respect to (collectively, "incur" and
correlatively, an "incurrence" of) any Indebtedness (including
Acquired Indebtedness); PROVIDED, HOWEVER, that the Authority may
incur Indebtedness if (i) the Fixed Charge Coverage Ratio for the
Authority's most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding
the date of such incurrence would have been at least 2.50 to 1 if
the date on which such Indebtedness is incurred is on or prior to
November 15, 1997, 2.75 to 1 if such date is after November 15,
1997 and on or prior to November 15, 1999 and 3.00 to 1 thereafter,
in each case determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred and application of proceeds had
occurred at the beginning of such four-quarter period, (ii) such
Indebtedness is expressly subordinated in right of payment to the
Notes and (iii) such Indebtedness does not have a Weighted Average
Life to Maturity less than the Weighted Average Life to Maturity of
the Notes.
The foregoing limitations shall not apply to:
(a) the incurrence by the Authority of Indebtedness and
letters of credit for working capital purposes (with letters
of credit being deemed to have a principal amount equal to the
maximum potential liability of the Authority under the related
reimbursement or other similar agreement) in an aggregate
principal amount not to exceed at any one time $25 million
less any amount that is a permanent reduction in principal for
purposes of calculating Excess Cash Flow which may be secured
by a pari passu lien on the Note Collateral;
(b) the incurrence by the Authority of Indebtedness
represented by the Notes and the Subordinated Notes or the
incurrence of Subordinated Indebtedness to evidence advances under
the Secured Completion Guarantee pursuant to the terms thereof;
(c) the incurrence by the Authority of Indebtedness
represented by Capital Lease Obligations or purchase money
obligations, provided that (i) the Authority may not incur
Indebtedness with a principal amount in excess of $40 million
pursuant to this clause (c) outstanding in the aggregate at
any time, (ii) the proceeds are used for the purpose of
financing all or any part of the purchase or lease of personal
property or equipment used in the business of the Authority,
(iii) the term of any Indebtedness incurred pursuant to this
clause at the time of incurrence is not less than 4 years, and
(iv) the Weighted Average Life to Maturity of all Indebtedness
incurred pursuant to this clause at the time of incurrence is
not less than 2 years;
(d) the incurrence by the Authority of Indebtedness the
proceeds of which are used to develop, design or construct a
hotel or hotels with at least 200 rooms as part of the Resort,
provided, however, that the aggregate principal amount of such
Indebtedness (excluding any portion thereof that is original
issue discount) does not exceed $35.0 million; and provided
that such Indebtedness is not secured by any Note Collateral;
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(e) the incurrence by the Authority of Indebtedness (the
"Refinancing Indebtedness") issued in exchange for, or the
proceeds of which are used to extend, refinance, renew,
replace, or refund Indebtedness referred to in the first
paragraph of this Section 4.09 or in clauses (b), (c) or (d)
or this clause (e), PROVIDED, HOWEVER, that (1) the principal
amount of such Refinancing Indebtedness shall not exceed the
principal amount of Indebtedness so extended, refinanced,
renewed, replaced, substituted or refunded (plus the amount of
reasonable expenses incurred and any premium paid in
connection therewith or the amount of any original issue
discount), (2) the Refinancing Indebtedness shall, if
applicable, be subordinate in right and priority of payment to
the Notes on terms at least as favorable to the holders of
Notes as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced,
substituted or refunded, and (3) the Refinancing Indebtedness
shall have a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of the
Indebtedness being extended, refinanced, renewed, replaced,
substituted or refunded; and
(f) Hedging Obligations that are incurred for the purpose
of fixing or hedging interest rate risk with respect to any
floating rate Indebtedness that is permitted by the terms of
this Indenture to be outstanding.
If this Section 4.09 authorizes the incurrence of any
Indebtedness that may be secured by a Pari Passu Lien on the Note
Collateral, the Trustee is hereby authorized to enter into an
intercreditor agreement with the holder of such pari passu
Indebtedness (the "Pari Passu Debtholder") upon the request of the
Authority that provides to the effect of at least the following:
(a) the Lien of the Trustee on the Note Collateral shall
be equal in priority (regardless of the time or method of
attachment or perfection) to the Lien in favor of, or for the
benefit of, such Pari Passu Debtholder for the sum of (1) a
principal amount of Indebtedness not to exceed the principal
amount permitted by the Indenture to be secured by a Pari
Passu Lien and (2) any other Obligations in respect of such
principal amount of pari passu Indebtedness;
(b) such intercreditor agreement is solely for the
purpose of establishing the relative interests of the Pari
Passu Debtholder and the Trustee and the Noteholders and is
not for the benefit of any other party;
(c) the Trustee, so long as the principal amount of the
outstanding Notes is greater than the principal amount
outstanding on such pari passu Indebtedness, shall have the
sole right to take, enforce or exercise any right or remedy,
to take or exercise any action or election or to refrain from
taking or exercising any action with respect to any of the
Note Collateral or the Collateral Documents; and so long as
the principal amount of the outstanding Notes is greater than
the principal amount outstanding on such pari passu
Indebtedness, the Pari Passu Debtholder shall not, and shall
not permit any of its representatives to, take, enforce or
exercise any right or remedy, to take or exercise any action
or election or to refrain from taking or exercising any action
with respect to any of the Note Collateral or any of its
collateral or security documents with respect to any of the
Note Collateral; provided, that the Pari Passu Debtholder may
take or exercise any action or
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election or refrain from taking or exercising any action with
respect to any collateral that is not Note Collateral or under
any document that does not apply to the Note Collateral; and
provided, further, that the Trustee shall have no duty or
obligation to any Pari Passu Debtholder in taking or
exercising any action or election or in refraining from taking
or exercising any action with respect to any of the Note
Collateral or the Collateral Documents;
(d) each of the Trustee and the Pari Passu Debtholder
agree that any money or funds realized with respect to the
Note Collateral in connection with the enforcement or exercise
of any right or remedy with respect to any Note Collateral
following the acceleration of the Notes shall be distributed
as follows: First, to the payment of all reasonable expenses
in connection with the collection, realization or
administration of such funds or the exercise of rights or
remedies; Second, to each holder of Indebtedness secured by a
Pari Passu Lien on the Note Collateral, a proportion of such
remaining money or funds in the same proportion as the total
outstanding obligations so secured held by such holder bears
to the total outstanding obligations so secured until all such
secured obligations have been paid in full; and Third, to the
Authority or to whosoever may be lawfully entitled to receive
the same as a court of competent jurisdiction may direct;
(e) the Trustee agrees that any amounts in the Cash
Collateral Accounts in the name of the Trustee shall be held
for the ratable benefit of the Holders of the Notes and the
Pari Passu Debtholders; and
(f) each of the Trustee, the Noteholders and the Pari
Passu Debtholders shall have the right to alter or amend their
respective agreements and documents with the Authority or the
Tribe in accordance with their terms and to release any Note
Collateral from their respective Liens in accordance with the
terms of their respective agreements.
SECTION 4.10. ASSET SALES.
The Authority shall not cause, make or suffer to exist an
Asset Sale, unless (i) the Authority receives consideration at the
time of such Asset Sale at least equal to the fair market value of
the assets sold or otherwise disposed of and (ii) at least 85% of
such consideration consists of cash; PROVIDED that the Authority
shall not make or cause or permit to be made any Asset Sale of Key
Project Assets.
Within 180 days after the Authority's receipt of the Net
Proceeds of any Asset Sale, the Authority may apply the Net
Proceeds from such Asset Sale to an investment in the Principal
Business or in tangible long-term assets used or useful in the
Principal Business or to permanently reduce Indebtedness that is
not Subordinated Indebtedness. Any Net Proceeds from the Asset
Sale will be pledged to the Holders of the Notes as collateral on
the Notes until applied or released as herein provided. When the
aggregate amount of Net Proceeds from the Asset Sale that are not
invested as provided in the preceding sentence ("Excess Proceeds")
exceeds $5.0 million, the Authority shall make an offer to all
Holders of Notes (an "Asset Sale Offer") to purchase the maximum
principal amount of Notes, that is an integral multiple of $1,000,
that may be purchased out of the Excess Proceeds at an offer price
in cash in an amount equal to 100% of the principal amount thereof,
plus accrued and unpaid interest, if any to the date fixed for
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the closing of such offer, in accordance with the procedures
set forth in Article 3 hereto. The Authority shall commence
an Asset Sale Offer with respect to Excess Proceeds within 10
Business Days after the date that Excess Proceeds exceeds $5.0
million by mailing the notice required in Section 3.10 hereof
to the Holders. To the extent that the aggregate amount of
Notes properly tendered pursuant to an Asset Sale Offer is
less than the Excess Proceeds, such remaining Excess Proceeds
shall be released to the Authority, subject to the terms of
the Cash Collateral Accounts Pledge and Security Agreement,
and the Authority may use any such remaining Excess Proceeds
so released for any lawful purpose. If the aggregate
principal amount of Notes surrendered by Holders thereof
exceeds the amount of Excess Proceeds, the Trustee shall
select the Notes to be purchased in the manner described in
Section 3.02 hereof. Upon completion of any such Asset Sale
Offer, the amount of Excess Proceeds shall be reset at zero.
The Net Proceeds of all Asset Sales of assets constituting
Note Collateral (other than Permitted Investments), as well as
Excess Proceeds, shall be promptly and without commingling
deposited with the Trustee in a Cash Collateral Account
established pursuant to Section 10.12 until applied as
permitted pursuant to this paragraph. The Authority shall
grant to the Trustee, on behalf of the Holders, a first
priority Lien on any properties or assets acquired with the
Net Proceeds of any such Asset Sale on the terms set forth in
this Indenture and the Collateral Documents.
SECTION 4.11. EVENT OF LOSS.
(a) Within 360 days after any Event of Loss with respect to
Note Collateral with a fair market value (or replacement cost, if
greater) in excess of $500,000, the Authority may apply the Net
Loss Proceeds from such Event of Loss to the rebuilding, repair,
replacement or construction of improvements to the Project, with no
concurrent obligation to make any purchase of any Notes, PROVIDED
that (i) the Authority delivers to the Trustee within 45 days of
such Event of Loss a written opinion from a reputable architect
that the Project with at least the Minimum Facilities can be
rebuilt, repaired, replaced or constructed and Operating within 360
days of such Event of Loss and that, with respect to any Event of
Loss that occurs on or prior to September 30, 1997, such
rebuilding, repair, replacement or construction of improvements can
be rebuilt, repaired, replaced or constructed and Operating on or
prior to September 30, 1997, (ii) an Officers' Certificate
certifying that the Authority has available from Net Loss Proceeds
or cash on hand sufficient funds to complete such rebuilding,
repair, replacement or construction, and (iii) the Net Loss
Proceeds is less than $50 million. Any Net Loss Proceeds from an
Event of Loss that are not reinvested or are not permitted to be
reinvested as provided in the first sentence of this paragraph will
be deemed "Excess Loss Proceeds." Where the aggregate amount of
"Excess Loss Proceeds" exceeds $50 million, the Authority shall
make an offer to all Holders of Notes (an "Event of Loss Offer") to
purchase the maximum principal amount of Notes, that is an integral
multiple of $1,000, that may be purchased out of the Excess Loss
Proceeds at an offer price in cash in an amount equal to 100% of
the principal amount thereof, plus accrued and unpaid interest, if
any, to the date fixed for the closing of such offer, in accordance
with the procedures set forth in this Indenture. To the extent that
the aggregate amount of Notes properly tendered pursuant to an
Event of Loss Offer is less than the Excess Loss Proceeds, such
remaining Excess Loss Proceeds shall be released to the Authority,
subject to the terms of the Cash Collateral Accounts Pledge and
Security Agreement, and the Authority may use any such remaining
Excess Loss Proceeds so released for any lawful purpose. Upon
completion of any such Event of Loss Offer, the amount of
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Excess Loss Proceeds shall be reset at zero. Pending any
permitted rebuilding, repair or construction or the completion
of any Excess Loss Offer, the Authority shall pledge to the
Trustee as additional Note Collateral any Net Loss Proceeds or
other cash on hand required for such permitted rebuilding,
repair or construction pursuant to the terms of the Leasehold
Mortgage. Such pledged funds will be released to the
Authority to pay for such permitted rebuilding repair or
construction or such Event of Loss Offer pursuant to the terms
of the Leasehold Mortgage. The Net Loss Proceeds of all
Events of Loss with respect to assets constituting Note
Collateral (other than Permitted Investments), as well as
Excess Loss Proceeds, shall be promptly and without
commingling deposited with the Trustee in a Cash Collateral
Account established pursuant to Section 10.12 until applied as
permitted pursuant to this paragraph. The Authority shall
grant to the Trustee, on behalf of the Holders of the Notes, a
first priority lien on any properties or assets rebuilt,
repaired or constructed with such Net Loss Proceeds on the
terms set forth in this Indenture and the Collateral Documents.
(b) With respect to any Event of Loss pursuant to clause (D)
of the definition of "Event of Loss" that has a fair market value
(or replacement cost, if greater) in excess of $2.0 million, the
Authority will be required to receive consideration at least (i)
equal to the fair market value (as determined by an Independent
Financial Advisor) of the assets subject to an Event of Loss and
(ii) 85% of which is in the form of cash or Cash Equivalents;
PROVIDED, HOWEVER, that the amount of (A) any liabilities (as shown
on the Authority's most recent balance sheet or in the notes
thereto) of the Authority (other than liabilities that are by their
terms expressly subordinated to the Notes), that are assumed by the
transferee of any such assets and (B) any notes or other
obligations received by the Authority from such transferee that are
converted by the Authority into cash (to the extent of the cash
received) within 10 Business Days following the closing of such
sale of the assets subject to such Event of Loss, shall be deemed
to be cash only for purposes of satisfying clause (ii) of this
Section 4.11 and for no other purpose.
(c) With respect to any Event of Loss with respect to Note
Collateral with a fair market value (or replacement cost, if
greater) of $500,000 or less, the Net Loss Proceeds therefrom shall
be released to the Authority.
SECTION 4.12. TRANSACTIONS WITH AFFILIATES.
The Authority shall not sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make any contract,
agreement, understanding, loan, advance or guarantee with, or for
the benefit of, the Tribe, the Management Company or any Affiliate
of the Tribe or of the Management Company (each of the foregoing,
an "Affiliate Transaction"), unless (a) such Affiliate Transaction
is on terms that are no less favorable to the Authority than those
that would have been obtained in a comparable transaction by the
Authority with an unrelated Person and (b) the Authority delivers
to the Trustee (i) with respect to any Affiliate Transaction
involving aggregate payments in excess of $2.0 million, a
resolution adopted by a majority of the disinterested members of
the Management Board approving such Affiliate Transaction and set
forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (a) above and (ii) with respect to
any Affiliate Transaction involving aggregate payments in excess of
$5.0 million, a written opinion as to the fairness to the Authority
from a financial point of view issued by an Independent Financial
Advisor with assets in excess of $1 billion. The foregoing
provisions shall not
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apply to the following: (x) Restricted Payments permitted by
Section 4.07 hereof; (y) the Development and Construction
Agreement or the Management Agreement in effect on the
Issuance Date or (z) any management agreement for any
commercial operations not covered by the Management Agreement
that does not provide for any compensation to the Manager
greater than 40% of Net Revenues from such operations and
which provides that such fees are subordinated to the payment
of the Notes to the same extent as the Management Agreement
provides.
SECTION 4.13. LIENS.
The Authority shall not directly or indirectly create, incur,
assume or suffer to exist any Lien, except Permitted Liens, on any
asset owned as of the Issuance Date or thereafter acquired by the
Authority, or any income or profits therefrom, or assign or convey
any right to receive income therefrom.
SECTION 4.14. LINE OF BUSINESS.
For so long as any Notes are outstanding, the Authority shall
not engage in any business or activity other than the Principal
Business.
SECTION 4.15. GOVERNMENTAL EXISTENCE.
Subject to Article 5 and Article 11 hereof, as the case may
be, the Authority shall do or cause to be done all things necessary
to preserve and keep in full force and effect (i) its existence in
accordance with the respective organizational, statutory,
constitutional or legal documents (as the same may be amended from
time to time) of the Authority or the Tribe, and (ii) the rights
(charter and statutory), licenses and franchises of the Authority.
SECTION 4.16. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
Upon the occurrence of a Change of Control, the Authority
shall make an offer to each Holder to purchase all or any part
(equal to $1,000 or an integral multiple thereof) of the Notes
pursuant to the offer described below (the "Change of Control
Offer") at a price in cash (the "Change of Control Payment") equal
to 101% of the aggregate principal amount thereof, plus accrued and
unpaid interest, if any, to the date of purchase, PROVIDED, that
the Authority shall not be required to make such an offer to
purchase (i) if such event deemed to be a Change of Control ceases
to exist prior to the closing of such offer to purchase, or (ii)
if, on or before the 120th day after the Change of Control, if such
Change of Control arises under either clause (iv) or (v) of the
definition thereof, the Manager is replaced, or the Authority is
using its best efforts to effect such a replacement, with a Person
with experience and reputation in the gaming industry which is
comparable to that of Sun International. Such Change of Control
Offer shall be made in accordance with the procedures set forth in
Article 3 hereof. The Authority shall commence such Change of
Control Offer by mailing the notice set forth in Section 3.10
hereof to Holders. The Authority shall comply with the
requirements of Rule 14e-1 under the Exchange Act, and any other
securities laws and regulations thereunder to the extent such laws
or regulations are applicable in connection with the repurchase of
the Notes pursuant to any Repurchase Offer.
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SECTION 4.17. REGISTRATION RIGHTS.
Pursuant to the Registration Rights Agreement, the Authority
will file a registration statement (the "Exchange Offer
Registration Statement") with respect to an offer to exchange the
Series A Notes for a new issue of Series B Notes of the Authority
(the "New Notes") registered under the Securities Act, with terms
identical to those of the Notes (the "Exchange Offer"). If (i) the
Exchange Offer is not permitted by applicable law or (ii) any
holder of Notes notifies the Authority that (A) it is prohibited by
law or SEC policy from participating in the Exchange Offer, (B)
that it may not resell the New Notes acquired by it in the Exchange
Offer to the public without delivering a prospectus and the
prospectus contained in the Exchange Offer Registration Statement
is not appropriate or available for such resales or (C) that it is
a broker-dealer and holds Notes acquired directly from the
Authority or an affiliate of the Authority, the Authority will be
required to provide a shelf registration statement (the "Shelf
Registration Statement") to cover resales of the Notes by the
holders thereof.
If (i) the Authority fails to file within 30 days, or cause to
become effective within 120 days after filing, the Exchange Offer
Registration Statement, or (ii) the Authority is obligated to
provide a Shelf Registration Statement and such Shelf Registration
Statement is not filed within 30 days, or declared effective within
120 days after filing, or (iii) the Authority fails to consummate
the Exchange Offer within 30 days of the date on which the Exchange
Offer Registration Statement was required to be declared effective
by the Commission or (iv) the Shelf Registration Statement or the
Exchange Offer Registration Statement is declared effective but
shall thereafter cease to be effective or usable in connection with
resales of the Notes for the periods specified in the Registration
Rights Agreement (each such event referred to in clauses (i)
through (iv) above a "Registration Default"), then the Authority
shall pay to each holder of Notes, with respect to the first 90-day
period following such Registration Default, liquidated damages
("Liquidated Damages") in an amount equal to $.05 per week per
$1,000 in principal amount of Notes held by such holder. The
amount of such Liquidated Damages will increase by an additional
$.05 per week per $1,000 in principal amount of Notes held by such
holders for each subsequent 90-day period until such Registration
Default has been cured, up to a maximum of $.50 per week.
SECTION 4.18. USE OF PROCEEDS.
The Authority shall use the net proceeds from the sale of the
Notes and the net proceeds from the sale of the Subordinated Notes
(to the extent provided in Section 4.19), only for Permitted
Proceed Uses. The Authority shall cause the net proceeds from the
sale of the Notes and the net proceeds from the sale of the
Subordinated Notes to be deposited into the Escrow Account and
disbursed only in accordance with the Disbursement and Escrow
Agreement.
SECTION 4.19. DISBURSEMENT AND ESCROW AGREEMENT.
The Authority shall place all of the net proceeds of the
Offering together with the net proceeds from the sale of the
Subordinated Notes (to the extent provided below) into the Escrow
Account to be held in escrow and invested in cash or Cash
Equivalents by the Escrow Agent until needed from time to time to
fund the construction of the Resort pursuant to the terms of the
Disbursement and Escrow Agreement. On or prior to the
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Issuance Date, the Authority shall have entered into the
Disbursement and Escrow Agreement. The Trustee, for the
ratable benefit of the Holders, shall have an exclusive, and
perfected security interest in the Escrow Account. To the
extent any net proceeds of the sale of Subordinated Notes
remain subsequent to the acquisition of the land on which the
Resort will be constructed, such net proceeds will also be
placed into the Escrow Account. The Escrow Agent will make
disbursements out of the Escrow Account in accordance with a
detailed line-item Construction Budget. The Disbursement and
Escrow Agreement will provide for restrictions on changing the
Construction Budget. The Authority shall cause the
Construction Budget and the terms of the Disbursement and
Escrow Agreement to be approved by the general contractor for
the Resort and shall cause such general contractor to agree to
comply with its terms.
SECTION 4.20. GAMING LICENSES.
The Authority covenants to use its best efforts to obtain and
retain in full force and effect at all times all Gaming Licenses
necessary for the operation of the Resort provided, that, if in the
course of the exercise of its governmental or regulatory functions
the Authority is required to suspend or revoke any consent, permit
or license or close or suspend any operation of any part of the
Resort as a result of any noncompliance with law, the Authority
will use its best efforts to promptly and diligently correct such
noncompliance or replace any personnel causing such noncompliance
so that the Resort will be opened and fully operating.
The Authority shall file with the Trustee and provide Holders
of Notes, promptly after receipt by the Authority, any Notice of
Violation, Order of Temporary Closure, or Assessment of Civil
Fines, from the NIGC pursuant to 25 C.F.R. Part 573 or 575 (or any
successor provision) and any Notice of Non-Compliance issued by, or
cause of action commenced by, the State of Connecticut under
Section 13 of the Compact (or any successor provision).
SECTION 4.21. CONSTRUCTION.
The Authority shall cause construction of the Resort,
including the furnishing, fixturing and equipping thereof, to be
prosecuted with diligence and continuity in a good and workmanlike
manner substantially in accordance with the Plans and within the
Construction Budget.
SECTION 4.22. MAINTENANCE OF INSURANCE.
Until the Notes have been paid in full, the Authority shall
maintain insurance with responsible carriers against such risks and
in such amounts as is customarily carried by similar businesses
with such deductibles, retentions, self insured amounts and
coinsurance provisions as are customarily carried by similar
businesses of similar size, including, without limitation, property
and casualty, and shall have provided insurance certificates
evidencing such insurance to the Trustee prior to the Issuance Date
and shall hereafter provide such certificates prior to the
anniversary or renewal date of each such policy, which certificate
shall expressly state the expiration date for each policy listed.
The Authority shall furnish or cause to be furnished certified
copies of the policies.
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Customary insurance coverage shall be deemed to include the
following: (i) workers' compensation insurance to the extent
required to comply with all applicable state, territorial, or
United States laws and regulations, or the laws and regulations of
any other applicable jurisdiction, (ii) comprehensive general
liability insurance with minimum limits of $10 million, (iii)
Umbrella or Bumbershoot liability insurance providing excess
liability coverages over and above the foregoing underlying
insurances up to a minimum limit of $50 million, and (iv) property
insurance protecting the property against loss or damage by fire,
lightning, windstorm, tornado, water damage, vandalism, riot,
earthquake, civil commotion, malicious mischief, hurricane, and
such other risks and 32 hazards as are from time to time covered by
an "all-risk" policy or a property policy covering "special" causes
of loss (such insurance shall provide coverage in not less than
100% of actual replacement value (as determined at each policy
renewal based on the F.W. Dodge Building Index or some other
recognized means) of any improvements and with a deductible no
greater than $500,000 (other than earthquake insurance, for which
the deductible may be up to 10% of such replacement value)). All
insurance required under this Indenture (except worker's
compensation) shall name the Authority and the Trustee as
additional insureds, with losses in excess of $1 million payable
jointly to the Authority and the Trustee (unless a Default or Event
of Default has occurred and is then continuing, in which case all
losses are payable solely to the Trustee), with no recourse against
the Trustee for the payment of premiums, deductibles, commissions
or club calls, and for at least 30 days notice of cancellation.
All such losses in excess of $1 million shall be deposited in the
Event of Loss Account to be established pursuant to Section 10.12
hereof and shall be pledged to the Trustee until released in
accordance with the terms of the applicable Collateral Document.
All such insurance policies shall be issued by carriers having an
A.M. Best & Company, Inc. rating of A or higher and a financial
size category of not less than XII, or if such carrier is not rated
by A.M. Best & Company, Inc., having the financial stability and
size deemed appropriate by an opinion from a reputable insurance
broker. The Authority shall deliver to the Trustee on the Issuance
Date and each anniversary hereafter a certificate of an insurance
agent stating that the insurance policies obtained by the Authority
comply with this Section 4.22 and the related applicable provisions
of the Collateral Documents.
SECTION 4.23. LIMITATION ON STATUS AS INVESTMENT COMPANY.
The Authority shall not become an Investment Company subject
to registration as an "investment company" (as that term is defined
in the Investment Company Act of 1940, as amended), or from
otherwise becoming subject to regulation under the Investment
Company Act of 1940.
SECTION 4.24. COLLATERAL DOCUMENTS.
The Authority will not amend, waive or modify, or take or
refrain from taking any action that has the effect of amending,
waiving or modifying, any provision of the Collateral Documents,
the Management Agreement or the Note Purchase Agreement for the
Subordinated Notes to the extent that such amendment, waiver,
modification or action could have an adverse effect on the rights
of the Trustee or the Holders, PROVIDED, that: (i) the Note
Collateral may be released or modified as expressly provided in
this Indenture and in the Collateral Documents; (ii) the
Construction Budget may be amended as expressly provided in the
Disbursement and Escrow Agreement; (iii) this Indenture, the
Management Agreement and any of the Collateral Documents may be
otherwise
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amended, waived or modified as set forth under Article 9
hereof; (iv) the Note Purchase Agreement for the Subordinated
Notes may be amended in accordance with its terms, provided
such amendments do not (A) cause or permit any principal,
interest or premium on the Subordinated Notes to be paid or to
become due and payable at any time earlier or in an amount
greater than such would become paid or due and payable without
such amendment, (B) amend any terms of the subordination of
the Subordinated Notes, or (C) amend any provision included
therein expressly for the benefit of the Notes; and (v) the
Management Agreement may be amended with the consent of the
NIGC, provided that such amendment does not adversely affect
the economic rights of the Holders of the Notes.
SECTION 4.25. FURTHER ASSURANCES.
The Authority shall do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register, any and all
such further acts, deeds, conveyances, security agreements,
mortgages, assignments, estoppel certificates, financing statements
and continuations thereof, termination statements, notices of
assignment, transfers, certificates, assurances and other
instruments as may be required from time to time in order (i) to
carry out more effectively the purposes of the Collateral
Documents, (ii) to subject to the Liens created by any of the
Collateral Documents any of the properties, rights or interests
required to be encumbered thereby, (iii) to perfect and maintain
the enforceability, validity, effectiveness and priority of any of
the Collateral Documents and the Liens intended to be created
thereby, and (iv) to better assure, convey, grant, assign,
transfer, preserve, protect and confirm to the Trustee any of the
rights granted or now or hereafter intended by the parties thereto
to be granted to the Trustee, the Holders of the Notes or under any
other instrument executed in connection therewith or granted to the
Authority under the Collateral Documents or under any other
instrument executed in connection therewith.
SECTION 4.26. INTEREST AND EXCESS CASH FLOW ACCOUNT.
The Authority shall deposit into the Interest and Excess Cash
Flow Account established pursuant to Section 10.12 on a monthly
basis (i), on the first day of each month, the amount of fixed
interest accrued during the prior month on the Notes and 100% of
all Deferred Subordinated Interest for the prior month, (ii) no
later than the 25th day of each month, 50% of the Excess Cash Flow
for the prior month and (iii) no later than the 25th day of each
month, the amount of Cash Flow Participation Interest accrued for
such prior month. In respect of any year, if the cumulative amount
deposited under clause (ii) is greater than 50% of the Excess Cash
Flow from the beginning of such year to the end of such prior
month, the Authority shall be permitted to receive such excess from
the Interest and Excess Cash Flow Account upon request to the
Trustee. In respect of any semi-annual period, if the amount
deposited under clause (iii) is greater than the cumulative accrued
Cash Flow Participation Interest from the beginning of such period
to the end of the prior month, the Authority may receive such
excess from the Interest and Excess Cash Flow Account upon written
request to the Trustee. Funds in the Interest and Excess Cash Flow
Account may be withdrawn by the Trustee or upon the request of the
Authority to (i) pay interest on the Notes, (ii) make an Excess
Cash Purchase Offer, and (iii) with respect to amounts deposited in
respect of Excess Cash Flow, make payments or expenditures that
reduce Excess Cash Flow under the definition thereof. Funds in the
Interest and Excess Cash Flow Account which were to be
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withdrawn to make an Excess Cash Purchase Offer but which are
not accepted in such an offer may be applied as provided in
Section 4.07.
SECTION 4.27. RESTRICTIONS ON LEASING AND DEDICATION OF PROPERTY.
The Authority shall not lease, sublease, or grant a license,
concession or other agreement to occupy, manage or use any Note
Collateral owned or leased by the Authority (each, a "Lease
Transaction"), other than the following Lease Transactions,
PROVIDED that (1) no Default or Event of Default has occurred or is
continuing immediately after entering into such Lease Transaction
(or immediately after any extension or renewal of such Lease
Transaction made at the option of the Authority) and (2) no gaming
or casino operations may be conducted on any Note Collateral that
is the subject of such Lease Transaction other than by the
Authority:
(a) the Authority may enter into a Lease Transaction with
respect to any space on or within the Resort with any Person,
PROVIDED that (i) such Lease Transaction will not interfere with,
impair or detract from the operations of the Resort and will, in
the opinion of the Authority, enhance the value and operations of
the Resort, (ii) such Lease Transaction is at a fair market rent
(in light of other similar or comparable prevailing commercial
transactions) and contains such other terms such that the Lease
Transaction, taken as a whole, is commercially reasonable and fair
to the Authority in light of prevailing or comparable transactions
in other casinos, hotels, attractions or shopping venues and (iii)
such Lease Transaction complies with all applicable law, including
obtaining any consent of the Bureau of Indian Affairs, if required;
(b) the Authority and the Tribe may enter into the Lease;
(c) the Authority may enter into a management or operating
agreement with respect to any Note Collateral (other than any Note
Collateral or space used for any casino or gaming operations) with
any Person, PROVIDED that (i) the manager or operator has
experience in managing or operating similar operations, (ii) such
management or operating agreement is on commercially reasonable
and fair terms to the Authority and (iii) such management or
operating agreement is terminable without penalty to the Authority
upon no more than 90 days written notice; and
(d) the Authority may enter into the Management Agreement and
any hotel management agreement with the Manager provided that the
compensation to the Manager does not exceed 40% of the Net Revenues
of such operation and that such fees are subordinated to the
payment of the Notes to the same extent as the Management Agreement
provides.
The Trustee shall enter into a leasehold non-disturbance
agreement with respect to any Lease Transaction permitted under
clause (a) above, in the event that the Trustee, on behalf of the
Holders of Notes, forecloses or takes possession of any Note
Collateral. Such an agreement shall provide, among other things,
that any action taken with respect to any Note Collateral,
including any sale of Note Collateral, will be subject to the terms
of the Lease Transaction and will permit the lessee to cure certain
defaults under such Lease Transaction. No Lease Transaction may
provide that the Authority may subordinate its leasehold or fee
interest to any lessee or any financing party of any lessee.
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SECTION 4.28. EXCESS CASH PURCHASE OFFER.
Within 120 days after each fiscal year end of the Authority,
beginning with the fiscal year that first ends after September 30,
1996, the Authority shall make an offer to all Holders of Notes
(the "Excess Cash Purchase Offer") to purchase the maximum
principal amount of Notes that is an integral multiple of $1,000 at
an offer price in cash equal to the percentage set forth below of
the principal amount of the Notes to be purchased plus accrued and
unpaid interest, if any, to the date fixed for the closing of such
Excess Cash Purchase Offer that may be purchased with the sum of
(i) 50% of the Excess Cash Flow in respect of the fiscal year then
ended (or if the amount of Excess Cash Flow for such period is less
than $2.0 million and is greater than zero, then the Excess Cash
Flow shall be deemed zero, or if the amount of Excess Cash Flow for
such period is less than zero, the amount of such negative amount),
(ii) the amount of Deferred Subordinated Interest for such fiscal
year and (iii) accrued and unpaid interest on such principal, if
any, to the date fixed for the closing of such Excess Cash Purchase
Offer (collectively the amounts under clauses (i) and (ii), the
"Excess Cash Purchase Amount"):
Year %
- ----- --
1997
1998
1999
2000
2001
2002
If less than all Notes tendering in such Excess Cash Purchase Offer
are required to be purchased by the Authority, the Authority will
purchase Notes pro rata from each tendering holder in accordance
with the principal amount of indebtedness properly tendered. To
the extent that the aggregate principal amounts properly tendered
pursuant to any Excess Cash Purchase Offer is less than the Excess
Cash Purchase Amount with respect thereto, the Authority may apply
such difference pursuant to Section 4.07.
Any offer to repurchase Notes pursuant to this Section 4.28
shall be made in accordance with the procedures set forth in
Section 3.10 hereof.
SECTION 4.29. OWNERSHIP INTERESTS IN THE AUTHORITY.
Neither the Tribe nor the Authority shall permit any Person
other than the Tribe to acquire any Ownership Interest in the
Authority.
SECTION 4.30. LIMITATION OF CREATION OF SUBSIDIARIES.
The Authority will not create any instrumentality,
subdivisions or subunits unless the actions and assets of such
instrumentalities, subdivisions or subunit are subject to or bound
by the terms of this Indenture and the Collateral Documents. The
Authority will not form, acquire or own any Subsidiary, except as
otherwise provided in the organizational chart of the Authority as
delivered by the Authority to the Trustee.
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ARTICLE 5
SUCCESSORS
SECTION 5.01. LIQUIDATION OR DISSOLUTION.
The Authority shall not sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its properties
or assets in one or more transactions. The Authority shall not
consolidate or merge with or into any other Person.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Authority defaults in the payment when due of interest
on the Notes and such default continues for a period of 30 days;
provided that payments of Cash Flow Participation Interest that are
permitted to be deferred as provided in the Notes shall not become
due for this purpose until such payment is required to be made
pursuant to the terms of the Notes;
(b) the Authority defaults in the payment when due of
principal of or premium, if any, on the Notes when the same becomes
due and payable at maturity, upon redemption (or in connection with
an offer to purchase) or otherwise;
(c) the Authority fails to comply with any of the provisions
of Section 4.07, 4.09, 4.10, 4.11, 4.15, 4.16, 4.18, 4.28 or 5.01
hereof;
(d) the Authority or the Tribe (with respect to its
obligations hereunder) fails to observe or perform any other
covenant, representation, warranty or other agreement in this
Indenture, the Notes or the Collateral Documents for 60 days after
written notice to the Authority by the Trustee or to the Authority
and the Trustee from Holders of at least 25% in principal amount of
the Notes then outstanding;
(e) the Lease ceases to be in full force and effect or the
Authority defaults in the performance of any covenant set forth in
the Lease, the Leasehold Mortgage or any of the other Collateral
Documents (which default is not waived or cured);
(f) a default occurs under any mortgage, indenture or
instrument under which there is issued or by which there is secured
or evidenced any Indebtedness for money borrowed by the Authority
or the payment of which is guaranteed by the Authority, whether
such Indebtedness or guarantee now exists, or is created after the
Issuance Date, which default (a) is caused by a failure to pay when
due principal of or premium, if any, or interest on such
Indebtedness prior to the
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expiration of the grace period provided in such indebtedness (a
"Payment Cross-Default") or (b) results in the acceleration of such
Indebtedness prior to its express maturity or would constitute a default
in the payment of such issue of Indebtedness at final maturity of such
issue and, in each case, the principal amount of such Indebtedness,
together with the principal amount of any other such Indebtedness under
which a Payment Cross-Default then exists or with respect to which the
maturity thereof has been so accelerated or which has not been paid at
maturity, aggregates $7.5 million or more;
(g) a final judgment or final judgments for the payment of
money are entered by a court or courts of competent jurisdiction
against the Authority or any of its assets and such judgment or
judgments remain unpaid or undischarged or unstayed for a period of
60 days, PROVIDED that the aggregate of all such undischarged
judgments exceeds $7.5 million;
(h) the Authority breaches in a material respect any
representation or warranty set forth in the Lease or the Leasehold
Mortgage or any of the other Collateral Documents, or the Authority
repudiates any of its obligations under, or any judgment or decree
by a court or government agency of competent jurisdiction declaring
the unenforceability of, the Lease or any of the Collateral
Documents and such repudiation materially impairs the benefits of
the Trustee and the Holders of the Notes thereunder;
(i) the Authority pursuant to or within the meaning of
Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against
it in an involuntary case,
(iii) makes a general assignment for the benefit of its
creditors, or
(iv) generally is not paying its debts as they become
due; or
(j) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(i) is for relief against the Authority in an involuntary
case; or
(ii) orders the liquidation of the Authority;
and the order or decree remains unstayed and in effect
for 60 consecutive days;
(k) there is any revocation, termination, suspension or other
cessation of effectiveness of any Gaming License which results in
the cessation or suspension of gaming operations for a period of
more than 90 consecutive days at the Resort;
(l) there is a cessation of gaming operations for a period of
more than 90 consecutive days at the Resort (other than as a result
of a casualty loss) after the Resort becomes Operating; or
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(m) there is a cessation of gaming operations for a period of
more than 180 consecutive days as a result of a casualty loss after
the Resort becomes Operating, except if the Authority is diligently
pursuing reconstruction and opening of the Resort and such
reconstruction and opening can be accomplished with the funds
available to the Authority.
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default
specified in clause (i) or (j) of Section 6.01 hereof with respect
to the Authority), occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding
Notes may declare the principal, premium, if any, interest and any
other monetary obligations on all of the Notes to be due and
payable immediately. Notwithstanding the foregoing, if an Event of
Default specified in clause (i) or (j) of Section 6.01 hereof
occurs with respect to the Authority, the principal, premium, if
any, interest (including all Cash Flow Participation Interest
accrued or deferred) and any other monetary obligations on all of
the outstanding Notes shall be due and payable immediately without
further action or notice. The Holders of a majority in aggregate
principal amount of the then outstanding Notes by written notice to
the Trustee may on behalf of all of the Holders rescind an
acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of
Default (except nonpayment of principal, interest or premium that
has become due solely because of the acceleration) have been cured
or waived.
Notwithstanding the foregoing, the Trustee shall have no
obligation to accelerate the Notes if in the best judgment of the
Trustee acceleration is not in the best interest of the Holders of
the Notes.
If an Event of Default occurs on or after November 15, 1999 by
reason of any willful action (or inaction) taken (or not taken) by
or on behalf of the Authority with the intention of avoiding
payment of the premium that the Authority would have had to pay if
the Authority then had elected to redeem the Notes pursuant to
Section 3.07 hereof, then, upon acceleration of the Notes, an
equivalent premium shall also become and be immediately due and
payable, to the extent permitted by law, anything in this Indenture
or in the Notes to the contrary notwithstanding. If an Event of
Default occurs prior to November 15, 1999 by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the
Authority with the intention of avoiding the prohibition on
redemption of the Notes prior to such date, then, upon acceleration
of the Notes, an additional premium shall also become and be
immediately due and payable in an amount, as to each of the years
beginning on November 15 of the years set forth below, as set forth
below (expressed as a percentage of the principal amount that would
otherwise be due but for the provisions of this sentence):
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Year %
- ---- --
1995
1996
1997
1998
1999
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of
principal, premium, if any, and interest on the Notes or to enforce
the performance of any provision of the Notes, this Indenture or
the Collateral 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 of a
Note in exercising any right or remedy accruing upon an Event of
Default shall not impair the right or remedy or constitute a waiver
of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal
amount of the then outstanding Notes by notice to the Trustee may
on behalf of the Holders of all of the Notes waive an existing
Default or Event of Default and its consequences hereunder, except
a continuing Default or Event of Default in the payment of the
principal of, premium, if any, or interest on, the Notes (including
in connection with an offer to purchase) (PROVIDED, HOWEVER, that
the Holders of a majority in aggregate principal amount of the then
outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such
acceleration). Upon any such waiver, such Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed
to have been cured for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other Default or impair
any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then
outstanding Notes may direct the time, method and place of
conducting any proceeding for exercising any remedy available to
the Trustee or exercising any trust or power conferred on it,
including the exercise of any remedy under the Collateral
Documents. 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
of Notes or that may involve the Trustee in personal liability.
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SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice
of a continuing Event of Default or the Trustee receives such
notice from the Authority;
(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 of a Note or Holders of Notes 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; PROVIDED,
HOWEVER, that such provision does not effect the right of a Holder
to sue for enforcement of any overdue payment thereon.
A Holder of a Note may not use this Indenture to prejudice the
rights of another Holder of a Note or to obtain a preference or
priority over another Holder of a Note.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Note to receive payment of principal,
premium, if any, and interest on the Notes, on or after the
respective due dates expressed in the Notes (including in
connection with an offer to purchase), or to bring suit for the
enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such
Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b)
occurs and is continuing, the Trustee is authorized to recover
judgment in its own name and as trustee of an express trust against
the Authority for the whole amount of principal of, premium, if
any, and interest remaining unpaid on the Notes and interest on
overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and
other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and
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advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings
relative to the Authority (or any other obligor upon the
Notes), its creditors or its property and shall be entitled
and empowered to collect, receive and distribute any money or
other property payable or deliverable on any such claims and
any custodian in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the
Trustee, and in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 hereof. 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 7.07 hereof out of the
estate in any such proceeding, shall be denied for any reason,
payment of the same shall be secured by a Lien on, and shall
be paid out of, any and all distributions, dividends, money,
securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation
or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote
in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
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 7.07 hereof, including payment of all
compensation, expense and liabilities incurred, and all advances
made, by the Trustee and the costs and expenses of collection;
SECOND: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium, if any, and interest, ratably,
without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal, premium, if
any, and interest, respectively; and
THIRD: (i) with respect to any money collected in respect of
the Cash Maintenance Account that was not applied as provided
above, to the holders of the Subordinated Notes as their interests
may appear and (ii) with respect to any other money, to the
Authority 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 of Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the 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
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regard to the merits and good faith of the claims or defenses made
by the party litigant. This Section does not apply to a suit by
the Trustee, a suit by a Holder of a Note pursuant to Section 6.07
hereof, or a suit by Holders of more than 10% in principal amount
of the then outstanding Notes.
SECTION 6.12. MANAGEMENT OF CASINOS.
Notwithstanding any provision of this Article 6 to the
contrary, following an Event of Default, the Trustee shall be
authorized, to recommend that the Authority retain one or more
experienced operators of casinos to manage the casino located at
the Resort on behalf of the Holders of Notes; PROVIDED, HOWEVER,
that any such operator shall have all necessary legal
qualifications, including all Gaming Licenses and/or approvals of
the NIGC and the Tribe to manage the casino located at the Resort.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it
by this Indenture and the Collateral Documents, and use the same
degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely
by the express provisions of this Indenture and the Collateral
Documents and the Trustee need perform only those duties that are
specifically set forth in this Indenture and the Collateral
Documents and no others, and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming in all material
respects to the requirements of this Indenture and the Collateral
Documents. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform in all material
respects to the requirements of this Indenture and the Collateral
Documents.
(c) The Trustee may not be relieved from liabilities for its
own negligent action, its own negligent failure to act, or its own
willful misconduct, except that:
(i) this paragraph (c) does not limit the effect of
paragraph (b) of this Section;
(ii) the Trustee shall not be liable to the Authority,
any holder of the Notes or any other Person for any error of
judgment made in good faith by a Responsible
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Officer, unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable to the Authority,
any holder of the Notes or any other Person with respect to any
action it takes or omits to take in good faith in accordance with
a direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every
provision of this Inden-ture that in any way relates to the Trustee
is subject to paragraphs (a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or incur any liability. The
Trustee shall be under no obligation to exercise any of its rights
and powers under this Indenture before or following the occurrence
of any Event of Default at the request of any Holders, unless such
Holder shall have offered to the Trustee security and indemnity
satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the
Authority or as provided in this Indenture. Money held in trust by
the Trustee need not be segregated from other funds except to the
extent required by law or as provided in this Indenture.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) 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.
(b) 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
written advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection from liability in
respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any
agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or
within the rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Authority shall
be sufficient if signed by an Officer of the Authority.
(f) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders
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unless such Holders shall have requested such action in
accordance with this Indenture and have offered to the Trustee
reasonable security or indemnity against the costs, expenses
and liabilities that might be incurred by it in compliance
with such request or direction.
(g) Except with respect to Section 4.01 hereof, the Trustee
shall have no duty to inquire as to the performance of the
Authority's covenants in Article Four 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 Section 6.01(a) or 6.01(b) or (ii) any Default or Event of
Default of which the Trustee shall have received written
notification or obtained actual knowledge.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the
Authority with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any
conflicting interest it must eliminate such conflict within 90
days, apply to the SEC for permission to continue as trustee or
resign. Any Agent may do the same with like rights and duties.
The Trustee is also subject to Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture,
the Collateral Documents, the Notes, it shall not be accountable
for the Authority's use of the proceeds from the Notes or any money
paid to the Authority or upon the Authority's direction under any
provision of this Indenture or the Collateral Documents, it shall
not be responsible for the use or application of any money received
by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in
the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
SECTION 7.05. NOTICES OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and
if it is known to the Trustee, the Trustee shall mail to the Tribe
and the Holders of Notes notices 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 (including Cash Flow Participation Interest, if any) on
any Note, the Trustee may withhold the notices if and so long as
the Trustee in good faith determines that withholding the notices
is in the interests of the Holders of the Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
On each May 15 beginning with the May 15 following the date of
this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated
as of such reporting date that complies with TIA Section 313(a) (but if
no event described in TIA Section 313(a) has occurred within the twelve
months preceding the reporting date, no report need be
transmitted). The Trustee also shall comply with
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TIA Section 313(b)(2). The Trustee shall also transmit by mail
all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the
Holders of Notes shall be mailed to the Authority and filed with
the SEC and each stock exchange on which the Notes are listed in
accordance with TIA Section 313(d). The Authority shall promptly notify
the Trustee when the Notes are listed on any stock exchange.
At the expense of the Authority, the Trustee or, if the
Trustee is not the Registrar, the Registrar, shall report the names
of record holders of the Notes to any Gaming Regulatory Authority
when requested to do so by the Authority.
At the express direction of the Authority and at the
Authority's expense, the Trustee will provide any Gaming Regulatory
Authority with:
(i) copies of all notices, reports and other written
communications which 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 Authority so directs;
(iii) notice of any Default under this Indenture,
any acceleration of the Indebtedness evidenced hereby, the
institution of any legal actions or proceedings before any
court or governmental authority in respect of a Default or
Event of Default hereunder;
(iv) notice of the removal or resignation of the Trustee
within five Business Days of the effectiveness thereof;
(v) notice of any transfer or assignment of rights
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.
To the extent requested by the Authority and at the
Authority's expense, the Trustee shall cooperate with any Gaming
Regulatory Authority in order to provide such Gaming Regulatory
Authority with the information and documentation requested and as
otherwise required by applicable law.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Authority shall pay to the Trustee from time to time
reasonable compensation for its acceptance of this Indenture and
services hereunder in accordance with a written schedule provided
by the Trustee to the Authority. The Trustee's compensation shall
not be limited by any law on compensation of a trustee of an
express trust. The Authority 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.
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The Authority shall indemnify the Trustee against any and all
losses, liabilities or expenses incurred by it arising out of or in
connection with the acceptance or administration of its duties
under this Indenture or the Collateral Documents, including the
costs and expenses of enforcing this Indenture or the Collateral
Documents against the Authority (including this Section 7.07) and
defending itself against any claim (whether asserted by the
Authority or any Holder or any other person) or liability in
connection with the exercise or performance of any of its powers or
duties hereunder, except to the extent any such loss, liability or
expense may be attributable to its negligence or bad faith. The
Trustee shall notify the Authority promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the
Authority shall not relieve the Authority of its obligations
hereunder. The Authority shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate
counsel and the Authority shall pay the reasonable fees and
expenses of such counsel. The Authority need not pay for any
settlement made without its consent, which consent shall not be
unreasonably withheld.
The obligations of the Authority under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture.
To secure the Authority's payment obligations in this Section,
the Trustee shall have a Lien prior to the Notes on all money or
property held or collected by the Trustee, except that held in
trust to pay principal and interest (including Cash Flow
Participation Interest, if any) 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 6.01(i) or (j) hereof occurs,
the expenses and the compensation for the services (including the
fees and expenses of its agents and counsel) are intended to
constitute expenses of administration under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA
Section 313(b)(2) to the extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor
Trustee's acceptance of appointment and taking of office as
provided in this Section.
The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the
Authority. The Holders of Notes of a majority in principal amount
of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Authority in writing. The Authority
may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee
or its property; or
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(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Authority shall promptly
appoint a successor Trustee. For up to one year after the
successor Trustee takes office, the Holders of a majority in
principal amount of the then outstanding Notes may by written
action appoint a successor Trustee to replace the successor Trustee
appointed by the Authority.
If any Gaming Regulatory Authority requires a 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 Authority unless
the Trustee declines to do so, or, if the Trustee's relationship
with either the Authority may, in the Authority'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 Authority or the Holders of Notes of at least 10% in
principal amount of the then outstanding Notes may petition any
court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee, after written request by any Holder of a Note
who has been a Holder of a Note for at least six months, fails to
comply with Section 7.10, such Holder of a Note 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 Authority.
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 Holders
of the Notes. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, PROVIDED
all sums owing to the Trustee hereunder have been paid and subject
to the Lien provided for in Section 7.07 hereof. Notwithstanding
replacement of the Trustee pursuant to this Section 7.08, the
Authority's obligations under Section 7.07 hereof shall continue
for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business
to, another corporation, the successor corporation without any
further act shall be the successor Trustee; PROVIDED such
corporation shall be otherwise eligible and qualified under this
Article.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the
United States of America or of any state thereof that is authorized
under such laws to exercise corporate trustee power, that is
subject to
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supervision or examination by federal or state authorities and
that has a combined capital and surplus of at least $50
million as set forth in its most recent published annual
report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is
subject to TIA Section 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated therein. The Trustee hereby waives any right to
setoff any claim that it may have against the Authority in any
capacity (other than as Trustee, Paying Agent or Collateral Agent
hereunder or under the Collateral Documents) against any of the
assets of the Authority held by the Trustee, including in any of
the Cash Collateral Accounts; provided, however, that if the
Trustee is or becomes a lender of any other Indebtedness permitted
hereunder to be pari passu with the Notes, then such waiver shall
not apply to the extent of such Indebtedness.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Authority may, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate
delivered to the Trustee, at any time, elect to have either Section
8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article
Eight.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
(a) When (i) the Authority delivers to the Trustee all
outstanding Notes (other than Securities replaced pursuant to
Section 2.07) for cancellation or (ii) all outstanding Securities
have become due and payable and the Authority irrevocably deposits
with the Trustee funds sufficient to pay at maturity all
outstanding Notes, including interest thereon (other than Notes
replaced pursuant to Section 2.07), and if in either case the
Authority pays all other sums payable hereunder by it, then this
Indenture shall, subject to Sections 8.01(b) and 8.07 cease to be
of further effect. The Trustee shall acknowledge satisfaction and
discharge of this Indenture on the Authority's demand accompanied
by an Officers' Certificate and an Opinion of Counsel and at the
Authority's cost and expense.
(b) Upon the Authority's exercise under Section 8.01 hereof of
the option applicable to this Section 8.02, the Authority shall,
subject to the satisfaction of the conditions set forth in Section
8.04 hereof, be deemed to have been discharged from their
respective obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter,
"LEGAL DEFEASANCE"). For this purpose, Legal Defeasance means that
the Authority shall be deemed to have paid and discharged the
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entire Indebtedness represented by the outstanding Notes and cured
all existing Events of Default, which shall thereafter be deemed to
be "outstanding" only for the purposes of Section 8.05 hereof and
the other Sections of this Indenture referred to in (a) and (b)
below, and to have satisfied all its other obligations under such
Notes and this Indenture (and the Trustee, on demand of and at the
expense of the Authority, shall execute proper instruments
acknowledging the same), except for the following provisions which
shall survive until otherwise terminated or discharged hereunder:
(a) the rights of Holders of outstanding Notes to receive payments
in respect of the principal of, premium, if any, and interest on
such Notes when such payments are due, (b) the Authority's
obligations with respect to such Notes under Article 2 and Section
4.02 hereof, (c) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and the Authority's obligations in
connection therewith and (d) this Article Eight. Subject to
compliance with this Article Eight, the Authority may exercise its
option under this Section 8.02 notwithstanding the prior exercise
of its option under Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Authority's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Authority shall,
subject to the satisfaction of the conditions set forth in Section
8.04 hereof, be released from their obligations under the covenants
contained in Sections 4.03, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12,
4.13, 4.14, 4.16, 4.17, 4.18, 4.19,4.20, 4.21, 4.22, 4.24, 4.25,
4.26, 4.27, 4.28, 4.29, 4.30 and 5.01, and the Events of Default
specified under 6.01(c), 6.01(d), 6.01(e), 6.01(h), 6.01(k),
6.01(l) or 6.01(m) hereof with respect to the outstanding Notes on
and after the date the conditions set forth below are satisfied
(hereinafter, "COVENANT DEFEASANCE"), and the Notes shall
thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such covenants,
but shall continue to be deemed "outstanding" for all other
purposes hereunder (it being understood that such Notes shall not
be deemed outstanding for accounting purposes). For this purpose,
Covenant Defeasance means that, with respect to the outstanding
Notes, the Authority may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth
in any such covenant listed in this Section 8.03, whether directly
or indirectly, by reason of any reference elsewhere herein to any
such covenant or by reason of any reference in any such covenant to
any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of
Default under Section 6.01 hereof, but, except as specified above,
the remainder of this Indenture and such Notes shall be unaffected
thereby.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of
either Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant
Defeasance:
(a) the Authority must irrevocably deposit with the Trustee,
in trust, for the benefit of the Holders, cash in United States
dollars, non-callable Government Securities, or a combination
thereof, in such amounts as will be sufficient, in the opinion of
a nationally recognized firm of independent public accountants as
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evidenced by a certificate delivered to the Trustee, to pay the
principal of, premium, if any, and interest (including the maximum
amount payable as Cash Flow Participation Interest, if any) on the
outstanding Notes on the stated maturity date or on the applicable
redemption date, as the case may be, of such principal of, premium,
if any, or interest on the outstanding Notes on the stated Maturity
or on the applicable redemption date, as the case may be and the
Authority must specify whether the Notes are being defeased to
maturity or to a particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the
Authority shall have delivered to the Trustee an Opinion of Counsel
in the United States reasonably acceptable to the Trustee
confirming that, subject to customary assumptions and exclusions,
(A) the Authority has received from, or there has been published
by, the Internal Revenue Service a ruling or (B) since the Issuance
Date, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, subject to customary
assumptions and exclusions, the Holders of the outstanding Notes
will not recognize income, gain or loss for U.S. federal income tax
purposes as a result of such Legal Defeasance and will be subject
to U.S. federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Legal
Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the
Authority shall have delivered to the Trustee an Opinion of Counsel
in the United States reasonably acceptable to the Trustee
confirming that, subject to customary assumptions and exclusions,
the Holders of the outstanding Notes will not recognize income,
gain or loss for U.S. federal income tax purposes as a result of
such Covenant Defeasance and will be subject to U.S. federal income
tax on the same amounts, in the same manner and at the same times
as would have been the case if such Covenant Defeasance had not
occurred;
(d) no Default or Event of Default shall have occurred and be
continuing pursuant to Section 6.01(a), 6.01(b), 6.01(i) or 6.01(j)
hereof on the date of such deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under,
any material agreement or instrument (other than this Indenture) to
which the Authority is a party or by which the Authority is bound;
(f) the Authority shall have delivered to the Trustee an
opinion of counsel to the effect that after the 91st day following
the deposit following the deposit and as of the date of such
opinion and subject to customary assumptions and exclusions, the
trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally under any applicable United States law;
(g) the Authority shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the
Authority with the intent
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of defeating, hindering, delaying or defrauding any creditors
of the Authority or others; and
(h) the Authority shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, which Opinion of
Counsel may be subject to customary assumptions and exclusions,
each stating that all conditions precedent provided for or relating
to the Legal Defeasance or the Covenant Defeasance have been
complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 8.05, the "Trustee") pursuant to Section
8.04 hereof in respect of the outstanding Notes shall be held in
trust and applied by the Trustee, in accordance with the provisions
of such Notes and this Indenture, to the payment, either directly
or through any Paying Agent (including the Authority acting as
Paying Agent) as the Trustee may determine, to the Holders of such
Notes of all sums due and to become due thereon in respect of
principal, premium, if any, and interest (including the maximum
amount of Cash Flow Participation Interest payable), but such money
need not be segregated from other funds except to the extent
required by law.
The Authority shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the cash or
non-callable Government Securities deposited pursuant to Section
8.04 hereof or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law
is for the account of the Holders of the outstanding Notes.
Anything in this Article Eight to the contrary
notwithstanding, the Trustee shall deliver or pay to the Authority
from time to time upon the request of the Authority any money or
non-callable Government Securities held by it as provided in
Section 8.04 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may
be the opinion delivered under Section 8.04(a) hereof), are in
excess of the amount thereof that would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
SECTION 8.06. REPAYMENT TO AUTHORITY.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Authority, in trust for the payment of the
principal of, premium, if any, or interest on any Note and
remaining unclaimed for two years after such principal, premium, if
any, or interest has become due and payable shall be paid to the
Authority on its request or (if then held by the Authority) shall
be discharged from such trust; and the Holder of such Note shall
thereafter, as an unsecured creditor, look only to the Authority
for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of
the Authority as trustee thereof, shall thereupon cease; PROVIDED,
HOWEVER, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the
Authority cause to be published
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once, in the New York Times and The Wall Street Journal
(national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or
publication, any unclaimed balance of such money then
remaining will be repaid to the Authority.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance
with Section 8.02 or 8.03 hereof, as the case may be, by reason of
any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application,
then the Authority's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.02 or 8.03 hereof until such time as the
Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03 hereof, as the case may be;
PROVIDED, HOWEVER, that, if the Authority make any payment of
principal of, premium, if any, or interest (including Cash Flow
Participation Interest, if any) on any Note following the
reinstatement of its obligations, the Authority shall be subrogated
to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.
SECTION 8.08. NOTE COLLATERAL.
Upon the Authority's exercise under Section 8.01 hereof of the
option applicable to either Section 8.02 or 8.03, the Note
Collateral, except the funds in the trust fund described in Section
8.04 hereof, shall be released pursuant to Section 10.03 hereof.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Authority
and the Trustee may amend or supplement this Indenture, the Notes,
the Management Agreement or the Collateral Documents without the
consent of any Holder of a Note or the Tribe, and provided that any
required governmental approval, including that of the NIGC, is
obtained:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(c) to comply with Article 4 or Article 11 hereof;
(d) 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 of any Holder of a
Note;
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(e) to comply with requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA; or
(f) to enter into additional or supplemental Collateral
Documents.
Upon the request of the Authority accompanied by a resolution
of the Board of Directors of the Authority authorizing the
execution of any such amended or supple-mental Indenture, Notes or
Collateral Documents, and upon receipt by the Trustee of the
documents described in Section 7.02 hereof, the Trustee shall join
with the Authority in the execution of any amended or supplemental
Indenture, Notes or Collateral Documents authorized or permitted by
the terms of this Indenture and to make any further appropriate
agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into such amended or
supplemental Indenture, Notes or Collateral Documents that affects
its own rights, duties or immunities under this Indenture or
otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02 or elsewhere in
this Indenture, the Authority and the Trustee may amend or
supplement this Indenture, the Notes or the Collateral Documents
with the consent of the Holders of at least a majority in principal
amount of the Notes then outstanding (including consents obtained
in connection with a tender offer or exchange offer for the Notes),
provided that any required governmental approval is obtained,
including that of the NIGC, and, subject to Sections 6.04 and 6.07
hereof, any existing Default or Event of Default (other than a
Default or Event of Default in the payment of the principal of,
premium, if any, or interest, if any, on the Notes, except a
payment default resulting from an acceleration that has been
rescinded) or compliance with any provision of this Indenture or
the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes
(including consents obtained in connection with a tender offer or
exchange offer for the Notes). Without the consent of at least
66-2/3% in principal amount of the Notes then outstanding
(including consents obtained in a tender offer or exchange offer
for such Notes), no waiver or amendment to this Indenture may make
any change to Section 4.16 hereof. With the consent of a majority
in principal amount of the Notes then outstanding, the Authority
may amend or waive any provision of the Note Purchase Agreement for
the Subordinated Notes not otherwise permitted to be amended
hereunder or the Management Agreement.
Upon the request of the Authority accompanied by a resolution
of the Board of Directors of the Authority authorizing the
execution of any such amended or supple-mental Indenture, Notes or
Collateral Documents, and upon the filing with the Trustee of
evidence satisfactory to the Trustee of the consent of the Holders
of Notes as aforesaid, and upon receipt by the Trustee of the
documents described in Section 7.02 hereof, the Trustee shall join
with the Authority in the execution of such amended or supplemental
Indenture, Notes or Collateral Documents, unless such amended or
supplemental Indenture, Notes or Collateral Documents affects the
Trustee's own rights, duties or immunities under this Indenture,
the Notes, the Collateral Documents or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter
into such amended or supplemental Indenture, Notes or Collateral
Documents.
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It shall not be necessary for the consent of the Holders of
Notes under this Section 9.02 to approve the particular form of any
proposed amendment or waiver, but it shall be sufficient if such
consent approves the substance thereof.
After an amendment, supplement or waiver under this Section
becomes effective, the Authority shall mail to the Holders of Notes
affected thereby a notice briefly describing the amendment,
supplement or waiver. Any failure of the Authority to mail such
notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such amended or supplemental
Indenture, Notes or Collateral Documents or waiver. Subject to
Sections 6.04 and 6.07 hereof, the Holders of a majority in
aggregate principal amount of the Notes then outstanding may waive
compliance in a particular instance with any provision of this
Indenture, the Notes or the Collateral Documents. However, without
the consent of each Holder affected, an amendment or waiver may not
(with respect to any Notes held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of
any Note or alter or waive any of the provisions with respect to
the optional or mandatory redemption provisions of the Notes
(provided, however, that this clause (b) does not apply to any
provision with respect to any Repurchase Offer);
(c) reduce the rate of or change the time for payment of
interest, on any Note;
(d) 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 at
least a majority in aggregate principal amount of the then
outstanding Notes and a waiver of the payment default that resulted
from such acceleration);
(e) make any Note payable in money other than that stated in
the Notes;
(f) make any change in the provisions of this Indenture
relating to waivers of past monetary Defaults or the rights of
Holders of Notes to receive payments of principal of or premium, if
any, or interest on the Notes;
(g) release all or substantially all of the Note Collateral
from the Lien of this Indenture and the Collateral Documents; or
(h) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture, the Notes and
the Collateral Documents shall be set forth in a amended or
supplemental Indenture or Collateral Document that complies with
the TIA as then in effect, if applicable.
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SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the
Holder of a Note and every subsequent Holder of a Note or portion
of a Note that evidences the same debt as the consenting Holder's
Note, even if notation of the consent is not made on any Note.
However, any such Holder of a Note or subsequent Holder of a Note
may revoke the consent as to its Note if the Trustee receives
written notice of revocation before the date the waiver, supplement
or amendment becomes effective. An amendment, supplement or waiver
becomes effective in accordance with its terms and thereafter binds
every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Note thereafter
authenticated. The Authority in exchange for all Notes may issue
and the Trustee shall authenticate new Notes that reflect the
amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment,
supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental indenture,
Note or Collateral Document, if necessary, authorized pursuant to
this Article Nine if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the
Trustee. The Authority may not sign an amendment or supplemental
Indenture, Note or Collateral Document until the Board of Directors
approves it. In executing any amended or supplemental indenture,
Note or Collateral Document, if necessary, the Trustee shall be
entitled to receive and (subject to Section 7.01) shall be fully
protected in relying upon, an Officer's Certificate and an Opinion
of Counsel, which Opinion of Counsel may be subject to customary
assumptions and exclusions, stating that the execution of such
amended or supplemental indenture, Note or Collateral Document is
authorized or permitted by this Indenture.
ARTICLE 10
COLLATERAL AND SECURITY
SECTION 10.01. SECURITY.
The due and punctual payment of the principal of, premium, if
any, 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, and interest on
the overdue principal of, premium, if any, and interest on the
Notes and performance of all other obligations of the Authority to
the Holders of Notes or the Trustee under this Indenture and the
Notes, according to the terms hereunder or thereunder, shall be
secured by a first lien on the Note Collateral (which will also
secure the Working Capital Financing), as provided herein and in
the Collateral Documents
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which the Authority has entered into simultaneously with the
execution of this Indenture for the benefit of the Holders of
Notes. Each Holder of Notes, by its acceptance thereof,
consents and agrees to the terms of the Collateral Documents
(including, without limitation, the provisions providing for
foreclosure and release of Note Collateral and to the remedies
available therefor, whether under tribal law or otherwise) as
the same may be in effect or may be amended from time to time
in accordance with its terms and authorizes and directs the
Trustee to enter into the Collateral Documents and to perform
its obligations and exercise its rights thereunder in
accordance therewith. The Authority shall deliver to the
Trustee copies of all documents executed pursuant to this
Indenture and the Collateral Documents and shall do or cause
to be done all such acts and things as may be necessary or
proper, or as may be required by the provisions of the
Collateral Documents to assure and confirm to the Trustee the
security interest in the Note Collateral contemplated hereby,
by the Collateral Documents or any part thereof, as from time
to time constituted, so as to render the same available for
the security and benefit of this Indenture and of the Notes
secured hereby, according to the intent and purposes herein
expressed. The Authority shall take any and all actions
reasonably required to cause the Collateral Documents to
create and maintain, as security for the obligations of the
Authority hereunder, a valid and enforceable perfected first
priority Lien in and on all the Note Collateral, in favor of
the Trustee for the ratable benefit of the Holders, superior
to and prior to the rights of all third Persons and subject to
no other Liens than Permitted Liens.
SECTION 10.02. RECORDING AND OPINIONS.
The Authority will cause the applicable Collateral Documents
and any financing statements, all amendments or supplements to each
of the foregoing and any other similar security documents as
necessary, to be registered, recorded and filed and/or re-recorded,
re-filed and renewed in such manner and in such place or places, if
any, as may be required by law or reasonably requested by the
Trustee in order fully to preserve and protect the Lien securing
the obligations under the Notes pursuant to the Collateral
Documents. The Authority will use its best efforts to obtain any
required approval of the Bureau of Indian Affairs or the NIGC of
any of the Collateral Documents, this Indenture or any Note.
The Authority and any other obligor shall furnish to the
Trustee:
(a) promptly after the execution and delivery of this
Indenture, and promptly after the execution and delivery of any
other instrument of further assurance or amendment, an Opinion of
Counsel in the United States either (i) stating that, subject to
customary assumptions and exclusions, in the opinion of such
counsel, this Indenture, the Deed of Trust and other applicable
Collateral Documents and all other instruments of further assurance
or amendment have been properly recorded, registered and filed to
the extent necessary to make effective the Lien intended to be
created by such Collateral Documents and reciting the details of
such action or referring to prior Opinions of Counsel in which such
details are given, and stating that, subject to customary
assumptions and exclusions, as to such Collateral Documents and
such other instruments such recording, registering and filing are
the only recordings, registerings and filings necessary to give
notice thereof and that no re-recordings, re-registerings or re-
filings are necessary to maintain such notice, and further stating
that all financing statements and continuation statements have been
executed and filed that are necessary fully to preserve and protect
the rights of the
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Holders of Notes and the Trustee hereunder and under the
Collateral Documents or (ii) stating that, subject to
customary assumptions and exclusions, in the opinion of such
counsel, no such action is necessary to make any other Lien
created under any of the Collateral Documents effective as
intended by such Collateral Documents; and
(b) within 30 days after January 1, in each year beginning with
the year 1996, an Opinion of Counsel, dated as of such date, either
(i) stating that, subject to customary assumptions and exclusions,
in the opinion of such counsel, such action has been taken with
respect to the recording, registering, filing, re-recording, re-
registering and re-filing of this Indenture and all supplemental
indentures, financing statements, continuation statements or other
instruments of further assurance as is necessary to maintain the
Lien of this Indenture and the Collateral Documents until the next
Opinion of Counsel is required to be rendered pursuant to this
paragraph and reciting the details of such action or referring to
prior Opinions of Counsel in which such details are given, and
stating that all financing statements and continuation statements
have been executed and filed that are necessary fully to preserve
and protect the rights of the Holders and the Trustee hereunder and
under the Collateral Documents or (ii) stating that, subject to
customary assumptions and exclusions, in the opinion of such
counsel, no such action is necessary to maintain such Lien, until
the next Opinion of Counsel is required to be rendered pursuant to
this paragraph.
(c) The Authority shall furnish to the Trustee the
certificates or opinions, as the case may be, required by TIA
Section 314(d). Such certificates or opinions will be subject to
the terms of TIA Section 314(e).
SECTION 10.03. RELEASE OF NOTE COLLATERAL.
(a) Subject to subsections (b), (c) and (d) of this Section
10.03, Note Collateral may be released from the Lien and security
interest created by this Indenture and the Collateral Documents at
any time or from time to time upon the request of the Authority
pursuant to an Officers' Certificate certifying that all terms for
release and conditions precedent hereunder and under any applicable
Collateral Document have been met and specifying (i) the identity
of the Note Collateral to be released and (ii) the provision of
this Indenture which authorizes such release.
The Trustee shall release (at the sole cost and expense of the
Authority) (a) Note Collateral that is the subject of an Asset Sale
or which is sold, transferred or disposed of (other than any Asset
Sale to the Tribe or any Affiliate of the Tribe); PROVIDED, such
transaction is or will be in accordance with the provisions of this
Indenture or the applicable Collateral Document, including, without
limitation, the requirement that the Net Proceeds from such Asset
Sale are or will be applied in accordance with Section 4.10 hereof;
(b) Note Collateral that is condemned, seized or taken by the power
of eminent domain or otherwise confiscated pursuant to an Event of
Loss; PROVIDED that the Net Loss Proceeds from such Event of Loss
are or will be applied in accordance with Section 4.11 hereof; (c)
Note Collateral which may be released with the consent of Holders
pursuant to Article 9 hereof; (d) all Note Collateral (except as
provided in Article 8 hereof and, in particular, the funds in the
trust fund described in Section 8.04 and any funds in any accounts
established under Section 10.12 hereof) upon discharge or
defeasance of this Indenture in accordance with Article 8 hereof;
(e) all Note Collateral upon the payment in full of all obligations
of the Authority with respect to the Notes; (f) any amounts in
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the Cash Maintenance Account, Interest and Excess Cash Flow
Account, Net Receipts Account or any other cash or Cash
Equivalents held as security for the Notes may be released
pursuant to the terms of this Indenture, the Cash Collateral
Accounts Pledge and Security Agreement or any other relevant
Collateral Document; and (g) collateral under the Leasehold
Mortgage may be released in accordance with the terms of the
Leasehold Mortgage. Upon receipt of such Officers'
Certificate the Trustee shall execute, deliver or acknowledge
any necessary or proper instruments of termination,
satisfaction or release to evidence the release of any Note
Collateral permitted to be released pursuant to this Indenture or
the Collateral Documents.
(b) No Note Collateral shall be released from the Lien and
security interest created by the Collateral Documents pursuant to
the provisions of the Collateral Documents unless there shall have
been delivered to the Trustee the certificate required by this
Section 10.03 (or the applicable certificate called for by the Cash
Collateral Accounts Pledge and Security Agreement).
(c) The Trustee may release Note Collateral from the Lien and
security interest created by this Indenture and the Collateral
Documents upon the sale or disposition of Note Collateral pursuant
to the Trustee's powers, rights and duties with respect to remedies
provided under any of the Collateral Documents.
(d) The release of any Note Collateral from the terms of this
Indenture and the Collateral Documents shall not be deemed to
impair the security under this Indenture in contravention of the
provisions hereof if and to the extent the Note Collateral is
released pursuant to the terms hereof. To the extent applicable,
the Authority shall cause TIA Section 313(b), relating to reports, and
TIA Section 314(d), relating to the release of property or securities
from the Lien and security interest of the Collateral Documents and
relating to the substitution therefor of any property or securities
to be subjected to the Lien and security interest of the Collateral
Documents to be complied with. Any certificate or opinion required
by TIA Section 314(d) may be made by an Officer of the Authority except
in cases where TIA Section 314(d) requires that such certificate or
opinion be made by an independent Person, which Person shall be an
independent engineer, appraiser or other expert selected or
approved by the Trustee in the exercise of reasonable care.
If, at any time there is no Manager under the Management
Agreement, the rights of the Manager to make withdrawals as set
forth in this Section 10.03(e) may be made by the Authority for the
purposes set forth herein.
SECTION 10.04. PROTECTION OF THE TRUST ESTATE.
