<PAGE>
As filed with the Securities and Exchange Commission on April 21, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM S-4
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)
Not Applicable 7993 06--1436334
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification Number)
incorporation or Classification Code
organization) Number)
Mohegan Tribal Gaming Authority
1 Mohegan Sun Boulevard
Uncasville, CT 06382
(860) 204-8000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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Roland J. Harris
Chairman and Member of Management Board
Mohegan Tribal Gaming Authority
1 Mohegan Sun Boulevard
Uncasville, CT 06382
(860) 204-8000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
David B.H. Martin, Jr., Esq.
Hogan & Hartson L.L.P.
555 Thirteenth Street, N.W.
Washington, D.C. 20004
(202) 637-5600
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
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If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) 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 this form is a post-effective amendment filed pursuant to Rule 462(d)
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. [_]
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CALCULATION OF REGISTRATION FEE
<TABLE>
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<CAPTION>
Proposed
Proposed Maximum
Title of Each Class of Amount Maximum Aggregate Amount of
Securities to be to be Offering Price Offering Registration
Registered Registered Per Share(1) Price(1) Fee
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<S> <C> <C> <C> <C>
8 1/8% Senior Notes Due
January 1, 2006....... $200,000,000 100% $200,000,000 $55,600
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8 3/4% Senior
Subordinated Notes Due
January 1, 2009....... $300,000,000 100% $300,000,000 $83,400
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</TABLE>
(1) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(f) under the Securities Act of 1933, as amended.
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 the 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>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion
Dated April 21, 1999
PROSPECTUS [LOGOS]
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$500,000,000
Mohegan Tribal Gaming Authority
Offer To Exchange All Outstanding
$200,000,000 8 1/8% Senior Notes Due 2006
For $200,000,000 8 1/8% Senior Exchange Notes Due 2006
and
All Outstanding $300,000,000 8 3/4% Senior Subordinated Notes Due 2009
For $300,000,000 8 3/4% Senior Subordinated Exchange Notes Due 2009
Interest Payable January 1 and July 1, Beginning on July 1, 1999
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Material Terms of the Exchange Offers
. We are offering to . The terms of the
exchange all validly Exchange Notes will be
tendered and not substantially identical
validly withdrawn to the terms of the
Outstanding Notes for Outstanding Notes,
an equal amount of a except for special
new series of notes transfer restrictions
that are registered and registration rights
under the Securities relating to the
Act of 1933. Outstanding Notes.
. The Exchange Offers . You may only tender the
will expire at 5:00 P. Outstanding Notes in
M., New York City Time, denominations of $1,000
on , 1999, unless and multiples of
extended. $1,000.
. You may withdraw . The exchange of notes
tenders of Outstanding should not be a taxable
Notes at any time exchange for U.S.
before the expiration federal income tax
of the Exchange Offers. purposes.
. We will not receive any . The Exchange Offers are
proceeds from the subject to customary
Exchange Offers. conditions.
Please see Risk Factors beginning on page 15 for a discussion of factors that
you should consider in connection with the Exchange Offers.
We are not making the Exchange Offers in any state or Jurisdiction where it
is not permitted.
None of the National Indian Gaming Commission, the
U.S. Securities and Exchange Commission or any other
federal or state agency has approved or disapproved
of the Notes to be distributed in the Exchange
Offers, nor have any of these organizations
determined that this Prospectus is truthful or
complete. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is , 1999.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PROSPECTUS SUMMARY....................................................... 1
RISK FACTORS............................................................. 15
THE EXCHANGE OFFERS...................................................... 26
USE OF PROCEEDS.......................................................... 34
CAPITALIZATION........................................................... 35
SELECTED FINANCIAL DATA.................................................. 36
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS........................................................... 38
BUSINESS................................................................. 44
THE AUTHORITY............................................................ 55
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS........................... 58
MOHEGAN TRIBE OF INDIANS OF CONNECTICUT.................................. 59
OTHER MATERIAL AGREEMENTS................................................ 61
GOVERNMENT REGULATION.................................................... 68
DESCRIPTION OF OTHER INDEBTEDNESS........................................ 72
DESCRIPTION OF THE EXCHANGE NOTES........................................ 74
PLAN OF DISTRIBUTION..................................................... 129
LEGAL MATTERS............................................................ 129
INDEPENDENT AUDITORS..................................................... 129
WHERE YOU CAN GET MORE INFORMATION....................................... 130
INDEX TO FINANCIAL STATEMENTS............................................ F-1
</TABLE>
<PAGE>
PROSPECTUS SUMMARY
This summary highlights selected information contained elsewhere in this
Prospectus. Because it is a summary, it does not contain all of the information
that is important to you. This summary is qualified in its entirety by the more
detailed information and by the Authority's Consolidated Financial Statements,
the notes thereto and the other financial data that are contained elsewhere in
this Prospectus. You should carefully read this entire Prospectus and the
Letter of Transmittal in their entirety, particularly the section entitled
"Risk Factors" and the financial statements and the related notes to those
statements. References in this Prospectus to the "Authority" are to the Mohegan
Tribal Gaming Authority. The term the "Tribe" refers to the Mohegan Tribe of
Indians of Connecticut. The terms "we" and "us" refer to the Tribe and the
Authority, collectively.
The Tribe and the Authority
The Mohegan Tribe of Indians of Connecticut is a federally recognized Indian
tribe with a 390-acre reservation located in southeastern Connecticut. Under
the Indian Gaming Regulatory Act of 1988, 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 compact with the affected
state. The Tribe and the State of Connecticut have entered into such a compact
that has been approved by the U.S. Secretary of the Interior. The Tribe's
gaming operation is one of only two legally authorized gaming operations
offering traditional slot machines and table games in the Northeastern United
States outside of Atlantic City, New Jersey. The Tribe has established an
instrumentality, the Mohegan Tribal Gaming Authority, with the exclusive power
to conduct and regulate gaming activities for the Tribe. The Authority is
governed by a Management Board, which consists of the nine members of the
Mohegan Tribal Council.
Mohegan Sun
In October 1996, the Authority opened a gaming and entertainment complex
known as Mohegan Sun at a total cost of approximately $303 million. Mohegan Sun
is located in Uncasville, Connecticut, approximately 125 miles from New York
City and approximately 100 miles from Boston, Massachusetts. Mohegan Sun is
situated on a 240-acre site on the Tribe's reservation overlooking the Thames
River with direct access from Routes I-395 and 2A via a four-lane access road
constructed by the Authority. As of December 31, 1998, Mohegan Sun had
approximately 176,500 square feet of gaming space. Mohegan Sun currently offers
. 3,025 slot machines, 150 table games (including blackjack, roulette,
craps, baccarat, caribbean stud poker and let it ride) and 42 poker
tables;
. food and beverage amenities, including three gourmet restaurants, a 680-
seat buffet, a New York style delicatessen, a 24-hour coffee shop, a 10-
station food court and multiple service bars for a total of 1,888
restaurant seats;
. a high stakes bingo hall with seating for up to 1,400 guests, which is
also used as an events center that can accommodate up to 1,800 guests;
. an approximately 10,000 square foot lounge featuring live entertainment
seven days a week;
. an approximately 9,000 square foot simulcasting race book facility;
. parking spaces for 7,500 guests and for 1,700 employees;
. a children's arcade area and a child care facility operated by New
Horizons Kids Quest, Inc.; and
. an approximately 4,000 square foot gas station facility.
Mohegan Sun, which frequently operates at capacity on weekends, does not
currently offer any hotel accommodations or a large-scale dedicated
entertainment venue. Additionally, it offers only limited retail outlets. We
believe that there are significant opportunities to increase revenues and
profits by expanding the gaming space and adding hotel, entertainment and other
amenities.
1
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For its first fiscal year of operations ended September 30, 1997, Mohegan
Sun welcomed approximately 6.5 million guests and recorded gross revenues of
$512.1 million. During its second fiscal year ended September 30, 1998, Mohegan
Sun had approximately 7.5 million guests, an increase of 15.4% over 1997, and
its gross revenues were $641.4 million, an increase of 25.2% over the prior
year. The Authority's EBITDAM (earnings before extraordinary items, interest,
income taxes, depreciation, amortization and management fees) for the 12 months
ended September 30, 1997 and 1998 were $135.4 million and $200.3 million,
respectively. The Authority's EBITDAM for the quarters ended December 31, 1997
and 1998 were $35.1 million and $51.8 million, respectively.
Strategy
Our overall strategy is to profit from expanding demand in the Northeast
gaming market. Our initial success has resulted primarily from guests living
within 100 miles of Mohegan Sun. Based upon Mohegan Sun's results and
experience to date, we believe the Northeast gaming market is strong and that
there is significant demand for additional amenities. We expect to develop
Mohegan Sun into a full-scale entertainment and destination resort and believe
that this will increase the number of guests and lengthen their stays at
Mohegan Sun. Specifically, we plan to expand Mohegan Sun's facilities using the
proceeds from the Outstanding Notes, along with money we borrow pursuant to a
bank credit facility, as well as internally generated cash flow. The expansion
will include additional casino space, a hotel, a large convention facility,
entertainment facilities and additional retail establishments. We will build
the expansion with an effort to minimize disruption to the existing facility
while Mohegan Sun continues to operate. In preparation for the expansion and to
capture existing demand, we have recently widened our marketing efforts to
include the entire New York City metropolitan area. We believe that by
providing Mohegan Sun with additional capacity and the ability to capture a
share of the overnight market in connection with our marketing efforts, we will
extend Mohegan Sun's market penetration. We believe that the expansion will
create a long-term competitive advantage for Mohegan Sun in the East Coast
gaming market. See "Business--Competition."
The Mohegan Sun Expansion
To capitalize on the strong market fundamentals in the region and Mohegan
Sun's popularity, we are expanding the casino significantly and adding a hotel,
convention facilities, entertainment facilities and additional retail
establishments. Key elements of the expansion include
. approximately 100,000 square feet of additional gaming space;
. a hotel with approximately 1,500 rooms;
. approximately 100,000 square feet of convention space;
. an entertainment events center with seating for up to 10,000;
. nine new restaurants and lounges;
. approximately 300,000 additional square feet of retail space; and
. approximately 6,000 additional guest parking spaces.
The Authority commenced construction on the expansion in March, 1999 and
intends to complete the expansion by the fall of 2001. The cost of developing,
constructing, equipping and opening the expansion is expected to be
approximately $750 million (excluding capitalized interest). The Tribe has
issued a formal resolution capping the scope of the expansion budget at $800
million (excluding capitalized interest). In addition, the Tribe has set up a
$40 million construction reserve account that, in some circumstances, will be
used to pay for costs in excess of the expansion budget.
2
<PAGE>
The Tribe has chosen a project developer, an architect, a cost and
scheduling consultant, a site master planning firm and a retail consultant for
the expansion. The expansion development team currently includes
. Project Developer--Trading Cove Associates, a joint venture between an
affiliate of Sun International Hotels Limited and Waterford Gaming
L.L.C., to oversee the planning, design, construction, furnishing and
opening of the expansion;
. Project Architect--Kohn Pedersen Fox Associates PC, an internationally
recognized architectural firm, to coordinate the design of the expansion
facilities;
. Cost and Scheduling Consultant--Hanscomb Limited, an international
project cost and scheduling consulting firm, to oversee cost planning
and control and provide other planning and scheduling services;
. Site Master Planner--EDAW, Inc., a land planning and architectural firm,
to master plan the expansion site in a manner that minimizes disruption
to the existing facilities during construction; and
. Retail Consultant--Gordon Brant LV, LLC, a retail consulting and
development firm with experience in gaming industry projects, to assist
with the overall concept and design of the retail facilities of the
expansion.
We believe the market favors expansion now for several reasons, including:
(1) unsatisfied current demand for gaming space at the existing facility; (2) a
growing gaming market in the Northeast region; (3) length of stay data
indicating the need for a hotel and other amenities; and (4) the need to remain
competitive with the Foxwoods Resort Casino, a neighboring gaming resort. The
expansion is intended to attract a greater number of guests to the facility,
particularly during mid-week periods, and to increase the amount of time and
money guests spend at Mohegan Sun.
Market
Mohegan Sun and the Foxwoods Resort Casino are the only two legally
authorized gaming operations offering both traditional slot machines and table
games in the Northeastern United States outside of Atlantic City, New Jersey,
which is approximately 260 miles from Mohegan Sun. Foxwoods is located
approximately 10 miles east of Mohegan Sun and is owned and operated by the
Mashantucket Pequot Tribe. Foxwoods is currently the largest gaming facility in
the United States in terms of the number of total gaming positions. Based on
the size and success of Foxwoods and the rapid growth of Mohegan Sun, we
believe that the gaming market in the Northeastern United States remains
underserved. See "Business--Competition."
Mohegan Sun frequently operates at capacity on weekends. The addition of new
gaming space will accommodate more of this weekend demand. The Authority
estimates that the current average length of time that guests spend at Mohegan
Sun is approximately 110 minutes. We believe that the addition of a large hotel
as well as convention and entertainment amenities will increase the average
length of time guests spend at Mohegan Sun.
In the past, the Authority has marketed primarily to guests living within
100 miles of Mohegan Sun. This excludes most of the New York City metropolitan
area. The Authority has recently begun a substantial marketing effort to tap a
wider market, including the New York City metropolitan area. As a result of
this marketing effort, the number of guests from New York State has grown over
50% from the last fiscal year as measured by Mohegan Sun's guest database. The
Authority believes the majority of this increase can be attributed to guests
residing within the New York City metropolitan area and believes the New York
City market shows significant potential for additional growth. The Authority
also believes the expansion, particularly a large hotel, should draw many
additional customers from this and other more distant markets. See "Business--
Marketing Strategy."
3
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Assumption of Self-Management
The Authority engaged Trading Cove Associates in 1995 to operate, manage and
market Mohegan Sun under a seven-year management agreement. Management fees
paid to Trading Cove Associates under this agreement are based on profitability
thresholds of Mohegan Sun. In anticipation of the expansion of Mohegan Sun, the
Authority and Trading Cove Associates have agreed to terminate this management
arrangement. Under the Relinquishment Agreement, the Authority will formally
assume, and Trading Cove Associates will relinquish, the management, operation
and maintenance of Mohegan Sun on January 1, 2000. The Relinquishment Agreement
provides that the Authority will pay Trading Cove Associates 5% of gross
revenues from Mohegan Sun (as determined under the terms of the Relinquishment
Agreement) beginning January 1, 2000 and ending December 31, 2014. As a result
of this new agreement, the Authority was required to recognize the estimated
present value of this payment obligation as a liability in the fourth fiscal
quarter of 1998. This liability was recorded as a non-cash extraordinary
charge. See "Other Material Agreements--Existing Management Agreement with
Trading Cove Associates" and "--Relinquishment Agreement with Trading Cove
Associates."
Trading Cove Associates has agreed to work closely with the Authority to
facilitate a smooth and effective management transition. The Authority
anticipates entering into long term employment contracts with the senior
managers of Mohegan Sun, three of whom collectively have 45 years of experience
in the gaming and hotel industry. The Authority has also entered into a
development services agreement with Trading Cove Associates to oversee the
planning, design, construction, furnishing and opening of the expansion of
Mohegan Sun. See "Other Material Agreements--Expansion Development Services
Agreement with Trading Cove Associates."
Address and Telephone Number
The Authority's mailing address is 1 Mohegan Sun Boulevard, Uncasville, CT
06382. Its telephone number is (860) 204-8000.
4
<PAGE>
SUMMARY OF THE EXCHANGE OFFERS
The following is a summary of the principal terms of the Exchange Offers. A
more detailed description is contained herein under the caption "The Exchange
Offers." The term "Senior Exchange Notes" refers to the 8 1/8% Senior Notes due
2006 being offered in our Exchange Offer. The term "Outstanding Senior Notes"
refers to the Authority's currently outstanding 8 1/8% Senior Notes due 2006
that the Authority is exchanging for Senior Exchange Notes. The term "Senior
Subordinated Exchange Notes" refers to the 8 3/4% Senior Subordinated Notes due
2009 being offered in our Exchange Offer. The term "Outstanding Senior
Subordinated Notes" refers to the Authority's currently outstanding 8 3/4%
Senior Subordinated Notes due 2009 that the Authority is exchanging for Senior
Subordinated Exchange Notes. The term "Outstanding Notes" refers to the
Outstanding Senior Notes and the Outstanding Senior Subordinated Notes,
collectively. The term "Exchange Notes" refers to the the Senior Exchange Notes
and the Senior Subordinated Exchange Notes, collectively. The term "Senior
Notes Indenture" refers to the indenture that applies to both the Outstanding
Senior Notes and the Senior Exchange Notes, and the term "Senior Subordinated
Notes Indenture" refers to indenture that applies to both the Outstanding
Senior Subordinated Notes and the Senior Subordinated Exchange Notes. The term
"Indentures" refers collectively to the Senior Notes Indenture and the Senior
Subordinated Notes Indenture.