Upon prior written notice to the Authority, the Trustee shall
have the power (i) to institute and maintain such suits and
proceedings as it may deem expedient, to prevent any impairment of
the Note Collateral under any of the Collateral Documents; and (ii)
to enforce the obligations of the Authority, under this Indenture
or the Collateral Documents, to institute and maintain such suits
and proceedings as may be expedient to prevent any impairment of
the Note Collateral under the Collateral Documents and in the
profits, rents, revenues and other income arising therefrom;
including the power to institute and maintain suits or proceedings
to restrain the enforcement of or compliance with any legislative
or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or
compliance with, such
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enactment, rule or order would impair any Note Collateral or
be prejudicial to the interests of the Holders of Notes or the
Trustee, to the extent permitted thereunder. Upon receipt of
notice that the Authority is not in compliance with any of the
requirements of the Deed of Trust, the Trustee may, but shall
have no obligation to purchase, at the Authority's expense,
such insurance coverage necessary to comply with the
appropriate section of the mortgage.
SECTION 10.05. CERTIFICATES OF THE AUTHORITY.
The Authority shall furnish to the Trustee, prior to
each proposed release of Note Collateral pursuant to the
Collateral Documents (i) all documents required by TIA Section 314(d)
and (ii) an Opinion of Counsel in the United States, which may
be rendered by internal counsel to the Authority, to the
effect that, subject to customary assumptions and exclusions,
such accompanying documents constitute all documents required
by TIA Section 314(d). The Trustee may, to the extent permitted by
Sections 7.01 and 7.02 hereof, accept as conclusive evidence
of compliance with the foregoing provisions the appropriate
statements contained in such documents and such Opinion of
Counsel.
SECTION 10.06. CERTIFICATES OF THE TRUSTEE.
In the event that the Authority wishes to release Note
Collateral in accordance with the Collateral Documents and has
delivered the certificates and documents required by the Collateral
Documents and Sections 10.03 and 10.05 hereof, the Trustee shall
determine whether it has received all documentation required by TIA
Section 314 (d) in connection with such release and, based on such
determination and the Opinion of Counsel delivered pursuant to
Section 10.05, shall deliver a certificate to the Trustee setting
forth such determination.
SECTION 10.07. AUTHORIZATION OF ACTIONS TO BE TAKEN BY THE
TRUSTEE UNDER THE COLLATERAL DOCUMENTS.
Subject to the provisions of Section 7.01 and 7.02 hereof, the
Trustee may, in its sole discretion and without the consent of the
Holders of Notes on behalf of the Holders of Notes, take all
actions it deems necessary or appropriate in order to (a) enforce
any of the terms of the Collateral Documents and (b) collect and
receive any and all amounts payable in respect of the Obligations
of the Authority hereunder. The Trustee shall have power to
institute and maintain such suits and proceedings as it may deem
expedient to prevent any impairment of the Note Collateral by any
acts that may be unlawful or in violation of the Collateral
Documents or this Indenture, and such suits and proceedings as the
Trustee may deem expedient to preserve or protect its interests and
the interests of the Holders of Notes in the Note Collateral
(including power to institute and maintain suits or proceedings to
restrain the enforcement of or compliance with any legislative or
other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or
compliance with, such enactment, rule or order would impair the
security interest hereunder or be prejudicial to the interests of
the Holders of Notes or of the Trustee).
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SECTION 10.08. AUTHORIZATION OF RECEIPT OF FUNDS BY THE
TRUSTEE UNDER THE COLLATERAL DOCUMENTS.
Upon an Event of Default and so long as such Event of Default
continues, the Trustee may exercise in respect of the Note
Collateral, in addition to the other rights and remedies provided
for herein, in the Collateral Documents or otherwise available to
it, all of the rights and remedies of a secured party under the
Uniform Commercial Code or other applicable law, and the Trustee
may also upon obtaining possession of the Note Collateral as set
forth herein, without notice to the Authority, except as specified
below, sell the Note Collateral or any part thereof in one or more
parcels at public or private sale, at any exchange, broker's board
or at any of the Trustee's offices or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as the
Trustee may deem commercially reasonable. The Authority
acknowledges and agrees that any such private sale may result in
prices and other terms less favorable to the seller than if such a
sale were a public sale. The Authority agrees that, to the extent
notice of sale shall be required by law, at least 10 days' notice
to the Authority of the time and place of any public sale or the
time after which any private sale is to be made shall constitute
reasonable notification. The Trustee shall not be obligated to
make any sale regardless of notice of sale having been given. The
Trustee may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which
it was so adjourned.
Any cash that is Note Collateral held by the Trustee and all
cash proceeds received by the Trustee in respect of any sale of,
collection from, or other realization upon all or any part of the
Note Collateral shall be applied (unless otherwise provided for in
the Note Collateral Documents and after payment of any and all
amounts payable to the Trustee pursuant to the Indenture), as the
Trustee shall determine or as the Holders of the Notes shall direct
pursuant to Section 6.05 hereof, (i) against the Obligations for
the ratable benefit of the Holders of the Notes, (ii) to maintain,
repair or otherwise protect the Note Collateral or (iii) to take
such other action to protect the other rights of the Holders of the
Notes or to take any other appropriate action or remedy for the
benefit of the Holders of the Notes. Any surplus of such cash or
cash proceeds held by the Trustee and remaining after payment in
full of all the Obligations of the Authority under this Indenture,
the Notes or the Collateral Documents shall be paid over to the
Authority or to whomsoever may be lawfully entitled to receive such
surplus or as a court of competent jurisdiction may direct.
SECTION 10.09. TERMINATION OF SECURITY INTEREST.
Upon the payment in full of all Obligations of the Authority
under this Indenture, the Notes and the Collateral Documents, or
upon Legal Defeasance, the Trustee shall, at the request of the
Authority, deliver a certificate to the Collateral Agent stating
that such Obligations have been paid in full, and instruct the
Collateral Agent to release the Liens pursuant to this Indenture
and the Collateral Documents.
SECTION 10.10. COOPERATION OF TRUSTEE.
In the event the Authority pledges or grants a security
interest in additional Note Collateral, the Trustee shall cooperate
with the Authority in reasonably and promptly agreeing to the form
of, and executing as required, any instruments or documents
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necessary to make effective the security interest in the Note
Collateral to be so substituted or pledged. To the extent
practicable, the terms of any security agreement or other
instrument or document necessitated by any such substitution or
pledge shall be comparable to the provisions of the existing
Collateral Documents. Subject to, and in accordance with the
requirements of this Article 10 and the terms of the Collateral
Documents, in the event that the Authority engages in any
transaction pursuant to Section 10.03, the Trustee shall cooperate
with the Authority in order to facilitate such transaction in
accordance with any reasonable time schedule proposed by the
Authority, including by delivering and releasing the Note
Collateral in a prompt and reasonable manner.
SECTION 10.11. COLLATERAL AGENT.
The Trustee may, from time to time, appoint one or more
Collateral Agents hereunder. Each of such Collateral Agents may be
delegated any one or more of the duties or rights of the Trustee
hereunder or under the Collateral Documents or which are specified
in any Collateral Documents, including without limitation, the
right to hold any Note Collateral in the name of, registered to, or
in the physical possession of, such Collateral Agent, for the
rateable benefit of the Holders of the Notes. Each such Collateral
Agent shall have such rights and duties as may be specified in an
agreement between the Trustee and such Collateral Agent. The
Trustee and any Collateral Agent shall be authorized hereunder to
give any acknowledgment reasonably requested by any party to
confirm the rights and obligations of the parties.
SECTION 10.12. CASH FUNDS PLEDGE.
(a) As security for the payment of the Obligations under the
Indenture, the Notes and the Collateral Documents, the Authority
hereby pledges to the Trustee and grants to the Trustee for the
ratable benefit of the Holders of the Notes a duly perfected first
priority security interest in the Net Receipts Account, the Cash
Maintenance Account, the Interest and Excess Cash Flow Account, the
Replacement Reserve Account, the Event of Loss Account and the
Asset Sale Account (collectively, the "Cash Collateral Accounts"),
together with all amounts in, and investments of amounts in, each
and every such account. The Authority also agrees not to further
pledge or grant other security interests in the foregoing Note
Collateral to any Person, except as otherwise provided in this
Indenture and, except that the Authority may grant a security
interest of second priority in the Cash Maintenance Account and
funds and investments therein to the holders of the Subordinated
Notes. The Authority shall establish the Cash Collateral Accounts
in the name of the Trustee pursuant to the terms of the Cash
Collateral Accounts Pledge and Security Agreement. The Cash
Collateral Accounts shall be maintained with an Eligible
Institution, which initially shall be the Trustee, and all funds
therein may only be invested in cash or Cash Equivalents.
(b) As security for the payment of the principal of, premium
(if any) on, and all Fixed Interest and Cash Flow Participation
Interest at any time accruing on, the Notes and the payment of all
other Obligations secured by any of the Note Collateral pursuant to
any of the Collateral Documents, the Authority hereby grants the
Trustee, for the ratable benefit of the Holders of the Notes, a
continuing first and sole security interest upon all present and
future cash, from whatever source derived, whenever received, and
whether or not deposited in any Cash Collateral Account or held by
the Trustee;
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provided, that so long as no Default or Event of Default has
occurred and is continuing, upon written request of the
Authority to the Trustee, the Trustee shall release the Lien
under this paragraph (b) with respect to any cash or account
as to which a Permitted Lien under clause (i),(v) or (viii) of
the definition thereof is permitted.
(c) The Authority covenants to deposit or cause to be
deposited daily, in accordance with the terms of the Management
Agreement, all Gross Revenues of the Resort into the Net Receipts
Account, except for Gross Revenues with respect to which the
Trustee has released its lien under Section 10.12(b).
(d) Cash in any Cash Collateral Account may be withdrawn
pursuant to the terms of the Cash Collateral Accounts Pledge and
Security Agreement. The Authority further covenants to maintain
each Cash Collateral Account in existence so long as any
Obligations under the Notes are outstanding.
(f) The Authority agrees to do or cause to be done all things,
and to make all filings, and to enter into any agreements or
instruments reasonably requested by the Eligible Financial
Institution at which any Cash Collateral Account is located, to
evidence and perfect the first priority security interest in favor
of the Trustee for the ratable benefit of the Noteholders granted
therein, the rights and interests hereunder of the Trustee, for the
ratable benefit of the Holders of the Notes, in such Cash
Collateral Account and to otherwise effect the intention and
purposes of the parties hereunder with respect to such Cash
Collateral Account.
(g) The Authority shall establish each Cash Collateral Account
in the name of the Trustee and the Trustee shall have sole dominion
and control thereon and in all amounts in, and investments of
amounts in, such accounts, to the full extent necessary to ensure
the validity, effectiveness, perfection, priority and
enforceability of the foregoing pledge and security interest in
favor of the Trustee.
ARTICLE 11
COVENANTS OF THE TRIBE
SECTION 11.01. COVENANTS OF THE TRIBE.
(a) Except with the consent of a majority in interest of the
Holders of the Notes or as required by federal or state law, the
Tribe shall not, and shall not permit any of its representatives,
political subunits or councils, agencies, instrumentalities, to,
directly or indirectly, (i) increase or impose any tax, levy or
other monetary payment or reimbursement obligation on the Authority
or on any patrons of the Resort or on any activity at the Resort
(gaming or otherwise), other than (1) any payments due under any
agreement in effect on the Issuance Date and pursuant to the terms
of the agreement in effect on the Issuance Date or any such
payments that are not materially adverse to the economic interests
of the Holders of the Notes, (2) which the Authority has agreed to
reimburse each Noteholder for the economic effect thereof, if any,
(3) which correspondingly reduces the Restricted Payments otherwise
payable to the Tribe under Section 4.07 or (4) which are
reasonable, nondiscriminatory charges for utilities or other
governmental services supplied by the Tribe and used by the
Authority in an amount not
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to exceed the reasonable cost of such services and a
reasonable allowance for administrative costs; (ii) amend the
terms of the Lease in any material manner that would be
adverse to the economic interests of the Holders of the Notes;
(iii) subject to paragraph (b), amend the Tribal Gaming
Ordinance in effect on the Issuance Date, restrict or
eliminate the exclusive right of the Authority to conduct
gaming operations on behalf of the Tribe or permit any other
entity to conduct gaming operations on any property owned or
controlled by the Tribe, in each case, in a material manner
that would be adverse to the economic interests of the Holders
of the Notes; or (iv) take any other action, enter into any
agreement, amend its constitution or enact any ordinance, law,
rule or regulation that would prejudice or have a material
adverse effect on any of the rights of the Holders of the
Notes under this Indenture or the Collateral Documents. In
addition, except as specifically provided in this Indenture,
the Tribe shall not, and shall not permit the Authority or any
of the Tribe's representatives, political subunits or councils
agencies, instrumentalities to, directly or indirectly impose,
levy, tax or otherwise make any charge on the Notes, the
Indenture, the Collateral Documents, any payments or deposits
to be made thereunder, including without limitation upon the
payment of any principal, premium or interest (including Cash
Flow Participation Interest) unless such levy, tax or charge
is reimbursed in full to the Holders.
(b) The Tribe covenants that any amendments made to the Tribal
Gaming Ordinance will be a legitimate effort to ensure that the
Authority and the Resort conduct their gaming operations in a
manner that adequately protects the environment, the public health
and safety, or the integrity of the Authority or the Resort. The
Tribe and the Authority agree that any licensure or investigation
of a holder of the Notes, in such holder's capacity as a
Noteholder, shall be conducted in good faith and with a reasonable
basis therefor.
(c) Any action taken by the Tribe to comply with federal or
state law that would otherwise violate paragraph (a) shall be taken
only after prior written notice to the Trustee, accompanied with an
Officers' Certificate and Opinion of Counsel that such action is
required by federal or state law. To the extent possible under
federal or state law, the Tribe shall give the Trustee at least 30
days' prior written notice of any such action.
(d) The Tribe will not permit or incur any consensual
liability of the Tribe (or of any other instrumentality or subunit
of the Tribe) that is a legal obligation of the Authority, or for
which the Authority's assets may be bound, other than a liability
that the Authority is permitted or not prohibited from incurring on
its own behalf under this Indenture.
(e) In the event that the Tribe receives any payment from the
Authority at a time when such payment is prohibited by the terms of
this Indenture, such payment shall be held by the Tribe in trust
for the benefit of, and shall be paid forthwith over and delivered,
upon the written request of the Trustee or the Authority, to the
Authority.
(f) The Tribe will not, pursuant to or within the meaning of
Bankruptcy Law, appoint or consent to the appointment of a
Custodian of the Authority or for all or substantially all of the
property of the Authority.
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(g) The Tribe agrees that it will not enact any Bankruptcy Law
or similar law for the relief of debtors that would impair, limit,
restrict, delay or otherwise adversely affect any of the rights and
remedies of the Trustee or the Noteholders provided for in the
Indenture, the Notes or the Collateral Documents.
(h) The Tribe agrees that it will not, and will not permit the
Authority or any of the Tribe's representatives, political
subunits, agencies, instrumentalities or councils to, exercise any
power of eminent domain over the property that is the subject of
the Leasehold Mortgage (other than any such exercise that would not
materially adversely affect the economic rights and benefits of the
Trustee or the Holders thereunder). Except as required by federal
or state law, the Tribe will not enact any statute, law, ordinance
or rule that would have a material adverse effect on the rights of
the Trustee or the Holders under the Indenture, the Notes or the
Collateral Documents.
(i) Other than pursuant to execution and delivery of the
Indenture and the Collateral Documents by the parties thereto, no
filing, recording or other act is required under any law, rule or
ordinance of the Tribe to perfect and to maintain the perfection of
the first priority lien on the Note Collateral created by the
Collateral Documents and this Indenture.
(j) The Tribe hereby agrees that upon any payment or
distribution of assets upon any liquidation, dissolution, winding
up, reorganization, assignment for the benefit of creditors,
marshalling of assets or any bankruptcy, insolvency or similar
proceedings of the Authority or the Resort, the holders of the
Notes shall be entitled to receive payment in full with respect to
all principal, premium, interest and other amounts owing in respect
of the Notes before any payment or any distribution to the Tribe.
(k) The Tribe agrees that the Authority shall have sole and
exclusive jurisdiction to operate any Gaming enterprise on behalf
of the Tribe or any political subunit thereof.
(l) The Tribe hereby consents, agrees and acknowledges to the
creation of the Liens securing the Obligations under this
Indenture, the Notes and the Collateral Documents created under
this Indenture or the Collateral Documents. The Tribe agrees that
all Gross Revenues of the Resort shall be deposited into the Net
Receipts Account as provided in Section 10.12.
Any action taken in violation of this Section 11.01 shall be
deemed in contravention of Article XIV ("Non-impairment of
Contracts") of the Constitution of the Tribe.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by TIA Section 318(c), the imposed
duties shall control.
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SECTION 12.02. NOTICES.
Any notice or communication by the Authority 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' address:
If to the Authority:
Mohegan Tribal Gaming Authority
Ralph Sturges, Chief and
Carlisle Fowler,
Business Board Member and
Roland Harris
Business Board Member
Mohegan Tribe of Indians of Connecticut
27 Church Lane
Uncasville, CT 06382
Telecopy: (203) 848-9253
With a copy to:
Lewis B. Rome, Esq.
Rome, McGuigan, Hoberman, Sabanosh & Klebanoff, P.C.
One State Street
Hartford, Connecticut 06103-3103
Telecopy: (203) 724-3921
If to the Tribe:
Ralph Sturges, Chief and
Carlisle Fowler,
Business Board Member and
Roland Harris
Business Board Member
Mohegan Tribe of Indians of Connecticut
27 Church Lane
Uncasville, CT 06382
Telecopy: (203) 848-0545
With a copy to:
Lewis B. Rome, Esq.
Rome, McGuigan, Hoberman, Sabanosh & Klebanoff, P.C.
One State Street
Hartford, Connecticut 06103-3103
Telecopy: (203) 724-3921
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If to the Trustee:
First Fidelity Bank
10 State House Square
Hartford, Connecticut 06103-3698
Attention: W. Jeffrey Kramer
Vice President, Corporate Trust
With a copy to:
William Shure, Esq.
Sachs, Shure, Sklarz & Gallant, P.C.
700 State Street
New Haven, Connecticut 06509
Telecopy: (203) 777-3347
The Authority 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; five Business Days
after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if
telecopied; and the next Business Day after timely delivery to the
courier, if sent by overnight air courier guaranteeing next day
delivery.
Any notice or communication to a Holder shall be mailed by
first class mail, certified or registered, return receipt
requested, or by overnight air courier guaranteeing next day
delivery to its address shown on the register kept by the
Registrar. Any notice or communication shall also be so mailed to
any Person described in TIA Section 313(c), to the extent required by
the TIA. Failure to mail a notice or communication to a Holder or
any defect in it shall not affect its sufficiency with respect to
other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not
the addressee receives it.
If the Authority mails a notice or communication to Holders,
it shall mail a copy to the Trustee and each Agent at the same
time.
SECTION 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER
HOLDERS OF NOTES.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the
Notes. The Authority, the Trustee, the Registrar and anyone else
shall have the protection of TIA Section 312(c).
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SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Authority to the
Trustee to take any action under this Indenture, the Authority
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 12.05 hereof) stating that, in the opinion of
the signers, all conditions precedent and covenants, if any, pro-
vided for in this Indenture relating to the proposed action have
been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements
set forth in Section 12.05 hereof) stating that, subject to
customary assumptions and exclusions, in the opinion of such
counsel, all such conditions precedent and covenants have been
satisfied.
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a
certificate provided pursuant to TIA Section 314(a)(4)) shall comply
with the provisions of TIA Section 314(e) and shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not
such covenant or condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
SECTION 12.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make
reasonable rules and set reasonable requirements for its functions.
SECTION 12.07. DISPUTE RESOLUTION AND CONSENT TO SUIT.
The Tribe does not consent to the enforcement, levy or other
execution of any judgment for money or other damages against any
assets, real or personal, of the Tribe, except that the Tribe and
the Authority each do herewith consent to the enforcement and
execution of any judgment, whether obtained as a result of
judicial, administrative, or arbitrational proceedings, against any
assets of the Authority and the assets of the Tribe to the extent
of Section 11.01(k). Subject to the foregoing, the Tribe and the
Authority each does herewith waive its sovereign immunity from
unconsented suit, whether such
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suit be brought in law or in equity, or in administrative proceedings or
proceedings in arbitration, to permit the commencement, maintenance, and
enforcement of any action, by any person with standing to maintain an action, to
interpret or enforce the terms of this Indenture, the Collateral Documents or
the Notes, and to enforce and execute any judgment resulting therefrom against
the Authority or the assets of the Authority. Notwithstanding any other
provision of law or canon of construction, the Tribe and the Authority each
intends this waiver to be interpreted liberally to permit the full litigation of
disputes arising under or out of this Indenture, the Collateral Documents or the
Notes. Without limiting the generality of the foregoing, the Tribe and the
Authority waive their immunity from unconsented suit to permit the maintenance
of the following actions:
(a) COURTS. The Tribe and the Authority each waive their immunity from
unconsented suit to permit any court of competent jurisdiction to (i)
enforce and interpret the terms of this Indenture, the Collateral Documents
and the Notes, and award and enforce the award of damages owing as a
consequence of a breach thereof, whether such award is the product of
litigation, administrative proceedings, or arbitration; (ii) determine
whether any consent or approval of the Tribe or the Authority has been
improperly granted or unreasonably withheld; (iii) enforce any judgment
prohibiting the Tribe or the Authority from taking any action, or mandating
or obligating the Tribe or the Authority to take any action, including a
judgment compelling the Tribe or the Authority to submit to binding
arbitration; and (iv) adjudicate any claim under the Indian Civil Rights
Act of 1968, 25 U.S.C. Section 1302 (or any successor statute).
(b) ARBITRATION. The Tribe and the Authority each waive their immunity
from unconsented suit to permit arbitrators, appointed and acting under the
commercial arbitration rules of the American Arbitration Association,
whenever and to the extent any agreement to submit a matter to arbitration
is made by the Tribe or by the Authority, to (i) enforce and interpret the
terms of this Indenture, the Collateral Documents and the Notes, and to
award and enforce the award of any damages owing as a consequence thereof;
(ii) determine whether any consent or approval of the Tribe or the
Authority has been unreasonably withheld; and (iii) enforce any judgment
prohibiting the Tribe or the Authority from taking any action, or mandating
or obligating the Tribe or the Authority to take any action, including a
judgment compelling the Tribe or the Authority to submit to binding
arbitration.
(c) GAMING DISPUTES COURT. Without limiting in any manner the foregoing
waivers of immunity or the jurisdiction of any of the courts of the United
States or any state thereof, the Tribe and the Authority hereby stipulate
and agree that, immediately upon execution and delivery of this Indenture,
judgment may and shall be entered by the Gaming Disputes Court:
(i) declaring that (a) the Series A Notes are, and the Series B Notes
when issued will be, the duly authorized, lawful and valid obligation
of the Authority, enforceable in accordance with their terms against
the Authority in the Gaming Disputes Court, (b) this Indenture and the
Lease are the duly authorized, lawful and valid obligation of the
Tribe and the Authority, enforceable in accordance with their terms
against the Tribe and the Authority in the Gaming Disputes Court, (c)
the Collateral Documents are the duly authorized, lawful and valid
obligation of the Authority, enforceable in
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accordance with their terms against the Authority in the Gaming
Disputes Court, (d) the Liens granted pursuant to Section 10.12 and
upon the other Note Collateral pursuant to the Collateral Documents
are valid and enforceable and, as to the funds in each of the Cash
Collateral Accounts and any other Note Collateral located within the
territorial jurisdiction of the Gaming Disputes Court, are duly
perfected and prior Liens thereon, enforceable in accordance with the
terms of the Collateral Documents (including by foreclosure as therein
set forth) against the Authority, against any purchaser (including a
bona fide purchaser) of such other Note Collateral and against any
creditor that acquires a judicial Lien on any of the Note Collateral,
and no financing statement or continuation statement is required to be
filed, or Collateral Document is required to be registered, recorded
or lodged, or other action is required to be taken or event is
required to have occurred, in order for such Liens to be and remain so
perfected and for as long as any of the Notes may remain outstanding,
and (e) there shall be no limitation (either by way of a time bar on
the commencement of any action or proceeding or under any equitable
principles such as the doctrine of laches) on the time within which
any action or proceeding to collect any claim, to foreclose any Lien
or otherwise to enforce any claim, interest, Lien, right or remedy
arising in favor of the Trustee or any Holder under the Notes, this
Indenture, the Lease or the Collateral Documents must be commenced,
and
(ii) ordering that (a) the Trustee shall be appointed and authorized
to act as the receiver of and trustee for all funds in each of the
Cash Collateral Accounts and as such receiver and trustee shall have
the power and authority to demand, collect, receive, hold and disburse
as set forth in Section 10.03(e) hereof, and as supplemented by the
Cash Collateral Accounts Pledge and Security Agreement, all funds in
each of the Cash Collateral Accounts at any time and in any manner
arising and by whomever held and all power and authority reasonably
incidental thereto, and (b) on each day, the Authority shall cause to
be delivered to the Trustee, for deposit to the Net Receipts Account,
all funds required to be deposited therein, and (c) the Trustee shall
release, hold or pay out such deposit as provided in Section 10.03(e)
hereof, and as supplemented by the Cash Collateral Accounts Pledge and
Security Agreement.
SECTION 12.08. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
Neither the Tribe nor any officer or office holder, employee, agent,
representative, member of the Authority or the Tribe, as such, shall have any
liability for any obligations of the Authority under the Notes, this Indenture
or the Collateral Documents, as applicable, or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes.
SECTION 12.09. GOVERNING LAW.
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THE INTERNAL LAW (EXCLUSIVE OF CONFLICT OF LAWS PRINCIPLES) OF
THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS
INDENTURE AND THE NOTES.
SECTION 12.10. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Authority or of any other Person. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 12.11. SUCCESSORS.
All agreements of the Authority and the Tribe in this Indenture and the
Notes, as applicable, shall bind their respective successors. All agreements of
the Trustee in this Indenture shall bind its successors.
SECTION 12.12. 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 12.13. 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 12.14. 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 of this Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
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SIGNATURES
Dated as of September 29, 1995 Mohegan Tribal Gaming Authority
By: /s/ Ralph W. Sturges
-------------------------------
Name: Ralph W. Sturges
Title: Chair of Management Board
Attest:
/s/ Carlisle Fowler
- ------------------------------
Dated as of September 29, 1995 First Fidelity Bank
By: /s/ W. Jeffrey Kramer
--------------------------------
Name: W. Jeffrey Kramer
Title: Vice President
Attest:
/s/ Thomas J. Brett
- ------------------------------
Dated as of September 29, 1995 Mohegan Tribe of Indians of
Connecticut (solely with
respect to its obligations under
Articles 11 and 12 and Section
4.29)
By: /s/ Ralph W. Sturges
-------------------------------
Name: Ralph W. Sturges
Title: Lifetime Chief and
Chairman
Attest:
/s/ Carlisle Fowler
- ------------------------------
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXHIBIT A-I
(Face of Note)
% SERIES A SENIOR SECURED NOTES due 2002
No. $
----------
MOHEGAN TRIBAL GAMING AUTHORITY
promises to pay to
or registered assigns,
the principal sum of
Dollars on November 15, 2002.
Interest Payment Dates: May 15, and November 15
Record Dates: May 1, and November 1
Dated: September , 1995
---
MOHEGAN TRIBAL GAMING AUTHORITY
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
(SEAL)
This is one of the
Notes referred to in the
within-mentioned Indenture:
- -----------------------------------
as Trustee
By:
--------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A-I-1
<PAGE>
(Back of Note)
% Series A Senior Secured Notes due 2002
---
[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 to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) ("DTC"), to the issuer or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in the name of Cede & Co.
or such other name as may be requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or such other entity as may be requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.](1)
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE NOTE
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY
BE RELYING ON THE EXEMPTION PROVIDED BY RULE 144A UNDER THE SECURITIES ACT.
THE HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE TRIBE AND
THE AUTHORITY THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (1) (a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN OF RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c)
OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL IF THE AUTHORITY SO REQUESTS), (2) TO THE
AUTHORITY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH
CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE NOTE
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (1) ABOVE.
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
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1. This paragraph is to be included only if the Note is in global form.
A-I-2
<PAGE>
1. INTEREST. Mohegan Tribal Gaming Authority (or any successor thereto as
provided in the Indenture, the "Authority"), promises to pay interest at the
rate of __% per annum of the principal amount of this Note (the "Fixed
Interest") from the Issuance Date to the date of payment of such principal
amount of this Note and shall pay the Liquidated Damages payable pursuant to
Section 5 of the Registration Rights Agreement referred to below. Installments
of Fixed Interest and Liquidated Damages shall become due and payable
semi-annually in arrears on each May 15 and November 15 to the holder of record
at the close of business on the preceding May 1 or November 1. Additionally,
installments of accrued and unpaid Fixed Interest shall become due and payable
with respect to any principal amount of this Note that matures (whether at
stated maturity, upon acceleration, upon maturity of repurchase obligation or
otherwise) upon such maturity of such principal amount of this Note. The
Authority shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal and premium, if any, from time to
time on demand at a rate that is 1% per annum in excess of the rate then in
effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of Fixed Interest
and Liquidated Damages (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Fixed Interest on
this Note shall be computed on the basis of a 360-day year, consisting of twelve
30- day months. Each installment of Fixed Interest shall be calculated to
accrue from and including the most recent date to which Fixed Interest has been
paid or provided for (or from and including the Issuance Date if no installment
of Fixed Interest has been paid) to, but not including, the date of payment.
In addition, this Note shall bear Cash Flow Participation Interest,
calculated as described below, from the Commencement Date to the date of payment
of this Note. Installments of accrued or deferred Cash Flow Participation
Interest on this Note accrued through the Accrual Period last ended shall become
due and payable semi-annually on each May 15 and November 15 after the
Commencement Date to the holder of record at the close of business on the
preceding May 1 or November 1, provided that no Cash Flow Participation Interest
shall be payable with respect to any period prior to the earlier of the first
day the Resort commences operations and October 31, 1996. Additionally, all
installments of accrued or deferred Cash Flow Participation Interest shall
become due and payable (and may not be further deferred) with respect to any
principal amount of this Note that matures (whether at stated maturity, upon
acceleration, maturity of repurchase obligation or otherwise) upon such maturity
of such principal amount of this Note.
The Authority, at its option, may defer payment of all or a portion of any
installment of Cash Flow Participation Interest then otherwise due if, and only
to the extent that, (a) the payment of such portion of Cash Flow Participation
Interest shall cause the Authority's Fixed Charge Coverage Ratio for the four
consecutive fiscal quarters last completed prior to such interest payment date
to be less than 2.0:1 on a pro forma basis after giving effect to the assumed
payment of such Cash Flow Participation Interest but before giving effect to the
payment of any interest on the Subordinated Notes which is then not payable in
cash and (b) the principal of this Note corresponding to such Cash Flow
Participation Interest has not then matured and become due and payable (at
stated maturity, upon acceleration, upon maturity of repurchase obligation or
otherwise). Cash Flow Participation Interest that is deferred shall become due
and payable on the earlier of (i) the next succeeding interest payment date on
which such Cash Flow Participation Interest is not permitted to be deferred, and
(ii) upon the maturity of the corresponding principal of this Note (whether at
stated maturity, upon acceleration, upon maturity of repurchase obligation or
otherwise). No interest shall accrue on any Cash Flow Participation Interest
deferred and which has not yet become due and payable. To the extent permitted
by law, interest shall accrue on overdue Cash Flow Participation Interest at the
same rate as the Fixed Interest plus one percent per annum.
Each installment of Cash Flow Participation Interest shall be calculated to
accrue (an "Accrual Period") from, but not including, the most recent date to
which Cash Flow Participation
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<PAGE>
Interest has been paid or provided for or through which Cash Flow Participation
Interest had been calculated and deferred (or from and including the
Commencement Date if no installment of Cash Flow Participation Interest has been
paid, provided for or deferred) to, and including, either (a) the last day of
the next Semi-annual Period if the corresponding principal of this Note has not
become due and payable or (b) the date of payment if the corresponding principal
of this Note has become due and payable (whether at stated maturity, upon
acceleration, upon maturity of repurchase obligation or otherwise). With
respect to each Accrual Period, Cash Flow Participation Interest shall accrue
daily on the principal of this Note outstanding during such period as follows
(except with respect to the Initial Period): (i) for each day during each month
that ends during such Accrual Period and which month ends at least 25 days prior
to the date of payment, an amount equal to 1/30 of the Monthly Cash Flow
Participation Interest on this Note for such month until all of such Monthly
Cash Flow Participation Interest has been accrued (and all of such month's
Monthly Cash Flow Participation Interest on this Note shall be accrued by the
last day of such month) and (ii) for any day in any remaining period, 1/30 of
the prior month's Monthly Base Cash Flow Participation Interest on this Note;
provided, however, that additional Cash Flow Participation Interest will cease
accruing on any outstanding principal of this Note until the next succeeding
September 30, if on any day, the Cash Flow Participation Interest on such
principal amount of this Note accrued since the immediately preceding September
30 (excluding any deferred Cash Flow Participation Interest accrued prior to
such September 30) exceeds the product of $________ million times such principal
amount of this Note divided by $175,000,000. With respect to any principal
amount of this Note during the Initial Period, Cash Flow Participation Interest
shall accrue daily in the amount of 1/180 of the Cash Flow Participation
Interest for such principal in the next succeeding Semi-annual Period.
Any reference in this Note to "accrued and unpaid interest" includes the
amount of unpaid Cash Flow Participation Interest due and payable.
"COMMENCEMENT DATE" means the earlier of (i) October 31, 1996 and (ii) the
first day that the Resort becomes Operating.
"CASH FLOW" shall have the meaning set forth in the Indenture.
"CASH FLOW PARTICIPATION INTEREST" means as of any payment date, the Cash
Flow Participation Interest on this Note accrued through the Accrual Period last
ended (including any Accrual Period that ends on such payment date) and any Cash
Flow Participation Interest previously accrued and the payment of which has been
permitted to be deferred.
"FIXED CHARGE COVERAGE RATIO" shall have the meaning set forth in the
Indenture.
"INITIAL PERIOD" means the period, if any, beginning on the Commencement
Date and ending on the day prior to the first day that the Resort becomes
Operating.
"MONTHLY CASH FLOW PARTICIPATION INTEREST" means, with respect to any month
and any principal amount of this Note, the product of ___% of the Authority's
Cash Flow for such month times a fraction, the numerator of which is the
principal amount outstanding on this Note and the denominator of which is
$175,000,000.
"SEMI-ANNUAL PERIOD" means each period that begins on April 1 and ends on
the next succeeding September 30, or each period that begins on October 1 and
ends on the next succeeding March 31.
2. METHOD OF PAYMENT. The Authority shall pay interest (including Cash
Flow Participation Interest, if any) on the Notes (except defaulted interest)
and Liquidated Damages to the Persons who are registered Holders of Notes at the
close of business on May 1 or November 1 next
A-I-4
<PAGE>
preceding the Interest Payment Date, even if such Notes are cancelled after such
record date and on or before such Interest Payment Date (the "Record Date"),
except as provided in Section 2.12 of the Indenture with respect to defaulted
interest or as provided with respect to Notes called for redemption after such
record and on or before such Interest Payment Date. The Holder hereof must
surrender this Note to a Paying Agent to collect principal payments. The Notes
shall be payable as to principal, premium, if any, interest (including Cash Flow
Participation Interest, if any) and Liquidated Damages at the office or agency
of the Authority maintained for such purpose within or without the City and
State of New York, or, at the option of the Authority, payment of interest
(including Cash Flow Participation Interest, if any) and Liquidated Damages may
be made by check mailed to the Holders at their addresses set forth in the
register of Holders and provided that payment by wire transfer of immediately
available funds will be required with respect to principal of and interest,
premium on, all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Authority or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, First Fidelity Bank (including
any successor appointed under the Indenture, the "Trustee"), the Trustee under
the Indenture, shall act as Paying Agent and Registrar. The Authority may
change any Paying Agent or Registrar without notice to any Holder. The
Authority may act in any such capacity.
4. INDENTURE AND COLLATERAL DOCUMENTS. The Authority issued the Notes
under an Indenture dated as of September __, 1995 (as it may be amended from
time to time, the "Indenture") among the Authority, the Tribe, and the Trustee.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code Sections 77aaa-77bbbb) as in effect on the Issuance Date. The Notes
are subject to all such terms, and Holders are referred to the Indenture and
such Act for a statement of such terms. The Notes are obligations of the
Authority limited to $175 million in aggregate principal amount. The terms of
the Indenture shall govern any inconsistencies between the Indenture and the
Notes. The Notes are secured by certain collateral pursuant to the Collateral
Documents referred to in the Indenture and which may be released pursuant to the
terms thereof.
5. OPTIONAL REDEMPTION.
Except as set forth below, the Authority shall not have the
option to redeem the Notes prior to November 15, 1999. From and
after November 15, 1999, the Authority shall have the option to
redeem the Notes, in whole or in part, upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and
unpaid interest (including Cash Flow Participation Interest and
Liquidated Damages, if any) thereon to the applicable redemption
date, if redeemed during the twelve-month period beginning on
November 15 of the years indicated below:
YEAR PERCENTAGE
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1999 . . . . . . . . . . . . . . . . . . . . . . . .
2000 . . . . . . . . . . . . . . . . . . . . . . . .
2001 . . . . . . . . . . . . . . . . . . . . . . . .
Notwithstanding any other provisions of Article 3 of the Indenture, if any
Gaming Regulatory Authority requires that a Holder or beneficial owner of the
Notes be licensed, qualified
A-I-5
<PAGE>
or found suitable under any applicable gaming laws in order to maintain any
gaming license or franchise of the Authority under any applicable gaming laws,
and the Holder or beneficial owner fails to apply for a license, qualification
or finding of suitability within 30 days after being requested to do so by such
Gaming Regulatory Authority (or such lesser period that may be required by such
Gaming Regulatory Authority) or if such Holder or beneficial owner is not so
licensed, qualified or found suitable, the Authority has the right, at its
option, (i) to require such Holder or beneficial owner to dispose of such
Holder's or beneficial owner's Notes within 30 days of receipt of such notice of
such finding by the applicable Gaming Regulatory Authority (or such earlier date
as may be required by the applicable Gaming Regulatory Authority) or (ii) to
call for redemption of the Notes of such Holder or beneficial owner at a
redemption price equal to the lesser of the principal amount thereof or the
price at which such Holder or beneficial owner acquired the Notes, together
with, in either case, accrued and unpaid interest (including Cash Flow
Participation Interest and Liquidated Damages), if any, to the earlier of the
date of redemption or the date of the finding of unsuitability by such Gaming
Regulatory Authority, which may be less than 30 days following the notice of
redemption if so ordered by such Gaming Regulatory Authority. The Authority
shall not be required to pay or reimburse any Holder or beneficial owner of
Notes who is required to apply for any such license, qualification or finding of
suitability for the costs of the licensure or investigation for such
qualification or finding of suitability. Such expenses shall be the obligation
of such Holder or beneficial owner.
6. MANDATORY REDEMPTION.
The Authority shall not be required to make mandatory redemption or sinking
fund payments with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
Under certain circumstances, as provided in the Indenture, the Authority
may be required to purchase all or a portion of the Notes. Holders of Notes
that are subject to an offer to purchase will receive an offer to purchase from
the Authority prior to any related purchase date, and may elect to have such
Notes purchased by completing the form entitled "Option of Holders to Elect
Purchase" appearing below.
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest (including Cash Flow Participation Interest
or Liquidated Damages, if any) ceases to accrue on Notes or portions thereof
called for redemption.
9. 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
Authority may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Authority need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. Prior to due presentment to the Trustee for
registration of the transfer of this Note, the Trustee, any Agent and the
Authority may deem and treat the Person in whose name this Note is registered as
its absolute owner for the purpose of receiving
A-I-6
<PAGE>
payment of principal of and interest on this Note and for all other purposes
whatsoever, whether or not this Note is overdue, and neither the Trustee, any
Agent, nor the Authority shall be affected by notice to the contrary. The
registered holder of a Note shall be treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture, the Notes, the Collateral Documents or the Management Agreement may
be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the then outstanding Notes, and any existing
default or compliance with any provision of the Indenture or the Notes may be
waived with the consent of the Holders of a majority in principal amount of the
then outstanding Notes. Without the consent of any Holder of a Note, the
Indenture, the Notes or the Collateral Documents may be amended or supplemented
to cure any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to comply with Article
Five or Article 10 of the Indenture, to provide for the assumption of the
Authority's obligations to Holders of the Notes in case of a merger or
consolidation pursuant to Article Five or Article 10 of the Indenture, 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 under the
Indenture of any such Holder, or to comply with the requirements of the
Commission in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act or to enter into additional or supplemental
Collateral Documents.
12. DEFAULTS AND REMEDIES. Events of Default include (as more fully
described, and subject to, the terms and conditions of the Indenture as it may
be amended from time to time): (i) default in payment of interest (including
Cash Flow Participation Interest or Liquidated Damages, if any) when due and
payable on any Note for 30 days; (ii) default in payment of principal of or
premium, if any on any Note when due; (iii) failure by the Authority to comply
with Section 4.07, 4.09, 4.10, 4.11, 4.15, 4.16, 4.18, 4.28 or 5.01 of the
Indenture; (iv) failure by the Authority or the Tribe for 60 days after written
notice to it to comply with any of its other agreements in the Indenture, the
Notes, or the Collateral Documents; (v) any default occurs under the Lease or
any Collateral Document or the Lease ceases to be in full force and effect that
continues beyond any applicable due period; (vi) payment defaults under and the
acceleration prior to express maturity of certain other indebtedness which
aggregates $7.5 million or more; (vii) certain final judgments that remain
unpaid, undischarged and unstayed if the aggregate of all such undischarged
judgements exceeds $7.5 million; (viii) breach of representation or warranty in,
or in the repudiation with respect to the Lease or any of the Collateral
Documents; (ix) certain events of bankruptcy or insolvency; (x) revocation,
termination, suspension or other cessation of effectiveness of any Gaming
License which results in the cessation or suspension of gaming operations for a
period of more than 90 consecutive days at the Resort; (xi) cessation of gaming
operations for a period of more than 90 consecutive days at the Resort (other
than as a result of a casualty loss) after the Resort becomes Operating; (xii)
cessation of gaming operations for a period of more than 180 consecutive days as
a result of a casualty loss except if the Authority is diligently pursuing
reconstruction and opening of the Resort and such reconstruction and operating
can be accomplished with the funds available to the Authority. If any Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare the principal,
premium, if any, interest (including all Cash Flow Participation Interest
accrued or deferred and Liquidated Damages) and any other monetary obligations
on all of the Notes to be due and payable. Notwithstanding the foregoing, in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency, all outstanding Notes shall become due and payable without further
action or notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of the Notes notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal or
interest (including Cash Flow Participation Interest, if any)) if it
A-I-7
<PAGE>
determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Notes then outstanding by notice
to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of interest on,
or the principal of, the Notes. The Authority is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and the
Authority is required, within five Business Days upon becoming aware of any
Default or Event of Default, to deliver to the Trustee a statement specifying
such Default or Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Authority or its Affiliates, and may otherwise deal with the Authority
or its Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. Neither the Tribe nor any officer or
office holder, employee, agent, representative, member of the Authority or the
Tribe, as such, shall have any liability for any obligations of the Authority
under this Note, the Indenture or the Collateral Documents, as applicable, or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes.
15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. 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).
17. ADDITIONAL RIGHTS OF HOLDERS. In addition to the rights provided to
Holders of Notes under the Indenture, Holders shall have all the rights set
forth in the Collateral Documents.
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Authority has
caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Authority shall furnish to any Holder upon written request and without
charge a copy of the Indenture and/or any of the Collateral Documents. Requests
may be made to:
Mohegan Tribal Gaming Authority
27 Church Lane
Uncasville, Connecticut 06382
Attention: Roland Harris and Carlisle Fowler,
Business Board Members, and Chief Ralph Sturges
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<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Authority. The agent may substitute
another to act for him.
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Date:
-----------
Your Signature:
-----------------------------------
(Sign exactly as your name appears on the face
of this Note)
Signature Guarantee.
A-I-9
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Authority pursuant
to Section 4.10, 4.11, 4.16 or 4.28 of the Indenture, check the box below:
/ / Section 4.10 / / Section 4.11 / / Section 4.16
/ / Section 4.28
If you want to elect to have only part of the Note purchased by the
Authority pursuant to Section 4.10, Section 4.11, Section 4.16 or Section 4.28
of the Indenture, state the amount you elect to have purchased: $___________
Date: Your Signature:
----------- ------------------------------
(Sign exactly as your name
appears on the Note)
Tax Identification No.:
------------
Signature Guarantee.
A-I-10
<PAGE>
EXHIBIT A-II-1
(Face of Note)
% SERIES B SENIOR SECURED NOTES due 2002
---
No. $__________
MOHEGAN TRIBAL GAMING AUTHORITY
promises to pay to
or registered assigns,
the principal sum of
Dollars on November 15, 2002.
Interest Payment Dates: May 15, and November 15
Record Dates: May 1, and November 1
Dated: September __, 1995
MOHEGAN TRIBAL GAMING AUTHORITY
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
(SEAL)
This is one of the
Notes referred to in the
within-mentioned Indenture:
- --------------------------------------
as Trustee
By:
-----------------------------------
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A-II-1
<PAGE>
(Back of Note)
% Series B Senior Secured Notes due 2002
---
[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 to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) ("DTC"), to the issuer or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in the name of Cede & Co.
or such other name as may be requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or such other entity as may be requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.](1)
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST. Mohegan Tribal Gaming Authority (or any successor thereto as
provided in the Indenture, the "Authority"), promises to pay interest at the
rate of ____% per annum of the principal amount of this Note (the "Fixed
Interest") from the Issuance Date to the date of payment of such principal
amount of this Note. Installments of Fixed Interest shall become due and
payable semi-annually in arrears on each May 15 and November 15 to the holder of
record at the close of business on the preceding May 1 or November 1.
Additionally, installments of accrued and unpaid Fixed Interest shall become due
and payable with respect to any principal amount of this Note that matures
(whether at stated maturity, upon acceleration, upon maturity of repurchase
obligation or otherwise) upon such maturity of such principal amount of this
Note. The Authority shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand at a rate that is 1% per annum in excess of the rate
then in effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of Fixed Interest
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Fixed Interest on this Note shall be
computed on the basis of a 360-day year, consisting of twelve 30-day months.
Each installment of Fixed Interest shall be calculated to accrue from and
including the most recent date to which Fixed Interest has been paid or provided
for (or from and including the Issuance Date if no installment of Fixed Interest
has been paid) to, but not including, the date of payment.
In addition, this Note shall bear Cash Flow Participation Interest,
calculated as described below, from the Commencement Date to the date of payment
of this Note. Installments of accrued or deferred Cash Flow Participation
Interest on this Note accrued through the Accrual Period last ended shall become
due and payable semi-annually on each May 15 and November 15 after the
Commencement Date to the holder of record at the close of business on the
preceding May 1 or November 1, provided that no Cash Flow Participation Interest
shall be payable with respect to any period prior to the earlier of the first
day the Resort commences operations and October 31, 1996. Additionally, all
installments of accrued or deferred Cash Flow Participation Interest shall
become due and payable (and may not be further deferred) with respect to any
principal amount of this Note that matures (whether at stated maturity, upon
acceleration, maturity of repurchase obligation or otherwise) upon such maturity
of such principal amount of this Note.
- -------------------------
(1) This paragraph is to be included only if the Note is in global form.
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The Authority, at its option, may defer payment of all or a portion of any
installment of Cash Flow Participation Interest then otherwise due if, and only
to the extent that, (a) the payment of such portion of Cash Flow Participation
Interest shall cause the Authority's Fixed Charge Coverage Ratio for the four
consecutive fiscal quarters last completed prior to such interest payment date
to be less than 2.0:1 on a pro forma basis after giving effect to the assumed
payment of such Cash Flow Participation Interest but before giving effect to the
payment of any interest on the Subordinated Notes which is then not payable in
cash and (b) the principal of this Note corresponding to such Cash Flow
Participation Interest has not then matured and become due and payable (at
stated maturity, upon acceleration, upon maturity of repurchase obligation or
otherwise). Cash Flow Participation Interest that is deferred shall become due
and payable on the earlier of (i) the next succeeding interest payment date on
which such Cash Flow Participation Interest is not permitted to be deferred, and
(ii) upon the maturity of the corresponding principal of this Note (whether at
stated maturity, upon acceleration, upon maturity of repurchase obligation or
otherwise). No interest shall accrue on any Cash Flow Participation Interest
deferred and which has not yet become due and payable. To the extent permitted
by law, interest shall accrue on overdue Cash Flow Participation Interest at the
same rate as the Fixed Interest plus one percent per annum.
Each installment of Cash Flow Participation Interest shall be calculated to
accrue (an "Accrual Period") from, but not including, the most recent date to
which Cash Flow Participation Interest has been paid or provided for or through
which Cash Flow Participation Interest had been calculated and deferred (or from
and including the Commencement Date if no installment of Cash Flow Participation
Interest has been paid, provided for or deferred) to, and including, either (a)
the last day of the next Semi-annual Period if the corresponding principal of
this Note has not become due and payable or (b) the date of payment if the
corresponding principal of this Note has become due and payable (whether at
stated maturity, upon acceleration, upon maturity of repurchase obligation or
otherwise). With respect to each Accrual Period, Cash Flow Participation
Interest shall accrue daily on the principal of this Note outstanding during
such period as follows (except with respect to the Initial Period): (i) for
each day during each month that ends during such Accrual Period and which month
ends at least 25 days prior to the date of payment, an amount equal to 1/30 of
the Monthly Cash Flow Participation Interest on this Note for such month until
all of such Monthly Cash Flow Participation Interest has been accrued (and all
of such month's Monthly Cash Flow Participation Interest on this Note shall be
accrued by the last day of such month) and (ii) for any day in any remaining
period, 1/30 of the prior month's Monthly Base Cash Flow Participation Interest
on this Note; provided, however, that additional Cash Flow Participation
Interest will cease accruing on any outstanding principal of this Note until the
next succeeding September 30, if on any day, the Cash Flow Participation
Interest on such principal amount of this Note accrued since the immediately
preceding September 30 (excluding any deferred Cash Flow Participation Interest
accrued prior to such September 30) exceeds the product of $________ million
times such principal amount of this Note divided by $175,000,000. With respect
to any principal amount of this Note during the Initial Period, the Cash Flow
Participation Interest shall accrue daily in the amount of 1/180 of the Cash
Flow Participation Interest for such principal in the next succeeding
Semi-annual Period.
Any reference in this Note to "accrued and unpaid interest" includes the
amount of unpaid Cash Flow Participation Interest due and payable.
"COMMENCEMENT DATE" means the earlier of (i) October 31, 1996 and (ii) the
first day that the Resort becomes Operating.
"CASH FLOW" shall have the meaning set forth in the Indenture.
"CASH FLOW PARTICIPATION INTEREST" means, as of any payment date, Cash Flow
Participation Interest on this Note accrued through the Accrual Period last
ended (including any
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<PAGE>
Accrual Period that ends on such payment date) and any Cash Flow Participation
Interest previously accrued and the payment of which has been permitted to be
deferred.
"FIXED CHARGE COVERAGE RATIO" shall have the meaning set forth in the
Indenture.
"INITIAL PERIOD" means the period, if any, beginning on the Commencement
Date and ending on the day prior to the first day that the Resort becomes
Operating.
"MONTHLY CASH FLOW PARTICIPATION INTEREST" means, with respect to any month
and any principal amount of this Note, the product of ___% of the Authority's
Cash Flow for such month times a fraction, the numerator of which is the
principal amount outstanding on this Note and the denominator of which is
$175,000,000.
"SEMI-ANNUAL PERIOD" means each period that begins on April 1 and ends on
the next succeeding September 30, or each period that begins on October 1 and
ends on the next succeeding March 31.
2. METHOD OF PAYMENT. The Authority shall pay interest (including Cash
Flow Participation Interest, if any) on the Notes (except defaulted interest)
and Liquidated Damages to the Persons who are registered Holders of Notes at the
close of business on April 30 or September 30 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 "Record Date"), except as provided in
Section 2.12 of the Indenture with respect to defaulted interest or as provided
with respect to Notes called for redemption after such record and on or before
such Interest Payment Date. The Holder hereof must surrender this Note to a
Paying Agent to collect principal payments. The Notes shall be payable as to
principal, premium, if any, interest (including Cash Flow Participation
Interest, if any) and Liquidated Damages at the office or agency of the
Authority maintained for such purpose within or without the City and State of
New York, or, at the option of the Authority, payment of interest (including
Cash Flow Participation Interest, if any) and Liquidated Damages may be made by
check mailed to the Holders at their addresses set forth in the register of
Holders and provided that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest, premium and
Liquidated Damages on, all Global Notes and all other Notes the Holders of which
shall have provided wire transfer instructions to the Authority or the Paying
Agent. Such payment shall be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.
3. PAYING AGENT AND REGISTRAR. Initially, First Fidelity Bank (including
any successor appointed under the Indenture, the "Trustee"), the Trustee under
the Indenture, shall act as Paying Agent and Registrar. The Authority may
change any Paying Agent or Registrar without notice to any Holder. The
Authority may act in any such capacity.
4. INDENTURE AND COLLATERAL DOCUMENTS. The Authority issued the Notes
under an Indenture dated as of September __, 1995 (as it may be amended from
time to time, the "Indenture") among the Authority, the Tribe, and the Trustee.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code Sections 77aaa-77bbbb) as in effect on the Issuance Date. The Notes
are subject to all such terms, and Holders are referred to the Indenture and
such Act for a statement of such terms. The Notes are obligations of the
Authority limited to $175 million in aggregate principal amount. The terms of
the Indenture shall govern any inconsistencies between the Indenture and the
Notes. The Notes are secured by certain collateral pursuant to the Collateral
Documents referred to in the Indenture and which may be released pursuant to the
terms thereof.
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<PAGE>
5. OPTIONAL REDEMPTION.
Except as set forth below, the Authority shall not have the option to
redeem the Notes prior to November 15, 1999. From and after November 15, 1999,
the Authority shall have the option to redeem the Notes, in whole or in part,
upon not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest (including Cash Flow Participation Interest, if any) thereon to
the applicable redemption date, if redeemed during the twelve-month period
beginning on November 15 of the years indicated below:
YEAR PERCENTAGE
- ---- ----------
1999 . . . . . . . . . . . . . . . . . . . . . .
2000 . . . . . . . . . . . . . . . . . . . . . .
2001 . . . . . . . . . . . . . . . . . . . . . .
Notwithstanding any other provisions of Article 3 of the Indenture, if any
Gaming Regulatory Authority requires that a Holder or beneficial owner of the
Notes be licensed, qualified or found suitable under any applicable gaming laws
in order to maintain any gaming license or franchise of the Authority under any
applicable gaming laws, and the Holder or beneficial owner fails to apply for a
license, qualification or finding of suitability within 30 days after being
requested to do so by such Gaming Regulatory Authority (or such lesser period
that may be required by such Gaming Regulatory Authority) or if such Holder or
beneficial owner is not so licensed, qualified or found suitable, the Authority
has the right, at its option, (i) to require such Holder or beneficial owner to
dispose of such Holder's or beneficial owner's Notes within 30 days of receipt
of such notice of such finding by the applicable Gaming Regulatory Authority (or
such earlier date as may be required by the applicable Gaming Regulatory
Authority) or (ii) to call for redemption of the Notes of such Holder or
beneficial owner at a redemption price equal to the lesser of the principal
amount thereof or the price at which such Holder or beneficial owner acquired
the Notes, together with, in either case, accrued and unpaid interest (including
Cash Flow Participation Interest), if any, to the earlier of the date of
redemption or the date of the finding of unsuitability by such Gaming Regulatory
Authority, which may be less than 30 days following the notice of redemption if
so ordered by such Gaming Regulatory Authority. The Authority shall not be
required to pay or reimburse any Holder or beneficial owner of Notes who is
required to apply for any such license, qualification or finding of suitability
for the costs of the licensure or investigation for such qualification or
finding of suitability. Such expenses shall be the obligation of such Holder or
beneficial owner.
6. MANDATORY REDEMPTION.
The Authority shall not be required to make mandatory redemption or sinking
fund payments with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
Under certain circumstances, as provided in the Indenture, the Authority
may be required to purchase all or a portion of the Notes. Holders of Notes
that are subject to an offer to purchase will receive an offer to purchase from
the Authority prior to any related purchase date, and may elect to have such
Notes purchased by completing the form entitled "Option of Holders to Elect
Purchase" appearing below.
A-II-5
<PAGE>
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest (including Cash Flow Participation Interest,
if any) ceases to accrue on Notes or portions thereof called for redemption.
9. 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
Authority may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Authority need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. Prior to due presentment to the Trustee for
registration of the transfer of this Note, the Trustee, any Agent and the
Authority may deem and treat the Person in whose name this Note is registered as
its absolute owner for the purpose of receiving payment of principal of and
interest (including Cash Flow Participation Interest, if any) on this Note and
for all other purposes whatsoever, whether or not this Note is overdue, and
neither the Trustee, any Agent, nor the Authority shall be affected by notice to
the contrary. The registered holder of a Note shall be treated as its owner for
all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture, the Notes, the Collateral Documents or the Management Agreement may
be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the then outstanding Notes, and any existing
default or compliance with any provision of the Indenture or the Notes may be
waived with the consent of the Holders of a majority in principal amount of the
then outstanding Notes. Without the consent of any Holder of a Note, the
Indenture, the Notes or the Collateral Documents may be amended or supplemented
to cure any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to comply with Article
Five or Article 10 of the Indenture, to provide for the assumption of the
Authority's obligations to Holders of the Notes in case of a merger or
consolidation pursuant to Article Five or Article 10 of the Indenture, 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 under the
Indenture of any such Holder, or to comply with the requirements of the
Commission in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act or to enter into additional or supplemental
Collateral Documents.
12. DEFAULTS AND REMEDIES. Events of Default include (as more fully
described, and subject to, the terms and conditions of the Indenture as it may
be amended from time to time): (i) default in payment of interest (including
Cash Flow Participation Interest, if any) when due and payable on any Note for
30 days; (ii) default in payment of principal of or premium, if any on any Note
when due; (iii) failure by the Authority to comply with Section 4.07, 4.09,
4.10, 4.11, 4.15, 4.16, 4.18, 4.28 or 5.01 of the Indenture; (iv) failure by the
Authority or the Tribe for 60 days after written notice to it to comply with any
of its other agreements in the Indenture, the Notes, or the Collateral
Documents; (v) any default occurs under the Lease or any Collateral Document
that continues beyond any applicable cure period or the Lease ceases to be in
full force and effect; (vi) payment defaults under and the acceleration prior to
express maturity of certain other indebtedness which aggregates $7.5 million or
more; (vii) certain final judgments that remain unpaid, undischarged and
unstayed if the aggregate of all such undischarged judgements exceeds
A-II-6
<PAGE>
$7.5 million; (viii) breach of representation or warranty in, or the repudiation
with respect to, the Lease or any of the Collateral Documents; (ix) certain
events of bankruptcy or insolvency; (x) revocation, termination, suspension or
other cessation of effectiveness of any Gaming License which results in the
cessation or suspension of gaming operations for a period of more than 90
consecutive days at the Resort; (xi) cessation of gaming operations for a period
of more than 90 consecutive days at the Resort (other than as a result of a
casualty loss) after the Resort becomes Operating; (xii) cessation of gaming
operations for a period of more than 180 consecutive days as a result of a
casualty loss except if the Authority is diligently pursuing reconstruction and
opening of the Resort and such reconstruction and opening can be accomplished
with the funds available to the Authority. If any Event of Default occurs and
is continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare the principal, premium, if any, interest
(including all Cash Flow Participation Interest accrued or deferred) and any
other monetary obligations on all of the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes shall become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest (including Cash Flow Participation Interest, if any)) if
it determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Notes then outstanding by notice
to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of interest
(including Cash Flow Participation Interest, if any) on, or the principal of,
the Notes. The Authority is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Authority is
required, within five Business Days upon becoming aware of any Default or Event
of Default, to deliver to the Trustee a statement specifying such Default or
Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Authority or its Affiliates, and may otherwise deal with the Authority
or its Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. Neither the Tribe nor any officer or
office holder, employee, agent, representative, member of the Authority or the
Tribe, as such, shall have any liability for any obligations of the Authority
under this Note, the Indenture or the Collateral Documents, as applicable, or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes.
15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. 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).
17. ADDITIONAL RIGHTS OF HOLDERS. In addition to the rights provided to
Holders of Notes under the Indenture, Holders shall have all the rights set
forth in the Collateral Documents.
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<PAGE>
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Authority has
caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Authority shall furnish to any Holder upon written request and without
charge a copy of the Indenture and/or any of the Collateral Documents. Requests
may be made to:
Mohegan Tribal Gaming Authority
27 Church Lane
Uncasville, Connecticut 06382
Attention: Roland Harris and Carlisle Fowler,
Business Board Members, and Chief Ralph Sturges
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<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Authority. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date:
----------
Your Signature:
------------------------------
(Sign exactly as your name appears on the face
of this Note)
Signature Guarantee.
A-II-9
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Authority pursuant
to Section 4.10, 4.11, 4.16 or 4.28 of the Indenture, check the box below:
/ / Section 4.10 / / Section 4.11 / / Section 4.16
/ / Section 4.28
If you want to elect to have only part of the Note purchased by the
Authority pursuant to Section 4.10, Section 4.11, Section 4.16 or Section 4.28
of the Indenture, state the amount you elect to have purchased: $___________
Date: Your Signature:
---------- -----------------------------------
(Sign exactly as your name appears
on the Note)
Tax Identification No.:
------------
Signature Guarantee.
A-II-10
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF
DEBENTURES
Re: __% Senior Secured Notes due 2002 of Mohegan Tribal Gaming Authority.
This Certificate relates to $____ principal amount of Notes held in
book-entry or *________ definitive form by ____________________ (the
"Transferor").
The Transferor*:
/ / has requested the Trustee by written order to deliver in exchange for its
beneficial interest in the Global Note held by the Depository a Note or Notes in
definitive, registered form of authorized denominations in an aggregate
principal amount equal to its beneficial interest in such Global Note (or the
portion thereof indicated above); or
/ / has requested the Trustee by written order 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 as provided in Section 2.06 of such
Indenture, the transfer of this Note does not require registration under the
Securities Act (as defined below) because:*
/ / Such Note is being acquired for the Transferor's own account, without
transfer (in satisfaction of Section 2.06(a)(ii)(A) or Section 2.06(d)(i)(A) of
the Indenture).
/ / Such Note is being transferred to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act")) in reliance on Rule 144A (in satisfaction of Section
2.06(a)(ii)(B), Section 2.06(b)(A) or Section 2.06(d)(i)(B) of the Indenture) or
pursuant to an exemption from registration in accordance with Rule 904 under the
Securities Act (in satisfaction of Section 2.06(a)(ii)(B) or Section
2.06(d)(i)(B) of the Indenture.)
- -------------------------
* Check applicable box.
B-1
<PAGE>
EXHIBIT 10.5
LAND LEASE
-C-COPYRIGHT 1995 BY THE MOHEGAN TRIBAL GAMING AUTHORITY,
TRADING COVE ASSOCIATES AND SUN INTERNATIONAL HOTELS
LIMITED. REPRODUCTION OF THE MATERIAL HEREIN OR
SUBSTANTIAL QUOTATION OF ITS PROVISIONS WITHOUT
PERMISSION VIOLATES THE COPYRIGHT LAWS OF THE UNITED
STATES AND WILL BE SUBJECT TO LEGAL PROSECUTION.
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT
LAWS.
<PAGE>
Execution Copy
LAND LEASE
THIS LAND LEASE (this "Lease") is entered into this 29th day
of September 1995, between the MOHEGAN TRIBE OF INDIANS OF
CONNECTICUT, a federally recognized Indian tribe (as lessor or
landlord under this Lease being hereinafter referred to as the
"Tribe"), and the MOHEGAN TRIBAL GAMING AUTHORITY, an
instrumentality of the Tribe (as lessee or tenant under this Lease
being hereinafter referred to as the "Authority").
This Lease of land constituting the initial reservation of the
Tribe as prescribed by 25 U.S.C. Section 1775c is being entered
into by the Tribe pursuant to and in accordance with the provisions
of 25 U.S.C. Section 415, 25 C.F.R. Section 162 and the Indian
Gaming Regulatory Act, 25 U.S.C. Section 2701 et seq. and also
pursuant to the authority contained in Article V, Section 1 and
Article XIII, Section 1 of the Tribe's Constitution and Ordinance
No. 95 - 7/15 - 1 of the Tribal Council, and by the Authority in
reliance on the provisions of Article XIII, Section 3 of the
Tribe's Constitution, for the purpose of enabling the Authority to
obtain financing by the issuance of certain debt instruments to be
secured by a leasehold mortgage on the Premises, as hereinafter
defined, thereby permitting the Authority to construct, equip and
operate a gaming facility, resort, hotel and other related
developments (the "Project"), which will promote the economic
development and general welfare of the Tribe.
1. PREMISES. The Tribe, in consideration of the rents
reserved and the terms, conditions, covenants and agreements herein
contained, hereby leases to the Authority, and the Authority hereby
hires from the Tribe, the land located in the Town of Montville,
County of New London, and State of Connecticut, described on
Exhibit A and depicted on Exhibit B attached to this Lease,
together with all rights which apply to and/or benefit the land,
whether now or hereafter acquired, including all rights,
privileges, tenements, licenses, hereditaments, rights-of-way,
easements, utility use, appendages and appurtenances appertaining
thereto, all betterments, additions, alterations, substitutions,
replacements and revisions thereof and thereto, and all proceeds
and products of the foregoing, but subject to all rights-of-way,
easements, restrictions and encumbrances of record, and the
Improvements (as such term is defined in Section 18 hereof)
(collectively, the "Premises"). By entering into this Lease, the
Authority accepts the Premises in the condition they are in as of
the date of this Lease, as is, without warranty or representation
of any kind as to the condition or quality of the Premises. The
Authority represents that the Premises, the improvements thereon,
subsurface conditions, and the present uses and non-uses thereof,
1
<PAGE>
have been examined by the Authority, and the Authority accepts the
same, without recourse to the Tribe except as expressly provided in
this Lease, in the condition and state in which they or any of them
now are, without representation or warranty, express or implied in
fact or by law, as to the nature, condition or usability thereof or
as to the use or uses to which the Premises or any part thereof may
be put (except as set forth in this Lease) or as to the prospective
income from, and expenses of operation of, the Premises. The Tribe
warrants that the Project constitutes a permitted use of the
Premises under the laws of the Tribe.
The Premises are leased together with and subject to the
following:
(a) The non-exclusive right of the Authority to
construct, install, maintain, repair, replace, use and operate, in,
on, over and across the Premises and any adjoining lands now or
hereafter owned by, or in trust for, the Tribe, including any
portion of the Premises as to which this Lease is terminated by the
Tribe in accordance with Section 2 (d) hereof, such roads as may be
required for reasonable access to and from the Premises, subject to
the approval of the Secretary, to the extent required by law. The
Authority shall construct and maintain at all times during the term
of this Lease one or more paved roads providing such access to and
from the Premises as may be reasonably required in order for the
Authority to operate the Premises for its intended purposes.
(b) The non-exclusive right of the Authority to acquire,
construct, install, maintain, repair, replace, use and operate, in,
on, over and across the Premises and any adjoining lands now or
hereafter owned by, or in trust for, the Tribe, including any
portion of the Premises as to which this Lease is terminated by the
Tribe in accordance with Section 2 (d) hereof, such electric power,
water, sanitary and storm sewer, and other utilities lines serving
the Premises as may be reasonably required in order for the
Authority to operate the Premises for its intended purposes,
subject to the approval of the Secretary, to the extent required by
law, provided that such utilities lines shall be located, designed
and constructed in accordance with plans approved in advance by the
Tribe, which approval shall not be unreasonably withheld or
delayed.
2. RIGHTS RESERVED TO THE TRIBE. In addition to any other
rights of the Tribe, the Tribe reserves the following rights with
respect to the Premises:
(a) The non-exclusive right to use and operate, in, on,
over and across the Premises, the access roads on the Premises,
2
<PAGE>
together with the right to construct, install, maintain, repair,
replace, use and operate drives, rights-of-way, and/or roadways on
the Premises connecting to such access roads to serve any property
which may now or hereafter be owned by, or in trust for, the Tribe,
including any portion of the Premises as to which this Lease is
terminated by the Tribe in accordance with Section 2 (d) hereof, so
long as none of the foregoing rights of the Tribe unreasonably
interfere with the intended uses of the Premises by the Authority.
(b) The non-exclusive right to use and operate, in, on,
over and across the Premises, the utilities lines serving the
Premises to serve any property which may now or hereafter be owned
by, or in trust for, the Tribe, including any portion of the
Premises as to which this Lease is terminated by the Tribe in
accordance with Section 2 (d) hereof, together with the
nonexclusive right to construct, install, maintain, repair,
replace, use and operate, in, on, over and across the Premises,
such electric power, water, sanitary and storm sewer, and other
utilities serving such other property of the Tribe as may be
reasonably required in connection with the development of such
lands by the Tribe, provided that such utilities shall be located,
designed and constructed so as to avoid unreasonable interference
with the Authority's use of the Premises for its intended purposes
as set forth in this Lease, and provided that the Tribe promptly
restores any portion of the Premises disturbed by the construction
of such utilities.
(c) The right, at any reasonable times during the term
of this Lease, and with reasonable notice to the Authority, or, at
any time in the event of an emergency, to enter upon the Premises,
to inspect the same and any improvements erected and placed
thereon, and all activities occurring thereon, so long as such
inspection does not unreasonably interfere with the Authority's
operations on and uses of the Premises as permitted by this Lease,
and, at the Tribe's option, to perform any obligations of the
Authority hereunder if the Authority fails to do so after
reasonable prior notice to the Authority and all Permitted
Mortgagees, as hereinafter defined, in accordance with this Lease.
(d) The right, subject to the provisions and limitations
of any Permitted Mortgage, to terminate this Lease as to any
portion of the Premises, provided that such released portion shall
not be used to conduct any gaming operations. Upon any such
termination, all other terms and provisions in the Lease shall
remain in full force and effect. The Tribe and the Authority shall
execute an amendment to this Lease to evidence the portion of the
Premises which shall remain subject to this Lease.
(e) The right to grant utility and access easements to
others over, under and across the Premises, provided that same do
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not unreasonably interfere with the Authority's use of the Premises
for its intended purposes as set forth in this Lease.
3. TERM OF LEASE. The term of this Lease shall be twenty-
five (25) years, commencing on the later of August 1, 1995, or the
date on which this Lease is approved by the Secretary of the
Interior or his authorized representative (the "Secretary"),
provided, however, that if such approval is not obtained on or
before August 1, 1996, then this Lease shall be void and of no
further force or effect, unless otherwise agreed in writing by the
Tribe and the Authority. The commencement date of this Lease shall
be confirmed by the Authority and the Tribe in an amendment to this
Lease substantially in the form of Exhibit C attached hereto.
Provided that no Event of Default has occurred and is continuing at
the time of exercise of the rights provided in this Section 3, the
Authority shall have the option to extend the term of this Lease
for one (1) additional twenty-five (25) year period, commencing
upon the expiration of the initial term, by giving written notice
thereof to the Tribe no more than two (2) years nor less than one
(1) year prior to the expiration of the initial term. If the
Authority exercises its option to extend, then all of the terms and
conditions of this Lease shall remain in effect throughout such
extension period, except that the Authority shall have no further
option to extend this Lease beyond the end of such extension
period. References to the "term of this Lease" or "Lease term"
shall mean the initial term and, if the Authority exercises the
option to extend in accordance with this Lease, the extension
period.
4. RENT. The Mohegan Tribal Gaming Authority is an
instrumentality of Tribal government. The construction and
operation of the Project by the Mohegan Tribal Gaming Authority, on
behalf of the Tribe, constitutes a public purpose of the Tribe.
Pursuant to 25 C.F.R. Section 162.5(b)(2), the Tribe has the
authority, with the consent of the Secretary, to lease tribal land at a
nominal rental for public purposes to agencies of Tribal
government, or for purposes of subsidization for the benefit of the
Tribe.
In consideration of the possession, use and occupancy of the
Premises as set forth herein, the Authority and its successors and
assigns shall pay, in addition to payments of all taxes and other
expenses set forth in Section 15 of this Lease and all other
obligations provided for hereunder, annual rent ("Annual Rent") to
the Tribe as follows:
(a) During any period when the Mohegan Tribal Gaming
Authority or another agency or instrumentality of the Tribe is the
tenant under this Lease, the Annual Rent shall be $1.00 per year,
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payable in advance on the first day of the Lease term and on each
anniversary thereof.
(b) During any period when any party other than the
Mohegan Tribal Gaming Authority or another agency or
instrumentality of the Tribe is the tenant under this Lease, the
Annual Rent shall be equal to eight percent (8%) of the tenant's
Gross Revenues from the Premises, payable in arrears on the twenty-
fifth (25th) day of each calendar month for the prior calendar
month in monthly installments, based on the Gross Revenues for the
prior calendar month. For purposes of this paragraph (b), "Gross
Revenues" shall mean gross revenues of the tenant from all sources
in connection with its operations at the Premises.
Within 90 days after the end of each calendar year, an
adjustment shall be made, as necessary, so that the total Annual
Rent paid by the tenant for the preceding calendar year will be
equal to the above percentage of Gross Revenues for such calendar
year.
5. USE OF PREMISES. The Authority shall use the Premises
solely for the construction and operation of the Project and for no
other purpose unless approved in advance by the Tribe in writing;
provided, however, that following foreclosure of any Mortgage on
the Authority's interest in this Lease, or any transfer of such
interest in lieu of foreclosure to the holder of any such Mortgage,
the Premises may be used for any lawful purpose, subject to
applicable building, zoning and other governmental regulations,
EXCEPT THAT IN NO EVENT SHALL ANY NON-INDIAN PERMITTED MORTGAGEE OR
TRANSFEREE OF THE LEASEHOLD ESTATE CREATED BY THIS LEASE CONDUCT
GAMING OPERATIONS ON THE PREMISES.
6. PERMITTED MORTGAGES ONLY. The Authority shall not
mortgage, pledge, or encumber the leasehold estate created by this
Lease or any portion thereof or interest therein except through a
Permitted Mortgage. For purposes of this Lease, a "Permitted
Mortgage" shall be, and a "Permitted Mortgagee" shall be the holder
of, (i) that certain Open-End Construction-Permanent Leasehold
Mortgage Deed, Assignment of Leases and Rents and Security
Agreement of even date herewith between the Authority, as Mortgagor
and First Fidelity Bank, as Mortgagee, securing, among other
things, the obligations of the Authority under those certain Senior
Secured Notes (the "Senior Secured Notes") in the aggregate
principal amount of $175,000,000 and under that certain Indenture
of even date herewith between the Authority, as issuer, and First
Fidelity Bank, as trustee, (the "Indenture"), or (ii) a mortgage:
(a) which shall provide, among other things, that in the
event of default in any of the mortgagor's obligations thereunder,
the Permitted Mortgagee shall provide written notice to the Tribe
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of such fact and the Tribe shall have the right (but not the
obligation) within 60 days after its receipt of such notice (or if
such default cannot with diligence be cured within such 60 day
period, within a reasonable time thereafter provided that the Tribe
proceeds promptly to cure the same and thereafter prosecutes the
curing of such default with diligence), to cure such default in the
Authority's name and on the Authority's behalf, provided that
current payments due the holder during such 60 day period (or such
lesser time as may have been required to cure such default) are
made to the holder, and shall further provide that so long as said
current payments due are paid to the holder as required under the
Permitted Mortgage, said holder shall not have the right, unless
such default shall not have been cured within such time, to
accelerate the note secured by such Permitted Mortgage or to
foreclose under the Permitted Mortgage on account of such default;
(b) which shall provide, among other things, that after
the expiration of such cure period, if the Permitted Mortgagee
intends to foreclose under the Permitted Mortgage, the Permitted
Mortgagee shall first notify the Tribe of its intention to do so
and the Tribe shall have the right, but not the obligation upon
notifying the Permitted Mortgagee within sixty (60) days of receipt
of said notice from the Permitted Mortgagee, to purchase the note
and all of the instruments securing the note for the amount of the
outstanding indebtedness (including interest, principal, premiums
and make-whole obligations in respect thereof), together with all
reasonable costs and expenses due to the Permitted Mortgagee in
accordance with such instruments, provided that such purchase must
be consummated and payment made in full within ninety (90) days
after the Permitted Mortgagee gives notice of its intent to
foreclose, or the Tribe shall be deemed to have waived its right to
purchase; and
(c) which shall provide that such Permitted Mortgage is
and shall be subject and subordinate to any and all access and
utility easements granted by the Tribe pursuant to Section 2 of
this Lease.
Any Permitted Mortgagee shall have, without the requirement of
consent by the Tribe, the right, but not the obligation, to enforce
and preserve such Permitted Mortgagee's rights under any Permitted
Mortgage and any other agreement entered into in connection
therewith.
7. AMENDMENT OF LEASE. Any material amendments to this
Lease shall be subject to the prior written approval of each
Permitted Mortgagee, which approval shall not be unreasonably
withheld or delayed. For purposes of this Lease, "material"
amendments shall mean any amendment which effects changes in rent,
the term of the Lease, a termination of Lease and any other
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amendments likely to adversely affect the value of the Premises and
other collateral under a Permitted Mortgage or the rights and
remedies of the Permitted Mortgagee or which would increase the
obligations of the Permitted Mortgagee if the Permitted Mortgagee
were to foreclose its Permitted Mortgage. The Authority and Tribe
shall execute such further amendments to this Lease, as may be
reasonably required by a Permitted Mortgagee or prospective
Mortgagee to carry out the provisions of this Lease. So long as
any indebtedness or other obligation secured by said Permitted
Mortgage shall remain unsatisfied and not fully discharged, the
Tribe shall not without the prior written consent of said Permitted
Mortgagee being first had and obtained (a) accept any surrender of
the Premises or any portion thereof or termination of this Lease,
whether voluntary or involuntary or upon a failure of any condition
under this lease, or (b) exercise or accept the exercise of any
option or right of the Authority to terminate this Lease or to
purchase the Tribe's reversionary interest hereunder. The
provisions of this paragraph shall not prevent the Tribe from
exercising its rights and remedies provided in this Lease or by law
upon the occurrence of an Event of Default, subject to the rights
of any Permitted Mortgagee as provided elsewhere in this Lease.
8. CONSENT TO ACQUISITION OF LEASEHOLD INTEREST BY PERMITTED
MORTGAGEE; SUBSEQUENT ASSIGNMENT AND SUBLETTING. The Tribe and the
Secretary (upon approval of this Lease by the Secretary) hereby
consent to the assignment and transfer by the Authority of its
interest in this Lease to any Permitted Mortgagee, either through
foreclosure of the Permitted Mortgage or by a transfer in lieu of
foreclosure, or by exercise of any other right or remedy granted by
the applicable Permitted Mortgage, or to any purchaser at a
foreclosure or other sale. After an event of default under the
applicable Permitted Mortgage, if the Permitted Mortgagee succeeds
to the Authority's interest under this Lease through foreclosure or
transfer in lieu of foreclosure or otherwise, as provided above,
then such Permitted Mortgagee shall have the right to assign this
Lease or sublet the Premises from time to time, in whole or in
part, without obtaining the consent of the Tribe or the Secretary.
Any such assignee shall assume in writing all of the Authority's
obligations under this Lease and shall have the rights of, and be
substituted for, the Authority. Upon any such assumption by a
subsequent assignee, the Permitted Mortgagee shall be automatically
released from all liability, if any, hereunder. Following the
occurrence of an event of default under any Permitted Mortgage, and
prior to any foreclosure, transfer in lieu of foreclosure or other
disposition of the Authority's interest in this Lease, the
Permitted Mortgagee shall have the right, to the extent provided in
the Permitted Mortgage and upon giving written notice thereof to
the Tribe, to take possession of and sublease all or any part of
the Premises on such terms as the Permitted Mortgagee may deem
reasonable for the account of the Authority, and to exercise, in
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the name of the Authority, any and all other rights or privileges
granted to the Authority pursuant to this Lease. In the event the
Permitted Mortgagee, in the liquidation of its Permitted Mortgage,
should acquire and sell the leasehold interest in this Lease and
take a Permitted Mortgage to secure part or all of the sale price,
the provisions of this Lease shall apply to such Permitted
Mortgage.
Nothing herein shall permit the Permitted Mortgagee or any
assignee, sublessee, purchaser, or transferee of the Permitted
Mortgagee to transfer any interest in this Lease or its leasehold
interest in the Premises to any person or entity engaged by the
Tribe or the Authority to manage a gaming enterprise under the
provisions of the Indian Gaming Regulatory Act, 25 U.S.C.
Sections 2701-2721 (1994).
9. PERMITTED MORTGAGEE'S RIGHT TO CURE DEFAULT. Any
Permitted Mortgagee shall have the right, but not the obligation,
without requirement of consent by the Tribe to:
(a) cure any default under this Lease within any
applicable cure period, and to timely perform any obligation
required hereunder, and any such cure or performance by Permitted
Mortgagee shall be effective as if the same had been undertaken and
performed by the Authority; and
(b) acquire and convey, assign, transfer and exercise
any right, remedy or privilege granted to the Authority by this
Lease or otherwise by law, subject to the provisions, if any, in
said Permitted Mortgage limiting any exercise of any such right,
remedy or privilege; and
(c) rely upon and enforce any provisions of this Lease
to the extent that such provisions are for the benefit of a
Permitted Mortgagee.
In addition to the rights set forth in Section 9(a) - (c), in the
event of default in any of the Authority's obligations hereunder,
the Tribe shall provide written notice to the Permitted Mortgagee
of such fact and the Permitted Mortgagee shall have the right (but
not the obligation) within sixty (60) days after its receipt of
such notice (or if such default cannot with diligence be cured
within such sixty (60) day period, within a reasonable time
thereafter provided that the Permitted Mortgagee proceeds promptly
to cure the same and thereafter prosecute the curing of such
default with diligence), to cure such default in the Authority's
name and on the Authority's behalf, provided that current payments
due the Tribe during such sixty (60) day period (or such lesser
time as may have been required to cure such default) are made to
the Tribe.
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Notwithstanding anything to the contrary contained in this
Lease, so long as any indebtedness or other obligation secured by
a Permitted Mortgage shall remain unsatisfied and not fully
discharged, upon the occurrence of an Event of Default by the
Authority hereunder, the Tribe shall not (i) terminate this Lease
nor the Authority's right of possession of the Premises; (ii)
exercise any right of reentry provided in this Lease or otherwise
by law; (iii) take possession of and/or relet the Premises or any
portion thereof or (iv) enforce any other right or remedy which may
affect the rights of any Permitted Mortgagee under the applicable
Permitted Mortgage unless (A) the default consists of the
Authority's failure to pay any sum of money expressly required to
be paid by the Authority pursuant to this Lease (a "Monetary
Default"), and (B) such Permitted Mortgagee has failed to cure the
Authority's Monetary Default pursuant to this Lease; provided,
however, that upon expiration of the term of this Lease, including
any option period, the Tribe shall have the right to reenter and
take possession of the Premises.
A Permitted Mortgagee shall not, as a condition to the
exercise of its rights hereunder, be required to assume personal
liability for the payment and performance of the obligations of the
Authority hereunder. Any such payment or performance or other act
by a Permitted Mortgagee hereunder shall not be construed as an
agreement by such Permitted Mortgagee to assume such personal
liability except to the extent such Permitted Mortgagee actually
becomes the lessee hereunder; provided, however that in the event
the Permitted Mortgagee transfers the leasehold estate to a
purchaser of the same any such transferee shall be required to
enter into a written agreement assuming such personal liability and
upon any such assumption the Permitted Mortgagee shall
automatically be released from personal liability hereunder.
10. ASSIGNMENTS AND SUBLETTING. Except as otherwise provided
in this Lease and subject to any restrictions of the Authority in
a Permitted Mortgage, the Authority shall not assign, pledge,
encumber, hypothecate or transfer all or any part of the
Authority's interest in this Lease, whether voluntarily or
involuntarily, by operation of law or otherwise, and shall not
sublease all or any portion of the Premises, without the prior
written consent of the Tribe (and, if required by law, the
Secretary), which consent shall not be unreasonably withheld or
delayed. The Secretary's consent shall not be required for any
sublease. The Authority may, without obtaining the consent of the
Tribe or the Secretary, sublease all or any portion of the Premises
to any entity directly or indirectly owned or controlled by the
Tribe.
11. COMPLIANCE WITH LAW. The Authority shall not use or
cause or permit to be used any part of the Premises for any conduct
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or purpose which constitutes a nuisance or waste of the Premises or
which violates any applicable law, regulation, code or ordinance,
or any order of any court or governmental authority having
jurisdiction over the Premises. The Authority shall promptly
comply, at its expense, with all laws, regulations, codes,
ordinances and governmental requirements relating to or affecting
the Premises or the Authority's use or occupancy thereof.
All applicable Tribal licensing, permitting, and other
approval requirements (including, but not limited to building codes
and permits) that must be adhered to by the Authority under tribal
law in order for the Authority to utilize the Premises for the
purposes set forth in this Lease are identified in Exhibit D
hereto. The Tribe shall not impose any additional requirements
that would materially and adversely affect the Authority's use of
the Premises for the purposes set forth in this Lease.
12. HAZARDOUS SUBSTANCES. The Authority covenants and hereby
agrees that the Authority shall not, during the term of this Lease,
permit toxic or hazardous substances or wastes, pollutants or
contaminants, including, without limitation, asbestos, urea
formaldehyde, the group of organic compounds known as
polychlorinated biphenyls, petroleum products including gasoline,
fuel oil, crude oil and various constituents of such products, any
hazardous substance as defined in the Comprehensive Environmental
Response, Compensation and Liability Act 42 U.S.C. Sections 9601 et
seq., and any other substance similarly defined or identified in
any other federal, state or tribal laws, rules or regulations
relating to the protection of the environment (collectively,
"Hazardous Substances"), to be generated, treated, stored,
transferred from, discharged, released or disposed of, or otherwise
placed, deposited in or located on, used, transported over, or
otherwise entered on or into the Premises, except in accordance
with all applicable state, federal, local and tribal laws,
regulations, rules, codes and ordinances relating to the protection
of the environment ("Environmental Laws"); nor shall the Authority
undertake any activity on the Premises that would cause or
contribute to the Premises becoming a treatment, storage or
disposal facility for Hazardous Substances within the meaning of
any applicable Environmental Laws. The foregoing provision shall
not be deemed to prohibit the incidental storage or use of
Hazardous Substances in the ordinary course of the Authority's
business, provided such storage or use is in compliance with all
applicable Environmental Laws.
13. EXCULPATION. Neither the Tribe nor the United States,
nor their officers, agents or employees shall be liable to the
Authority or its successors, assignees or subtenants, including any
Permitted Mortgagee, for any loss, damage, or injury of any kind
whatsoever to the person or property of the Authority or any
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sublessee, or any other person, caused by any use or condition of
the Premises or by any defect in any structure erected thereon, or
arising from any accident, fire or other casualty on the Premises.
14. INDEMNIFICATION OF TRIBE. The Tribe shall not be liable,
and the Authority shall defend, indemnify and hold the Tribe, its
members, officers, agents and employees, harmless against all
liability, claims of liability, obligations, suits, damages,
penalties, claims, costs, charges, and expenses, including
attorney's fees, that may be imposed upon the Tribe by reason of:
(a) Any work or things done in, on or about the Premises
and/or the Improvements, as hereinafter defined, or any part
thereof;
(b) Any use, nonuse, possession, occupation, condition,
operation, or maintenance of the Premises and/or the Improvements;
(c) Any negligence on the part of the Authority or any
of the Authority's agents, contractors, servants, employees,
subtenants, licensees, or invitees;
(d) Any accident, injury, or damage to any person or
property occurring in, on, or about the Premises and/or the
Improvements or any part thereof;
(e) Any failure by the Authority to perform or comply
with any of the covenants, agreements, terms or conditions
contained in this Lease on its part to be performed or complied
with; and
(f) Any tax attributable to the execution, delivery, or
recording of this Lease or any modification thereof.
The Authority's obligation to defend the Tribe hereunder shall be
by counsel reasonably acceptable to the Tribe, and "attorney's
fees" shall include both reasonable attorneys' fees and paralegals'
fees and expenses. In the event that any action or proceeding is
brought against the Tribe, its members, officers, agents or
employees by reason of any of the matters set forth in parts (a)
through (f) above, then the Authority upon notice from the Tribe,
shall protect and defend at the Authority's sole expense such
action or proceeding by counsel reasonably satisfactory to the
Tribe, and in the event the Authority shall fail to protect and
defend the Tribe, its members, officers, agents or employees, then
the Tribe may undertake to protect and defend itself, its members,
officers, agents or employees and the Authority shall pay to the
Tribe, upon demand, all costs and expenses incurred by the Tribe in
connection therewith, including, without limitation, all attorneys'
fees and expenses. The provisions of this Section 14 are for the
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sole benefit of the Tribe, and may not be relied on or enforced by
any other party. The obligations of the Authority under this
Section 14 (i) shall be personal to the Mohegan Tribal Gaming
Authority and independent of the demise of the Premises, (ii) shall
not run with the land or the leasehold estate hereunder, (iii) need
not be assumed by any person or entity who succeeds to the tenant's
interest hereunder (including without limitation any Permitted
Mortgagee or any purchaser upon foreclosure of any Permitted
Mortgage), (iv) shall not, if unpaid, be collectible from any
property subject to a Permitted Mortgage, or any proceeds thereof,
or from any Permitted Mortgagee or its successors or assigns, and
(v) shall not, if unpaid, constitute a default under this Lease or
grounds for termination of this Lease.
15. PAYMENT OF TAXES AND OTHER EXPENSES. The rent provided
for in Section 4 of this Lease shall be fully "net" to the Tribe.
Accordingly, the Authority shall pay, in addition to the payments
of Annual Rent, all costs of owning, operating, constructing,
maintaining, repairing, replacing and insuring the Premises and any
improvements located thereon, all charges for water, sewer and
other utilities, services furnished to the Premises, and all fees,
taxes, assessments and other charges which may be levied against
the Premises or the Authority's interest in the Premises by the
Tribe or any other governmental authority having the power to levy
such fees, taxes, assessments or other charges, and which are
payable for and with respect to the term of the Lease.
All applicable Tribal taxes, fees, assessments and other
charges payable by the Authority to the Tribe or levied against the
Premises that are required for the Authority, to use the Premises
for the purposes set forth in this Lease are listed in Exhibit E
hereto. The Tribe shall not impose any new or additional taxes,
fees, assessments or other charges on the Premises or the
Authority, except for reasonable, nondiscriminatory charges for
utilities or other governmental services supplied by the Tribe and
used by the Authority or the Premises.
Nothing contained in this Lease is intended or shall be
construed to constitute a waiver by the Tribe or the Authority of
any applicable laws that provide tax immunity to trust or
restricted Tribal property or to any interest therein or income
derived therefrom.
16. AUTHORITY'S REPAIR OBLIGATIONS; INSURANCE. The Authority
will, at its Expense, maintain, repair and replace, whether as a
result of casualty, or otherwise, the Premises and all Improvements
now located or hereafter constructed thereon pursuant to the terms
of this Lease in order that the same is in good, safe and habitable
condition throughout the term of this Lease, ordinary wear and tear
excepted and in any event in a condition satisfactory to the Tribe
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in its reasonable discretion. The Authority shall maintain or
cause the manager of the operations at the Premises to maintain
adequate "all-risk" property insurance in an amount equal to the
full replacement value of all buildings and other improvements and
fixtures located on the Premises against loss throughout the term
of this Lease. In addition, the Authority shall maintain or cause
the manager of the operations at the Premises to maintain
comprehensive general liability insurance against claim for bodily
injury, death or property damage occurring in, on or about the
Premises with a combined single limit of at least $2,000,000 per
occurrence, together with an umbrella policy of liability insurance
providing additional coverage of at least $5,000,000 per
occurrence. All such policies of insurance shall name the Tribe
and any Permitted mortgagee as additional insureds and loss payees,
as appropriate, shall provide for 30 days' advance written notice
to the Tribe and any such Permitted Mortgagee prior to any
modification or cancellation thereof, and shall be in form and
substance, and issued by insurance companies, reasonably
satisfactory to the Tribe and such Permitted Mortgagee. Subject to
the terms of any Permitted Mortgage, which terms shall be approved
in writing by the Tribe, any insurance proceeds received as a
result of damage or destruction shall be applied first to the cost
of restoration of any Improvements located on the Premises, subject
to such reasonable controls as may be required by the Tribe, and
the remainder, if any, shall be paid to the Authority or to any
Permitted Mortgagee, to the extent required by such Permitted
Mortgage. The Authority shall provide the Tribe with a duplicate
original of each of the Authority's insurance policies and renewals
thereof prior to commencement of the Lease term and prior to
expiration of any existing policy.
17. ALTERATIONS. No building or other improvement shall be
constructed or materially altered by the Authority, and no grading,
excavating or other construction activity shall be commenced, on
the Premises unless complete and final plans and specifications for
such construction or alteration have been submitted to and approved
by the Tribe. Any such approval of the Tribe shall not be
unreasonably withheld or delayed. Any such construction or
alteration shall be commenced and completed promptly and in a good
and workmanlike manner using new, top quality materials and in
compliance with all applicable permits, authorizations and
building, zoning and other laws and ordinances and the requirements
of all Permitted Mortgagees.
18. SURRENDER OF POSSESSION; OWNERSHIP OF IMPROVEMENTS. The
Authority agrees peaceably to surrender possession and occupancy of
the Premises to the Tribe at the termination or expiration of this
Lease. Any and all buildings, improvements, and related facilities
now existing or hereafter constructed on the Premises, including
utilities constructed or installed in or on the Premises by or at
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the expense of the Authority, and all repairs, remodeling or
additions thereof or thereto (collectively, the "Improvements")
shall, upon such construction and/or installation, become a part of
the Premises leased to the Authority pursuant to the terms of this
Lease, and all references in this Lease to "Premises" shall from
and after such construction and/or installation include the
Improvements. Any and all equipment, furniture, Trade Fixtures and
other personal property of the Authority used in connection with
the use and operation of the Premises and the Improvements (the
"Equipment"), shall be and remain the separate, personal property
of the Authority throughout the term of this Lease. The Authority
may remove all or any part of the Equipment upon termination or
expiration of this Lease, provided that the Authority shall repair
and be responsible for any damage done to the Premises by such
removal. If any Equipment which the Authority has the right to
remove is not removed within 90 calendar days after the date of
expiration or termination of this Lease, and provided that the
Tribe does not interfere with such timely removal, such property
shall automatically become the property of the Tribe and may be
used, sold, transferred or otherwise disposed of by the Tribe in
any manner, in the Tribe's sole discretion, and at the expense of
the Authority.
19. DEFAULT. The occurrence of any of the following events
shall constitute an Event of Default by the Authority under this
Lease:
(a) the Authority fails to pay when due any amount
required to be paid by the Authority under this Lease (except
Section 14 hereof) and such failure continues for 30 days after
written notice thereof from the Tribe to the Authority and any
Permitted Mortgagee; or
(b) the Authority fails to observe or perform any other
covenant or obligation of the Authority under this Lease (except
Section 14 hereof) and such failure continues for 60 days (or, if
such default cannot reasonably be cured within 60 days, for such
longer period reasonably required to cure such default provided
that the Authority has within such 60 days promptly commenced
curing such default and diligently pursues such cure to completion)
after written notice from the Tribe to the Authority and any
Permitted Mortgagee; or
(c) the Authority pledges, encumbers, hypothecates or
conveys its interest in this Lease or any part thereof to anyone in
violation of the terms of this Lease.
Notwithstanding the foregoing, if the Authority, in connection
with a good faith dispute, deposits funds in escrow or obtains a
bond that prevents any foreclosure of the leasehold estate, then
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the Authority shall not be in default hereunder.
20. DISPUTE RESOLUTION AND CONSENT TO SUIT. The Tribe does
not consent to the enforcement, levy or other execution of any
judgment for money or other damages against any assets, real or
personal, of the Tribe, except that the Tribe and the Authority
each do herewith consent to the enforcement and execution of any
judgment, whether obtained as a result of judicial, administrative,
or arbitration proceedings, against any assets of the Authority, in
connection with any judicial, administrative or arbitration
proceeding commenced for purposes of interpreting or enforcing the
obligations of the Tribe or the Authority pursuant to this Lease.
Subject to the foregoing, the Tribe and the Authority each does
herewith waive its sovereign immunity from unconsented suit whether
such suit be brought in law or in equity, or in administrative
proceedings or proceedings in arbitration, to permit the
commencement, maintenance, and enforcement of any action, by any
person with standing to maintain an action, to interpret or enforce
the terms of this Lease, and to enforce and execute any judgment
resulting therefrom. Notwithstanding any other provision of law or
canon of construction, the Tribe and the Authority each intend this
waiver to be interpreted liberally to permit the full litigation of
disputes arising under or out of this Lease. Without limiting the
generality of the foregoing, the Tribe and the Authority waive
their immunity from unconsented suit to permit the maintenance of
the following actions:
(a) Courts. The Tribe and the Authority each waive
their immunity from unconsented suit to permit any court of
competent jurisdiction to (i) enforce and interpret the terms of
this Lease, and award and enforce the award of any damages owing by
the Authority as a consequence of a breach thereof, whether such
award is the product of litigation, administrative proceedings, or
arbitration; (ii) determine whether any consent or approval of the
Tribe or the Authority has been improperly granted or unreasonably
withheld; (iii) enforce any judgment prohibiting the Tribe or the
Authority from taking any action, or mandating or obligating the
Tribe or the Authority to take any action, including a judgment
compelling the Tribe or the Authority to submit to binding
arbitration; and (iv) adjudicate any claim under the Indian Civil
Rights Act of 1968, 25 U.S.C. Section 1302 (1994).
(b) Arbitration. The Tribe and the Authority each waive
their immunity from unconsented suit to permit arbitrators,
appointed and acting under the commercial arbitration rules of the
American Arbitration Association, whenever and to the extent any
agreement to submit a matter to arbitration is made by the Tribe
and the Authority, to (i) enforce and interpret the terms of this
Lease, and award and enforce the award of any damages owing by the
15
<PAGE>
Authority as a consequence of a breach thereof; (ii) determine
whether any consent or approval of the Tribe or the Authority has
been improperly granted or unreasonably withheld; and (iii) enforce
any judgment prohibiting the Tribe or the Authority from taking any
action, or mandating or obligating the Tribe or the Authority to
take any action, including a judgment compelling the Tribe or the
Authority to submit to binding arbitration. Any such arbitration
hearings shill be held at a place designated by the arbitrator(s)
in New London County, Connecticut. The parties and the
arbitrator(s) shall maintain strict confidentiality with respect to
any such arbitration.
21. PERFORMANCE DURING DISPUTES. It is mutually agreed that
during any kind of controversy, claim, disagreement or dispute,
including a dispute as to the validity of this Lease, the Authority
shall remain in possession of the Premises as tenant; and the Tribe
and the Authority shall continue their performance of the
provisions of this Lease. The Authority shall be entitled to
injunctive relief from a civil court or other competent authority
to maintain possession in the event of a threatened eviction during
any dispute, controversy, claim or disagreement arising out of this
Lease.
22. TERMINATION. Upon the occurrence of an Event of Default
by the Authority as provided in Section 19, the Tribe shall have
the right to terminate this Lease with the consent of the
Secretary, pursuant to 25 C.F.R. Section 162.14 (as that regulation
may be amended), subject to the rights of any transferee permitted
hereunder or any Permitted Mortgagee, as provided in this Lease.
23. SECRETARIAL APPROVAL. It is understood and agreed that
this Lease, or any amendment thereto, is contingent upon, and shall
be valid only after approval by the Secretary as required by law.
Execution of this Lease by the Secretary shall be deemed, to the
extent necessary, to make this Lease fully effective under federal
law. The Secretary hereby waives the requirement to provide a
surety bond pursuant to 25 C.F.R. Section 162.5(c).
24. FEDERAL SUPERVISION. The Authority acknowledges and
understands that title to the Premises is held by the United States
of America in trust for the Tribe. Nothing contained in this Lease
shall operate to delay or prevent a termination of Federal trust
responsibilities with respect to the land by the issuance of a fee
patent or otherwise during the term of this Lease; however, such
termination shall not serve to abrogate this Lease. No member of,
or delegate to, Congress or Resident Commissioner shall be admitted
to any share or part of this Lease or to any benefit that may arise
hereunder, but this provision shall not be construed to extend to
this contract if made with a corporation or company for its general
benefit. During any period when the Premises are in trust or
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restricted status, all of the Authority's obligations under this
Lease, and the obligations of its sureties, are to the United
States as well as to the Tribe.
25. SUCCESSORS BOUND. The terms of this Lease shall benefit
and be binding upon the successors and assigns of the Tribe and the
successors and permitted assigns of the Authority in like manner as
upon the original parties, except as otherwise provided in this
Lease. The term "Authority," as used in this Lease, means the
Mohegan Tribal Gaming Authority and any person or entity succeeding
to the interest of the Mohegan Tribal Gaming Authority as tenant
under this Lease, in accordance with the provisions of this Lease
and applicable law.
26. QUIET ENJOYMENT. The Tribe covenants that at all times
during the term of this Lease, so long as no Event of Default has
occurred and is continuing hereunder, that the Authority's quiet
enjoyment of the Premises or any part thereof shall not be
disturbed by any act of the Tribe or anyone acting by, through or
under the Tribe.
27. NOTICES. Any notice required by or sent pursuant to any
provision of this Lease shall be in writing and shall be deemed
given if and when it is personally delivered or sent by certified
mail addressed, until some other address is designated in a notice
so given, as follows:
If to Tribe: Mohegan Tribe of Indians of
Connecticut
27 Church Lane
Uncasville, CT 06382
Attn: Tribal Chair and Business Board
With a copy to: Lewis B. Rome, Esq.
Rome, McGuigan, Sabanosh
& Klebanoff, P.C.
One State Street
Hartford, CT 06103
If to Authority: Mohegan Tribal Gaming Authority
27 Church Lane
Uncasville, CT 06382
Attn: Tribal Chair and Business Board
With a copy to: Trading Cove Associates
914 Hartford Turnpike
P. O. Box 60
Waterford, CT 06385
Attn: Len Wolman
17
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28. GOVERNING LAW. This Lease, the parties' obligations
hereunder, and any disputes hereunder shall be governed by and
interpreted and construed in accordance with federal law (to the
extent applicable) and the laws of the Tribe, provided that nothing
herein shall be deemed to modify the provisions of sections 11 and
15 of this Lease, and, to the extent required to supplement
applicable federal law and tribal law, the substantive laws of the
State of Connecticut (excepting its choice of law rules).
29. RECORDING. Following approval by the Secretary, this
Lease, or a memorandum of this Lease in the form prescribed by
Connecticut law, shall be recorded in the appropriate Land Titles
and Records Office of the Bureau of Indian Affairs, in the land
records of the Town of Montville, Connecticut, and any land records
of the Tribe.
30. INVALID PROVISIONS. If any clause, Section, Article,
Paragraph, or Subparagraph of this Lease shall be unenforceable or
invalid, such material shall be read out of this Lease and shall
not affect the validity of any other clause, Section, Article,
Paragraph, or Subparagraph, or give rise to any cause of action of
either party to this Lease against the other, and the remainder of
this Lease shall be valid and enforceable to the fullest extent
permitted by law.
31. WAIVER. The waiver by the Tribe of, or the failure of
the Tribe to take action with respect to, any breach of any term,
covenant, condition, provision, restriction, or reservation herein
contained, shall not be deemed to be a waiver of such term,
covenant, condition, provision, restriction, or reservation or
subsequent breach of same, or of any other term, covenant,
condition, provision, restriction, or reservation herein contained.
The Tribe may grant a waiver of any term of this Lease, but such
must be in writing and signed by the Tribe before being effective.
The subsequent acceptance of Annual Rent or any other amount
hereunder by the Tribe shall not be deemed to be a waiver of any
preceding breach by the Authority of any term, covenant, condition,
provision, restriction, or reservation of this Lease, other than
the failure of the Authority to pay the particular rent so
accepted, regardless of the Tribe's knowledge of such preceding
breach at the time of acceptance of such rent.
32. SAVING CLAUSE. If for any reason the term of this Lease,
or any renewal thereof, or any substantive provision thereof, shall
be found to be unenforceable, illegal or violative of public
policy, this Lease shall automatically be amended to conform to the
applicable decision, and each party hereto expressly agrees to
execute any amendment necessary to effectuate the goals and
18
<PAGE>
purposes of this Lease.
33. FORCE MAJEURE. If any dispute shall arise under any
provision of this Lease as to whether the Authority shall have
commenced promptly or within any limit of time specified in this
Lease or proceeded continuously and with all due diligence with any
required construction, repair or replacement, there shall be a
suspension of performance during the period of any acts of God or
by strikes which affect both the building industry generally and
the Premises specifically or by orders, directives or regulations
of any govern-mental agency or board, making available the
materials reasonably required for any such construction, repair or
replacement and to any unavoidable delays in adjusting any fire
insurance loss. The provisions of this Section 33 shall not,
however, apply to a default by the Authority in the payment of any
Annual Rent or other charges to be paid by the Authority under the
provisions of this Lease.
34. ESTOPPEL CERTIFICATE. The Tribe and the Authority,
promptly upon any request therefor from the other, shall execute,
cause such signature to be acknowledged by a notary public and
deliver to the other or to a third person, if so directed by the
other, a statement in writing identifying this Lease and the
parties hereto and declaring, as of the date thereof, the following
and such other matters as may be reasonably required by the party
making such request:
(a) Whether or not this Lease is in default, and, to
the extent that any default does then exist, the nature of any such
default, including any event which may constitute an Event of
Default upon the mere passage of time or notice or both;
(b) Whether or not this Lease is in full force and
effect and that this Lease has not been modified except as provided
in an amendment or amendments identified therein, stating further
that this Lease as so amended is in full force and effect.
(c) Whether the date to which the rent and other charges
required to be paid under this Lease have been paid by or on behalf
of the Authority;
(d) That the Tribe has not conveyed, assigned,
transferred or delegated any right or duty of the Tribe hereunder,
nor has the Tribe encumbered or otherwise hypothecated the Tribe's
reversionary interest in and to the Premises or any rights
hereunder except as may be set forth in such statement; and
(e) That any such statement may conclusively be relied
upon by the Tribe, the Authority and any Permitted Mortgagee or any
proposed Mortgagee in making a loan to the Authority or by any
19
<PAGE>
title insurance company which issues a title insurance policy or
other guaranty or endorsement relating to the existence and status
of this Lease.
35. NO MERGER. So long as any Permitted Mortgage is in
existence, unless all Permitted Mortgagees shall otherwise
expressly consent in writing, the fee title to the Premises and the
leasehold estate created by this Lease shall not merge but shall
remain separate and distinct, notwithstanding the acquisition of
said fee title by the United States of America in trust for the
Tribe and said leasehold estate by the Tribe.
36. DEFINITIONS. The following terms, for purposes of this
Lease, shall have the meaning as set forth in this Section:
"Annual Rent" shall have the meaning as set forth in Section
4 of this Lease.
"Authority" shall have the meaning as set forth in Section 25
of this Lease.
"Bureau of Indian Affairs (B.I.A.)" shall mean the Bureau of
Indian Affairs under the Department of the Interior of the United
States of America.
"Environmental Laws" shall have the meaning as set forth in
Section 12 of this Lease.
"Equipment" shall mean all equipment, furniture and Trade
Fixtures required or used in the operation of the Premises and the
Improvements.
"Gaming" shall mean any and all activities defined as Class II
or Class III Gaming under the Indian Gaming Regulatory Act, 25
U.S.C. Sections 2701-2721 (1994) or authorized under the Compact.
"Gross Revenues" shall have the meaning as set forth in
Section 4(b) of this Lease.
"Hazardous Substances" shall have the meaning as set forth in
Section 12 of this Lease.
"Improvements" shall have the meaning as set forth in Section
18 of this Lease.
"Indenture" shall have the meaning as set forth in Section 6
of this Lease.
"Land Title and Records Office" shall have the meaning as set
forth in Section 29 of this Lease.
20
<PAGE>
"Lease" or "Land Lease" shall mean this lease entered into
this 29th day of September 1995.
"Lease Term" or "term of this Lease" shall have the meaning as
set forth in Section 3 of this Lease.
"Material amendments" shall have the meaning as set forth in
Section 7 of this Lease.
"Monetary Default" shall have the meaning as set forth in
Section 9 of this Lease.
"Open-End Construction - Permanent Leasehold Mortgage Deed,
Assignment of Leases and Rents and Security Agreement" shall have
the meaning as set forth in Section 6 of this Lease.
"Permitted Mortgage" shall have the meaning as set forth in
Section 6 of this Lease.
"Permitted Mortgagees" shall have the meaning as set forth in
Section 6 of this Lease.
"Premises" shall have the meaning as set forth in Section 1 of
this Lease.
"Project" shall mean the Gaming Facility, resort, hotel and
other related developments on the Premises.
"Resident Commissioner" shall have the meaning as set forth in
Section 24 of this Lease.
"Senior Secured Notes" shall have the meaning as set forth in
Section 6 of this Lease.
"Trade Fixtures" means articles which are easily removable,
and which are placed by and at the sole expense of the Lessee in or
attached to the Improvements to prosecute the trade or business of
the Lessee for which it occupies the Improvements or for use in
connection with such business or to promote convenience and
efficiency in conducting such business.
"Tribal Council" shall mean the Mohegan Tribal Council created
pursuant to the Tribe's Constitution or, a designee agency,
committee, corporation or council created pursuant to any
resolution or ordinance of the Mohegan Tribal Council.
"Tribe" shall mean the Mohegan Tribe of Indians of
Connecticut, a federally recognized Indian tribe, its successors
and assigns.
21
<PAGE>
The remainder of this page is intentionally blank.
Signatures appear on following pages.
22
<PAGE>
IN WITNESS THEREOF, this Lease has been executed as of the
date first above written.
WITNESSES: MOHEGAN TRIBE OF INDIANS
OF CONNECTICUT
/s/ Judith A. Shapiro /s/ Ralph W. Sturges
_______________________ By:___________________________
Ralph Sturges
/s/ Michael Roy Chairman, Tribal Council
_______________________
MOHEGAN TRIBAL GAMING
AUTHORITY
/s/ Judith A. Shapiro /s/ Ralph W. Sturges
_______________________ By:___________________________
Ralph Sturges
Chairman, Management Board
/s/ Michael Roy
_______________________
23
<PAGE>
CITY OF WASHINGTON )
) ss. September 29, 1995
DISTRICT OF COLUMBIA)
On September 29, 1995, Ralph W. Sturges, personally
appeared, before me, signer and sealer of the foregoing instrument,
who acknowledged that he executed the instrument as the
Lifetime Chief and Chairman of the MOHEGAN TRIBE OF INDIANS OF
CONNECTICUT, a federally recognized Indian tribe, as his free act
and deed and the free act and deed of the Tribe.
/s/ Carol C. Williams
_____________________________
Notary Public
My Commission Expires: June 14, 1998
CITY OF WASHINGTON )
) ss. September 29, 1995
DISTRICT OF COLUMBIA)
On September 29, 1995, Ralph W. Sturges, personally appeared,
before me, signer and sealer of the foregoing instrument, who
acknowledged that he executed the instrument as the Chairman,
Management Board of the MOHEGAN TRIBAL GAMING AUTHORITY, as his
free act and deed and the free act and deed of the Authority.
/s/ Carol C. Williams
_____________________________
Notary Public
My Commission Expires: June 14, 1998
24
<PAGE>
Attachment to Land Lease
SECTION 81 COMPLIANCE
In compliance with Section 81 of Title 25 U.S.C.A., the residence
and occupation of the parties is as follows:
Party in Interest: Mohegan Tribe of Indians or Connecticut
Address: 27 Church Lane
Uncasville, CT 06382
Occupation: Indian Tribe
Party in Interest: Mohegan Tribal Gaming Authority
Address: 27 Church Lane
Uncasville, CT 06382
Occupation: Tribal Gaming Authority
Fixed limited time
to run: 25 years, with option to renew for 25 years
(see Section 3)
The Chairman of the Mohegan Tribe of Indians of Connecticut "Tribe"
is authorized to execute the attached document by Resolution No.
95-3 of the Tribal Council of the Tribe, dated August 30, 1995.
The Chairman exercises his authority in this instance because the
Tribe has determined that execution of the attached document will
further the economic development objectives of the Tribe.
The Chairman of the Management Board of the Mohegan Tribal Gaming
Authority ("Management Board") is authorized to execute the
attached document by Resolution No. 95-4 of the Management Board,
dated August 30, 1995. The Chairman of the Management Board
exercises his authority in this instance because the Management
Board has determined that execution of the attached document will
further the economic development objectives of the Tribe.
The document was executed on or about 12:30 p.m. (time) on
September 28, 1995, at New York, New York (place), for the
particular purpose set forth above.
The undersigned parties agree that the foregoing agreement is in
compliance with 25 U.S.C. Sections 81 and 415 and 25 C.F.R Section
162.
<PAGE>
WITNESS: MOHEGAN TRIBE OF INDIANS OF
CONNECTICUT
/s/ Judith A. Shapiro /s/ Ralph W. Sturges
_____________________ By:___________________________
Ralph Sturges
Title: Chairman
MOHEGAN TRIBAL GAMING
AUTHORITY
/s/ Judith A. Shapiro /s/ Ralph W. Sturges
_____________________ By:___________________________
Ralph Sturges
Title: Chairman,
Management Board
Approved Pursuant to 25 U.S.C.
Sections 81 and 415 and 25
C.F.R. Section 162
United States Department of Interior
Bureau of Indian Affairs:
/s/ Nancy Jemison
Date: September 29, 1995 By:___________________________
Director (Acting)
Eastern Area Office
Bureau of Indian Affairs
for the Secretary of the
Interior and the Commissioner
of Indian Affairs, acting
under delegated authority
<PAGE>
CITY OF WASHINGTON )
) ss.
DISTRICT OF COLUMBIA)
On September 29, 1995, personally appeared, before me, Carol
C. Williams a Notary Public in and for said County and State, Nancy
Jemison, personally known to me to be the person whose name is
subscribed to the above instrument, who acknowledged that she
executed the instrument as the Acting Area Director of the Eastern
Area Office of the Bureau of Indian Affairs, for the Secretary of
the Interior and the Commissioner of Indian Affairs, acting under
delegated authority.
/s/ Carol C. Williams
___________________________
Notary Public
My Commission Expires: June 14, 1998
<PAGE>
EXHIBIT A
Legal Description of the Property
A certain tract or parcel of land, together with the buildings and
all other improvements thereon, situated on the southeasterly side
of Sandy Desert Road, the southeasterly side of Connecticut Route
No. 32, the northeasterly side of Broadview Avenue and the
northwesterly side of Fort Shantok Road in the Town of Montville,
County of New London and State of Connecticut and being more
particularly shown and delineated on a certain map or plan entitled
"Harris & Clark, Inc. Land Surveyors - Civil Engineers Griswold,
Connecticut Survey Plan Prepared For The Mohegan Tribe Of Indians
(U.N.C., Inc. Property) Sandy Desert Road Montville, Connecticut
Scale 1" = 200' Date December 1994 Ident. No. 94-1801", which
premises are more particularly bounded and described as follows:
Beginning at a concrete monument recovered in the southeasterly
street line of Sandy Desert Road at a northwesterly corner of the
herein-described tract and on the dividing line between the herein-
described tract and land now or formerly of Blanche E. Jenoks et
al; thence running South 04 degree 34' 54" East for a distance of
298.94 feet to a concrete monument recovered; thence running South
04 degrees 35" 33" East for a distance of 254.69 feet to a concrete
monument recovered; thence running North 85 degrees 28' 43" West
for a distance of 52.08 feet to a concrete monument recovered, the
last three courses being bounded by said Jenoks, et al land; thence
running South 06 degrees 35" 16" East for a distance of 181.76 feet
to a concrete monument recovered; thence running North 85 degrees
19' 00" West for a distance of 239.12 feet to a concrete monument
recovered, the last two courses being bounded by land now or
formerly of Elizabeth J. and Russell E. Heebner; thence running
South 06 degrees 37' 20" East for a distance of 126.21 feet bounded
southwesterly by land now or formerly of James H. Sarayusa to a re-
bar recovered; thence running South 03 degrees 10' 57" West for a
distance of 99.70 feet, bounded northwesterly by land now or
formerly of Paul R. Springer, Jr. and Noreen Springer to a concrete
monument recovered; thence running North 86 degrees 44' 47" West
for a distance of 212.23 feet, bounded northeasterly by said
Springer land to a concrete monument recovered; thence running
South 01 degrees 15' 36" West for a distance of 99.98 feet, bounded
northwesterly by land now or formerly of Donald McKeith and Arlene
McKeith to a concrete monument recovered; thence running South 07
degrees 03' 32" West for a distance of 124.82 feet to a concrete
monument recovered; thence running South 07 degrees 34' 18" West
for a distance of 138.80 feet to a concrete monument recovered;
thence running North 78 degrees 51' 46" West for a distance of
209.41 feet to a concrete
<PAGE>
monument recovered, the last three courses being bounded by land
now or formerly of Walter J. Keane and Debbie L. Keane; thence
running South 07 degrees 31' 24" West for a distance of 69.99 feet,
bounded northwesterly by Connecticut Route No. 32 to a concrete
monument recovered; thence running South 78 degrees 52' 37" East
for a distance of 209.39 feet to a concrete monument recovered;
thence running South 78 degrees 51' 05" East for a distance of 160
71 feet to a concrete monument recovered at Connecticut Grid
Coordinates North 739507.44 East 1178517.72; thence running South
11 degrees 08' 03" West for a distance of 36.00 feet to a point;
thence running South 78 degrees 51' 57" East for a distance of
11.00 feet to a point; thence running South 11 degrees 05' 03" West
for a distance of 92.35 feet to a point to be set at the face of a
retaining wall, the last five courses being bounded by land now or
formerly of Frank G. Roderick, Jr., et al; thence running South 79
degrees 25' 36" East for a distance of 191.76 feet along a stone
wall, bounded southwesterly in part by land now or formerly of
Richard and Shirley McDonald and in part by land now or formerly of
Jimmy N. and Kathleen M. Sistare to a concrete monument recovered;
thence running South 78 degrees 35' 40" East for a distance of
200.09 feet, bounded southwesterly in part by land now or formerly
of Mark M. Deveau and in part by land now or formerly of Agnes and
Ernest J. LaPorte to a concrete monument recovered; thence running
South 78 degrees 54' 17" East for a distance of 300.86 feet,
bounded southwesterly in part by land now or formerly of Joyce
Carol Elliott, et al, in part by land now or formerly of Eleanor
Joyce Luft and in part by land now or formerly of Christopher A.
and Lisa N. Newell to a rebar recovered; thence running South 77
degrees 39' 24" East for a distance of 209 75 feet, bounded
southwesterly in part by land now or formerly of Peter G. Rousseau
and Helen H. Rousseau and in part by land now or formerly of Robert
L. Ellal and Johannah J. Ellal to a concrete monument recovered;
thence running South 78 degrees 50' 54" East for a distance of 216
56 feet, bounded southwesterly by land now or formerly of
Christopher L. and Phyllis M. McCormick to an iron pin recovered;
thence running South 88 degrees 02' 27" East for a distance of 183
74 feet, bounded southwesterly in part by said McCormick land and
in part by land now or formerly of Horace W. and Gloria M. Deshefy
to a concrete monument recovered; thence running South 01 degrees
34' 54" West for a distance of 202.82 feet to a concrete monument
recovered; thence running South 88 degrees 26' 02" East for a
distance of 150.00 feet to a point to be set, the last two courses
being bounded by said Deshefy land; thence running North 01 degrees
31' 09" East for a distance of 35.00 feet to an iron pipe
recovered; thence running South 83 degrees 26' 29" East for a
distance of 322.65 feet to a concrete monument recovered; thence
running South 08 degrees 21' 36" West for a distance of 200.83 feet
to a concrete monument recovered, the last three courses being
bounded by land now or formerly of Harry W. Collins; thence running
South 81 degrees 53' 04" East for a distance of 415.62 feet,
ii
<PAGE>
bounded southwesterly by Broadview Avenue to a concrete monument
recovered; thence running North 01 degrees 42' 10" West for a
distance of 58.70 feet to an iron pipe recovered; thence running
North 10 degrees 42' 05" West for a distance of 45.00 feet to a
point to be set; thence running North 05 degrees 19' 48" West for
a distance of 124.70 feet to a concrete monument recovered; thence
running South 81 degrees 57" 48" East for a distance of 181.26 feet
to a concrete monument recovered; thence running South 81 degrees
57' 48" East for a distance of 192.70 feet to a point to be set;
thence running South 48 degrees 42' 13" East for a distance of
158.40 feet along a fence line to a concrete monument recovered;
thence running South 47 degrees 09' 18" East for a distance of
565.19 feet to a drill hole recovered in a stone wall, the last
seven courses being bounded by land now or formerly of Catherine
Bolduc; thence running North 72 degrees 11' 49" East for a distance
of 102.09 feet along a stone wall to an angle in said stone wall;
thence running North 80 degrees 58' 11" East for a distance of 58
21 feet along a stone wall to the end of said stone wall; thence
running North 71 degrees 15' 46" East for a distance of 92.65 feet
to a stone wall corner; thence running North 71 degrees 20' 55"
East for a distance of 23 94 feet along a stone wall to an angle in
said stone wall; thence running North 74 degrees 43' 11" East for
a distance of 71.08 feet along a stone wall to a concrete monument
recovered; thence running North 76 degrees 14' 02" East for a
distance of 28.06 feet along a stone wall to an angle in said stone
wall; thence running North 68 degrees 37' 42" East for a distance
of 15.60 feet along a stone wall to an angle in said stone wall;
thence running North 73 degrees 29' 49" East for a distance of
127.85 feet along a stone wall to a drill hole recovered in said
stone wall; thence running North 72 degrees 22' 11" East for a
distance of 21.61 feet along a stone wall to an iron pipe
recovered; thence running South 16 degrees 57' 33" East for a
distance of 31.59 feet along a fence line to a fence post; thence
running South 15 degrees 05' 54" East for a distance of 84.04 feet
along a fence line to a 6-inch Oak tree with wire; thence running
South 13 degrees 10' 31" East for a distance of 54 71 feet along a
fence line to a 4-inch Birch tree with wire; thence running South
23 degrees 18' 51" East for a distance of 62.20 feet along a fence
line to 4-inch Beech tree with wire; thence running South 202 45'
04" East for a distance of 114.84 feet along a fence line to a wood
fence post; thence running South 17 degrees 30' 26" East for a
distance of 41.85 feet along a fence line to a stump with wire;
thence running South 16 degrees 42' 33" East for a distance of
148.83 feet along a fence line to a 14-inch Oak tree with wire;
thence running South 19 degrees 07' 08" East for a distance of 22
59 feet along a fence line to a 15-inch Oak tree with wire; thence
running South 12 degrees 45' 40" East for a distance of 36.94 feet
along a fence line to a 10-inch dead Oak tree with wire; thence
running South 14 degrees 30' 26" East for a distance of 11.00 feet
along a fence line to 10-inch dead Oak tree with wire; thence
iii
<PAGE>
running South 04 degrees 25' 15" East for a distance of 28.81 feet
along a fence line to a 12-inch dead Oak tree with wire; thence
running South 11 degrees 13' 19" East for a distance of 17.10 feet
along a fence line to an 8-inch dead Oak tree with wire; thence
running South 07 degrees 15' 03" East for a distance of 84.60 feet
along a fence line to an 18-inch dead Oak tree with wire; thence
running South 03 degrees 14' 32" West for a distance of 56.67 feet
along a fence line to a point in the center of a stone wall; thence
running North 78 degree 00' 54" West for a distance of 68.44 feet
along a stone wall to an angle in said stone wall; thence running
North 84 degrees 17' 33" West for a distance of 109.78 feet along
a stone wall to an angle in said stone wall; thence running North
87 degrees 48' 33" West for a distance of 53.11 feet along a stone
wall to an angle in said stone wall; thence running South 85
degrees 52' 51" West for a distance of 29.79 feet along a stone
wall to a drill hole recovered at a stone wall corner; thence
running South 09 degrees 09' 03" East for a distance of 238.99 feet
along a stone wall to a drill hole set at the end of said stone
wall; thence running South 03 degrees 03' 19" East for a distance
of 61.53 feet along a fence line to a 26-inch Oak tree with wire;
thence running South 23 degrees 09' 48" East for a distance of
47.77 feet along a fence line to a 17-inch Oak tree with wire;
thence running South 11 degrees 51' 04" West for a distance of
36.61 feet along a fence line to a 16-inch dead tree with wire;
thence running South 46 degrees 39' 16" East for a distance of
32.48 feet to a railroad spike in ledge recovered; thence running
South 07 degrees 17' 57" East for a distance of 55.19 feet along a
stone wall to an iron pipe recovered in said stone wall the last
thirty-three courses being bounded by land now or formerly of
Martin Realty, Inc; thence running South 12 degrees 31' 25" East
for a distance of 115.48 feet, bounded southwesterly by land now or
formerly of Glenn P. Martin, et al to an iron pipe recovered;
thence running North 83 degrees 21' 50" East for a distance of 242
09 feet to a drill hole recovered on ledge; thence running South 06
degrees 08' 17" East for a distance of 400.24 feet to a point in
the northwesterly street line of Fort Shantok Road, the last two
courses being bounded by land now or formerly of Mathew C. Hopkins
and Antonette M. Hopkins; thence running North 83 degrees 46' 08"
East for a distance of 429.13 feet, bounded southeasterly by Fort
Shantok Road to a point to be set in the northwesterly street line
of Fort Shantok Road at a southwesterly corner of land now or
formerly of Edward G. Bernat and Beatrice L. Bernat; thence running
North 14 degrees 53' 14" West for a distance of 65.12 feet to the
remains of a metal fence post; thence running North 11 degrees 17'
52" West for a distance of 21.20 feet to the remains of a metal
fence post; thence running North 15 degrees 18' 16" West for a
distance of 23.09 feet to the remains of a metal fence post; thence
running North 15 degrees 15' 33" West for a distance of 89.79 feet
along a stone wall to an angle in said stone wall; thence running
North 13 degrees 28' 03" West for a distance of 52.97 feet along a
iv
<PAGE>
stone wall to an angle in said stone wall; thence running North 09
degrees 03' 32" West for a distance of 11.42 feet along a stone
wall to a drill hole recovered in said stone wall; thence running
North 12 degrees 03' 02" West for a distance of 56.33 feet along a
stone wall to an iron pipe recovered; thence running North 14
degrees 23' 00" West for a distance of 117.48 feet along a stone
wall to the end of said stone wall; thence running North 15 degrees
10' 19" West for a distance of 227.98 feet to a stone pile; thence
running North 15 degrees 10' 30" West for a distance of 137.29 feet
to a stone pile, the last then courses being bounded by land now or
formerly of Edward G. Bernat and Beatrice L. Bernat; thence running
North 16 degrees 07' 30" West for a distance of 304.36 feet to a
14-inch dead tree with wire; thence running North 16 degrees 43'
31" West for a distance of 94.09 feet along a fence line to a 5-
inch Beech tree with wire; thence running North 17 degrees 46' 50"
West for a distance of 86.72 feet along a fence line to a 20-inch
Oak tree with wire; thence running North 15 degrees 59' 54" West
for a distance of 69.57 feet along a fence line to a 20-inch Oak
tree with wire; thence running North 13 degrees 09' 20" West for a
distance of 241.49 feet along a fence line to a 22-inch Oak tree
with wire; thence running North 08 degrees 51' 10" West for a
distance of 99.13 feet along a fence line to a tree with wire;
thence running North 13 degrees 11' 22" West for a distance of 44
72 feet along a fence line to a stump with wire; thence running
North 06 degrees 55' 31" West for a distance of 44.45 feet long a
fence line to an iron pipe recovered in a stone wall; thence
running North 73 degrees 35' 41" East for a distance of 71.66 feet
along a stone wall to the end of said stone wall; thence running
North 73 degrees 57' 46" East for a distance of 48.45 feet to a
concrete monument recovered; thence running North 75 degrees 05'
39" East for a distance of 190.94 feet to a concrete monument
recovered; thence running North 73 degrees 18' 39" East for a
distance of 166.10 feet to an angle point; thence running North 75
degrees 48' 39" East for a distance of 241.15 feet to a point to be
set at Connecticut Grid Coordinates North 738813.29, East
1183036.66, the last thirteen courses being bounded by land now or
formerly of Southeastern Connecticut Regional Resources Recovery
Authority; thence running North 44 degrees 37' 01" West for a
distance of 437.22 feet to a point to be set; thence running North
46 degrees 20' 29" West for a distance of 133.75 feet to a point to
be set; thence running North 43 degrees 39' 31" East for a distance
of 209.89 feet to a point to be set, the last three courses being
bounded by other land now or formerly of UNC, Inc; thence running
along the arc of a curve to the left with a radius of 3,100.00
feet, a central angle of 04 degrees 34' 39" for a distance of
247.66 feet to a point; thence running North 51 degrees 56' 11"
West for a distance of 150.00 feet to a point; thence running along
the arc of a curve to the right with a radius of 1,132.75 feet, a
central angle of 37 degrees 19' 02" for a distance of 737.77 feet
to a point; thence running along the arc of a curve to the right
v
<PAGE>
with a radius of 883.00 feet, a central angle of 38 degrees 49' 37"
for a distance of 598.37 feet to a concrete monument recovered, the
last four courses being bounded by land now or formerly of Central
Vermont Railway, Inc; thence running North 45 degrees 14' 00" West
for a distance of 35 feet, more or less, bounded northeasterly by
land now or formerly of Central Vermont Railway, Inc. to the tidal
high water mark of Trading Cove; thence running in a general
westerly direction along the tidal high water mark of Trading Cove
for a distance of 3,743 feet, more or less, to a point which is
located North 06 degrees 33' 05" East 55 feet, more or less, from
a rebar recovered at Connecticut Grid Coordinates North 741768.53,
East 1179150.50; thence running South 06 degrees 33' 05" West for
a distance of 55 feet, more or less, to a rebar recovered; thence
running South 06 degrees 33' 05" West for a distance of 547.50 feet
to an iron pipe recovered, the last two courses being bounded
northwesterly land now or formerly of Stamatios F. Lahaniatis;
thence running South 06 degrees 34' 37" West for a distance of
275.26 feet, bounded northwesterly by land now or formerly of John
Lahaniatis and Joan Lahaniatis to an iron pipe recovered; thence
running South 07 degree 16' 42" West for a distance of 52.35 feet,
bounded northwesterly by the southeasterly terminus of Sandy Desert
Road to a concrete monument recovered; thence running South 88
degrees 08' 28" West for a distance of 246.94 feet, bounded
northwesterly by Sandy Desert Road to the concrete monument
recovered at the point and place of beginning.
Together with all rights, easements, hereditaments and
appurtenances thereto appertaining and all right, title and
interest, if any, in and to strips and gores adjoining said
premises and in and to the land lying in the bed of any street or
streets adjoining said premises.
Reference is hereby made to a certain Quit-Claim Deed from United
Nuclear Corporation to UNC Resources, Inc., dated July 1, 1983 and
recorded on August 10, 1984 at Volume 160, page 552 of Montville
Land Records Reference is further made to a Certificate of Change
of Name from UNC Resources, Inc. to UNC Incorporated dated June 16,
1986 and recorded on September 10, 1986 at Volume 177, Page 438 of
Montville Land Records.
Said premises are conveyed subject to the following encumbrances:
1. Pole line easement in favor of the Hartford Electric Light
Company dated October 7, 1958, recorded November 6, 1958 in Volume
66, Page 40 of the Montville Land Records (said easement
encumbering Tract Nos. 8 and 3 as shown on plan entitled "Plan Made
for Olin Mathieson Chemical Corporation Showing Property in Town of
Montville, Conn.)
2. Certificate of Taking in an action instituted by Southeastern
vi
<PAGE>
Connecticut Regional Resources Recovery Authority against UNC
Incorporated dated March 4, 1993, recorded March 10, 1993 in Volume
251, Page 713 of the Montville Land Records pursuant to which
Southeastern Connecticut Regional Resources Recovery Authority
exercised its right of eminent domain to condemn a certain access
easement over and across a portion of those premises delineated on
a certain map for plan entitled, "Plan made for United Nuclear
Corporation Showing Property on Fort Shantok Road Montville,
Connecticut Scale 1"=50 Feet Chandler, Palmer & King Norwich, Conn.
November 1979"
3. Pole line easement in favor of the Hartford Electric Light
Company dated October 27, 1958, recorded November 6, 1958 in Volume
66, Page 38 of the Montville Land Records, which right-of-way
encumbers Tract Nos. 10, 1, 2 and 9 and that area between Tract
Nos. 10 and 11, all as shown on a plan entitled "Plan Made For Olin
Mathieson Chemical Corporation Showing Property in Town of
Montville, conn. Scale 1"=200 Ft. Chandler & Palmer, Engr's.
Norwich, Conn. July 31, 1957 Additions Sept. 1957 Sub-Division Of
Tract 6 Oct 1958 Revision Of"""November 1958 Revised March 1,
1961."
4. Survey by Harris & Clark, Inc. dated December, 1995 shows the
following:
Lawn encroachment along the northerly line of land now or
formerly of Horace W. and Gloria M. Deshefy, which lawn
encroachment is approximately 40 feet in width.
5. Riparian rights of other in and to the Trading Cove.
6. Certificate of Taking by Southeastern Connecticut Regional
Resources Recovery Authority in an action entitled "Southeastern
Connecticut Regional Resources Recovery Authority vs. UNC
Incorporation, Town of Montville Water Pollution Control Authority
and The Hartford Electric Company" dated February 16, 1993,
recorded in Volume 251, Page 167 of the Montville Land Records
(thereby exercising its right of eminent domain to condemn certain
groundwater easements in conjunction with leachate discharge from
the condemnor's ash residue disposal facility located on adjacent
real property to the south).
7. Rights to maintain a 30-inch (30") reinforced concrete pipe,
endwall and paved ditch and together with permanent sloping rights
contained in a Certificate of Condemnation from Albert Elbaum and
Evelyn Elbaum to the State of Connecticut dated July 1, 1965,
recorded July 3, 1965 in Volume 87, Page 205 of the Montville Land
Records, which rights were conveyed by the State of Connecticut to
the Town of Montville by deed dated September 9, 1968, recorded in
Volume 102, Page 171 of said land records.
vii
<PAGE>
EXHIBIT B TO LAND LEASE
[LOCATION MAP OF LEASED PROPERTY]
<PAGE>
EXHIBIT C TO LAND LEASE
AMENDMENT OF LAND LEASE
THIS AMENDMENT OF LAND LEASE made and entered into as of this 29
day of September, 1995, by and between the Mohegan Tribe of Indians
of Connecticut (the "Tribe"), as Lessor, and the Mohegan Tribal
Gaming Authority (the "Authority), as Lessee.
W I T N E S S E T H:
WHEREAS, on or about _______________, 1995, the Tribe and the
Authority entered into a Land Lease (the "Lease"), whereby the
Tribe agreed to lease to the Authority certain property located in
the Town of Montville, County of New London and State of
Connecticut, as more fully described in the Lease (the "Premises")
for the purpose of construction, equipping and the operation of the
Project, as defined in the Lease; and
WHEREAS, the Tribe and the Authority desire to amend the Lease
to confirm the commencement date thereof.
NOW, THEREFORE, for and in consideration of the sum of One
Dollar ($1.00) and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Tribe
and the Authority hereby confirm that the commencement date of the
Lease is ____________________, 1995.
Except as modified hereby, the Lease shall remain in full
force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment of Land Lease on the day and year first above written.
Witnessed: MOHEGAN TRIBE OF INDIANS OF
CONNECTICUT
/s/ Judith A. Shapiro
_____________________ By: ________________________
_____________________ Its
Duly Authorized
MOHEGAN TRIBAL GAMING AUTHORITY
/s/ Judith A. Shapiro
_____________________ By: __________________________
_____________________ Its
Duly Authorized
<PAGE>
STATE OF CONNECTICUT )
) ss: __________________, 1995
COUNTY OF )
On ___________________, l995, ____________________________,
personally appeared before me, signer and sealer of the foregoing
instrument, who acknowledged that he or she executed the instrument
as the ___________________________________ of the Mohegan Tribe of
Indians of Connecticut, a federally recognized Indian tribe, as
his/her free act and deed and the free act and deed of the Tribe.
__________________________________
Commissioner of Superior Court
Notary Public
My Commission Expires:_____________
STATE OF CONNECTICUT )
) ss: _____________________, 1995
COUNTY OF )
On ___________________, 1995, _____________________________,
personally appeared before me, signer and sealer of the foregoing
instrument, who acknowledged that he or she executed the instrument
as the ____________________________ of the Mohegan tribe of Indians
of Connecticut, a federally recognized Indian tribe, as his/her
free act and deed And the free act and deed of the Tribe.
____________________________________
Commissioner of Superior Court
Notary Public
My Commission Expires
<PAGE>
EXHIBIT D TO LAND LEASE
TRIBAL LICENSING, PERMIT AND GOVERNMENTAL APPROVAL REQUIREMENTS
1. Building Permit(s)
2. Health and Safety Inspection(s)
3 . Cafe Permit
4. Gaming License
5. Certificate(s) of Occupancy
<PAGE>
EXHIBIT E TO LAND LEASE
TRIBAL TAXES, ASSESSMENTS, FEES
-- NONE --
<PAGE>
AMENDMENT OF LAND LEASE
THIS AMENDMENT OF LAND LEASE made and entered into as of this
29th day of September, 1995, by and between the Mohegan Tribe of
Indians of Connecticut (the "Tribe"), as Lessor, and the Mohegan
Tribal Gaming Authority (the "Authority), as Lessee.
W I T N E S S E T H:
WHEREAS, on or about September 29, 1995, the Tribe and the
Authority entered into a Land Lease (the "Lease"), whereby the
Tribe agreed to lease to the Authority certain property located in
the Town of Montville, County of New London and State of
Connecticut, as more fully described in the Lease (the "Premises")
for the purpose of construction, equipping and the operation of the
Project, as defined in the Lease; and
WHEREAS, the Tribe and the Authority desire to amend the Lease
to confirm the commencement date thereof.
NOW, THEREFORE, for and in consideration of the sum of One
Dollar ($1.00) and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Tribe
and the Authority hereby confirm that the commencement date of the
Lease is September 29, 1995.
Except as modified hereby, the Lease shall remain in full
force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment of Land Lease on the day and year first above written.
Witnessed: MOHEGAN TRIBE OF INDIANS OF
CONNECTICUT
/s/ Judith A. Shapiro /s/ Ralph W. Sturges
_________________________ By: ________________________
Ralph W. Sturges
/s/ Michael L. Roy Its Chairman and Lifetime
_________________________ Chief
Michael L. Roy Duly Authorized
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
/s/ Judith A. Shapiro /s/ Ralph W. Sturges
_________________________ By: __________________________
Ralph W. Sturges
/s/ Michael L. Roy Its Chairman of the
_________________________ Management Board
Michael L. Roy Duly Authorized
<PAGE>
City of Washington )
) ss: September 29, 1995
District of Columbia )
On September 29, 1995, Ralph W. Sturges, personally
appeared before me, signer and sealer of the foregoing instrument,
who acknowledged that he executed the instrument as the Lifetime
Chief and Chairman of the Mohegan Tribe of Indians of Connecticut,
a federally recognized Indian tribe, as his free act and deed and
the free act and deed of the Tribe.
/s/ Carol C. Williams
___________________________________
Notary Public
My Commission Expires: June 14, 1998
City of Washington )
) ss: September __, 1995
District of Columbia )
On September 29, 1995, Ralph W. Sturges, personally
appeared before me, signer and sealer of the foregoing instrument,
who acknowledged that he executed the instrument as the Chairman,
Management Board of the Mohegan Tribal Gaming Authority, as his
free act and deed and the free act and deed of the Tribe.
/s/ Carol C. Williams
___________________________________
Notary Public
My Commission Expires: June 14, 1998
<PAGE>
OPEN-END CONSTRUCTION - PERMANENT LEASEHOLD
MORTGAGE DEED, ASSIGNMENT OF LEASES AND RENTS AND
SECURITY AGREEMENT
-C-COPYRIGHT 1995 BY THE MOHEGAN TRIBAL GAMING AUTHORITY, TRADING
COVE ASSOCIATES AND SUN INTERNATIONAL HOTELS LIMITED. REPRODUCTION
OF THE MATERIAL HEREIN OR SUBSTANTIAL QUOTATION OF ITS PROVISIONS
WITHOUT PERMISSION VIOLATES THE COPYRIGHT LAWS OF THE UNITED STATES
AND WILL BE SUBJECT TO LEGAL PROSECUTION.
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS.
<PAGE>
Execution Copy
When recorded, return to:
First Fidelity Bank
10 State House Square
Hartford, Connecticut 06103-3698
Attn: W. Jeffrey Kramer
Vice President, Corporate Trust
OPEN-END CONSTRUCTION - PERMANENT LEASEHOLD
MORTGAGE DEED, ASSIGNMENT OF LEASES AND RENTS AND
SECURITY AGREEMENT
TO ALL PEOPLE TO WHOM THESE PRESENTS SHALL COME, GREETING:
THIS Mortgage is made as of the 29th day of September, 1995,
pursuant to 25 C.F.R. S162.12(c), between the MOHEGAN TRIBAL
GAMING AUTHORITY, an instrumentality of The Mohegan Tribe of
Indians of Connecticut (hereinafter referred to as "Mortgagor")
having a notice address of 27 Church Lane, Uncasville, CT 06382,
for the consideration of One ($1.00) Dollar and other good and
valuable consideration received to Mortgagor's satisfaction from
FIRST FIDELITY BANK, as Trustee for the benefit of the Holders of
the Notes as defined in the Indenture, as hereinafter defined, a
Connecticut banking corporation, having its principal office at 10
State House Square, Hartford, Connecticut 06103-3698 (the
"Mortgagee").