The Exchange Offers ........ The Authority is offering to exchange $1,000
principal amount of our Senior Exchange Notes,
which have been registered under the Securities
Act, for each $1,000 principal amount of our
unregistered Outstanding Senior Notes. Together
with this exchange, the Authority is also
offering to exchange of $1,000 principal amount
of its Senior Subordinated Exchange Notes, which
have been registered under the Securities Act,
for each $1,000 principal amount of its
unregistered Outstanding Senior Subordinated
Notes. The Authority issued the Outstanding Notes
on February 24, 1999 in a private offering.
In order for your Outstanding Notes to be
exchanged, you must properly tender them before
the expiration of the Exchange Offers. All
Outstanding Notes that are validly tendered and
not validly withdrawn will be exchanged. The
Authority will issue the Exchange Notes on or
promptly after the expiration of the Exchange
Offers.
Outstanding Notes may be tendered for exchange in
whole or in part in integral multiples of $1,000
principal amount.
Registration Rights
Agreements ................. The Authority sold the Outstanding Notes on
February 24, 1998 to a group of initial
purchasers which included Salomon Smith Barney,
NationsBanc Montgomery Securities LLC, SG Cowen,
Bear, Stearns & Co. Inc., BancBoston Robertson
Stephens Inc. and Fleet Securities, Inc.
Simultaneously with that sale, the Authority
signed a registration rights agreement relating
to the Outstanding Senior Notes and a
registration rights agreement relating to the
Outstanding Senior Subordinated Notes with these
initial purchasers which requires the Authority
to conduct the Exchange Offers.
You have the right under the registration rights
agreements to exchange your Outstanding Notes for
Exchange Notes with substantially identical
terms. The Exchange Offers are intended to
satisfy these rights. After the Exchange Offers
are complete, you
5
<PAGE>
will no longer be entitled to any exchange or
registration rights with respect to your
Outstanding Notes.
For a description of the procedures for tendering
Outstanding Notes, see "The Exchange Offers--
Procedures for Tendering Outstanding Notes."
Consequences of Failure to
Exchange Your Outstanding
Notes ...................... If you do not exchange your Outstanding Notes for
Exchange Notes in the Exchange Offers, you will
still have the restrictions on transfer provided
in the Outstanding Notes and in the Indentures.
In general, the Outstanding Notes may not be
offered or sold unless registered or exempt from
registration under the Securities Act, or in a
transaction not subject to the Securities Act and
applicable state securities laws. The Authority
does not plan to register the Outstanding Notes
under the Securities Act.
Expiration Date ............ The Exchange Offers will expire at 5:00 p.m., New
York City time, on , 1999. This will be the
Expiration Date unless extended by the Authority.
If the Authority does extend the offers, the
Expiration Date will be the latest date and time
to which an Exchange Offer is extended. See "The
Exchange Offers--Expiration Date; Extensions;
Amendments."
Conditions to the Exchange
Offers...................... The Exchange Offers are subject to conditions
which the Authority may waive at its sole
discretion. The Exchange Offers are not
conditioned upon any minimum principal amount of
Outstanding Notes being tendered for exchange.
See "The Exchange Offers--Conditions to the
Exchange Offers."
The Authority reserves the right in its sole and
absolute discretion, subject to applicable law,
at any time and from time to time
. to delay the acceptance of the Outstanding
Notes;
. to terminate either or both Exchange Offers if
specified conditions have not been satisfied;
. to extend the Expiration Date of either or
both Exchange Offers and retain all tendered
Outstanding Notes subject, however, to the
right of tendering holders to withdraw their
tender of Outstanding Notes; and
. to waive any condition or otherwise amend the
terms of the Exchange Offer in any respect.
See "The Exchange Offers--Expiration Date;
Extensions; Amendments."
Procedures for Tendering
Outstanding Notes .......... If you wish to tender your Outstanding Notes for
exchange, you must
. complete and sign a Letter of Transmittal
according to the instructions contained in the
Letter of Transmittal; and
6
<PAGE>
. forward the Letter of Transmittal by mail,
facsimile transmission or hand delivery,
together with any other required documents, to
the relevant Exchange Agent, either with the
Outstanding Notes to be tendered or in
compliance with the specified procedures for
guaranteed delivery of such Outstanding Notes.
Specified brokers, dealers, commercial banks,
trust companies and other nominees may also
effect tenders by book-entry transfer.
Please do not send your Letter of Transmittal or
certificates representing your Outstanding Notes
to us. Those documents should only be sent to the
appropriate Exchange Agent. Questions regarding
how to tender and requests for information should
be directed to the appropriate Exchange Agent.
See "The Exchange Offers--Exchange Agents."
Special Procedures for
Beneficial Owners ......... If your Outstanding Notes are registered in the
name of a broker, dealer, commercial bank, trust
company or other nominee, the Authority urges you
to contact such person promptly if you wish to
tender your Outstanding Notes. See "The Exchange
Offers--Procedures for Tendering Outstanding
Notes."
Withdrawal Rights .......... You may withdraw the tender of your Outstanding
Notes at any time before the Expiration Date. To
do this, you should deliver a written notice of
your withdrawal to the appropriate Exchange Agent
according to the withdrawal procedures described
under the heading "The Exchange Offers--
Withdrawal Rights."
Resales of Exchange Notes... The Authority believes that you will be able to
offer for resale, resell or otherwise transfer
Exchange Notes issued in the Exchange Offers
without compliance with the registration and
prospectus delivery provisions of the Securities
Act, provided that
. you are acquiring the Exchange Notes in the
ordinary course of your business;
. you are not participating, and have no
arrangement or understanding with any person
to participate, in the distribution of the
Exchange Notes; and
. you are not an affiliate of the Mohegan Tribal
Gaming Authority.
The Authority's belief is based on
interpretations by the staff of the SEC, as shown
in no-action letters issued to third parties
unrelated to the Authority. The staff of the SEC
has not considered the Exchange Offers in the
context of a no-action letter, and, the Authority
cannot assure you that the staff of the SEC would
make a similar determination with respect to
these Exchange Offers.
7
<PAGE>
If the Authority's belief is not accurate and you
transfer an Exchange Note without delivering a
prospectus meeting the requirements of the
Securities Act or without an exemption from such
requirements, you may incur liability under the
Securities Act. The Authority does not and will
not assume, or indemnify you against, such
liability.
Each broker-dealer that receives Exchange Notes
for its own account in exchange for Outstanding
Notes which were acquired by such broker-dealer
as a result of market-making or other trading
activities must acknowledge that it will deliver
a prospectus meeting the requirements of the
Securities Act in connection with any resale of
such Exchange Notes. A broker-dealer may use this
Prospectus for an offer to sell, resale or other
transfer of Exchange Notes. See "Plan of
Distribution."
Exchange Agents ............ The exchange agent for the Exchange Offer for the
Outstanding Senior Notes is First Union National
Bank. The exchange agent for the Exchange Offer
for the Outstanding Senior Subordinated Notes is
State Street Bank and Trust Company. The
addresses, telephone and facsimile numbers of the
exchange agents are shown in "The Exchange
Offers--Exchange Agents" section of this
prospectus and in the Letters of Transmittal.
Use of Proceeds ............ The Authority will not receive any cash proceeds
from the issuance of the Exchange Notes offered
hereby. See "Use of Proceeds."
Certain Federal Income Tax
Consequences .............. Your acceptance of an Exchange Offer and the
related exchange of your Outstanding Notes for
Exchange Notes will not be a taxable exchange for
United States federal income tax purposes. You
should not recognize any taxable gain or loss or
any interest income as a result of the exchange.
See "The Exchange Offers" for more detailed information concerning the
Exchange Offers.
8
<PAGE>
SUMMARY OF THE TERMS OF THE EXCHANGE NOTES
The Exchange Offers relate to the exchange of (1) up to $200,000,000
principal amount of Senior Exchange Notes for up to an equal principal amount
of Outstanding Senior Notes and (2) up to $300,000,000 principal amount of
Senior Subordinated Exchange Notes for up to an equal principal amount of
Outstanding Senior Subordinated Notes. The form and terms of the Exchange Notes
are substantially identical to the form and terms of the Outstanding Notes,
except the Exchange Notes will be registered under the Securities Act.
Therefore, the Exchange Notes will not bear legends restricting their transfer
and will not be entitled to registration under the Securities Act. The Exchange
Notes will evidence the same debt as the Outstanding Notes (which they
replace). The Outstanding Senior Notes and the Senior Exchange Notes are
governed by the same indenture, the Senior Notes Indenture. The Outstanding
Senior Subordinated Notes and the Senior Subordinated Exchange Notes are
governed by the same indenture, the Senior Subordinated Notes Indenture.
Senior Exchange Notes
Securities Offered ......... $200 million in total principal amount of 8 1/8%
Senior Exchange Notes due 2006.
Maturity ................... January 1, 2006.
Interest ................... Annual rate--8 1/8%.
Payment frequency--every six months on January 1
and July 1.
First payment--July 1, 1999.
Ranking .................... The Senior Exchange Notes rank equally with all
of the Authority's existing and future senior
unsecured indebtedness and equally with 50% of
the Authority's payment obligations under the
Relinquishment Agreement and senior to all of the
Authority's senior subordinated indebtedness and
the remaining 50% of the Authority's payment
obligations under the Relinquishment Agreement.
The Senior Exchange Notes will effectively be
subordinated to all of the Authority's existing
and future senior secured indebtedness, including
the bank credit facility.
Assuming the Authority had fully drawn all
possible amounts available under the Bank Credit
Facility on December 31, 1998, the Senior
Exchange Notes would have been
. subordinated to $500 million of senior secured
debt; ranked equally with 50% of the
Authority's payment obligations under the
Relinquishment Agreement and with no other
senior debt; and ranked senior to (1) $300
million of senior subordinated debt, (2) $90
million in original principal amount plus
accrued and unpaid interest thereon of
defeased junior subordinated notes, and (3)
the remaining 50% of the Authority's payment
obligations under the Relinquishment
Agreement.
9
<PAGE>
Optional Redemption ........ The Authority may redeem some or all of the
Senior Exchange Notes at any time at prices equal
to the greater of (1) 100% of their principal
amount or (2) the sum of the present value of
100% of the principal amount plus all required
interest payments due on such Senior Exchange
Notes (excluding accrued but unpaid interest)
discounted to the Maturity Date at the treasury
yield plus 50 basis points plus accrued and
unpaid interest (including some additional
interest) to, but excluding, the date of
redemption. See "Description of Exchange Notes--
Description of the Senior Exchange Notes" under
the heading "Optional Redemption."
Mandatory Offer to
Repurchase ................. In some circumstances, if the Authority sells
certain assets or experiences specific kinds of
changes of control, it must offer to repurchase
the Senior Exchange Notes at the prices listed in
the section "Description of Exchange Notes--
Description of the Senior Exchange Notes" under
the heading "Repurchase at the Option of
Holders."
Basic Covenants of Senior
Notes Indenture ............ The Authority will issue the Senior Exchange
Notes under an indenture with First Union
National Bank. The Senior Notes Indenture will,
among other things, restrict the Authority's
ability to
. incur additional indebtedness;
. pay dividends or make other distributions;
. make investments;
. use assets as security in other transactions;
and
. sell certain assets or merge with or into
another person.
For more details, see the section "Description of
Exchange Notes--Description of the Senior
Exchange Notes" under the heading "Certain
Covenants."
Senior Subordinated Exchange Notes
Securities Offered ......... $300 million in total principal amount of 8 3/4%
Senior Subordinated Exchange Notes due 2009.
Maturity ................... January 1, 2009.
Interest ................... Annual rate--8 3/4%.
Payment frequency--every six months on January 1
and July 1.
First payment--July 1, 1999.
Ranking .................... The Senior Subordinated Exchange Notes rank
equally with all of the Authority's existing and
future senior subordinated indebtedness and
senior to all of the Authority's subordinated
indebtedness. The Senior Subordinated Exchange
Notes will be subordinated to all of the
Authority's existing and future senior
indebtedness, including the Senior Exchange Notes
and the Bank Credit Facility.
10
<PAGE>
Assuming the Authority had fully drawn all
possible amounts available under the Bank Credit
Facility on December 31, 1998, the Senior
Subordinated Exchange Notes would have been
. subordinated to $500 million of senior secured
debt;
. subordinated to $200 million of other senior
debt (the Senior Exchange Notes);
. subordinated in a liquidation, bankruptcy or
similar proceeding to 50% of the Authority's
payment obligations under the Relinquishment
Agreement that are then due and owing, but
effectively not subordinated to such payment
obligations that are not yet due under the
Relinquishment Agreement since the payment
obligations under the Relinquishment Agreement
cannot be accelerated by their terms;
. ranked equally to the remaining 50% of the
Authority's payment obligations under the
Relinquishment Agreement that are then due and
owing, but effectively senior to such payment
obligations that are not yet due under the
Relinquishment Agreement since payment
obligations under the Relinquishment Agreement
cannot be accelerated by their terms; and
. ranked senior to $90 million in original
principal amount, plus accrued and unpaid
interest thereon, of defeased junior
subordinated notes.
Optional Redemption ........ On or after January 1, 2004, the Authority may
redeem some or all of the Senior Subordinated
Exchange Notes at any time at the redemption
prices listed in the section "Description of
Exchange Notes--Description of the Senior
Subordinated Exchange Notes" under the heading
"Optional Redemption."
Mandatory Offer to
Repurchase ................. In some circumstances if the Authority sells
certain assets or experiences specific kinds of
changes of control, it must offer to repurchase
the Senior Subordinated Exchange Notes at the
prices listed in the section "Description of
Exchange Notes--Description of the Senior
Subordinated Exchange Notes" under the heading
"Repurchase at the Option of Holders."
Basic Covenants of Senior
Subordinated Notes
Indenture .................. The Authority will issue the Senior Subordinated
Exchange Notes under an indenture with State
Street Bank and Trust Company. The Senior
Subordinated Notes Indenture will, among other
things, restrict the Authority's ability to
. incur additional indebtedness;
. pay dividends or make other distributions;
. make investments;
. use assets as security in other transactions;
and
. sell certain assets or merge with or into
another person.
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<PAGE>
For more details, see the section "Description of
Exchange Notes--Description of the Senior
Subordinated Exchange Notes" under the heading
"Certain Covenants."
Terms Common to Senior Exchange Notes and Senior Subordinated Exchange Notes
Special Redemption ......... The Authority may redeem a holder's Exchange
Notes or require the holder to dispose of the
Exchange Notes if (1) any gaming regulatory
authority requires such holder to be licensed or
otherwise qualified under applicable gaming laws
in order for the Authority to maintain any of its
gaming licenses or franchises and (2) such holder
does not obtain such license or qualification
within the required time periods. Any such
redemption or sale shall be at the price listed
in the section "Description of Exchange Notes--
Description of the Senior Exchange Notes" and "--
Description of the Senior Subordinated Exchange
Notes" under the respective headings "Optional
Redemption."
Risk Factors
See "Risk Factors" beginning on page 15 for a discussion of factors that you
should carefully consider before tendering any Outstanding Notes for Exchange
Notes.
12
<PAGE>
Summary Financial Data
The following table summarizes the information under the section "Selected
Financial Data" and should be read with the Authority's financial statements
and the related notes included in this Prospectus beginning on page F-1. You
should also read the following information in conjunction with the sections in
this Prospectus entitled "Capitalization," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Business."