THE CONDITION OF THIS MORTGAGE IS SUCH THAT:
WHEREAS, the United States of America in trust for The Mohegan
Tribe of Indians of Connecticut (the "Tribe") is the owner of the
land in the Town of Montville, County of New London and State of
Connecticut, more fully described on Exhibit A attached hereto (the
"Premises") and the buildings, structures, improvements and
fixtures (excluding Mortgagor's Trade Fixtures) now located or
hereafter constructed on the Premises (collectively, the
"Improvements"); and
WHEREAS, the Tribe, as lessor, and Mortgagor, as lessee, have
entered into a Land Lease dated September 29, 1995 (the "Land
Lease"), with respect to the Premises and Improvements, which land
Lease was approved by the Secretary of the Interior or his
authorized representative on September 29, 1995; and
WHEREAS, the Premises and Improvements are subject to certain
Permitted Encumbrances enumerated on said Exhibit A or otherwise as
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<PAGE>
described in Section 4.13 of the hereinafter described Indenture
(hereinafter referred to as "Permitted Encumbrances"); and
WHEREAS, Mortgagor now owns or may hereafter acquire certain
Personal Property (as hereinafter defined); and
WHEREAS, Mortgagor and Mortgagee, as trustee, are parties to
an Indenture of Trust dated September 29, 1995 (hereinafter,
together with any extensions, renewals, modifications,
substitutions and replacements thereof and therefor, referred to as
the "Indenture"), a copy of which is on file in the office of
Mortgagee at 10 State House Square, Hartford, Connecticut
06103-3698, pursuant to which Mortgagor has issued its Senior
Secured Notes due 2002 in the aggregate principal amount of
$175,000,000 (hereinafter referred to as the "Notes"), which Notes
are in the form(s) attached hereto as Exhibit B, for the purpose of
providing financing for the development of the Premises and the
construction of the Improvements; and
WHEREAS, the holders of the Notes have this day advanced to
the Mortgagor the sum of $175,000,000.00 for the construction or
repair of the Improvements; and
WHEREAS, the holder of the Notes have agreed to make the loan
evidenced by the Notes to be paid over to the Mortgagor in
installments as the work progresses, the time and amount of each
advancement to be at the sole discretion and upon the estimate of
the Mortgagee, so that when all of the work shall have been
completed to the satisfaction of the Mortgagee, the Mortgagee shall
then pay over to the Mortgagor any balance to complete the full
loan evidenced by the Notes; and
WHEREAS, the parties have entered into Escrow and Disbursement
Agreement of even date herewith (together with any amendments
thereto, the "Disbursement Agreement"), a copy of which is on file
in the office of Mortgagee at 10 State House Square, Hartford,
Connecticut 06103-3698; and
WHEREAS, the principal amount of the Notes, together with
interest thereon at the rates specified in the Notes, is payable in
accordance with the terms of the Indenture, with the entire unpaid
principal balance and any unpaid, accrued interest thereon maturing
and being due and payable in full not later than November 15, 2002
(the "Maturity Date"); and
WHEREAS, this Mortgage is entered into in reliance on Article
XIII, Section 3 of the Tribe's Constitution;
2
<PAGE>
NOW, THEREFORE, to secure the payment of principal and
interest and all other premiums, post-petition interest,
indemnifications, reimbursements, damages and other monetary
obligations under the Notes, the Indenture and the Other Security
Documents as such terms are hereinafter defined, all of which terms
are hereby incorporated herein and made a part hereof by reference
as fully set forth herein, the payment by the Mortgagor to the
Mortgagee as herein provided of all sums advanced by the Mortgagee
pursuant to any term hereof, with interest thereon as provided
herein, and the payment, performance, and observance of all of the
covenants and agreements herein contained and contained in the
Indenture (collectively, the "Obligations"), Mortgagor hereby
gives, grants, bargains, sells, assigns, transfers and mortgages
unto Mortgagee, its successors and assigns, and grants the
Mortgagee and its successors and assigns a security interest in,
all right, title and interest of the Mortgagor in and to the
following:
(A) The Land Lease;
(B) Mortgagor's leasehold interest in the Premises, the
Improvements and the Appurtenant Rights (as hereinafter
defined) pursuant to the Land Lease;
(C) All other right, title, interest and claims of Mortgagor
now existing or hereafter arising under the Land Lease; and
(D) The Personal Property;
(E) TOGETHER WITH: (i) all estate, right, title and interest
of Mortgagor of, in and to all judgments and decrees, insurance
proceeds, awards of damages and settlements hereafter made
resulting from condemnation proceedings or the taking of any of
Mortgagor's interest in the property described in Granting Clauses
(A), (B), (C) and (D) hereof or any part thereof under any
applicable power of eminent domain, or for any damage (whether
caused by such taking or otherwise) to Mortgagor's interest in the
property described in Granting Clauses (A), (B), (C) and (D) hereof
or any part thereof; (ii) all proceeds of any sales or other
dispositions of Mortgagor's interest in the property or rights
described in Granting Clauses (A), (B), (C) and (D) hereof or any
part thereof whether voluntary or involuntary; provided, however,
that the foregoing shall not be deemed to permit such sales,
transfers, or other dispositions except as specifically permitted
herein and in the Indenture; and (iii) whether arising from any
voluntary or involuntary disposition of the property described in
Granting Clauses (A), (B), (C) and (D), all Proceeds (as
hereinafter defined), products, replacements, additions,
3
<PAGE>
substitutions, renewals and accessions, remainders, reversions and
after-acquired interest in, of and to such property;
(F) TOGETHER WITH all of Mortgagor's right, title and
interest in any Space Leases or any part thereof that Mortgagor has
entered into, taken by assignment, taken subject to, or assumed, or
has otherwise become bound by, now or in the future, together with
all of the following (including all "Cash Collateral" within the
meaning of the Bankruptcy Code) arising from the Space Leases: (a)
all Rents (as hereinafter defined) and all rights of Mortgagor to
receive and collect the same, (b) all guaranties, letters of
credit, security deposits, collateral, cash deposits, and other
credit enhancement documents, arrangements and other measures with
respect to the Space Leases, (c) the right to enforce against any
tenants under the Space Leases and otherwise any and all remedies
under the Space Leases, including Mortgagor's right to evict from
possession any tenant thereunder or to retain, apply, use, draw
upon, pursue, enforce or realize upon any guaranty of any Space
Lease, to terminate, modify, or amend the Space Leases; to obtain
possession of, use, or occupy, any of the real or personal property
subject to the Space Leases, and any claim that Mortgagor may have
by reason of a termination, rejection, or disaffirmance of such
Space Lease pursuant to any Bankruptcy law;
(G) TOGETHER WITH all of Mortgagor's right, title and
interest in and to any and all maps, plans, specifications,
surveys, studies, tests, reports, data and drawings relating to the
development of the Premises and the construction of the
Improvements, including without limitation, all marketing plans,
feasibility studies, soils tests, design contracts and all
contracts and agreements of Mortgagor relating thereto including,
without limitation, architectural, structural, mechanical and
engineering plans and specifications, studies, data and drawings
prepared for or relating to the development of the Premises or the
construction, renovation or restoration of any of the Improvements;
(H) TOGETHER WITH all of the Mortgagor's right, title, and
interest in and to any and all licenses, permits, variances,
special permits, franchises, certificates, rulings, approvals,
waivers, orders, right and agreements (including options, option
rights and contract rights) now or hereafter obtained by Mortgagor
from any governmental authority having or claiming jurisdiction
over the Premises, the Improvements or any other element of the
Premises or providing access thereto, or the operation of any
business on, at, or from the Premises, excluding, however, any
Gaming Permits;
4
<PAGE>
(I) TOGETHER WITH any and all monies and other property
arising from or used in connection with Mortgagor's operation of
the Premises and the Improvements, including, without limitation,
the original proceeds of the Notes and any additional advances
under this Mortgage; and all of the Mortgagor's right, title and
interest in and to all extensions, improvements, betterments,
renewals, substitutes for and replacements of, and all additions,
accessions, and appurtenances to, any of the foregoing that
Mortgagor may subsequently acquire an interest in or obtain by any
means, or construct, assemble or otherwise place on any of the
Subject Property, and all conversions of any of the foregoing; it
being the intention of Mortgagor that all property in which
Mortgagor hereafter acquires an interest and which is required by
the Indenture or any Other Security Document or this Mortgage to be
subjected to the lien of this Mortgage or intended so to be shall
forthwith upon the acquisition of such interest by Mortgagor be
subject to the lien of this Mortgage as if such property were now
owned by Mortgagor and were specifically described in this Mortgage
and granted hereby or pursuant hereto, and the Mortgagee is hereby
authorized to receive any and all such property as and for
additional security for the obligations secured or intended to be
secured hereby;
(J) TOGETHER WITH any and all Accounts Receivable, royalties,
earnings, income, proceeds, products, Rents, revenues, reversions,
remainders, issues, profits, avails, production payments, and other
benefits directly or indirectly derived or otherwise arising from
any of the foregoing, all of which are hereby assigned to
Mortgagee, who, except as otherwise expressly provided in this
Mortgage and the Indenture, is authorized to collect and receive
the same, to give receipts and acquittances therefor and to apply
the same to the Obligations secured hereunder, whether or not then
due and payable; and
(K) TOGETHER WITH Mortgagor's rights further to assign,
encumber or otherwise transfer or dispose of the Mortgagor's
interest in the property described in Granting Clauses (A) through
(J) inclusive, above, for debt or otherwise, except as otherwise
set forth in this Mortgage, the Indenture or the Other Security
Documents;
(L) EXPRESSLY EXCLUDING, HOWEVER, (i) the fee title and
reversionary interest of the United States and the Tribe in the
Premises, the Improvements and the Appurtenant Rights, and (ii) any
Personal Property to the extent that (a) Mortgagor is permitted to
enter into a financing agreement for such Personal Property under
the Indenture and (b) such financing agreement prohibits Mortgagee
from maintaining a security interest in the Personal Property
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covered thereby, but only while the debt evidenced by such
financing agreement remains unsatisfied.
For purposes of this Mortgage, the following terms shall have
the meanings set forth below:
(1) "Accounts Receivable" means any right to payment for
goods sold or leased or for services rendered which is not
evidenced by an instrument or chattel paper, whether or not it has
been earned by performance.
(2) "Appurtenant Rights" means all tenements, hereditaments,
rights, remainders, reversions, privileges, benefits, easements (in
gross or appurtenant), rights-of-way, gores or strips of land,
streets, ways, alleys, passages, sewer rights, and all
appurtenances whatsoever, and all claims or demands at law or in
equity, in any way belonging, benefitting, relating or appertaining
to the Premises, the Improvements, or any part thereof, whether now
existing or hereafter arising.
(3) "Personal Property" means all right, title and interest
of Mortgagor, if any, in and to the following: all goods,
equipment, inventory, supplies, building and construction materials
(prior to incorporation into the Improvements) and other personal
property of every nature whatsoever constituting a part or portion
and/or used in the operation of the hotel, casino, restaurants,
stores, parking facilities, special events arena, theme park, and
all other commercial operations on the Premises, including but not
limited to communication systems, visual and electronic
surveillance systems and transportation systems, and including all
property and materials stored therein and all tools, utensils, food
and beverage, liquor, uniforms, linens, housekeeping and
maintenance supplies, vehicles, fuel, advertising and promotional
materials, blueprints, surveys, plans and other documents relating
to the Premises or Improvements, and all furnishings, Trade
Fixtures and equipment, including, but not limited to, all gaming
equipment and devices which are to be installed and used in
connection with the operation of the Project, including without
limitation those items of furnishings, Trade Fixtures and equipment
which are to be purchased in accordance with the construction
budget, and those items of furniture, Trade Fixtures and equipment
which are to be purchased or leased by Mortgagor, machinery and any
other items of personal property in which Mortgagor now or
hereafter owns or acquires an interest or right and which are used
or useful in the construction, operation, use and occupancy of the
Premises or Improvements; and all gaming and financial equipment,
computer equipment, calculators, adding machines, video game and
slot machines, and any other electronic equipment of every nature
used or located on any part of the Premises or Improvements, and
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the Intangible Collateral, in each case whether now owned or
hereafter acquired by Mortgagor.
(4) "Gaming Permits" means any license, franchise, permit or
other authorization on the date of the Indenture or thereafter
required to own, lease, operate or otherwise conduct casino gaming
at the Premises, which cannot be mortgaged, pledged or assigned as
security for the Obligations. (This definition is included herein
to confirm that no such Gaming Permits shall be included in the
lien of this Mortgage.)
(5) "Intangible Collateral" means all right, title and
interest of Mortgagor, if any, in and to the following: (a) the
rights to use all names, logos and designs, and all derivations
thereof now or hereafter used by Mortgagor in connection with the
Premises or Improvements, together with the goodwill associated
therewith, EXPRESSLY EXCLUDING, however, the names "Mohegan",
"Mohegan Tribe" or any other name, logo or design used by the Tribe
to designate itself, or its tribal heritage, customs or governance,
(b) any and all concession agreements, supply or service contracts,
licenses, permits (excluding, however, Gaming Permits),
governmental approvals (to the extent such licenses, permits and
approvals may be pledged under applicable law), signs, goodwill,
supplier lists, checking accounts, safe deposit boxes (excluding
the contents of such deposit boxes owned by persons other than
Mortgagor), cash, instruments, chattel papers, documents, unearned
premiums, deposits, refunds, including but not limited to income
tax refunds, prepaid expenses, rebates, tax and insurance escrow
and impound accounts, if any, actions and rights in action, and all
other claims, including without limitation condemnation awards and
insurance proceeds, and all other contract rights and general
intangibles (excluding, however, all books, records, and customer
lists relating to any gaming operations being conducted at the
Premises which cannot be mortgaged, pledged or assigned as security
for the Obligations) resulting from or used in connection with the
operation of the Subject Property and in which Mortgagor now or
hereafter has rights; and (d) all of Mortgagor's documents,
instruments, contract rights, and general intangibles including,
without limitation all permits (excluding, however, Gaming
Permits), licenses, franchises and agreements required for the use,
occupancy or operation of any Improvements (to the extent such
licenses, permits and approvals are not prohibited from being
pledged under applicable law); and (e) general intangibles,
vacation license resort agreements or other time share license or
right to use agreements, including without limitation all rents,
issues, profits, income and maintenance fees resulting therefrom,
whether any of the foregoing is now owned or hereafter acquired.
(6) "Proceeds" means whatever is received upon the sale,
exchange, collection or other disposition of collateral or
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proceeds, and, in any event, shall include but not be limited to
(i) any and all proceeds of any insurance (including without
limitation property casualty and title insurance), indemnity,
warranty or guaranty payable from time to time with respect to any
of the Subject Property; (ii) any and all proceeds in the form of
accounts, security deposits, tax escrows (if any), down payments
(to the extent the same may be pledged under applicable law),
collections, contract rights, documents, instruments, chattel
paper, liens and security instruments, guaranties or general
intangibles relating in whole or in part to the Premises and all
rights and remedies of whatever kind or nature which Mortgagor may
hold or acquire for the purpose of securing or enforcing any
obligation due Mortgagor thereunder; (iii) any and all payments in
any form whatsoever made or due and payable from time to time in
connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of the Mortgagor's
interest in the Subject Property by any governmental authority; and
(iv) any and all other amounts from time to time paid or payable in
connection with any of the Subject Property; provided, however,
that the Mortgagor is not authorized to dispose of any of the
Subject Property unless such disposition is otherwise permitted by
the Indenture or this Mortgage.
(7) "Rents" means all rents, income, receipts, issues,
profits, revenues and maintenance fees, room, food and beverage
revenues, license and concession fees, income, proceeds and other
benefits to which Mortgagor may now or hereafter be entitled from
the Premises, or Space Leases or any property encumbered hereby or
any business or other activity conducted by Mortgagor at the
Premises.
(8) "Space Lease" means any and all leases, subleases,
lettings, licenses, concessions, operating agreements, management
agreements, and all other agreements affecting the Premises and/or
Improvement that Mortgagor has entered into, taken by assignment,
taken subject to, or assumed, or has otherwise become bound by now
or in the future, that give any person the right to conduct its
business on, or otherwise use, operate or occupy, all or any
portion of the Premises and/or Improvement, together with all
amendments, extensions, and renewals of the foregoing entered into
in compliance with this Mortgage, together with all rental,
occupancy, service, maintenance or any other similar agreements
pertaining to use or occupation of, or the rendering of services at
the Premises and/or Improvement or any part hereof.
(9) "Trade Fixtures" means articles, which are easily
removable, and which are placed by and at the sole expense of the
Mortgagor in or attached to the Improvements to prosecute the trade
or business of the Mortgagor for which it occupies the Improvements
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or for use in connection with such business or to promote
convenience and efficiency in conducting such business.
(10) "UCC" means the Connecticut Uniform Commercial Code, now
in force and as hereafter amended, as the same has been
incorporated into and made part of the law of the Tribe as of the
date of this Mortgage.
All of the foregoing items and property shall be hereinafter
collectively referred to as the "Subject Property".
TO HAVE AND TO HOLD THE Subject Property, together with all
rights, privileges, hereditaments and appurtenances thereunto now
or hereafter belonging, or in any way appertaining, and the
proceeds and products of all Improvements and Property, unto
Mortgagee, its successors and assigns, to their use and behoof
forever.
NOTHING CONTAINED IN THIS MORTGAGE SHALL BE CONSTRUED TO AUTHORIZE
THE MORTGAGEE TO CONDUCT ANY GAMING OPERATIONS ON THE PREMISES.
FURTHER, NOTHING CONTAINED IN THIS MORTGAGE SHALL BE CONSTRUED TO
GRANT TO MORTGAGEE ANY INTEREST IN ANY MANAGER'S INTEREST IN ANY
MANAGEMENT AGREEMENT FOR THE OPERATION OF ALL OR ANY PART OF THE
PREMISES OR THE IMPROVEMENTS, OR TO CONDUCT GAMING ON THE PREMISES.
Mortgagor and Mortgagee further agree as follows:
ARTICLE I
GENERAL COVENANTS AND WARRANTIES
SECTION 1.1. PERFORMANCE OF MORTGAGOR'S OBLIGATIONS.
Mortgagor shall duly, punctually and fully pay, do and perform all
Obligations and all other obligations and things on its part to be
paid, done or performed under the Indenture, under this Mortgage
and under any other instrument which refers to or secures the
Indenture. Time is of the essence hereof.
SECTION 1.2. REPRESENTATIONS AND WARRANTIES BY MORTGAGOR.
Mortgagor represents and warrants to Mortgagee, as follows:
(a) Mortgagor is the lawful owner of a leasehold
interest in the Premises and Improvements pursuant to the Land
Lease, and is the owner of the Personal Property; Mortgagor has
good right and lawful authority to grant, bargain, sell, transfer
and assign the Subject Property as provided herein; and the Subject
Property is free and clear of all mortgages, liens, pledges,
security interests, charges and encumbrances, excepting only
Permitted Encumbrances. Mortgagor warrants and will defend the
Mortgagor's leasehold interest and/or title to, as applicable, the
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Subject Property against all claims and demands whatsoever, except
the Permitted Encumbrances.
(b) There is no provision in any indenture, contract or
agreement, to which Mortgagor is a party or by which it is bound,
or any law, statute, ordinance, governmental rule, regulation or
restriction, or any order of any court or administrative agency, to
which Mortgagor is subject or by which Mortgagor is bound, which
prohibits the execution and delivery by Mortgagor of this Mortgage,
the Indenture or any other instruments which refer to or secure the
Indenture or evidence the indebtedness secured hereby, including
without limitation the Disbursement Agreement (hereinafter
collectively referred to as "Other Security Documents" and
individually referred to as an "Other Security Document"), or the
performance or observance by Mortgagor of any of the terms,
covenants or conditions of this Mortgage, the Indenture or any
Other Security Document.
(c) Execution and delivery of this Mortgage, the
Indenture and the Other Security Documents, by and on behalf of
Mortgagor, have been duly and validly authorized, and this
Mortgage, the Indenture and Other Security Documents have been duly
and validly executed and delivered, by and on behalf of Mortgagor,
and are valid, binding and enforceable obligations of Mortgagor in
accordance with their terms.
(d) All applicable building, zoning, occupational safety
and health, energy and environmental laws, ordinances and
regulations affecting the Subject Property permit the use and
occupancy thereof for class II and class III Indian gaming and
related purposes and have been complied with, and Mortgagor has
obtained the necessary consents, permits and licenses to operate
the Improvements for said purposes.
(e) Mortgagee may at all times peaceably and quietly
enter upon, hold, occupy and enjoy the entire Subject Property in
accordance with the terms hereof; (b) neither Mortgagor nor any
affiliate of Mortgagor is insolvent and no bankruptcy or insolvency
proceedings are pending or contemplated by or, to the best of
Mortgagor's knowledge, against Mortgagor or any affiliate of
Mortgagor; (c) all costs arising from construction of any
Improvements, the performance of any labor and the purchase of all
Personal Property and Improvements have been or shall be paid when
due; (d) Mortgagor shall at all times conduct and operate the
Subject Property in a manner so as not to lose the right to conduct
gaming activities at the Premises; (e) no material part of the
Subject Property has been damaged, destroyed, condemned or
abandoned; and (f) each of the representations and warranties
contained in the Notes, the Indenture, this Mortgage and the Other
Security Documents is true and correct in all material respects.
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SECTION 1.3. [Intentionally Omitted]
SECTION 1.4. [Intentionally Omitted]
SECTION 1.5. FURTHER ASSURANCES; SECURITY AGREEMENT.
Mortgagor will procure, do, execute, acknowledge and deliver each
and every further act, deed, conveyance, transfer, document and
assurance reasonably necessary or proper for the carrying out more
effectively of the purpose of this Mortgage and, without limiting
the foregoing, for granting, bargaining, selling, transferring and
assigning unto Mortgagee all of the right, title and interest which
the Mortgagor has by virtue of its tenant's interest under the Land
Lease in and/or to the Subject Property, or property intended so to
be, whether now owned or hereafter acquired by Mortgagor
(hereinafter, "Mortgagor's Interest in the Subject Property"),
including without limitations the preparation, execution and filing
of any documents, such as financing statements and continuation
statement, deemed advisable by Mortgagee for perfecting and
maintaining its lien on the Subject Property. This Mortgage shall
further constitute and be deemed to be a Security Agreement under
the UCC and Mortgagor hereby grants to Mortgagee a present and
continuing security interest in any property, Trade Fixtures,
equipment, inventory, leases (subject to the absolute assignment
thereof hereinafter described), rents, issues, income, profits,
Personal Property, accounts, chattel paper, documents, instruments,
money and deposit accounts, contract rights, claims, trade names
and general intangibles included in, arising from or otherwise
related to the Mortgagor's Interest in the Subject Property or any
portion thereof, and, subject to the provisions of this Mortgage,
in Mortgagor's interest in insurance policies and unearned premiums
prepaid thereon, insurance proceeds, and awards, payments or
consideration for the taking of Mortgagor's Interest in the Subject
Property, or any portion thereof, by condemnation or exercise of
the power of eminent domain, or from any sale in lieu or in
anticipation thereof, assigned by Mortgagor to Mortgagee hereunder,
to the extent that a security interest may be granted therein under
the terms of the UCC.
SECTION 1.6. CARE AND MAINTENANCE OF SUBJECT PROPERTY.
Mortgagor shall not commit or permit waste or deterioration upon or
of the Subject Property and shall cause the Subject Property and
every part thereof, including but not limited to parking areas,
Improvements and all ingress and egress easements, if any, to be
continually maintained, preserved and kept in safe and good repair,
working order and condition, and will comply with all present and
future laws, statutes, ordinances, rules and regulations of any
governmental authority having or claiming jurisdiction with
reference to the Subject Property and the manner of leasing, using,
operating or maintaining the same (hereinafter referred to as
"Governmental Requirements"), as now existing or as hereafter
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amended, and will comply in all materials respects with any
requirements of all insurance companies insuring all or any part of
the Premises or the Improvements and will comply with all private
declarations, easements, covenants and restrictions, if any,
affecting the title to the Subject Property, or any thereof
(hereinafter referred to as "Private Restrictions"), and will not
commit, suffer or permit any violation thereof, and will from time
to time make all necessary and proper restorations, rebuildings,
repairs, renewals, replacements, additions and betterments to the
Subject Property, whether required as the result of casualty or
otherwise, and whether or not insurance proceeds or condemnation
proceeds exist or are sufficient therefor, in a good and
workmanlike manner, so that the value and efficient use thereof
shall be fully restored, preserved and maintained, and so that all
Governmental Requirements and Private Restrictions shall be
complied with. Mortgagor shall give Mortgagee written notice
within five Business Days (as that term is defined in the
Indenture), if it receives notice of any violation of any
Governmental Requirement or Private Restriction, or if any damage
or destruction occurs to the Subject Property. Except to the
extent permitted by the Indenture, Mortgagor agrees not to make any
use of the Subject Property, other than as permitted under the Land
Lease; except as contemplated by the Indenture not to demolish,
remove, or materially and adversely alter the Improvements, without
the prior written consent of Mortgagee, not to be unreasonably
withheld; and not to remove from the Premises or Improvements any
material part of the Property, unless immediately replaced with
like property of at least equal utility and value of the property
being replaced when such property was new. All such replacements
and additions shall be subject to the lien hereof and the security
interest created hereby, which shall be prior to all other liens or
security interests thereon and therein, excepting Permitted
Encumbrances. Mortgagee or its agents may enter upon the Subject
Property at all reasonable times to inspect the same and for the
purpose of protecting its security and preserving its rights
hereunder, but shall not be liable to any person, party or entity
for failure to do so. Except to the extent permitted by the
Indenture, Mortgagor covenants and agrees not to commence
construction of any new buildings or Improvements upon the
Premises, or any additions to existing Improvements, without the
prior written consent of Mortgagee, not to be unreasonably
withheld, and to promptly complete with due diligence any
buildings, Improvements and additions for which Mortgagee's consent
is obtained hereunder in good and workmanlike manner, free and
clear of all liens, charges and encumbrances, except the lien
hereof and Permitted Encumbrances.
SECTION 1.7. IMPOSITIONS AND LIENS. Mortgagor shall, before
any penalty or interest attaches thereto because of delinquency in
payment, pay and discharge, or cause to be paid and discharged, all
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taxes, assessments, levies and governmental charges imposed upon or
against the Subject Property or upon or against the Indenture (not
including income taxes of the Mortgagee) or upon or against the
Premises or upon or against the Improvements or upon or against the
Property (herein collectively referred to as "Impositions") and
will thereafter deliver the paid receipts therefor to Mortgagee
within 30 days after written request therefor from Mortgagee.
Mortgagor shall not suffer to exist and shall promptly pay and
discharge any mechanic's, statutory or other lien or encumbrance on
the Premises, Improvements and/or Subject Property or any part
thereof (hereinafter referred to as "Liens"), except for Permitted
Encumbrances.
Notwithstanding the foregoing, Mortgagor shall not be in
default hereunder in respect to the payment of any Imposition or
Lien which Mortgagor shall be required by any provision hereof to
pay, so long as Mortgagor shall first notify Mortgagee, in writing,
at least 30 days prior to the due date thereof, if any, or
otherwise at least 15 days before commencement of any contest
thereof, of its intention to contest the amount, applicability
and/or validity of said Imposition or Lien and shall thereafter, in
good faith, in compliance with all applicable statutes, and with
all possible promptness, diligently contest the same, and Mortgagor
may postpone or defer payment of a portion of said Imposition or
Lien, if, but only if, permitted by statute, and if neither the
Subject Property, nor any portion thereof, would, by reason of such
postponement or deferment, be in danger of being forfeited or lost.
Upon a final adjudication of any such contest, and, in any event,
at least 30 days prior to the date on which the interest of
Mortgagee in the Subject Property would otherwise forfeit by reason
of the nonpayment of any such Imposition or Lien, Mortgagor shall
pay the amount thereof then due, including any penalties and
interest thereon.
Nothing in this Section 1.7 shall be deemed to be an admission
by Mortgagor that any part of the Subject Property may be made
subject to any taxes, assessments, levies, governmental charges or
Liens (other than the lien of this Mortgage).
SECTION 1.8. INSURANCE. Mortgagor shall obtain, maintain
and keep in full force and effect, or cause the manager of all or
any part of the facilities operated upon the Premises to obtain,
maintain, and keep in effect, during the term of this Mortgage,
with all premiums paid thereon, insurance policies as required by
the Indentures and shall provide Mortgagee evidence thereof in
accordance with the Indenture.
All insurance shall be effected under a valid enforceable
policy or policies, shall be issued by insurers of recognized
responsibility, which are licensed to do business in State of
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Connecticut, and which are acceptable to Mortgagee acting
reasonably, and shall be reasonably satisfactory to Mortgagee in
all other respects. Mortgagor shall not carry separate insurance
concurrent in form or contributing in the event of loss with that
required to be maintained by Mortgagor, unless it also complies
with all provisions of the Indenture applicable to such insurance.
All hazard and casualty insurance policies maintained by
Mortgagor or the manager pursuant to the foregoing provisions shall
(i) provide that any losses payable thereunder shall (pursuant to
a standard first mortgage clause in favor of Mortgagee to be
attached to each such policy) be payable to Mortgagee, its
successors and assigns as their interests may appear, (ii) include
effective waivers by the insurer of all claims for insurance
premiums against Mortgagee, (iii) provide that any losses shall be
payable notwithstanding (a) any act of negligence by Mortgagor or
Mortgagee, (b) any foreclosure or other proceedings or notice of
sale relating to the Subject Property, (c) any waiver of
subrogation rights by the insured, or (d) any change in the title
to or ownership of any of the Subject Property, and (iv) be written
in amounts sufficient to prevent Mortgagor from becoming a co-
insurer under said policies. All liability insurance policies
maintained by Mortgagor pursuant to the foregoing contribution from
any other insurance carried by Mortgagee in the event of loss.
In the event of loss, Mortgagor shall immediately give written
notice thereof to Mortgagee and shall, in good faith and with due
diligence, promptly file, prosecute and collect upon its insured
claims for loss, and shall cause all proceeds thereof to be paid
over to Mortgagee. The amount of any settlement of any such claim
shall always be subject to the Mortgagee's prior written approval,
not to be unreasonably withheld or delayed. If Mortgagor does not
promptly and diligently do so, or if any Event of Default (as
hereinafter defined) then exists hereunder, Mortgagee is authorized
and empowered (but not obligated or required) to make proof of
loss, to select, adjust or compromise any claims for loss, damage
or destruction under, and to collect and receive all proceeds of,
any policies of hazard and casualty insurance maintained pursuant
hereto. Mortgagor shall reimburse Mortgagee, on demand, for all
costs and expenses, including but not limited to court costs and
reasonable attorneys' fees, incurred by Mortgagee in connection
therewith. All proceeds of such insurance are hereby absolutely
and unconditionally assigned, and shall be paid, to Mortgagee.
All Net Loss Proceeds (as defined in the Indenture) received
in connection with any such loss shall be held and disbursed in
accordance with the Indenture.
SECTION 1.9. UTILITIES AND SERVICES. Mortgagor shall pay or
cause to be paid promptly, when due, all charges or fees for
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utilities or services, including but not limited to electricity,
water, gas, telephone, sanitary sewer, and trash and garbage
removal, supplied to the Subject Property, and, upon request of
Mortgagee, shall furnish receipts to Mortgagee showing such
payment.
SECTION 1.10. [Intentionally Omitted.]
SECTION 1.11. CURE OF DEFAULTS BY MORTGAGEE. If Mortgagor
shall fail to observe, comply with or perform any of the terms,
agreements, covenants and/or conditions herein with respect to the
procuring and delivery of insurance, the payment of Impositions or
Liens, the keeping of the Subject Property in repair, the
protection of the Subject Property or Mortgagor's interest therein,
the observing, performing and discharging of the obligations of
Mortgagor under the Land Lease and the Space Leases, or any other
term, agreement, covenant or condition contained herein, in the
Indenture or in any Other Security Document, Mortgagee may, at its
option, itself observe, comply with or perform the same, may make
such advances to observe, comply with or perform the same as
Mortgagee shall deem appropriate, and may pay reasonable fees of
attorneys' employed by Mortgagee in connection therewith, and may
enter the Subject Property for the purpose of observing, complying
with or performing any such term covenant or condition. Mortgagee
may expend such sums, including reasonable attorneys' fees (prior
to trial, at trial and on appeal), to sustain the lien of this
Mortgage or its priority, or to protect or enforce, or to obtain
the right to enforce, its rights, powers and remedies hereunder,
including the payment of any prior liens, claims and encumbrances,
other than Permitted Encumbrances which are not in default, or to
protect the Subject Property, as it may deem desirable. Mortgagor
agrees to repay all such sums so advanced, paid or expended upon
demand, and all sums so advanced, paid or expended, with interest
at the default rate set forth in the Indenture, shall be a lien
upon the Subject Property, shall be secured hereby and may be
collected in the same manner as the principal debt secured hereby,
but no such advance or expenditure shall be deemed to relieve
Mortgagor from any default hereunder.
SECTION 1.12. SALE, TRANSFER OR ENCUMBRANCE. Except to the
extent permitted by the Indenture, if Mortgagor shall voluntarily,
involuntarily or by operation of law agree to, cause, suffer or
permit (a) any sale, transfer, lease or conveyance of any material
interest of Mortgagor, legal or equitable, in the Land Lease, the
Subject Property or any portion thereof; (b) any change in the
ownership of a controlling interest in Mortgagor; or (c) any
mortgage, pledge, encumbrance or lien to be outstanding against the
Subject Property or any portion thereof, or any security interest
to exist therein, except as created by this Mortgage and the other
documents which secure the Indenture, and except Permitted
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Encumbrances, without, in each instance, the prior written consent
of Mortgagee which shall not be unreasonably withheld or delayed,
Mortgagee may, at its election, declare the entire indebtedness
hereby secured to be immediately due and payable, without notice to
Mortgagor (which notice Mortgagor hereby expressly waives), and
upon such declaration the entire indebtedness hereby secured shall
be immediately due and payable.
SECTION 1.13. ASSIGNMENT OF LEASES AND RENTS. If the Subject
Property is or in the future becomes subleased to third parties as
permitted by and in accordance with Section 4.27 of the Indenture,
then Mortgagor and Mortgagee agree as follows:
(a) This is a present, absolute, effective, irrevocable
and completed assignment by Mortgagor to Mortgagee of the Space
Leases and Rents and of the right to collect and apply the same,
which is not contingent upon Mortgagee being in possession of the
Subject Property. Prior to the occurrence of an Event of Default
hereunder, Mortgagor may collect all Rents due under any Space
Leases. After the occurrence and during the continuance of an
Event of Default, Mortgagee shall have the absolute right to
collect all Rents.
(b) Mortgagor shall, at its costs and expense, perform
each obligation to be performed by the landlord under each Space
Lease; except as permitted by the Indenture, not borrow against,
pledge or further assign any Rents due thereunder; not permit the
prepayment of any Rents due for more than 30 days in advance; not
permit any tenant to assign or sublet its interest in any Space
Lease unless required to do so by the terms thereof and then only
if such assignment does not work to relieve the tenant of any
liability for performance of its obligations thereunder; not
materially and adversely amend or modify the obligations of the
parties under any Space Lease without prior written consent of
Mortgagee, not to be unreasonably withheld or delayed.
(c) If any tenant shall default under a Space Lease,
Mortgagor shall, in the ordinary course of business, exercise sound
business judgment with respect to such default but may not waive
claims or discharge tenants and/or occupants from their obligations
under the Space Lease or terminate or accept a surrender of any
Space Lease, without the prior written consent of Mortgagee.
(d) If Mortgagor fails to perform any obligations of
Mortgagor under any Space Lease or if Mortgagee becomes aware of or
is notified by any tenant under any Space Lease of a failure on the
part of Mortgagor to so perform, Mortgagee may, but shall not be
obligated to, without waiving or releasing Mortgagor from any
obligation in this Mortgage, remedy such failure, and Mortgagor
agrees to repay upon demand all sums incurred by Mortgagee in
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remedying any such failure together with interest as provided in
the Indenture. Any such sums, together with interest, shall be
part of the indebtedness secured hereby.
(e) Mortgagee shall not be deemed to be a partner of, or
a joint venturer with, Mortgagor with respect to the Subject
Property or to be a participant of any kind in the management or
operation of the Subject Property. Except as to the provisions of
the Land Lease, Mortgagee shall not be obligated to perform or
discharge, nor does it hereby undertake to perform or discharge,
any obligation, duty or liability under any Space Lease, or with
respect to the Subject Property or the inspection, maintenance or
repair thereof, under or by reason of this Mortgage. Neither this
Section 1.13, nor the exercise by Mortgagee of its rights
hereunder, shall be deemed to constitute Mortgagee a beneficiary or
mortgagee in possession of the Subject Property, unless Mortgagee
elects in writing to be so constituted.
SECTION 1.14. [Intentionally Omitted.]
SECTION 1.15. HAZARDOUS SUBSTANCES. Mortgagor shall not
permit toxic or hazardous substances or wastes, pollutants or
contaminants, including, without limitation, asbestos, urea
formaldehyde, the group of organic compounds known as
polychlorinated biphenyls, petroleum products including gasoline,
fuel oil, crude oil and various constituents of such products, any
hazardous substance as defined in the Comprehensive Environmental
Response Act of 1980 (42 U.S.C. S9601, et seq.), and any other
federal, state or tribal laws, rules or regulations relating to the
protection of the environment
(collectively, "Hazardous Substance"), to be generated, treated,
stored, transferred from, discharged, released or disposed of, or
otherwise placed, deposited in or located on, used, transported
over, or otherwise entered on or into the Premises, except in
accordance with all applicable state, federal, local and tribal
laws, regulations, rules, codes and ordinances relating to the
environment ("Environmental Regulations"); nor shall the Mortgagor
undertake any activity on the Premises that would cause or
contribute to the Premises becoming a treatment, storage or
disposal facility for Hazardous Substances within the meaning of
any applicable Environmental Regulations. The foregoing provision
shall not be deemed to prohibit the incidental storage or use of
Hazardous Substances in the ordinary course of the Mortgagor's
business, provided such storage or use is in compliance with all
applicable Environmental Regulations.
SECTION 1.16. INDEMNITY. Mortgagor agrees to indemnify,
protect, hold harmless and defend Mortgagee from and against any
and all losses, liabilities, suits, actions, obligations, fines,
damages, judgments, penalties, claims, causes of action, charges,
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costs and expenses (including reasonable attorneys' fees,
disbursements and court costs prior to trial, at trial and on
appeal) which may be imposed on, incurred or paid by, or asserted
against Mortgagee by reason or on account of, or in connection
with, (i) any willful misconduct of Mortgagor or any Event of
Default hereunder, (ii) the construction or alteration of the
Subject Property, (iii) any negligence of Mortgagor or any tenant
of the Subject Property or any part thereof, or any of their
respective agents, contractors, subcontractors, servants,
directors, officers, employees, licensees or invitees, or (iv) any
accident, injury, death or damage to any person or property
occurring in, on or about the Subject Property or any street,
drive, sidewalk, curb or passageway adjacent thereto, except to the
extent that the same results directly from the gross negligence or
willful misconduct of Mortgagee. Any amount payable to Mortgagee
under this Section 1.16 shall be due and payable upon demand
therefor and receipt by Mortgagor of a statement from Mortgagee
setting forth in reasonable detail the amount claimed and the basis
therefor. Mortgagor's obligations under this Section 1.16 shall
not be affected by the absence or unavailability of insurance
covering the same or by the failure or refusal of any insurance
carrier to perform any obligation on its part under any such policy
of insurance. If any claim, action or proceeding is made or
brought against Mortgagee which is subject to the indemnity set
forth in this Section 1.16, and provided Mortgagor is given prompt
written notice thereof, Mortgagor shall defend the Mortgagee by
counsel reasonably acceptable to the Mortgagee, and "attorneys'
fees" shall include both reasonable attorneys' fees and paralegals'
fees and expenses. In the event that any action or proceeding is
brought against the Mortgagee, its officers, agents or employees by
reason of any of the matters set forth hereinabove, then the
Mortgagor upon notice from the Mortgagee, shall protect and defend
at the Mortgagor's sole expense such action or proceeding by
counsel reasonably satisfactory to the Mortgagee and in the event
the Mortgagor shall fail to protect and defend the Mortgagee, its
officers, agents or employees, then the Mortgagee may undertake to
protect and defend itself, its officers, agents or employees and
the Mortgagor shall pay to the Mortgagee, upon demand, all costs
and expenses incurred by the Mortgagee in connection therewith,
including without limitation, all such attorneys' fees.
SECTION 1.17. LAND LEASE. Mortgagor shall punctually perform
all obligations, covenants and agreements to be performed by it
under the Land Lease, strictly in accordance with the terms
thereof, and shall at all times do all things necessary to compel
performance by the Tribe of all of its obligations, covenants and
agreements under the Land Lease. Mortgagor shall, at all times,
maintain the validity and effectiveness of the Land Lease, and
shall neither take nor permit any action which would release the
Tribe from its obligations or liabilities under the Land Lease, or
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would result in the termination, amendment or modification of, or
impair the validity of the Land Lease. If Mortgagor defaults under
the Land Lease, Mortgagee shall have the right, at its option, to
cure such default in accordance with the Land Lease, and all
reasonable costs and expenses incurred by Mortgagee in doing so,
together with interest thereon at the rate provided in the
Indenture, shall become due and payable immediately and shall be
added to the indebtedness secured by this Mortgage. Mortgagor
appoints Mortgagee as its attorney-in-fact for purposes of taking
all actions necessary to cure any such default, in Mortgagee's sole
discretion, which power of attorney is coupled with an interest and
shall be irrevocable as long as any indebtedness secured by this
Mortgage remains outstanding. If, under the Land Lease, Mortgagor
shall, at any time before satisfaction of this Mortgage, acquire
any additional interest in the Premises or Improvements, then the
lien of this Mortgage shall attach, extend to, cover and be a lien
upon such title or other interest, provided that in no event shall
the fee interest of the United States in trust for the Tribe in the
Premises or the Improvements become subject to this Mortgage.
SECTION 1.18. BANKRUPTCY EFFECT. Mortgagor acknowledges that
pursuant to Section 365 of the Bankruptcy Reform Act of 1978 (as
the same may be amended or recodified from time to time, called the
"Bankruptcy Reform Act") it is possible that a trustee in
bankruptcy of the Tribe or the Tribe as a debtor-in-possession
could reject the Land Lease, in which case Mortgagor as tenant
would have the election described in Section 365(h) of the
Bankruptcy Reform Act (which election, as it may be amended,
revised or recodified from time to time, and together with any
comparable right under any other state or federal law relating to
bankruptcy, reorganization or other relief for debtors, whether now
or hereafter in effect, is called the "Election") to treat the Land
Lease as terminated by such rejection or, in the alternative, to
remain in possession for the balance of the term of the Land Lease
and any renewal or extension thereof that is enforceable by the
tenant under applicable non-bankruptcy law.
(a) Mortgagor agrees not to terminate or permit
termination of the Land Lease by exercise of the Election without
the prior written consent of Mortgagee. Mortgagor acknowledges
that because the Land Lease is a significant part of the
Mortgagee's security for the obligations secured under this
Mortgage, the Mortgagee does not anticipate that it would consent
to termination of the Land Lease and shall not under any
circumstances be obliged to give such consent.
(b) In order to secure the covenant made in Section 1.1
of this Mortgage and as security for the other obligations secured
under this Mortgage, Mortgagor assigns the Election to Mortgagee
under this Mortgage. Mortgagor acknowledges and agrees that this
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assignment of the Election is one of the rights which Mortgagee may
use at any time in order to protect and preserve the other rights
and interests of Mortgagee under this Mortgage, since exercise of
the Election in favor of terminating the Land Lease would
constitute waste hereunder.
(c) Mortgagor acknowledges and agrees that the Election
is in the nature of a remedy and is not a property interest which
Mortgagor can separate from the Land Lease. Therefore, Mortgagor
agrees that exercise of the Election in favor of preserving the
right to possession under the Land Lease shall not be deemed to
constitute a taking or sale of Mortgagor's interest in the Subject
Property by Mortgagee and shall not entitle Mortgagor to any credit
against the obligations secured by this Mortgage.
(d) Mortgagor further acknowledges and agrees that if
the Election is exercised in favor of Mortgagor remaining in
possession, then Mortgagor's resulting right under the Land Lease
to possession and use of (and rents and profits from) the Premises
and Improvements, as adjusted by the effect of Section 365 of the
Bankruptcy Reform Act, shall be part of the Premises and
Improvements and shall be subject to the lien created by this
Mortgage. However, Mortgagor acknowledges and agrees that the
right under the Land Lease to possession and use of the premises
and Improvements as so adjusted is not equivalent to the leasehold
interest which is the Subject Property at the time of execution of
this Mortgage. Therefore, Mortgagor agrees that rejection of the
Land Lease under the Bankruptcy Reform Act by a trustee in
bankruptcy of the Tribe or by the Tribe as a debtor-in-possession
shall constitute a default under this Mortgage and shall entitle
Mortgagee to all rights and remedies upon an Event of Default under
this Mortgage.
ARTICLE II
TAKING OF PROPERTY
SECTION 2.1. CONDEMNATION OR SALE IN LIEU THEREOF. In case
of a taking of or damage to all or any portion of the Subject
Property as a result of, or a sale thereof in lieu of or in
anticipation of, the exercise of the power of condemnation or
eminent domain, or the commencement of any proceedings or
negotiations which might result in such a taking, damage or sale,
Mortgagor shall promptly give Mortgagee written notice thereof,
generally describing the nature of such taking, damage, sale,
proceedings or negotiations and the nature and extent of the
taking, damage or sale which has resulted or might result
therefrom, as the case may be, together with a copy of each and
every document relating thereto received by Mortgagor, and
Mortgagee shall have the right to participate in such proceedings
or negotiations with respect to Mortgagor's leasehold interest
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therein. Should any of the Subject Property be taken or damaged by
exercise of the power of condemnation or eminent domain, or be sold
by private sale in lieu or in anticipation thereof, Mortgagor does
hereby irrevocably assign, set over and transfer to Mortgagee any
award, payment or other consideration for the interest of the
Mortgagor by reason of its rights as tenant under the Land Lease or
otherwise in the property so taken, damaged or sold and any claim
or cause of action therefor. All Net Loss Proceeds (as defined in
the Indenture) received in connection with any of the foregoing
shall be held and disbursed in accordance with the Indenture.
ARTICLE III
DEFAULT AND REMEDIES THEREFOR
SECTION 3.1. EVENT OF DEFAULT. The occurrence of any of the
following shall constitute an "Event of Default" under this
Mortgage:
(a) the Mortgagor defaults in the payment when due of
interest on the Notes and such default continues for a period of 30
days; provided that payments of Cash Flow Participation Interest
(as defined in the Notes) that are permitted to be deferred as
provided in the Notes shall not become due for this purpose until
such payment is required to be made pursuant to the terms of the
Notes;
(b) the Mortgagor defaults in the payment when due of
principal of or premium, if any, on the Notes when the same becomes
due and payable at maturity, upon redemption (or in connection with
an offer to purchase) or otherwise;
(c) the Mortgagor fails to comply with any of the
provisions of Section 4.07, 4.09, 4.10, 4.11, 4.15, 4.16, 4.18,
4.28 or 5.01 of the Indenture;
(d) the Mortgagor or the Tribe (with respect to its
obligations under the Indenture) fails to observe or perform any
other covenant, representation, warranty or other agreement in the
Indenture, the Notes or the Other Security Documents for 60 days
after written notice to the Mortgagor by the Mortgagee or to the
Mortgagor and the Mortgagee from Holders of at least 25% in the
principal amount of the Notes then outstanding;
(e) the Land Lease ceases to be in full force and effect
or the Mortgagor defaults in the performance of any covenant set
forth in the Lease, the Leasehold Mortgage, or any of the Other
Security Documents (which default is not waived or cured);
(f) a default occurs under any mortgage, indenture or
instrument under which there is issued or by which there is secured
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or evidenced any Indebtedness for money borrowed by the Mortgagor
or the payment of which is guaranteed by the Mortgagor, whether
such Indebtedness or guarantee now exists, or is created after the
Issuance Date, which default (a) is caused by a failure to pay when
due principal of or premium, if any, or interest on such
Indebtedness prior to the expiration of the grace period provided
in such indebtedness (a "Payment Cross-Default") or (b) results in
the acceleration of such Indebtedness prior to its express maturity
or would constitute a default in the payment of such issue of
Indebtedness at final maturity of such issue and, in each case, the
principal amount of such Indebtedness, together with the principal
amount of any other such Indebtedness under which a Payment Cross-
Default then exists or with respect to which the maturity thereof
has been so accelerated or which has not been paid at maturity,
aggregates $7.5 million or more;
(g) final judgment or final judgments for the payment of
money are entered by a court or courts of competent jurisdiction
against the Mortgagor or any of its assets and such judgment or
judgments remain unpaid or undischarged or unstayed for a period of
60 days, provided that the aggregate of all such undischarged
judgments exceed $7.5 million;
(h) the Mortgagor breaches in a material respect any
representation or warranty set forth in the Land Lease or this
Mortgage or any of the Other Security Documents, or the Mortgagor
repudiates any of its obligations under, or any judgment or decree
by a court or government agency of competent jurisdiction declaring
the unenforceability of, the Land Lease or any of the Other
Security Documents and such repudiation materially impairs the
benefits of the Mortgagee and the Holders of the Notes thereunder;
(i) the Mortgagor pursuant to or within the meaning of
Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief
against it in an involuntary case,
(iii) makes a general assignment for the benefit
of its creditors, or
(iv) generally is not paying its debts as they
become due; or
(j) a court of competent jurisdiction enters an order or
decree under any bankruptcy law that:
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(i) is for relief against the Mortgagor in an
involuntary case; or
(ii) orders the liquidation of the Mortgagor;
and the order or decree remains unstayed and in effect for 60
consecutive days;
(k) there is any revocation, termination, suspension or
other cessation of effectiveness of any Gaming Permit which results
in the cessation or suspension of gaming operations for a period of
more than 90 consecutive days at the Resort (as defined in the
Indenture);
(l) there is a cessation of gaming operations for a
period of more than 90 consecutive days at the Resort (other than
as a result of a casualty loss) after the Resort becomes operating;
or
(m) there is a cessation of gaming operations for a
period of more than 180 consecutive days as a result of a casualty
loss after the Resort becomes operating except if the Mortgagor is
diligently pursuing reconstruction and opening of the Resort and
such reconstruction and opening can be accomplished with the funds
available to the Mortgagor.
The Indebtedness secured by this Mortgage is subject to
acceleration upon the occurrence of an Event of Default.
SECTION 3.2 REMEDIES. In the event of the happening of any
Event of Default, or in the case the principal of the Notes shall
have become due and payable in full, whether by lapse of time or by
acceleration, then and in every such case, Mortgagee shall have the
right and power, at its option, in addition to any other rights of
Mortgagee under the Indenture and the Other Security Documents to
pursue any one or more of the following remedies:
(a) Remedies Under State Laws. Without limiting any
other remedy available under this Mortgage or applicable federal or
Tribal law, Mortgagee shall have the right, at its option, to
exercise any right or remedy which would be available to Mortgagee
under the laws of the State of Connecticut ("State Laws"), if such
State Laws were directly applicable to this Mortgage and the
Subject Property, including without limitation the right to
foreclose this Mortgage by action or in any other manner provided
by State Laws (for which purpose Mortgagee is hereby granted all
requisite powers under State Laws, including without limitation the
power of sale, if and to the full extent now or hereafter permitted
by State Laws), the right to have a receiver appointed to operate
and manage the Subject Property and collect the Rents, and to
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perform all other functions and duties of a receiver to the full
extent permitted under State Laws, and the right to exercise all
rights and remedies of a secured creditor under the UCC. If and to
the extent that State Laws pertaining to any remedy or procedure
selected by Mortgagee would require action to be taken by a
sheriff, clerk of court or other state or local official or
authorized person, the Gaming Disputes Court established pursuant
to Article XIII, Section 2 of the Tribe's Constitution (the "Tribal
Court") shall direct and authorize such action to be taken by an
agent or officer of the Tribal Court who shall be selected,
appointed and fully empowered by the Tribal Court for such purpose.
If and to the extent that application of procedures specified by
State Laws in any action to enforce this Mortgage would be
impossible or impractical, the Tribal Court shall by order, at
Mortgagee's request, direct and establish such alternative and/or
supplementary procedures as may be necessary or appropriate to
assure practical realization and implementation of the remedies
granted to Mortgagee and/or
contemplated by this Subsection.
(b) Contractual Receiver. Mortgagee may, at its option,
but without obligation to do so, without notice to or consent of
Mortgagor, either in person or by agent, without regard for the
adequacy or value of the Subject Property or of any other security
for the indebtedness secured hereby, the commission of waste or the
solvency or insolvency of Mortgagor or of any other party bound for
the payment and such indebtedness, with or without bringing any
action or proceeding, or by a receiver or trustee to be appointed,
at Mortgagee's request, by any court of competent jurisdiction,
enter upon, inspect, conduct tests with respect to, take possession
of, maintain, manage and operate the Subject Property in the name,
place and stead of Mortgagor and on Mortgagor's behalf and
capacity, subject to the provisions of this Subsection, and to
make, execute, enforce, modify, alter, cancel and accept the
surrender of any Space Leases (whether or not the same extend
beyond the term of this Mortgage), obtain or evict tenants, fix or
modify Rents, refund and collect security deposits, and do any
other acts in connection with the maintenance, management and
operation of the Subject Property to protect the security hereof
and to operate the Subject Property which Mortgagee, in its sole
discretion, deems proper, and either with or without taking
possession of the Subject Property, in its own name or in the name
of Mortgagor, sue for or otherwise demand, collect, receive, and
give receipts for all cash receipts from the operation of the
Subject Property and all Rents, and apply the same (i) upon the
costs of collection thereof, including the fees and costs of agents
and attorneys employed by Mortgagee; upon the costs of managing,
operating and leasing the Subject Property, including taxes,
insurance, maintenance, repairs, improvements, the fees of
professional managing agents, architects, engineers and appraisers,
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license and permit fees, leasing fees and commissions, and
Mortgagee's out-of-pocket expenses; and (ii) upon any indebtedness
secured hereby, in accordance with the Indenture. Mortgagor hereby
grants to Mortgagee an irrevocable power of attorney, coupled with
an interest, to perform all of the acts and things provided for in
this Subsection, as Mortgagor's agent and in Mortgagor's name. The
entering upon and taking possession of the Subject Property, the
collection of such cash receipts and Rents and the application
thereof as aforesaid, and/or the exercise or failure to exercise
any remedy hereunder, shall not cure or waive any Event of Default
or waive, modify or affect any notice of default under the
Indenture, under this Mortgage of under any Other Security
Document, invalidate any act done pursuant to such Event of Default
or notice of default, or in any way preclude or abridge the right
of Mortgagee to foreclose this Mortgage or take other legal or
equitable action hereunder. Mortgagee may, without entering into
possession or pursuing any other remedy as provided in this
subsection or at law or in equity, or in conjunction with such
possession or pursuit of other remedy, give notice to any or all
tenants under Space Leases authorizing and directing said tenants
to pay Rents directly to Mortgagee, or to any receiver appointed
pursuant to this Subsection. If a tenant received such a notice,
Mortgagor hereby directs such tenant to make payment pursuant
thereto, and it shall be conclusively presumed, as between
Mortgagor and such tenant, that the tenant is obligated and
entitled to make such payment to Mortgagee, or to any receiver
appointed pursuant to this Subsection, and that such payment
constitutes payment of Rents under the Space Lease in question.
Mortgagee shall be accountable only for Rents actually collected
hereunder and not for the rental value of the Subject Property.
(c) Sale or Disposition. Mortgagee shall have the
right, but not the obligation, by giving written notice to
Mortgagor of Mortgagee's exercise of its rights under this
Subsection (which notice may be given simultaneously with the
exercise of such rights), to assume exclusive possession, control,
custody and ownership of Mortgagor's Interest in the Subject
Property (or the interest of any receiver appointed pursuant to
Section 3.2(a) or 3.2(b) above) or any portion thereof, and to
sell, assign, sublease or otherwise dispose of the Subject
Property, in whole or in part, from time to time, and in a
commercially reasonable manner, all as determined by Mortgagee in
its reasonable discretion, without further notice to Mortgagor or
any other party, free and clear of any interest of Mortgagor, any
court-appointed receiver, any secured or unsecured creditor other
than Mortgagee, any tenants under Space Leases or any other party
in possession or control of any part of the Subject Property, or
any other claimant (but subject to the Permitted Encumbrances).
The cash proceeds, if any, realized by Mortgagee from any such
sale, assignment, sublease or other disposition shall be applied in
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the order specified in Section 3.5. No such action on the part of
Mortgagee shall constitute a satisfaction of the Obligations or a
satisfaction or release of this Mortgage with respect to any of the
Subject Property, except to the extent expressly provided in
Sections 3.5 and 3.10 or otherwise agreed in writing by Mortgagee.
(d) Equitable Remedies. Mortgagor may proceed to
protect and enforce its rights by a suit or suits in equity or at
law for the specific performance of any covenant or agreement
contained herein, in the Indenture or in any Other Security
Document, or in aid of the execution of any right, power or remedy
herein or therein granted, including without limitation the rights,
powers and remedies granted Mortgagee pursuant to Section 3.2(d),
or for damages, or to collect the indebtedness secured hereby, or
for the enforcement of any other appropriate legal, equitable,
statutory or contractual remedy. The Tribal Court, upon
Mortgagee's request, shall promptly issue such equitable,
declaratory, injunctive, supporting, enabling, confirming and other
orders and judgments as Mortgagee shall reasonably request to
implement, ratify and confirm Mortgagee's exercise of the rights
and remedies provided in this Section and to assure Mortgagee of
the practical realization of the remedial benefits intended to be
extended by this Section.
(e) Limitation on Remedies. NOTHING CONTAINED IN THIS
MORTGAGE SHALL (1) PERMIT MORTGAGEE OR ANY ASSIGNEE, SUBLESSEE,
PURCHASER, OR TRANSFEREE OF THE MORTGAGEE TO TRANSFER MORTGAGOR'S
INTEREST IN THE LEASE TO ANY PERSON OR ENTITY ENGAGED BY THE TRIBE
OR THE MORTGAGOR TO MANAGE A GAMING ENTERPRISE; OR (2) AUTHORIZE
ANY SALE OR OTHER DISPOSITION OF THE FEE TITLE OR REVERSIONARY
INTEREST OF THE UNITED STATES AND THE TRIBE IN THE PREMISES, THE
IMPROVEMENTS AND THE APPURTENANT RIGHTS. NEITHER TRADING COVE
ASSOCIATES, A CONNECTICUT LIMITED PARTNERSHIP, NOR ANY OF ITS
ASSIGNS OR SUCCESSORS SHALL BE ALLOWED TO HAVE ANY INTEREST IN THE
LEASE.
SECTION 3.3 WAIVER OF CONSTITUTIONAL AND STATUTORY RIGHTS.
MORTGAGOR UNDERSTANDS AND AGREES THAT FOLLOWING AN EVENT OF
DEFAULT, MORTGAGEE MAY TAKE POSSESSION OF THE SUBJECT PROPERTY AND
DISPOSE OF THE SAME BY SALE OR OTHERWISE, WITHOUT NOTICE TO
MORTGAGOR EXCEPT AS EXPRESSLY PROVIDED IN THIS MORTGAGE, AND IN
SOME CIRCUMSTANCES WITHOUT PROVIDING MORTGAGOR WITH AN OPPORTUNITY
TO BE HEARD PRIOR TO ANY SUCH DISPOSITION. MORTGAGOR FURTHER
UNDERSTANDS THAT UNDER THE CONSTITUTION OF THE UNITED STATES OR
UNDER THE INDIAN CIVIL RIGHTS ACT OF 1968, IT MAY HAVE THE RIGHT TO
NOTICE AND HEARING BEFORE THE SUBJECT PROPERTY MAY BE SOLD OR
DISPOSED OF AND THAT THE REMEDIES DESCRIBED ABOVE PROVIDE ONLY FOR
LIMITED NOTICE TO MORTGAGOR, AND MAY NOT REQUIRE ANY HEARING OR
OTHER JUDICIAL PROCEEDING. MORTGAGOR HEREBY RELINQUISHES, WAIVES
AND GIVES UP ANY CONSTITUTIONAL OR STATUTORY RIGHTS TO NOTICE AND
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HEARING BEFORE SALE OR OTHER DISPOSITION OF THE SUBJECT PROPERTY
AND EXPRESSLY CONSENTS AND AGREES THAT THE SUBJECT PROPERTY MAY BE
SOLD OR OTHERWISE DISPOSED IN ACCORDANCE WITH THE TERMS OF THIS
MORTGAGE, ALL AS DESCRIBED ABOVE. MORTGAGOR ACKNOWLEDGES THAT THIS
WAIVER IS A MATERIAL AND BARGAINED-FOR PART OF THE CONSIDERATION
FOR THE INDEBTEDNESS EVIDENCED BY THE NOTES, THAT MORTGAGOR IS
REPRESENTED BY LEGAL COUNSEL, THAT BEFORE SIGNING THIS DOCUMENT
THIS SECTION AND MORTGAGOR'S CONSTITUTIONAL AND STATUTORY RIGHTS
WERE FULLY EXPLAINED BY SUCH COUNSEL, AND THAT MORTGAGOR
UNDERSTANDS THE NATURE AND EXTENT OF THE RIGHTS WAIVED HEREBY AND
THE EFFECT OF SUCH WAIVER.
SECTION 3.4 CUMULATIVE NATURE OF RIGHTS, POWERS AND
REMEDIES. Each and every right, power or remedy herein
specifically given shall be cumulative with and in addition to
every other right, power or remedy, express or implied, given or
now or hereafter existing at law, in equity, by statute, in the
Indenture or in any Other Security Document, and each and every
right, power and remedy herein specifically given or otherwise so
existing may be exercised concurrently or separately, from time to
time, as often and in such order as may be deemed expedient by
Mortgagee, and the exercise or the beginning of the exercise of one
right, power or remedy shall not be deemed a waiver of the right to
exercise at the same time or thereafter any other right, power or
remedy. No delay or omission of Mortgagee in the exercise of any
such right, power or remedy shall impair any such right, power or
remedy or any other right, power or remedy of Mortgagee or be
construed to be a waiver of any default or acquiescence therein.
Mortgagee shall have all rights, powers and remedies available
under the law in effect now and/or at the time such rights, powers
and remedies are sought to be enforced, whether or not they are
available under the law in effect on the date hereof.
SECTION 3.5 APPLICATION OF PROCEEDS. The proceeds and
avails of any foreclosure or other sale, lease or disposition of
Mortgagor's Interest in the Subject Property, or any part thereof,
and the proceeds and avails of any other remedy hereunder, shall be
paid and applied as follows, unless otherwise provided herein or
required by applicable law:
(a) First, to the payment of, or reimbursement to
Mortgagee for, all costs, charges and expenses incurred by
Mortgagee in acquiring possession, control, custody and ownership
of Mortgagor's Interest in the Subject Property, in owning,
managing, operating, subleasing, and selling, assigning or
otherwise disposing of Mortgagor's Interest in the Subject Property
or any portion thereof, including all costs and expenses (including
attorneys' fees and legal costs) incurred by Mortgagee in
exercising or enforcing any of its rights or remedies pursuant to
this Mortgage, the Notes or any of the Other Security Documents,
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all liabilities and advances incurred or made in connection
therewith or otherwise incurred or made hereunder by Mortgagee, as
provided herein, and all funds advanced by Mortgagee to pay
Impositions, Liens and encumbrances superior to the lien of this
Mortgage;
(b) Second, to the payment to Mortgagee of the amount
then owing and unpaid under the Indenture and this Mortgage for
principal, interest, advances and interest thereon, and, in case
any such proceeds shall be insufficient to pay the whole amount so
due, then to the payment of such items in the order set forth in
the Indenture; and
(c) Third, any excess to be paid to Mortgagor, its
successors or assigns, or to whomsoever may be lawfully entitled to
receive the same.
SECTION 3.6 RESTORATION OF POSITION. In case Mortgagee
shall have proceeded to enforce any right, remedy or power under
this Mortgage by foreclosure, entry or otherwise, and such
proceedings shall have been discontinued or abandoned for any
reason or shall have been determined adversely to Mortgagee, then
and in every such case Mortgagor and Mortgagee shall be restored to
their former positions and rights hereunder with respect to
Mortgagor's Interest in the Subject Property, and all rights,
remedies and powers of Mortgagee shall continue in full force and
effect as if no such proceedings had been initiated.
SECTION 3.7 CLAIMS IN RECEIVERSHIP, INSOLVENCY AND
BANKRUPTCY. In the case of any receivership, insolvency,
bankruptcy, reorganization, arrangement, readjustment, composition,
dissolution, liquidation, termination or other judicial proceedings
affecting Mortgagor, its creditors or its property, Mortgagee, to
the extent permitted by law, shall be entitled to file such proofs
of claim and other documents as may be necessary or advisable in
order to have its claims allowed in such proceedings for the entire
amount due and payable under the Indenture, this Mortgage and any
Other Security Documents, at the date of institution of such
proceedings, and for any additional amounts which may become due
and payable hereunder and thereunder after such date, including but
not limited to Mortgagor's reasonable costs, expenses and
attorneys' fees incurred in connection therewith.
SECTION 3.8 MARSHALLING; PARCELS. Notwithstanding the
existence of any other security interests in Mortgagor's Interest
in the Subject Property held by Mortgagee or any other party or the
existence of other security for the indebtedness secured hereby,
Mortgagee shall have the right to determine the order in which any
or all of Mortgagor's Interest in the Subject Property shall be
subjected to the remedies provided for herein and in which any of
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such other security shall be subjected to the remedies provided for
in the Other Security Documents. Mortgagee shall also have the
right to determine the order in which any or all portions of the
indebtedness secured hereby are satisfied from the proceeds
realized by the exercise of the remedies provided herein or
provided in any Other Security Document. Mortgagor, for itself and
on behalf of all persons, parties and entities which may claim
under Mortgagor, hereby waives all requirements of law relating to
the marshalling of assets, if any, which would be applicable in
connection with the enforcement by Mortgagee of its remedies for an
Event of Default hereunder or an event of default under any Other
Security Document, absent this waiver. In the event of the
foreclosure of Mortgagor's Interest in the Subject Property,
Mortgagor's Interest in the Subject Property may be sold in one or
more parts or as an entirety, as Mortgagee may elect.
SECTION 3.9 WAIVERS. No waiver of any provision hereof
shall be implied from the conduct of the parties. Any such waiver
must be in writing and must be signed by the party against which
such waiver is sought to be enforced. The waiver or release by
Mortgagee of any breach of the provisions, covenants and conditions
set forth herein on the part of the Mortgagor to be kept and
performed shall not be a waiver or release of any preceding or
subsequent breach of the same or any other provision, covenant or
condition contained herein. The subsequent acceptance of any sum
in payment of any indebtedness secured hereby or any other payment
hereunder by Mortgagor to Mortgagee shall not be construed to be a
waiver or release of any preceding breach by Mortgagor of any
provision, covenant or condition of this Mortgage, other than the
failure of Mortgagor to pay the particular sum so accepted,
regardless of Mortgagee's knowledge of such preceding breach at the
time of acceptance of such payment. No payment by Mortgagor or
receipt by Mortgagee of a lesser amount than the full amount
secured hereby shall be deemed to be other than on account of the
sums due and payable hereunder, nor shall any endorsement of
statement on any check or any letter accompanying any check or
payment be deemed an accord and satisfaction, and Mortgagee may
accept any check or payment without prejudice to Mortgagee's right
to recover the balance of such sums or to pursue any other remedy
provided in this Mortgage. The consent by Mortgagee to any matter
or event requiring such consent shall not constitute a waiver of
the necessity for such consent to any subsequent matter or event.
SECTION 3.10 SURVIVAL OF OBLIGATIONS. The Notes, the
Indenture, this Mortgage, the Other Security Documents and all
unpaid Obligations shall survive and remain in full force and
effect, and shall continue to be valid, binding and enforceable in
accordance with their terms, notwithstanding the exercise of any
one or more of the remedies granted to Mortgagee hereunder, the
issuance of any order or judgment by any court of competent
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jurisdiction, or any foreclosure or other sale, assignment,
sublease or other disposition of Mortgagor's Interest in the
Subject Property. The Obligations and the documents evidencing and
securing the same shall not merge with, or be replaced by, any
order, judgment or other right or interest which may accrue to
Mortgagee in connection with the exercise of any such remedies, and
shall be deemed paid or satisfied only to the extent of any net
cash payments or proceeds actually received by Mortgagee and
applied in reduction of such Obligations.
SECTION 3.11. PURCHASE OF SUBJECT PROPERTY BY MORTGAGEE. In
case of any sale of any of the Subject Property pursuant to any
judgment or decree of any court or otherwise in connection with the
enforcement of any of the terms of this Mortgage, Mortgagee and
each holder of any of the Notes and their respective successors or
assigns, may become the purchaser, and if Mortgagee or any other
trustee, agent or nominee for the holders of the Notes is the
purchaser and the holders of the Notes have so agreed, then for the
purpose of making settlement for or payment of the purchase price,
the Mortgagee or such other trustee, agent or nominee shall be
entitled to turn in and use the Obligations, including any claims
for interest matured and unpaid thereon, together with any
additions to the Obligations and interest thereon, if any, in order
that there may be credited as paid on the purchase price, at
Mortgagee's option, any sum then due hereunder and/or under the
Notes, the Indenture and the Other Security Documents, including
principal and interest thereon, and any accrued additions to the
Obligations and interest thereon, or any portion thereof.
ARTICLE IV
RIGHTS OF THE TRIBE
Notwithstanding anything contained herein to the contrary:
(i) If an Event of Default shall have occurred
hereunder, except as provided in the last sentence of this clause
(i) the Mortgagee shall not have the right to accelerate the
indebtedness, to foreclose this Mortgage, or to sell, assign or
otherwise dispose of any of the Subject Property unless the
Mortgagor shall have provided notice of such Event of Default to
the Tribe under the Land Lease (the "Default Notice") and provided
the Tribe with a period of sixty (60) days after the delivery of
such Default Notice to cure such Event of Default in the
Mortgagor's name and on the Mortgagor's behalf (or if such default
cannot with diligence be cured within such sixty day period, for a
reasonable time thereafter provided that the Tribe proceeds
promptly to cure the same and thereafter prosecutes the curing of
such default with diligence). The Mortgagor and the Mortgagee
acknowledge and agree that the Tribe shall have no obligation to
cure any such Event of Default. The limitation on the Mortgagee's
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ability to accelerate the Indebtedness, foreclose on this Mortgage,
or sell, assign or otherwise dispose of the Subject Property as
provided above shall not apply to an Event of Default resulting
from the Mortgagor's failure to make monetary payments as required
under the Notes, this Mortgage or any of the Other Security
Documents (Events of Default other than those arising from
Mortgagor's failure to make monetary payments herein called
"Nonmonetary Events of Default"); provided, however, that the
Mortgagee shall provide the Tribe with notice of such failure of
the Mortgagor to make monetary payments and any payment made by the
Tribe on the Mortgagor's behalf shall be accepted by the Mortgagee
as if it had been made by the Mortgagor; and
(ii) Before the Mortgagee may foreclose this
Mortgage or sell, assign or otherwise dispose of any of the Subject
Property due to an Event of Default, Mortgagee shall be obligated
to (1) provide the Tribe with the Default Notice required with
respect to each Event of Default and the cure periods required with
respect to Nonmonetary Defaults, all as provided in Clause (i)
above, and (2) provide the Tribe with notice of the Mortgagee's
intention to foreclose this Mortgage or to otherwise sell, assign
or dispose of any of the Subject Property (the "Foreclosure
Notice") and (3) provide the Tribe with a period of sixty (60) days
after the delivery of such Foreclosure Notice within which the
Tribe shall have the right (but not the obligation) to purchase the
Notes, the Indenture, this Mortgage and all of the Other Security
Documents from the Mortgagee for an amount equal to the principal
of, premium (if any) on and interest on all outstanding
indebtedness and Obligations secured hereby, including all
reasonable costs and expenses due to the Mortgagee in accordance
with the Notes, the Indenture, this Mortgage and the Other Security
Documents; provided, however, that any such purchase shall be
consummated and payment made in full within ninety (90) days after
Mortgagee gives the Foreclosure Notice, or the Tribe will be deemed
to have waived its right to purchase.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. BINDING EFFECT; SURVIVAL; NUMBER; GENDER.
Whenever any of the parties hereto is referred to, such reference
shall be deemed to include and apply to the successors and assigns
of such party, subject to the provisions of Section 1.12 hereof;
and all covenants, promises and agreements by or on behalf of
Mortgagor in this Mortgage contained shall bind Mortgagor and also
its successors and assigns and shall inure to the benefit of
Mortgagee, and their successors and assigns, whether elsewhere
herein so expressed or not. All representations and warranties
contained herein or otherwise heretofore made by Mortgagor to
Mortgagee shall survive the execution and delivery hereof. The
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singular of all terms used herein shall include the plural, the
plural shall include the singular, and the use of any gender herein
shall include all other genders, where the context so requires or
permits.
SECTION 5.2. SEVERABILITY. The unenforceability or
invalidity of any provision or provisions of this Mortgage as to
any persons or circumstances shall not render that provision nor
any other provision or provisions herein contained unenforceable or
invalid as to any other persons or circumstances, and all
provisions hereof, in all other respects, shall remain, valid and
enforceable. Mortgagee shall be subrogated for further security to
the lien, whether or not released of record, of any and all
encumbrances paid out of the proceeds of the Notes or out of any
advances made by Mortgagee hereunder.
SECTION 5.3. NOTICES. All notices and elections provided
for herein shall be in writing and shall be deemed to have been
given (unless otherwise required by the specific provisions hereof
or by law in respect to any matter) when given in the manner
specified in the Indenture.
SECTION 5.4. LITIGATION. Mortgagee shall have the power and
authority, upon prior notice to Mortgagor, to institute and
maintain any suits and proceedings as Mortgagee may deem advisable
to (i) prevent any impairment of the Subject Property by any acts
which may be unlawful or any violation of the Mortgage, (ii)
preserve or protect its interest in the Subject Property, or (iii)
restrain the enforcement of or compliance with any legislation or
other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid, if, in the sole opinion of
Mortgagee, the enforcement of or compliance with such enactment,
rule or order might impair the security hereunder or be prejudicial
to Mortgagee's interest.
SECTION 5.5. ACTS OF MORTGAGEE. In the event Mortgagee (a)
grants any extension of time or forbearance with respect to the
payment of any indebtedness secured by this Mortgage; (b) takes
other or additional security for the payment thereof; (c) waives or
fails to exercise any right, power or remedy granted herein, in the
Indenture or in any Other Security Document; (d) grants any
release, with or without consideration, of the whole or any part of
the security for the payment of the indebtedness secured hereby or
the release of any person, party or entity liable for payment of
said indebtedness; and/or (e) amends or modifies in any respect any
of the terms and provisions hereof, of the Indenture (including
substitution of another Indenture) or of any Other Security
Document; then, and in any such event, such act or omission to act
shall not release Mortgagor under any covenant of this Mortgage, of
the Indenture or of any Other Security Document, nor preclude
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Mortgagee from exercising any right, power or privilege herein or
therein granted or intended to be granted, and shall not in any way
impair or affect the lien or priority of this Mortgage. In the
event the Mortgagor shall be granted an interest in any additional
property, improvements, leases, fixtures or personal property not
specifically identified herein or in the Land Lease, but located on
or used in connection with the Premises, and the same shall,
therefore, become a part of the Subject Property, then this
Mortgage shall immediately attach to and constitute a lien against
or security interest in such additional items, as appropriate,
without further act or deed or either party hereto, provided,
however, that in no event shall the fee title of the United States
in trust for the Tribe in and/or to the Premises and/or
Improvements become subject to this Mortgage.
SECTION 5.6. GOVERNING LAW. This Mortgage, the parties'
obligations hereunder, and any disputes hereunder shall be governed
by and interpreted and construed in accordance with federal law (to
the extent applicable) and the law of the Tribe, and, to the extent
required to supplement applicable federal law and tribal law, the
substantive laws of the State of Connecticut (except its choice of
law rules, and except that Mortgagor's rights and remedies set
forth herein, and the lien granted hereby, shall in any event be
lawful and enforceable in accordance with the terms hereof). This
instrument shall be construed in accordance with its intent and
with the fair meaning of its provisions, and without regard to any
presumption or other rule requiring construction against the party
which caused the same to be drafted.
SECTION 5.7. COUNTERPARTS. This Mortgage may be executed
simultaneously in two or more identical counterparts, each of
which, standing, alone, shall be an original, but all of which
shall constitute but one agreement.
SECTION 5.8. NOTICE. Any notice required by or sent
pursuant to any provision of this Mortgage shall be in writing and
shall be deemed given if and when it is personally delivered or
sent by certified mail addressed, until some other address is
designated in a notice so given, as follows:
If to Mortgagor: Mohegan Tribal Gaming Authority
27 Church Lane
Uncasville, CT 06382
Attention: Tribal Chair and Business
Board
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With a copy to: Trading Cove Associates
914 Hartford Turnpike
P.O. Box 60
Waterford, CT 06385
Attention: Len Wolman
If to Mortgagee: 10 State House Square
Hartford, CT 06103-3698
Attention: W. Jeffrey Kramer
Vice-President
Corporate Trust
SECTION 5.9. OPEN-END MORTGAGE PROVISIONS. This is an
"Open-End Mortgage" and the holder hereof shall have all of the
rights, powers and protection to which the holder of any Open-End
Mortgage is entitled under Connecticut law. Upon request, the
Mortgagee may, in its discretion, make future advances to the
Mortgagor. Any future advance, and the interest payable thereon,
shall be secured by this Mortgage when evidenced by a promissory
note stating that the note is secured thereby. At no time shall
the principal amount of the debt secured by this Mortgage exceed
the aggregate original principal face amounts of the Notes, nor
shall the maturity of any future advance secured hereby extend
beyond the date the final principal payment is due on the Notes.
Additionally, at no time shall the principal amount of the debt
secured by this Mortgage, together with all other indebtedness for
the construction and development of the Resort, exceed
$325,000,000, the maximum amount for recoupment of development
costs as provided in the Amended and Restated Gaming Facility
Management Agreement, as approved by the National Indian Gaming
Commission.