<TABLE>
<CAPTION>
Fiscal Year Ended Quarter Ended
September 30, December 31,
------------------ -----------------
1998 1997(1) 1998 1997
-------- -------- -------- --------
(Dollars in thousands, except per
diem data)
<S> <C> <C> <C> <C>
Statements of Income (Loss) Data:
Net revenues.............................. $575,143 $467,837 $163,858 $127,142
Income from operations.................... 135,350 80,029 33,456 22,858
Interest expense.......................... 50,172 45,137 12,810 11,778
Income before extraordinary items......... 87,578 36,687 21,261 11,728
Extraordinary items(2).................... (419,457) -- -- --
Net income (loss)(2)...................... (331,879) 36,687 21,261 11,728
Ratio of earnings to fixed charges(3)..... 2.7x 1.8x 2.6x 1.9x
Other Data:
EBITDA(4)................................. $152,878 $112,184 $ 38,125 $ 27,658
EBITDAM(5)................................ 200,320 135,427 51,770 35,062
Depreciation and amortization............. 17,528 32,155 4,669 4,800
Capital expenditures...................... 32,731 35,749 6,113 17,909
Slot machine win per day.................. 361 319 401 311
Table game win per day.................... 2,545 2,401 2,727 2,364
Slot machines............................. 3,029 2,962 3,025 2,996
Table games............................... 150 149 150 148
Restaurant seats.......................... 1,868 1,808 1,888 1,808
Casino square footage at period end....... 176,500 167,500 176,500 167,500
Other Financial Data:
Ratio of EBITDAM(5) to interest expense... 4.0x 3.0x 4.0x 3.0x
Ratio of total debt to EBITDAM(5)......... 1.6 2.3 -- --
</TABLE>
<TABLE>
<CAPTION>
December 31, 1998
---------------------
As
Actual Adjusted(6)
-------- -----------
(In thousands)
<S> <C> <C>
Balance Sheet Data:
Cash and cash equivalents................................. $109,578 $244,978
Defeasance trust assets(7)................................ -- 135,700
Total assets.............................................. 554,746 841,846
Total debt and capital lease obligations(8)............... 327,998 652,998
Total capital(2)(9)....................................... (372,300) (410,200)
</TABLE>
- --------
(1) The Authority commenced operations at Mohegan Sun on October 12, 1996.
(2) The Authority, in conformance with FASB 5, has recorded a non-cash expense
and liability for the estimated present value of the Authority's future
Relinquishment Agreement payment obligations. These payments are based on
the amount of gross revenue generated by the Authority. As of September 30,
1998, the present value of this liability was estimated at $549.1 million,
of which $419.1 million was reflected as an extraordinary item in the
statements of income (loss), and $130.0 million was capitalized
13
<PAGE>
on the balance sheet as trademarks and other intellectual property acquired
as part of the Relinquishment Agreement. Recording this liability has
created negative capital as of September 30, 1998. This liability will be
reassessed periodically and may require additional non-cash adjustments to
be recorded in the statement of income (loss). The estimated liability has
not changed as of December 31, 1998. See the Authority's financial
statements and the accompanying notes and "Other Material Agreements--
Relinquishment Agreement with Trading Cove Associates."
(3) The ratio of earnings to fixed charges is determined by dividing (a)
earnings before extraordinary items and fixed charges by (b) fixed charges.
Fixed charges consist of total interest expense, including cash flow
participation interest relating to the 13 1/2% Senior Secured Notes.
(4) Earnings before extraordinary items, interest, income taxes, depreciation
and amortization. EBITDA is presented because we believe it is frequently
used by securities analysts, investors and other interested parties in the
gaming industry. However, EBITDA should only be read in conjunction with
all of the Authority's financial data summarized above and its financial
statements, including the notes, prepared in conformance with generally
accepted accounting principles or GAAP appearing elsewhere herein. EBITDA
should not be construed as an alternative either to (a) income from
operations (as determined according to GAAP) as an indicator of the
Authority's operating performance or (b) cash flows from operating
activities (as determined according to GAAP) as a measure of liquidity. In
addition, because the Authority is an instrumentality of a sovereign Indian
nation, it is not subject to federal or state income tax.
(5) Earnings before extraordinary items, interest, income taxes, depreciation,
amortization and management fees. Management fees are paid by the Authority
to Trading Cove Associates under the terms of its management agreement
which terminates on January 1, 2000. Until such termination and because
management fees are subordinate to debt service, the Authority believes
EBITDAM is a supplemental financial measurement useful in the evaluation of
its gaming business.
(6) As adjusted amounts reflect (a) the sale of the Outstanding Notes and the
application of the related net proceeds, including to redeem $175.0 million
in aggregate principal amount of senior secured notes and to establish a
defeasance trust account for junior subordinated notes of the Authority;
(b) the release of restricted cash balances to the Authority in the amount
of $81.3 million; and (c) the closing of the Bank Credit Facility with no
loan amounts drawn.
(7) The Authority created a defeasance trust account as of March 3, 1999 and
deposited into such defeasance trust cash or government securities
estimated to be sufficient to redeem its junior subordinated notes. The
Authority has outstanding $40.0 million of junior subordinated notes
bearing interest at 15% per annum and $50.0 million of junior subordinated
notes bearing interest at prime rate plus 1% per annum. These notes do not
pay cash interest. The Authority will redeem these notes on January 1,
2000, the first permitted redemption date, at a price of 100% of the
principal amount plus accrued and unpaid interest less $500,000.
(8) Actual and as adjusted amounts include $90.0 million of principal and $35.2
million of accrued and unpaid interest related to junior subordinated notes
which were defeased as of March 3, 1999 and will be redeemed on January 1,
2000.
(9) As adjusted amounts reflect a tender premium of $37.9 million for
redemption of senior secured notes.
14
<PAGE>
RISK FACTORS
You should carefully consider the information below, as well as all other
information provided to you in this Prospectus before tendering your
Outstanding Notes in the Exchange Offers.
High Degree of Leverage; Restrictive Loan Covenants
The Authority's substantial indebtedness could adversely affect its
financial health and prevent it from fulfilling its obligations under the
Exchange Notes.
The Authority currently has and will continue to have a significant amount
of indebtedness. Total debt and capital lease obligations (including accrued
and unpaid interest on junior subordinated notes) as of December 31, 1998 were
$328.0 million. As of the same date and as adjusted to reflect (1) the sale of
the Outstanding Notes and the application of the related net proceeds,
including the redemption of $175.0 million in aggregate principal amount of
senior secured notes and the establishment of a defeasance trust account for
the Authority's junior subordinated notes; (2) the release of restricted cash
balances to the Authority in the amount of $81.3 million; and (3) the closing
of the Bank Credit Facility with no loan amounts drawn, total debt and capital
lease obligations would have been $653.0 million. In addition, the Authority
has borrowing capacity under the Bank Credit Facility of up to $500.0 million.
If the Authority had fully drawn all possible amounts available under the Bank
Credit Facility, total debt and capital lease obligations would be
approximately $1.2 billion.
The Authority's substantial indebtedness could have important consequences
to you. For example, it could
. make it more difficult for the Authority to satisfy its obligations with
respect to the Exchange Notes;
. increase the Authority's vulnerability to adverse economic and industry
conditions;
. limit the Authority's ability to fund future working capital, capital
expenditures and other general corporate requirements;
. require the Authority to dedicate a substantial portion of its cash flow
from operations to payments on the Authority's indebtedness, thereby
reducing the availability of the Authority's cash flow to fund working
capital, capital expenditures and other general corporate purposes;
. limit the Authority's flexibility in planning for, or reacting to,
changes in its business and the industry in which the Authority
operates;
. place the Authority at a disadvantage compared to its competitors that
have less debt; and
. limit, along with the financial and other restrictive covenants in the
Authority's other indebtedness, among other things, the Authority's
ability to borrow additional funds.
Failure by the Authority to comply with covenants in its debt instruments
could result in an event of default which, if not cured or waived, could have a
material adverse effect on the Authority. See "Description of Exchange Notes--
Description of the Senior Exchange Notes--Repurchase at the Option of Holders--
Change of Control," "--Description of the Senior Subordinated Exchange Notes--
Repurchase at the Option of Holders--Change of Control" and "Description of
Other Indebtedness--Bank Credit Facility."
The Bank Credit Facility includes covenants that, among other things,
restrict the Authority's ability to do the following:
. pay dividends and make other restricted payments;
. incur additional indebtedness;
15
<PAGE>
. grant liens, other than liens created under the new Bank Credit Facility
and certain other permitted liens;
. sell material assets; and
. make capital expenditures (subject to amounts for the casino expansion).
The Bank Credit Facility will also require the Authority to maintain
specified financial ratios, including interest coverage and leverage ratios and
not to exceed specified fixed ratios of senior indebtedness to EBITDA. There
can be no assurance that these requirements will be met in the future. If they
are not, the holders of the indebtedness under the Bank Credit Facility would
be entitled to declare such indebtedness immediately due and payable. See
"Description of Other Indebtedness--Bank Credit Facility."
Unsecured Ranking and Subordination to Existing Indebtedness
The Authority's obligations under the Indentures are not secured. Your right
to receive payments on the Senior Exchange Notes will effectively be
subordinated to the Authority's Bank Credit Facility and other secured
indebtedness. Your right to receive payments on the Senior Subordinated
Exchange Notes will be junior to the Authority's existing and future senior
indebtedness, including the Bank Credit Facility and the Senior Exchange Notes.
Senior Exchange Notes
The Senior Exchange Notes are general unsecured obligations of the Authority
and rank pari passu in right of payment with all current and future unsecured
senior indebtedness of the Authority. However, borrowings under the Bank Credit
Facility and other equipment financing arrangements are secured by first
priority liens on substantially all of the assets of the Authority. As a
result, upon any distribution to creditors in a bankruptcy, liquidation or
reorganization or similar proceeding relating to the Authority or the Tribe,
the holders of secured debt may be paid in full in cash before any payment may
be made with respect to the Senior Exchange Notes. Assuming the Authority had
fully drawn all possible amounts under the Bank Credit Facility on December 31,
1998, the Senior Exchange Notes would have been subordinated to approximately
$500 million of senior secured debt. In addition, under the Relinquishment
Agreement with Trading Cove Associates, beginning on January 1, 2000 and ending
on December 31, 2014, the Authority has agreed to pay Trading Cove Associates
5% of Mohegan Sun's gross revenues (calculated under the terms of the
Relinquishment Agreement) to compensate Trading Cove Associates for terminating
its management rights. 50% of this payment ranks equal in right of payment to
the Senior Exchange Notes and the remaining 50% of this payment ranks junior in
right of payment to the Senior Exchange Notes.
Senior Subordinated Exchange Notes
In the event of a bankruptcy, liquidation or reorganization or similar
proceeding relating to the Authority or the Tribe, holders of the Senior
Subordinated Exchange Notes will participate with trade creditors and all other
holders of subordinated indebtedness in the assets remaining after the
Authority or the Tribe has paid all of the senior debt, including the Senior
Exchange Notes. However, because the Senior Subordinated Notes Indenture
requires that amounts otherwise payable to the holders of the Senior
Subordinated Exchange Notes in a bankruptcy or similar proceeding be paid to
holders of designated senior debt instead, holders of the Senior Subordinated
Exchange Notes may receive less, ratably, than holders of trade payables in any
such proceedings. In any of these cases, the Authority or the Tribe may not
have sufficient funds to pay all creditors and holders of the Senior
Subordinated Exchange Notes may receive less, ratably, than the holders of
senior debt.
Assuming the Authority had fully drawn all possible amounts under the Bank
Credit Facility, the Senior Subordinated Exchange Notes would have been
subordinated to approximately $700 million of senior debt. The Authority will
be permitted to borrow substantial additional indebtedness, including senior
debt, in the future under the terms of the Indentures. In the event of a
liquidation, bankruptcy or a similar proceeding, the Senior
16
<PAGE>
Subordinated Exchange Notes are subordinated to 50% of the Authority's payment
obligations under the Relinquishment Agreement that are then due and owing, but
are effectively not subordinated to such payment obligations that are not yet
due under the Relinquishment Agreement since the payment obligations under the
Relinquishment Agreement cannot be accelerated by their terms and have no
blockage rights as Designated Senior Debt. In addition, the Senior Subordinated
Exchange Notes rank equally to the remaining 50% of the Authority's payment
obligations under the Relinquishment Agreement that are then due and owing, but
are effectively senior to such payment obligations that are not yet due under
the Relinquishment Agreement since payment obligations under the Relinquishment
Agreement cannot be accelerated by their terms.
Difficulties in Enforcing Obligations Against the Authority
Your ability to enforce your rights against the Authority is limited by the
Tribe's sovereign immunity.
Although the Tribe and the Authority have sovereign immunity and may not be
sued without their consent, both the Tribe and the Authority have granted a
limited waiver of sovereign immunity and consent to suit in connection with the
Exchange Notes, the Indentures and the other documents related to the Exchange
Notes. Such waiver includes suits against the Authority to enforce its
obligation to repay the Exchange Notes. If such waiver of sovereign immunity is
held to be ineffective, the Trustees (as defined) and the holders of the
Exchange Notes could be precluded from judicially enforcing their rights and
remedies. Generally, waivers of sovereign immunity have been held to be
enforceable against Indian tribes. Neither the Authority nor the Tribe has
waived sovereign immunity from private civil suits, including violations of the
federal securities laws. For this reason, an investor may not have any remedy
against the Authority or the Tribe for violations of federal securities laws.
The Tribe's Constitution has established a special court, the Gaming
Disputes Court, to rule on disputes with respect to Mohegan Sun, including any
disputes relating to the Notes and the Indentures. The Gaming Disputes Court
must consist of at least four judges, none of whom may be members of the Tribal
Council or their families 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 Division
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 Mohegan reservation. Moreover the
federal and state courts, under the doctrines of comity and exhaustion of
tribal remedies, may be required (1) to defer to the jurisdiction of the Gaming
Disputes Court, or (2) to require that any plaintiff exhaust its remedies in
the Gaming Disputes Court before bringing any action in the federal or state
court. Thus, there may be no federal or state court forum with respect to a
dispute relating to the Exchange Notes or the Indentures. In addition, the
Authority may not be subject to the federal bankruptcy laws. Thus, no assurance
can be given that, if an event of default occurs under the Indentures, any
forum will be available to the holders of the Exchange Notes other than the
Gaming Disputes Court. In such a court, there are few 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 Tribal officials to carry out such judgment. In
addition, the land under the casino facility is owned by the United States in
trust for the Tribe, and creditors of the Authority or the Tribe may not force
or obtain title to the land. See "Mohegan Tribe of Indians of Connecticut--
Gaming Disputes Court."
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, before 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 Branch of the Gaming Disputes Court that the proposed
amendment would constitute an impermissible impairment of contract. Further,
the Tribal Constitution prohibits
17
<PAGE>
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. The Tribe has approximately 750 registered voters.
Amendment to any of such provisions of the Tribe's Constitution could adversely
affect the ability of the holders of the Exchange Notes to enforce the
obligations of the Authority on the Exchange Notes.
Exclusive Reliance on Gaming Revenue for Debt Service Payments
Mohegan Sun's failure to generate sufficient cash flow could prevent the
Authority from fulfilling its obligations under the Exchange Notes.
The Authority relies on revenues from the gaming operations of Mohegan Sun
to meet its debt service requirements. Such operations are subject to many
financial, economic, political, competitive and regulatory factors beyond the
Authority's control. If Mohegan Sun is unable to generate sufficient cash flow,
the Authority 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.
Risks of Expansion
Failure to complete Mohegan Sun's expansion on budget and on time could
adversely affect the financial health of the Authority.
Construction projects such as the expansion of Mohegan Sun are inherently
subject to significant development and construction risks. These include the
following:
. labor disputes;
. shortages of material and skilled labor;
. weather interference;
. engineering problems;
. environmental problems (including asbestos, lead and hazardous waste
removal);
. fire, flood and other natural disasters; and
. geological, construction, demolition, excavation, regulatory and/or
equipment problems.
All of these risks could cause unanticipated cost increases. Although we
have chosen a developer and have preliminary plans, the final plans for the
expansion are still under development. The actual cost and scope of the project
will be dependent upon the final plans. The Tribe expects the expansion to cost
approximately $750 million (excluding capitalized interest) and has adopted a
formal resolution capping the expansion budget at $800 million to account for
any unforeseen design changes or enhancements. In addition, the Tribe has
established a $40 million construction reserve account that, in some
circumstances, will be used to pay for costs in excess of the expansion budget.
The anticipated construction costs and completion dates for the expansion
are based on budgets, conceptual design documents and schedule estimates
prepared by Trading Cove Associates for the Authority with the assistance of
certain architects and contractors. The final amount of the project is subject
to modification based upon the occurrence of particular events, such as design
change order delays. Construction in the northeastern United States is also
subject to a number of weather related risks. Long winters and severe or
unexpected rain, storms or other bad weather may delay completion and/or
increase the costs of the construction.
18
<PAGE>
The expansion is scheduled to be completed in the fall of 2001. There can be
no assurance that the expansion facilities will commence operations on schedule
or that construction costs for the expansion will not exceed budget. Failure to
complete the expansion within the budget or on schedule may have a material
adverse effect on the results of Mohegan Sun's operations and the Authority's
financial condition.
Although construction activities related to the expansion of Mohegan Sun are
planned to minimize disruption, construction noise and debris and the temporary
closing of some facilities may disrupt Mohegan Sun's current operations.
Unexpected construction delays could exacerbate or magnify these disruptions.
There can be no assurance that construction of the expansion will not have a
material adverse effect the Authority's results of operations.