SECTION 5.10. SUBORDINATION OF MORTGAGE. The Mortgagee
hereby agrees that this Mortgage is and shall be subject and
subordinate to any and all access and utility easements granted by
the Tribe pursuant to the Land Lease which shall be recorded on the
Montville Land Records and any other applicable land records and
the Mortgagee agrees to execute any and all additional documents to
confirm such subordination as shall be reasonably required of
Mortgagee.
SECTION 5.11. [Intentionally Omitted]
SECTION 5.12. [Intentionally Omitted]
SECTION 5.13. CONSENT TO BE SUED. Notwithstanding anything
to the contrary contained in this Mortgage, the liability of the
Tribe and the officers, office holders, agents, employees
representatives and members of the Tribe and the Mortgagor shall be
limited to the extent provided in Section 12.08 of the Indenture.
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Mortgagor hereby waives its sovereign immunity from unconsented
suit, whether such suit be brought in law or in equity, or in
administrative proceedings or proceedings in arbitration, to permit
the commencement, maintenance, and enforcement of any action, by
any person with standing to maintain an action, to interpret or
enforce the terms of this Mortgage, and to enforce and execute any
judgment resulting therefrom against the Mortgagor or the assets of
the Mortgagor. Notwithstanding any other provision of law or canon
of construction, the Mortgagor intends this waiver to be
interpreted liberally to permit the full litigation of disputes
arising under or out of this Mortgage. Without limiting the
generality of the foregoing, the Mortgagor waives it immunity from
unconsented suit to permit any court of competent jurisdiction or
mutually agreed upon panel of arbitrators to (i) enforce and
interpret the terms of this Mortgage, and award and enforce the
award of damages owing as a consequence of a breach hereof, whether
such award is the product of litigation, administrative
proceedings, or arbitration; (ii) determine whether any consent or
approval of the Mortgagor has been improperly granted or
unreasonably withheld; (iii) enforce any judgment prohibiting the
Mortgagor from taking any action, or mandating or obligating the
Mortgagor to take any action, including a judgment compelling the
Mortgagor to submit to binding arbitration, if and to the extent
provided for in any other agreement between Mortgagor and
Mortgagee; and (iv) adjudicate any claim under the Indian Civil
Rights Act of 1968, 25 U.S.C. S1302 (1994). Any arbitration
carried out under this provision shall proceed in accordance with
the rules of the American Arbitration Association.
SECTION 5.14. NON-MERGER OF INTERESTS. Mortgagee and
Mortgagor agree that in no event shall the fee title of the United
States in trust for the Tribe in and/or to the Premises and/or
Improvements ever be subject to this Mortgage, this Mortgage being
intended to cover only the leasehold interest of the Mortgagor in
the Premises and Improvements under the Land Lease. So long as
this Mortgage is in effect, unless the Mortgagee shall otherwise
expressly consent in writing, the fee title to the Premises and
Improvements and the leasehold estate under the Land Lease shall
not merge but shall remain separate and distinct, notwithstanding
the acquisition of said fee title and said leasehold estate by the
Tribe or by the United States in trust for the Tribe.
SECTION 5.15. INCORPORATION BY REFERENCE. All terms,
covenants, conditions, provisions and requirements of the Indenture
are incorporated by reference in this Mortgage. Any capitalized
term used in this Mortgage without definition, but defined in the
Indenture, shall have the same meaning here as in the Indenture.
SECTION 5.16. CONFLICTS. The terms and provisions of this
Mortgage shall be subject and subordinate to the terms of the
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Indenture. To the extent that the Indenture provides Mortgagor
with a particular cure or notice period, or establishes any
limitations or conditions on Mortgagee's actions, with regard to a
particular set of facts, Mortgagor shall be entitled to the same
cure periods and notice periods, and Mortgagee shall be subject to
the same limitations and conditions, under this Mortgage, in place
of the cure period, notice periods, limitations and conditions
provided for under this Mortgage; provided, however, that such cure
periods, notice periods, limitations and conditions shall not be
cumulative as between the Indenture and this Mortgage. In the
event of any conflict or inconsistency between the provisions of
this Mortgage and those of the Indenture, including, without
limitation, any conflicts or inconsistencies in any definitions
herein or therein, the provisions or definitions of the Indenture
shall govern.
SECTION 5.17. OTHER COLLATERAL. This Mortgage is one of a
number of security agreements to secure the debt delivered by or on
behalf of Mortgagor pursuant to the Indenture and the Other
Security Documents and securing, among other things, the
Obligations secured hereunder. All potential junior lien claimants
are placed on notice that, under any of the Notes, Indenture, this
Mortgage or Other Security Documents or otherwise (such as by
separate future unrecorded agreement between Mortgagor and
Mortgagee), other collateral for the Obligations and other
obligations secured hereunder (i.e., collateral other than the
Subject Property) may, under certain circumstances, be released
without a corresponding reduction in the total principal amount
secured by this Mortgage. Such a release would decrease the amount
of collateral securing the same indebtedness, thereby increasing
the burden on the remaining security created and continued by this
Mortgage. No such release shall impair the priority of the lien of
this Mortgage. By accepting its interests in the Subject Property,
each and every junior lien claimant shall be deemed to have
acknowledged the possibility of, and consented to, any such
release. Nothing in this paragraph shall impose any obligations
upon Mortgagee.
SECTION 5.18. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED
BY APPLICABLE LAW, THE MORTGAGOR HEREBY WAIVES THE RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM, WHETHER
IN CONTRACT OR IN TORT, AT LAW OR IN EQUITY, ARISING OUT OF OR IN
ANY WAY RELATED TO THE NOTES, THE INDENTURE, THIS MORTGAGE, OR THE
OTHER SECURITY DOCUMENTS.
ARTICLE VI
CONDITIONAL PARTIAL RELEASE PERMITTED
SECTION 6.1. PROCEDURE FOR CONDITIONAL PARTIAL RELEASE.
Provided that no Event of Default by the Authority has occurred and
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is continuing under the Indenture, upon written request of the
Authority to the Trustee, the Trustee shall release the lien of
this Mortgage as to a portion of the Land Lease and as to a portion
of the Mortgagor's leasehold estate in the Premises, so long as
such portion of the Land Lease and Mortgagor's leasehold estate in
the Premises is not utilized and is not intended to be utilized for
the Resort, including any gaming operations, as more fully set
forth in the Plans, as such terms are defined in the Indenture,
provided that such released portion shall not be used to conduct
any gaming operations. The Authority shall deliver to the Trustee
an instrument of release, together with a survey of the leasehold
estate to the Premises which shall remain subject to this Mortgage
and of the released portion of such leasehold estate, and together
with an endorsement to the title insurance policy of the Trustee
reflecting such change in the leasehold estate.
NOW, THEREFORE, if the Notes and any extensions, renewals or
alterations thereof shall be fully paid according to their tenor,
and if all covenants, conditions, agreements and provisions
contained in the Indenture, the Notes, this Mortgage and the Other
Security Documents, and any extensions, renewals or modifications
thereof are fully kept and performed, then this Mortgage shall
become null and void; otherwise to remain in full force and effect.
IN WITNESS WHEREOF, the undersigned has caused this instrument
to be duly executed as of the day and year first above written.
Witnesses: Mortgagor:
/s/ Helga Woods MOHEGAN TRIBAL GAMING AUTHORITY
- --------------------------
Helga Woods
/s/ H. William Shure By: /s/ Ralph Sturges
- -------------------------- ------------------------------
H. William Shure Ralph Sturges, Chairman
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STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On September 29, 1995, personally appeared before me Ralph
Sturges, signer and sealer of the foregoing instrument, who
acknowledged that he/she executed the instrument as the Chairman of
the MOHEGAN TRIBAL GAMING AUTHORITY, an instrumentality of the
Mohegan Tribe of Indians of Connecticut as his/her free act and
deed and the free act and deed of the Authority.
/s/ Elizabeth T. McNamee
--------------------------------------
Notary Public
My Commission Expires: August 14, 1997
[Seal]
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LANDLORD'S CONSENT
The undersigned, as landlord pursuant to the Land Lease dated
September 29, 1995, between the Mohegan Tribe of Indians of
Connecticut and the Mohegan Tribal Gaming Authority, hereby gives
its consent to the foregoing.
Dated:
Witnesses: MOHEGAN TRIBE OF INDIANS OF
CONNECTICUT
/s/ Helga M. Woods
- ---------------------------
Helga M. Woods
/s/ H. William Shure By: /s/ Ralph Sturges
- --------------------------- ------------------------------
H. William Shure Ralph Sturges, LifeTime Chief
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On September 28, 1995, personally appeared before me Ralph
Sturges, signer and sealer of the foregoing instrument, who
acknowledged that he/she executed the instrument as the LifeTime
Chief and Chair of the MOHEGAN TRIBE OF INDIANS OF CONNECTICUT, as
his/her free act and deed and the free act and deed of the Tribe.
/s/ Elizabeth T. McNamee
- --------------------------------------
Elizabeth T. McNamee
Notary Public
My Commission Expires: August 14, 1997
[Seal]
<PAGE>
INDEX TO DEFINED TERMS
Accounts Receivable. . . . . . . . . . . . . . . . . . . . . 5
Appurtenant Rights . . . . . . . . . . . . . . . . . . . . . 5
Attorney's Fees. . . . . . . . . . . . . . . . . . . . . . . 16
Bankruptcy Reform Act. . . . . . . . . . . . . . . . . . . 17
Cash Collateral. . . . . . . . . . . . . . . . . . . . . . . 3
Default Notice . . . . . . . . . . . . . . . . . . . . . . . 25
Disbursement Agreement . . . . . . . . . . . . . . . . . . . 2
Election . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Environmental Regulations. . . . . . . . . . . . . . . . . . 15
Event of Default . . . . . . . . . . . . . . . . . . . . . . 18
Foreclosure Notice . . . . . . . . . . . . . . . . . . . . . 26
Gaming Permits . . . . . . . . . . . . . . . . . . . . . . . 6
Governmental Requirements. . . . . . . . . . . . . . . . . . 10
Hazardous Substances . . . . . . . . . . . . . . . . . . . . 15
Impositions. . . . . . . . . . . . . . . . . . . . . . . . . 11
Improvements . . . . . . . . . . . . . . . . . . . . . . . . 1
Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . 2
Intangible Collateral. . . . . . . . . . . . . . . . . . . . 6
Land Lease . . . . . . . . . . . . . . . . . . . . . . . . . 1
Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Maturity Date. . . . . . . . . . . . . . . . . . . . . . . . 2
Mortgagee. . . . . . . . . . . . . . . . . . . . . . . . . 1
Mortgagor. . . . . . . . . . . . . . . . . . . . . . . . . . 1
Mortgagor's Interest in the Subject Property . . . . . . . . 9
Nonmonetary Events of Default. . . . . . . . . . . . . . . . 25
Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Obligations. . . . . . . . . . . . . . . . . . . . . . . . . 2
Open-End Mortgage. . . . . . . . . . . . . . . . . . . . . . 28
Other Security Documents . . . . . . . . . . . . . . . . . . 9
Permitted Encumbrances . . . . . . . . . . . . . . . . . . 1
Personal Property. . . . . . . . . . . . . . . . . . . . . . 5
Premises . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Private Restrictions . . . . . . . . . . . . . . . . . . . . 10
Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Rents. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Space Leases . . . . . . . . . . . . . . . . . . . . . . . . 7
State Laws . . . . . . . . . . . . . . . . . . . . . . . . . 19
Subject Property . . . . . . . . . . . . . . . . . . . . . . 7
Tribal Court . . . . . . . . . . . . . . . . . . . . . . . . 19
Tribe. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
UCC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
<PAGE>
Attachment to Open - End Construction - Permanent
Leasehold Mortgage Deed, Assignment of
Leases and Rents and Security Agreement
SECTION 81 COMPLIANCE
In compliance with Section 81 of Title 25 U.S.C.A., the addresses
and occupations of the parties are as follows:
Party in Interest: Mohegan Tribe of Indians of
Connecticut
Address: 27 Church Lane
Uncasville, CT 06382
Occupation: Indian Tribe
Party in Interest: Mohegan Tribal Gaming Authority
Address: 27 Church Lane
Uncasville, CT 06382
Occupation: Tribal Gaming Authority
Party in Interest: First Fidelity Bank
Address: 10 State House Square
Hartford, CT 06103-3698
Occupation: Commercial Bank and Trust Company
Fixed limited time
to run: This mortgage is given as security
for notes which become due on
November 15, 2002. In event of
default on the notes, the mortgage
cannot go beyond the term of the Land
Lease (i.e., 25 years, with option to
renew for 25 years).
The Chairman of the Mohegan Tribe of Indians of Connecticut
("Tribe") is authorized to execute the attached document by
Resolution No. 95-3 of the Tribal Council of the Tribe, dated
August 30, 1995. The Chairman exercises his authority in this
instance because the Tribe has determined that execution of the
attached document will further the economic development objectives
of the Tribe.
The Chairman of the Management Board of the Mohegan Tribal Gaming
Authority ("Management Board") is authorized to execute the
attached document by Resolution No. 95-4 of the Management Board,
<PAGE>
dated August 30, 1995. The Chairman of the Management Board
exercises his authority in this instance because the Management
Board has determined that execution of the attached document will
further the economic development objectives of the Tribe.
The document was executed on or about 12:30 p.m. (time) on
September 18, 1995, at New York, NY (place), for the particular
purpose set forth above.
The undersigned parties agree that the foregoing agreement is in
compliance with 25 U.S.C. SS81 and 415 and 25 C.F.R. S162.
WITNESS: Mohegan Tribe of Indians
of Connecticut
/s/ Helga M. Woods By: /s/ Ralph Sturges
- -------------------------- -----------------------------
Helga M. Woods Ralph Sturges
Title: Chairman
/s/ Elizabeth T. McNamara
- --------------------------
Elizabeth T. McNamara
Mohegan Tribal Gaming Authority
/s/ Helga M. Woods By: /s/ Ralph Sturges
- -------------------------- -----------------------------
Helga M. Woods Ralph Sturges
Title: Chairman, Management Board
/s/ Elizabeth T. McNamara
- --------------------------
Elizabeth T. McNamara
First Fidelity Bank
/s/ H. William Shure By: /s/ W. Jeffrey Kramer
- -------------------------- ----------------------------
H. William Shure W. Jeffrey Kramer
Title:
/s/ Helga M. Woods
- --------------------------
Helga M. Woods
<PAGE>
Approved Pursuant to 25 U.S.C. SS 81
and 415 and 25 C.F.R. S162
United States Department of Interior
Bureau of Indian Affairs:
By: /s/ Nancy Jemison
Date: September 29, 1995 ---------------------------
Nancy Jemison
Director (Acting)
Eastern Area Office
Bureau of Indian Affairs
for the Secretary of the
Interior and the Commissioner of
Indian Affairs, acting under
delegated authority
<PAGE>
CITY OF WASHINGTON )
) ss:
DISTRICT OF COLUMBIA )
On September 29, 1995, personally appeared before me Carol C.
Williams, a Notary Public in and for said County and State, Nancy
Jemison, personally known to me to be the person whose name is
subscribed to the above instrument, who acknowledged that he or she
executed the instrument as the Acting Area Director of the Eastern
Area Office of the Bureau of Indian Affairs, for the Secretary of
the Interior and the Commissioner of Indian Affairs, acting under
delegated authority.
/s/ Carol C. Williams
--------------------------------
Carol C. Williams
Notary Public
My Commission Expires: June 4, 1998
<PAGE>
EXHIBIT A
Legal Description of the Property
A certain tract or parcel of land, together with the buildings and all other
improvements thereon, situated on the southeasterly side of Sandy Desert Road,
the southeasterly side of Connecticut Route No. 32, the northeasterly side of
Broadview Avenue and the northwesterly side of Fort Shantok Road in the Town of
Montville, County of New London and State of Connecticut and being more
particularly shown and delineated on a certain map or plan entitled "Harris &
Clark, Inc. Land Surveyors - Civil Engineers Griswold, Connecticut Survey Plan
Prepared For The Mohegan Tribe of Indians (U.N.C., Inc. Property) Sandy Desert
Road Montville, Connecticut Scale 1 inch = 200 feet Date December 1994 Ident.
No. 94-1801", which premises are more particularly bounded and described as
follows:
Beginning at a concrete monument recovered in the southeasterly street line
of Sandy Desert Road at a northwesterly corner of the herein-described tract
and on the dividing line between the herein-described tract and land now or
formerly of Blanche E. Jenoks, et al; thence running South 04 DEG. 34' 54"
East for a distance of 298.94 feet to a concrete monument recovered; then
running South 04 DEG. 35" 33" East for a distance of 254.69 feet to a concrete
monument recovered; thence running North 85 DEG. 28' 43" West for a distance
of 52.08 feet to a concrete monument recovered, the last three courses being
bounded by said Jenoks, et al land; then running South 06 DEG. 35" 16" East
for a distance of 181.76 feet to a concrete monument recovered; thence
running North 85 DEG. 19' 00" West for a distance of 239.12 feet to a
concrete monument recovered, the last two courses being bounded by land now
or formerly of Elizabeth J. and Russell E. Heebner; thence running South 06
DEG. 37' 20" East for a distance of 126.21 feet bounded southwesterly by land
now or formerly of James H. Sarayusa to a re-bar recovered; thence running
South 03 DEG. 10' 57" West for a distance of 99.70 feet, bounded
northwesterly by land now or formerly of Paul R. Springer, Jr. and Noreen
Springer to a concrete monument recovered; thence running North 86 DEG 44' 47"
West for a distance of 212.23 feet, bounded northeasterly by said Springer
land to a concrete monument recovered; thence running South 01 DEG. 15' 36"
West for a distance of 99.98 feet, bounded northwesterly by land now or
formerly of Donald McKeith and Arlene McKeith to a concrete monument
recovered; thence running South 07 DEG. 03' 32" West for a distance of 124.82
feet to a concrete monument recovered; thence running South 07 DEG. 34' 18"
West for a distance of 138.80 feet to a concrete monument recovered; thence
running North 78 DEG 51' 46" West for a distance of 209.41 feet to a concrete
monument recovered, the last three courses being bounded by land now or
formerly of Walter J. Keane and Debbie L. Keane; thence running South 07 DEG.
31' 24" West for a distance of 69.99 feet, bounded northwesterly by
Connecticut Route No. 32 to a concrete monument recovered; thence running
South 78 DEG. 52' 37" East for a distance of 209.39 feet to a concrete
monument recovered; thence running South
<PAGE>
78 DEG. 51' 05" East for a distance of 160.71 feet to a concrete monument
recovered at Connecticut Grid Coordinates North 739507.44 East 1178517.72;
thence running South 11 DEG. 08' 03" West for a distance of 36.00 feet to a
point; thence running South 78 DEG. 51' 57" East for a distance of 11.00 feet
to a point; thence running South 11 DEG. 08' 03" West for a distance of 92.35
feet to a point to be set at the face of a retaining wall, the last five
courses being bounded by land now or formerly of Frank G. Roderick, Jr., et
al; thence running South 79 DEG. 25' 36" East for a distance of 191.76 feet
along a stone wall, bounded southwesterly in part by land now or formerly of
Richard and Shirley McDonald and in part by land now or formerly of Jimmy N.
and Kathleen M. Sistare to a concrete monument recovered; thence running
South 78 DEG. 35' 40" East for a distance of 200.59 feet, bounded
southwesterly in part by land now or formerly of Mark M. Deveau and in part
by land now or formerly of Agnes and Ernest J. LaPorte to a concrete monument
recovered; thence running South 78 DEG. 54' 17" East for a distance of 300.86
feet, bounded southwesterly in part by land now or formerly of Joyce Carol
Elliot, et al, in part by land now or formerly of Eleanor Joyce Luft and in
part by land now or formerly of Christopher A. and Lisa M. Newell to a rebar
recovered; thence running South 77 DEG. 39' 24" East for a distance of 209.75
feet, bounded southwesterly in part by land now or formerly of Peter G.
Rousseau and Helen H. Rousseau and in part by land now or formerly of Robert
L. Ellal and Johannah J. Ellal to a concrete monument recovered; thence
running South 78 DEG. 50' 54" East for a distance of 216.56 feet, bounded
southwesterly by land now or formerly of Christopher L. and Phyllis M.
McCormick to an iron pin recovered; thence running South 88 DEG. 02' 27" East
for a distance of 183.74 feet, bounded southwesterly in part by said
McCormick land and in part by land now or formerly of Horace W. and Gloria M.
Deshefy to a concrete monument recovered; thence running South 01 DEG. 34'
54" West for a distance of 202.82 feet to a concrete monument recovered;
thence running South 88 DEG. 26' 02" East for a distance of 150.00 feet to a
point to be set, the last two courses being bounded by said Deshefy land;
thence running North 01 DEG 31' 09" East for a distance of 35.00 feet to an
iron pipe recovered; thence running South 83 DEG. 26' 29" East for a distance
of 322.65 feet to a concrete monument recovered; thence running South 08 DEG.
21' 36" West for a distance of 200.83 feet to a concrete monument recovered;
the last three courses being bounded by land now or formerly of Harry W.
Collins; thence running South 81 DEG. 53' 04" East for a distance of 415.62
feet, bounded southwesterly by Broadview Avenue to a concrete monument
recovered; thence running North 01 DEG. 42' 10" West for a distance of 58.70
feet to an iron pipe recovered; thence running North 10 DEG. 42' 05" West for
a distance of 45.00 feet to a point to be set; thence running North 05 DEG.
19' 48" West for a distance of 124.70 feet to a concrete monument recovered;
thence running South 81 DEG. 57" 48" East for a distance of 181.26 feet to a
concrete monument recovered; thence running South 81 DEG. 57' 48" East for a
distance of 192.70 feet to a point to be set; thence running South 48 DEG.
42' 13" East for a distance of 158.40 feet along a fence line to a concrete
monument recovered; thence running South 47 DEG. 09' 18" East for a distance
of 565.19 feet to a drill hole recovered in a stone wall, the last seven
courses being bounded by land now or formerly of Catherine Bolduc; thence
running North 72 DEG. 11' 49" East for a distance of 102.09 feet
ii
<PAGE>
along a stone wall to an angle in said stone wall; thence running North 80
DEG. 58' 11" East for a distance of 58.21 feet along a stone wall to the end
of said stone wall; thence running North 71 DEG. 15' 46" East for a distance
of 92.65 feet to a stone wall corner; thence running North 71 DEG. 20' 55"
East for a distance of 23.94 feet along a stone wall to an angle in said
stone wall; thence running North 74 DEG. 43' 11" East for a distance of 71.08
feet along a stone wall to a concrete monument recovered; thence running
North 76 DEG. 14' 02" East for a distance of 28.06 feet along a stone wall to
an angle in said stone wall; thence running North 68 DEG 37' 42" East for a
distance of 15.60 feet along a stone wall to an angle in said stone wall;
thence running North 73 DEG. 29' 49" East for a distance of 127.85 feet along
a stone wall to a drill hole recovered in said stone wall; thence running
North 72 DEG. 22' 11" East for a distance of 21.61 feet along a stone wall to
an iron pipe recovered; thence running South 16 DEG. 57' 33" East for a
distance of 31.59 feet along a fence line to a fence post; thence running
South 15 DEG. 05' 54" East for a distance of 84.04 feet along a fence line to
a 6-inch Oak tree with wire; thence running South 13 DEG. 10' 31" East for a
distance of 54.71 feet along a fence line to a 4-inch Birch tree with wire;
thence running South 23 DEG. 18' 51" East for a distance of 62.20 feet along
a fence line to a 4-inch Beech tree with wire; thence running South 20 DEG.
45' 04" East for a distance of 114.84 feet along a fence line to a wood fence
post; thence running South 17 DEG. 30' 26" East for a distance of 41.85 feet
along a fence line to a stump with wire; thence running South 16 DEG. 42' 33"
East for a distance of 148.83 feet along a fence line to a 14-inch Oak tree
with wire; thence running South 19 DEG 07' 08" East for a distance of 22.59
feet along a fence line to a 15-inch Oak tree with wire; thence running South
12 DEG. 45' 40" East for a distance of 36.94 feet along a fence line to a
10-inch dead Oak tree with wire; thence running South 14 DEG. 30' 26" East
for a distance of 11.00 feet along a fence line to 10-inch dead Oak tree with
wire; thence running South 04 DEG. 25' 15" East for a distance of 28.81 feet
along a fence line to a 12-inch dead Oak tree with wire; thence running South
11 DEG. 13' 19" East for a distance of 17.10 feet along a fence line to an
8-inch dead Oak tree with wire; thence running South 07 DEG. 15' 03" East for
a distance of 84.60 feet along a fence line to an 18-inch dead Oak tree with
wire; thence running South 03 DEG. 14' 32" West for a distance of 56.67 feet
along a fence line to a point in the center of a stone wall; thence running
North 78 DEG. 00' 54" West for a distance of 68.44 feet along a stone wall to
an angle in said stone wall; thence running North 84 DEG. 17' 33" West for a
distance of 109.78 feet along a stone wall to an angle in said stone wall;
thence running North 87 DEG. 48' 33" West for a distance of 53.11 feet along
a stone wall to an angle in said stone wall; thence running South 85 DEG. 52'
51" West for a distance of 29.79 feet along a stone wall to a drill hole
recovered at a stone wall corner; thence running South 09 DEG. 09' 03" East
for a distance of 238.99 feet along a stone wall to a drill hole set
at the end of said stone wall; thence running South 03 DEG. 03' 19" East for a
distance of 61.53 feet along a fence line to a 26-inch Oak tree with wire;
thence running South 23 DEG. 09' 48" East for a distance of 47.77 feet along
a fence line to a 17-inch Oak tree with wire; thence running South 11 DEG.
51' 04" West for a distance of 36.61 feet along a fence line to a 16-inch
dead tree with wire; thence running South 46 DEG. 39' 16" East for a distance
of 32.48 feet to a railroad spike in ledge recovered; thence running South 07
DEG. 17' 57"
iii
<PAGE>
East for a distance of 55.19 feet along a stone wall to an iron pipe
recovered in said stone wall the last thirty-three courses being bounded by
land now or formerly of Martin Realty, Inc.; thence running South 12 DEG. 31'
25" East for a distance of 115.48 feet, bounded southwesterly by land now or
formerly of Glenn P. Martin, et al to an iron pipe recovered; thence running
North 83 DEG. 21' 50" East for a distance of 242.09 feet to a drill hole
recovered on ledge; thence running South 06 DEG. 08' 17" East for distance of
400.24 feet to a point in the northwesterly street line of Fort Shantok Road,
the last two courses being bounded by land now or formerly of Mathew C.
Hopkins and Antonette M. Hopkins; thence running North 83 DEG. 46' 08" East
for a distance of 429.13 feet, bounded southeasterly by Fort Shantok Road to
a point to be set in the northwesterly street line of Fort Shantok Road at a
southwesterly corner of land now or formerly of Edward G. Bernat and Beatrice
L. Bernat; thence running North 14 DEG. 53' 14" West for a distance of 65.12
feet to the remains of a metal fence post; thence running North 11 DEG. 17'
52" West for a distance of 21.20 feet to the remains of a metal fence post;
thence running North 15 DEG. 18' 16" West for a distance of 23.09 feet to the
remains of a metal fence post; thence running North 15 DEG. 15' 33" West for
a distance of 89.79 feet along a stone wall to an angle in said stone wall;
thence running North 13 DEG. 28' 03" West for a distance of 52.97 feet along
a stone wall to an angle in said stone wall; thence running North 09 DEG. 03'
32" West for a distance of 11.42 feet along a stone wall to a drill hole
recovered in said stone wall; thence running North 12 DEG. 03' 02" West for a
distance of 56.33 feet along a stone wall to an iron pipe recovered; thence
running North 14 DEG. 23' 00" West for a distance of 117.48 feet along a
stone wall to the end of said stone wall; thence running North 15 DEG. 10'
19" West for a distance of 227.98 feet to a stone pile; thence running North
15 DEG. 16' 30" West for a distance of 137.29 feet to a stone pile, the last
then courses being bounded by land now or formerly of Edward G. Bernat and
Beatrice L. Bernat; thence running North 16 DEG. 07' 30" West for a distance
of 304.36 feet to a 14-inch dead tree with wire; thence running North 16 DEG.
43' 31" West for a distance of 94.09 feet along a fence line to a 5-inch
Beech tree with wire; thence running North 17 DEG. 46' 50" West for a
distance of 86.72 feet along a fence line to a 20-inch Oak tree with wire;
thence running North 15 DEG. 59' 54" West for a distance of 69.57 feet along
a fence line to a 20-inch Oak tree with wire; thence running North 13 DEG.
09' 20" West for a distance of 241.49 feet along a fence line to a 22-inch
Oak tree with wire; thence running North 08 DEG. 51' 10" West for a distance
of 99.13 feet along a fence line to a tree with wire; thence running North 13
DEG. 11' 22" West for a distance of 44.72 feet along a fence line to a stump
with wire; thence running North 06 DEG. 55' 31" West for a distance of 44.45
feet long a fence line to an iron pipe recovered in a stone wall; thence
running North 73 DEG. 35' 41" East for a distance of 71.66 feet along a stone
wall to the end of said stone wall; thence running North 73 DEG. 57' 46" East
for a distance of 48.45 feet to a concrete monument recovered; thence running
North 75 DEG. 05' 39" East for a distance of 190.94 feet to a concrete
monument recovered; thence running North 73 DEG. 18' 39" East for a distance
of 166.10 feet to an angle point; thence running North 75 DEG. 48' 39" East
for a distance of 241.15 feet to a point to be set at Connecticut Grid
Coordinates North 738813.29, East 1183036.66, the last thirteen courses being
bounded by land
iv
<PAGE>
now or formerly of Southeastern Connecticut Regional Resources Recovery
Authority; thence running North 44 DEG. 37' 01" West for a distance of
437.22 feet to a point to be set; thence running North 46 DEG. 20' 29"
West for a distance of 133.75 feet to a point to be set; thence running
North 43 DEG. 39' 31" East for a distance of 209.89 feet to a point to be
set, the last three courses being bounded by other land now or formerly of
UNC, Inc.; thence running along the arc of a curve to the left with a
radius of 3,100.00 feet, a central angle of 04 DEG. 34' 39" for a distance
of 247.66 feet to a point; thence running North 51 DEG. 56' 11" West for a
distance of 150.00 feet to a point; thence running along the arc of a
curve to the right with a radius of 1,132.75 feet, a central angle of 37
DEG. 19' 02" for a distance of 737.77 feet to a point; thence running along
the arc of a curve to the right with a radius of 883.00 feet, a central
angle of 38 DEG. 49' 37" for a distance of 598.37 feet to a concrete
monument recovered, the last four courses being bounded by land now or
formerly of Central Vermont Railway, Inc.; thence running North 45 DEG.
14' 00" West for a distance of 35 feet, more or less, bounded
northeasterly by land now or formerly of Central Vermont Railway, Inc. to
the tidal high water mark of Trading Cove; thence running in a general
westerly direction along the tidal high water mark of Trading Cove for a
distance of 3,743 feet, more or less, to a point which is located North 06
DEG. 33' 05" East 55 feet, more or less, from a rebar recovered at
Connecticut Grid Coordinates North 741768.53, East 1179180.50; thence
running South 06 DEG. 33' 05" West for a distance of 55 feet, more or
less, to a rebar recovered; thence running South 06 DEG. 33' 05" West for
a distance of 547.80 feet to an iron pipe recovered, the last two courses
being bounded northwesterly by land now or formerly of Stamatios F.
Lahaniatis; thence running South 06 DEG. 34' 37" West for a distance of
275.26 feet, bounded northwesterly by land now or formerly of John
Lahaniatis and Joan Lahaniatis to an iron pipe recovered; thence running
South 07 DEG. 16' 42" West for a distance of 52.35 feet, bounded
northwesterly by the southeasterly terminus of Sandy Desert Road to a
concrete monument recovered; thence running South 88 DEG. 08' 28" West for
a distance of 246.94 feet, bounded northwesterly by Sandy Desert Road to
the concrete monument recovered at the point and place of beginning.
Together with all rights, easements, hereditaments and appurtenances thereto
appertaining and all right, title and interest, if any, in and to strips and
gores adjoining said premises and in and to the land lying in the bed of any
street or streets adjoining said premises.
Reference is hereby made to a certain Quit-Claim Deed from United Nuclear
Corporation to UNC Resources, Inc, dated July 1, 1983 and recorded on August
10, 1984 at Volume 160, page 552 of Montville Land Records. Reference is
further made to a Certificate of Change of Name from UNC Resources, Inc. to UNC
Incorporated dated June 16, 1986 and recorded on September 10, 1986 at Volume
177, Page 438 of Montville Land Records.
Said premises are conveyed subject to the following encumbrances:
v
<PAGE>
1. Pole line easement in favor of the Hartford Electric Light Company dated
October 7, 1958, recorded November 6, 1958 in Volume 66, Page 40 of the
Montville Land Records (said easement encumbering Tract Nos. 8 and 3 as
shown on plan entitled "Plan Made for Olin Mathieson Chemical Corporation
Showing Property in Town of Montville, Conn.)
2. Certificate of Taking in an action instituted by Southeastern Connecticut
Regional Resources Recovery Authority against UNC Incorporated dated March
4, 1993, recorded March 10, 1993 in Volume 251, Page 713 of the Montville
Land Records pursuant to which Southeastern Connecticut Regional Resources
Recovery Authority exercised its right of eminent domain to condemn a
certain access easement over and across a portion of those premises
delineated on a certain map for plan entitled, "Plan made for United
Nuclear Corporation Showing Property on Fort Shantok Road Montville,
Connecticut Scale 1"=50 Feet Chandler, Palmer & King Norwich, Conn.
November 1979."
3. Pole line easement in favor of the Hartford Electric Light Company dated
October 27, 1958, recorded November 6, 1958 in Volume 66, Page 38 of the
Montville Land Records, which right-of-way encumbers Tract Nos. 10, 1, 2
and 9 and that area between Tract Nos. 10 and 11, all as show on a plan
entitled "Plan Made For Olin Mathieson Chemical Corporation Showing
Property in Town of Montville, conn. Scale: 1"=200 Ft. Chandler & Palmer,
Engr's. Norwich, Conn. July 31, 1957 Additions Sept. 1957 Sub-Division Of
Tract 6 Oct 1958 Revision Of"""November 1958 Revised March 1, 1961."
4. Survey by Harris & Clark, Inc. dated December, 1995 shows the following:
Lawn encroachment along the northerly line of land now or formerly of
Horace W. and Gloria M. Deshefy, which lawn encroachment is approximately
40 feet in width.
5. Riparian rights of other in and to the Trading Cove.
6. Certificate of Taking by Southeastern Connecticut Regional Resources
Recovery Authority in an action entitled "Southeastern Connecticut
Regional Resources Recovery Authority vs. UNC Incorporation, Town of
Montville Water Pollution Control Authority and The Hartford Electric
Company" dated February 16, 1993, recorded in Volume 251, Page 167 of the
Montville Land Records (thereby exercising its right of eminent domain to
condemn certain groundwater easements in conjunction with leachate
discharge from the condemnor's ash residue disposal facility located on
adjacent real property to the south).
vi
<PAGE>
7. Rights to maintain a 30-inch (30") reinforced concrete pipe, endwall and
paved ditch and together with permanent sloping rights contained in a
Certificate of Condemnation from Albert Elbaum and Evelyn Elbaum to the
State of Connecticut dated July 1, 1965, recorded in July 3, 1965 in Volume
87, Page 205 of the Montville Land Records, which rights were conveyed by
the State of Connecticut to the Town of Montville by deed dated September
9, 1968, recorded in Volume 102, Page 171 of said land records.
vii
<PAGE>
EXHIBIT B TO OPEN-END CONSTRUCTION -- PERMANENT LEASEHOLD MORTGAGE DEED,
ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT
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EXHIBIT A-I
(Face of Note)
--- % SERIES A SENIOR SECURED NOTES due 2002
No. $ --------------
MOHEGAN TRIBAL GAMING AUTHORITY
promises to pay to
or registered assigns,
the principal sum of
Dollars on November 15, 2002.
Interest Payment Dates: May 15, and November 15
Record Dates: May 1, and November 1
Dated: September ---, 1995
MOHEGAN TRIBAL GAMING AUTHORITY
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
(SEAL)
This is one of the
Notes referred to in the
within-mentioned Indenture:
- --------------------------------------
as Trustee
By:
----------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
A-I-1
<PAGE>
(Back of Note)
--- % Series A Senior Secured Notes due 2002
[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 to a nominee of the Depository or by a nominee of the Depository
to the Depositorty or another nominee of the Depository or by the Depository
or any such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York,
New York) ("DTC"), to the issuer or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as may be requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as may be requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.](1)
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE NOTE
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY
BE RELYING ON THE EXEMPTION PROVIDED BY RULE 144A UNDER THE SECURITIES ACT.
THE HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE TRIBE
AND THE AUTHORITY THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN OF RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,(b) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT,
(c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE AUTHORITY SO REQUESTS), (2)
TO THE AUTHORITY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND,
IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE
NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (1) ABOVE.
Capitalized terms used herein shall have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
- ------------------
1. This paragraph is to be included only if the Note is in global form.
A-I-2
<PAGE>
1. INTEREST. Mohegan Tribal Gaming Authority (or any successor thereto as
provided in the Indenture, the "Authority"), promises to pay interest at the
rate of __% per annum of the principal amount of this Note (the "Fixed
Interest") from the Issuance Date to the date of payment of such principal
amount of this Note and shall pay the Liquidated Damages payable pursuant to
Section 5 of the Registration Rights Agreement referred to below.
Installments of Fixed Interest and Liquidated Damages shall become due and
payable semi-annually in arrears on each May 15 and November 15 to the holder
of record at the close of business on the preceding May 1 or November 1.
Additionally, installments of accrued and unpaid Fixed Interest shall become
due and payable with respect to any principal amount of this Note that
matures (whether at stated maturity, upon acceleration, upon maturity of
repurchase obligation or otherwise) upon such maturity of such principal
amount of this Note. The Authority shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, from time to time on demand at a rate that is
1% per annum in excess of the rate then in effect; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law)
on overdue installments of Fixed Interest and Liquidated Damages (without
regard to any applicable grace periods) from time to time on demand at the
same rate to the extent lawful. Fixed Interest on this Note shall be computed
on the basis of a 360-day year, consisting of twelve 30-day months. Each
installment of Fixed Interest shall be calculated to accrue from and
including the most recent date to which Fixed Interest has been paid or
provided for (or from and including the Issuance Date if no installment of
Fixed Interest has been paid) to, but not including, the date of payment.
In addition, the Note shall bear Cash Flow Participation Interest,
calculated as described below, from the Commencement Date to the date of
payment of this Note. Installments of accrued or deferred Cash Flow
Participation Interest on this Note accrued through the Accrual Period last
ended shall become due and payable semi-annually on each May 15 and November
15 after the Commencement Date to the holder of record at the close
of business on the preceding May 1 or November 1, provided that no Cash Flow
Participation Interest shall be payable with respect to any period prior to
the earlier of the first day the Resort commences operations and October 31,
1996. Additionally, all installments of accrued or deferred Cash Flow
Participation Interest shall become due and payable (and may not be further
deferred) with respect to any principal amount of this Note that matures
(whether at stated maturity, upon acceleration, maturity of repurchase
obligation or otherwise) upon such maturity of such principal amount of this
Note.
The Authority, at its option, may defer payment of all or a portion of
any installment of Cash Flow Participation Interest then otherwise due if,
and only to the extent that, (a) the payment of such portion of Cash Flow
Participation Interest shall cause the Authority's Fixed Charge Coverage
Ratio for the four consecutive fiscal quarters last completed prior to such
interest payment date to be less than 2.0:1 on a pro forma basis after giving
effect to the assumed payment of such Cash Flow Participation Interest but
before giving effect to the payment of any interest on the Subordinated Notes
which is then not payable in cash and (b) the principal of this Note
corresponding to such Cash Flow Participation Interest has not then matured
and become due and payable (at stated maturity, upon acceleration, upon
maturity of repurchase obligation or otherwise). Cash Flow Participation
Interest that is deferred shall become due and payable on the earlier of (i)
the next succeeding interest payment date on which such Cash Flow
Participation Interest is not permitted to be deferred, and (ii) upon the
maturity of the corresponding principal of this Note (whether at stated
maturity, upon acceleration, upon maturity of repurchase obligation or
otherwise). No interest shall accrue on any Cash Flow Participation Interest
deferred and which has not yet become due and payable. To the extent
permitted by law, interest shall accrue on overdue Cash Flow Participation
Interest at the same rate as the Fixed Interest plus one percent per annum.
Each installment of Cash Flow Participation Interest shall be calculated
to accrue (an "Accrual Period") from, but not including, the most recent date
to which Cash Flow Participation
A-I-3
<PAGE>
Interest has been paid or provided for or through which Cash Flow
Participation Interest had been calculated and deferred (or from and
including the Commencement Date if on installment of Cash Flow Participation
Interest has been paid, provided for or deferred) to, and including, either
(a) the last day of the next Semi-annual Period if the corresponding
principal of this Note has not become due and payable or (b) the date of
payment if the corresponding principal of this Note has not become due and
payable (whether at stated maturity, upon acceleration, upon maturity of
repurchase obligation or otherwise). With respect to each Accrual Period,
Cash Flow Participation Interest shall accrue daily on the principal of this
Note outstanding during such period as follows (except with respect to the
Initial Period): (i) for each day during each month that ends during such
Accrual Period and which month ends at least 25 days prior to the date of
payment, an amount equal to 1/30 of the Monthly Cash Flow Participation
Interest on this Note for such month until all of such Monthly Cash Flow
Participation Interest has been accrued (and all of such month's Monthly Cash
Flow Participation Interest on this Note shall be accrued by the last day of
such month) and (ii) for any day in any remaining period, 1/30 of the prior
month's Monthly Base Cash Flow Participation Interest on this Note, provided,
however, that additional Cash Flow Participation Interest will cease accruing
on any outstanding principal of this Note until the next succeeding September
30, if on any day, the Cash Flow Participation Interest on such principal
amount of this Note accrued since the immediately preceding September 30
(excluding any deferred Cash Flow Participation Interest accrued prior to
such September 30) exceeds the product of $_______ million times such
principal amount of this Note divided by $175,000,000. With respect to any
principal amount of this Note during the Initial Period, Cash Flow
Participation Interest shall accrue daily in the amount of 1/180 of the Cash
Flow Participation Interest for such principal in the next succeeding
Semi-annual Period.
Any reference in this Note to "accrued and unpaid interest" includes the
amount of unpaid Cash Flow Participation Interest due and payable.
"COMMENCEMENT DATE" means the earlier of (i) October 31, 1996 and (ii)
the first day that the Resort becomes Operating.
"CASH FLOW" shall have the meaning set forth in the Indenture.
"CASH FLOW PARTICIPATION INTEREST" means as of any payment date, the
Cash Flow Participation Interest on this Note accrued through the Accrual
Period last ended (including any Accrual Period that ends on such payment
date) and any Cash Flow Participation Interest previously accrued and the
payment of which has been permitted to be deferred.
"FIXED CHARGE COVERAGE RATIO" shall have the meaning set forth in the
Indenture.
"INITIAL PERIOD" means the period, if any, beginning on the Commencement
Date and ending on the day prior to the first day that the Resort becomes
Operating.
"MONTHLY CASH FLOW PARTICIPATION INTEREST" means, with respect to any
month and any principal amount of this Note, the product of __% of the
Authority's Cash Flow for such month times a fraction, the numerator of which
is the principal amount outstanding on this Note and the denominator of which
is $175,000,000.
"SEMI-ANNUAL PERIOD" means each period that begins on April 1 and ends
on the next succeeding September 30, or each period that begins on October 1
and ends on the next succeeding March 31.
2. METHOD OF PAYMENT. The Authority shall pay interest (including Cash Flow
Participation Interest, if any) on the Notes (except defaulted interest) and
Liquidated Damages to the Persons who are registered Holders of Notes at the
close of business on May 1 or November 1 next
A-I-4
<PAGE>
preceding the Interest Payment Date, even if such Notes are cancelled after
such record date and on or before such Interest Payment Date (the "Record
Date"), except as provided in Section 2.12 of the Indenture with respect to
defaulted interest or as provided with respect to Notes called for redemption
after such record and on or before such Interest Payment Date. The Holder
hereof must surrender this Note to a Paying Agent to collect principal
payments. The Notes shall be payable as to principal, premium, if any,
interest (including Cash Flow Participation Interest, if any) and Liquidated
Damages at the office or agency of the Authority maintained for such purpose
within or without the City and State of New York, or, at the option of the
Authority, payment of interest (including Cash Flow Participation Interest,
if any) and Liquidated Damages may be made by check mailed to the Holders at
their addresses set forth in the register of Holders and provided that
payment by wire transfer of immediately available fund, will be required with
respect to principal of and interest, premium on, all Global Notes and all
other Notes the Holders of which shall have provided wire transfer
instructions to the Authority or the Paying Agent. Such payment shall be in
such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, First Fidelity Bank (including
any successor appointed under the Indenture, the "Trustee"), the Trustee
under the Indenture, shall act as Paying Agent and Registrar. The Authority
may change any Paying Agent or Registrar without notice to any Holder. The
Authority may act in any such capacity.
4. INDENTURE AND COLLATERAL DOCUMENTS. The Authority issued the Notes
under an Indenture dated as of September __, 1995 (as it may be amended from
time to time, the "Indenture") among the Authority, the Tribe, and the
Trustee. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S. Code Sections 77aaa-77bbbb) as in effect on the
Issuance Date. The Notes are subject to all such terms, and Holders are
referred to the Indenture and such Act for a statement of such terms. The
Notes are obligations of the Authority limited to $175 million in aggregate
principal amount. The terms of the Indenture shall govern any inconsistencies
between the Indenture and the Notes. The Notes are secured by certain
collateral pursuant to the Collateral Documents referred to in the Indenture
and which may be released pursuant to the terms thereof.
5. OPTIONAL REDEMPTION.
Except as set forth below, the Authority shall not have the option to
redeem the Notes prior to November 15, 1999. From and after November 15,
1999, the Authority shall have the option to redeem the Notes, in whole or in
part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest (including Cash Flow Participation Interest and
Liquidated Damages, if any) thereon to the applicable redemption date, if
redeemed during the twelve-month period beginning on November 15 of the years
indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
1999...........................................
2000...........................................
2001...........................................
</TABLE>
Notwithstanding any other provisions of Article 3 of the Indenture, if any
Gaming Regulatory Authority requires that a Holder or beneficial owner of the
Notes be licensed, qualified or found suitable under any applicable gaming
laws in order to maintain any gaming license or
A-1-5
<PAGE>
franchise of the Authority under any applicable gaming laws, and the Holder
or beneficial owner fails to apply for a license, qualification or finding of
suitability within 30 days after being requested to do so by such Gaming
Regulatory Authority (or such lesser period that may be required by such
Gaming Regulatory Authority) or if such Holder or beneficial owner is not so
licensed, qualified or found suitable, the Authority has the right, at its
option, (i) to require such Holder or beneficial owner to dispose of such
Holder's or beneficial owner's Notes within 30 days of receipt of such notice
of such finding by the applicable Gaming Regulatory Authority (or such
earlier date as may be required by the applicable Gaming Regulatory
Authority) or (ii) to call for redemption of the Notes of such Holder or
beneficial owner at a redemption price equal to the lesser of the principal
amount thereof or the price at which such Holder or beneficial owner acquired
the Notes, together with, in either case, accrued and unpaid interest
(including Cash Flow Participation Interest and Liquidated Damages), if any,
to the earlier of the date of redemption or the date of the finding of
unsuitability by such Gaming Regulatory Authority, which may be less than 30
days following the notice of redemption if so ordered by such Gaming
Regulatory Authority. The Authority shall not be required to pay or reimburse
any Holder or beneficial owner of Notes who is required to apply for any such
license, qualification or finding of suitability for the costs of the
licensure or investigation for such qualification or finding of suitability.
Such expenses shall be the obligation of such Holder or beneficial owner.
6. MANDATORY REDEMPTION.
The Authority shall not be required to make mandatory redemption or sinking
fund payments with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
Under certain circumstances, as provided in the Indenture, the Authority
may be required to purchase all or a portion of the Notes. Holders of Notes
that are subject to an offer to purchase will receive an offer to purchase
from the Authority prior to any related purchase date, and may elect to have
such Notes purchased by completing the form entitled "Option of Holders to
Elect Purchase" appearing below.
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at least 30
days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest (including Cash Flow
Participation Interest or Liquidated Damages, if any) ceases to accrue on
Notes or portions thereof called for redemption.
9. 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 Authority may require a Holder to pay any taxes and fees
required by law or permitted by the Indenture. The Authority need not
exchange or register the transfer of any Note or portion of a Note selected
for redemption, except for the unredeemed portion of any Note being redeemed
in part. Also, it need not exchange or register the transfer of any Notes for
a period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. Prior to due presentment to the Trustee for
registration of the transfer of this Note, the Trustee, any Agent and the
Authority may deem and treat the Person in whose name this Note is registered
as its absolute owner for the purpose of receiving payment of principal of
and interest on this Note and for all other purposes whatsoever, whether
A-1-6
<PAGE>
or not this Note is overdue, and neither the Trustee, any Agent, nor the
Authority shall be affected by notice to the contrary. The registered holder
of a Note shall be treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture, the Notes, the Collateral Documents or the Management Agreement
may be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the then outstanding Notes, and any existing
default or compliance with any provision of the Indenture or the Notes may be
waived with the consent of the Holders of a majority in principal amount of
the then outstanding Notes. Without the consent of any Holder of a Note, the
Indenture, the Notes or the Collateral Documents may be amended or supplemented
to cure any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to comply with
Article Five or Article 10 of the Indenture, to provide for the assumption of
the Authority's obligations to Holders of the Notes in case of a merger or
consolidation pursuant to Article Five or Article 10 of the Indenture, 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 under
the Indenture of any such Holder, or to comply with the requirements of the
Commission in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act or to enter into additional or supplemental
Collateral Documents.
12. DEFAULTS AND REMEDIES. Events of Default include (as more fully
described, and subject to, the terms and conditions of the Indenture as it
may be amended from time to time): (i) default in payment of interest
(including Cash Flow Participation Interest or Liquidated Damages, if any)
when due and payable on any Note for 30 days; (ii) default in payment of
principal of or premium, if any on any Note when due; (iii) failure by the
Authority to comply with Section 4.07, 4.09, 4.10, 4.11, 4.15, 4.16, 4.18,
4.28 or 5.01 of the Indenture; (iv)failure by the Authority or the Tribe for
60 days after written notice to it to comply with any of its other agreements
in the Indenture, the Notes, or the Collateral Documents; (v) any default
occurs under the Lease or any Collateral Documents or the Lease ceases to be
in full force and effect that continues beyond any applicable due period;
(vi) payment defaults under and the acceleration prior to express maturity of
certain other indebtedness which aggregates $7.5 million or more; (vii)
certain final judgments that remain unpaid, undischarged and unstayed if the
aggregate of all such undischarged judgements exceeds $7.5 million; (viii)
breach of representation or warranty in, or in the repudiation with respect
to the Lease or any of the Collateral Documents; (ix) certain events of
bankruptcy or insolvency; (x) revocation, termination, suspension or other
cessation of effectiveness of any Gaming License which results in the
cessation or suspension of gaming operations for a period of more than 90
consecutive days at the Resort; (xi) cessation of gaming operations for a
period of more than 90 consecutive days at the Resort (other than as a result
of a casualty loss) after the Resort becomes Operating; (xii) cessation of
gaming operations for a period of more than 180 consecutive days as a result
of a casualty loss except if the Authority is diligently pursuing
reconstruction and opening of the Resort and such reconstruction and
operating can be accomplished with the funds available to the Authority. If
any Event of Default occurs and is continuing, the Trustee or the Holders of
at least 25% in principal amount of the then outstanding Notes may declare
the principal, premium, if any, interest (including all Cash Flow
Participation Interest accrued or deferred and Liquidated Damages) and any
other monetary obligations on all of the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising
from certain events of bankruptcy or insolvency, all outstanding Notes shall
become due and payable without further action or notice. Holders may not
enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in principal amount of
the then outstanding Notes may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Holders of the Notes notice of
any continuing Default or Event of Default (except a Default or Event of
Default relating to the payment of principal or interest (including Cash Flow
Participation Interest, if any)) if it determines that withholding notice is
in their interest. The Holders of a majority in aggregate
A-I-7
<PAGE>
principal amount of the Notes then outstanding by notice to the Trustee may
on behalf of the Holders of all of the Notes waive any existing Default or
Event of Default and its consequences under the Indenture except a continuing
Default or Event of Default in the payment of interest on, or the principal
of, the Notes. The Authority is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Authority is
required, within five Business Days upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such
Default or Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Authority or its Affiliates, and may otherwise deal with the
Authority or its Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. Neither the Tribe nor any officer or
office holder, employee, agent, representative, member of the Authority or
the Tribe, as such, shall have any liability for any obligations of the
Authority under this Note, the Indenture or the Collateral Documents, as
applicable, or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
15. AUTHENTICATION. This Note shall not be valid until authentication by
the manual signature of the Trustee or an authenticating agent.
16. 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).
17. ADDITIONAL RIGHTS OF HOLDERS. In addition to the rights provided to
Holders of Notes under the Indenture, Holders shall have all the rights set
forth in the Collateral Documents.
18. CUSIP NUMBERS. Pursuant to recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Authority has
caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed
on the Notes or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers place thereon.
The Authority shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or any of the Collateral
Documents. Requests may be made to:
Mohegan Tribal Gaming Authority
27 Church Lane
Uncasville, Connecticut 06382
Attention: Roland Harris and Carlisle Fowler,
Business Board Members, and Chief Ralph Sturges
A-I-8
<PAGE>
Assignment Form
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to ___________________________________________________
_________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _________________________________________________
to transfer this Note on the books of the Authority. The agent may substitute
another to act for him.
_________________________________________________________________________
Date: _____________
Your Signature: ______________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee.
A-I-9
<PAGE>
Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the Authority
pursuant to Section 4.10, 4.11, 4.16 or 4.28 of the Indenture, check the box
below:
/ / Section 4.10 / / Section 4.11 / / Section 4.16
/ / Section 4.28
If you want to elect to have only part of the Note purchased by the
Authority pursuant to Section 4.10, Section 4.11, Section 4.16 or Section 4.28
of the Indenture, state the amount you elect to have purchased: $_____________
Date:________________ Your Signature:_______________________________
(Sign exactly as your name appears on the Note)
Tax Identification No.:_________
Signature Guarantee.
A-I-10
<PAGE>
EXHIBIT A-II-1
(Face of Note)
___% SERIES B SENIOR SECURED NOTES due 2002
No. $__________
MOHEGAN TRIBAL GAMING AUTHORITY
promises to pay to
or registered assigns,
the principal sum of
Dollars on November 15, 2002.
Interest Payment Dates: May 15, and November 15
Record Dates: May 1, and November 1
Dated: September ___, 1995
MOHEGAN TRIBAL GAMING AUTHORITY
By:______________________________
Name:
Title:
By:______________________________
Name:
Title:
(SEAL)
This is one of the
Notes referred to in the
within-mentioned Indenture:
_____________________________________
as Trustee
By:__________________________________
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
A-II-1
<PAGE>
(Back of Note)
__% Series B Senior Secured Notes due 2002
[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 to a nominee of the Depository or by a nominee of the Depository
to the Depository or another nominee of the Depository or by the Depository
or any such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York,
New York) ("DTC"), to the issuer or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as may be requested by an authorized
representateve of DTC (and any payment is made to Cede & Co. or such other
entity as may be requested by an authorized representative of DTC). ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.](1)
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Mohegan Tribal Gaming Authority (or any successor thereto
as provided in the Indenture, the "Authority"), promises to pay interest at
the rate of __% per annum of the principal amount of this Note (the "Fixed
Interest") from the Issuance Date to the date of payment of such principal
amount of this Note. Installments of Fixed Interest shall become due and
payable semi-annually in arrears on each May 15 and November 15 to the holder
of record at the close of business on the preceding May 1 or November 1.
Additionally, installments of accrued an unpaid Fixed Interest shall become
due and payable with respect to any principal amount of this Note that
matures (whether at stated maturity, upon acceleration, upon maturity of
repurchase obligation or otherwise) upon such maturity of such principal
amount of this Note. The Authority shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, in any, from time to time on demand at a rate that is
1% per annum in excess of the rate then in effect; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law)
on overdue installments of Fixed Interest (without regard to any applicable
grace periods) from time to time on demand at the same rate to the extent
lawful. Fixed Interest on this Note shall be computed on the basis of a
360-day year, consisting of twelve 30-day months. Each installment of Fixed
Interest shall be calculated to accrue from and including the most recent
date to which Fixed Interest has been paid or provided for (or from and
including the Issuance Date if no installment of Fixed Interest has been
paid) to, but not including, the date of payment.
In addition, this Note shall bear Cash Flow Participation Interest,
calculated as described below, from the Commencement Date to the date of
payment of this Note. Installments of accrued or deferred Cash Flow
Participation Interest on this Note accrued through the Accrual Period last
ended shall become due and payable semi-annually on each May 15 and November
15 after the Commencement Date to the holder of record at the close
of business on the preceding May 1 or November 1, provided that no Cash Flow
Participation Interest shall be payable with respect to any period prior to
the earlier of the first day the Resort commences operations and October 31,
1996. Additionally, all installments of accrued or deferred Cash Flow
Participation Interest shall become due and payable (and may not be further
deferred) with respect to any
- ----------
(1) This paragraph is to be included only if the Note is in global form.
A-II-2
<PAGE>
principal amount of this Note that matures (whether at stated maturity, upon
acceleration, maturity of repurchase obligation or otherwise) upon such
maturity of such principal amount of this Note.
The Authority, at its option, may defer payment of all or a portion of
any installment of Cash Flow Participation Interest then otherwise due if,
and only to the extent that, (a) the payment of such portion of Cash Flow
Participation Interest shall cause the Authority's Fixed Charge Coverage
Ratio for the four consecutive fiscal quarters last completed prior to such
interest payment date to be less than 2.0:1 on a pro forma basis after giving
effect to the assumed payment of such Cash Flow Participation Interest but
before giving effect to the payment of any interest on the Subordinated Notes
which is then not payable in cash and (b) the principal of this Note
corresponding to such Cash Flow Participation Interest has not then matured
and become due and payable (at stated maturity, upon acceleration, upon
maturity of repurchase obligation or otherwise). Cash Flow Participation
Interest that is deferred shall become due and payable on the earlier of (i)
the next succeeding interest payment date on which such Cash Flow
Participation Interest is not permitted to be deferred, and (ii) upon the
maturity of the corresponding principal of this Note (whether at stated
maturity, upon acceleration, upon maturity of repurchase obligation or
otherwise). No interest shall accrue on any Cash Flow Participation Interest
deferred and which has not yet become due and payable. To the extent
permitted by law, interest shall accrue on overdue Cash Flow Participation
Interest at the same rate as the Fixed Interest plus one percent per annum.
Each installment of Cash Flow Participation Interest shall be calculated
to accrue (an "Accrual Period") from, but not including, the most recent date
to which Cash Flow Participation Interest has been paid or provided for or
through which Cash Flow Participation Interest had been calculated and
deferred (or from and including the Commencement Date if no installment of
Cash Flow Participation Interest has been paid, provided for or deferred) to,
and including, either (a) the last day of the next Semi-annual Period if the
corresponding principal of this Note has not become due and payable or (b)
the date of payment if the corresponding principal of this Note has become
due and payable (whether at stated maturity, upon acceleration, upon maturity
of repurchase obligation or otherwise). With respect to each Accrual Period,
Cash Flow Participation Interest shall accrue daily on the principal of this
Note outstanding during such period as follows (except with respect to the
Initial Period): (i) for each day during each month that ends during such
Accrual Period and which month ends at least 25 days prior to the date of
payment, an amount equal to 1/30 of the Monthly Cash Flow Participation
Interest on this Note for such month until all of such Monthly Cash Flow
Participation Interest has been accrued (and all of such month's Monthly Cash
Flow Participation Interest on this Note shall be accrued by the last day of
such month) and (ii) for any day in any remaining period, 1/30 of the prior
month's Monthly Base Cash Flow Participation Interest on this Note; provided,
however, that additional Cash Flow Participation Interest will cease accruing
on any outstanding principal of this Note until the next succeeding September
30, if on any day, the Cash Flow Participation Interest on such principal
amount of this Note accrued since the immediately preceding September 30
(excluding any deferred Cash Flow Participation Interest accrued prior to
such September 30) exceeds the product of $_______ million times such
principal amount of this Note divided by $175,000,000. With respect to any
principal amount of this Note during the Initial Period, the Cash Flow
Participation Interest shall accrue daily in the amount of 1/180 of the Cash
Flow Participation Interest for such principal in the next succeeding
Semi-annual Period.
Any reference in this Note to "accrued and unpaid interest" includes the
amount of unpaid Cash Flow Participation Interest due and payable.
"COMMENCEMENT DATE" means the earlier of (i) October 31, 1996 and (ii)
the first day that the Resort becomes Operating.
"CASH FLOW" shall have the meaning set forth in the Indenture.
A-II-3
<PAGE>
"CASH FLOW PARTICIPATION INTEREST" means, as of any payment date.
Cash Flow Participation Interest on this Note accrued through the Accrual
Period last ended (including any Accrual Period that ends on such payment
date) and any Cash Flow Participation Interest previously accrued and the
payment of which has been permitted to be deferred.
"FIXED CHARGE COVERAGE RATIO" shall have the meaning set forth in the
Indenture.
"INITIAL PERIOD" means the period, if any, beginning on the Commencement
Date and ending on the day prior to the first day that the Resort becomes
Operating.
"MONTHLY CASH FLOW PARTICIPATION INTEREST" means, with respect to any
month and any principal amount of this Note, the product of __% of the
Authority's Cash Flow for such month times a fraction, the numerator of which
is the principal amount outstanding on this Note and the denominator of which
is $175,000,000.
"SEMI-ANNUAL PERIOD" means each period that begins on April 1 and ends
on the next succeeding September 30, or each period that begins on October 1
and ends on the next succeeding March 31.
2. METHOD OF PAYMENT. The Authority shall pay interest (including Cash Flow
Participation Interest, if any) on the Notes (except defaulted interest) and
Liquidated Damages to the Persons who are registered Holders of Notes at the
close of business on April 30 or September 30 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 "Record Date"), except as provided
in Section 2.12 of the Indenture with respect to defaulted interest or as
provided with respect to Notes called for redemption after such record and on
or before such Interest Payment Date. The Holder hereof must surrender this
Note to a Paying Agent to collect principal payments. The Notes shall be
payable as to principal, premium, if any, interest (including Cash Flow
Participation Interest, if any) and Liquidated Damages at the office or
agency of the Authority maintained for such purpose within or without the
City and State of New York, or, at the option of the Authority, payment of
interest (including Cash Flow Participation Interest, if any) and Liquidated
Damages may be made by check mailed to the Holders at their addresses set
forth in the register of Holders and provided that payment by wire transfer
of immediately available funds will be required with respect to principal of
and interest, premium and Liquidated Damages on, all Global Notes and other
Notes the Holders of which shall have provided wire transfer instructions to
the Authority or the Paying Agent. Such payment shall be in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, First Fidelity Bank (including
any successor appointed under the Indenture, the "Trustee"), the Trustee
under the Indenture, shall act as Paying Agent and Registrar. The Authority
may change any Paying Agent or Registrar without notice to any Holder. The
Authority may act in any such capacity.
4. INDENTURE AND COLLATERAL DOCUMENTS. The Authority issued the Notes
under an Indenture dated as of September __, 1995 (as it may be amended from
time to time, the "Indenture") among the Authority, the Tribe, and the
Trustee. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S. Code Sections 77aaa-77bbbb) as in effect on the
Issuance Date. The Notes are subject to all such terms, and Holders are
referred to the Indenture and such Act for a statement of such terms. The
Notes are obligations of the Authority limited to $175 million in aggregate
principal amount. The terms of the Indenture shall govern any inconsistencies
between the Indenture and the Notes. The Notes are secured by certain
collateral pursuant to the Collateral Documents referred to in the Indenture
and which may be released pursuant to the terms thereof.
A-II-4
<PAGE>
5. OPTIONAL REDEMPTION.
Except as set forth below, the Authority shall not have the option to
redeem the Notes prior to November 15, 1999. From and after November 15,
1999, the Authority shall have the option to redeem the Notes, in whole or in
part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest (including Cash Flow Participation Interest, if
any) thereon to the applicable redemption date, if redeemed during the
twelve-month period beginning on November 15 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
1999...........................................
2000...........................................
2001...........................................
</TABLE>
Notwithstanding any other provisions of Article 3 of the Indenture, if any
Gaming Regulatory Authority requires that a Holder or beneficial owner of the
Notes be licensed, qualified or found suitable under any applicable gaming
laws in order to maintain any gaming license or franchise of the Authority
under any applicable gaming laws, and the Holder or beneficial owner fails to
apply for a license, qualification or finding of suitability within 30 days
after being requested to do so by such Gaming Regulatory Authority (or such
lesser period that may be required by such Gaming Regulatory Authority) or if
such Holder or beneficial owner is not so licensed, qualified or found
suitable, the Authority has the right, at its option, (i) to require such
Holder or beneficial owner to dispose of such Holder's or beneficial owner's
Notes within 30 days of receipt of such notice of such finding by the
applicable Gaming Regulatory Authority (or such earlier date as may be
required by the applicable Gaming Regulatory Authority) or (ii) to call for
redemption of the Notes of such Holder or beneficial owner at a redemption
price equal to the lesser of the principal amount thereof or the price at
which such Holder or beneficial owner acquired the Notes, together with, in
either case, accrued and unpaid interest (including Cash Flow Participation
Interest), if any, to the earlier of the date of redemption or the date of
the finding of unsuitability by such Gaming Regulatory Authority, which may
be less than 30 days following the notice of redemption if so ordered by such
Gaming Regulatory Authority. The Authority shall not be required to pay or
reimburse any Holder or beneficial owner of Notes who is required to apply
for any such license, qualification or finding of suitability for the costs
of the licensure or investigation for such qualification or finding of
suitability. Such expenses shall be the obligation of such Holder or
beneficial owner.
6. MANDATORY REDEMPTION.
The Authority shall not be required to make mandatory redemption or sinking
fund payments with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
Under certain circumstances, as provided in the Indenture, the Authority
may be required to purchase all or a portion of the Notes. Holders of Notes
that are subject to an offer to purchase will receive an offer to purchase
from the Authority prior to any related purchase date, and may elect to have
such Notes purchased by completing the form entitled "Option of Holders to
Elect Purchase" appearing below.
A-II-5
<PAGE>
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest (including Cash Flow
Participation Interest, if any) ceases to accrue on Notes or portions thereof
called for redemption.
9. 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 Authority may require a Holder to pay any taxes and fees
required by law or permitted by the Indenture. The Authority need not
exchange or register the transfer of any Note or portion of a Note selected
for redemption, except for the unredeemed portion of any Note being redeemed
in part. Also, it need not exchange or register the transfer of any Notes for
a period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. Prior to due presentment to the Trustee for
registration of the transfer of this Note, the Trustee, any Agent and the
Authority may deem and treat the Person in whose name this Note is registered
as its absolute owner for the purpose of receiving payment of principal of
and interest (including Cash Flow Participation Interest, if any) on this
Note and for all other purposes whatsoever, whether or not this Note is
overdue, and neither the Trustee, any Agent, nor the Authority shall be
affected by notice to the contrary. The registered holder of a Note shall be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture, the Notes, the Collateral Documents or the Management Agreement
may be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the then outstanding Notes, and any existing
default or compliance with any provision of the Indenture or the Notes may be
waived with the consent of the Holders of a majority in principal amount of
the then outstanding Notes. Without the consent of any Holder of a Note, the
Indenture, the Notes or the Collateral Documents may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
comply with Article Five or Article 10 of the Indenture, to provide for the
assumption of the Authority's obligations to Holders of the Notes in case of
a merger or consolidation pursuant to Article Five or Article 10 of the
Indenture, 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 under the Indenture of any such Holder, or to comply with the
requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act or to enter into
additional or supplemental Collateral Documents.
12. DEFAULTS AND REMEDIES. Events of Default include (as more fully
described, and subject to, the terms and conditions of the Indenture as it
may be amended from time to time): (i) default in payment of interest
(including Cash Flow Participation Interest, if any) when due and payable on
any Note for 30 days; (ii) default in payment of principal of or premium, if
any on any Note when due; (iii) failure by the Authority to comply with
Section 4.07, 4.09, 4.10, 4.11, 4.15, 4.16, 4.18, 4.28 or 5.01 of the
Indenture; (iv) failure by the Authority or the Tribe for 60 days after
written notice to it to comply with any of its other agreements in the
Indenture, the Notes, or the Collateral Documents; (v) any default occurs
under the Lease or any Collateral Document that continues beyond any
applicable cure period or the Lease ceases to be in full force and effect;
(vi) payment defaults under and the acceleration prior to express maturity of
certain other indebtedness which aggregates $7.5 million or more; (vii)
certain final judgments that remain unpaid, undischarged and unstayed if the
aggregate of all such undischarged judgements exceeds
A-II-6
<PAGE>
$7.5 million; (viii) breach of representation or warranty in, or the
repudiation with respect to, the Lease or any of the Collateral Documents;
(ix) certain events of bankruptcy or insolvency; (x) revocation, termination,
suspension or other cessation of effectiveness of any Gaming License which
results in the cessation or suspension of gaming operations for a period of
more than 90 consecutive days at the Resort; (xi) cessation of gaming
operations for a period of more than 90 consecutive days at the Resort (other
than as a result of a casualty loss) after the Resort becomes Operating;
(xii) cessation of gaming operations for a period of more than 180
consecutive days as a result of a casualty loss except if the Authority is
diligently pursuing reconstruction and opening of the Resort and such
reconstruction and opening can be accomplished with the funds available to
the Authority. If any Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the then outstanding
Notes may declare the principal, premium, if any, interest (including all
Cash Flow Participation Interest accrued or deferred) and any other monetary
obligations on all of the Notes to be due and payable. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, all outstanding Notes shall become due and payable
without further action or notice. Holders may not enforce the Indenture or
the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then
outstanding Notes may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest (including Cash Flow
Participation Interest, if any)) if it determines that withholding notice is
in their interest. The Holders of a majority in aggregate principal amount of
the Notes then outstanding by notice to the Trustee may on behalf of the
Holders of all of the Notes waive any existing Default or Event of Default
and its consequences under the Indenture except a continuing Default or Event
of Default in the payment of interest (including Cash Flow Participation
Interest, if any) on, or the principal of, the Notes. The Authority is
required to deliver to the Trustee annually a statement regarding compliance
with the Indenture, and the Authority is required, within five Business Days
upon becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Authority or its Affiliates, and may otherwise deal with the Authority
or its Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. Neither the Tribe nor any officer of
office holder, employee, agent, representative, member of the Authority or
the Tribe, as such, shall have any liability for any obligations of the
Authority under this Note, the Indenture or the Collateral Documents, as
applicable, or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. 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).
17. ADDITIONAL RIGHTS OF HOLDERS. In addition to the rights provided to
Holders of Notes under the Indenture, Holders shall have all the rights set
forth in the Collateral Documents.
A-II-7
<PAGE>
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Authority has
caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed
on the Notes or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
The Authority shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or any of the Collateral
Documents. Requests may be made to:
Mohegan Tribal Gaming Authority
27 Church Lane
Uneasville, Connecticut 06382
Attention: Roland Harris and Carlisle Fowler,
Business Board Members, and Chief Ralph Sturges
A-II-8
<PAGE>
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 ASIGNEE'S NAME, ADDRESS AMD ZIP CODE)
and irrevocably appoint ---------------------------------------------------
to transfer this Note on the books of the Authority. The agent may substitute
another to act for him.
- -----------------------------------------------------------------------------
Date:
----------------------
Your Signature:
----------------------------
(SIGN EXACTLY AS YOUR NAME APPEARS ON THE
FACE OF THIS NOTE)
Signature Guarantee.
A-II-9
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Authority
pursuant to Section 4.10, 4.11, 4.16 or 4.28 of the Indenture, check the box
below:
/ / Section 4.10 / / Section 4.11 / / Section 4.16
/ / Section 4.28
If you want to elect to have only part of the Note purchased by
the Authority pursuant to Section 4.10, Section 4.11, Section 4.16
or Section 4.28 of the Indenture, state the amount you elect to have
purchased: $
---------------------
Date: Your Signature:
------------------- -------------------------------
(SIGN EXACTLY AS YOUR NAME APPEARS ON THE NOTE)
Tax Identification No.:
-----------
Signature Guarantee.
A-II-10
<PAGE>
- --------------------------------------------------------------------------------
CASH COLLATERAL ACCOUNTS PLEDGE AND SECURITY AGREEMENT
DATED AS OF SEPTEMBER 29, 1995
-C-COPYRIGHT 1995 BY THE MOHEGAN TRIBAL GAMING AUTHORITY, TRADING COVE
ASSOCIATES AND SUN INTERNATIONAL HOTELS LIMITED. REPRODUCTION OF THE MATERIAL
HEREIN OR SUBSTANTIAL QUOTATION OF ITS PROVISIONS WITHOUT PERMISSION VIOLATES
THE COPYRIGHT LAWS OF THE UNITED STATES AND WILL BE SUBJECT TO LEGAL
PROSECUTION.
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS.