Failure to Obtain Funds to Complete Expansion
In the event Mohegan Sun fails to achieve expected results, the Authority
may not have sufficient funds to complete Mohegan Sun's expansion.
The Authority expects that approximately $376.0 million of the Mohegan Sun
expansion will be financed from cash flow from operations through December 31,
2001. There can be no assurances that Mohegan Sun will generate sufficient cash
flow from operations to finance the Mohegan Sun expansion. If Mohegan Sun fails
to generate cash flow as expected, the expansion could be delayed, resulting in
a material adverse effect on the financial condition of the Authority.
Competition from Other Gaming Operations
Many competitors have greater resources than the Authority, and other Indian
tribes may receive approval to engage in casino gaming.
The gaming industry is highly competitive. Mohegan Sun currently competes
primarily with the Foxwoods Resort Casino and, to a lesser extent, with casinos
in Atlantic City, New Jersey. Foxwoods is approximately 10 miles from Mohegan
Sun and is the largest gaming facility in the United States in terms of total
gaming positions. In addition, Foxwoods offers a number of amenities that
Mohegan Sun does not have, including hotel accommodations, extensive retail
shopping and more expansive non-gaming entertainment offerings. Foxwoods has
been in operation for nearly seven years and may have greater financial
resources and greater operating experience than the Authority or the Tribe.
Upon the completion of the expansion, the Authority intends to broaden
Mohegan Sun's market beyond day-trip customers to include guests making
overnight stays at the resort. This means that Mohegan Sun will begin to
compete more directly for customers with casinos in Atlantic City, New Jersey
and, to a lesser extent, gaming resorts such as those on the Gulf Coast of
Mississippi and Las Vegas, Nevada. Many of these casinos and other resorts have
greater resources and greater name recognition than Mohegan Sun.
Under current law, outside of Atlantic City, New Jersey, casino gaming in
the northeastern United States may be conducted only by federally recognized
Indian tribes operating under federal Indian gaming law. Currently, the Oneida
Indian Nation operates Turning Stone Casino Resort in Verona, New York,
approximately 270 miles from Mohegan Sun. The St. Regis Mohawk Tribe in
Hogansburg, New York near the Canadian border has entered into a gaming compact
with the state of New York. Although this tribe has yet to develop a gaming
facility, it has initiatives both on its reservation in Hogansburg (for which
it has had a gaming management contract approved by the National Indian Gaming
Commission) and at Monticello Raceway in the Catskills, 90 miles from New York
City (for which it has received Bureau of Indian Affairs Eastern Area Office
approval to take land into trust). Both initiatives still require additional
federal and state level approvals. In addition, at least two other federally
recognized tribes in New England are each seeking to establish gaming
operations. Several other tribes in New England are seeking federal recognition
as Native American peoples with the intent of establishing gaming operations. A
number of states, including Connecticut
19
<PAGE>
and New York, have also investigated legalizing casino gaming by non-Indians in
one or more locations. The Authority cannot predict whether any of these other
tribes or other efforts to legalize casino gaming will be successful in
establishing gaming operations, and if established, whether such gaming
operations will have a material adverse effect on the Authority's proposed
operations. See "Business--Competition."
Need to Obtain Construction Related Licenses and Permits
A failure to obtain necessary licenses and permits could delay the expansion
of Mohegan Sun thereby causing a material adverse effect on operating results.
No assurances can be given that the required licenses, permits or other
approvals for the expansion of Mohegan Sun will be issued. Even if issued, such
licenses, permits or other approvals could have conditions or restrictions that
could adversely affect the completion of the expansion. The failure to obtain
any of these licenses, permits or other approvals in a timely manner may delay,
restrict or prevent the expansion from being completed as contemplated herein.
See "Government Regulation."
Reliance on Nearby Markets
A downturn in the local economy could negatively impact the Authority's
financial performance.
Until and for some time after the expansion is completed, Mohegan Sun will
depend heavily on day-trip customers. Any downturn in the regional economy, the
entrance of new competitors or the expansion of existing competitors within
this local market could have a material adverse effect on the Authority's
results of operations. See "--Competition From Other Gaming Operations."
Limited Operating History Associated with the Operation
Mohegan Sun is subject to the risks of a new business.
Mohegan Sun did not begin operations until October 12, 1996 and has many of
the same risks inherent in the establishment of a new business enterprise. In
addition, Mohegan Sun's limited operating history makes the prediction of the
Authority's future operating results difficult.
Management of Growth; Uncertainty of Future Expanded Operations
The transition to full management responsibility for the Authority coupled
with the risks associated with operating a substantially expanded facility
could have a material adverse effect on Mohegan Sun's future performance.
Mohegan Sun's profitability has been partially dependent upon the efforts
and skills of Trading Cove Associates. Trading Cove Associates will have legal
responsibility for overseeing and managing Mohegan Sun until December 31, 1999.
While the Authority has already assumed many of Mohegan Sun's day-to-day
management functions, on January 1, 2000, it will assume full management,
operation and maintenance responsibility of Mohegan Sun. There can be no
assurance that the Authority will be as successful managing Mohegan Sun as
Trading Cove Associates has been. See "Other Material Agreements."
Mohegan Sun, when expanded, will have significantly larger gaming
facilities, entertainment venues and retail space, as well as new hotel and
convention facilities. There can be no assurance that the Authority will be
successful in integrating the planned casino and resort expansion into Mohegan
Sun's current operations or in managing the expanded resort. The failure to
integrate and manage the new services and amenities successfully could have a
material adverse effect on the Authority's results of operations.
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Dependence on Key Personnel; Significant Change in Tribal Management
The loss of any key management member or any significant change in the
makeup of the Tribal Council could have a material adverse effect on Mohegan
Sun.
Mohegan Sun's success depends in large part on the continued service of key
management personnel, particularly William Velardo, the Authority's Executive
Vice President and General Manager, Mitchell Etess, the Authority's Senior Vice
President of Marketing, and Jeffrey Hartmann, the Authority's Chief Financial
Officer. The loss of the services of one or more of these individuals or other
key personnel could have a material adverse effect on the Authority's business,
operating results and financial condition. See "The Authority."
Additionally, Roland J. Harris serves as Chairman of the Tribal Council of
the Tribe and Chairman of the Management Board of the Authority. The Members of
the Tribal Council, including the Chairman, are elected by the Tribe every five
years. The next election is in October of 2000. The loss of Mr. Harris's
services, as well as a significant change in the composition of the Tribal
Council, could have a material adverse effect on the Authority and the
development of the Mohegan Sun expansion. See "Mohegan Tribe of Indians of
Connecticut."
Regulatory Redemption
Your Exchange Notes may be redeemed automatically if your ownership of the
Exchange Notes jeopardizes the Authority's gaming licenses.
The Authority will have the right to redeem the Exchange Notes if any holder
of Exchange Notes jeopardizes the Authority's gaming license by not having
required licenses or qualifications. The redemption price for these Exchange
Notes, without accrued interest, is equal to the lowest of the holder's cost,
the principal amount of such Exchange Notes or the average of the current
market price of such Exchange Notes. See "Description of Exchange Notes--
Description of the Senior Exchange Notes--Optional Redemption" and "Description
of Exchange Notes--Description of the Senior Subordinated Exchange Notes--
Optional Redemption."
Highly Regulated Industry
Changes in the law could have a material adverse effect on the Authority's
ability to conduct gaming.
Gaming on the Tribe's reservation is extensively regulated by federal, state
and tribal regulatory bodies, including the National Indian Gaming Commission
and agencies of the State of Connecticut (for example, the Division of Special
Revenue, the State Police and the Department of Liquor Control). As is the case
with any casino, changes in applicable laws and regulations could limit or
materially affect the types of gaming that may be conducted by the Authority
and the revenues realized therefrom.
In August 1996, federal legislation became effective, creating a nine-member
commission to examine and prepare a report within three years on the effects of
gambling, including gambling on riverboats, Indian reservations and at non-
Indian casinos. No prediction can be made as to what, if any, legislation might
arise from such a report if it is completed. Moreover, Congress has regulatory
authority over Indian affairs and can establish and change the terms upon which
Indian tribes may conduct gaming. Currently, the operation of all gaming on
Indian lands is subject to the Indian Gaming Regulatory Act of 1988. For the
past several years, legislation has been introduced in Congress with the intent
of modifying a variety of perceived problems with this act. Virtually all of
the proposals that have been seriously considered would be prospective in
effect and have contained clauses that would grandfather existing Indian gaming
operations such as Mohegan Sun. Bills have also been proposed, however, which
would have the effect of repealing many of the key provisions of the Indian
Gaming Regulatory Act and prohibiting the continued operation of particular
classes of gaming on specified Indian reservations in states where such gaming
is not otherwise allowed on a commercial basis.
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However, none of the substantive proposed amendments to the Indian Gaming
Regulatory Act have proceeded out of committee hearings to a vote by either the
House or the Senate.
While it is possible that retroactive legislation could be adopted forcing
the closure of existing Indian gaming enterprises, given the number of existing
gaming compacts and tribal gaming operations nationwide, we believe that it is
unlikely that Congress would enact such legislation without grandfathering
existing Indian gaming operations. Furthermore, such legislation would
certainly be challenged by us and other Indian gaming operations as an invalid
exercise of Congressional authority. However, if Congress passes prohibitory
legislation that does not include any grandfathering exemption for existing
tribal gaming operations, and if such legislation is sustained in the courts
against tribal challenge, the Authority's ability to meet its obligations to
creditors, including the holders of the Notes, would be doubtful.
Under federal law, gaming on Indian land is dependent on the permissibility
under state law of specified forms of gaming or similar activities. If the
State of Connecticut were to make various forms of gaming illegal or against
public policy, 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. If
Connecticut were to make gaming against public policy, it would forfeit the
substantial income ($276.2 million for the 12 months ended December 31, 1998)
derived from the gaming activities at Mohegan Sun and Foxwoods and the
resulting slot contributions to the state. See "Other Material Agreements--
Gaming Compact with the State of Connecticut."
Possible Environmental Liabilities
Risks of material environmental liability may remain as a result of
incomplete remediation of known environmental hazards.
The Authority currently incurs and may continue to incur costs to comply
with environmental requirements, such as those relating to discharges to air,
water and land, the handling and disposal of solid and hazardous waste, and the
cleanup of properties affected by hazardous substances. Under such
environmental requirements, 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. The owner or operator may
also 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. These 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 remediate such property
properly, 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 the
site. In addition, environmental requirements address the impacts of
development on wetlands areas. See "Business--The Expansion."
The site on which Mohegan Sun is located was formerly occupied by United
Nuclear Corporation, a naval products manufacturer of, among other things,
nuclear reactor fuel components. United Nuclear Corporation's facility was
officially decommissioned on June 8, 1994 when the Nuclear Regulatory
Commission confirmed that all licensable quantities of special nuclear material
had been removed from the site and that any residual special nuclear material
contamination was remediated according to an approved decommissioning plan.
From 1991 through 1993, United Nuclear Corporation commissioned
environmental audits and soil sampling programs which 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. In addition, initial construction at
the site involved extensive soil excavation
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and contaminated soils were removed during the excavation. The site currently
meets state remediation requirements.
Under the terms of United Nuclear Corporation's environmental certification
and indemnity agreement with the Department of the Interior (which took the
former United Nuclear Corporation land into trust for the Mohegan Tribe),
United Nuclear Corporation agreed to indemnify the Department for environmental
actions and expenses based on acts or conditions existing or occurring as a
result of United Nuclear Corporation's activities on the property.
Notwithstanding the foregoing, no assurance can be given (1) that the various
environmental reports or any other existing environmental studies revealed all
environmental liabilities, (2) that any prior owners or tenants did not create
any material environmental condition not known to us, (3) that future laws,
ordinances or regulations will not impose any material environmental liability,
or (4) that a material environmental condition does not otherwise exist on the
site.
Taxation of Indian Gaming
A change in the Authority's current tax-exempt status could have a material
adverse effect on the Authority's ability to repay its obligation under the
Exchange Notes.
Based on current interpretation of the tax code, neither the Tribe nor the
Authority is a taxable entity for purposes of federal income taxation. There
can be no assurance that Congress will not reverse or modify the exemption for
Indian tribes from federal income taxation.
Efforts have been made in Congress over the past several years to amend the
Internal Revenue Code to provide for taxation of the net income of tribal
business entities. These have included a House bill which would have taxed
gaming income earned by Indian tribes as unrelated business income subject to
corporate tax rates. Although no such legislation has been enacted, some could
be passed in the future. Future proposals or amendments in this area could
materially and adversely affect the market value of the Exchange Notes or the
Authority's ability to pay the principal and interest on the Exchange Notes.
Change of Control Events
The Authority may lack sufficient funds to effect a repurchase of the
Exchange Notes upon a change of control.
Upon the occurrence of specified change of control events, the Authority
will be required to offer to repurchase all then outstanding Exchange Notes.
The Authority may not have the ability to raise the funds necessary to finance
the change of control offer required by the Indentures.
Year 2000 Date Conversion
Failure by the Authority to address the Year 2000 problem adequately may
have a material adverse effect on results of operations.
The Authority is currently working to verify system readiness for the
processing of date-sensitive information by its computerized information
systems to the end of the century. The "Year 2000" problem impacts computer
programs and hardware timers using two digits (rather than four) to define the
applicable year. Any of the Authority's programs that have time-sensitive
functions may recognize a date using "00" as the year 1900 rather than 2000, or
not at all, which could result in miscalculations or system failures. The
Authority, like many companies, depends on fully operational computer systems
in all areas of its business. As a large facility in a relatively remote
location, Mohegan Sun is heavily dependent on a local infrastructure which may
not be adequate to take on the challenges of the Year 2000 problem. It is
especially dependent on that local infrastructure for critical services such as
incoming utilities and outgoing sewage. Additionally, the Authority is
dependent upon many vendors such as food and beverage suppliers, outside
software suppliers and system integrators to provide uninterrupted service for
the operation to run effectively.
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With the assistance of an outside consultant, the Authority has implemented
a Year 2000 program to provide an independent analysis of the Authority's Year
2000 preparedness and the adequacy of the Authority's Year 2000 plans. The
program includes inventorying entities, identifying problems, planning
compliance and implementation strategies, attempting to correct the problems
and testing the solutions.
As of March 31, 1999, Mohegan Sun was approximately 75% in conformance with
the GartnerGroup Year 2000 best practices model. The Authority anticipates
completion of the program by June 1999. Although there can be no assurance, it
is anticipated that remediation and verification to become Year 2000 compliant
will not exceed $1.0 million and will not have a material adverse impact on the
Authority's financial position, results of operations, or cash flow. While the
Authority's efforts are designed to be successful, because of the complexity of
the Year 2000 issues and the interdependence of organizations using computer
systems, there can be no assurance that the Authority's efforts, or those of a
third party with whom the Authority interacts, will be satisfactorily completed
in a timely fashion. This could result in a material adverse effect on future
operations. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations."
Certain Transfer Restrictions; No Prior Market for Exchange Notes; Failure to
Exchange the Outstanding Notes
Certain transfer restrictions and the failure of a market to develop could
affect the liquidity and price of your Exchange Notes. In the event you do not
exchange your Outstanding Notes, you cannot be assured of a continuation of a
trading market for the Outstanding Notes.
You may generally sell Exchange Notes without complying with the
registration requirements of the Securities Act, unless you are:
. an "affiliate" of the Company within the meaning of Rule 405 under the
Securities Act
. a broker-dealer that acquired Outstanding Notes as a result of market-
making or other trading activities
. a broker-dealer that acquired Outstanding Notes directly from us for
resale pursuant to Rule 144A or another available exemption under the
Securities Act
"Affiliates" of the Authority may sell Exchange Notes only in compliance
with the provisions of Rule 144 under the Securities Act or another available
exemption. The broker-dealers described above must deliver a prospectus in
connection with any resale of Exchange Notes.
The Exchange Notes constitute a new issue of securities for which no
established trading market exists. If Exchange Notes are traded after their
initial issuance, they may trade at a discount, depending upon the Authority's
financial condition, prevailing interest rates, the market for similar
securities and other factors beyond the Authority's control, including general
economic conditions. The Authority does not intend to apply for a listing or
quotation of the Exchange Notes on any securities exchange. The initial
purchasers of the Outstanding Notes have informed the Authority that they
intend to make a market in the Exchange Notes. However, the initial purchasers
have no obligation to do so, and may discontinue any market-making activities
at any time without notice. The Authority cannot assure you of the development
or liquidity of any trading market for the Exchange Notes following the
Exchange Offers.