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 1
1.1 DEFINED TERMS. . . . . . . . . . . . . . . . . 1
1.2 INDENTURE DEFINED TERMS . . . . . . . . . . . . 3
1.3 INDEX OF ADDITIONAL DEFINED TERMS . . . . . . . 4
2. PLEDGE AND GRANT OF SECURITY INTEREST - ESTABLISHMENT OF CASH
COLLATERAL ACCOUNTS . . . . . . . . . . . . . . . . 4
2.1 . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3. WITHDRAWALS OF FUNDS FROM CASH COLLATERAL ACCOUNTS. . . 5
3.1 . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.2 . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.3 . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.4 . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4. INVESTMENT OF FUNDS IN THE CASH COLLATERAL ACCOUNTS . . 9
4.1 . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2 . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5. EVENTS OF DEFAULT . .. . . . . . . . . . . . . . . . . 10
5.1 . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.2 . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.3 . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6. CERTAIN MATTERS REGARDING THE BANK AND THE TRUSTEE. . . 10
6.1 LIMITATION OF BANK'S LIABILITY . . . . . . . . . 10
6.2 INDEMNITY OF BANK . . . . . . . . . . . . . . . 11
6.3 RIGHT TO CONSULT COUNSEL . . . . . . . . . . . . 11
6.4 AGENCY . . . . . . . . . . . . . . . . . . . . . 11
6.5 WAIVER OF SETOFF RIGHTS. . . . . . . . . . . . . 11
6.6 COOPERATION . . . . . . . . . . . . . . . . . . 11
6.7 COMPENSATION . . . . . . . . . . . . . . . . . . 11
6.8 LIMITATION OF TRUSTEE'S LIABILITY. . . . . . . . 12
6.9 INDEMNITY OF TRUSTEE . . . . . . . . . . . . . . 12
7. TERMINATION . . . . . . . . . . . . . . . . . . . . . . 12
8. SUBSTITUTION OF RESIGNATION . . . . . . . . . . . . . . 12
9. BANK STATEMENTS . . . . . . . . . . . . . . . . . . . . 13
-i-
<PAGE>
10. CHOICE OF LAW . . . . . . . . . . . . . . . . . . . . . 13
11. CONSENT TO SUIT. WAIVER OF JURY TRAIL . . . . . . . . 13
12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 14
12.1 WAIVER . . . . . . . . . . . . . . . . . . . . . 14
12.2 INVALIDITY . . . . . . . . . . . . . . . . . . . 15
12.3 NO AUTHORITY . . . . . . . . . . . . . . . . . . 15
12.4 ASSIGNMENT . . . . . . . . . . . . . . . . . . . 15
12.5 BENEFIT . . . . . . . . . . . . . . . . . . . . 15
12.6 TIME . . . . . . . . . . . . . . . . . . . . . . 15
12.7 ENTIRE AGREEMENT; AMENDMENTS . . . . . . . . . . 15
12.8 NOTICES . . . . . . . . . . . . . . . . . . . . 15
12.9 COUNTERPARTS . . . . . . . . . . . . . . . . . . 16
12.10 CAPTIONS . . . . . . . . . . . . . . . . . . . . 17
13. REMEDIES . . . . . . . . . . . . . . . . . . . . 17
13.1 ADDITIONAL REMEDIES . . . . . . . . . . . . . . 17
13.2 FUTURE ADVANCES . . . . . . . . . . . . . . . . 18
LIST OF SCHEDULES AND EXHIBITS
SCHEDULE I
FORM OF REVOCATION NOTICE . . . . . . . . . . . . . . . I
SCHEDULE II
FORM OF TRUSTEE'S NOTICE . . . . . . . . . . . . . . . III
EXHIBIT A
FORM OF DISBURSEMENT REQUEST AND CERTIFICATION (A). . . IV
EXHIBIT B
FORM OF DISBURSEMENT REQUEST AND CERTIFICATION (B). . . V
EXHIBIT C
FORM OF DISBURSEMENT REQUEST AND CERTIFICATION (C). . . IX
EXHIBIT D
FORM OF DISBURSEMENT REQUEST AND CERTIFICATION (D). . . XI
EXHIBIT E
FORM OF DISBURSEMENT REQUEST AND CERTIFICATION (E). . XIII
EXHIBIT F
FORM OF DISBURSEMENT REQUEST AND CERTIFICATION (F). . . XIV
EXHIBIT G
FORM OF DISBURSEMENT REQUEST AND CERTIFICATION (G). . . XVI
EXHIBIT H
FORM OF LETTER UNDER SECTION 4.2(D)(II)(A)
-ii-
<PAGE>
CASH COLLATERAL ACCOUNTS PLEDGE AND SECURITY AGREEMENT
CASH COLLATERAL ACCOUNTS PLEDGE AND SECURITY AGREEMENT (as
amended from time to time, the "AGREEMENT") dated as of September
29, 1995, by and among First Fidelity Bank, a Connecticut banking
corporation, as depository bank for the Cash Collateral Accounts
(the "BANK"), First Fidelity Bank, a Connecticut banking
corporation, as trustee under the Indenture (as defined below) (the
"TRUSTEE"), Trading Cove Associates, a Connecticut partnership (the
"MANAGER"), Sun International Hotels Limited, a Bahamian
corporation ("SIHL"), the Mohegan Tribal Gaming Authority of the
Mohegan Tribe of Indians of Connecticut (the "AUTHORITY"), and the
Mohegan Tribe of Indians of Connecticut (the "TRIBE").
RECITALS
A. SENIOR SECURED NOTES. The Authority has issued
$175,000,000 in aggregate principal amount of its ___% Senior
Secured Notes due 2002 (as the same may be amended from time to
time, the "SENIOR SECURED NOTES"). The Senior Secured Notes are
issued pursuant to the provisions of an indenture (as the same may
be amended from time to time, the "INDENTURE") dated as of
September 29, 1995 among the Authority, the Trustee and, for the
limited purposes set forth therein, the Tribe. In addition, the
Authority has issued $40,000,000 in aggregate principal amount of
its Subordinated Notes due 2003 and may issue such additional
principal amount of such notes as contemplated by the Secured
Completion Guarantee (as defined below), (collectively, as the same
may be amended from time to time, the "SUBORDINATED NOTES"). The
Subordinated Notes are issued pursuant to the provisions of a note
purchase agreement (as amended from time to time, and including the
form of Subordinated Note attached thereto, the "PURCHASE
AGREEMENT") dated as of September 29, 1995 among the Authority and
SIHL.
B. COLLATERAL AND COLLATERAL ASSIGNMENT. Pursuant to
Section 10.12 of the Indenture, the Authority has agreed to pledge
and grant to the Trustee, for the ratable benefit of the holders of
the Senior Secured Notes, a duly preferred first priority security
interest in certain cash required to be deposited in the Cash
Collateral Accounts. The purpose of this Agreement is to take any
and all actions required to effect and perfect such pledge and
security interest and to set forth the conditions upon which, and
the manner in which, funds will be disbursed from the Cash
Collateral Accounts.
<PAGE>
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. DEFINITIONS.
1.1 DEFINED TERMS. In this Agreement, unless a
different meaning clearly appears from the context, the terms
defined in this Section 1 shall have the meanings herein specified,
such definitions to be equally applicable to both the singular and
plural forms of any of the terms defined:
"ASSET SALE ACCOUNT" means the cash collateral account
required to be established by Section 4.10 and Section 10.12 of the
Indenture, in which there must be deposited all Net Proceeds from
Asset Sales pursuant to Section 4.10 of the Indenture.
"BANK STATEMENT" means a monthly statement setting forth in
reasonable particularity deposits in, withdrawals from and the
balance of funds in each of the Cash Collateral Accounts, and the
manner in which such funds are invested, and includes any
additional statement as the Manager, the Authority or the Trustee
may require from time to time regarding the status of Cash
Collateral Accounts.
"BANK'S OFFICE" means the office of the Bank located at 10
State House Square, Hartford, CT 06103-3698.
"BUSINESS DAY" means any day other than a Saturday, Sunday or
other day on which federal or state banks are required or permitted
by law to close in the State of Connecticut.
"CASH CONTINGENCY RESERVE FUND" means the account called for
by Section 4.26 of the Gaming Facility Management Agreement as in
effect on the date hereof. The Manager shall notify the Bank, the
Authority and the Trustee of the name and address of the commercial
banking institution at which the Cash Contingency Reserve Fund
shall be opened initially and of each change thereof.
"CASH MAINTENANCE ACCOUNT" means the cash collateral account
required to be established by Section 4.08 and Section 10.12 of the
Indenture, in which there must be deposited the amounts specified
in Section 4.08 of the Indenture.
"CASH COLLATERAL" means (a) all amounts required to be
deposited into a Cash Collateral Account, (b) the Cash Collateral
Accounts and all funds, cash, Cash Equivalents and other items from
time to time acquired by the Bank with funds in the Cash Collateral
Accounts, as well as any earnings, proceeds or income therefrom and
(c) any claims, present or future, of the Authority against any
Person liable upon or for the payment of any thereof.
"CASH COLLATERAL ACCOUNT" means each of the Cash Maintenance
Account, Depository Account, Interest and Excess Cash Flow
Account, Replacement Reserve Account, Event of Loss Account, and
Asset Sale Account; and "CASH COLLATERAL ACCOUNTS" means the
foregoing accounts collectively.
"DEPOSITORY ACCOUNT" means the account called for by Section
4.23 of the Gaming Facility Management Agreement as in effect on
the date hereof, in which all Gross Revenues are required to be
deposited daily.
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"DISBURSEMENT ACCOUNT" means the account called for by Section
4.24 of the Gaming Facility Management Agreement as in effect on
the date hereof, from which Operating Expenses may be paid to the
exclusion of any other Cash Collateral Account. The Manager shall
notify the Bank, the Authority and the Trustee of the name and
address of the commercial banking institution at which the
Disbursement Account shall be opened initially and of each change
thereof.
"ELIGIBLE INSTITUTION" means (a) the Trustee, (b) an affiliate
of the Trustee or (c) a commercial banking institution which is not
affiliated with or chartered by the Tribe, which is federally
chartered or organized under the laws of the State of Connecticut,
has combined capital and surplus of not less than $500 million, and
whose debt is rated "A" (or higher) according to Standard & Poor's
Ratings Group ("S&P") or Moody's Investors Service, Inc.
("Moody's").
"EVENT OF LOSS ACCOUNT" means the account required to be
established by Section 4.11 and Section 10.12 of the Indenture, in
which there must be deposited all Net Loss Proceeds, pursuant to
Section 4.11 of the Indenture.
"INTEREST AND EXCESS CASH FLOW ACCOUNT" means the account
required to be established by Section 4.26 and Section 10.12 of the
Indenture, in which there must be deposited the amounts specified
in Section 4.26 of the Indenture.
"MANAGER" means Trading Cove Associates, a Connecticut
partnership, or a successor permitted pursuant to the Indenture.
"OBLIGATIONS" means all obligations and indebtedness of the
Authority under the Senior Secured Notes, and any other obligation
now or hereafter arising, of every kind and nature, owed by the
Authority under the Indenture, the Senior Secured Notes or the
Collateral Documents to the holders of the Senior Secured Notes or
the Trustee.
"OFFICERS' CERTIFICATE" means a disbursement request and
certification signed by two authorized signatories of the Authority
or the Manager, as the case may be, in the form of Exhibit A, B, C,
D, E, F or G to this Agreement, as applicable.
"PAYMENT INSTRUCTIONS" means, with respect to the Trustee, the
Tribe, the Authority or the Manager, written instructions given to
the Bank by the applicable Person as to the method and place of
payment of any funds to be disbursed to such Person pursuant to
this Agreement.
"PERMITTED PRINCIPAL PAYMENTS" means, payments on the
principal of any Indebtedness of the Authority permitted to be
incurred under the Indenture (other than the Notes or the
Subordinated Notes).
"REPLACEMENT RESERVE ACCOUNT" means the account called for by
Section 4.12 of the Gaming Facility Management Agreement as in
effect on the date hereof.
"REVOCATION NOTICE" means a notice given by the Trustee to the
Bank, with a copy to the Authority and the Manager, in the form of
SCHEDULE I attached hereto. A Revocation Notice shall cease to be
"in effect" or "outstanding" for purposes hereof at such time as
the Bank shall have received from the Trustee, with a copy to the
Authority and the Manager, a notice in the form of SCHEDULE II
hereto revoking its standing instructions in the Revocation Notice.
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"TRUSTEE" means First Fidelity Bank, a Connecticut banking
corporation, and any successor trustee under the Indenture.
1.2 INDENTURE DEFINED TERMS. In addition, the following
terms shall have the respective meanings assigned to such terms in
the Indenture:
ASSET SALE
ASSET SALE OFFER
BLOCKAGE PERIOD
CASH EQUIVALENTS
CASH FLOW
CASH FLOW PARTICIPATION INTEREST
CHANGE OF CONTROL OFFER
COLLATERAL DOCUMENTS
COMMENCEMENT DATE
DEFAULT
ESCROW AND DISBURSEMENT AGREEMENT
EVENT OF LOSS
EVENT OF LOSS OFFER
EXCESS CASH FLOW
EXCESS CASH PURCHASE OFFER
EXCESS LOSS PROCEEDS
EXCESS PROCEEDS
GAMING DISPUTES COURT
GAMING FACILITY MANAGEMENT AGREEMENT
GROSS REVENUES
LEASEHOLD MORTGAGE
LIEN
MANAGEMENT AGREEMENT
MANAGEMENT FEE
MINIMUM PRIORITY PAYMENT
NET PROCEEDS
NET LOSS PROCEEDS
NET REVENUE
NOTES
OFFICER
OPERATING EXPENSES
PAYMENT BLOCKAGE
PAYMENT DEFAULT
PERSON
RESORT
SECURED COMPLETION GUARANTEE
SUBORDINATED NOTES
1.3 Index of Additional Defined Terms. In addition, the
terms listed in the left column below shall have the respective
meanings assigned to such terms in the Section of this Agreement
listed opposite such terms in the right column below:
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Section of
Defined Term Definition
------------ ----------
AGREEMENT . . . . . . . . . . . . . . . . . . . INTRODUCTION
AUTHORITY . . . . . . . . . . . . . . . . . . . INTRODUCTION
BANK. . . . . . . . . . . . . . . . . . . . . . INTRODUCTION
EVENT OF DEFAULT. . . . . . . . . . . . . . . . . . . . . 5
INDENTURE . . . . . . . . . . . . . . . . . . A OF RECITALS
PURCHASE AGREEMENT. . . . . . . . . . . . . . A OF RECITALS
SENIOR SECURED NOTES. . . . . . . . . . . . . A OF RECITALS
SIHL. . . . . . . . . . . . . . . . . . . . . . INTRODUCTION
SUBORDINATED NOTES. . . . . . . . . . . . . . A OF RECITALS
TRIBE . . . . . . . . . . . . . . . . . . . . . INTRODUCTION
2. PLEDGE AND GRANT OF SECURITY INTEREST - ESTABLISHMENT OF
CASH COLLATERAL ACCOUNTS.
2.1 The Authority hereby irrevocably grants to the
Trustee a first priority perfected security interest in the Cash
Collateral, and pledges, assigns and sets over the Cash Collateral
to the Trustee, for the ratable benefit of the holders of the
Senior Secured Notes, to secure the Obligations. The Tribe hereby
represents and warrants that the Authority is the sole owner of the
Cash Collateral, with sole power to pledge the Cash Collateral and
grant security interests therein, and the Tribe hereby irrevocably
consents to such pledge and grant.
2.2 In order to effectuate the foregoing pledge and
grant of security interest in favor of the Trustee, the Authority
hereby irrevocably directs the Bank to open at the Bank's Office
the following bank accounts in the name of the Trustee, and the
Bank has opened the following bank accounts in the name of the
Trustee:
(a) the Depository Account, Account No. ______;
(b) the Replacement Reserve Account, Account No. ______;
(c) the Interest and Excess Cash Flow Account, Account
No. ______;
(d) the Cash Maintenance Account, Account No. ______;
(e) the Event of Loss Account, Account No. _______; and
(f) the Asset Sale Account, Account No. ______.
The parties hereto agree that any provision of this Agreement to
the contrary notwithstanding, express or implied, the Trustee shall
have at all times sole dominion and control over each of the Cash
Collateral Accounts and all funds, cash, Cash Equivalents and other
items from time to time acquired by the Bank with funds in the Cash
Collateral Accounts, as well as any earnings, proceeds or income
therefrom.
2.3 The Authority and the Manager agree that all Gross
Revenues (except as otherwise permitted by Section 10.12(c) of the
Indenture) shall be deposited daily in the Depository Account, that
all Net Proceeds shall be deposited in the Asset Sale Account upon
receipt, and that all Net
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Loss Proceeds shall be deposited in the Event of Loss Account upon
receipt, and further agree that no Gross Revenues (except as
otherwise permitted by Section 10.12(c) of the Indenture), Net
Proceeds, Net Loss Proceeds or other funds derived from the
operation of the Resort or any other commercial enterprise
of the Authority will be deposited in any other bank account,
except as contemplated by the Escrow and Disbursement Agreement
until the same shall terminate and except that the Authority may
maintain (a) the Petty Cash Fund and Cash Prize Reserve Fund
contemplated by Section 4.26 of the Management Agreement at the
Resort so long as monies held therein shall not exceed the amount
permitted by the Management Agreement as in effect on the date
hereof and (b) the Cash Contingency Reserve Fund and the
Disbursement Account contemplated by Section 4.24 of the Management
Agreement in the name of the Authority so long as, in each case,
the provisions of Section 3.2.2 are complied with.
3. WITHDRAWALS OF FUNDS FROM CASH COLLATERAL ACCOUNTS.
3.1 The Bank shall not allow any Person to withdraw
funds from any of the Cash Collateral Accounts except upon a
written direction of the Trustee. The Trustee hereby directs the
Bank to effect the following disbursements from the Cash Collateral
Accounts specified below in the amounts, at the times and otherwise
in accordance with the instructions set forth below, subject to the
provisions of Section 13.1:
3.1.1 Prior to the first business day of each
calendar month, the Manager, on behalf of the Authority, shall
deliver to the Bank, with a copy to the Authority and the Trustee,
an Officers' Certificate in the form of EXHIBIT A. To the extent
of funds available in the Depository Account, the Bank shall on the
first business day of such calendar month, transfer from the
Depository Account to the Interest and Excess Cash Flow Account,
the amount specified in said Officers' Certificate.
3.1.2 Prior to the 25th day of each calendar
month, commencing on the earlier of October 31, 1996 and the first
calendar month after commencement of operations, the Manager, on
behalf of the Authority, shall deliver to the Bank, with a copy to
the Authority and the Trustee, an Officers' Certificate in the form
of EXHIBIT B. To the extent of funds available in the Depository
Account, the Bank shall, on the 25th day of such month or, if such
day is not a business day, on the next succeeding business day,
effect the following transfers and payments in the order of
priority specified below: (a) first, withdraw from the Depository
Account for payment to the Tribe in accordance with the Tribe's
Payment Instructions the amount of the Minimum Priority Payment
specified in Paragraph 2 of said Officers' Certificate, (b) second,
transfer from the Depository Account to the Cash Maintenance
Account, the amount, if any, specified in Paragraph 3 of said
Officers' Certificate, (c) third, transfer from the Depository
Account to the Interest and Excess Cash Flow Account, the amounts,
if any, specified in Paragraphs 4 and 5 of said certificate, and
(d) fourth, if no Revocation Notice is then in effect with respect
to the applicable transfer or payment, and except as otherwise
provided in Section 3.1.10, make the balance of the transfers and
the payments, if any, specified in Paragraph 6 of said certificate
in accordance with the payment instructions therein.
3.1.3 Except as otherwise provided in Section
3.2.4, the Bank shall, from and after the Commencement Date, to the
extent of funds available in the Depository Account transfer from
the Depository Account to the Disbursement Account such amounts as
the Manager, on behalf of the Authority, may request to be so
transferred in accordance with the provisions of Section 3.2.2.
3.1.4 The Bank shall upon receipt of an
Officers' Certificate from the Manager on behalf of the Authority
in the form of EXHIBIT C, to the extent of funds available in the
Event of Loss Account, make payments from the Event of Loss Account
to the Persons and in the amounts specified
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by the Manager on behalf of the Authority in said
Officers' Certificate, provided that if a Revocation Notice
applicable to withdrawals from the Event of Loss Account shall
be outstanding or Section 3.1.10 shall apply, no payment may
be made from funds on deposit in the Event of Loss Account
except to the Trustee.
3.1.5 The Bank shall upon receipt of an
Officers' Certificate from the Manager on behalf of the Authority
in the form of EXHIBIT D, to the extent of funds available in the
Asset Sale Account, make payments from the Asset Sale Account to
the Persons and in the amounts specified by the Manager on behalf
of the Authority in said Officers' Certificate, provided that if a
Revocation Notice applicable to withdrawals from the Asset Sale
Account shall be outstanding or Section 3.1.10 shall apply, no
payment may be made from funds on deposit in the Asset Sale Account
except to the Trustee.
3.1.6 So long as no Revocation Notice applicable
to withdrawals from the Replacement Reserve Account shall be
outstanding, and except as otherwise provided in Section 3.1.10,
the Bank shall upon receipt of an Officers' Certificate from the
Manager on behalf of the Authority in the form of EXHIBIT E, to the
extent of funds available in the Replacement Reserve Account, make
payments from such account to the Persons and in the amounts
specified by the Manager on behalf of the Authority in said
certificate.
3.1.7 The Bank shall upon receipt of an
Officers' Certificate from the Manager on behalf of the Authority
in the form of Exhibit F, to the extent of funds available in the
Interest and Excess Cash Flow Account, make payments from the
Interest and Excess Cash Flow Account to the Persons and in the
amounts specified by the Manager on behalf of the Authority in said
Officers' Certificate, provided that if a Revocation Notice shall
be outstanding with respect to the applicable payment or Section
3.1.10 shall apply, no payment may be made from funds on deposit in
the Interest and Excess Cash Flow Account except to the Trustee.
3.1.8 The Bank shall upon receipt of an
Officers' Certificate from the Manager on behalf of the Authority
or an Officer's Certificate from the Authority in the form of
Exhibit G, transfer to the Trustee, in accordance with the
Trustee's Payment Instructions, on the day specified in such
Officers' Certificate, the amount therein specified from funds on
deposit in the Depository Account.
3.1.9 Upon receipt of a written request from the
Trustee, the Bank shall transfer to the Trustee in accordance with
the Trustee's Payment Instructions the amount specified in such
written request from the Cash Collateral Account or Accounts, and
on the date or dates, specified therein. No Person other than the
Trustee may direct the Bank to withdraw funds from the Cash
Maintenance Account and all funds withdrawn therefrom may only be
paid over to the Trustee.
3.1.10 Except for the disbursement of the Minimum
Priority Payments and transfers of funds from the Depository
Account to the Interest and Excess Cash Flow Account and to the
Cash Maintenance Account, at the request of the Manager on behalf
of the Authority, or of the Trustee, the Bank shall not honor
requests from any Person other than the Trustee for transfers of
funds from the Depository Account to any other account, or permit
withdrawals of funds from any account by any Person other than the
Trustee or at its direction, unless the Officers' Certificates
required to be delivered pursuant to Sections 3.1.1 and 3.1.2 with
respect to the month in which a transfer of funds is requested
shall have been received by it.
3.2 The Authority hereby authorizes the Manager to give
the Officers' Certificates referred to in Section 3.1 on its behalf
in accordance with this Agreement. The Manager agrees timely
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to deliver the Officers' Certificates called for by Section 3.1. Each
of the Manager and the Authority further agrees for the benefit of
the Trustee and the holders of the Senior Secured Notes that:
3.2.1 It shall immediately give notice to the
Trustee and the Bank of any Default, Payment Default or Event of
Default of which it is aware.
3.2.2 It shall not use or allow to be used any
funds in the Disbursement Account for any purpose other than the
payment of Operating Expenses or Permitted Principal Payments, and
shall not request or permit any transfer of funds from the
Depository Account to the Disbursement Account more than one time
per week and then only in an amount which shall not exceed the
aggregate amount of Operating Expenses and Permitted Principal
Payments that are reasonably anticipated to be due and payable
within the ensuing 7-day period. It shall not use or allow to be
used any funds in the Cash Contingency Reserve Fund for any purpose
other than the payment of excess winnings to gaming customers of
the Resort as contemplated by the Management Agreement as in effect
on the date hereof, and shall not request or permit any transfer of
funds from the Depository Account to the Cash Contingency Reserve
Fund if, after giving effect to such transfer, the funds on deposit
therein would exceed $50,000 at any time. No amounts may be
withdrawn to pay Permitted Principal Payments on the Indebtedness
permitted by Section 4.09(a) of the Indenture so long as a
Revocation Notice is in effect with respect to such payments. Each
request for withdrawal of funds from the Depository Account for
deposit in the Disbursement Account or the Cash Contingency Reserve
Fund shall be deemed to be a representation and warranty that such
request and withdrawal are permitted under this Section 3.2.2 and
under Section 3.2.4.
3.2.3 It shall not request or cause or permit to
be requested a disbursement of funds in the Depository Account,
Event of Loss Account, Asset Sale Account or Interest and Excess
Cash Flow Account, except for a purpose specifically permitted by
the provisions of the Indenture applicable to such account; it
shall not request or cause or permit to be requested a disbursement
of funds in the Cash Maintenance Account; and it shall not request
or cause or permit to be requested a disbursement of funds in the
Disbursement Account, the Replacement Reserve Account or the Cash
Contingency Reserve Fund, except for a purpose specifically
permitted by the Management Agreement as in effect on the date
hereof.
3.2.4 It shall not have the right to, and shall
not, request the Bank to make any withdrawals from: (a) the Asset
Sale Account, the Event of Loss Account or the Replacement Reserve
Account for payment to any Person other than the Trustee from and
after the date that the Senior Secured Notes shall have been
accelerated to and including the date such acceleration shall have
been rescinded or the Obligations shall have been paid in full,
without the prior written consent of the Trustee; (b) the
Depository Account for deposit in the Disbursement Account, the
Replacement Reserve Account or the Cash Contingency Reserve Fund
from and after the date that the Senior Secured Notes shall have
been accelerated to and including the date such acceleration shall
have been rescinded or the Obligations shall have been paid in
full, without the prior written consent of the Trustee; (c) any
Cash Collateral Account for payments to the Authority, the Tribe or
the Manager upon the occurrence and during the continuance of a
Payment Default or while a Blockage Period is in effect (provided
that the foregoing provision shall not apply to the making of the
Minimum Priority Payments); (d) any Cash Collateral Account for
payments of interest on the Subordinated Notes upon the occurrence
and during the continuance of a Default or an Event of Default; and
(e) any Cash Collateral Account for payments of principal on the
Subordinated Notes upon the occurrence and during the continuance
of any Event of Default.
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3.2.5 It shall not take or cause to be taken any
action which would result in or would constitute a Default or Event
of Default under the Indenture, this Agreement or any other
Collateral Document, whether or not such action might otherwise be
permitted under any other agreement to which it is a party.
3.3 The Manager, SIHL and the Tribe understand and agree
that rights they may have to payments from the Authority whether
under the Management Agreement or otherwise are subordinate to the
rights of the Trustee and the holders of the Senior Secured Notes
in the Cash Collateral, including, without limitation, pursuant to
the provisions of this Agreement, until indefeasible payment in
full of the Obligations shall have been made, any provision of the
Management Agreement, expressly or by implication, to the contrary
notwithstanding; PROVIDED that the Trustee and the holders of the
Senior Secured Notes shall have no right to recover any amount
properly paid to the Tribe, the Manager or the holders of the
Subordinated Notes, in each case in compliance with the terms of
the Indenture (including Section 4.07 thereof) and of this
Agreement (including all exhibits thereto) and, in the case of the
Subordinated Notes, in compliance with the provisions of the
Purchase Agreement (including Article VIII thereof) as in effect on
the date hereof.
3.4 The Trustee agrees that as promptly as practicable
upon its obtaining actual knowledge that a Default, Payment Default
or Event of Default is no longer continuing or a Blockage Period is
no longer in effect, it shall notify the Bank of such event.
4. INVESTMENT OF FUNDS IN THE CASH COLLATERAL ACCOUNTS.
4.1 Pending disbursement in accordance with this
Agreement, all funds on deposit in the Cash Collateral Accounts
shall be invested in cash; PROVIDED HOWEVER that the Trustee hereby
directs the Bank, so long as no Revocation Notice shall be in
effect, to invest such funds in Cash Equivalents if so instructed
by the Manager on behalf of the Authority; and PROVIDED, FURTHER,
that the Bank shall not invest any such funds in any investment
unless such investment is described in Section 4.2 of this
Agreement and the Bank has taken the actions described in Section
4.2 with respect to such investment. The Bank shall hold all Cash
Equivalents under the sole dominion and control of the Bank, as
agent for the Trustee for the ratable benefit of holders of the
Senior Secured Notes. Further, the Bank shall note in its records
that all funds and other assets in the Cash Collateral Accounts
have been pledged to the Trustee, and that the Bank is holding such
items as agent for the Trustee. Accordingly, such funds shall not
be within the bankruptcy "estate" of the Bank. The Authority
hereby authorizes the Manager to invest funds in the Cash
Collateral Accounts in Cash Equivalents on its behalf in accordance
with this Agreement.
4.2 The Authority and the Trustee hereby irrevocably
instruct the Bank as follows:
(a) To the extent it is within its power, the Bank
at all times shall maintain all of the Cash Collateral free and
clear of all Liens, safekeeping or other charges, demands and
claims of any nature whatsoever now or hereafter existing, in favor
of anyone other than the Trustee;
(b) With respect to any cash in any Cash Collateral
Account, the Bank shall at all times maintain dominion and control
over, and possession of, such cash on behalf of the Trustee until
such time as the cash is disbursed from such Cash Collateral
Account in accordance with the terms of this Agreement;
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(c) With respect to any certificated securities, as
a condition to acquiring any such securities: (i) the Bank shall
confirm that the Bank does not have any knowledge of any other
claims of any other person or entity in or to the securities; (ii)
the Bank shall cause any such securities to be issued in the name
of, or endorsed to, the Bank as agent for the Trustee; (iii) the
Bank at all times shall maintain dominion and control over, and
possession of, said securities on behalf of the Trustee until such
time as the securities are sold for cash, at which time all
proceeds shall be held in accordance with clause (b) of this
Section 4.2; and (iv) the Bank at all times shall designate in its
records that it is holding said securities as agent for the
Trustee, as trustee under the Indenture.
(d) With respect to any uncertificated securities
(other than uncertificated securities issued by the federal
government or an agency or instrumentality thereof), as a condition
to acquiring any such securities: (i) the Bank shall confirm that
the Bank does not have any knowledge of any other claims of any
other person or entity in or to the securities; (ii) the Bank (A)
shall cause the Authority to execute a letter substantially in the
form of EXHIBIT H attached hereto addressed to the issuer (or the
transfer agent for the issuer, if applicable) pertaining to the
securities, the Bank shall deliver said letter to the issuer of the
securities (or the transfer agent for the issuer, if applicable),
and the Bank shall have received back from the issuer (or the
transfer agent for the issuer, if applicable) a copy of said letter
signed by the issuer of the securities (or the transfer agent for
the issuer, if applicable), or (B) shall have taken such
alternative steps as are necessary or appropriate in order to cause
the Trustee to enjoy a continuous first priority perfected security
interest in the securities; and (iii) the Bank at all times shall
designate in its records that it is holding said securities as
agent for the Trustee, as trustee under the Indenture. For
purposes of determining the steps to be taken under clause (ii)(B)
of this Section 4.2(d), the Bank may rely upon an opinion of
counsel to the Authority or the Bank (the expense of which shall be
paid by the Authority) specifying (A) that the counsel is familiar
with the laws applicable to the perfection of security interests in
said securities and (B) the steps required to perfect and maintain
a first priority security interest in favor of the Trustee in said
securities.
(e) With respect to any uncertificated securities
issued by the federal government or an agency or instrumentality
thereof, as a condition to acquiring any such securities: (i) the
Bank shall confirm that the Bank does not have any knowledge of any
claims of any other person or entity in or to the securities; and
(ii) the Bank shall have taken such steps as are necessary and
appropriate in order to cause the Trustee to enjoy a continuous
perfected first priority security interest in said securities. For
purposes of determining the foregoing steps, the Bank may rely upon
an opinion of counsel to the Authority or the Bank (the expense of
which shall be paid by the Authority) specifying (A) that the
counsel is familiar with the laws applicable to the perfection of
security interests in said securities and (B) the steps required to
perfect and maintain a first priority security interest in favor of
the Trustee in said securities.
(f) The Bank shall take any other steps from time
to time requested by the Trustee to confirm and maintain the
priority of the security interests in favor of the Trustee in items
of the Cash Collateral that have been delivered to the Bank.
(g) The Bank shall immediately disburse all funds
held in the Cash Collateral Accounts to the Trustee and transfer
title to all other Cash Collateral held by the Bank hereunder to
the Trustee upon receipt of written request therefor by the
Trustee.
5. EVENTS OF DEFAULT. The occurrence of any of the
following specified events shall be an Event of Default hereunder:
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5.1 The occurrence and continuance of an Event of
Default (as defined in the Indenture) under the Indenture.
5.2 Any representation, warranty, certification,
statement (collectively, "representations") or covenant or
agreement by the Manager, the Authority or the Tribe in this
Agreement, or any certificate, request, budget or statement
delivered pursuant to this Agreement, fails to be true in any
material respect on the date given or made in the case of a
representation, or is breached in any material respect, in the case
of a covenant.
5.3 Any monies are withdrawn from any of the Cash
Collateral Accounts in violation of the provisions of the
Indenture, this Agreement, or any other Collateral Document, and
the monies so withdrawn are not redeposited in the applicable
account within two business days of the date on which such
withdrawal occurred; or the Trustee ceases to have a valid and
enforceable pledge and a perfected security interest of first
priority in the Cash Collateral.
6. CERTAIN MATTERS REGARDING THE BANK AND THE TRUSTEE.
6.1 LIMITATION OF BANK'S LIABILITY. The Bank's
responsibility and liability under this Agreement shall be limited
as follows: (a) the Bank shall have no responsibility to the
Manager, SIHL, the Tribe, the Authority, the Trustee or the holders
of the Senior Secured Notes or the Subordinated Notes as a
consequence of performance by the Bank hereunder except for any
gross negligence or willful misconduct of the Bank or failure to
account for funds held on deposit. The Bank shall have no duties
or obligations hereunder except as expressly set forth herein,
shall be responsible only for the performance of such duties and
obligations, shall not be required to take any action otherwise
than in accordance with the terms hereof and shall not be in any
manner liable or responsible for any loss or damage arising by
reason of any act or omission to act by it hereunder or in
connection with any of the transactions contemplated hereby,
including, but not limited to, any loss that may occur by reason of
forgery, false representations, the exercise of its discretion, or
any other reason, except for its gross negligence (including but
not limited to its failure to account for funds on deposit) or
willful misconduct.
6.2 INDEMNITY OF BANK. The Authority indemnifies, holds
harmless and defends the Bank and its officers, directors, agents
and employees, from and against any and all claims, actions,
obligations, liabilities and expenses, including defense costs,
investigative fees and costs, legal fees, and claims for damages,
arising from the Bank's performance under this Agreement, except to
the extent that such liability, expense or claim is attributable to
the gross negligence or willful misconduct of the Bank or failure
to account for funds on deposit.
6.3 RIGHT TO CONSULT COUNSEL. The Bank and the Trustee
may, if either of them deems necessary or appropriate, consult with
and be advised by counsel in respect to rights or duties hereunder.
Each of the Bank and the Trustee shall be entitled to rely upon the
advice of its counsel in any action taken in its capacity as the
Bank or the Trustee, as the case may be, hereunder and shall be
protected from any liability of any kind for actions taken in
reasonable reliance upon such opinion of its counsel. The
Authority agrees to pay all such reasonable counsel fees.
6.4 AGENCY. The Bank shall act solely as the Trustee's
agent in connection with its duties under this Agreement,
notwithstanding any other provision contained in this Agreement,
without any right to receive compensation from the Trustee and
without any authority to obligate the Trustee or to compromise or
pledge its security interest hereunder. The Authority acknowledges
and agrees that in no event shall the Trustee or the holders of the
Senior Secured Notes be liable for, nor shall the
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<PAGE>
Obligations of the Authority be affected or diminished as a
consequence of, any action or inaction of the Bank with respect to
the Cash Collateral.
6.5 WAIVER OF SETOFF RIGHTS. The Bank hereby
acknowledges the Trustee's security interest as set forth above and
waives any security interest or other lien in the Cash Collateral
and further waives any right to set off the Cash Collateral now or
in the future against any indebtedness of the Authority, the Tribe,
the Manager, SIHL or any other Person to the Bank. The waivers set
forth in this Section 6.5 are of rights which may exist now or
hereafter in favor of the Bank in its individual capacity, and not
of any such rights which may exist now or hereafter in favor of the
Bank in its capacity as agent for the Trustee. Nothing in this
Section 6.5 shall be construed as waiving, limiting or diminishing
any rights of the Trustee as trustee under the Indenture against
the Authority.
6.6 COOPERATION. The Bank is hereby directed to
cooperate with the Trustee in the exercise of its rights in the
Cash Collateral provided for herein. The Trustee will take all
necessary action to preserve and protect the security interest
created hereby as a lien and encumbrance upon the Cash Collateral
and, upon demand, the other parties hereto will execute and deliver
to the Trustee such instruments and documents as the Trustee may
reasonably deem necessary or advisable to confirm or perfect the
rights of the Trustee under this Agreement and the Trustee's
interest in the Cash Collateral.
6.7 COMPENSATION. For each calendar year during the
term of this Agreement (a) prior to the Commencement Date, the
Authority shall pay the sum of $_________ to the Bank as
compensation for services to be performed by the Bank under this
Agreement in said year, and (b) thereafter, the Bank shall disburse
from the Depository Account $_________ to the Bank as compensation
for services to be performed by the Bank under this Agreement in
said year. The Bank shall receive such payments without the
requirement of obtaining any further consent or action on the part
of any other party to this Agreement with respect to such payment.
6.8 LIMITATION OF TRUSTEE'S LIABILITY. The Trustee's
responsibility and liability under this Agreement shall be limited
as follows: (a) the Trustee shall have no responsibility to the
Manager, SIHL, the Tribe, the Authority, the Bank or the holders of
the Senior Secured Notes or Subordinated Notes as a consequence of
performance by the Trustee hereunder except for any gross
negligence (including but not limited to its failure to account for
funds received by it) or willful misconduct of the Trustee and
except as otherwise provided in the Indenture and except as
otherwise provided in the Indenture. The Trustee shall have no
duties or obligations hereunder except as expressly set forth
herein and in the Indenture, shall be responsible only for the
performance of such duties and obligations, shall not be required
to take any action otherwise than in accordance with the terms
hereof and of the Indenture and shall not be in any manner liable
or responsible for any loss or damage arising by reason of any act
or omission to act by it hereunder or in connection with any of the
transactions contemplated hereby, including, but not limited to,
any loss that may occur by reason of forgery, false
representations, the exercise of its discretion, or any other
reason, except for its gross negligence (including but not limited
to its failure to account for funds received by it) or willful
misconduct and except as otherwise provided in the Indenture.
6.9 INDEMNITY OF TRUSTEE. In addition to its
indemnification obligations in the Indenture, the Authority
indemnifies, holds harmless and defends the Trustee and its
officers, directors, agents and employees, from and against any and
all claims, actions, obligations, liabilities and expenses,
including reasonable defense costs, investigative fees and costs,
legal fees, and claims for damages, arising from the Trustee's
performance under this Agreement, except to the extent that such
liability, expense or claim is attributable to the gross negligence
(including but not limited to its failure to account
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for funds received by it) or willful misconduct of the Trustee and
except as otherwise provided in the Indenture.
7. TERMINATION. This Agreement shall terminate upon receipt
by the Bank from the Trustee of a notice to the effect that the
Senior Secured Notes have been paid in full, unless sooner
terminated pursuant to Section 8 hereof; PROVIDED, HOWEVER, that
the obligations of the Authority under Section 6.2 and Section 6.9
of this Agreement shall survive the termination of this Agreement.
8. SUBSTITUTION OR RESIGNATION. The Trustee shall have the
right, upon the expiration of thirty (30) days following delivery
of written notice of substitution to all the other parties hereto
to cause the Bank to be relieved of its duties hereunder and to
select a substitute bank to serve hereunder, provided that such
substitute bank shall be an Eligible Institution. The Bank may
resign at any time upon thirty (30) days' written notice to all the
other parties hereto. Such resignation shall take effect upon
receipt by the Bank of an instrument of acceptance executed by a
successor Eligible Institution and consented to by the other
parties hereto. Upon selection of such substitute bank, the
Authority, the Trustee, the Tribe, the Manager, SIHL and the
substitute bank shall enter into an agreement substantially
identical to this Agreement and, thereafter, the Bank shall be
relieved of its duties and obligations to perform hereunder, except
that the Bank shall transfer to the substitute bank upon request
therefor all funds and Cash Equivalents maintained by the Bank
hereunder and originals of all documents in the Bank's possession
relating to such funds or Cash Equivalents or this Agreement.
9. BANK STATEMENTS. The Bank shall deliver the Bank
Statements to the Authority and the Manager and, upon its request,
to the Trustee; PROVIDED, HOWEVER, that the Bank shall not be
required to provide such statements more often than weekly. On or
prior to the fifteenth day of each month, the Bank shall deliver to
the Trustee a statement setting forth the aggregate dollar amount
on deposit in each of the Cash Mandatory Maintenance Account and
the Interest and Excess Cash Flow Account on the last day of the
preceding month.
Upon the request of the Authority or the Trustee, the Manager
shall deliver or cause to be delivered to the requesting Person
copies of such bank statements pertaining to the Disbursement
Account or the Cash Contingency Reserve Fund as the requesting
Person may request.
10. CHOICE OF LAW. This Agreement, the parties' obligations
hereunder, and any disputes hereunder, shall be governed by and
interpreted and construed in accordance with the substantive laws
of the State of Connecticut (except its choice of law rules, and
except that the Trustee's rights and remedies set forth herein, and
the pledge and security interest granted hereby, shall in any event
be lawful and enforceable in accordance with the terms hereof under
the laws of the Tribe). This Agreement shall be construed in
accordance with its intent and with the fair meaning of its
provisions, and without regard to any presumption or other rules
requiring construction against the party which caused the same to
be drafted.
11. CONSENT TO SUIT. WAIVER OF JURY TRIAL.
11.1 The Tribe does not consent to the enforcement, levy
or other execution of any judgment for money or other damages
against any assets, real or personal, of the Tribe, except that the
Tribe and the Authority each do herewith consent to the enforcement
and execution of any judgment, whether obtained as a result of
judicial, administrative, or arbitrational proceedings, against any
assets of the Authority. Subject to the foregoing, the Tribe and
the Authority each does herewith waive its sovereign immunity from
unconsented suit, whether such suit be brought in law or in equity,
or in
13
<PAGE>
administrative proceedings or proceedings in arbitration, to
permit the commencement, maintenance, and enforcement of any
action, by any person with standing to maintain an action, to
interpret or enforce the terms of this Agreement, and to enforce
and execute any judgment resulting therefrom against the Authority
or the assets of the Authority. Notwithstanding any other
provision of law or canon of construction, the Tribe and the
Authority each intend this waiver to be interpreted liberally to
permit the full litigation of disputes arising under or out of this
Agreement. Without limiting the generality of the foregoing, the
Tribe and the Authority waive their immunity from unconsented suit
to permit the maintenance of the following actions:
(a) COURTS. The Tribe and the Authority each waive
their immunity from unconsented suit to permit any court of
competent jurisdiction to (i) enforce and interpret the terms of
this Agreement, and award and enforce the award of damages against
the Authority owing as a consequence of a breach thereof, whether
such award is the product of litigation, administrative
proceedings, or arbitration; (ii) determine whether any consent or
approval of the Tribe or the Authority has been improperly granted
or unreasonably withheld; (iii) enforce any judgment prohibiting
the Tribe or the Authority from taking any action, or mandating or
obligating the Tribe or the Authority to take any action, including
a judgment compelling the Tribe or the Authority to submit to
binding arbitration; and (iv) adjudicate any claim under the Indian
Civil Rights Act of 1968, 25 U.S.C. Section 1302 (or any successor
statute).
(b) GAMING DISPUTES COURT. Without limiting in any
manner the foregoing waivers of immunity or the jurisdiction of any
of the courts of the United States or any state thereof, the Tribe
and the Authority hereby stipulate and agree that, immediately upon
execution and delivery of this Agreement, judgment may and shall be
entered by the Gaming Disputes Court:
(i) declaring that (a) the Senior Secured Notes
are, or when issued will be, the duly authorized, lawful and valid
obligation of the Authority, enforceable in accordance with their
terms against the Authority in the Gaming Disputes Court, (b) the
Indenture and the Collateral Documents, including this Agreement,
are the duly authorized, lawful and valid obligation of the Tribe
and the Authority, enforceable in accordance with their terms
against the Tribe and the Authority in the Gaming Disputes Court,
(c) the Liens granted pursuant to this Agreement are valid and
enforceable and, as to the funds and investments in each of the
Cash Collateral Accounts are duly perfected and prior Liens
thereon, enforceable in accordance with the terms of this Agreement
and the Indenture (including by foreclosure as herein or therein
set forth) against the Authority, against any purchaser (including
a bona fide purchaser) of such Cash Collateral and against any
creditor that acquires a judicial Lien on any of the Cash
Collateral, and no financing statement or continuation statement is
required to be filed, or Collateral Document is required to be
registered, recorded or lodged, or other action is required to be
taken or event is required to have occurred, in order for such
Liens to be and remain so perfected and for as long as any of the
Senior Secured Notes may remain outstanding, and (d) there shall be
no limitation (either by way of a time bar on the commencement of
any action or proceeding or under any equitable principles such as
the doctrine of laches) on the time within which any action or
proceeding to collect any claim, to foreclose any Lien or otherwise
to enforce any claim, interest, Lien, right or remedy arising in
favor of the Trustee or any Holder under the Senior Secured Notes,
the Indenture, or this Agreement must be commenced, and
14
<PAGE>
(ii) ordering that (a) the Trustee shall be
appointed and authorized to act as the receiver of and trustee for
all funds in each of the Cash Collateral Accounts and as such
receiver and trustee shall have the power and authority to demand,
collect, receive, hold and disburse all funds in each of the Cash
Collateral Accounts at any time and in any manner arising and by
whomever held and all power and authority reasonably incidental
thereto, and (b) on each day, the Authority shall cause to be
delivered to the Trustee, for deposit to the Depository Account,
all funds required to be deposited therein, and (c) the Trustee
shall release, hold or pay out such deposit as provided in Section
10.03 of the Indenture.
(c) Each party hereto agrees that it shall not
contest or dispute the legality, validity or enforceability of the
provisions of this Section 11.1.
12. MISCELLANEOUS.
12.1 WAIVER. Any party hereto may specifically waive any
breach of this Agreement by any other party, but no such waiver
shall be deemed to have been given unless such waiver is in
writing, signed by the waiving party and specifically designates
the breach waived, nor shall any such waiver constitute a
continuing waiver of similar or other breaches.
12.2 INVALIDITY. If, for any reason whatsoever, any one
or more of the provisions of this Agreement shall be held or deemed
to be inoperative, unenforceable or invalid in a particular case or
in all cases, such circumstances shall not have the effect of
rendering any of the other provisions of this Agreement
inoperative, unenforceable or invalid, and the inoperative,
unenforceable or invalid provision shall be construed as if it were
written so as to effectuate, to the maximum extent possible, the
parties' intent.
12.3 NO AUTHORITY. The Bank shall have no authority to,
and shall not make any warranty or representation or incur any
obligation on behalf of, or in the name of, the Trustee.
12.4 ASSIGNMENT. This Agreement is personal to the
parties hereto, and the rights and duties of any party hereunder
shall not be assignable except with the prior written consent of
the other parties, provided that (i) the rights and duties of the
Trustee are assignable to a successor trustee appointed in
accordance with the terms of the Indenture, (ii) the rights and
duties of the Bank are assignable to any entity appointed in
accordance with the terms hereof as the successor bank hereunder,
and (iii) the rights and duties of the Manager are assignable to a
successor manager appointed in accordance with the terms of the
Indenture. In any event, this Agreement shall inure to and be
binding upon the parties and their successors and permitted
assigns.
12.5 BENEFIT. The parties hereto, the holders from time
to time of the Senior Secured Notes, and their respective
successors and assigns, but no others, shall be bound hereby and
entitled to the benefits hereof.
12.6 TIME. Time is of the essence of each provision of
this Agreement.
12.7 ENTIRE AGREEMENT; AMENDMENTS. This Agreement,
together with the Indenture and the other Collateral Documents,
contains the entire agreement among the parties with respect to the
subject matter hereof and supersedes any and all prior agreements,
understandings and commitments,
15
<PAGE>
whether oral or written. This Agreement may be amended only by a
writing signed by duly authorized representatives of all parties.
12.8 NOTICES. All notices and other communications
required or permitted to be given or made under this Agreement
shall be in writing and may be personally delivered, sent by
telecopier, sent by reputable courier or sent by United States
certified mail and shall be deemed to have been duly given and
received, regardless of when and whether received, either: (a) on
the day of hand delivery; (b) on the second business day if sent by
overnight reputable courier; (c) upon confirmation of receipt of
telecopy, when sent by telecopier; or (d) on the day sent, when
sent by United States certified mail, postage and certification fee
prepaid, return receipt requested, addressed as follows:
To the Bank:
First Fidelity Bank
10 State House Square
Hartford, CT 06103-3698
Attention: W. Jeffrey Kramer
Vice President Corporate Trust
Telecopy:
To the Trustee:
First Fidelity Bank
10 State House Square
Hartford, CT 06103-3698
Attention: W. Jeffrey Kramer
Vice President Corporate Trust
Telecopy:
To the Tribe or the Authority:
Ralph Sturges, Chief, and
Carlisle Fowler, Business Board Member, and
Roland Harris, Business Board Member
Mohegan Tribe of Indians of Connecticut
27 Church Lane
Uncasville, CT 06382
Telecopy: (203) 848-0545
With a copy to:
Lewis B. Rome, Esq.
Rome, McGuigan, Hoberman,
Sabanosh & Klebanoff, P.C.
One State Street
16
<PAGE>
Hartford, Connecticut 06103-3103
Telecopy: (203) 724-3921
To the Manager or SIHL:
Len Wolman
Trading Cove Associates
914 Hartford Turnpike
P.O. Box 60
Waterford, Connecticut 06385
Telecopy: (203) 437-7752
or at such other address or telecopier number as the specified
entity most recently may have designated in writing in accordance
with this paragraph to the others. Notwithstanding the foregoing,
no notice to the Bank or the Trustee shall be deemed to have been
given to it or received by it unless and until actually received by
it. The failure by any party hereto to give a copy of any notice
given by it hereunder to any Person (other than the recipient
thereof), unless such Person is the Bank or the Trustee, shall not
affect the validity of such notice.
12.9 COUNTERPARTS. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same instrument.
12.10 CAPTIONS. Captions in this Agreement are for
convenience only and shall not be considered or referred to in
resolving questions of interpretation of this Agreement.
13. REMEDIES.
13.1 ADDITIONAL REMEDIES. In addition to the rights
otherwise provided under this Agreement and to any rights and
remedies provided in the Indenture, the Senior Secured Notes and
the other Collateral Documents, upon an Event of Default and for so
long as such Event of Default continues the Trustee may exercise
any or all of the following remedies, successively or concurrently
and in such order as the Trustee elects:
(a) The Trustee may deliver some or all of the
notices contemplated by Section 3.1.10 and Section 4.2(g) above.
(b) The Trustee may exercise in respect of the Cash
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of
a secured party under the Connecticut Uniform Commercial Code (now
in force and as hereafter amended) or other applicable law, and the
Trustee may also, without notice to the Authority, the Manager, the
Tribe or SIHL except as specified below, sell the Cash Collateral
or any part thereof in one or more parcels at one or more public or
private sales, at any exchange, broker's board or at any of the
Trustee's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Trustee may deem
commercially reasonable. Each of the Authority and the other
parties hereto acknowledges and agrees that any such private sale
may result in prices and other terms less favorable
17
<PAGE>
to the seller than if such sale were a public sale. Each of the
Authority and the other parties hereto agrees that, to the extent
notice of sale shall be required by law, at least ten (10) days'
notice to the Authority of the time and place of any public sale
or the time after which any private sale is to be made shall
constitute reasonable notification. The Trustee shall not be
obligated to make any sale regardless of notice of sale having been
given. The Trustee may adjourn any public or private sale from time
to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place
to which it was so adjourned. Each purchaser at any such sale shall
acquire the property sold free and clear of any claim or right of the
Authority, the Bank or any other party to this Agreement.
(c) Any cash that is Cash Collateral held by the
Trustee and all cash proceeds received by the Trustee in respect of
any sale of, collection from, or other realization upon all or any
part of the Cash Collateral shall be applied (after payment of any
and all amounts payable to the Trustee pursuant to the Indenture)
against the Obligations for the ratable benefit of the holders of
the Senior Secured Notes. Any surplus of such cash or cash
proceeds held by the Trustee and remaining after payment in full of
all the Obligations shall be paid over to the Authority or to
whomsoever may be lawfully entitled to receive such surplus or as
a court of competent jurisdiction may direct.
(d) The Authority hereby irrevocably appoints the
Trustee as its attorney-in-fact effective upon and during the
continuance of an Event of Default with full power of substitution
to do any act which the Authority is obligated hereby to do,
whether directly or through the Manager on behalf of the Authority,
to exercise such rights as the Authority might exercise with
respect to the Cash Collateral and to execute and file in the
Authority's name any financing statements and amendments thereto
required or advisable to protect the Trustee's rights or security
interest hereunder. Such appointment and power of attorney shall
be irrevocable and coupled with an interest.
13.2 FUTURE ADVANCES. All funds advanced in the
reasonable exercise of the Bank's or Trustee's judgment to protect
the rights and interests of the Trustee or the holders of the
Senior Secured Notes under the Indenture or the Collateral
Documents are deemed to be obligatory advances and are to be added
to the total indebtedness secured by the Leasehold Mortgage. All
sums so advanced shall be secured by the Leasehold Mortgage with
the same priority of lien as the security for any other obligations
secured thereunder; provided, however, that at no time shall the
principal amount of the debt secured by the Leasehold Mortgage,
together with all other indebtedness for the construction and
development of the Resort, exceed $325,000,000.
[Signature Pages To Follow]
18
<PAGE>
SIGNATURES
Dated as of September 29, 1995 MOHEGAN TRIBAL GAMING AUTHORITY
By: /s/ Ralph W. Sturges
---------------------------------
Name: Ralph W. Sturges
Title: Chairman, Management Board
Attest:
/s/ Carlisle Fowler
- ----------------------
Dated as of September 29, 1995 TRADING COVE ASSOCIATES
By: /s/ Len Wolman
---------------------------------
Name: Len Wolman
Title: President, LMW Investments,
Inc. Managing Partner
Attest:
/s/ Elizabeth J. McNamee
- ---------------------------
Dated as of September 29, 1995 SUN INTERNATIONAL HOTELS LIMITED
By: /s/ Howard B. Kerzner
---------------------------------
Name: Howard B. Kerzner
Title: Executive Vice President
Attest:
/s/ Judith A. Shapiro
- ---------------------------
19
<PAGE>
Dated as of September 29, 1995 FIRST FIDELITY BANK
By: /s/ W. Jeffrey Kramer
---------------------------------
Name: W. Jeffrey Kramer
Title: Vice President
Attest:
/s/ Thomas J. Brett
- ----------------------
Dated as of September 29, 1995 MOHEGAN TRIBE OF INDIANS OF
CONNECTICUT
(solely with respect to its obligations
under Sections 2.1 and 3.3)
By: /s/ Ralph W. Sturges
---------------------------------
Name: Ralph W. Sturges
Title: Lifetime Chief and Chair
of Tribal Council
Attest:
/s/ Carlisle Fowler
- ----------------------
20
<PAGE>
SCHEDULE I TO CASH COLLATERAL ACCOUNTS PLEDGE
AND SECURITY AGREEMENT
FORM OF REVOCATION NOTICE
[Letterhead of Trustee]
[Date]
First Fidelity Bank
10 State House Square
Hartford, Connecticut 06103-3698
Attention: W. Jeffrey Kramer
Vice President, Corporate Trust
Re: Cash Collateral Accounts Pledge and Security Agreement
dated September 29, 1995 among the Authority, Tribe,
Manager, Bank, SIHL and the undersigned Trustee
(the "Agreement")
Ladies and Gentlemen:
We refer to the Agreement. Capitalized terms used herein
shall have the respective meanings given such terms in the
Agreement. This letter constitutes a Revocation Notice under the
Agreement.
Please be advised that to the best of our knowledge:
Check Applicable Box or Boxes:
/ / 1. A Default has occurred and is continuing and you are
hereby advised not to honor requests for payment of interest on the
Subordinated Notes.
/ / 2. An Event of Default has occurred and is continuing
and you are hereby advised not to honor requests for payments of
principal of or interest on the Subordinated Notes.
/ / 3. A Payment Default has occurred and is continuing and
you are hereby advised not to honor requests for payment in favor
of the Tribe (other than Minimum Priority Payments), the Authority
or the Manager or Permitted Principal Payments on Indebtedness
permitted by Section 4.09(a) of the Indenture.
/ / 4. A Blockage Period is in effect and you are hereby
advised not to honor requests for payments in favor of the Tribe
(other than Minimum Priority Payments), the Authority or the
Manager or Permitted Principal Payments on Indebtedness permitted
by Section 4.09(a) of the Indenture.
I
<PAGE>
/ / 5. The Senior Secured Notes have been accelerated and
no funds may be withdrawn from any of the Cash Collateral Accounts
by any Person other than the Trustee or at its specific direction
in each instance.
/ / 6. All funds in any of the Cash Collateral Accounts not
currently invested in Cash Equivalents must be invested in cash.
The foregoing instructions will be effective until
further notice is given by the Trustee to you in the form of
Schedule II to the Agreement cancelling the foregoing instructions.
Chicago Title Insurance Company
By:________________________________
Name:______________________________
Title:_____________________________
cc: Trading Cove Associates
Mohegan Tribal Gaming Authority
II
<PAGE>
SCHEDULE II TO CASH COLLATERAL ACCOUNTS PLEDGE
AND SECURITY AGREEMENT
FORM OF TRUSTEE'S NOTICE
[Letterhead of Trustee]
[Date]
First Fidelity Bank
10 State House Square
Hartford, Connecticut 06103-3698
Attention: W. Jeffrey Kramer
Vice President, Corporate Trust
Re: Cash Collateral Accounts Pledge and Security Agreement
dated September 29, 1995 among the Authority, Tribe,
Manager, Bank, SIHL and the undersigned Trustee
(the "Agreement")
Ladies and Gentlemen:
We refer to the Agreement. Capitalized terms used herein
shall have the respective meanings given such terms in the
Agreement. This letter constitutes a Trustee's notice under the
Agreement.
1. Please be advised that the instructions given to you
in Paragraph [1][2][3][4][5][6](1) of our Revocation Notice dated
[insert date] are cancelled effective upon receipt of this notice
by you.
Chicago Title Insurance Company
By:________________________________
Name:______________________________
Title:_____________________________
cc: Trading Cove Associates
Mohegan Tribal Gaming Authority
- -------------------------
1. Delete inapplicable item.
III
<PAGE>
EXHIBIT A TO CASH COLLATERAL ACCOUNTS PLEDGE
AND SECURITY AGREEMENT
FORM OF DISBURSEMENT REQUEST AND CERTIFICATION (A)
[Letterhead of Manager]
[Date]
First Fidelity Bank
10 State House Square
Hartford, Connecticut 06103-3698
Attention: W. Jeffrey Kramer
Vice President, Corporate Trust
Re: Cash Collateral Accounts Pledge and Security Agreement
dated September 29, 1995 among the Authority, Tribe,
Trustee, Bank, SIHL and the undersigned Manager
(the "Agreement")
Ladies and Gentlemen:
We refer to the Agreement. Capitalized terms used herein
shall have the respective meanings given such terms in the
Agreement. This letter constitutes an Officers' Certificate under
Section 3.1.1 of the Agreement.
The undersigned hereby certifies that the aggregate amount
required to be deposited in the Interest and Excess Cash Flow
Account on [insert date, I.E. first business day of applicable
month and year] pursuant to clause (i) of the first sentence of
Section 4.26 of the Indenture is equal to $_______.
The foregoing certifications are true and correct and each of
the Bank and the Trustee is entitled to rely on the foregoing.
Trading Cove Associates
By:___________________________
Name:_________________________
Title:________________________
By:___________________________
Name:_________________________
Title:________________________
cc: Chicago Title Insurance Company
Mohegan Tribal Gaming Authority
IV
<PAGE>
EXHIBIT B TO CASH COLLATERAL ACCOUNTS PLEDGE
AND SECURITY AGREEMENT
FORM OF DISBURSEMENT REQUEST AND CERTIFICATION (B)
[Letterhead of Manager]
[Date]
First Fidelity Bank
10 State House Square
Hartford, Connecticut 06103-3698
Attention: W. Jeffrey Kramer
Vice President, Corporate Trust
Re: Cash Collateral Accounts Pledge and Security Agreement
dated September 29, 1995 among the Authority, Tribe,
Trustee, Bank, SIHL and the undersigned Manager
(the "Agreement")
Ladies and Gentlemen:
We refer to the Agreement. Capitalized terms used herein
shall have the respective meanings given such terms in the
Agreement. This letter constitutes an Officers' Certificate under
Section 3.1.2 of the Agreement.
1. The undersigned hereby certifies that attached hereto as
ANNEX I is a complete, accurate and reasonably detailed computation
of the Cash Flow and the Excess Cash Flow for the calendar month
ended [insert last day of month next preceding certificate's date].
2. The undersigned hereby certifies (a) that the Tribe is
entitled to the payment of a Minimum Priority Payment of $50,000 on
the day which is the 25th day of the month in which this
certificate is delivered or, if such day is not a business day, the
next succeeding business day and (b) that this payment is permitted
by Section 4.07(a) of the Indenture.
Check the Applicable Box
/ / 3A. The undersigned hereby certifies that the amount
required to be deposited in the Cash Maintenance Account on the day
which is the 25th day of the month in which this certificate is
delivered or, if such day is not a business day, the next
succeeding business day, pursuant to Section 4.08 of the Indenture
equals $_____________.
OR
/ / 3B. The undersigned hereby certifies that no monies are
required to be deposited in the Cash Maintenance Account on the
25th day of the month in which this certificate is delivered
pursuant to Section 4.08 of the Indenture.
V
<PAGE>
Check the Applicable Box:
/ / 4A. The undersigned hereby certifies that the sum of
$______, representing 50% of the Excess Cash Flow accrued for the month
of [insert month next preceding certificate's date], is required to
be deposited in the Interest and Excess Cash Flow Account pursuant
to clause (ii) of the first sentence of Section 4.26 of the
Indenture, after giving effect to the related provisions of the
second sentence of said Section, on the day which is the 25th day
of the month in which this certificate is delivered or, if such day
is not a business day, the next succeeding business day.
OR
/ / 4B. No deposits are required to be made in the Interest
and Excess Cash Flow Account on the 25th day of the month in which
this certificate is delivered pursuant to clause (ii) of the first
sentence of Section 4.26 of the Indenture, after giving effect to
the related provisions of the second sentence of said Section.
Check the Applicable Box:
/ / 5A. The undersigned hereby certifies that the amount of
Cash Flow Participation Interest accrued for the month of [insert
month next preceding certificate's date] is equal to $_____, and
such amount is required to be deposited in the Interest and Excess
Cash Flow Account pursuant to clause (iii) of the first sentence of
Section 4.26 of the Indenture, after giving effect to the related
provisions of the third sentence of said Section, on the day which
is the 25th day of the month in which this certificate is delivered
or, if such day is not a business day, the next succeeding business
day.
OR
/ / 5B. No deposit of Cash Flow Participation Interest is
required to be made in the Interest and Excess Cash Flow Account on
the 25th day of the month in which time this certificate is
delivered pursuant to clause (iii) of the first sentence of Section
4.26 of the Indenture after giving effect to the related provisions
of the third sentence of said Section.
6. The undersigned (i) hereby requests the Bank to
effect the following transfers and payments on the day which is the
25th day of the month in which this certificate is delivered or, if
such day is not a business day, the next succeeding business day
if, but only if, the amount specified in Paragraph 2 has been paid
and the amounts specified in Boxes 3A and 4A, if any, have been
deposited in full in the Cash Maintenance Account and the Interest
and Excess Cash Flow Account, respectively, and (ii) as a condition
to such transfers and payments, makes the certifications specified
below:
Check All Applicable Boxes:
/ / (a) to transfer $_______ from the Depository Account to
the Replacement Reserve Account; and, in connection therewith,
certifies that this transfer does not violate Section 3.2.4 of the
Agreement or any other provision thereof and is otherwise permitted
by the Indenture and the Management Agreement (as in effect on the
date of the Agreement).
/ / (b) to transfer $________ from the Depository Account to
the Cash Contingency Reserve Fund in accordance with the payment
instructions attached hereto, and, in connection therewith,
certifies that this transfer does not violate Section 3.2.4 of the
Agreement or any
VI
<PAGE>
other provision thereof and is otherwise permitted by the Indenture
and the Management Agreement (as in effect on the date of the Agreement).
/ / (c) to pay the sum of $__________ to the holders of the
Subordinated Notes in accordance with the payment instructions
attached hereto from funds on deposit in the Depository Account,
and, in connection therewith, certifies that such payment is
permitted under Section 4.07[(d)] [(e)] of the Indenture and not
otherwise prohibited by the Indenture or the Purchase Agreement
(including Article VIII thereof and the form of Subordinated Note
attached thereto) as in effect on the date of the Agreement, and
does not violate Section 3.2.4 of the Agreement or any other
provision thereof.
/ / (d) to pay the sum of $___________ to the Authority in
accordance with the Authority's Payment Instructions from funds on
deposit in the Depository Account, and, in connection therewith,
certifies that such payment is permitted under Section 4.07(h) of
the Indenture and not otherwise prohibited by the Indenture, and
does not violate Section 3.2.4 of the Agreement or any other
provision thereof.
/ / (e) to pay a Management Fee of $_____________ to the
Manager in accordance with the Manager's Payment Instructions from
funds on deposit in the Depository Account, and, in connection
therewith, certifies that such payment is permitted under Section
4.07(b) of the Indenture and not otherwise prohibited by the
Indenture or the Management Agreement as in effect on the date
hereof, and does not violate Section 3.2.4 of the Agreement or any
other provision thereof.
/ / (f) to pay the amount of $___________ to the Tribe in
accordance with the Tribe's Payment Instructions from funds on
deposit in the Depository Account, and, in connection therewith,
certifies that such payment is permitted under Section 4.07(c) of
the Indenture and not otherwise prohibited by the Indenture, and
does not violate Section 3.2.4 of the Agreement or any other
provision thereof.
/ / (g) transfer the amount of $_________ from the Interest
and Excess Cash Flow Account to the Depository Account, and, in
connection therewith, certifies that such transfer is permitted
under Section 4.26 of the Indenture and not otherwise prohibited by
the Indenture, and does not violate Section 3.2.4 of the Agreement
or any other provision thereof.
VII
<PAGE>
The foregoing representations, warranties and certifications
are true and correct and each of the Bank and the Trustee is
entitled to rely on the foregoing.
Trading Cove Associates
By:___________________________
Name:_________________________
Title:________________________
By:___________________________
Name:_________________________
Title:________________________
cc: Chicago Title Insurance Company
Mohegan Tribal Gaming Authority
VIII
<PAGE>
EXHIBIT C TO CASH COLLATERAL ACCOUNTS PLEDGE
AND SECURITY AGREEMENT
FORM OF DISBURSEMENT REQUEST AND CERTIFICATION (C)
[Letterhead of Manager]
[Date]
First Fidelity Bank
10 State House Square
Hartford, Connecticut 06103-3698
Attention: W. Jeffrey Kramer
Vice President, Corporate Trust
Re: Cash Collateral Accounts Pledge and Security Agreement
dated September 29, 1995 among the Authority, Tribe,
Trustee, Bank, SIHL and the undersigned Manager
(the "Agreement")
Ladies and Gentlemen:
We refer to the Agreement. Capitalized terms used herein
shall have the respective meanings given such terms in the
Agreement. This letter constitutes an Officers' Certificate under
Section 3.1.4 of the Agreement.
Check the Applicable Box or Boxes:
/ / 1. The undersigned certifies that the Authority has
satisfied all conditions precedent set forth in the Indenture and
the Leasehold Mortgage to the release of Net Loss Proceeds held in
the Event of Loss Account and the payments requested below are
permitted under Section 3.2.4 of the Agreement. The undersigned
requests that the aggregate sum of $__________ be paid to the
Persons and in the amounts specified in Annex I hereto from funds
on deposit in the Event of Loss Account. The undersigned certifies
that all such payments constitute payments permitted by Section
4.11 of the Indenture and by the Leasehold Mortgage and are not
otherwise prohibited by the Indenture, the Leasehold Mortgage or
the Agreement.
/ / 2. The undersigned requests that the sum of
$___________ be paid to the Trustee in accordance with the
Trustee's Payment Instructions on [insert business day preceding
the day specified below] from funds on deposit in the Event of Loss
Account, such amount being the aggregate amount required to be paid
on [insert date] to the holders of Senior Secured Notes who have
accepted the Authority's Event of Loss Offer pursuant to Section
4.11 of the Indenture.
/ / 3. The undersigned certifies that the Authority has
satisfied all conditions precedent set forth in Section 4.11 of the
Indenture to the release of Excess Loss Proceeds to the Authority
and the payment requested below is permitted under Section 3.2.4 of
the Agreement. The undersigned requests that the sum of
$_______________ be paid to the Authority in accordance with the
Authority's Payment
IX
<PAGE>
Instructions from funds on deposit in the Event of Loss Account.
The undersigned certifies that such payment is permitted by
Section 4.11 of the Indenture and not otherwise prohibited by the
Indenture or the Agreement.
The foregoing representations, warranties and certifications
are true and correct and each of the Bank and the Trustee is
entitled to rely on the foregoing.
Trading Cove Associates
By:___________________________
Name:_________________________
Title:________________________
By:___________________________
Name:_________________________
Title:________________________
cc: Chicago Title Insurance Company
Mohegan Tribal Gaming Authority
X
<PAGE>
EXHIBIT D TO CASH COLLATERAL ACCOUNTS PLEDGE
AND SECURITY AGREEMENT
FORM OF DISBURSEMENT REQUEST AND CERTIFICATION (D)
[Letterhead of Manager]
[Date]
First Fidelity Bank
10 State House Square
Hartford, Connecticut 06103-3698
Attention: W. Jeffrey Kramer
Vice President, Corporate Trust
Re: Cash Collateral Accounts Pledge and Security Agreement
dated September 29, 1995 among the Authority, Tribe,
Trustee, Bank, SIHL and the undersigned Manager
(the "Agreement")
Ladies and Gentlemen:
We refer to the Agreement. Capitalized terms used herein
shall have the respective meanings given such terms in the
Agreement. This letter constitutes an Officers' Certificate under
Section 3.1.5 of the Agreement.
Check the Applicable Box or Boxes:
/ / 1. The undersigned certifies that the Authority has
satisfied all conditions precedent set forth in the Indenture to
the release of Net Proceeds held in the Asset Sale Account and the
payments requested below are permitted under Section 3.2.4 of the
Agreement. The undersigned requests that the aggregate sum of
$_________ be paid to the Persons and in the amounts specified in
ANNEX I hereto from funds on deposit in the Asset Sale Account.
The undersigned certifies that all such payments constitute
payments permitted by Section 4.10 of the Indenture and not
otherwise prohibited by the Indenture or the Agreement.
/ / 2. The undersigned requests that the sum of $__________
be paid to the Trustee in accordance with the Trustee's Payment
Instructions on [insert business day preceding the day specified
below] from funds on deposit in the Asset Sale Account, such amount
being the aggregate amount required to be paid on [insert date] to
the holders of Senior Secured Notes who have accepted the
Authority's Asset Sale Offer pursuant to Section 4.10 of the
Indenture.
/ / 3. The undersigned certifies that the Authority has
satisfied all conditions precedent set forth in Section 4.10 of the
Indenture to the release of Excess Proceeds to the Authority and
the payment requested below is permitted under Section 3.2.4 of the
Agreement. The undersigned requests that the sum of
$_______________ be paid to the Authority in accordance with the
Authority's Payment Instructions from funds on deposit in the Asset
Sale Account. The undersigned certifies that such payment is
permitted by Section 4.10 of the Indenture and not otherwise
prohibited by the Indenture or the Agreement.
XI
<PAGE>
The foregoing representations, warranties and certifications
are true and correct and each of the Bank and the Trustee is
entitled to rely on the foregoing.
Trading Cove Associates
By:___________________________
Name:_________________________
Title:________________________
By:___________________________
Name:_________________________
Title:________________________
cc: Chicago Title Insurance Company
Mohegan Tribal Gaming Authority
XII
<PAGE>
EXHIBIT E TO CASH COLLATERAL ACCOUNTS PLEDGE
AND SECURITY AGREEMENT
FORM OF DISBURSEMENT REQUEST AND CERTIFICATION (E)
[Letterhead of Manager]
[Date]
First Fidelity Bank
10 State House Square
Hartford, Connecticut 06103-3698
Attention: W. Jeffrey Kramer
Vice President, Corporate Trust
Re: Cash Collateral Accounts Pledge and Security Agreement
dated September 29, 1995 among the Authority, Tribe,
Trustee, Bank, SIHL and the undersigned Manager
(the "Agreement")
Ladies and Gentlemen:
We refer to the Agreement. Capitalized terms used herein
shall have the respective meanings given such terms in the
Agreement. This letter constitutes an Officers' Certificate under
Section 3.1.6 of the Agreement.