The Authority has not registered nor does it intend to register the
Outstanding Notes under the Securities Act. Outstanding Notes that remain
outstanding after consummation of the Exchange Offers will therefore remain
subject to transfer restrictions under applicable securities laws. Unexchanged
Outstanding Notes will continue to bear a legend reflecting these restrictions
on transfer. Furthermore, the Authority has not conditioned the Exchange Offers
on receipt of any minimum or maximum principal amount of Outstanding Notes. As
Outstanding Notes are tendered and accepted in the Exchange Offers, the
principal amount of
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remaining Outstanding Notes will decrease. This decrease will reduce the
liquidity of the trading market for the Outstanding Notes. The Authority cannot
assure you of the liquidity, or even the continuation, of the trading market
for the Outstanding Notes following the Exchange Offers.
Risks of Not Complying with Exchange Offer Procedures
In order to receive Exchange Notes, you must follow the Exchange Offer
procedures.
You are responsible for complying with all Exchange Offer procedures. You
will only receive Exchange Notes in exchange for your Outstanding Notes if,
prior to the Expiration Date, you deliver the following to the appropriate
Exchange Agent:
. certificates for the Outstanding Notes or a book-entry confirmation of a
book-entry transfer of the Outstanding Notes into the Exchange Agent's
account at the Depository Trust Company ("DTC")
. the Letter of Transmittal (or a facsimile thereof), properly completed
and duly executed by you, together with any required signature
guarantees
. any other documents required by the Letter of Transmittal
You should allow sufficient time to ensure that the Exchange Agents receive
all required documents before the expiration of the Exchange Offers. Neither
the Authority nor the Exchange Agents have any duty to inform you of defects or
irregularities with respect to the tender of your Outstanding Notes for
exchange. See "The Exchange Offers."
Forward-Looking Statements
Differences between the Authority's expectations and actual future events
could lead to a material adverse effect on the Mohegan Sun Expansion.
Forward-looking statements are subject to risks, uncertainties and
assumptions about the Authority, and there can be no assurances about the
Authority's current expectations and projections about future events. The
uncertainties include
. the expansion and construction activities for the new casino, the new
hotel and the convention center and related upgrades and amenities;
. the financial performance of the existing casino;
. its dependence on existing management;
. its levels of leverage and ability to meet its debt service obligations;
. general domestic and global economic conditions;
. changes in federal or state tax laws or the administration of such laws;
. changes in gaming laws or regulations (including potential legalization
of gaming in some jurisdictions); and
. maintenance of licenses required under gaming laws and regulations and
construction permits and approvals required under applicable laws and
regulations.
If the Authority's estimates on these types of items differs from actual
future events, there could be a material adverse effects on future operations
and cash flow from those operations.
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THE EXCHANGE OFFERS
Purpose and Effect of the Exchange Offers
In connection with the sale of the Outstanding Notes, the Authority entered
into registration rights agreements with the initial purchasers of the
Outstanding Notes pursuant to which the Authority agreed to file and to use its
best efforts to cause to become effective with the Commission a registration
statement with respect to the exchange of the Outstanding Notes for Exchange
Notes with terms identical in all material respects to the terms of the
Outstanding Notes. Copies of these registration rights agreements have been
filed as an exhibit to the Registration Statement of which this Prospectus is a
part. The Exchange Offers are being made to satisfy the contractual obligations
of the Authority under the registration rights agreements.
By tendering Outstanding Notes in exchange for Exchange Notes, each holder
represents to the Authority that: (1) any Exchange Notes to be received by such
holder are being acquired in the ordinary course of such holder's business; (2)
such holder has no arrangement or understanding with any person to participate
in a distribution (within the meaning of the Securities Act) of Exchange Notes;
(3) such holder is not an "affiliate" of the Authority (within the meaning of
Rule 405 under the Securities Act), or if such holder is an affiliate, that
such holder will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable; (4) such holder
has full power and authority to tender, exchange, sell, assign and transfer the
tendered Outstanding Notes, (5) the Authority will acquire good, marketable and
unencumbered title to the tendered Outstanding Notes, free and clear of all
liens, restrictions, charges and encumbrances; and (vi) the Outstanding Notes
tendered for exchange are not subject to any adverse claims or proxies. Each
tendering holder also will warrant and agree that such holder will, upon
request, execute and deliver any additional documents deemed by the Authority
or the Exchange Agent to be necessary or desirable to complete the exchange,
sale, assignment, and transfer of the Outstanding Notes tendered pursuant to
the Exchange Offers. Each broker-dealer that receives Exchange Notes for its
own account in exchange for Outstanding Notes pursuant to the Exchange Offers,
where such Outstanding Notes were acquired by such broker-dealer as a result of
market-making or other trading activities, must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Notes. See
"Plan of Distribution."
The Exchange Offers are not being made to, nor will the Authority accept
tenders for exchange from, holders of Outstanding Notes in any jurisdiction in
which the Exchange Offers or the acceptance of the Exchange Notes would be in
violation of the securities or blue sky laws of that jurisdiction.
Unless the context requires otherwise, the term "holder" with respect to an
Exchange Offer means any person in whose name the Outstanding Notes are
registered on the books of the Authority or any other person who has obtained a
properly completed bond power from the registered holder, or any participant in
DTC whose name appears on a security position listing as a holder of
Outstanding Notes (which, for purposes of the Exchange Offers, include
beneficial interests in the Outstanding Notes held by direct or indirect
participants in DTC and Outstanding Notes held in definitive form).
Terms of the Exchange Offers
The Authority hereby offers, upon the terms and subject to the conditions
shown in this Prospectus and in the accompanying Letter of Transmittal, to
exchange $1,000 principal amount of Senior Exchange Notes for each $1,000
principal amount of Outstanding Senior Notes and $1,000 principal amount of
Senior Subordinated Exchange Notes for each $1,000 principal amount of
Outstanding Senior Subordinated Notes, properly tendered before the Expiration
Date and not properly withdrawn according to the procedures described below.
Holders may tender their Outstanding Notes in whole or in part in integral
multiples of $1,000 principal amount.
The form and terms of the Exchange Notes are the same as the form and terms
of the Outstanding Notes except that (1) the Exchange Notes have been
registered under the Securities Act and therefore are not subject to the
restrictions on transfer applicable to the Outstanding Notes and (2) holders of
the Exchange Notes will not be entitled to some of the rights of holders of the
Outstanding Notes under the registration rights agreement. The Exchange Notes
evidence the same indebtedness as the Outstanding Notes (which they replace)
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and will be issued pursuant to, and entitled to the benefits of, the Senior
Notes Indenture and the Senior Subordinated Notes Indenture.
Neither Exchange Offer is conditioned upon the other Exchange Offer or on
any minimum principal amount of Outstanding Notes being tendered for exchange.
The Authority reserves the right in its sole discretion to purchase or make
offers for any Outstanding Notes that remain outstanding after the Expiration
Date in either Exchange Offer or, as shown under "--Conditions to the Exchange
Offers," to terminate, either or both of the Exchange Offers and, to the extent
permitted by applicable law, purchase Outstanding Notes in the open market, in
privately negotiated transactions or otherwise. The terms of any such purchases
or offers could differ from the terms of the Exchange Offers. As of the date of
this Prospectus, $200 million principal amount of Outstanding Senior Notes and
$300 million principal amount of Outstanding Senior Subordinated Notes are
outstanding.
Holders of Outstanding Notes do not have any appraisal or dissenters' rights
in connection with the Exchange Offers. Outstanding Notes which are not
tendered for, or are tendered but not accepted in connection with, the Exchange
Offers will remain outstanding. See "Risk Factors--Risks of Not Complying With
Exchange Offer Procedures."
If any tendered Outstanding Notes are not accepted for exchange because of
an invalid tender, the occurrence of particular other events shown herein or
otherwise, certificates for any such unaccepted Outstanding Notes will be
returned, without expense, to the tendering holder thereof promptly after the
Expiration Date.
Holders who tender Outstanding Notes in connection with the Exchange Offers
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 Outstanding Notes in connection with the Exchange Offers. The
Authority will pay all charges and expenses, other than specified applicable
taxes. See "--Fees and Expenses."
THE AUTHORITY MAKES NO RECOMMENDATION TO THE HOLDERS OF THE OUTSTANDING
NOTES AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION OF
THEIR OUTSTANDING NOTES IN THE EXCHANGE OFFERS. IN ADDITION, NO ONE HAS BEEN
AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF THE OUTSTANDING NOTES
MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE EXCHANGE OFFERS,
AND, IF SO, THE AGGREGATE AMOUNT OF OUTSTANDING NOTES TO TENDER AFTER READING
THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL AND CONSULTING WITH THEIR
ADVISERS, IF ANY, BASED ON THEIR FINANCIAL POSITION AND REQUIREMENTS.
Expiration Date; Extensions; Amendments
The "Expiration Date" for each Exchange Offer is 5:00 p.m., New York City
time, on , 1999 unless the Exchange Offer is extended by the Authority.
(If the Authority does extend an Exchange Offer, the "Expiration Date" will be
the latest date and time to which that Exchange Offer is extended). Because
neither Exchange Offer is conditioned on the other Exchange Offer, it is
possible that one Exchange Offer could terminate before the other. To the
extent practicable, however, the Authority will seek to terminate both Exchange
Offers at the same time.
The Authority expressly reserves the right in its sole and absolute
discretion, subject to applicable law, at any time and from time to time, (1)
to delay the acceptance of the Outstanding Notes for exchange, (2) to terminate
an Exchange Offer (whether or not any Outstanding Notes have theretofore been
accepted for exchange) if the Authority determines, in its sole and absolute
discretion, that any of the events or conditions referred to under "--
Conditions to the Exchange Offers" has occurred or exists or has not been
satisfied with respect to such Exchange Offer, (3) to extend the Expiration
Date of an Exchange Offer and retain all Outstanding Notes tendered pursuant to
such Exchange Offer, subject, however, to the right of holders of Outstanding
Notes to withdraw their tendered Outstanding Notes as described under "--
Withdrawal Rights," and (4) to waive any condition or otherwise amend the terms
of an Exchange Offer in any respect. If an
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Exchange Offer is amended in a manner determined by the Authority to constitute
a material change, or if the Authority waives a material condition of such
Exchange Offer, the Authority will promptly disclose such amendment by means of
a Prospectus Supplement that will be distributed to the registered holders of
the affected Outstanding Notes, and the Authority will extend the Exchange
Offer to the extent required by Rule 14e-1 under the Exchange Act.
Any such delay in acceptance, termination, extension or amendment will be
followed promptly by oral or written notice thereof to the Exchange Agent for
such Exchange Offer (any such oral notice to be promptly confirmed in writing)
and by making a public announcement, and such announcement in the case of an
extension will be made no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date. Without limiting
the manner in which the Authority may choose to make any public announcement,
and subject to applicable laws, the Authority shall have no obligation to
publish, advertise or otherwise communicate any such public announcement other
than by issuing a release to an appropriate news agency.
Acceptance for Exchange and Issuance of Exchange Notes
Upon the terms and subject to the conditions of each Exchange Offer, the
Authority will exchange, and will issue to the relevant Exchange Agent,
Exchange Notes for Outstanding Notes validly tendered and not withdrawn
(pursuant to the withdrawal rights described under "Withdrawal Rights")
promptly after the Expiration Date.
In all cases, delivery of Exchange Notes in exchange for Outstanding Notes
tendered and accepted for exchange pursuant to each Exchange Offer will be made
only after timely receipt by the relevant Exchange Agent of (1) Outstanding
Notes or a book-entry confirmation of a book-entry transfer of Outstanding
Notes into the appropriate Exchange Agent's account at DTC, (2) the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, and (3) any other documents required by the
Letter of Transmittal. Accordingly, the delivery of Exchange Notes might not be
made to all tendering holders at the same time, and will depend upon when
Outstanding Notes, book-entry confirmations with respect to Outstanding Notes
and other required documents are received by the relevant Exchange Agent.
The term "book-entry confirmation" means a timely confirmation of a book-
entry transfer of Outstanding Notes into the appropriate Exchange Agent's
account at DTC.
Subject to the terms and conditions of each Exchange Offer, the Authority
will be deemed to have accepted for exchange, and thereby exchanged,
Outstanding Notes validly tendered and not withdrawn as, if and when the
Authority gives oral or written notice to the relevant Exchange Agent (any such
oral notice to be promptly confirmed in writing) of the Authority's acceptance
of such Outstanding Notes for exchange pursuant to each Exchange Offer. The
Authority's acceptance for exchange of Outstanding Notes tendered pursuant to
any of the procedures described above will constitute a binding agreement
between the tendering holder and the Authority upon the terms and subject to
the conditions of the Exchange Offers. The Exchange Agents will act as agents
for the Authority for the purpose of receiving tenders of Outstanding Notes,
Letters of Transmittal and related documents, and as agents for tendering
holders for the purpose of receiving Outstanding Notes, Letters of Transmittal
and related documents and transmitting Exchange Notes to holders who validly
tendered Outstanding Notes. Such exchange will be made promptly after the
Expiration Date of each Exchange Offer. If for any reason the acceptance for
exchange or the exchange of any Outstanding Notes tendered pursuant to an
Exchange Offer is delayed (whether before or after the Authority's acceptance
for exchange of Outstanding Notes), or the Authority extends an Exchange Offer
or is unable to accept for exchange or exchange Outstanding Notes tendered
pursuant to an Exchange Offer, then, without prejudice to the Authority's
rights set forth herein, each Exchange Agent may, nevertheless, on behalf of
the Authority and subject to Rule 14e-1(c) under the Exchange Act, retain
tendered Outstanding Notes and such Outstanding Notes may not be withdrawn
except to the extent tendering holders are entitled to withdrawal rights as
described under "--Withdrawal Rights."
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Procedures for Tendering Outstanding Notes
Valid Tender
Except as set forth below, in order for Outstanding Notes to be validly
tendered pursuant to an Exchange Offer, either (1) (a) a properly completed and
duly executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees and any other required documents, must be received by the
appropriate Exchange Agent at the address set forth under "--Exchange Agents"
prior to the Expiration Date and (b) tendered Outstanding Notes must be
received by the Exchange Agents, or such Outstanding Notes must be tendered
pursuant to the procedures for book-entry transfer set forth below and a book-
entry confirmation must be received by the Exchange Agents, in each case prior
to the Expiration Date, or (2) the guaranteed delivery procedures set forth
below must be complied with.
If less than all of the Outstanding Notes are tendered, a tendering holder
should fill in the amount of Outstanding Notes being tendered in the
appropriate box on the Letter of Transmittal. The entire amount of Outstanding
Notes delivered to the Exchange Agents will be deemed to have been tendered
unless otherwise indicated.
If any Letter of Transmittal, endorsement, bond power, power of attorney, or
any other document required by the Letter of Transmittal is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing. Unless waived by the Authority,
evidence satisfactory to the Authority of such person's authority to so act
must also be submitted.
Any beneficial owner of Outstanding Notes that are held by or registered in
the name of a broker, dealer, commercial bank, trust company or other nominee
or custodian is urged to contact such entity promptly if such beneficial holder
wishes to participate in the Exchange Offers.
The method of delivery of Outstanding Notes, the Letter Of Transmittal and
all other required documents is at the option and sole risk of the tendering
holder. Delivery will be deemed made only when actually received by the proper
Exchange Agent. 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 timely delivery and proper insurance should be obtained. No
Letter of Transmittal or Outstanding Notes should be sent to the Authority.
Holders may request their respective brokers, dealers, commercial banks, trust
companies or nominees to effect these transactions for them.
Book-Entry Transfer
Each Exchange Agent will make a request to establish an account with respect
to the applicable Outstanding Notes at DTC for purposes of the applicable
Exchange Offer within two business days after the date of this Prospectus. Any
financial institution that is a participant in DTC's book-entry transfer
facility system may make a book-entry delivery of the Outstanding Notes by
causing DTC to transfer such Outstanding Notes into the relevant Exchange
Agent's account at DTC in accordance with DTC's procedures for transfers.
However, although delivery of Outstanding Notes may be effected through book-
entry transfer into the relevant Exchange Agent's account at DTC, the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees and any other required documents, must in any
case be delivered to and received by the relevant Exchange Agent at its address
set forth under "--Exchange Agents" prior to the Expiration Date, or the
guaranteed delivery procedure set forth below must be complied with.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO AN EXCHANGE
AGENT.
Signature Guarantees
Certificates for Outstanding Notes need not be endorsed and signature
guarantees on a Letter of Transmittal or a notice of withdrawal, as the case
may be, are unnecessary unless (a) a certificate for
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<PAGE>
Outstanding Notes is registered in a name other than that of the person
surrendering the certificate or (b) a registered holder completes the box
entitled "Special Issuance Instructions" or "Special Delivery Instructions" in
the Letter of Transmittal. In the case of (a) or (b) above, such certificates
for Outstanding Notes must be duly endorsed or accompanied by a properly
executed bond power, with the endorsement or signature on the bond power and on
the Letter of Transmittal or the notice of withdrawal, as the case may be,
guaranteed by a firm or other entity identified in Rule 17Ad-15 under the
Exchange Act as an "eligible guarantor institution," including (as such terms
are defined therein) (1) a bank, (2) a broker, dealer, municipal securities
broker or dealer or government securities broker or dealer, (3) a credit union,
(4) a national securities exchange, registered securities association or
clearing agency, or (5) a savings association that is a participant in a
Securities Transfer Association (each an "Eligible Institution"), unless
surrendered on behalf of such Eligible Institution. See Instruction 1 to the
Letter of Transmittal.
Guaranteed Delivery
If a holder desires to tender Outstanding Notes pursuant to an Exchange
Offer and the certificates for such Outstanding Notes are not immediately
available or time will not permit all required documents to reach the proper
Exchange Agent before the Expiration Date, or the procedures for book-entry
transfer cannot be completed on a timely basis, such Outstanding Notes may
nevertheless be tendered, provided that all of the following guaranteed
delivery procedures are complied with
(1) such tenders are made by or through an Eligible Institution;
(2) prior to the Expiration Date, the relevant Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form accompanying the Letter of
Transmittal, setting forth the name and address of the holder of Outstanding
Notes and the amount of Outstanding Notes tendered, stating that the tender is
being made thereby and guaranteeing that within three New York Stock Exchange
trading days after the date of execution of the Notice of Guaranteed Delivery,
the certificates for all physically tendered Outstanding Notes, in proper form
for transfer, or a book-entry confirmation, as the case may be, and any other
documents required by the Letter of Transmittal will be deposited by the
Eligible Institution with the proper Exchange Agent. The Notice of Guaranteed
Delivery may be delivered by hand, or transmitted by facsimile or mail to the
relevant Exchange Agent and must include a guarantee by an Eligible Institution
in the form set forth in the Notice of Guaranteed Delivery; and
(3) the certificates (or book-entry confirmation) representing all tendered
Outstanding Notes, in proper form for transfer, together with a properly
completed and duly executed Letter of Transmittal, with any required signature
guarantees and any other documents required by the Letter of Transmittal, are
received by the relevant Exchange Agent within three New York Stock Exchange
trading days after the date of execution of the Notice of Guaranteed Delivery.
Determination of Validity
All questions as to the form of documents, validity, eligibility (including
time of receipt) and acceptance for exchange of any tendered Outstanding Notes
will be determined by the Authority, in its sole discretion, which
determination shall be final and binding on all parties. The Authority reserves
the absolute right, in its sole and absolute discretion, to reject any and all
tenders it determines not to be in proper form or the acceptance for exchange
of which may, in the view of counsel to the Authority, be unlawful. The
Authority also reserves the absolute right, subject to applicable law, to waive
any of the conditions of either Exchange Offer as set forth under "--Conditions
to the Exchange Offers" or any defect or irregularity in any tender of
Outstanding Notes of any particular holder whether or not similar defects or
irregularities are waived in the case of other holders.
The Authority's interpretation of the terms and conditions of the Exchange
Offers (including the relevant Letter of Transmittal and the instructions
thereto) will be final and binding on all parties. No tender of Outstanding
Notes will be deemed to have been validly made until all defects or
irregularities with respect to such tender
30
<PAGE>
have been cured or waived. None of the Authority, any affiliates of the
Authority, the Exchange Agents or any other person shall be under any duty to
give any notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification.
Resales of Exchange Notes
Based on interpretations by the staff of the Commission, as set forth in no-
action letters issued to third parties unrelated to the Authority, the
Authority believes that holders of Outstanding Notes who exchange their
Outstanding Notes for Exchange Notes may offer for resale, resell and otherwise
transfer such Exchange Notes without compliance with the registration and
prospectus delivery provisions of the Securities Act. This would not apply,
however, to any holder that is a broker-dealer that acquired Outstanding Notes
as a result of market-making activities or other trading activities or directly
from the Authority for resale under an available exemption under the Securities
Act. Also, resale would only be permitted for Exchange Notes that are acquired
in the ordinary course of a holder's business, where such holder has no
arrangement or understanding with any person to participate in the distribution
of such Exchange Notes and such holder is not an "affiliate" of the Authority.
The staff of the Commission has not considered the Exchange Offers in the
context of a no-action letter, and there can be no assurance that the staff of
the Commission would make a similar determination with respect to the Exchange
Offers. Each broker-dealer that receives Exchange Notes for its own account in
exchange for Outstanding Notes under the Exchange Offers, where such
Outstanding Notes were acquired by such broker-dealer as a result of market-
making or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. See "Plan of
Distribution."
Withdrawal Rights
Except as otherwise provided herein, tenders of Outstanding Notes may be
withdrawn at any time prior to the Expiration Date of an Exchange Offer. In
order for a withdrawal to be effective, such withdrawal must be in writing and
timely received by the relevant Exchange Agent at its address set forth under
"--Exchange Agents" prior to the Expiration Date. Any such notice of withdrawal
must specify the name of the person who tendered the Outstanding Notes to be
withdrawn, the principal amount of Outstanding Notes to be withdrawn, and (if
certificates for such Outstanding Notes have been tendered) the name of the
registered holder of the Outstanding Notes as set forth on the Outstanding
Notes, if different from that of the person who tendered such Outstanding
Notes. If certificates for Outstanding Notes have been delivered or otherwise
identified to the Exchange Agent, the notice of withdrawal must specify the
serial numbers on the particular certificates for the Outstanding Notes to be
withdrawn and the signature on the notice of withdrawal must be guaranteed by
an Eligible Institution, except in the case of Outstanding Notes tendered for
the account of an Eligible Institution. If Outstanding Notes have been tendered
pursuant to the procedures for book-entry transfer set forth in "--Procedures
for Tendering Outstanding Notes," the notice of withdrawal must specify the
name and number of the account at DTC to be credited with the withdrawal of
Outstanding Notes and must otherwise comply with the procedures of DTC.
Withdrawals of tenders of Outstanding Notes may not be rescinded. Outstanding
Notes properly withdrawn will not be deemed validly tendered for purposes of an
Exchange Offer, but may be retendered at any subsequent time prior to the
Expiration Date of such Exchange Offer by following any of the procedures
described above under "--Procedures for Tendering Outstanding Notes."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Authority, in its
sole discretion, which determination shall be final and binding on all parties.
Neither the Authority, any affiliates of the Authority, the Exchange Agents or
any other person shall be under any duty to give any notification of any
defects or irregularities in any notice of withdrawal or incur any liability
for failure to give any such notification. Any Outstanding Notes which have
been tendered but which are withdrawn will be returned to the holder promptly
after withdrawal.
Interest on the Exchange Notes
Interest on the Senior Exchange Notes will be payable every six months on
January 1 and July 1 of each year at a rate of 8 1/8% per annum, commencing
July 1, 1999. The Senior Exchange Notes will mature on
31
<PAGE>
January 1, 2006. Interest on the Senior Subordinated Exchange Notes will be
payable every six months on January 1 and July 1 of each year at a rate of 8
3/4% per annum, commencing July 1, 1999.The Senior Subordinated Exchange Notes
will mature on January 1, 2009.
Conditions to the Exchange Offers
If any of the following conditions has occurred or exists or has not been
satisfied prior to the Expiration Date of an Exchange Offer, the Authority will
not be required to accept for exchange any Outstanding Notes and will not be
required to issue Exchange Notes in exchange for any Outstanding Notes. In
addition, the Authority may, at any time and from time to time, terminate or
amend an Exchange Offer (whether or not any Outstanding Notes have theretofore
been accepted for exchange) or may waive any conditions to or amend an Exchange
Offer.
. A change in the current interpretation by the staff of the Commission
which permits resale of Exchange Notes as described about under "--
Resales of Exchange Notes."
. The institution or threat of an action or proceeding in any court or by
or before any governmental agency or body with respect to the Exchange
Offers which, in the Authority's judgment, would reasonably be expected
to impair the ability of the Authority to proceed with the Exchange
Offers.
. The adoption or enactment of any law, statute, rule or regulation which,
in the Authority's judgment, would reasonably be expected to impair the
ability of the Authority to proceed with the Exchange Offers.
. The issuance of a stop order by the Commission or any state securities
authority suspending the effectiveness of the Registration Statement, or
proceedings for that purpose.
. Failure to obtain any governmental approval, which the Authority
considers necessary for the consummation of the Exchange Offers as
contemplated hereby.
. Any change or development involving a prospective change in the business
or financial affairs of the Authority which the Authority thinks might
materially impair its ability to proceed with the Exchange Offers.
If the Authority determines in its sole and absolute discretion that any of
the foregoing events or conditions has occurred or exists or has not been
satisfied at any time prior to an Expiration Date, the Authority may, subject
to applicable law, terminate the applicable Exchange Offer (whether or not any
Outstanding Notes have theretofore been accepted for exchange) or may waive any
such condition or otherwise amend the terms of an Exchange Offer in any
respect. If such waiver or amendment constitutes a material change to an
Exchange Offer, the Authority will promptly disclose such waiver or amendment
by means of a prospectus supplement that will be distributed to the registered
holders of the applicable Outstanding Notes. In this case, the Authority will
extend the applicable Exchange Offer to the extent required by Rule 14e-1 under
the Exchange Act.
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<PAGE>
Exchange Agents
First Union National Bank has been appointed as the Senior Exchange Agent,
State Street Bank and Trust Company has been appointed as the Senior
Subordinated Exchange Agent. Delivery of the Letters of Transmittal and any
other required documents, questions, requests for assistance, and requests for
additional copies of this Prospectus or of the Letter of Transmittal should be
directed to the appropriate Exchange Agent as follows:
Exchanging Outstanding Senior Notes for Senior Exchange Notes
By Facsimile
(704) 590-7626
Confirm by telephone: (704) 590-7408
By Hand or Overnight Courier
First Union National Bank
1525 W.T. Harris Boulevard
Charlotte, North Carolina 28288-1153
Attention: Corporate Trust Department
By Mail
First Union National Bank
1525 W.T. Harris Boulevard
Charlotte, North Carolina 28288-1153
Attention: Corporate Trust Department
Exchanging Outstanding Senior Subordinated Notes for Senior Subordinated
Exchange Notes
By Facsimile
(617) 664-5290
Attention: Customer Service
Confirm by telephone: (617) 664-5249
By Hand or Overnight Courier
State Street Bank and Trust Company
Corporate Trust Department
Two International Place--4th Floor
Boston, MA 02110
Attention: Ralph Jones
By Mail
State Street Bank and Trust Company
Corporate Trust Department
P.O. Box 778
Boston, MA 02102
Attention: Ralph Jones
DELIVERY TO OTHER THAN THE ABOVE ADDRESSES OR FACSIMILE NUMBERS WILL NOT
CONSTITUTE A VALID DELIVERY. DELIVERY TO THE WRONG EXCHANGE AGENT WILL NOT
CONSTITUTE DELIVERY.
33
<PAGE>
Fees and Expenses
The expenses of soliciting tenders will be borne by the Authority. The
principal solicitation is being made by mail. Additional solicitation may be
made personally or by telephone or other means by officers, directors or
employees of the Authority.
The Authority has not retained any dealer-manager or similar agent in
connection with the Exchange Offers and will not make any payments to brokers,
dealers or others soliciting acceptances of the Exchange Offers. The Authority
has agreed to pay the Exchange Agents reasonable and customary fees for their
services and will reimburse them for reasonable out-of-pocket expenses in
connection therewith. The Authority will also pay brokerage houses and other
custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of this Prospectus and related documents
to the beneficial owners of Outstanding Notes, and in handling or tendering for
their customers.
Holders who tender their Outstanding Notes for exchange will not be
obligated to pay any transfer taxes in connection therewith, except that if
Exchange Notes are to be delivered to, or are to be issued in the name of, any
person other than the registered holder of the Outstanding Notes tendered, or
if a transfer tax is imposed for any reason other than the exchange of
Outstanding Notes in connection with the Exchange Offers, then the amount of
any such transfer tax (whether imposed on the registered holder or any other
persons) will be payable by the tendering holder. If satisfactory evidence of
payment of such transfer tax or exemption therefrom is not submitted with the
Letter of Transmittal, the amount of such transfer tax will be billed directly
to such tendering holder.
USE OF PROCEEDS
The Exchange Offers are intended to satisfy certain obligations of the
Authority under the registration agreements. The Authority will not receive any
cash proceeds from the issuance of the Exchange Notes. In consideration for
issuing the Exchange Notes as contemplated in this Prospectus, the Authority
will receive, in exchange, an equal number of Outstanding Notes in like
principal amount. The form and terms of the Exchange Notes are identical in all
material respects to the form and terms of the Outstanding Notes, except as
otherwise described in the section entiteled "The Exchange Offers--Terms of the
Exchange Offers." The Outstanding Notes surrendered in exchange for the
Exchange Notes will be retired and cancelled and cannot be reissued. A portion
of the proceeds from the offering of the Outstanding Notes has been used to
redeem the 13 1/2% Senior Secured Notes and defease junior subordinated notes.
The remainder of these proceeds will be used to fund the Mohegan Sun expansion
and for general corporate purposes.
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<PAGE>
CAPITALIZATION
The following table shows, as of December 31, 1998, the Authority's actual
and adjusted cash balance and capitalization, including the application of the
net proceeds to the Authority from the offering of the Outstanding Notes. This
table should be read in conjunction with the more detailed information and
financial statements appearing elsewhere in this Prospectus.
<TABLE>
<CAPTION>
December 31, 1998
-------------------------
Actual As Adjusted(1)
--------- --------------
(in thousands)
<S> <C> <C>
Cash and cash equivalents........................... $ 109,578 $ 244,978
Junior Subordinated Notes defeasance trust assets... -- 135,700
========= =========
Debt (including current maturities of debt and
capital lease obligations)
Bank Credit Facility.............................. $ -- $ --
13 1/2% Senior Secured Notes...................... 175,000 --
Junior Subordinated Notes(2)...................... 125,191 125,191
Outstanding Senior Notes.......................... -- 200,000
Outstanding Senior Subordinated Notes............. -- 300,000
Equipment financing............................... 27,807 27,807
--------- ---------
Total debt and capital lease obligations........ 327,998 652,998
Total capital(3).................................... (372,300) (410,200)
--------- ---------
Total capitalization(4)............................. $ (44,302) $ 242,798
========= =========
</TABLE>
- --------
(1) As adjusted amounts reflect (a) the sale of the Outstanding Notes and the
application of the related net proceeds, including the redemption of
$175.0 million in aggregate principal amount of the 13 1/2% Senior Secured
Notes and the establishment of a defeasance trust account for the junior
subordinated notes of the Authority; (b) the release of restricted cash
balances to the Authority in the amount of $81.3 million; and (c) the
closing of the Bank Credit Facility with no loan amounts drawn.
(2) This amount reflects $90.0 million of principal and $35.2 million of
accrued and unpaid interest.
(3) The Authority, in accordance with FASB 5, has recorded a non-cash expense
and liability for the estimated present value of the Authority's future
Relinquishment Agreement payment obligations. These payments are based on
the amount of gross revenue generated by the Authority. As of September
30, 1998, the present value of this liability was estimated at $549.1
million, of which $419.1 million was reflected as an extraordinary item in
the statements of income (loss) and $130.0 million was capitalized on the
balance sheet as trademarks and other intellectual property acquired as
part of the Relinquishment Agreement. Recording this liability has created
negative capital as of September 30, 1998. This liability will be
reassessed periodically and may require additional non-cash adjustments to
be recorded in the statement of income (loss). The estimated liability has
not changed as of December 31, 1998. See the Authority's financial
statements and the accompanying notes and "Other Material Agreements--
Relinquishment Agreement with Trading Cove Associates."
(4) Total capitalization is the sum of total debt, capital lease obligations
and total capital.
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<PAGE>
SELECTED FINANCIAL DATA
The selected financial data shown below for the fiscal years ended September
30, 1997 and 1998 have been taken from the audited financial statements of the
Authority included in this Prospectus. The selected financial data for the
quarters ended December 31, 1997 and 1998 have been taken from the Authority's
unaudited interim financial statements included elsewhere in this Prospectus,
which in the opinion of the Authority's management include all adjustments
(including only normal, recurring adjustments) necessary for a fair
presentation of such information. Operating results for interim periods are not
necessarily indicative of the results that might be expected for the entire
fiscal year. The financial information shown below should be read in
conjunction with the financial statements and notes, "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and the other
financial and statistical data included in this Prospectus.