The undersigned hereby (a) requests that the aggregate amount
of $__________ be paid to the Persons and in the amounts specified
in ANNEX II from funds on deposit in the Replacement Reserve
Account and (b) certifies that such payments are permitted to be
made under the Agreement (including Section 3.2.4 thereof), the
Indenture and the Gaming Facility Management Agreement (as in
effect on the date hereof).
The foregoing certifications are true and correct and each of
the Bank and the Trustee is entitled to rely on the foregoing.
Trading Cove Associates
By:___________________________
Name:_________________________
Title:________________________
By:___________________________
Name:_________________________
Title:________________________
cc: Chicago Title Insurance Company
Mohegan Tribal Gaming Authority
XIII
<PAGE>
EXHIBIT F TO CASH COLLATERAL ACCOUNTS PLEDGE
AND SECURITY AGREEMENT
FORM OF DISBURSEMENT REQUEST AND CERTIFICATION (F)
[Letterhead of Manager]
[Date]
First Fidelity Bank
10 State House Square
Hartford, Connecticut 06103-3698
Attention: W. Jeffrey Kramer
Vice President, Corporate Trust
Re: Cash Collateral Accounts Pledge and Security Agreement
dated September 29, 1995 among the Authority, Tribe,
Trustee, Bank, SIHL and the undersigned Manager
(the "Agreement")
Ladies and Gentlemen:
We refer to the Agreement. Capitalized terms used herein
shall have the respective meanings given such terms in the
Agreement. This letter constitutes an Officers' Certificate under
Section 3.1.7 of the Agreement.
Check the Applicable Box or Boxes:
/ / 1. The undersigned requests that the amount of
$________ be paid to the Trustee in accordance with the Trustee's
Payment Instructions on [insert business day preceding the date
specified below in this Paragraph 1.] from funds available in the
Interest and Excess Cash Flow Account, such amount representing
interest (including Liquidated Damages, if any) due and payable
on the Senior Secured Notes on [insert date].
/ / 2. The undersigned requests that the amount of
$_________ be paid to the Trustee in accordance with the Trustee's
Payment Instructions on [insert business day preceding the date
specified below in this Paragraph 2.] from funds available in the
Interest and Excess Cash Flow Account, such amount being the aggregate
amount required to be paid on [insert date] to the holders of
Senior Secured Notes who have accepted the Authority's Excess Cash
Purchase Offer pursuant to Section 4.28 of the Indenture.
/ / 3. The undersigned (a) certifies that its request for
the payments requested below and the making thereof are not
prohibited by Section 3.2.4 of the Agreement, (b) requests that the
aggregate amount of $_________ be paid to the Persons and in the
amounts specified in ANNEX I hereto from funds available in the
Interest and Excess Cash Flow Account, and (c) certifies that the
making of such payments is permitted by clause (iii) of the
penultimate sentence of Section 4.26 of the Indenture, will be
applied to the making of capital expenditures that reduce Excess
Cash Flow under the definition thereof, and is not otherwise
prohibited by the Indenture or the Agreement.
/ / 4. The undersigned certifies that (a) its request for
the payments requested below and the making thereof are not
prohibited by Section 3.2.4 of the Agreement, (b) requests that the
amount
XIV
<PAGE>
of $____________ be paid from funds on deposit in the Interest
and Excess Cash Flow Account to the holders of the Subordinated
Notes who have accepted the Authority's Excess Cash Purchase
Offer pursuant to Section 4.07(f) of the Indenture in accordance
with the attached payment instructions and (c) certifies that
the making of such payment is permitted by Section 4.07(f) of
the Indenture and not otherwise prohibited by the Indenture or the
Agreement.
/ / 5. The undersigned certifies that (a) its request for
the payment requested below and the making thereof are not
prohibited by Section 3.2.4 of the Agreement, (b) requests that the
amount of $________ be paid from funds on deposit in the Interest
and Excess Cash Flow Account to the Tribe in accordance with the
Tribe's Payment Instructions and (c) certifies that the making of
such payment is permitted by Section 4.07(g) of the Indenture and
not otherwise prohibited by the Indenture or the Agreement.
The foregoing certifications are true and correct and each of
the Bank and the Trustee is entitled to rely on the foregoing.
Trading Cove Associates
By:___________________________
Name:_________________________
Title:________________________
By:___________________________
Name:_________________________
Title:________________________
cc: Chicago Title Insurance Company
Mohegan Tribal Gaming Authority
XV
<PAGE>
EXHIBIT G TO CASH COLLATERAL ACCOUNTS PLEDGE
AND SECURITY AGREEMENT
FORM OF DISBURSEMENT REQUEST AND CERTIFICATION (G)
[Letterhead of Manager or Authority]
[Date]
First Fidelity Bank
10 State House Square
Hartford, Connecticut 06103-3698
Attention: W. Jeffrey Kramer
Vice President, Corporate Trust
Re: Cash Collateral Accounts Pledge and Security Agreement
dated September 29, 1995 among the Authority, Tribe,
Trustee, Bank, SIHL, and [Manager] (the "Agreement")
Ladies and Gentlemen:
We refer to the Agreement. Capitalized terms used herein
shall have the respective meanings given such terms in the
Agreement. This letter constitutes an Officers' Certificate under
Section 3.1.8 of the Agreement.
Check the Applicable Box or Boxes:
/ / 1. The undersigned requests that the amount of
$________ be paid to the Trustee in accordance with the Trustee's
Payment Instructions on [insert business day preceding the date
specified below in this Paragraph 1.] from funds available in the
Depository Account, such amount being the aggregate amount required
to be paid on [insert date] to the holders of Senior Secured Notes
who have accepted the Authority's Change of Control Offer pursuant
to Section 4.16 of the Indenture.
/ / 2. The undersigned requests that the amount of
$_________ be paid to the Trustee in accordance with the Trustee's
Payment Instructions on [insert business day preceding the date
specified below in this Paragraph 1.] from funds available in the
Depository Account, such amount being the aggregate amount required
to be paid on [insert date] to the holders of Senior Secured Notes
whose Notes are required to be redeemed pursuant to Section 3.08 of
the Indenture.
XVI
<PAGE>
The foregoing certifications are true and correct and each of
the Bank and the Trustee is entitled to rely on the foregoing.
Trading Cove Associates or
Mohegan Tribal Gaming Authority
By:___________________________
Name:_________________________
Title:________________________
By:___________________________
Name:_________________________
Title:________________________
cc: Chicago Title Insurance Company
Mohegan Tribal Gaming Authority
XVII
<PAGE>
EXHIBIT H TO CASH COLLATERAL ACCOUNTS PLEDGE
AND SECURITY AGREEMENT
[Date]
[INSERT NAME AND ADDRESS OF ISSUER OR TRANSFER AGENT, AS
APPLICABLE]
_______________________________________
_______________________________________
Attention: _____________________
Re: Pledge of Shares of _________________ (the "Issuer")
Ladies and Gentlemen:
This letter shall provide you with irrevocable instructions
concerning __________ shares (the "Shares") of beneficial interest of
_______________ [INSERT NAME OF ISSUER] to be held in account no.
____________________ (the "Account") and registered in the name
of the undersigned (the "Shareholder"). The undersigned hereby
certifies and agrees as follows:
1. The Shareholder has pledged and granted a security
interest in the Shares, together with all interest, dividends,
gains and other income thereon and reinvestments thereof, together
with all right, title and interest of Shareholder in the Account
with respect to the foregoing (the "Pledge"), to _______________
[INSERT NAME OF TRUSTEE] (the "Trustee") in its capacity as trustee
under that certain Indenture dated September 29, 1995 among the
Mohegan Tribal Gaming Authority (the "Authority"), an
instrumentality of the Mohegan Tribe of Indians of Connecticut (the
"Tribe"), the Tribe and the Trustee pertaining to the Authority's
______% Senior Secured Notes due 2002. In such capacity, the
Trustee is referred to herein as the "Pledgee."
2. The Shareholder hereby represents to you that: (a)
the Pledgee has designated _____________ [INSERT NAME OF BANK] (the
"Bank") to serve as the Pledgee's designee and agent in order to
perfect the security interest in favor of the Pledgee; and (b) the
Shareholder has not granted any security interest, right or claim
in the Shares or the Account to any person other than the Pledgee.
3. Accordingly, the Shareholder hereby irrevocably
directs you to make such notations in the records pertaining to the
Shares and the Account as are necessary to reflect the Pledge,
including the registration of the Shares and the Account in the
name of the Authority and the registration of the Pledge of the
Shares in the following name:
"___________________ [INSERT NAME OF BANK], as
agent for _______________ [INSERT NAME OF
TRUSTEE], in the latter's capacity as trustee
under that certain Indenture dated September 29, 1995
among the Mohegan Tribal Gaming Authority, the Mohegan
Tribe of Indians of Connecticut, and [INSERT NAME OF
TRUSTEE] pertaining to the Authority's [_____]% Senior
Secured Notes due 2002"
XVIII
<PAGE>
4. The Shareholder hereby further irrevocably directs
you to reinvest all dividends or distributions from net investment
income and capital gains in additional Shares of the Issuer,
subject to the Pledge. In addition, the Shareholder hereby
irrevocably instructs you, notwithstanding any contrary
instructions from the Shareholder, to follow only instructions
received from the Bank, furnished in writing, concerning (a) the
payment or reinvestment of dividends or distributions and (b) the
redemption, transfer, sale or any other disposition or transaction
concerning the Shares or the interest, dividends, gains and other
income thereon.
5. The Shareholder also irrevocably authorizes and
directs you to send all notices, statements and all other
communications concerning the Shares or the Account to the
following address or such other address as may be specified in
written instructions from the Bank: [Insert name and address of
Bank]
[Insert Name of Bank], as agent for [Insert Name of Trustee]
[Insert address of Bank]
Attn:_______________________________
Re: Mohegan Tribal Gaming Authority
6. The Shareholder agrees that neither you, the Issuer
or any of their respective partners, trustees, officers, employees
or affiliates (collectively, the "Issuer Affiliates") shall be
liable for complying in good faith with the instructions contained
herein or failing to comply with any contrary or inconsistent
instructions that may subsequently be issued by the Shareholder.
The Shareholder further agrees to hold harmless and indemnify each
of the Issuer Affiliates against any claim or loss arising out of
any actions or omissions taken by any person in reliance on or
compliance with the instructions and authorizations contained
herein.
7. The Shareholder agrees that the instructions
contained herein may be revoked by the Shareholder only upon the
receipt by you of the Bank's written consent to such revocation or
written notification from the Bank that the Pledge has been
terminated.
Very truly yours,
MOHEGAN TRIBAL GAMING AUTHORITY
By:_______________________________
Name:_____________________________
Title:____________________________
GUARANTEE OF SIGNATURE
Authorized Signature
By:_______________________ Address:
Title:____________________
Dated:____________________ Dated:
XIX
<PAGE>
The undersigned hereby confirms the following for the benefit
of the above-referenced Pledgee and Bank:
(i) The undersigned is [CHECK APPROPRIATE BOX]
/ / The Issuer of the Shares, which has been
organized under the laws of a jurisdiction which
has adopted Article 8 of the Uniform Commercial
Code pertaining to investment securities, and
said laws accordingly permit the undersigned to
register a pledge of the Shares in favor of the
Pledgee by taking the steps referenced in numbered
paragraph 3 of the above letter.
/ / The transfer agent for the Issuer of the Shares,
which Issuer has been organized under the laws of a
jurisdiction which has adopted Article 8 of the Uniform
Commercial Code pertaining to investment securities,
and said laws accordingly permit the undersigned to
register a pledge of the Shares in favor of the Pledgee
by taking the steps referenced in numbered paragraph 3
of the above letter.
(ii) The undersigned agrees to comply with the instructions
set forth in the above letter. The Pledge has been
registered on ______________, 199_ [INSERT DATE].
(iii) Immediately after registration of the Pledge, there
were no liens, restrictions or adverse claims (as
to which the undersigned has a duty to disclose
under the Uniform Commercial Code) to the Shares,
other than the Pledge.
Date: _____________________, 199 _________________________________
XX
<PAGE>
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
included in or made a part of this registration statement and to all
references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
Hartford Connecticut
May 31, 1996
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility of a Trustee pursuant to
Section 305(b)(2)
------
FIRST UNION BANK OF CONNECTICUT
(Exact name of trustee as specified in its charter)
CONNECTICUT STATE BANK
(Jurisdiction of incorporation or organization if not a U.S. national bank)
06-0547320
(I.R.S. Employer Identification No.)
10 STATE HOUSE SQUARE, HARTFORD, CONNECTICUT 06103-3698
(Address of trustee's principal executive offices) (zip code)
NOT APPLICABLE
(Name, address and telephone number of agent for service of process)
MOHEGAN TRIBAL GAMING AUTHORITY
(Exact name of obligor as specified in its charter)
NOT APPLICABLE 06-1436334
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ROLAND HARRIS, CHAIRMAN, MANAGEMENT BOARD
67 SANDY DESERT ROAD
UNCASVILLE, CONNECTICUT 06382
(Address of principal executive offices) (zip code)
131/2% SERIES B SENIOR SECURED NOTES DUE 2002
(Title of indenture securities)
Item 1. General Information.
Furnish the following information as to the trustee:
<PAGE>
(a) Name and address of each examining or supervising authority to which
it
is subject.
Connecticut Commissioner of Banking, 262 Constitution Plaza,
Hartford, Connecticut 06115
Board of Governors of the Federal Reserve System, Washington D.C.
Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Items 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15 have been omitted
pursuant to General Instruction B.
Item 16. List of Exhibits.
List below all exhibits filed as a part of this statement of eligibility
and qualification.
1. A copy of the articles of association of the trustee as now in effect.
2. A copy of the certificate of authority to commence business.
3. Not Applicable. Authorization of the trustee to exercise corporate
trust powers is contained in articles of association.
4. A copy of the bylaws of the trustee as now in effect.
5. Not Applicable
6. Consent of trustee required by Section 321(b) of the Trust Indenture
Act of 1939.
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority.
- 2 -
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee,
First Union Bank of Connecticut, a Connecticut State-chartered bank,
incorporated and existing under the laws of the State of Connecticut, has duly
caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Hartford and State of
Connecticut on the 19th day of March, 1996.
FIRST UNION BANK OF CONNECTICUT
By: /s/ W. Jeffrey Kramer
-------------------------------------------
W. Jeffrey Kramer
Its Vice President
- 3 -
<PAGE>
EXHIBIT 1
ARTICLES OF INCORPORATION
OF
FIRST UNION BANK OF CONNECTICUT
AS AMENDED AND RESTATED JANUARY 1, 1996
FIRST: The name of the corporation is FIRST UNION BANK OF
CONNECTICUT.
SECOND: The nature of the business to be transacted, or the purposes
to be promoted or carried out by the corporation are as follows:
To transact a general banking business as a state bank and trust
company and, in the conduct of such business, to engage in any lawful act
or activity for Connecticut and to possess and exercise all the powers and
privileges granted by The Banking Law of Connecticut or by any other law of
Connecticut, together with any powers incidental thereto, so far as such
powers and privileges are necessary or convenient to the conduct, promotion
or attainment of the business or purposes of the corporation, including,
without limiting the generality of the foregoing, the power to:
(a) Receive deposits, including deposits of public funds or money
held in a fiduciary capacity;
(b) Receive for safekeeping or otherwise all kinds of personal
property;
(c) Act as trustee, receiver, executor or administrator or as
guardian or conservator of the estate, but not of the person, of
any person;
(d) Act as transfer agent or registrar of stocks and bonds;
(e) Act as agent, fiscal agent or trustee for any corporation, for
holders of bonds, notes or other securities or for the state or
any political subdivision thereof or taxing district therein;
(f) Lend money with or without security and issue letters of credit
for any lawful purpose;
(g) Borrow money and pledge assets therefor;
(h) Conduct a safe deposit business as permitted by applicable law;
and
<PAGE>
(i) Invest its assets in investment securities as permitted by
applicable law.
To transact such business and to exercise all rights, privileges,
powers and franchises possessed by any entity with which the corporation or
a predecessor of the corporation has merged or consolidated.
THIRD: The principal office of the corporation is located in the city
of Stamford, State of Connecticut.
FOURTH: The total number of shares of capital stock which the
corporation shall have authority to issue is six million (6,000,000) common
shares, and the par value of each such share is Five Dollars ($5.00),
amounting in the aggregate to thirty million dollars ($30,000,000), which
shares shall be transferable according to such rules as may be established
by the Board of Directors of the corporation.
FIFTH: (a) the name, address and business of each incorporator of the
corporation are as follows:
NAME ADDRESS BUSINESS
Union Trust Company Church and Elm Streets Bank and Trust Company
New Haven, Connecticut 06505
Union Trust Company 180 Fairfield Avenue Bank and Trust Company
Bridgeport, Connecticut 06904
(b) the name, address and occupation of each prospective initial
director of the corporation are as follows:
NAME ADDRESS OCCUPATION
Carl Bennett Greenbriar Lane Chairman and President,
Stamford, Connecticut 06903 Caldor, Inc.
D. Allan Bromley 35 Tokeneke Drive Henry Ford II Professor
and Director of
North Haven, Connecticut A. W. Wright
06473 Nuclear Structure
Laboratory Yale
University
Gino P. Giusti 236 West Haviland Lane President and Director,
Stamford, Connecticut 06903 Texasgulf Inc.
J. Robert Gunther Uncas Circle - Sachems Head Chairman and President
Guilford, Connecticut 06437 George Schmitt & Co.,
Inc.
Eric R. Hansen 31 Arrowhead Way Vice President of
Darien, Connecticut 06820 Northeast Bancorp, Inc.
and President of Union
Trust Company
Robert W. Harcke 8 Point Road Chairman, Universal Wire
Niantic, Connecticut 06357 Products, Inc.
- 2 -
<PAGE>
John M. Henske 104 Beachside Avenue Chairman and Chief
Green Farms, Connecticut Executive Officer
06436 Olin Corporation
Robert E. Ix Walsh Lane Chairman and Chief
Greenwich, Connecticut Executive Officer,
06830 Cadbury Schweppes
U.S.A. Inc.
O. Haydn Owens, Jr. 410 North Cedar Road Vice President, The
Fairfield, Connecticut Southern New England
06430 Telephone Co.
Kenneth A. Randall 13 Valley Road President, The Conference
New Canaan, Connecticut Board, Inc.
06840
Thomas F. Richardson Marchant Road Chairman and President
West Redding, Connecticut Northeast Bancorp, Inc.
06896 and Chairman and Chief
Executive Officer, Union
Trust Company
Audrey M. Sargent 18 Wepawaug Road None
Woodbridge, Connecticut
06525
Theodore F. Talmage 11406 Lost Tree Way Retired
North Palm Beach, Florida
33403
Henry H. Townshend, Jr. 709 Townsend Avenue Retired
New Haven, Connecticut
06512
Paul E. Waggoner Vineyard Point Road Director, The Connecticut
Guilford, Connecticut 06437 Agricultural Experiment
Station
A. Porter Waterman Parsonage Road President, Weepor
Greenwich, Connecticut 06830 Corporation
Howard R. Weckerley 17 Cove Road Retired
River Hills Plantation
Clover, South Carolina 29710
SIXTH: (A) INDEMNIFICATION OF DIRECTORS
The corporation shall, to the fullest extent permitted by applicable
banking, corporate and other law and regulations, indemnify any person who
is or was a director of the corporation from and against any and all
expenses, liabilities or other losses arising in connection with any
action, suit, appeal or other proceeding, by reason of the fact that such
person is or was serving as a director of the corporation and may, to the
fullest extent permitted by applicable banking, corporate and other law and
regulation, advance monies to such persons for expenses incurred in
defending any such action, suit, appeal or other proceeding on such terms
as the corporation's Board of Directors shall determine. The corporation
may purchase insurance for the purpose of indemnifying such persons and/or
reimbursing the corporation upon payment of indemnification
- 3 -
<PAGE>
to such persons to the extent that indemnification is authorized by the
preceding sentences, except that insurance coverage shall not be available
in connection with a formal order by a court or judicial or governmental
body assessing civil money penalties against such person or in the event
that such coverage would be prohibited by applicable banking, corporate and
other law or regulations.
(B) INDEMNIFICATION OF OFFICERS, EMPLOYEES AND AGENTS
The corporation shall indemnify any person who is or was an officer,
employee or agent of the corporation or who is or was a director, general
partner, trustee or principal of another entity serving as such at the
request of the corporation from and against any and all expenses,
liabilities or other losses arising in connection with any action, suit,
appeal or other proceeding, by reason of the fact that such person is or
was serving as an officer, employee or agent of the corporation or as a
director of another entity at the request of the corporation to the extent
authorized by the corporate policy of the corporation, as adopted and
modified from time to time by the shareholder of the corporation, except to
the extent that such indemnification would be prohibited by applicable
banking, corporate and other law or regulation. The corporation may advance
monies to such persons for expenses incurred in defending any such action,
suit, appeal or other proceeding in accordance with the corporate policy of
the corporation, as adopted and modified from time to time by the
shareholder of the corporation, except to the extent that such advancement
would be prohibited by applicable banking, corporate and other law or
regulation. The corporation may purchase insurance for the purpose of
indemnifying such persons and/or reimbursing the corporation upon payment
of indemnification to such person to the extent that indemnification is
authorized by the preceding sentence, except that insurance coverage shall
not be available in connection with a formal order by a court or judicial
or governmental body assessing civil money penalties against such person or
in the event that such coverage would be prohibited by applicable banking,
corporate and other law or regulation.
- 4 -
<PAGE>
EXHIBIT 2
STATE OF CONNECTICUT
DEPARTMENT OF BANKING
260 CONSTITUTION PLAZA - HARTFORD, CT 06103
John P. Burke
Commissioner
CERTIFICATION
I, John P. Burke, Banking Commissioner of the State of Connecticut, do
hereby certify that FIRST UNION BANK OF CONNECTICUT, is a state bank and trust
company duly organized and existing under the laws of the State of Connecticut,
and located in STAMFORD, Connecticut.
In Testimony Whereof, I have hereunto set my hand and affixed my seal at
Hartford, Connecticut, this 21st day of March, 1996.
[S E A L]
/s/ John P. Burke
-----------------------------
John P. Burke
Banking Commissioner
TEL: (203) 240-8299
FAX: (203) 240-8178
AN EQUAL OPPORTUNITY EMPLOYER
<PAGE>
EXHIBIT 4
AMENDED AND RESTATED BYLAWS
OF
FIRST UNION BANK OF CONNECTICUT (EFF. 1/1/96)
(FORMERLY FIRST FIDELITY BANK;
FORMERLY UNION TRUST COMPANY)
STAMFORD, CONNECTICUT
AS ADOPTED OCTOBER 12, 1993
ARTICLE I
MEETINGS OF STOCKHOLDERS
ANNUAL MEETING
1. The Annual Meeting of the stockholders of the Company shall be held on such
date between February 1 and April 1 in each year as the Board of Directors
shall designate and at such hour as shall be specified in the notice of
such meeting. The Annual Meeting shall be held at the principal office of
the Company in the Town of New Haven, or such other place within or without
the State of Connecticut as the Board of Directors may designate.
SPECIAL MEETINGS
2. A special meeting of the stockholders shall be called when ordered by a
majority of the Board of Directors or the Chief Executive Officer or when
requested in writing by the holders of record of not less than one-tenth of
the capital stock issued and outstanding.
NOTICE OF MEETINGS
3. Written notice of each stockholders' meeting stating the time, place and
purpose or purposes of the meeting, shall be mailed to each stockholder
entitled to vote at such meeting at his address as shown on the books of
the Company at least ten (10) days before the date of said meeting.
QUORUM
4. At all meetings of the stockholders there shall be present, either in
person or by proxy, stockholders representing a majority of the capital
stock of the Company issued and outstanding, in order to constitute a
quorum for the election of directors or the transaction of other business.
In the absence of a quorum, a majority in interest of the stockholders
present in person or by proxy may adjourn the meeting from time to time,
without further notice, until a quorum shall attend, and thereupon any
business may be
<PAGE>
transacted which might have been transacted at the meeting originally
called.
VOTING
5. At all meetings of the stockholders, each stockholder shall be entitled to
vote, in person or by proxy, one vote for each share of stock standing in
his name on the books of the Company on the record date set for such
meeting.
ARTICLE II
DIRECTORS
GENERAL POWERS
1. The property, affairs and business of the Company shall be managed and
controlled by its Board of Directors, which may exercise all of the
corporate powers of the Company except such as are by law, the Articles of
Incorporation of the Company or the Bylaws expressly conferred upon or
reserved to the stockholders.
NUMBER, TERM OF OFFICE AND QUALIFICATIONS
2. The number of directors of the Company shall be not less than nine (9) nor
more than twenty-five (25). They shall be elected at the Annual Meeting and
shall hold office for one (1) year and until their successors are duly
elected and qualified.
VACANCIES
3. In case of any vacancy among the directors from any cause, the remaining
directors at any regular or special meeting may elect a successor to hold
office until the next Annual Meeting of the stockholders and until his
successor is duly elected and qualified.
ORGANIZATION MEETING OF THE BOARD OF DIRECTORS
4. The Board of Directors at their first meeting after the Annual Meeting of
the stockholders shall elect or appoint officers at or above the level of
senior vice president to serve during the ensuing year.
REGULAR MEETINGS
5. Regular meetings of the Board of Directors shall be held at least quarterly
on such days and time as the Board of Directors may from time to time
determine. No notice of such regular meetings need be given.
- 2 -
<PAGE>
SPECIAL MEETINGS
6. Special meetings of the Board of Directors shall be called when ordered by
the Chief Executive Officer or when requested in writing by any five
directors, at such time and place as may be designated in such order or
request, and the Secretary of the Company shall give reasonable notice
thereof to each director either by mail, telegraph, facsimile, telephone or
in person. A waiver of notice in writing signed by any director whether
before or after such meeting shall be considered equivalent to proper
notice to such director.
QUORUM
7. A majority of the number of directors serving at the time shall constitute
a quorum at any meeting.
COMPENSATION OF DIRECTORS
8. All directors who are not also officers of the Company or any of its
affiliates shall be entitled to a reasonable fee for attendance at meetings
of the Board and of Committees of the Board, such fee to be fixed from time
to time by a resolution of the Board of Directors or of the Executive
Committee.
TERM OF DIRECTORS
9. No person who shall have attained the age of 70 years as of January first
in any year shall be eligible to be elected a Director or to be re-elected
a Director.
COMMUNICATIONS EQUIPMENT
10. Any or all directors may participate in a meeting of the Board or committee
thereof by means of conference telephone or any means of communication by
which all persons participating in the meeting are able to hear each other.
ACTION WITHOUT MEETING
11. Any action required or permitted to be taken by the Board or committee
thereof by law, the Company's Articles of Incorporation, or these Bylaws
may be taken without a meeting, if, prior or subsequent to the action, all
members of the Board or committee shall individually or collectively
consent in writing to the action. Each written consent or consents shall be
filed with the minutes of the proceedings of the Board or committee. Action
by written consent shall have the same force and effect as a unanimous vote
of the directors, for all purposes. Any certificate or other documents
which relates to action so taken shall state that the action was
- 3 -
<PAGE>
taken by unanimous written consent of the Board or committee without a
meeting.
ARTICLE III
COMMITTEES
EXECUTIVE COMMITTEES
1. There shall be an Executive Committee which, when the Board of Directors is
not in session, shall have and may exercise all the powers of the Board
that lawfully may be delegated. The Executive Committee shall meet at such
times as the members shall agree and whenever called by the Chairman of the
committee. The Executive Committee shall consist of such number of
directors, not less than. four, as the Board shall from time to time
appoint. A quorum for all meetings of the Executive Committee shall be a
majority of the members. The Board of Directors may appoint a Chairman of
the Executive Committee; in his absence or if no such appointment is made,
the President of the Company shall be its Chairman.
The Executive Committee shall keep a record of its proceedings which shall
be reported to the Board of Directors at its next regular meeting.
In the event of the absence of any member at a meeting, any other director
may be called to serve in his place with full power to act.
OTHER COMMITTEES
2. The Board of Directors shall have the power to appoint, or to authorize the
appointment of, such other committees as it may deem advisable, to
determine the powers, duties, authority and functions of such committees,
to provide for the selection of the members thereof and to determine their
term or tenure of service.
ARTICLE IV
OFFICERS
OFFICERS
1. The Board of Directors shall have the power to appoint a Chairman of the
Board, one or more Vice Chairmen of the Board, a Chief Executive Officer, a
President, one or more Executive Vice Presidents, one or more Senior Vice
Presidents, one or more Vice Presidents, a Secretary, a Treasurer, an
Auditor, one or more Trust Officers and such other officers as from time to
time may be elected or appointed by the Board of Directors. The Board may
by resolution authorize the President to appoint other officers with such
titles and duties as he
- 4 -
<PAGE>
may designate. All officers shall be subject to removal at any time with or
without cause by the affirmative vote of a majority of the whole Board of
Directors. If any office shall become vacant, the Board of Directors may
fill such vacancy. Any officer may hold more than one office, except as
otherwise provided by law.
In its discretion, the Board of Directors may leave unfilled any offices
except those of President, Secretary and Treasurer.
CHIEF EXECUTIVE OFFICER
2. The Board of Directors shall designate who shall be the Chief Executive
Officer of the Company and who shall substitute for him during his absence
or disability. If all of the persons so designated are absent or disabled,
any other senior officer designated by the Executive Committee or by the
Board of Directors as such shall be the Chief Executive Officer. The Chief
Executive Officer shall have general charge of the business of the Company.
POWERS AND DUTIES OF OFFICERS
3. All officers shall perform such duties and possess such powers as shall
pertain to their respective offices, as may be imposed by law, as may be
set forth in these Bylaws, and as may be, from time to time, prescribed by
the Board of Directors or by the Chief Executive Officer.
ARTICLE V
CAPITAL STOCK
1. Transfer of shares shall be made upon the books of the Company by the
holder in person, or by power of attorney, duly executed, witnessed and
filed with the Secretary or other proper officer of the Company, upon
surrender of the certificate or certificates of such shares. In case of the
loss or destruction of a certificate another may be issued in its place
upon proof of loss or destruction which shall be satisfactory to the Board
of Directors.
ARTICLE VI
EMERGENCIES
1. In the event of any emergency caused by enemy action,nuclear disaster or
accident, storm, fire, flood, explosion or other cause (the continuation of
any such event being referred to herein as a "State of Emergency" declared
by the President of the United States or the person performing his
functions, Governor of the State or any Federal or State banking regulatory
agency having jurisdiction over the Company), of
- 5 -
<PAGE>
sufficient severity to prevent the conduct and management of the affairs
and business of the Company as contemplated by these Bylaws other than this
paragraph 1, then during the existence of such State of Emergency,
(a) The requirement of these Bylaws as to notice and place of directors'
meetings shall be waived and the Board of Directors shall have the
power, in the absence or disability of any officer or upon the refusal
of any officer to act, to delegate and prescribe such officer's powers
and duties to any other officer, or to any director; any powers
granted to the Board of Directors pursuant to this paragraph (a) may
be exercised as provided in paragraph (b) below:
(b) Any two or more members of the Executive Committee shall constitute a
quorum of that Committee during such State of Emergency for the full
conduct and management of the affairs and business of the Company in
accordance with the provisions of Article m of these Bylaws. In the
event that two members of the then incumbent Executive Committee do
not present themselves at the Head Office or Acting Head Office, and
only for the period during which two such members are not present, an
interim committee consisting of all of the remaining directors present
at such office and willing to serve shall perform the functions of the
Executive Committee for the full conduct and management of the affairs
and business of the Company in accordance with the foregoing
provisions of this Section; provided, however, that no action may be
taken by such interim committee present and voting at a meeting
attended by no less than two such members; and
(c) The business ordinarily conducted at the Head Office or any branch
office of the Company may be relocated elsewhere in suitable quarters,
in addition to or in lieu of its normal location, as may be designated
by the Board of Directors or by the Executive Committee or by such
interim committee as may be conducting the affairs of the Company
pursuant to paragraph (b) above.
Actions taken pursuant to this Section are subject to conformity with any
governmental directives issued during any such State of Emergency. Actions taken
pursuant to this Section may be ratified at the next annual meeting of
stockholders or at a special meeting called for that purpose; however, failure
to ratify shall not render any action duly taken pursuant to this Section
illegal or invalid as against third persons who have acquired rights or incurred
disabilities in reliance thereon.
2. To the full extent permitted by applicable law, the Company will indemnify
any director, officer or employee of the
- 6 -
<PAGE>
Company for any actions taken in good faith by such person during any State
of Emergency pursuant to this Article VI or any resolution adopted in
accordance herewith.
ARTICLE VII
CORPORATE SEAL
SEAL
1. The seal, an impression of which appears below, is the seal of the Company
as adopted by the Board of Directors:
[Seal]
The Chairman of the Board, the Vice Chairman, the Chief Executive Officer,
the President, Senior Executive Vice President, Executive Vice President,
Senior Vice President, Vice President, each Assistant Vice President, the
Chief Financial Officer, the Secretary, each Assistant Secretary, each
Trust Officer, or each Assistant Trust Officer shall have the authority to
affix the corporate seal of this Company and to attest to the same.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
FISCAL YEAR
1. The fiscal year of the Company shall be the calendar year.
EXECUTION OF INSTRUMENTS
2. All agreements, contracts, indentures, mortgages, deeds, conveyances,
transfers, certificates, declarations, receipts, discharges, releases,
satisfactions, settlements, petitions, schedules, accounts, affidavits,
bonds, undertakings, proxies and other instruments or documents may be
signed, executed, acknowledged, verified, delivered or accepted in behalf
of the Company by the Chairman of the Board, or Vice Chairman, or Chief
Executive Officer, or the President, or Senior Executive Vice President, or
Executive Vice President, or Senior Vice President, or Vice President, or
Assistant Vice President, or Chief Financial Officer, or the Secretary, or
Assistant Secretary, or, if in connection with the exercise of fiduciary
powers of the Company, by any of said officers or by any Trust Officer or
Assistant Trust Officer, to the extent authorized by the corporate policy
of the Company, as adopted and modified from time to time. Any such
instruments may also be executed, acknowledged, verified, delivered, or
accepted in
- 7 -
<PAGE>
behalf of the Company in such other manner and by such other officers as
the Board may from time to time direct.
VOTING SHARES OF OTHER CORPORATIONS
3. The Chairman, Vice Chairman, or President are authorized to vote, represent
and exercise on behalf of this Company all rights incident to any and all
shares of stock of any other corporation standing in the name of the
Company. The authority granted herein may be exercised by such officers in
person or by proxy or by power of attorney duly executed by said officer.
ARTICLE IX
AMENDMENTS
1. These Bylaws may be altered, amended, or added to by the stockholders at
any annual or special meeting or to the extent permitted by law, by the
Board of Directors at any meeting, provided in either case notice thereof
has been given.
- 8 -
<PAGE>
EXHIBIT 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939 in connection with the 131/2% Series B Senior Secured Notes due 2002 of
the Mohegan Tribal Gaming Authority, First Union Bank of Connecticut hereby
consents that reports of examinations of Federal, state, territorial or district
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon request therefor.
FIRST UNION BANK OF CONNECTICUT
By: /s/ W. Jeffrey Kramer
----------------------------------
W. Jeffrey Kramer
Its Vice President
<PAGE>
Board of Governors of the Federal Reserve System
EXHIBIT 7 OMB Number: 7100-0036
---------
Federal Deposit Insurance Corporation
OMB Number: 3064-0052
Office of the Comptroller of the Currency
OMB Number: 1557-0081
Expires March 31, 1996
FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL
- -------------------------------------------------------------------------------
Please refer to page i, /1/
[Logo] Table of Contents, for
the required disclosure
of estimated burden.
- -------------------------------------------------------------------------------
CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR
A BANK WITH DOMESTIC AND FOREIGN OFFICES--FFIEC 031
REPORT AT THE CLOSE OF BUSINESS DECEMBER 31, 1995 (951231)
--------
(RCRI 9999)
This report is required by law: 12 U.S.C. Section 324 (State member banks);
12 U.S.C. Section 1817 (State nonmember banks); and 12 U.S.C. Section 161
(National banks).
This report form is to be filed by banks with branches and consolidated
subsidiaries in U.S. territories and possessions, Edge or Agreement
subsidiaries, foreign branches, consolidated foreign subsidiaries, or
International Banking Facilities.
- -------------------------------------------------------------------------------
NOTE: The Reports of Condition and Income must be signed by an authorized
officer and the Report of Condition must be attested to by not less than two
directors (trustees) for State nonmember banks and three directors for State
member and National banks.
I, Ernest J. Verrico, SVP and Comptroller
----------------------------------------------------
Name and Title of Officer Authorized to Sign Report
of the named bank do hereby declare that these Reports of Condition and
Income (including the supporting schedules) have been prepared in conformance
with the instructions issued by the appropriate Federal regulatory authority
and are true to the best of my knowledge and belief.
/S/ Ernest J. Verrico
- ------------------------------------------------------
Signature of Officer Authorized to Sign Report
January 29, 1996
- ------------------------------------------------------
Date of Signature
- ------------------------------------------------------
The Reports of Condition and Income are to be prepared in accordance with
Federal regulatory authority instructions.
NOTE: These instructions may in some cases differ from generally accepted
accounting principles.
We, the undersigned directors (trustees), attest to the correctness of this
Report of Condition (including the supporting schedules) and declare that it
has been examined by us and to the best of our knowledge and belief has been
prepared in conformance with the instructions issued by the appropriate
Federal regulatory authority and is true and correct.
/s/ [Illegible]
- ----------------------------------------------
Director (Trustee)
/s/ Albert L. Knott
- ----------------------------------------------
Director (Trustee)
- ----------------------------------------------
Director (Trustee)
- -------------------------------------------------------------------------------
FOR BANKS SUBMITTING HARD COPY REPORT FORMS:
STATE MEMBER BANKS: Return the original and one copy to the appropriate
Federal Reserve District Bank.
STATE NONMEMBER BANKS: Return the original only in the SPECIAL RETURN ADDRESS
ENVELOPE PROVIDED. If express mail is used in lieu of the special return
address envelope, return the original only to the FDIC, c/o Quality Data
Systems, 2127 Espey Court, Suite 204, Crofton, MD 21114.
NATIONAL BANKS: Return the original only in the SPECIAL RETURN ADDRESS
ENVELOPE PROVIDED. If express mail is used in lieu of the special return
address envelope, return the original only to the FDIC, c/o Quality Data
Systems, 2127 Espey Court, Suite 204, Crofton, MD 21114.
- -------------------------------------------------------------------------------
FDIC Certificate Number /0/9/2/3/0/ CALL NO. 194 31 12-31-95
(RCRI 9050)
STBK: 09-1563 02447 STCERT: 09-09230
FIRST FIDELITY BANK
P.O. BOX 700
STAMFORD, CT 06904
Board of Governors of the Federal Reserve System, Federal Deposit Insurance
Corporation, Office of the Comptroller of the Currency
<PAGE>
FFIEC 031
Page i
/2/
Consolidated Reports of Condition and Income for
A Bank With Domestic and Foreign Offices
- -------------------------------------------------------------------------------
TABLE OF CONTENTS
SIGNATURE PAGE Cover
REPORT OF INCOME
Schedule RI--Income Statement...........................RI-1, 2, 3
Schedule RI-A--Changes in Equity Capital..................... RI-4
Schedule RI-B--Charge-offs and Recoveries and Changes
in Allowance for Loan and Lease Losses...................RI-4, 5
Schedule RI-C--Applicable Income Taxes by Taxing
Authority...................................................RI-5
Schedule RI-D--Income from International Operations...........RI-6
Schedule RI-E--Explanations................................RI-7, 8
Disclosure of Estimated Burden
The estimated average burden associated with this information collection is
31.6 hours per respondent and is estimated to vary from 15 to 225 hours per
response, depending on individual circumstances. Burden estimates include the
time for reviewing instructions, gathering and maintaining data in the
required form, and completing and maintaining business records in the normal
course of a respondent's activities. Comments concerning the accuracy of this
burden estimate and suggestions for reducing this burden should be directed
to the Office of Information and Regulatory Affairs, Office of Management and
Budget, Washington, D.C. 20503, and to one of the following:
Secretary
Board of Governors of the Federal Reserve System
Washington, D.C. 20551
Legislative and Regulatory Analysis Division
Office of the Comptroller of the Currency
Washington, D.C. 20219
Assistant Executive Secretary
Federal Deposit Insurance Corporation
Washington, D.C. 20429
REPORT OF CONDITION
Schedule RC--Balance Sheet.................................RC-1, 2
Schedule RC-A--Cash and Balances Due From Depository
Institutions................................................RC-3
Schedule RC-B--Securities...............................RC-3, 4, 5
Schedule RC-C--Loans and Lease Financing Receivables:
Part I. Loans and Leases..............................RC-6, 7
Part II. Loans to Small Businesses and Small Farms
(included in the forms for June 30 only).........RC-7a, 7b
Schedule RC-D--Trading Assets and Liabilities (to be
completed only by selected banks)...........................RC-8
Schedule RC-E--Deposit Liabilities....................RC-9, 10, 11
Schedule RC-F--Other Assets..................................RC-11
Schedule RC-G--Other Liabilities.............................RC-11
Schedule RC-H--Selected Balance Sheet Items
for Domestic Offices...................................... RC-12
Schedule RC-I--Selected Assets and Liabilities of IBFs.......RC-13
Schedule RC-K--Quarterly Averages............................RC-13
Schedule RC-L--Off-Balance Sheet Items...............RC-14, 15, 16
Schedule RC-M--Memoranda.................................RC-17, 18
Schedule RC-N--Past Due and Nonaccrual Loans, Leases,
and Other Assets.......................................RC-19, 20
Schedule RC-O--Other Data for Deposit Insurance
Assessments............................................RC-21, 22
Schedule RC-R--Risk-Based Capital........................RC-23, 24
Optional Narrative Statement Concerning the Amounts
Reported in the Reports of Condition and Income............RC-25
Special Report (TO BE COMPLETED BY ALL BANKS)
Schedule RC-J--Repricing Opportunities (sent only to
and to be completed only by savings banks)
For information or assistance, National and State nonmember banks should
contact the FDIC's Call Analysis Unit, 550 17th Street, NW, Washington, D.C.
20429, toll free on (800) 688-FDIC(3342), Monday through Friday between 8:00
a.m. and 5:00 p.m., Eastern time. State member banks should contact their
Federal Reserve District Bank.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Address: PO BOX 700 Page RI-1
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: |0|9|2|3|0|
</TABLE>
Consolidated Report of Income
for the period January 1, 1995-December 31, 1995
All Report of Income schedules are to be reported on a calendar year-to-date
basis in thousands of dollars.
Schedule RI -- Income Statement
<TABLE>
<CAPTION>
I480
-----------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Interest income:
a. Interest and fee income on loans:
(1) In domestic offices:
(a) Loans secured by real estate ............................................... 4011 109,582 1.a.(1)(a)
(b) Loans to depository institutions ........................................... 4019 70 1.a.(1)(b)
(c) Loans to finance agricultural production and other loans to farmers ........ 4024 22 1.a.(1)(c)
(d) Commercial and industrial loans ............................................ 4012 26,648 1.a.(1)(d)
(e) Acceptances of other banks ................................................. 4026 86 1.a.(1)(e)
(f) Loans to individuals for household, family, and other personal expenditures:
(1) Credit cards and related plans ......................................... 4054 1,268 1.a.(1)(f)(1)
(2) Other .................................................................. 4055 9,635 1.a.(1)(f)(2)
(g) Loans to foreign governments and official institutions ..................... 4056 0 1.a.(1)(g)
(h) Obligations (other than securities and leases) of states and political
subdivisions in the U.S.:
(1) Taxable obligations .................................................... 4503 227 1.a.(1)(h)(1)
(2) Tax-exempt obligations ................................................. 4504 393 1.a.(1)(h)(2)
(i) All other loans in domestic offices ........................................ 4058 556 1.a.(1)(i)
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs .................. 4059 0 1.a.(2)
b. Income from lease financing receivables:
(1) Taxable leases ................................................................. 4505 0 1.b.(1)
(2) Tax-exempt leases .............................................................. 4307 0 1.b.(2)
c. Interest income on balances due from depository institutions:(1)
(1) In domestic offices ............................................................ 4105 2 1.c.(1)
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs .................. 4106 0 1.c.(2)
d. Interest and dividend income on securities:
(1) U.S. Treasury securities and U.S. Goverment agency and corporation obligations . 4027 35,094 1.d.(1)
(2) Securities issued by states and political subdivbisions in the U.S.:
(a) Taxable securities ......................................................... 4506 0 1.d.(2)(a)
(b) Tax-exempt securities ...................................................... 4507 39 1.d.(2)(b)
(3) Other domestic debt securities ................................................. 3657 4,493 1.d.(3)
(4) Foreign debt securities ........................................................ 3658 21 1.d.(4)
(5) Equity securities (including investments in mutual funds) ...................... 3659 0 1.d.(5)
e. Interest income from trading assets ................................................ 4069 0 1.e.
</TABLE>
- ----------
(1) Includes interest income on time certificates of deposit not held for
trading.
3
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Address: PO BOX 700 Page RI-2
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: |0|9|2|3|0|
</TABLE>
Schedule RI -- Continued
<TABLE>
<CAPTION>
Year-to-date
-----------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Interest income (continued)
f. Interest income on federal funds sold and securities purchased under
agreements to resell in domestic offices of the bank and of its Edge
and Agreement subsidiaries, and in IBFs ............................ 4020 2,924 1.f.
g. Total interest income (sum of items 1.a through 1.f) ............... 4107 191,060 1.g.
2. Interest expense:
a. Interest on deposits:
(1) Interest on deposits in domestic offices:
(a) Transaction accounts (NOW accounts, ATS accounts, and
telephone and preauthorized transfer accounts) ............. 4508 3,109 2.a.(1)(a)
(b) Nontransaction accounts:
(1) Money market deposit accounts (MMDAs) .................. 4509 10,196 2.a.(1)(b)(1)
(2) Other savings deposits ................................. 4511 9,137 2.a.(1)(b)(2)
(3) Time certificates of deposit of $100,000 or more ....... 4174 5,108 2.a.(1)(b)(3)
(4) All other time deposits ................................ 4512 23,998 2.a.(1)(b)(4)
(2) Interest on deposits in foreign offices, Edge and Agreement
subsidiaries, and IBFs ......................................... 4172 0 2.a.(2)
b. Expense of federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and in IBFs ....................... 4180 24,072 2.b.
c. Interest on demand notes issued to the U.S. Treasury, trading
liabilities, and other borrowed money .............................. 4185 2,986 2.c.
d. Interest on mortgage indebtedness and obligations under capitalized
leases ............................................................. 4072 0 2.d.
e. Interest on subordinated notes and debentures ...................... 4200 0 2.e.
f. Total interest expense (sum of items 2.a through 2.e) .............. 4073 78,606 2.f.
3. Net interest income (item 1.g minus 2.f) .............................. RIAD 4074 112,454 3.
4. Provisions:
a. Provision for loan and lease losses ................................ RIAD 4230 18,000 4.a
b. Provision for allocated transfer risk .............................. RIAD 4243 0 4.b
5. Noninterest income:
a. Income from fiduciary activities ................................... 4070 17,350 5.a.
b. Service charges on deposit accounts in domestic offices ............ 4080 12,838 5.b.
c. Trading gains (losses) and fees from foreign exchange transactions.. 4075 535 5.c.
d. Other foreign transaction gains (losses) ........................... 4076 0 5.d
e. Other gains (losses) and fees from trading assets and liabilities... 4077 109 5.e.
f. Other noninterest income:
(1) Other fee income ............................................... 5407 7,030 5.f.(1)
(2) All other noninterest income* .................................. 5408 4,879 5.f.(2)
g. Total noninterest income (sum of items 5.a through 5.f) ............ RIAD 4079 42,741 5.g
6. a. Realized gains (losses) on held-to-maturity securities ............. RIAD 3521 0 6.a
b. Realized gains (losses) on available-for-sale securities ........... RIAD 3196 (23) 6.b
7. Noninterest expense:
a. Salaries and employee benefits ..................................... 4135 35,522 7.a.
b. Expenses on premises and fixed assets (net of rental income)
(excluding salaries and employee benefits and mortgage interest).... 4217 16,335 7.b.
c. Other noninterest expense* ......................................... 4092 29,741 7.c.
d. Total noninterest expense (sum of items 7.a through 7.c) ........... RIAD 4093 81,598 7.d
8. Income (loss) before income taxes and extraordinary items and other
adjustments (item 3 plus or minus items 4.a, 4.b, 5.g, 6.a, 6.b, and 7.d) RIAD 4301 55,574 8.
9. Applicable income taxes (on item 8) ................................... RIAD 4302 20,181 9.
10.Income (loss) before extraordinary items and other adjustments (item 8
minus 9) .............................................................. RIAD 4300 35,393 10.
</TABLE>
- ----------
Describe on Schedule RI-E--Explanations.
4
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Address: PO BOX 700 Page RI-3
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: |0|9|2|3|0|
</TABLE>
Schedule RI -- Continued
<TABLE>
<CAPTION>
Year-to-date
-----------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
11. Extraordinary items and other adjustments:
a. Extraordinary items and other adjustments, gross of income taxes*.. 4310 0 11.a.
b. Applicable income taxes (on item 11.a)* ........................... 4315 0 11.b.
c. Extraordinary items and other adjustments, net of income taxes
(item 11.a minus 11.b) ............................................ RIAD 4320 0 11.c
12. Net income (loss) (sum of items 10 and 11.c).......................... RIAD 4340 35,393 12.
</TABLE>
<TABLE>
<CAPTION>
----
I481
------------
Year-to-date
-----------------
Memoranda Dollar Amounts in Thousands RIAD Bil Mil Thou
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Interest expense incurred to carry tax-exempt securities, loans, and
leases acquired after August 7, 1986, that is not deductible for
federal income tax purposes .......................................... 4513 36 M.1.
2. Income from the sale and servicing of mutual funds and annuities in
domestic offices (included in Schedule RI, item 8) ................... 8431 461 M.2.
3. Estimated foreign tax credit included in applicable income taxes,
items 9 and 11.b above ............................................... 4309 0 M.3.
4. To be completed only by banks with $1 billion or more in total assets:
Taxable equivalent adjustment to "Income (loss) before income taxes
and extraordinary items and other adjustments" (item 8 above) ........ 1244 245 M.4.
5. Number of full-time equivalent employees on payroll at end of current Number
period (round to nearest whole number) ............................... 4150 971 M.5.
6. Not applicable
7. If the reporting bank has restated its balance sheet as a result of
applying push down accounting this calendar year, report the date MM DD YY
of the bank's acquisition ............................................ 9106 00/00/00 M.7.
8. Trading revenue (from cash instruments and off-balance sheet
derivative instruments)
(included in Schedule R1, items 5.c and 5.e): Bil Mil Thou
a. Interest rate exposures ........................................... 8757 0 M.8.a.
b. Foreign exchange exposures ........................................ 8758 535 M.8.b.
c. Equity security and index exposures ............................... 8759 0 M.8.c.
d. Commodity and other exposures ..................................... 8760 0 M.8.d.
9. Impact on income of off-balance sheet derivatives held for purposes
other than trading:
a. Net increase (decrease) to interest income ........................ 8761 0 M.9.a.
b. Net (increase) decrease to interest expense ....................... 8762 288 M.9.b.
c. Other (noninterest) allocations ................................... 8763 0 M.9.c.
</TABLE>
- -------------------
Describe on Schedule RI-E--Explanations.
5
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Address: PO BOX 700 Page RI-4
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: |0|9|2|3|0|
</TABLE>
SCHEDULE RI-A -- CHANGES IN EQUITY CAPITAL
<TABLE>
<CAPTION>
I483
--------------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ----------------------------------------------------------------------------------------------- --------------------------
<S> <C> <C> <C> <C>
1. Total equity capital originally reported in the December 31, 1994, Reports of Condition
and Income ................................................................................... 3215 271,145 1.
2. Equity capital adjustments from amended Reports of Income, net* .............................. 3216 0 2.
3. Amended balance end of previous calendar year (sum of items 1 and 2) ......................... 3217 271,145 3.
4. Net income (loss) (must equal Schedule R1, item 12) .......................................... 4340 35,393 4.
5. Sale, conversion, acquisition, or retirement of capital stock, net ........................... 4346 0 5.
6. Changes incident to business combinations, net................................................ 4356 0 6.
7. LESS: Cash dividends declared on preferred stock ............................................. 4470 0 7.
8. LESS: Cash dividends declared on common stock ................................................ 4460 34,830 8.
9. Cumulative effect of changes in accounting principles from prior years* (see instructions for
this schedule) ............................................................................... 4411 0 9.
10. Corrections of material accounting errors from prior years* (see instructions for this
schedule) .................................................................................... 4412 0 10.
11. Change in net unrealized holding gains (losses) on available-for-sale securities ............. 8433 2,471 11.
12. Foreign currency translation adjustments ..................................................... 4414 0 12.
13. Other transactions with parent holding company* (not included in items 5, 7, or 8 above) ..... 4415 0 13.
14. Total equity capital end of current period (sum of items 3 through 13) (must equal
Schedule RC, item (28) ....................................................................... 3210 274,179 14.
---------------------------
</TABLE>
- ----------
*Describe on Schedule R1-E -- Explanations.
SCHEDULE RI-B -- CHARGE-OFFS AND RECOVERIES AND CHANGES
IN ALLOWANCE FOR LOAN AND LEASE LOSSES
PART I. CHARGE-OFFS AND RECOVERIES ON LOANS AND LEASES
Part I excludes charge-offs and recoveries through
the allocated transfer risk reserve.
<TABLE>
<CAPTION>
I486
---------------------------------------------------------
(Column A) (Column B)
Charge-offs Recoveries
-------------------------- ---------------------------
Calendar year-to-date
---------------------------------------------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou RIAD Bil Mil Thou
- --------------------------------------------------------------- -------------------------- --------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Loans secured by real estate:
a. To U.S. addressees (domicile) ............................. 4651 6,809 4661 330 1.a.
b. To non-U.S. addressees (domicile).......................... 4652 0 4662 0 1.b.
2. Loans to depository institutions and acceptances of
other banks:
a. To U.S. banks and other U.S. depository institutions ..... 4653 0 4663 0 2.a.
b. To foreign banks ......................................... 4654 0 4664 0 2.b.
3. Loans to finance agricultural production and other loans to
farmers ..................................................... 4655 0 4665 0 3.
4. Commercial and industrial loans:
a. To U.S. addressees (domicile) ............................. 4645 6,141 4617 2,524 4.a.
b. To non-U.S. addressees (domicile).......................... 4646 0 4618 0 4.b.
5. Loans to individuals for household, family, and other
personal expenditures:
a. Credit cards and related plans ........................... 4656 15 4666 1 5.a.
b. Other (includes single payment, installment, and all
student loans) ........................................... 4657 1,021 4667 530 5.b.
6. Loans to foreign governments and official institutions ...... 4643 0 4627 0 6.
7. All other loans ............................................. 4644 0 4628 0 7.
8. Lease financing receivables:
a. Of U.S. addressees (domicile).............................. 4658 0 4668 0 8.a.
b. Of non-U.S. addressees (domicile).......................... 4659 0 4669 0 8.b.
9. Total (sum of items 1 and 8)................................. 4635 13,986 4605 3,385 9.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Address: PO BOX 700 Page RI-5
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: |0|9|2|3|0|
</TABLE>
<TABLE>
<CAPTION>
PART I. CONTINUED
(Column A) (Column B)
Charge-offs Recoveries
------------------------ -----------------------
Calendar year-to-date
----------------------------------------------------
Memoranda Dollar Amounts in Thousands RIAD Bil Mil Thou RIAD Bil Mil Thou
- --------------------------------------------------------------- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1-3. Not applicable
4. Loans to finance commercial real estate, construction, and
land development activities (not secured by real estate)
included in Schedule R1-B, part I, items 4 and 7, above ...... 5409 0 5410 0 M.4.
5. Loans secured by real estate in domestic offices (included in
Schedule R1-B, part I, item 1, above):
a. Construction and land development ......................... 3582 617 3583 0 M.5.a.
b. Secured by farmland ....................................... 3584 0 3585 0 M.5.b.
c. Secured by 1-4 family residential properties:
(1) Revolving, open-end loans secured by 1-4 family
residential properties and extended under lines of
credit ................................................ 5411 551 5412 80 M.5.c.(1)
(2) All other loans secured by 1-4 family residential
properties ............................................ 5413 1,078 5414 35 M.5.c.(2)
d. Secured by multifamily (5 or more) residential properties .. 3588 0 3589 0 M.5.d.(2)
e. Secured by nonfarm nonresidential properties ............... 3590 4,563 3591 215 M.5.e.
</TABLE>
PART II. CHANGES IN ALLOWANCE FOR LOAN AND LEASE LOSSES
<TABLE>
<CAPTION>
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ------------------------------------------------------------------------- ----------------------------
<S> <C> <C> <C> <C>
1. Balance originally reported in the December 31, 1994, Reports of
Condition and Income ................................................. 3124 61,607 1.
2. Recoveries (must equal part I, item 9, column B above)................ 4605 3,385 2.
3. LESS: Charge-offs (must be equal part I, item 9, column A above) ..... 4635 13,986 3.
4. Provision for loan and lease losses (must equal Schedule RI,
item 4.a) ............................................................ 4230 18,000 4.
5. Adjustments* (see instructions for this schedule) ................... 4815 0 5.
6. Balance end of current period (sum of items 1 through 5) (must
equal Schedule RC, item 4.b) ......................................... 3123 73,006 6.
</TABLE>
- ----------
*Describe on Schedule RI-E -- Explanations.
SCHEDULE RI-C -- APPLICABLE INCOME TAXES BY TAXING AUTHORITY
Schedule RI-C is to be reported with the December Report of Income.
<TABLE>
<CAPTION>
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ------------------------------------------------------------------------- ----------------------------
<S> <C> <C> <C> <C>
1. Federal .............................................................. 4780 19,981 1.
2. State and local ...................................................... 4790 200 2.
3. Foreign .............................................................. 4795 0 3.
4. Total (sum of items 1 through 3) (must equal sum of Schedule RI,
items 9 and 11.b) .................................................... 4770 20,181 4.
5. Deferred portion of Item 4 ................. RIAD 4772 (6,493) 5.
---------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Address: PO BOX 700 Page RI-6
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: |0|9|2|3|0|
</TABLE>
SCHEDULE RI-D--INCOME FROM INTERNATIONAL OPERATIONS
For all banks with foreign offices, Edge or Agreement subsidiaries, or IBFs
where international operations account for more than 10 percent of total
revenues, total assets, or net income.
PART I. ESTIMATED INCOME FROM INTERNATIONAL OPERATIONS
<TABLE>
<CAPTION>
----
I492
------------
Year-to-date
-----------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Interest income and expense booked at foreign offices, Edge and Agreement subsidiaries,
and IBFs:
a. Interest income booked. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4837 N/A 1.a.
b. Interest expense booked . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4838 N/A 1.b.
c. Net interest income booked at foreign offices, Edge and Agreement subsidiaries, and
IBFs (item 1.a minus 1.b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4839 N/A 1.c.
2. Adjustments for booking location of international operations:
a. Net interest income attributable to international operations booked at domestic offices . . . 4840 N/A 2.a.
b. Net interest income attributable to domestic business booked at foreign offices . . . . . . . 4841 N/A 2.b.
c. Net booking location adjustment (item 2.a minus 2.b). . . . . . . . . . . . . . . . . . . . . 4842 N/A 2.c.
3. Noninterest income and expense attributable to international operations:
a. Noninterest income attributable to international operations . . . . . . . . . . . . . . . . . 4097 N/A 3.a.
b. Provision for loan and lease losses attributable to international operations. . . . . . . . . 4235 N/A 3.b.
c. Other noninterest expense attributable to international operations. . . . . . . . . . . . . . 4239 N/A 3.c.
d. Net noninterest income (expense) attributable to international operations (item 3.a minus
3.b and 3.c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4843 N/A 3.d.
4. Estimated pretax income attributable to international operations before capital allocation
adjustment (sum of items 1.c, 2.c, and 3.d). . . . . . . . . . . . . . . . . . . . . . . . . . . 4844 N/A 4.
5. Adjustment to pretax income for internal allocations to international operations to reflect
the effects of equity capital on overall bank funding costs. . . . . . . . . . . . . . . . . . . 4845 N/A 5.
6. Estimated pretax income attributable to international operations after capital allocation
adjustment (sum of items 4 and 5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4846 N/A 6.
7. Income taxes attributable to income from international operations as estimated in item 6 . . . . 4797 N/A 7.
8. Estimated net income attributable to international operations (item 6 minus 7) . . . . . . . . . 4341 N/A 8.
------------------------
</TABLE>
Memoranda
<TABLE>
<CAPTION> -----------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Intracompany interest income included in item 1.a above. . . . . . . . . . . . . . . . . . . . . 4847 N/A M.1.
2. Intracompany interest expense included in item 1.b above . . . . . . . . . . . . . . . . . . . . 4848 N/A M.2.
------------------------
</TABLE>
PART II. SUPPLEMENTARY DETAILS ON INCOME FROM INTERNATIONAL OPERATIONS REQUIRED
BY THE DEPARTMENTS OF COMMERCE AND TREASURY FOR PURPOSES OF THE U.S.
INTERNATIONAL ACCOUNTS AND THE U.S. NATIONAL INCOME AND PRODUCT ACCOUNTS
<TABLE>
<CAPTION>
------------
Year-to-date
-----------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Interest income booked at IBFs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4849 N/A 1.
2. Interest expense booked at IBFs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4850 N/A 2.
3. Noninterest income attributable to international operations booked at domestic offices
(excluding IBFs):
a. Gains (losses) and extraordinary items. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5491 N/A 3.a.
b. Fees and other noninterest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5492 N/A 3.b.
4. Provision for loan and lease losses attributable to international operations booked at domestic
offices (excluding IBFs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4852 N/A 4.
5. Other noninterest expense attributable to international operations booked at domestic offices
(excluding IBFs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4853 N/A 5.
-----------------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Address: PO BOX 700 Page RI-7
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: |0|9|2|3|0|
</TABLE>
SCHEDULE RI-E--EXPLANATIONS
Schedule RI-E is to be completed each quarter on a calendar year-to-date basis.
Detail all adjustments in Schedule RI-A and RI-B, all extraordinary items and
other adjustments in Schedule RI, and all significant items of other
noninterest income and other noninterest expense in Schedule RI. (See
instructions for details.)
<TABLE>
<CAPTION>
----
I495
------------
Year-to-date
-----------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. All other noninterest income (from Schedule RI, item 5.f.(2))
Report amounts that exceed 10% of Schedule RI, item 5.f.(2):
a. Net gains on other real estate owned . . . . . . . . . . . . . . . . . . . . . . . . . . 5415 0 1.a.
b. Net gains on sales of loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5416 1,324 1.b.
c. Net gains on sales of premises and fixed assets. . . . . . . . . . . . . . . . . . . . . 5417 0 1.c.
Itemize and describe the three largest other amounts that exceed 10% of Schedule RI,
item 5.f.(2):
---------
d. TEXT 4461 Cash Surrender Value - Corp Owned Life Insurance 4461 1,016 1.d.
----------------------------------------------------------------------------------------
e. TEXT 4462 Check Book Sales 4462 1,673 1.e.
----------------------------------------------------------------------------------------
TEXT 4463 4463 1.f.
----------------------------------------------------------------------------------------
2. Other noninterest expense (from Schedule RI, item 7.c):
a. Amortization expense of intangible assets. . . . . . . . . . . . . . . . . . . . . . . . 4531 3,172 2.a.
Report amounts that exceed 10% of Schedule RI, item 7.c:
b. Net losses on other real estate owned. . . . . . . . . . . . . . . . . . . . . . . . . . 5418 0 2.b.
c. Net losses on sales of loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5419 0 2.c.
d. Net losses on sales of premises and fixed assets . . . . . . . . . . . . . . . . . . . . 5420 0 2.d.
Itemize and describe the three largest other amounts that exceed 10% of Schedule RI,
item 7.c:
--------
e. TEXT 4464 FDIC Assessment 4464 3,123 2.e.
----------------------------------------------------------------------------------------
f. TEXT 4467 Intercompany Management Fees 4467 5,263 2.f.
----------------------------------------------------------------------------------------
g. TEXT 4468 4468 2.g.
----------------------------------------------------------------------------------------
3. Extraordinary items and other adjustments (from Schedule RI, item 11.a) and applicable
income tax effect (from Schedule RI, item 11.b) (itemize and describe all extraordinary
items and other adjustments):
--------
a. (1) TEXT 4469 4469 3.a.(1)
------------------------------------------------------------------------------------
(2) Applicable income tax effect RIAD 4486 3.a.(2)
----------------------
---------
b. (1) TEXT 4487 4487 3.b.(1)
------------------------------------------------------------------------------------
(2) Applicable income tax effect RIAD 4488 3.b.(2)
----------------------
---------
c. (1) TEXT 4489 4489 3.c.(1)
------------------------------------------------------------------------------------
(2) Applicable income tax effect RIAD 4491 3.c.(2)
----------------------
4. Equity capital adjustments from amended Reports of Income (from Schedule RI-A, item 2)
(itemize and describe all adjustments):
---------
a. TEXT 4492 4492 4.a.
----------------------------------------------------------------------------------------
b. TEXT 4493 4493 4.b.
----------------------------------------------------------------------------------------
5. Cumulative effect of changes in accounting principles from prior years
(from Schedule RI-A, item 9) (itemize and describe all changes in accounting principles):
---------
a. TEXT 4494 4494 5.a.
----------------------------------------------------------------------------------------
b. TEXT 4495 4495 5.b.
----------------------------------------------------------------------------------------
6. Corrections of material accounting errors from prior years (from Schedule RI-A, item 10)
(itemize and describe all corrections):
---------
a. TEXT 4496 4496 6.a.
----------------------------------------------------------------------------------------
b. TEXT 4497 4497 6.b.
----------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Address: PO BOX 700 Page RI-8
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: |0|9|2|3|0|
</TABLE>
SCHEDULE RI-E--CONTINUED
<TABLE>
<CAPTION>
------------
Year-to-date
-----------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
7. Other transactions with parent holding company (from Schedule RI-A, item 13)
(itemize and describe all such transactions):
---------
a. TEXT 4498 4498 7.a.
---------------------------------------------------------------------------------------------
b. TEXT 4499 4499 7.b.
---------------------------------------------------------------------------------------------
8. Adjustments to allowance for loan and lease losses (from Schedule RI-B, part II, item 5)
(itemize and describe all such adjustments):
---------
a. TEXT 4521 4521 8.a.
---------------------------------------------------------------------------------------------
b. TEXT 4522 4522 8.b.
---------------------------------------------------------------------------------------------
9. Other explanations (the space below is provided for the bank to briefly describe, at its I498 I499
option, any other significant items affecting the Report of Income): ------------------------
No comment __ (RIAD 4769)
Other explanations (please type or print clearly):
(TEXT 4769)
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Address: PO BOX 700 Page RC-1
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: |0|9|2|3|0|
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31, 1995
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
<TABLE>
<CAPTION>
SCHEDULE RC--BALANCE SHEET
C400
----
Dollar Amounts in Thousands RCFD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1).................................. 0081 214,677 1.a.
b. Interest-bearing balances(2)........................................................... 0071 50 1.b.
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A)............................. 1754 13,097 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)........................... 1773 660,698 2.b.
3. Federal funds sold and securities purchased under agreements to resell in domestic offices
of the bank an of its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds sold..................................................................... 0276 7,000 3.a.
b. Securities purchased under agreements to resell........................................ 0277 0 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RC-C) RCFD 2122 1,938,535 4.a
b. LESS: Allowance for loan and lease losses.................... RCFD 3123 73,006 4.b.
c. LESS: Allocated transfer risk reserve........................ RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c).................................... 2125 1,865,529 4.d.
5. Trading assets (from Schedule RC-D)....................................................... 3545 0 5.
6. Premises and fixed assets (including capitalized leases).................................. 2145 32,691 6.
7. Other real estate owned (from Schedule RC-M).............................................. 2150 4,555 7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M).. 2130 0 8.
9. Customers' liability to this bank on acceptances outstanding.............................. 2155 2,004 9.
10. Intangible assets (from Schedule RC-M).................................................... 2143 38,909 10.
11. Other assets (from Schedule RC-F)......................................................... 2160 95,032 11.
12. Total assets (sum of items 1 through 11)......................... ........................ 2170 2,934,242 12.
</TABLE>
- -------------------
1) Includes cash items in process of collection and unposted debits.
2) Includes time certificates of deposits not held for trading.
11
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Address: PO BOX 700 Page RC-2
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: |0|9|2|3|0|
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE RC--Continued
Dollar Amounts in Thousands Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits
a. In domestic offices (sum of totals of columns A and C from Schedule R-E, part 1)...... RCON 2200 2,101,747 13.a.
(1) Noninterest-bearing(1)........................................ RCON 6631 571,988 13.a.(1)
(2) Interest-bearing.............................................. RCON 6636 1,529,759 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E,
part II).............................................................................. RCFN 2200 0 13.b.
(1) Noninterest-bearing........................................... RCFN 6631 0 13.b.(1)
(2) Interest-bearing.............................................. RCFN 6636 0 13.b.(2)
14. Federal funds purchased and securities sold under agreements to repurchase in domestic
offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased............................................................... RCFD 0278 2,255 14.a.
b. Securities sold under agreements to repurchase........................................ RCFD 0279 518,872 14.b.
15. a. Demand notes issued to the U.S. Treasury.............................................. RCON 2840 0 15.a.
b. Trading liabilities (from Schedule RC-D).............................................. RCFD 3548 0 15.b.
16. Other borrowed money:
a. With original maturity of one year or less............................................ RCFD 2332 0 16.a.
b. With original maturity of more than one year.......................................... RCFD 2333 0 16.b.
17. Mortgage indebtedness and obligations under capitalized leases........................... RCFD 2910 0 17.
18. Bank's liability on acceptances executed and outstanding................................. RCFD 2920 2,004 18.
19. Subordinated notes and debentures........................................................ RCFD 3200 0 19.
20. Other liabilities (from Schedule RC-G)................................................... RCFD 2930 35,185 20.
21. Total liabilities (sum of items 13 through 20)........................................... RCFD 2948 2,660,063 21.
22. Limited-life preferred stock and related surplus......................................... RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus............................................ RCFD 3838 0 23.
24. Common stock............................................................................. RCFD 3230 14,424 24.
25. Surplus (exclude all surplus related to preferred stock)................................. RCFD 3839 200,511 25.
26. a. Undivided profits and capital reserves................................................ RCFD 3632 60,566 26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities................ RCFD 8434 (1,322) 26.b.
27. Cumulative foreign currency translation adjustments...................................... RCFD 3284 0 27.
28. Total equity capital (sum of items 23 through 27)........................................ RCFD 3210 274,179 28.
29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21, 22,
and 28).................................................................................. RCFD 3300 2,934,242 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best describes the
most comprehensive level of auditing work performed for the bank by independent external Number
auditors as of any date during 1994................................................................... RCFD 6724 N/A M.1.
</TABLE>
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified
public accounting firm which submits a report on the consolidated holding
company (but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
12
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Address: PO BOX 700 Page RC-3
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: |0|9|2|3|0|
</TABLE>
SCHEDULE RC-A--CASH AND BALANCES DUE FROM DEPOSITORY INSTITUTIONS
Exclude assets held for trading.
<TABLE>
<CAPTION>
C405
------------------
(Column A) (Column B)
Consolidated Domestic
Bank Offices
--------------------- ------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCON Bil Mil Thou
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Cash items in process of collection, unposted debits,
and currency and coin................................ 0022 136,003 1.
a. Cash items in process of collection and unposted
debits............................................ 0020 109,367 1.a.
b. Currency and coin................................. 0080 26,636 1.b.
2. Balances due from depository institutions in
the U.S. ............................................ 0082 24,898 2.
a. U.S. branches and agencies of foreign banks
(including their IBFs)............................ 0083 0 2.a.
b. Other commercial banks in the U.S. and other
depository institutions in the U.S. (including
their IBFs)....................................... 0085 24,898 2.b.
3. Balances due from banks in foreign countries and
foreign central banks................................ 0070 159 3.
a. Foreign branches of other U.S. banks.............. 0073 0 3.a.
b. Other banks in foreign countries and foreign
central banks..................................... 0074 159 3.b.
4. Balances due from Federal Reserve Banks.............. 0090 53,667 0090 53,667 4.
5. Total (sum of items 1 through 4) (total of column A
must equal Schedule RC, sum of items 1.a and 1.b).... 0010 214,727 0010 214,727 5.
--------------------- ------------------
</TABLE>
<TABLE>
<CAPTION>
------------------
Memorandum Dollar Amounts in Thousands RCON Bil Mil Thou
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Noninterest-bearing balances due from commercial
banks in the U.S. (included in item 2, column B
above)........................................................................ 0050 24,898 M.1.
------------------
</TABLE>
SCHEDULE RC-B--SECURITIES
Exclude assets held for trading.
<TABLE>
<CAPTION>
C410
---------------------------------------------------------------------------------
Held-to-maturity Available-for-sale
--------------------------------------- ---------------------------------------
(Column A) (Column B) (Column C) (Column D)
Amortized Cost Fair Value Amortized Cost Fair Value(1)
------------------ ------------------ ------------------ ------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. U.S. Treasury securities............ 0211 0 0213 0 1286 166,663 1287 166,714 1.