<TABLE>
<CAPTION>
Fiscal Year Ended Quarter Ended
September 30, December 31,
------------------- ------------------
1998 1997(1) 1998 1997
--------- -------- -------- --------
(Dollars in thousands except per
diem data)
<S> <C> <C> <C> <C>
Statements of Income (Loss) Data:
Revenues:
Gaming............................. $ 543,870 $440,540 $152,672 $119,798
Food and beverage.................. 55,544 46,925 15,013 12,596
Retail and other................... 36,328 21,489 13,287 10,025
Bingo operations................... 5,673 3,148 3,442 929
--------- -------- -------- --------
Gross revenues..................... 641,415 512,102 184,414 143,348
Promotional allowances............. (66,272) (44,265) (20,556) (16,206)
--------- -------- -------- --------
Net revenues....................... 575,143 467,837 163,858 127,142
--------- -------- -------- --------
Costs and Expenses:
Gaming............................. 237,946 209,086 66,590 56,307
Food and beverage.................. 21,212 24,168 5,386 4,940
Retail and other................... 24,607 16,282 9,113 6,390
Bingo operations................... 3,529 4,508 3,377 703
General and administration......... 87,529 78,366 27,622 23,740
Management fee..................... 47,442 23,243 13,645 7,404
Depreciation and amortization...... 17,528 32,155 4,669 4,800
--------- -------- -------- --------
Total costs and expenses......... 439,793 387,808 130,402 104,284
--------- -------- -------- --------
Income from operations............. 135,350 80,029 33,456 22,858
Other expense, net................. 47,772 43,342 12,195 11,130
--------- -------- -------- --------
Income before extraordinary items.. 87,578 36,687 21,261 11,728
Extraordinary items(2)............. (419,457) -- -- --
--------- -------- -------- --------
Net income (loss)(2)............... $(331,879) $ 36,687 $ 21,261 $ 11,728
========= ======== ======== ========
Ratio of earnings to fixed
charges(3).......................... 2.7x 1.8x 2.6x 1.9x
Other Data:
EBITDA(4)............................ $ 152,878 $112,184 $ 38,125 $ 27,658
EBITDAM(5)........................... 200,320 135,427 51,770 35,062
Capital expenditures................. 32,731 35,749 6,113 17,909
Slot machine win per day............. 361 319 401 311
Table game win per day............... 2,545 2,401 2,727 2,364
Slot machines........................ 3,029 2,962 3,025 2,996
Table games.......................... 150 149 150 148
Restaurant seats..................... 1,868 1,808 1,888 1,808
Casino square footage................ 176,500 167,500 176,500 167,500
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
September 30, December 31,
------------------- ------------
1998 1997 1998
--------- -------- ------------
(In thousands)
<S> <C> <C> <C> <C>
Balance Sheet Data:
Cash and cash
equivalents(6)......... $ 110,730 $ 88,844 $ 109,578
Total assets............ 554,480 386,974 554,746
Total debt and capital
lease obligations...... 326,106 316,146 327,998
Total capital........... (382,300) 21,931 (372,300)
</TABLE>
- --------
(1) The Authority commenced operations at Mohegan Sun on October 12, 1996.
(2) The Authority, in accordance with FASB 5, has recorded a non-cash expense
and liability for the estimated present value of the Authority's future
Relinquishment Agreement payment obligations. These payments are based on
the amount of gross revenue generated by the Authority. As of September 30,
1998, the present value of this liability was estimated at $549.1 million,
of which $419.1 million was reflected as an extraordinary item in the
statements of income (loss), and $130.0 million was capitalized on the
balance sheet as trademarks and other intellectual property acquired as
part of the Relinquishment Agreement. Recording this liability has created
negative capital as of September 30, 1998. This liability will be
reassessed periodically and may require additional non-cash adjustments to
be recorded in the statement of income (loss). The estimated liability has
not changed as of December 31, 1998. See the Authority's financial
statements and the accompanying notes and "Other Material Agreements--
Relinquishment Agreement with Trading Cove Associates."
(3) The ratio of earnings to fixed charges is determined by dividing (a)
earnings before extraordinary items and fixed charges by (b) fixed charges.
Fixed charges consist of total interest expense, including cash flow
participation interest relating to the 13 1/2% Senior Secured Notes.
(4) Earnings before extraordinary items, interest, income taxes, depreciation
and amortization. EBITDA is presented because we believe it is frequently
used by securities analysts, investors and other interested parties in the
gaming industry. However, EBITDA should only be read in conjunction with
all of the Authority's financial data summarized above and its financial
statements, including the notes, prepared in accordance with GAAP appearing
elsewhere herein. EBITDA should not be construed as an alternative either
to (a) income from operations (as determined in accordance with GAAP) as an
indicator of the Authority's operating performance or (b) cash flows from
operating activities (as determined according to GAAP) as a measure of
liquidity. In addition, because the Authority is an instrumentality of a
sovereign Indian nation, it is not subject to federal or state income tax.
(5) Earnings before extraordinary items, interest, income taxes, depreciation,
amortization and management fees. Management fees are paid by the Authority
to Trading Cove Associates pursuant to the terms of its management
agreement which terminates on January 1, 2000. Until such termination and
because management fees are subordinate to debt service, the Authority
believes EBITDAM is a supplemental financial measurement useful in the
evaluation of its gaming business.
(6) Including restricted cash balances of $74.5 million, $48.5 million, and
$81.3 million as of September 30, 1998, September 30, 1997 and December 31,
1998, respectively.
37
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Authority's sole business is the operation of Mohegan Sun, which opened
in October 1996. The growth in the Connecticut gaming market continues to
expand as well as Mohegan Sun's share in this market. The Authority is
currently undertaking an estimated $750 million expansion of Mohegan Sun.
Construction on the expansion began in March, 1999, and the expansion is
expected to be completed in the fall of 2001.
Results of Operations
Comparison of Operating Results for the Quarters Ended December 31, 1998 and
1997
For the quarter ended December 31, 1998, the Connecticut slot market grew at
a rate of 17.3%, reporting a gross slot win of $273.9 million, an increase of
$40.4 million over the period ended December 31, 1997. Mohegan Sun exceeded the
market's growth as it experienced a 30.3% increase in slot win over the same
period in the prior year. Slot revenues of $111.1 million for the quarter ended
December 31, 1998 reflected a slot win per unit per day of $401. Slot win per
unit per day for the quarter ended December 31, 1997 was $311. The slot win
growth of $25.8 million, or 30.3%, over the previous year reflected Mohegan
Sun's growth in slot win market share of 3.8% over the same period in the prior
year.
Gaming revenues totaled $152.7 million for the quarter ended December 31,
1998, marking an increase of $32.9 million, or 27.4%, over the quarter ended
December 31, 1997. The increase in gaming revenues is primarily due to a 17.3%
growth in the Connecticut slot market and the continued growth of the Mohegan
Sun customer base. Membership in the Mohegan Sun Player's Club totaled 975,933
and 663,932 guests as of December 31, 1998 and 1997, respectively.
For the quarter ended December 31, 1998, food and beverage revenues were
$15.0 million, indicating a growth of $2.4 million, or 19.2%, over the prior
year. Retail and other revenues were $13.3 million, a growth of $3.3 million,
or 32.5%, over the same period in the prior year. The increase in non-gaming
revenues is primarily attributed to increased utilization of complimentaries,
the addition of two new retail outlets to the facility in December 1997 and
April 1998 and the opening of the gas station facility in December 1998.
Bingo revenues totaled $3.4 million for the quarter ended December 31, 1998,
representing a $2.5 million increase over the same period in the prior year.
The increase is a result of an improvement in the overall awareness of the
bingo operation in the marketplace.
Promotional allowances totaled $20.6 million for the quarter ended December
31, 1998, representing a $4.4 million, or 26.8%, increase over the prior year.
The increase is attributable to a growth in the Mohegan Sun customer base as
well as an increased utilization of the Mohegan Sun Player's Club complimentary
program. Promotional allowances as a percentage of gaming revenue remained
constant at 13.5% for both the quarters ended December 31, 1998 and 1997.
Total costs and expenses were $130.4 million for the quarter ended December
31, 1998, an increase of $26.1 million, or 25.0%, over the prior year. The
increase in variable expenses is a direct result of an increase in volume as
gross revenues increased by $41.1 million, or 28.6%, partially offset by
improved operating efficiencies in costs such as rent expense and cost of goods
sold.
Gaming costs and expenses were $66.6 million for the quarter ended December
31, 1998, an increase of $10.3 million, or 18.2%, over the same period in the
prior year. The slot win contribution for the quarter ended December 31, 1998
totaled $28.4 million. This represents an increase of $6.4 million over the
same period in the prior year, which is directly attributable to the $25.8
million increase in slot revenues.
38
<PAGE>
General and administrative costs were $27.6 million for the quarter ended
December 31, 1998. The increase of $3.9 million, or 16.4%, is partially
attributable to marketing and advertising campaigns which increased the length
of stay and frequency of patron visits.
Management fees earned by Trading Cove Associates totaled $13.6 million for
the quarter ended December 31, 1998, an increase of $6.2 million, or 84.3%,
over the fees paid in last year's period. The increase in management fees is a
direct result of the increase in income from operations.
For the quarter ended December 31, 1998, depreciation and amortization
decreased by $131,000, or 2.7%, as compared with the same period in the prior
year. The decrease is primarily attributable to the expensing of financing
fees in fiscal 1998, partially offset by an increase in depreciation for newly
acquired capital assets such as the racebook and gas station facilities.
Income from operations for the quarter ended December 31, 1998 totaled
$33.5 million, compared to $22.9 million in the same period in the prior year.
The year over year increase of $10.6 million, or 46.4%, is primarily due to
the 27.4% increase in gaming revenues and improved operating efficiencies.
Other expense, net is comprised of interest expense minus interest and
other income. Interest expense of $12.8 million for the quarter ended December
31, 1998 represented an increase of $1.0 million, or 8.8%, over the same
period in the prior year. This increase was mainly attributable to an increase
in the cash flow participation interest owed to the holders of the 13 1/2%
Senior Secured Notes, which is derived as a percent of increased earnings
before extraordinary items, interest, taxes, depreciation, amortization and
management fees. The cash flow participation interest is paid to the holders
of the 13 1/2% Senior Secured Notes pursuant to the 13 1/2% Senior Secured
Notes indenture. Interest and other income was $615,000 for the quarter ended
December 31, 1998, a decrease of $33,000, or 5.1%, over the prior year's
period.
Comparison of Operating Results for the Fiscal Year Ended September 30, 1998
and the Period October 12, 1996 (date of commencement of operations) through
September 30, 1997
Net revenues for the fiscal year ended September 30, 1998 were $575.1
million compared with $467.8 million reported for the period ended September
30, 1997. The 22.9% increase in net revenues is primarily attributable to
increases in gaming revenue. As the Authority commenced operations on October
12, 1996, fiscal year 1998 included 12 more operating days than the period
ended September 30, 1997.
Gaming revenues totaled $543.9 million for the fiscal year ended September
30, 1998, marking an increase of $103.4 million, or 23.5%, over the period
ended September 30, 1997. The increase in gaming revenues is primarily due to
the growth in the Connecticut slot market and the continued growth of the
Mohegan Sun customer base. The Connecticut slot market grew at a rate of
18.7%, reporting a gross slot win of $1.1 billion, an increase of $168.8
million from fiscal year 1997. The slot win per unit per day for the fiscal
years ended September 30, 1998 and 1997 were $361 and $319, respectively. The
slot win growth of $83.9 million, or 26.8%, over the previous fiscal year
reflected Mohegan Sun's growth in slot win market share of 2.8% over the prior
year. Membership in the Mohegan Sun Player's Club totaled 908,821 and 587,952
guests as of September 30, 1998 and 1997, respectively.
For the fiscal year ended September 30, 1998, food and beverage revenues
were $55.5 million, indicating a growth of $8.6 million, or 18.4%, over the
prior year. Retail and other revenues were $36.3 million, a growth of $14.8
million, or 68.8%, over the prior year. These increases are attributed to
increased utilization of complimentaries and the addition of two new retail
outlets to the facility.
Bingo revenues totaled $5.7 million for the fiscal year ended September 30,
1998, representing a $2.6 million or 83.9%, increase over the prior year. The
increase is a result of improved operating efficiencies as well as an increase
in the overall awareness of the bingo operation.
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Promotional allowances totaled $66.3 million for the fiscal year ended
September 30, 1998, representing a $22.0 million, or 49.7%, increase over the
prior fiscal year. The increase is attributable to an increase in the customer
base as well as an increased utilization of the Mohegan Sun Player's Club
complimentary program. Additionally, promotional allowance as a percentage of
total revenues increased from 8.6% in fiscal 1997 to 10.3% in fiscal 1998.
Total costs and expenses were $439.8 million for the fiscal year ended
September 30, 1998, an increase of $52.0 million, or 13.4%, over the prior
fiscal year. The increase in expenses is a direct result of a 22.9% increase in
net revenues partially offset by improved operating efficiencies.
Gaming costs and expenses were $237.9 million for fiscal year 1998, an
increase of $28.9 million, or 13.8%, over the prior fiscal year. The slot win
contribution for the fiscal year ended September 30, 1998 totaled $102.3
million. This represents an increase of $21.6 million over the prior fiscal
year, which is directly attributable to increased slot revenues.
General and administrative costs were $87.5 million for the fiscal year
ended September 30, 1998. The increase of $9.2 million, or 11.7%, is partially
attributable to more aggressive marketing campaigns associated with efforts to
increase the frequency of patron visits. As a result, food, beverage and retail
expenses for the fiscal year increased by $5.4 million from the prior period.
For the fiscal year ended September 30, 1998, depreciation and amortization
decreased by $14.6 million, or 45.5%, over the prior period. The decrease is
primarily attributable to pre-opening expenditures of $18.2 million that were
fully depreciated over the first 12 months of business operations, partially
offset by an increase in depreciation for newly acquired capital assets.
The Authority incurred $47.4 million in management fees to Trading Cove
Associates for the fiscal year ended September 30, 1998, an increase of $24.2
million, or 104.1%, over fiscal year 1997. The increase in management fees was
a direct result of the increase in operating income.
Income from operations for the fiscal year ended September 30, 1998 totaled
$135.3 million, compared to $80.0 million in the previous period. The year over
year increase is primarily due to an increase in gaming revenues and improved
operating efficiencies.
Other expense, net is comprised of interest expense minus interest and other
income. Interest expense of $50.2 million for the fiscal year ended September
30, 1998 represented an increase of $5.0 million, or 11.2%, over the prior
year. This increase was mainly attributable to an increase in the cash flow
participation interest owed to the holders of the 13 1/2% Senior Secured Notes,
which is derived as a percent of increased earnings before extraordinary items,
interest, taxes, depreciation, amortization and management fees. The cash flow
participation interest is paid to the holders of the 13 1/2% Senior Secured
Notes pursuant to the 13 1/2% Senior Secured Notes indenture. Interest and
other income was $2.4 million for the fiscal year ended September 30, 1998, an
increase of $605,000, or 33.7%, over the prior year.
Extraordinary items include a loss on the early extinguishment of debt of
$332,000 due to the retirement of a capital lease and a $419.1 million expense
associated with an agreement with Trading Cove Associates whereby the Authority
will assume management control of Mohegan Sun. The relinquishment expense was
recorded as a one-time, non-cash charge pursuant to FASB 5 which requires that
the present value of future expenses be recorded as liabilities once they
become reasonably identifiable and quantifiable. This expense is based upon the
Authority's agreement to pay Trading Cove Associates 5% of gross revenues (as
determined under the terms of the Relinquishment Agreement) generated from
Mohegan Sun and from the planned expansion, beginning January 1, 2000 and
ending December 31, 2014. This amount was derived by discounting the present
value of 5% of projected revenues by the Authority's risk free investment rate.
Future payment obligations to Trading Cove Associates will be recorded as
adjustments to cash flow rather than expensed as
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incurred. However, future "centering" of the estimated present value of this
liability may require additional non-cash charges or credits similar in nature
to this one-time charge.
Liquidity, Capital Resources and Capital Spending
As of December 31, 1998, the Authority held cash and cash equivalents of
$28.3 million. Cash provided by operating activities for the quarters ended
December 31, 1998 and 1997 were $18.0 million and $10.0 million, respectively.
As of September 30, 1998 and 1997, cash and cash equivalents were $36.3 million
and $40.4 million, respectively. Cash provided by operating activities for the
fiscal year ended September 30, 1998 was $134.6 million, compared with $117.2
million for the fiscal year ended September 30, 1997.