2. U.S. Government agency and
corporation obligations (exclude
mortgage-backed securities):
a. Issued by U.S. Government
agencies(2)...................... 1289 0 1290 0 1291 0 1293 0 2.a.
b. Issued by U.S. Government-
sponsored agencies(3)............ 1294 3,773 1295 3,773 1297 43,927 1298 43,739 2.b.
---------------------------------------------------------------------------------
</TABLE>
- ----------------
(1) Includes equity securities without readily determinable fair values at
historical cost in item 6.c, column D.
(2) Includes Small Business Administration "Guaranteed Loan Pool
Certificates," U.S. Maritime Administration obligations, and Export-Import
Bank participation certificates.
(3) Includes obligations (other than mortgage-backed securities) issued by
the Farm Credit System, the Federal Home Loan Bank System, the Federal
Home Loan Mortgage Corporation, the Federal National Mortgage
Association, the Financing Corporation, Resolution Funding Corporation,
the Student Loan Marketing Association, and the Tennessee Valley
Authority.
13
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Address: PO BOX 700 Page RC-4
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: |0|9|2|3|0|
</TABLE>
SCHEDULE RC-B--CONTINUED
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
Held-to-maturity Available-for-sale
--------------------------------------- ---------------------------------------
(Column A) (Column B) (Column C) (Column D)
Amortized Cost Fair Value Amortized Cost Fair Value(1)
------------------ ------------------ ------------------ ------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3. Securities issued by states and
political subdivisions in
the U.S.:
a. General obligations............. 1676 255 1677 261 1678 0 1679 0 3.a.
b. Revenue obligations............. 1681 266 1686 266 1690 0 1691 0 3.b.
c. Industrial development and
similar obligations............. 1694 0 1695 0 1696 0 1697 0 3.c.
4. Mortgage-backed securities (MBS):
a. Pass-through securities:
(1) Guaranteed by GNMA.......... 1698 0 1699 0 1701 0 1702 0 4.a.(1)
(2) Issued by FNMA and FHLMC.... 1703 8,554 1705 8,599 1706 0 1707 0 4.a.(2)
(3) Other pass-through
securities.................. 1709 0 1710 0 1711 0 1713 0 4.a.(3)
b. Other mortgage-backed securities
(include CMOs, REMICs, and
stripped MBS):
(1) Issued or guaranteed by
FNMA, FHLMC, or GNMA........ 1714 0 1715 0 1716 380,254 1717 379,112 4.b.(1)
(2) Collateralized by MBS issued
or guaranteed by FHMA FHLMC,
or GNMA..................... 1718 0 1719 0 1731 0 1732 0 4.b.(2)
(3) All other mortgage-backed
securities.................. 1733 2 1734 2 1735 71,878 1736 71,123 4.b.(3)
5. Other debt securities:
a. Other domestic debt securities.. 1737 0 1738 0 1739 0 1741 0 5.a.
b. Foreign debt securities......... 1742 247 1743 247 1744 0 1746 0 5.b.
6. Equity securities:
a. Investments in mutual funds..... 1747 0 1748 0 6.a.
b. Other equity securities with
readily determinable fair
values.......................... 1749 0 1751 0 6.b.
c. All other equity securities(1).. 1752 10 1753 10 6.c.
7. Total (sum of items 1 through 6)
(total of column A must equal
Schedule RC, item 2.a) (total
of column D must equal Schedule RC,
item 2.b).......................... 1754 13,097 1771 13,148 1772 662,732 1773 660,698 7.
---------------------------------------------------------------------------------
</TABLE>
- -----------------
(1) Includes equity securities without readily determinable fair values at
historical cost in item 6.c, column D.
14
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Address: PO BOX 700 Page RC-5
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: |0|9|2|3|0|
</TABLE>
Schedule RC-B--Continued
<TABLE>
<CAPTION>
C412
------------------
Memorandum Dollar Amounts in Thousands RCFD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Pledged securities(2)........................................................ 0416 546,728 M.1.
2. Maturity and repricing data for debt securities(2)(3)(4) (excluding those
in nonaccrual status):
a. Fixed rate debt securities with a remaining maturity of:
(1) Three months or less.................................................. 0343 30 M.2.a.(1)
(2) Over three months through 12 months................................... 0344 83 M.2.a.(2)
(3) Over one year through five years...................................... 0345 4,132 M.2.a.(3)
(4) Over five years....................................................... 0346 8,852 M.2.a.(4)
(5) Total fixed rate debt securities (sum of Memorandum items 2.a.(1)
through 2.a.(4)....................................................... 0347 13,097 M.2.a.(5)
b. Floating rate debt securities with a repricing frequency of:
(1) Quarterly or more frequently.......................................... 4544 0 M.2.b.(1)
(2) Annually or more frequently, but less frequently than quarterly....... 4545 0 M.2.b.(2)
(3) Every five years or more frequently, but less frequently than
annually.............................................................. 4551 312,326 M.2.b.(3)
(4) Less frequently than every five years................................. 4552 348,362 M.2.b.(4)
(5) Total floating rate debt securities (sum of Memorandum items 2.b.(1)
through 2.b.(4))...................................................... 4553 660,688 M.2.b.(5)
c. Total debt securities (sum of Memorandum items 2.a.(5) and 2.b.(5)) (must
equal total debt securities from Schedule RC-B, sum of items 1 through 5,
columns A and D, minus nonaccrual debt securities included in
Schedule RC-N, item 9, column C).......................................... 0393 673,785 M.2.c.
3. Not applicable
4. Held-to-maturity debt securities restructured and in compliance with modified
terms (included in Schedule RC-B, items 3 through 5, column A, above)........ 5365 0 M.4.
5. Not applicable
6. Floating rate debt securities with a remaining maturity of one year or
less(2)(5) (to be completed by all banks).................................... 5519 0 M.6.
7. Amortized cost of held-to-maturity securities sold or transferred to
available-for-sale or trading securities during the calendar year-to-date
(report the amortized cost at date of sale or transfer)...................... 1778 0 M.7.
8. High-risk mortgage securities (included in the held-to-maturity and
available-for-sale accounts in Schedule RC-B, item 4.b):
a. Amortized cost............................................................ 8780 5,002 M.8.a.
b. Fair value................................................................ 8781 4,920 M.8.b.
9. Structured notes (included in the held-to-maturity and available-for-sale
accounts in Schedule RC-B, items 2, 3, and 5):
a. Amortized cost............................................................ 8782 11,419 M.9.a.
b. Fair value................................................................ 8783 11,505 M.9.b.
------------------
</TABLE>
- -----------------
(2) Includes held-to-maturity securities at amortized cost and
available-for-sale securities at fair value.
(3) Exclude equity securities, e.g., investments in mutual funds, Federal
Reserve stock, common stock, and preferred stock.
(4) Memorandum item 2 is not applicable to savings banks that must complete
supplemental Schedule RC-J.
(5) For commercial banks, the debt securities included in Memorandum item 6
will also have been reported in Memorandum item 2.b above. For savings
banks, the debt securities included in Memorandum item 6 will also have
been reported in supplemental Schedule RC-J, part I, item 4. Savings banks
should note that available-for-sale debt securities are reported at fair
value in Memorandum item 6 and at amortized cost in Schedule RC-J.
15
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Address: PO BOX 700 Page RC-6
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: |0|9|2|3|0|
</TABLE>
Schedule RC-C--Loans and Lease Financing Receivables
Part I. Loans and Leases
Do not deduct the allowance for loan and lease losses from amounts reported
in this schedule. Report total loans and leases, net of unearned income.
Exclude assets held for trading.
<TABLE>
<CAPTION>
C415
------------------------------------------
(Column A) (Column B)
Consolidated Domestic
Bank Offices
--------------------- ------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCON Bil Mil Thou
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Loans secured by real estate.......................... 1410 1,408,601 1.
a. Construction and land development.................. 1415 13,122 1.a.
b. Secured by farmland (including farm residential and
other improvements)................................ 1420 121 1.b.
c. Secured by 1-4 family residential properties:
(1) Revolving, open-end loans secured by 1-4 family
residential properties and extended under
lines of credit................................ 1797 139,530 1.c.(1)
(2) All other loans secured by 1-4 family residential
properties:
(a) Secured by first liens..................... 5367 754,185 1.c.(2)(a)
(b) Secured by junior liens.................... 5368 37,083 1.c.(2)(b)
d. Secured by multifamily (5 or more) residential
properties......................................... 1460 53,673 1.d.
e. Secured by nonfarm nonresidential properties....... 1480 410,887 1.e.
2. Loans to depository institutions:
a. To commercial banks in the U.S. ................... 1505 42,450 2.a.
(1) To U.S. branches and agencies of foreign banks. 1506 0 2.a.(1)
(2) To other commercial banks in the U.S. ......... 1507 42,450 2.a.(2)
b. To other depository institutions in the U.S. ...... 1517 748 1517 748 2.b.
c. To banks in foreign countries...................... 1510 1,119 2.c.
(1) To foreign branches of other U.S. banks........ 1513 0 2.c.(1)
(2) To other banks in foreign countries............ 1516 1,119 2.c.(2)
3. Loans to finance agricultural production and other
loans to farmers...................................... 1590 209 1590 209 3.
4. Commercial and industrial loans:
a. To U.S. addresses (domicile)....................... 1763 358,806 1763 358,806 4.a.
b. To non-U.S. addresses (domicile)................... 1764 0 1764 0 4.b.
5. Acceptances of other banks:
a. Of U.S. banks...................................... 1756 0 1756 0 5.a.
b. Of foreign banks................................... 1757 0 1757 0 5.b.
6. Loans to individuals for household, family, and other
personal expenditures (i.e., consumer loans)
(includes purchased paper)............................ 1975 111,259 6.
a. Credit cards and related plans (includes check
credit and other revolving credit plans)........... 2008 8,020 6.a.
b. Other (includes single payment, installment, and
all student loans)................................. 2011 103,239 6.b.
7. Loans to foreign governments and official institutions
(including foreign central banks)..................... 2081 0 2081 0 7.
8. Obligations (other than securities and leases) of
states and political subdivisions in the U.S. (includes
nonrated industrial development obligations........... 2107 6,731 2107 6,731 8.
9. Other loans........................................... 1563 9,424 9.
a. Loans for purchasing or carrying securities
(secured and unsecured)............................ 1545 0 9.a.
b. All other loans (exclude consumer loans)........... 1564 9,424 9.b.
10. Lease financing receivables (net of unearned income).. 2165 0 10.
a. Of U.S. addresses (domicile)....................... 2182 0 10.a.
b. Of non-U.S. addresses (domicile)................... 2183 0 10.b.
11. LESS: Any unearned income on loans reflected in
items 1-9 above....................................... 2123 812 2123 812 11.
12. Total loans and leases, net of unearned income (sum of
items 1 through 10 minus item 11) (total of column A
must equal Schedule RC, item 4.a)..................... 2122 1,938,535 2122 1,938,535 12.
------------------------------------------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Address: PO BOX 700 Page RC-7
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: |0|9|2|3|0|
</TABLE>
SCHEDULE RC-C--CONTINUED
PART I. CONTINUED
<TABLE>
<CAPTION>
(COLUMN A) (COLUMN B)
CONSOLIDATED DOMESTIC
memoranda BANK OFFICES
------------------ -----------------
DOLLAR AMOUNTS IN THOUSANDS RCFD BIL MIL THOU RCON BIL MIL THOU
- ----------------------------------------------- ------------------ ------------------
<S> <C> <C> <C> <C>
1. Commercial paper included in Schedule RC-C,
part 1, above . . . . . . . . . . . . . . . 1496 0 1496 0 M.1.
2. Loans and leases restructured and in
compliance with modified terms (included
in Schedule RC-C, part 1, above and not
reported as past due or nonaccrual in
Schedule RC-N, Memorandum item 1):
a. Loans secured by real estate:
(1) To U.S. addresses (domicile) . . . . 1687 0 M.2.a.(1)
(2) To non-U.S. addresses (domicile) . . 1689 0 M.2.a.(2)
b. All other loans and all lease financing
receivables (exclude loans to individuals
for household, family, and other personal
expenditures) . . . . . . . .. . . . . . 8691 0 M.2.b.
c. Commercial and industrial loans to and
lease financing receivables of non-U.S.
addresses (domicile) included in
Memorandum item 2.b above. . . . . . . . 8692 0 M.2.c.
3. Maturity and repricing data for loans and
leases(1) (excluding those in nonaccrual
status):
a. Fixed rate loans and leases with a
remaining maturity of:
(1) Three months or less . . . . . . . . . 0348 42,067 M.3.a.(1)
(2) Over three months through 12 months. . 0349 54,198 M.3.a.(2)
(3) Over one year through five years . . . 0356 347,159 M.3.a.(3)
(4) Over five years . . . . . . . . . . . 0357 544,936 M.3.a.(4)
(5) Total fixed rate loans and leases
(sum of Memorandum items 3.a.(1)
through 3.a.(4)) . . . . . . . . . . . 0358 988,360 M.3.a.(5)
b. Floating rate loans with a repricing
frequency of:
(1) Quarterly or more frequently. . . . . . 4554 472,531 M.3.b.(1)
(2) Annually or more frequently, but less
frequently than quarterly . . . . . . . 4555 425,223 M.3.b.(2)
(3) Every five years or more frequently.
but less frequently than annually . . . 4561 17,698 M.3.b.(3)
(4) Less frequently than every five
years . . . . . . . . . . . . . . . . . 4564 6,774 M.3.b.(4)
(5) Total floating rate loans (sum of
Memorandum items 3.b.(1) through
3.b.(4)) . . . . . . . . . . . . . . . 4567 922,226 M.3.b.(5)
c. Total loans and leases (sum of Memorandum
items 3.a.(5) and 3.b.(5)) (must equal
the sum of total loans and leases, net,
from Schedule RC-C, part I, item 12, plus
unearned income from Schedule RC-C, part I,
item 11, minus total nonaccrual loans and
leases from Schedule RC-N, sum of items 1
through 8, column C) . . . . . . . . . . . 1479 1,910,586 M.3.c.
4. Loans to finance commercial real estate,
construction, and land development activities
(not secured by real estate) included in
Schedule RC-C, part I, items 4 and 9,
column A, page RC-6(2) . . . . . . . . . . . 2746 48,919 M.4.
5. Loans and leases held for sale (included in
Schedule RC-C, part I, above) . . . . . . . . 5369 0 M.5.
6. Adjustable rate closed-end loans secured
by first liens on 1-4 family residential
properties (included in Schedule RC-C, RCON Bil Mil Thou
part I, item 1.c.(2)(a), column B, page RC-6 . 5370 466,418 M.6.
------------------ -----------------
</TABLE>
- ---------
(1) Memorandum item 3 is not applicable to savings banks that must complete
supplemental Schedule RC-J.
(2) Exclude loans secured by real estate that are included in Schedule RC-C,
part I, item 1, column A.
17
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Address: PO BOX 700 Page RC-8
City, State Zip: STAMFORD, CT 06904
</TABLE>
FDIC CERTIFICATE NO.: |0|9|2|3|0|
SCHEDULE RC-D--TRADING ASSETS AND LIABILITIES
Schedule RC-D is to be completed only by banks with $1 billion or more in
total assets or with $2 billion or more in par/notional amount of off-balance
sheet derivative contracts (as reported in Schedule RC-L, items 14.a through
14.e, columns A through D).
<TABLE>
<CAPTION>
C420
---------------------
DOLLAR AMOUNTS IN THOUSANDS BIL MIL THOU
- ----------------------------------------------- ---------------------
<S> <C> <C> <C>
ASSETS
1. U.S. Treasury securities in domestic offices . . . RCON 3531 0 1.
2. U.S. Government agency and corporation
obligations in domestic offices (exclude
mortgage-backed securities) . . . . . . . . . . . RCON 3532 0 2.
3. Securities issued by states and political
subdivisions in the U.S. in domestic offices . . . RCON 3533 0 3.
4. Mortgage-backed securities (MBS) in domestic
offices:
a. Pass-through securities issued or guaranteed by
by FNMA, FHLMC, or GNMA. . . . . . . . . . . . . RCON 3534 0 4.a.
b. Other mortgage-backed securities issued or
guaranteed by FNMA, FHLMC, or GNMA (include
CMOs, REMICs, and stripped MBS) . . . . . . . . RCON 3535 0 4.b.
c. All other mortgage-backed securities . . . . . . RCON 3536 0 4.c.
5. Other debt securities in domestic offices . . . . . RCON 3537 0 5.
6. Certificates of deposit in domestic offices . . . . RCON 3538 0 6.
7. Commercial paper in domestic offices . . . . . . . RCON 3539 0 7.
8. Bankers acceptances in domestic offices . . . . . . RCON 3540 0 8.
9. Other trading assets in domestic offices. . . . . . RCON 3541 0 9.
10. Trading assets in foreign offices . . . . . . . . . RCFN 3542 0 10.
11. Revaluation gains on interest rate, foreign
exchange rate, and other commodity and equity
contracts:
a. in domestic offices . . . . . . . . . . . . . . . RCON 3543 0 11.a.
b. in foreign offices . . . . . . . . . . . . . . . RCFN 3544 0 11.b.
12. Total trading assets (sum of items 1 through
11) (must equal Schedule RC, item 5) . . . . . . . . RCFD 3545 0 12.
---------------------
LIABILITIES Bil Mil Thou
---------------------
13. Liability for short positions . . . . . . . . . . . RCFD 3546 0 13.
14. Revaluation losses on interest rate, foreign
exchange rate, and other commodity and equity
contracts . . . . . . . . . . . . . . . . . . . . . RCFD 3547 0 14.
15. Total trading liabilities (sum of items 13 and
14) (must equal Schedule RC, item 15.b) . . . . . . RCFD 3548 0 15.
---------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Address: PO BOX 700 Page RC-
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: |0|9|2|3|0|
</TABLE>
Schedule RC-E--Deposit Liabilities
Part I. Deposits in Domestic Offices
<TABLE>
<CAPTION>
C425
---------------------------------------------------------------
Nontransaction
Transaction Accounts Accounts
---------------------------------------------------------------
(Column A) (Column B) (Column C)
Total transaction Memo: Total Total
accounts (including demand deposits nontransaction
total demand (included in accounts
deposits) column A) (including MMDAs)
--------------------- ------------------ ------------------
Dollar Amounts in Thousands RCON Bil Mil Thou RCON Bil Mil Thou RCON Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Deposits of:
1. Individuals, partnerships, and corporations........... 2201 794,062 2240 528,820 2346 1,246,382 1.
2. U.S. Government....................................... 2202 803 2280 803 2520 0 2.
3. States and political subdivisions in the U.S. ........ 2203 31,944 2290 29,135 2530 15,326 3.
4. Commercial banks in the U.S. ......................... 2206 3,883 2310 3,883 4.
a. U.S. branches and agencies of foreign banks........ 2347 0 4.a.
b. Other commercial banks in the U.S. ................ 2348 0 4.b.
5. Other depository institutions in the U.S. ............ 2207 1,685 2312 1,685 2349 0 5.
6. Banks in foreign countries............................ 2213 221 2320 221 6.
a. Foreign branches of other U.S. banks............... 2367 0 6.a.
b. Other banks in foreign countries................... 2373 0 6.b.
7. Foreign governments and official institutions
(including foreign central banks)..................... 2216 0 2300 0 2377 0 7.
8. Certified and official checks......................... 2330 7,441 2330 7,441 8.
9. Total (sum of items 1 through 8) (sum of
columns A and C must equal Schedule RC,
item 13.a)............................................ 2215 840,039 2210 571,988 2385 1,261,708 9.
---------------------------------------------------------------
</TABLE>
Memoranda
<TABLE>
<CAPTION>
------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Selected components of total deposits (i.e., sum of item 9, columns A
and C):
a. Total individual Retirement Accounts (IRAs) and Keogh Plan accounts...... 6835 206,910 M.1.a.
b. Total brokered deposits.................................................. 2365 0 M.1.b.
c. Fully insured brokered deposits (included in Memorandum item 1.b above):
(1) Issued in denominations of less than $100,000........................ 2343 0 M.1.c.(1)
(2) Issued either in denominations of $100,000 or in denominations
greater than $100,000 and participated out by the broker in shares
of $100,000 or less.................................................. 2344 0 M.1.c.(2)
d. Total deposits denominated in foreign currencies......................... 3776 0 M.1.d.
e. Preferred deposits (uninsured deposits of states and political
subdivisions in the U.S. reported in item 3 above which are secured or
collateralized as required under state law)............................. 5590 32,888 M.1.e.
2. Components of total nontransaction accounts (sum of Memorandum items 2.a
through 2.d must equal item 9, column C above):
a. Savings deposits:
(1) Money market deposit accounts (MMDAs)................................ 6810 300,262 M.2.a.(1)
(2) Other savings deposits (excludes MMDAs).............................. 0352 362,083 M.2.a.(2)
b. Total time deposits of less than $100,000................................ 6648 497,858 M.2.b.
c. Time certificates of deposit of $100,000 or more......................... 6645 101,505 M.2.c.
d. Open-account time deposits of $100,000 or more........................... 6646 0 M.2.d.
3. All NOW accounts (included in column A above)............................... 2398 268,051 M.3.
------------------
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Address: PO BOX 700 Page RC-
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: |0|9|2|3|0|
</TABLE>
Schedule RC-E--Continued
Part I. Continued
Memoranda (continued)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Deposit Totals for FDIC Insurance Assessments
------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
4. Total deposits in domestic offices (sum of item 9, column A and item 9,
column C) (must equal Schedule RC, item 13.a)............................... 2200 2,101,747 M.4.
a. Total demand deposits (must equal item 9, column B)...................... 2210 571,988 M.4.a.
b. Total time and savings deposits(1) (must equal item 9, column A plus
item 9, column C minus item 9, column B)................................. 2350 1,529,759 M.4.b.
------------------
- ------------------
(1) For FDIC insurance assessment purposes, "total time and savings deposits"
consists of nontransaction accounts and all transaction accounts other
than demand deposits.
- ----------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
5. Time deposits of less than $100,000 and open-account time deposits of
$100,000 or more (included in Memorandum items 2.b and 2.d above) with
a remaining maturity or repricing frequency of:(1)
a. Three months or less..................................................... 0359 162,009 M.5.a.
b. Over three months through 12 months (but not over 12 months)............. 3644 165,406 M.5.b.
6. Maturity and repricing data for time certificates of deposit of $100,000
or more:(1)
a. Fixed rate time certificates of deposit of $100,000 or more with a
remaining maturity of:
(1) Three months or less................................................. 2761 50,834 M.6.a.(1)
(2) Over three months through 12 months.................................. 2762 21,927 M.6.a.(2)
(3) Over one year through five years..................................... 2763 26,009 M.6.a.(3)
(4) Over five years...................................................... 2765 2,735 M.6.a.(4)
(5) Total fixed rate time certificates of deposit of $100,000 or more
(sum of Memorandum items 6.a.(1) through 6.a.(4)..................... 2767 101,505 M.6.a.(5)
b. Floating rate time certificates of deposit of $100,000 or more with a
repricing frequency of:
(1) Quarterly or more frequently......................................... 4568 0 M.6.b.(1)
(2) Annually or more frequently, but less frequently than quarterly...... 4569 0 M.6.b.(2)
(3) Every five years or more frequently, but less frequently than
annually............................................................. 4571 0 M.6.b.(3)
(4) Less frequently than every five years................................ 4572 0 M.6.b.(4)
(5) Total floating rate time certificates of deposit of $100,000 or more
(sum of Memorandum items 6.b.(1) through 6.b.(4)).................... 4573 0 M.6.b.(5)
c. Total time certificates of deposit of $100,000 or more (sum of Memorandum
items 6.a.(5) and 6.b.(5)) (must equal Memorandum item 2.c. above)....... 6645 101,505 M.6.c.
------------------
</TABLE>
- -----------------
(1) Memorandum items 5 and 6 are not applicable to savings banks that must
complete supplemental Schedule RC-J.
20
<PAGE>
Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Page RC-1
Legal Title of Bank: FIRST FIDELITY BANK
Address: PO BOX 700
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: 0 9 2 3 0
SCHEDULE RC-E--CONTINUED
PART II. DEPOSITS IN FOREIGN OFFICES (INCLUDING EDGE AND AGREEMENT
SUBSIDIARIES AND IBFS)
<TABLE>
<CAPTION>
--------------------
Dollar Amounts in Thousands RCFN Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Deposits of:
1. Individuals, partnerships, and corporations.................................................... 2621 0 1.
2. U.S. banks (including IBFs and foreign branches of U.S. banks)................................. 2623 0 2.
3. Foreign banks (including U.S. branches and agencies of foreign banks, including their IBFs).... 2625 0 3.
4. Foreign governments and official institutions (including foreign central banks)................ 2650 0 4.
5. Certified and official checks.................................................................. 2330 0 5.
6. All other deposits............................................................................. 2668 0 6.
7. Total (sum of items 1 through 6) (must equal Schedule RC, item 13.b)........................... 2200 0 7.
--------------------
SCHEDULE RC-F--OTHER ASSETS
------
C430
----------------------
Dollar Amounts in Thousands ///////// Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------------------
1. Income earned, not collected on loans.......................................................... RCFD 2164 14,394 1.
2. Net deferred tax assets(1)..................................................................... RCFD 2148 8,890 2.
3. Excess residential mortgage servicing fees receivable.......................................... RCFD 5371 0 3.
4. Other (itemize amounts that exceed 25% of this item)........................................... RCFD 2168 71,748 4.
a. TEXT 3549 Prepaid Expense - Qualified Pension RCFD 3549 22,415 4.a.
b. TEXT 3550 Corporate Owned Life Insurance RCFD 3550 21,273 4.b.
c. TEXT 3551 RCFD 3551 4.c.
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 11)............................ RCFD 2160 95,032 5.
----------------------
Memorandum
----------------------
Dollar Amounts in Thousands ///////// Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------------------
1. Deferred tax assets disallowed for regulatory capital purposes................................ RCFD 5610 0 M.1
SCHEDULE RC-G--OTHER LIABILITIES
------
C435
----------------------
Dollar Amounts in Thousands ///////// Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------------------
1. a. Interest accrued and unpaid on deposits in domestic offices(2)............................ RCON 3645 7,363 1.a.
b. Other expenses accrued and unpaid (includes accrued income taxes payable)................. RCFD 3646 25,531 1.b.
2. Net deferred tax liabilities(1)............................................................... RCFD 3049 0 2.
3. Minority interest in consolidated subsidiaries................................................ RCFD 3000 0 3.
4. Other (itemize amounts that exceed 25% of this item).......................................... RCFD 2938 4,291 4.
a. TEXT 3552 RCFD 3552 4.a.
b. TEXT 3553 RCFD 3553 4.b.
c. TEXT 3554 RCFD 3554 4.c.
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 20)............................ RCFD 2930 35,185 5.
</TABLE>
- -------------------
(1) See discussion of deferred income taxes in Glossary entry on "income taxes."
(2) For savings banks, include "dividends" accrued and unpaid on deposits.
21
<PAGE>
Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Page RC-1
Legal Title of Bank: FIRST FIDELITY BANK
Address: PO BOX 700
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: 0 9 2 3 0
SCHEDULE RC-H--SELECTED BALANCE SHEET ITEMS FOR DOMESTIC OFFICES
<TABLE>
<CAPTION>
------
C440
--------------------
Domestic Offices
--------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Customers' liability to this bank on acceptances outstanding.................................. 2155 2,004 1.
2. Bank's liability on acceptances executed and outstanding...................................... 2920 2,004 2.
3. Federal funds sold and securities purchased under agreements to resell........................ 1350 7,000 3.
4. Federal funds purchased and securities sold under agreements to repurchase.................... 2800 521,127 4.
5. Other borrowed money.......................................................................... 3190 0 5.
EITHER
6. Net due from own foreign offices, Edge and Agreement subsidiaries, and IBFs................... 2163 0 6.
OR
7. Net due to own foreign offices, Edge and Agreement subsidiaries, and IBFs..................... 2941 N/A 7.
8. Total assets (excludes net due to foreign offices, Edge and Agreement subsidiaries and
IBFs)......................................................................................... 2192 2,934,242 8.
9. Total liabilities (excludes net due to foreign offices, Edge and Agreement subsidiaries, and
IBFs)......................................................................................... 3129 2,660,063 9.
Items 10-17 include held-to-maturity and available-for-sale securities in domestic offices.
--------------------
RCON Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------
10. U.S. Treasury securities...................................................................... 1779 166,714 10.
11. U.S. Government agency and corporation obligations (exclude mortgage-backed securities........ 1785 47,512 11.
12. Securities issued by states and political subdivisions in the U.S. ........................... 1786 521 12.
13. Mortgage-backed securities (MBS):
a. Pass-through securities:
(1) Issued or guaranteed by FNMA, FHLMC, or GNMA.......................................... 1787 8,554 13.a.(1)
(2) Other pass-through securities......................................................... 1869 0 13.a.(2)
b. Other mortgage-backed securities (including CMOs, REMICs, and stripped MBS):
(1) Issued or guaranteed by FNMA, FHLMC, or GNMA.......................................... 1877 379,112 13.b.(1)
(2) All other mortgage-backed securities.................................................. 2253 71,125 13.b.(2)
14. Other domestic debt securities............................................................... 3159 0 14.
15. Foreign debt securities...................................................................... 3160 247 15.
16. Equity securities:
a. Investments in mutual funds.............................................................. 3161 0 16.a.
b. Other equity securities with readily determinable fair values............................ 3162 0 16.b.
c. All other equity securities.............................................................. 3169 10 16.c.
17. Total held-to-maturity and available-fo-sale securities (sum of items 10 through 16)......... 3170 673,795 17.
Memorandum (to be completed only by banks with IBFs and other "foreign" offices)
--------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------
M. EITHER
1. Net due from the IBF of the domestic offices of the reporting bank............................ 3051 N/A M.1.
OR
2. Net due to the IBF of the domestic offices of the reporting bank.............................. 3059 N/A M.2.
</TABLE>
22
<PAGE>
Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Page RC-1
Legal Title of Bank: FIRST FIDELITY BANK
Address: PO BOX 700
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: 0 9 2 3 0
SCHEDULE RC-I--SELECTED ASSETS AND LIABILITIES OF IBFs
TO BE COMPLETED ONLY BY BANKS WITH IBFs AND OTHER "FOREIGN" OFFICES.
<TABLE>
<CAPTION>
------
C445
--------------------
Dollar Amounts in Thousands RCFW Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Total IBF assets of the consolidated bank (component of Schedule RC, item 12)................. 2133 N/A 1.
2. Total IBF loans and lease financing receivables (component of Schedule RC-C, part I,
item 12, column A)............................................................................ 2076 N/A 2.
3. IBF commercial and industrial loans (component of Schedule RC-C, part I, item 4, column A).... 2077 N/A 3.
4. Total IBF liabilities (component of Schedule RC, item 21)..................................... 2898 N/A 4.
5. IBF deposit liabilities due to banks, including other IBFs (component of Schedule RC-E,
part II, items 2 and 3)....................................................................... 2379 N/A 5.
6. Other IBF deposit liabilities (component of Schedule RC-E, part II, items 1, 4, 5, and 6)..... 2381 N/A 6.
--------------------
SCHEDULE RC-K--QUARTERLY AVERAGES(1)
------
C455
----------------------
Dollar Amounts in Thousands ///////// Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------------------
ASSETS
1. Interest-bearing balances due from depository institutions.................................... RCFD 3381 50 1.
2. U.S. Treasury securities and U.S. Government agency and corporation obligations(2)............ RCFD 3382 610,091 2.
3. Securities issued by states and political subdivisions in the U.S.(2)......................... RCFD 3383 529 3.
4. a. Other debt securities(2)................................................................... RCFD 3647 72,428 4.a.
b. Equity securities(3) (includes investments in mutual funds and Federal Reserve stock)...... RCFD 3648 10 4.b.
5. Federal funds sold and securities purchased under agreements to resell in domestic offices
of the bank and of its Edge and Agreement subsidiaries, and in IBFs........................... RCFD 3365 36,185 5.
6. Loans:
a. Loans in domestic offices:
(1) Total loans............................................................................ RCON 3360 1,898,517 6.a.(1)
(2) Loans secured by real estate........................................................... RCON 3385 1,402,818 6.a.(2)
(3) Loans to finance agricultural production and other loans to farmers.................... RCON 3386 149 6.a.(3)
(4) Commercial and industrial loans........................................................ RCON 3387 364,020 6.a.(4)
(5) Loans to individuals for household, family, and other personal expenditures............ RCON 3388 117,510 6.a.(5)
b. Total loans in foreign offices, Edge and Agreement subsidiaries, and IBFs.................. RCFN 3360 0 6.b.
7. Trading assets................................................................................ RCFD 3401 0 7.
8. Lease financing receivables (net of unearned income).......................................... RCFD 3484 0 8.
9. Total assets(4)............................................................................... RCFD 3368 2,895,083 9.
LIABILITIES
10. Interest-bearing transaction accounts in domestic offices (NOW accounts, ATS accounts, and
telephone and preauthorized transfer accounts) (exclude demand deposits)...................... RCON 3485 245,034 10.
11. Nontransaction accounts in domestic offices:
a. Money market deposit accounts (MMDAs)...................................................... RCON 3486 309,800 11.a.
b. Other saving deposits...................................................................... RCON 3487 361,955 11.b.
c. Time certificates of deposit of $100,000 or more........................................... RCON 3345 102,298 11.c.
d. All other time deposits.................................................................... RCON 3469 504,915 11.d.
12. Interest-bearing deposits in foreign offices, Edge and Agreement subsidiaries, and IBFs....... RCFN 3404 0 12.
13. Federal funds purchased and securities sold under agreements to repurchase in domestic
offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs................... RCFD 3353 512,893 13.
14. Other borrowed money.......................................................................... RCFD 3355 14,279 14.
</TABLE>
- -------------------
(1) For all items, banks have the option of reporting either (1) an average of
daily figures for the quarter, or (2) an average of weekly figures (i.e.,
the Wednesday of each week of the quarter).
(2) Quarterly averages for all debt securities should be based on amortized
cost.
(3) Quarterly averages for all equity securities should be based on
historical cost.
(4) The quarterly average for total assets should reflect all debt securities
(not held for trading) at amortized cost, equity securities with readily
determinable fair values at the lower of cost or fair value, and equity
securities without readily determinable fair values at historical cost.
23
<PAGE>
Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Page RC-1
Legal Title of Bank: FIRST FIDELITY BANK
Address: PO BOX 700
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: 0 9 2 3 0
SCHEDULE RC-L--OFF-BALANCE SHEET ITEMS
Please read carefully the instructions for the preparation of Schedule RC-L.
Some of the amounts reported in Schedule RC-L are regarded as volume indicators
and not necessarily as measures of risk.
<TABLE>
<CAPTION>
------
C460
--------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Unused commitments:
a. Revolving, open-end lines secured by 1-4 family residential properties, e.g., home equity
lines..................................................................................... 3814 158,079 1.a.
b. Credit card lines......................................................................... 3815 95 1.b.
c. Commercial real estate, construction, and land development:
(1) Commitments to fund loans secured by real estate...................................... 3816 8,666 1.c.(1)
(2) Commitments to fund loans not secured by real estate.................................. 6550 0 1.c.(2)
d. Securities underwriting................................................................... 3817 0 1.d.
e. Other unused commitments.................................................................. 3818 278,356 1.e.
2. Financial standby letters of credit and foreign office guarantees............................. 3819 26,634 2.
a. Amount of financial standby letters of credit conveyed to others RCFD 3820 0 2.a.
3. Performance standby letters of credit and foreign office guarantees........................... 3821 2,050 3.
a. Amount of performance standby letters of credit conveyed to others RCFD 3822 0 3.a.
4. Commercial and similar letters of credit...................................................... 3411 1,859 4.
5. Participations in acceptance (as described in the instructions) conveyed to others by the
reporting bank................................................................................ 3428 0 5.
6. Participations in acceptances (as described in the instructions) acquired by the reporting
(nonaccepting) bank........................................................................... 3429 0 6.
7. Securities borrowed........................................................................... 3432 0 7.
8. Securities lent (including customers' securities lent where the customer is indemnified against
loss by the reporting bank)................................................................... 3433 0 8.
9. Mortgages transferred (i.e., sold or swapped) with recourse that have been treated as sold for
Call Report purposes:
a. FNMA and FHLMC residential mortgage loan pools:
(1) Outstanding principal balance of mortgages transferred as of the report date.......... 3650 1,216 9.a.(1)
(2) Amount of recourse exposure on these mortgages as of the report date.................. 3651 1,216 9.a.(2)
b. Private (nongovernment-issued or -guaranteed) residential mortgage loan pools:
(1) Outstanding principal balance of mortgages transferred as of the report date.......... 3652 0 9.b.(1)
(2) Amount of recourse exposure on these mortgages as of the report date.................. 3653 0 9.b.(2)
c. Farmer Mac agricultural mortgage loan pools:
(1) Outstanding principal balance of mortgages transferred as of the report date.......... 3654 0 9.c.(1)
(2) Amount of recourse exposure on these mortgages as of the report date.................. 3655 0 9.c.(2)
10. When-issued securities:
a. Gross commitments to purchase............................................................. 3434 0 10.a.
b. Gross commitments to sell................................................................. 3435 0 10.b.
11. Spot foreign exchange contracts............................................................... 8765 0 11.
12. All other off-balance sheet liabilities (exclude off-balance sheet derivatives) (itemize and
describe each component of this item over 25% of Schedule RC, item 28, "Total equity capital") 3430 0 12.
a. TEXT 3555 RCFD 3555 12.a.
b. TEXT 3556 RCFD 3556 12.b.
c. TEXT 3557 RCFD 3557 12.c.
d. TEXT 3558 RCFD 3558 12.d.
13. All other off-balance sheet assets (exclude off-balance sheet derivatives) (itemize and
describe each component of this item over 25% of Schedule RC, item 28, "Total equity capital") 5591 0 13.
a. TEXT 5592 RCFD 5592 13.a.
b. TEXT 5593 RCFD 5593 13.b.
c. TEXT 5594 RCFD 5594 13.c.
d. TEXT 5595 RCFD 5595 13.d.
</TABLE>
24
<PAGE>
<TABLE>
Legal Title of Bank: FIRST FIDELITY BANK
Address: PO BOX 700 Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 03
City, State Zip: STAMFORD, CT 06904 Page RC-
FDIC Certificate No.: 0 9 2 3 0
Schedule RC-L--Continued
<CAPTION>
C461
(Column A) (Column B) (Column C) (Column D)
Dollar Amounts in Thousands Interest Rate Foreign Exchange Equity Derivative Commodity and
Off-balance Sheet Derivatives Contracts Contracts Contracts Other Contracts
Position Indicators ----------------- ----------------- ----------------- -----------------
Tril Bil Mil Thou Tril Bil Mil Thou Tril Bil Mil Thou Thou Bil Mil Thou
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
14. Gross amounts (e.g., notional
amounts) (for each column, sum of
items 14.a through 14.e must equal
sum of items 15, 16.a, and 16.b):
a. Futures contracts.................. 0 0 0 0 14.a.
RCFD 8693 RCFD 8694 RCFD 8695 RCFD 8696
b. Forward contracts.................. 0 0 0 0 14.b.
RCFD 8697 RCFD 8698 RCFD 8699 RCFD 8700
c. Exchange-traded option contracts:
(1) Written options................ 0 0 0 0 14.c.(1)
RCFD 8701 RCFD 8702 RCFD 8703 RCFD 8704
(2) Purchased options............. 0 0 0 0 14.c.(2)
RCFD 8705 RCFD 8706 RCFD 8707 RCFD 8708
d. Over-the-counter option contracts:
(1) Written options.............. 0 0 0 0 14.d.(1)
RCFD 8709 RCFD 8710 RCFD 8711 RCFD 8712
(2)Purchased options............. 0 0 0 0 14.d.(2)
RCFD 8713 RCFD 8714 RCFD 8715 RCFD 8716
e. Swaps........................... 119,922 0 0 0 14.e.
RCFD 3450 RCFD 3826 RCFD 8719 RCFD 8720
15. Total gross notional amount of
derivative contracts held for trading 78,312 0 0 0 15.
RCFD A126 RCFD A127 RCFD 8723 RCFD 8724
16. Total gross notional amount of
derivative contracts held for
purposes other than trading:
a. Contracts marked to market........ 0 0 0 0 16.a.
RCFD 8725 RCFD 8726 RCFD 8727 RCFD 8728
b. Contracts not marked to market... 41,680 0 0 0 16.b.
RCFD 8729 RCFD 8730 RCFD 8731 RCFD 8732
</TABLE>
25
<PAGE>
<TABLE>
Legal Title of Bank: FIRST FIDELITY BANK
Address: PO BOX 700 Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 03
City, State Zip: STAMFORD, CT 06904 Page RC-
FDIC Certificate No.: 0 9 2 3 0
Schedule RC-L--Continued
<CAPTION>
(Column A) (Column B) (Column C) (Column D)
Dollar Amounts in Thousands Interest Rate Foreign Exchange Equity Derivative Commodity and
Off-balance Sheet Derivatives Contracts Contracts Contracts Other Contracts
Position Indicators ----------------- ----------------- ----------------- -----------------
RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
17. Gross fair values of
derivative contracts:
a. Contracts held for
trading:
(1) Gross positive
fair value .................... 8733 978 8734 0 8735 0 8736 0 17.a.(1)
(2) Gross negative
fair value .................... 8737 877 8738 0 8739 0 8740 0 17.a.(2)
b. Contracts held for
purposes other than
trading that are marked
to market:
(1) Gross positive
fair value..................... 8741 0 8742 0 8743 0 8744 0 17.b.(1)
(2) Gross negative
fair value .................... 8745 0 8746 0 8747 0 8748 0 17.b.(2)
c. Contracts held for
purposes other than
trading that are not
marked to market:
(1) Gross positive
fair value ................... 8749 1,603 8750 0 8751 0 8752 0 17.c.(1)
(2) Gross negative
fair value ................... 8753 48 8754 0 8755 0 8756 0 17.c.(2)
</TABLE>
<TABLE>
<CAPTION>
Memoranda Dollar Amounts in Thousands RCFD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------- -----------------
<S> <C> <C> <C> <C> <C>
1.-2. Not applicable
3. Unused commitments with an original maturity exceeding one year that are reported in
Schedule RC-L, items 1.a through 1.e, above (report only the unused portions of commitments
that are fee paid or otherwise legally binding) ................................................ 3833 203,674 M.3.
a. Participations in commitments with an original maturity
exceeding one year conveyed to others ................................... RCFD 3834 0 M.3.a.
4. To be completed only by banks with $1 billion or more in total assets:
Standby letters of credit and foreign office guarantees (both financial and performance) issued
to non-U.S. addressees (domicile) included in Schedule RC-L, items 2 and 3, above .............. 3377 128 M.4.
5. To be completed for the September report only:
Installment loans to individuals for household, family, and other personal expenditures that
have been securitized and sold without recourse (with servicing retained), amounts outstanding
by type of loan:
a. Loans to purchase private passenger automobiles ........................................... 2741 N/A M.5.a.
b. Credit cards and related plans ............................................................ 2742 N/A M.5.b.
c. All other consumer installment credit (including mobile home loans) ....................... 2743 N/A M.5.c.
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Address: PO BOX 700 Page RC-
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: |0|9|2|3|0|
</TABLE>
Schedule RC-M--Memoranda
<TABLE>
<CAPTION>
------
C465
--------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Extensions of credit by the reporting bank to its executive officers, directors, principal
shareholders, and their related interests as of the report date:
a. Aggregate amount of all extensions of credit to all executive officers, directors,
principal shareholders, and their related interests .......................................... 6164 20,251 1.a.
b. Number of executive officers, directors, and principal shareholders to whom the amount
of all extensions of credit by the reporting bank (including extensions of credit to Number
related interests) equals or exceeds the lesser of $500,000 or 5 percent
of total capital as defined for this purpose in agency regulations. RCFD 6165 2 1.b.
2. Federal funds sold and securities purchased under agreements to resell with U.S. branches
and agencies of foreign banks(1) (included in Schedule RC, items 3.a and 3.b).................... 3405 0 2.
3. Not applicable.
4. Outstanding principal balance of 1-4 family residential mortgage loans serviced for others
(include both retained servicing and and purchased servicing):
a. Mortgages serviced under a GNMA contract ..................................................... 5500 0 4.a.
b. Mortgages serviced under a FHLMC contract:
(1) Serviced with recourse to servicer ....................................................... 5501 0 4.b.(1)
(2) Serviced without recourse to servicer .................................................... 5502 50,084 4.b.(2)
c. Mortgages serviced under a FNMA contract:
(1) Serviced under a regular option contract ................................................. 5503 1,216 4.c.(1)
(2) Serviced under a special option contract ................................................. 5504 11,972 4.c.(2)
d. Mortgages serviced under other servicing contracts ........................................... 5505 17,585 4.d.
5. To be completed only by banks with $1 billion or more in total assets:
Customers' liability to this bank on acceptances outstanding (sum of items 5.a and 5.b must equal
Schedule RC, item 9):
a. U.S. addresses (domicile) .................................................................... 2103 2,004 5.a.
b. Non-U.S. addresses (domicile) ................................................................ 2104 0 5.b.
6. Intangible assets:
a. Mortgage servicing rights .................................................................... 3164 550 6.a.
b. Other identifiable intangible assets:
(1) Purchased credit card relationships ...................................................... 5506 0 6.a.(1)
(2) All other identifiable intangible assets ................................................. 5507 0 6.b.(2)
c. Goodwill ..................................................................................... 3163 38,359 6.c.
d. Total (sum of items 6.a through 6.c) (must equal Schedule RC, item 10) ....................... 2143 38,909 6.d.
e. Amount of intangible assets (included in item 6.b.(2) above) that have been grandfathered or
are otherwise qualifying for regulatory capital purposes ..................................... 6442 0 6.e.
7. Mandatory convertible debt, net of common or perpetual preferred stock dedicated to redeem
the debt ........................................................................................ 3295 0 7.
</TABLE>
- ------------------------
(1) Do not report federal funds sold and securities purchased under
agreements to resell with other commercial banks in the U.S. in this item.
27
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Address: PO BOX 700 Page RC-1
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: |0|9|2|3|0|
</TABLE>
Schedule RC-M--Continued
<TABLE>
<CAPTION>
-------------------
Dollar Amounts in Thousands Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
8. a. Other real estate owned:
(1) Direct and indirect investments in real estate ventures ........................... RCFD 5372 0 8.a.(1)
(2) All other real estate owned:
(a) Construction and land development in domestic offices ......................... RCON 5508 75 8.a.(2)(a)
(b) Farmland in domestic offices .................................................. RCON 5509 0 8.a.(2)(b)
(c) 1-4 family residential properties in domestic offices ......................... RCON 5510 1,497 8.a.(2)(c)
(d) Multifamily (5 or more) residential properties in domestic offices ............ RCON 5511 663 8.a.(2)(d)
(e) Nonfarm nonresidential properties in domestic offices ......................... RCON 5512 2,320 8.a.(2)(e)
(f) In foreign offices ............................................................ RCFN 5513 0 8.a.(2)(f)
(3) Total (sum of items 8.a.(1) and 8.a.(2)) (must equal Schedule RC, item 7) ......... RCFD 2150 4,555 8.a.(3)
b. Investments in unconsolidated subsidiaries and associated companies:
(1) Direct and indirect investments in real estate ventures ........................... RCFD 5374 0 8.b.(1)
(2) All other investments in unconsolidated subsidiaries and associated companies ..... RCFD 5375 0 8.b.(2)
(3) Total (sum of items 8.b.(1) and 8.b.(2)) (must equal Schedule RC, item 8) ......... RCFD 2130 0 8.b.(3)
c. Total assets of unconsolidated subsidiaries and associated companies ................. RCFD 5376 0 8.c.
9. Noncumulative perpetual preferred stock and and related surplus included in Schedule
RC, item 23, "Perpetual preferred stock related surplus" ................................ RCFD 3778 0 9.
10. Mutual fund and annuity sales in domestic offices during the quarter (include
proprietary, private label, and third party products):
a. Money market funds ................................................................... RCON 6441 0 10.a.
b. Equity securities funds .............................................................. RCON 8427 597 10.b.
c. Debt securities funds ................................................................ RCON 8428 648 10.c.
d. Other mutual funds ................................................................... RCON 8429 1,976 10.d.
e. Annuities ............................................................................ RCON 8430 462 10.e.
f. Sales of proprietary mutual funds and annuities (included in items 10.a through
10.e above) .......................................................................... RCON 8784 0 10.f.
</TABLE>
<TABLE>
Memorandum Dollar Amounts in Thousands RCFD Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Interbank holdings of capital instruments (to be completed for the December report
only):
a. Reciprocal holdings of banking organizations' capital instruments ..................... 3836 0 M.1.a.
b. Nonreciprocal holdings of banking organizations' capital instruments .................. 3837 0 M.1.b.
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Address: PO BOX 700 Page RC-1
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: |0|9|2|3|0|
</TABLE>
Schedule RC-N--Past Due and Nonaccrual Loans, Leases, and Other Assets
The FFIEC regards the information reported in all of Memorandum item 1, in
items 1 through 10, column A, and in Memorandum items 2 through 4, column A,
as confidential.
<TABLE>
<CAPTION>
C470
-----------------------------------------------------------
(Column A) (Column B) (Column C)
Past due Past due 90 Nonaccrual
30 through 89 days or more
days and still and still
accruing accruing
------------------ ------------------ ------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- ---------------------------------------------------- ------------------ ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Loans secured by real estate:
a. To U.S. addressees (domicile) ................ 1245 53,140 1246 10,272 1247 18,898 1.a.
b. To non-U.S. addressees (domicile) ............ 1248 0 1249 0 1250 0 1.b.
2. Loans to depository institutions and acceptances
of other banks:
a. To U.S. banks and other U.S. depository
institutions ................................. 5377 0 5378 0 5379 0 2.a.
b. To foreign banks ............................. 5380 0 5381 0 5382 0 2.b.
3. Loans to finance agricultural production and
other loans to farmers .......................... 1594 0 1597 0 1583 0 3.
4. Commercial and industrial loans:
a. To U.S. addressees (domicile) ................ 1251 5,495 1252 11 1253 9,863 4.a.
b. To non-U.S. addressees (domicile) ............ 1254 0 1255 0 1256 0 4.b.
5. Loans to individuals for household, family, and
other personal expenditures:
a. Credit cards and related plans ............... 5383 348 5384 152 5385 0 5.a.
b. Other (includes single payment, installment,
and all student loans) ....................... 5386 4,894 5387 1,783 5388 0 5.b.
6. Loans to foreign governments and official
institutions .................................... 5389 0 5390 0 5391 0 6.
7. All other loans ................................. 5459 0 5460 0 5461 0 7.
8. Lease financing receivables:
a. Of U.S. addressees (domicile) ................ 1257 0 1258 0 1259 0 8.a.
b. Of non-U.S. addressees (domicile) ............ 1271 0 1272 0 1791 0 8.b.
9. Debt securities and other assets (exclude other
real estate owned and other repossessed assets).. 3505 0 3506 0 3507 0 9.
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Amounts reported in items 1 through 8 above include guaranteed and unguaranteed portions of past due and nonaccrual
loans and leases. Report in item 10 below certain guaranteed loans and leases that have already been included in the
amounts reported in items 1 through 8.
<CAPTION>
------------------ ------------------ ------------------
RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
------------------ ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
10. Loans and leases reported in items 1
through 8 above which are wholly or partially
guaranteed by the U.S. Government .............. 5612 1,656 5613 1,664 5614 0 10.
a. Guaranteed portion of loans and leases
included in item 10 above ................... 5615 1,656 5616 1,664 5617 0 10.a.
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Address: PO BOX 700 Page RC-2
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: |0|9|2|3|0|
</TABLE>
Schedule RC-N--Continued
<TABLE>
<CAPTION>
C473
-----------------------------------------------------------
(Column A) (Column B) (Column C)
Past due Past due 90 Nonaccrual
30 through 89 days or more
days and still and still
accruing accruing
Memoranda ------------------ ------------------ ------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- ---------------------------------------------------- ------------------ ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Restructured loans and leases included in
Schedule RC-N, items 1 through 8, above (and not
reported in Schedule RC-C, part 1, Memorandum
item 2) ......................................... 1658 0 1659 0 1661 0 M.1.
2. Loans to finance commercial real estate,
construction, and land development activities
(not secured by real estate) included in
Schedule RC-N, items 4 and 7, above ............. 6558 306 6559 0 6560 0 M.2.
<CAPTION>
------------------ ------------------ ------------------
RCON Bil Mil Thou RCON Bil Mil Thou RCON Bil Mil Thou
------------------ ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
3. Loans secured by real estate in domestic offices
(included in Schedule RC-N, item 1, above):
a. Construction and land development............. 2759 398 2769 0 3492 810 M.3.a.
b. Secured by farmland........................... 3493 0 3494 0 3495 121 M.3.b.
c. Secured by 1-4 family residential properties:
(1) Revolving, open-end loans secured by
1-4 family residential properties and
extended under lines of credit............ 5398 4,483 5399 1,692 5400 351 M.3.c.(1)
(2) All other loans secured by 1-4 family
residential properties.................... 5401 37,332 5402 8,286 5403 647 M.3.c.(2)
d. Secured by multifamily (5 or more) residential
properties.................................... 3499 1,285 3500 0 3501 30 M.3.d.
e. Secured by nonfarm nonresidential properties.. 3502 9,642 3503 294 3504 16,939 M.3.e.
<CAPTION>
(Column A) (Column B)
Past due 30 Past due 90
through 89 days days or more
------------------ ------------------
RCFD Bil Mil Thou RCFD Bil Mil Thou
------------------ ------------------
<S> <C> <C> <C> <C> <C>
4. Interest rate, foreign exchange rate, and other
commodity and equity contracts:
a. Book value of amounts carried as assets....... 3522 0 3528 0 M.4.a.
b. Replacement cost of contracts with a
positive replacement cost..................... 3529 0 3530 0 M.4.b.
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Address: PO BOX 700 Page RC-
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: |0|9|2|3|0|
</TABLE>
Schedule RC-O--Other Data for Deposit Insurance Assessments
<TABLE>
<CAPTION>
C475
--------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Unposted debits (see instructions):
a. Actual amount of all unposted debits............................ 0030 N/A 1.a.
OR
b. Separate amount of unposted debits:
(1) Actual amount of unposted debits to demand deposits......... 0031 0 1.b.(1)
(2) Actual amount of unposted debits to time and savings
deposits(1)................................................. 0032 0 1.b.(2)
2. Unposted credits (see instructions):
a. Actual amount of all unposted credits........................... 3510 4,586 2.a.
OR
b. Separate amount of unposted credits:
(1) Actual amount of unposted credits to demand deposits........ 3512 N/A 2.b.(1)
(2) Actual amount of unposted credits to time and savings
deposits(1)................................................. 3514 N/A 2.b.(2)
3. Uninvested trust funds (cash) held in bank's own trust department
(not included in total deposits in domestic offices)............... 3520 0 3.
4. Deposits of consolidated subsidiaries in domestic offices and
in insured branches in Puerto Rico and U.S. territories and
possessions (not included in total deposits):
a. Demand deposits of consolidated subsidiaries................... 2211 1,026 4.a.
b. Time and savings deposits(1) of consolidated subsidiaries...... 2351 0 4.b.
c. Interest accrued and unpaid on deposits of consolidated
subsidiaries................................................... 5514 0 4.c.
5. Deposits in insured branches in Puerto Rico and U.S. territories
and possessions:
a. Demand deposits in insured branches (included in Schedule RC-E,
Part II)........................................................ 2229 0 5.a.
b. Time and savings deposits(1) in insured branches (included
in Schedule RC-E, Part II)...................................... 2383 0 5.b.
c. Interest accrued and unpaid on deposits in insured branches
(included in Schedule RC-G, item 1.b)........................... 5515 0 5.c.
Item 6 is not applicable to state nonmember banks that have not been
authorized by the Federal Reserve to act as pass-through correspondents.
6. Reserve balances actually passed through to the Federal Reserve
by the reporting bank on behalf of its respondent depository
institutions that are also reflected as deposit liabilities of
the reporting bank:
a. Amount reflected in demand deposits (included in Schedule RC-E,
Part I, Memorandum item 4.a).................................... 2314 0 6.a.
b. Amount reflected in time and savings deposits(1) (included in
Schedule RC-E, Part I, Memorandum item 4.b)..................... 2315 0 6.b.
7. Unamortized premiums and discounts on time and savings deposits:(1)
a. Unamortized premiums............................................ 5516 0 7.a.
b. Unamortized discounts........................................... 5517 0 7.b.
8. To be completed by banks with "Oakar deposits."
Total "Adjusted Attributable Deposits" of all institutions acquired
under Section 5(d)(3) of the Federal Deposit Insurance Act (from
most recent FDIC Oakar Transaction Worksheet(s)).................. 5518 205,796 8.
9. Deposits in lifeline accounts..................................... 5596 9.
10. Benefit-responsive "Depository Institution Investment Contracts"
(included in total deposits in domestic offices)................. 8432 0 10.
</TABLE>
- --------------
(1) For FDIC insurance assessment purposes, "time and savings deposits" consists
of nontransaction accounts and all transaction accounts other than demand
deposits.
31
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Address: PO BOX 700 Page RC-
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: |0|9|2|3|0|
</TABLE>
Schedule RC-O--Continued
<TABLE>
<CAPTION>
Dollar Amounts in Thousands RCON Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
11. Adjustments to demand deposits in domestic offices reported in
Schedule RC-E for certain reciprocal demand balances:
a. Amount by which demand deposits would be reduced if reciprocal
demand balances between the reporting bank and savings
associations were reported on a net basis rather than a gross
basis in Schedule RC-E........................................ 8785 0 11.a.
b. Amount by which demand deposits would be increased if
reciprocal demand balances between the reporting bank and
U.S. branches and agencies of foreign banks were reported on
a gross basis rather than a net basis in Schedule RC-E......... A181 0 11.b.
c. Amount by which demand deposits would be reduced if cash items
in process of collection were included in the calculation of
net reciprocal demand balances between the reporting bank and
the domestic offices of U.S. banks and savings associations
in Schedule RC-E.............................................. A182 0 11.c.
<CAPTION>
Memoranda (to be completed each quarter except as noted)
Dollar Amounts in Thousands RCON Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Total deposits in domestic offices of the bank (sum of Memorandum
items 1.a.(1) and 1.b.(1) must equal Schedule RC, item 13.a):
a. Deposit accounts of $100,000 or less:
(1) Amount of deposit accounts of $100,000 or less............ 2702 1,542,357 M.1.a.(1)
(2) Number of deposit accounts of $100,000 or less Number
(to be completed for the June report only).... RCON 3779 ------ M.1.a.(2)
N/A
b. Deposit accounts of more than $100,000:
(1) Amount of deposit accounts of more than $100,000.......... 2710 559,390 M.1.b.(1)
(2) Number of deposit accounts of more Number
than $100,000................................ RCON 2722 ------ M.1.b.(2)
2,377
2. Estimated amount of uninsured deposits in domestic offices of
the bank:
a. An estimate of your bank's uninsured deposits can be
determined by multiplying the number of deposit accounts of
more than $100,000 reported in Memorandum item 1.b.(2) above
by $100,000 and subtracting the result from the amount of
deposit accounts of more than $100,000 reported in
Memorandum item 1.b.(1) above.
Indicate in the appropriate box at the right whether your
bank has a method or procedure for determining a better YES NO
estimate of uninsured deposits than the estimate described --- --
above......................................................... RCON 6861 X M.2.a.
<CAPTION>
RCON Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
b. If the box marked YES has been checked, report the estimate
of uninsured deposits determined by using your bank's method
or procedure.................................................. 5597 N/A M.2.b.
</TABLE>
- --------------------------------------------------------------------------------
Person to whom questions about the Reports of Condition C477
and Income should be directed:
BRIAN K. REILLY VICE PRESIDENT (201) 565-7328
- -------------------------------- -------------------------------------------
Name and Title (TEXT 8901) Area code/phone number/extension (TEXT 8902)
32
<PAGE>
Schedule RC-R--Risk-Based Capital
This schedule must be completed by all banks as follows: Banks that reported
total assets of $1 billion or more in Schedule RC, item 12, for June 30,
1994, must complete items 2 through 9 and Memoranda items 1 and 2. Banks with
assets of less than $1 billion must complete items 1 and 2 below or
Schedule RC-R in its entirety, depending on their response to item 1 below.
<TABLE>
<S> <C> <C> <C> <C>
1. Test for determining the extent to which Schedule RC-R must be C480
completed. To be completed only by banks with total assets of less than ----
$1 billion. Indicate in the appropriate box at the right whether the YES NO
bank has total capital greater than or equal to eight percent of --- --
adjusted total assets................................................... RCFD 6056 1.
For purposes of this test, adjusted total assets equals total
assets less cash, U.S. Treasuries, U.S. Government agency obligations,
and 80 percent of U.S. Government-sponsored agency obligations plus
the allowance for loan and lease losses and selected off-balance sheet
items as reported on Schedule RC-L (see instructions).
If the box marked YES has been checked, then the bank only has to
complete item 2 below. If the box marked NO has been checked, the bank
must complete the remainder of this schedule.
A NO response to item 1 does not necessarily mean that the bank's
actual risk-based capital ratio is less than eight percent or that the
bank is not in compliance with the risk-based capital guidelines.
</TABLE>
<TABLE>
<CAPTION>
(Column A) (Column B)
Subordinated Debt(1) Other
and Intermediate Limited-
Item 2 is to be completed by all banks. Term Preferred Life Capital
Stock Instruments
----------------------------- -----------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2. Subordinated debt(1) and other limited-life
capital instruments (original weighted average
maturity of at least five years) with a
remaining maturity of:
a. One year or less................................. 3780 0 3786 0 2.a.
b. Over one year through two years.................. 3781 0 3787 0 2.b.
c. Over two years through three years............... 3782 0 3788 0 2.c.
d. Over three years through four years.............. 3783 0 3789 0 2.d.
e. Over four years through five years............... 3784 0 3790 0 2.e.
f. Over five years.................................. 3785 0 3791 0 2.f.
3. Not applicable
<CAPTION>
(Column A) (Column B)
Items 4-9 and Memoranda items 1 and 2 are to be Assets Credit Equiv-
completed by banks that answered NO to item 1 above and Recorded alent Amount
by banks with total assets of $1 billion or more. on the of Off-Balance
Balance Sheet Sheet Items (2)
----------------------------- -----------------------------
RCFD Bil Mil Thou RCFD Bil Mil Thou
<S> <C> <C> <C> <C> <C> <C> <C> <C>
4. Assets and credit equivalent amounts of
off-balance sheet items assigned to the Zero
percent risk category:
a. Assets recorded on the balance sheet:
(1) Securities issued by, other claims on,
and claims unconditionally guaranteed by,
the U.S. Government and its agencies and
other OECD central governments............... 3794 166,663 4.a.(1)
(2) All other.................................... 3795 82,041 4.a.(2)
b. Credit equivalent amount of off-balance sheet
items............................................ 3796 0 4.b.
</TABLE>
- --------------
(1) Exclude mandatory convertible debt reported in Schedule RC-M,
item 7.
(2) Do not report in column B the risk-weighted amount of assets
reported in column A.
33
<PAGE>
Schedule RC-R--Continued
<TABLE>
<CAPTION>
(Column A) (Column B)
Assets Credit Equiv-
Recorded alent Amount
on the of Off-Balance
Balance Sheet Sheet Items (1)
----------------------------- -------------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou
<S> <C> <C> <C> <C> <C> <C> <C> <C>
5. Assets and credit equivalent amounts of
off-balance sheet items assigned to the
20 percent risk category:
a. Assets recorded on the balance sheet:
(1) Claims conditionally guaranteed by the
U.S. Government and its agencies and other
OECD central governments.................... 3798 44,534 5.a.(1)
(2) Claims collateralized by securities
issued by the U.S. Government and its
agencies and other OECD central governments;
by securities issued by U.S. Government-
sponsored agencies; and by cash on deposit.. 3799 3,031 5.a.(2)
(3) All other................................... 3800 623,934 5.a.(3)
b. Credit equivalent amount of off-balance
sheet items..................................... 3801 2,249 5.b.
6. Assets and credit equivalent amounts of off-balance
sheet items assigned to the 50 percent risk category:
a. Assets recorded on the balance sheet............ 3802 768,448 6.a.
b. Credit equivalent amount of off-balance
sheet items..................................... 3803 1,216 6.b.
7. Assets and credit equivalent amounts of off-balance
sheet items assigned to the 100 percent risk category:
a. Assets recorded on the balance sheet............ 3804 1,319,919 7.a.
b. Credit equivalent amount of off-balance
sheet items..................................... 3805 129,868 7.b.
8. On-balance sheet assets value excluded from the
calculation of the risk-based capital ratio(2)..... 3806 (1,322) 8.
9. Total assets recorded on the balance sheet (sum
of items 4.a, 5.a, 6.a, 7.a, and 8, column A)
(must equal Schedule RC, item 12 plus items 4.b
and 4.c)........................................... 3807 3,007,248 9.
</TABLE>
<TABLE>
<CAPTION>
Memoranda
Dollar Amounts in Thousands RCFD Bil Mil Thou
<S> <C> <C> <C> <C>
1. Current credit exposure across all off-balance
sheet derivative contracts covered by the risk-
based capital standards............................ 8764 594 M.1.
</TABLE>
<TABLE>
<CAPTION>
With a remaining maturity of
-----------------------------------------------------------------------
(Column B)
(Column A) Over one year
One year or less through five years
---------------------------------- ----------------------------------
RCFD Tril Bil Mil Thou RCFD Tril Bil Mil Thou
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2. Notional principal amounts of off-balance
sheet derivative contracts(3):
a. Interest rate contracts.................. 3809 1,300 8766 86,100 M.2.a.
b. Foreign exchange contracts............... 3812 0 8769 0 M.2.b.
c. Gold contracts........................... 8771 0 8772 0 M.2.c.
d. Other precious metals contracts.......... 8774 0 8775 0 M.2.d.
e. Other commodity contracts................ 8777 0 8778 0 M.2.e.
f. Equity derivative contracts.............. A000 0 A001 0 M.2.f.
(Column C)
Over five years
---------------------------------
RCFD Tril Bil Mil Thou
<S> <C> <C> <C> <C> <C>
2. Notional principal amounts of off-balance
sheet derivative contracts(3):
a. Interest rate contracts.................. 8767 32,592 M.2.a.
b. Foreign exchange contracts............... 8770 0 M.2.b.
c. Gold contracts........................... 8773 0 M.2.c.
d. Other precious metals contracts.......... 8776 0 M.2.d.
e. Other commodity contracts................ 8779 0 M.2.e.
f. Equity derivative contracts.............. A002 0 M.2.f.
</TABLE>
- --------------
(1) Do not report in column B the risk-weighted amount of assets reported
in column A.
(2) Include the difference between the fair value and the amortized cost
of available-for-sale securities in item 8 and report the amortized
cost of these securities in items 4 through 7 above. Item 8 also includes
on-balance sheet asset values (or portions thereof) of off-balance sheet
interest rate, foreign exchange rate, and commodity contracts and
those contracts (e.g., futures contracts) not subject to risk-based
capital. Exclude from item 8 margin accounts and accrued receivables as
well as any portion of the allowance for loan and lease losses in excess
of the amount that may be included in Tier 2 capital.
(3) Exclude foreign exchange contracts with an original maturity of 14 days
or less and all futures contracts.
34
<PAGE>
<TABLE>
<CAPTION>
<S><C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563 FFIEC 031
Address: PO BOX 700 Page RC-1
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: |0|9|2|3|0|
</TABLE>
Optional Narrative Statement Concerning the Amounts
Reported in the Reports of Condition and Income
at close of business on December 31, 1995
FIRST FIDELITY BANK STAMFORD , Connecticut
- ------------------------------- --------------------- ---------------------
Legal Title of Bank City State
The management of the reporting bank may, if it wishes, submit a brief
narrative statement on the amounts reported in the Reports of Condition and
Income. This optional statement will be made available to the public, along
with the publicly available data in the Reports of Condition and Income, in
response to any request for individual bank report data. However, the
information reported in column A and in all of memorandum item 1 of Schedule
RC-N is regarded as confidential and will not be released to the public.
BANKS CHOOSING TO SUBMIT THE NARRATIVE STATEMENT SHOULD ENSURE THAT THE
STATEMENT DOES NOT CONTAIN THE NAMES OR OTHER IDENTIFICATIONS OF INDIVIDUAL
BANK CUSTOMERS, REFERENCES TO THE AMOUNTS REPORTED IN THE CONFIDENTIAL ITEMS
IN SCHEDULE RC-N, OR ANY OTHER INFORMATION THAT THEY ARE NOT WILLING TO HAVE
MADE PUBLIC OR THAT WOULD COMPROMISE THE PRIVACY OF THEIR CUSTOMERS. Banks
choosing not to make a statement may check the "No comment" box below and
should make no entries of any kind in the space provided for the narrative
statement; i.e., DO NOT enter in this space such phrases as "No statement,"
"Not applicable," "N/A," "No comment," and "None."
The optional statement must be entered on this sheet. The statement should
not exceed 100 words. Further, regardless of the number of words, the
statement must not exceed 750 characters, including punctuation, indentation,
and standard spacing between words and sentences. If any submission should
exceed 750 characters, as defined, it will be truncated at 750 characters
with no notice to the submitting bank and the truncated statement will appear
as the bank's statement both on agency computerized records and in
computer-file releases to the public.
All information furnished by the bank in the narrative statement must be
accurate and not misleading. Appropriate efforts shall be taken by the
submitting bank to ensure the statement's accuracy. The statement must be
signed, in the space provided below, by a senior officer of the bank who
thereby attests to its accuracy.
If, subsequent to the original submission, material changes are submitted for
the data reported in the Reports of Condition and Income, the existing
narrative statement will be deleted from the files, and from disclosure; the
bank, at its option, may replace it with a statement, under signature,
appropriate to the amended data.
The optional narrative statement will appear in agency records and in
release to the public exactly as submitted (or amended as described in the
preceding paragaph) by the management of the bank (except for the truncation
of statements exceeding the 750-character limit described above). THE
STATEMENT WILL NOT BE EDITED OR SCREENED IN ANY WAY BY THE SUPERVISORY
AGENCIES FOR ACCURACY OR RELEVANCE. DISCLOSURE OF THE STATEMENT SHALL NOT
SIGNIFY THAT ANY FEDERAL SUPERVISORY AGENCY HAS VERIFIED OR CONFIRMED THE
ACCURACY OF THE INFORMATION CONTAINED THEREIN. A STATEMENT TO THIS EFFECT
WILL APPEAR ON ANY PUBLIC RELEASE OF THE OPTIONAL STATEMENT SUBMITTED BY THE
MANAGEMENT OF THE REPORTING BANK.
- --------------------------------------------------------------------------------
No comment /X/ (RCON 6979) |c471 |c472 | -
BANK MANAGEMENT STATEMENT (please type or print clearly):
(TEXT 6980)
/s/ Ernest J. Verrico
----------------------------- -------------------
Signature of Executive Date of Signature
Officer of Bank
35
<PAGE>
<TABLE>
<CAPTION>
<S><C>
Legal Title of Bank: FIRST FIDELITY BANK Call Date: 12/31/95 ST-BK: 09-1563
Address: PO BOX 700
City, State Zip: STAMFORD, CT 06904
FDIC Certificate No.: |0|9|2|3|0|
THIS PAGE IS TO BE COMPLETED BY ALL BANKS
- -----------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS OF BANK OMB No. For OCC: 1557-0081
OMB No. For FDIC: 3064-0052
OMB No. For Federal Reserve: 7100-0036
Expiration Date: 3/31/96
PLACE LABEL HERE SPECIAL REPORT
(Dollar Amounts in Thousands)
---------------------------------------------------------------------------
CLOSE OF BUSINESS FDIC Certificate Number
DATE 12/31/95 |0|9|2|3|0| C-700 -
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
LOANS TO EXECUTIVE OFFICERS (Complete as of each Call Report Date)
- --------------------------------------------------------------------------------
The following information is required by Public Laws 90-44 and 102-242, but
does not constitute a part of the Report of Condition. With each Report of
Condition, these Laws require all banks to furnish a report of all loans or
other extensions of credit to their executive officers made since the date of
the previous Report of Condition. Data regarding individual loans or other
extensions of credit are not required. If no such loans or other extensions
of credit were made during the period, insert "none" against subitem (a).
(Exclude the first $15,000 of indebtedness of each executive officer under
bank credit card plan.) See Sections 215.2 and 215.3 of Title 12 of the Code
of Federal Regulations (Federal Reserve Board Regulation 0) for the
definitions of "executive officer" and "extension of credit," repectively.
Exclude loans and other extensions of credit to directors and principal
shareholders who are not executive officers.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- - Number of loans made to executive officers since the previous Call Report date. . . . . . . . . RCFD 3561 0 a.
- - Total dollar amount of above loans (in thousands of dollars). . . . . . . . . . . . . . . . . . RCFD 3562 0 b.
- - Range of interest charged on above loans
(example: 9 3/4% = 9.75). . . . . . . . . . . . . . . . . . . . . . RCFD 7701 0.00 % to RCFD 7702 0.00% c.
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
SIGNATURE AND TITLE OF OFFICER AUTHORIZED TO SIGN REPORT DATE (Month, Day, Year)
/s/ Ernest J. Verrico 1-29-96
- --------------------------------------------------------------------------------------------------------------------------------
NAME AND TITLE OF PERSON TO WHOM INQUIRES MAY BE DIRECTED (TEXT 8903) AREA CODE/PHONE NUMBER/EXTENSION
(TEXT 8904)
BRIAN K REILLY (201) 565-7238
- --------------------------------------------------------------------------------------------------------------------------------
D I C 8040/53 (6-95)
</TABLE>
36