The Authority's capital expenditures for the quarters ended December 31,
1998 and 1997 were $6.1 million and $17.9 million, respectively. For the
quarter ended December 31, 1998, capital expenditures included $2.9 million for
facility improvements and the acquisition of new capital assets, and $3.2
million for construction costs for the on-site gas station facility and the
preliminary stages of the planned expansion of Mohegan Sun. Capital spending
for the quarter ended December 31, 1997 of $17.9 million was comprised of $1.7
million for the purchase of new capital assets, $3.6 million in the settlement
of construction claims with Morse Diesel, Inc., related to the initial
construction of Mohegan Sun, and $12.6 million for the purchase of assets
previously held under operating leases.
During the quarters ended December 31, 1998 and 1997, the Authority, after
meeting its operating expenses and required deposits to reserve funds under the
indenture for the 13 1/2% Senior Secured Notes distributed a total of $11.3
million and $6.4 million, respectively, to the Tribe. As required under the
indenture for the 13 1/2% Senior Secured Notes, the Authority made an excess
cash purchase offer of $51.2 million to all holders of the 13 1/2% Senior
Secured Notes on December 30, 1998. The excess cash purchase offer expired, by
its terms, on January 29, 1999, and none of the holders of the 13 1/2% Senior
Secured Notes accepted the offer. On February 1, 1999, as required, the
Authority made an offer to repurchase in the amount of the excess cash purchase
offer to the holders of the junior subordinated notes. On February 1, 1999, the
holders of junior subordinated notes also rejected the offer. On February 2,
1999, as permitted by the 13 1/2% Senior Secured Notes indenture, the Authority
distributed the excess cash purchase offer amount of $51.2 million to the
Tribe.
On November 15, 1998 and 1997, the Authority made interest payments of $11.8
million each to the holders of the 13 1/2% Senior Secured Notes and payments of
$5.8 million and $4.1 million, respectively, in cash flow participation
interest. There were no cash interest payment requirements on the Junior
Subordinated Notes as interest is accrued and deferred until 50% of the 13 1/2%
Senior Secured Notes are offered to be repurchased or retired.
Capital expenditures were $32.7 million in fiscal year 1998, versus $35.7
million in fiscal year 1997. Capital expenditures for furniture, fixtures and
equipment were $14.0 million and $35.7 million in 1998 and 1997, respectively.
Additional capital expenditures made during 1998 of $8.4 million related to the
commencement of the renovation of the casino's north entry and construction of
the race book and gas station facilities, $0.3 million for preliminary spending
on Mohegan Sun's expansion plans, and $10.0 million for the acquisition of
equipment previously leased under operating leases.
During fiscal 1998, the Authority, after meeting its operating expenses and
required deposits to reserve funds under the indenture for the 13 1/2% Senior
Secured Notes, distributed a total of $72.4 million to the Tribe. As required
under the 13 1/2% Senior Secured Notes indenture, the Authority made an excess
cash purchase offer of $29.1 million to all holders of the 13 1/2% Senior
Secured Notes in January 1998. The holders of the 13 1/2% Senior Secured Notes
rejected the offer which was subsequently offered to the holders of junior
subordinated notes. The holders of junior subordinated notes also rejected the
offer, and, as a result, the funds were distributed to the Tribe.
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On February 7, 1998, the Authority finalized contract negotiations with
Trading Cove Associates to move forward with an expansion of Mohegan Sun, as
described more fully in this Prospectus. The expansion project is currently
estimated to cost $750 million (excluding capitalized interest). The Tribe has
issued a formal resolution capping the scope of the project to an expansion
budget of $800 million. The proposed development plans include approximately
100,000 square feet of additional gaming space, a luxury hotel facility with
approximately 1,500 rooms, an events center with seating for 10,000 guests and
a convention center with approximately 100,000 square feet of space. The
Authority also plans to include additional retail and restaurant facilities
into the design. Current plans would require significant upgrades and additions
to the facility's parking and infrastructure systems. The Tribe has chosen a
project developer, an architect, a site master planner, cost and scheduling
consultants and a retail consultant for the expansion. These firms, in
conjunction with the Tribe and the Authority, are in the process of developing
a construction budget and schedule. As a result, the estimated project cost is
still subject to adjustment. Mohegan Sun's expansion broke ground in March,
1999. Trading Cove Associates will oversee the planning, design and
construction of the expansion at Mohegan Sun and will receive compensation of
$14 million for such services.
Under the terms of the Relinquishment Agreement with Trading Cove
Associates, Trading Cove Associates will continue to manage the existing
property under its current management agreement until December 31, 1999. On
January 1, 2000, the Management Agreement between the Authority and Trading
Cove Associates will terminate, and the Authority will assume all day-to-day
management of Mohegan Sun. The Authority, as a result of the termination of the
Management Agreement, has agreed to pay to Trading Cove Associates 5% of gross
revenues (as defined in the Relinquishment Agreement), generated from Mohegan
Sun and from the planned expansion, beginning January 1, 2000 and ending
December 31, 2014. The liability for these relinquishment payments is estimated
at $549.1 million as of September 30, 1998. The Authority has netted against
its liability $130.0 million which has been capitalized on the balance sheet as
Trademarks and other intellectual property acquired as part of the
Relinquishment Agreement. Recording this liability has created negative capital
as of September 30, 1998. This liability will be reassessed periodically and
may require additional non-cash adjustments to be recorded in the statement of
income (loss). The estimated liability has not changed as of December 31, 1998.
For the remainder of fiscal 1999, the Authority expects capital expenditures
to be approximately $13.4 million on facility improvements and $52.6 million on
existing construction projects. These existing construction project
expenditures include $1.2 million relating to the completion of the gas station
facility and $51.4 million on the expansion of Mohegan Sun. Management believes
that existing cash balances and operating cash flow will provide the Authority
with sufficient resources to meet its capital expenditure requirements with
respect to current operations for at least the next 12 months.
On January 15, 1999, the Authority initiated the Tender Offer and Consent
Solicitation for the repurchase of all $175.0 million aggregate principal
amount outstanding of the 13 1/2% Senior Secured Notes. The offer was extended
twice and expired at 11:59 p.m., New York City time on February 26, 1999. The
tender offer price for the 13 1/2% Senior Secured Notes was $219.9 million.
Holders of 100% of the 13 1/2% Senior Secured Notes accepted the Tender Offer
and Consent Solicitation.
The Tribe established a $40.0 million construction reserve account that, in
specific circumstances, will be used to pay costs in excess of the expansion
budget. The Authority also established a segregated defeasance trust account
with a defeasance agent with cash equivalent funds estimated to be sufficient
to permit redemption of its junior subordinated notes on January 1, 2000.
Year 2000
Background
Many computer systems and applications currently use two-digit date fields
to designate a year. As the century date change occurs, date-sensitive systems
will recognize the year 2000 as 1900, or not at all. This
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inability to recognize, or properly treat, the year 2000 may cause systems to
process financial and operational information incorrectly, resulting in system
failures and other business problems.
Risk Factors
The Authority, like many companies, depends on fully operational computer
systems in all areas of its operations. Additionally, the Authority is
dependent upon many vendors to provide uninterrupted service for its operations
to run effectively. Exposure to both of these risk factors are issues for which
the Authority is formulating an approach.
Approach
With the assistance of an outside consultant, the Authority has implemented
a Year 2000 program to provide an independent analysis of the Authority's Year
2000 preparedness and the adequacy of the Authority's Year 2000 plans. The
program includes inventorying entities, identifying problems, planning
compliance, calculating time and cost estimates and generating implementation
strategies, attempting to correct the problems and testing the solutions. The
consultant will examine the methodology being used to approach risks in the
facilities' embedded systems and in products in the Authority's supply chain.
While the Authority's efforts are designed to be successful, because of the
complexity of the Year 2000 issues and the interdependence of organizations
using computer systems, there can be no assurance that the Authority's efforts,
or those of a third party with whom the Authority interacts, will be
satisfactorily completed in a timely fashion. This could result in a material
adverse effect on future operations.
Status
As of March 31, 1999, Mohegan Sun was approximately 75% in conformance with
the GartnerGroup Year 2000 best practices model. The Authority anticipates
completion of the program by June 1999. If at that time it is determined that
the program will not be completed, however, the Authority will develop a
contingency plan.
Cost
The Authority has incurred approximately $100,000 in costs associated with
the Year 2000 Program as of December 31, 1998. The Authority does not
separately track the internal costs incurred for the Year 2000 program, and the
$100,000 of costs incurred through December 31, 1998 are principally related to
payroll costs for the Authority's information systems group and outside
consulting fees. Although there can be no assurances, it is anticipated that
costs associated with the remediation and verification to become Year 2000
compliant will not exceed $1.0 million and will not have a material adverse
impact on the Authority's financial position, results of operations, or cash
flow.
State Compact
The Mohegan Compact stipulates that a portion of the revenues earned on slot
machines must be paid to the State of Connecticut. This slot win contribution
will be the lesser of (1) 30% of gross revenues from slot machines, or (2) the
greater of (a) 25% of gross revenues from slot machines or (b) $80.0 million.
The slot win contribution payments are linked to an exclusivity clause and
will not be required if the State of Connecticut legalizes any other gaming
operations with slot machines or other commercial casino table games within
Connecticut (except those consented to by the Tribe and the Mashantucket Pequot
Tribe). The Authority has reflected $102.3 million and $80.7 million,
respectively, of gaming expense on its financial statements for the required
slot win contribution to the State of Connecticut for the fiscal years ended
September 30, 1998 and 1997.
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BUSINESS
Mohegan Sun
The Authority owns and operates Mohegan Sun, a full-service gaming and
entertainment complex on a 240-acre site overlooking the Thames River on the
Tribe's reservation in southeastern Connecticut. The Authority has entered into
a land lease with the Tribe whereby the Tribe leases to the Authority the site
on which Mohegan Sun is located. Mohegan Sun opened in October 1996 at a total
cost of approximately $303 million. Mohegan Sun and Foxwoods Resort Casino are
the only two legally authorized gaming operations offering both traditional
slot machines and table games in the Northeastern United States outside of
Atlantic City, New Jersey.
For its first fiscal year of operations ended September 30, 1997, Mohegan
Sun welcomed approximately 6.5 million guests and recorded gross revenues of
$512.1 million. During its second fiscal year ended September 30, 1998, Mohegan
Sun had approximately 7.5 million guests, an increase of 15.4% over 1997, and
its gross revenues were $641.4 million, an increase of 25.2% over the prior
year. The Authority's EBITDAM (earnings before extraordinary items, interest,
income taxes, depreciation, amortization and management fees) for the 12 months
ended September 30, 1997 and 1998 were $135.4 million and $200.3 million,
respectively. The Authority's EBITDAM for the quarters ended December 31, 1997
and 1998 were $35.1 million and $51.8 million, respectively.
Mohegan Sun is an approximately 634,500 square foot facility which conveys a
historical northeastern Indian theme through architectural features and the use
of natural design elements such as timber, stone and water. It is comprised of
four quadrants, each of which has its own unique entrance and reflects a
separate seasonal theme--winter, spring, summer and fall--emphasizing the
importance of the seasonal changes to Mohegan Tribal life.
Mohegan Sun has approximately 176,500 square feet of gaming space, 3,025
slot machines, 150 table games (including blackjack, roulette, craps, baccarat,
caribbean stud poker and let it ride), 42 poker tables, and a high-stakes bingo
hall and a recently opened 9,000 square foot simulcasting race book facility.
Food and beverage amenities include the 680-seat Seasons buffet, three full-
service themed gourmet restaurants, a 24-hour coffee shop, a New York style
delicatessen, a 10-station food court featuring international and domestic
cuisine, and multiple full and floor service bars for a total of 1,888
restaurant seats. The 350-seat, 10,000 square foot Wolf Den Lounge located in
the center of the casino hosts musical entertainment seven days a week. Larger
events are currently held in the bingo hall or in temporary facilities
constructed on the grounds of the casino, including entertainment and casino
marketing activities. Six small retail shops covering 2,276 square feet of
space provide shopping opportunities ranging from Mohegan Sun souvenirs to
clothing to cigars. For non-gaming entertainment, Mohegan Sun also offers an
arcade-type recreation area and a child care facility operated by New Horizons
Kids Quest, Inc.
The Authority believes ease of access is one of the important factors that
differentiate Mohegan Sun from the Foxwoods Resort Casino. Mohegan Sun is
located approximately one mile from the interchange of I-395 and Route 2A in
Montville, Connecticut, approximately 10 miles west of the Foxwoods Resort
Casino. The Authority constructed a four-lane access road and entrance/exit
ramps off of Route 2A, giving guests direct access to Interstate 395 and
Interstate 95, the main highways connecting Boston, Providence and New York.
Mohegan Sun has parking spaces for 7,500 guests and for 1,700 employees. The
Authority opened a 4,000-square foot, 16-pump service station and convenience
store in December of 1998. The initial construction of Mohegan Sun included
infrastructure features designed to accommodate future growth. In addition, the
site was master planned to allow for expansion with minimal construction
disruption to existing operations.
Strategy
Our overall strategy is to profit from expanding demand in the Northeast
gaming market. Our initial success has resulted primarily from guests living
within 100 miles of Mohegan Sun. Based upon Mohegan
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Sun's results and experience to date, we believe the Northeast gaming market is
strong and that there is significant demand for additional amenities. We expect
to develop Mohegan Sun into a full-scale entertainment and destination resort
and believe that this will increase the number of guests and lengthen their
stays at Mohegan Sun. Specifically, we plan to expand Mohegan Sun's facilities
using the proceeds from this offering and the Bank Credit Facility, along with
internally generated cash flow. The expansion will include additional casino
space, a hotel, a large convention facility, entertainment facilities and
additional retail establishments. We will build the expansion with an effort to
minimize disruption to the existing facility and while Mohegan Sun continues to
operate. In preparation for the expansion and to capture existing demand, we
have recently widened our marketing efforts to include the entire New York City
metropolitan area. We believe that by providing Mohegan Sun with additional
capacity and the ability to capture a share of the overnight market in
connection with our marketing efforts, we will extend Mohegan Sun's market
penetration. We believe that the expansion will create a long-term competitive
advantage for Mohegan Sun in the East Coast gaming market. See "Business--
Competition."
The Expansion
Overview
We have approved plans for an expansion which will include an approximately
100,000 square feet of additional gaming space, a luxury hotel with
approximately 1,500 rooms, approximately 100,000 square feet of convention
space, an entertainment complex with seating for up to 10,000, approximately
6,000 additional guest parking spaces, specialty retail shops and uniquely
themed restaurants. The expansion will require significant upgrades and
additions to the facility's parking and infrastructure systems. We have master
planned the layout of the existing facilities and the expansion design so as to
minimize disruption to Mohegan Sun's current operations. The cost of
developing, constructing, equipping and opening the expansion is expected to
total approximately $750 million (excluding capitalized interest). The Tribe
has issued a formal resolution capping the scope of the expansion budget at
$800 million (excluding capitalized interest). In addition, the Tribe has
established a $40 million construction reserve account that, in specific
circumstances, will be used to pay costs in excess of the expansion budget.
The following is a summary of some of the key physical attributes of Mohegan
Sun before and after expansion.
<TABLE>
<CAPTION>
Casino Retail Convention Guest
Space Slot Table Poker Restaurant Hotel Space Event Space Parking
(sq. ft.) Machines Games Tables Seats Rooms (sq. ft.) Seating (sq. ft.) Spaces
--------- -------- ----- ------ ---------- ----- --------- ------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Resort before expansion
(December 31, 1998).... 176,500 3,025 150 42 1,888 0 2,276 1,800 0 7,500
Resort after expansion
(approximately)........ 276,500 5,025 225 42 2,976 1,500 300,000 10,000 100,000 13,500
</TABLE>
We believe the market favors expansion now for four reasons: (1) unsatisfied
current demand for gaming space at the existing facility; (2) a growing gaming
market in the Northeast region; (3) length of stay data indicating the need for
a hotel and other amenities; and (4) the need to remain competitive with the
Foxwoods Resort Casino. The expansion is intended to attract a greater number
of guests to the facility, particularly during mid-week periods, and to
increase the amount of time and money guests spend at Mohegan Sun. Historical
results show that the market has successfully absorbed both the opening of
Mohegan Sun in October 1996 and the expansion of Foxwoods, completed in July
1997. Despite the addition of over 3,400 slot machines and 200 gaming tables to
the Connecticut market during Mohegan Sun's first year of operation, Mohegan
Sun's win per position for the fiscal year ended September 30, 1997 was $300,
over 25% higher than Atlantic City's win per position for the twelve months
ended September 30, 1997.
Developer
The Authority has engaged Trading Cove Associates to oversee the planning,
design, construction, furnishing and opening of the expansion. Trading Cove
Associates has been working with the Tribe since 1992
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and assisted the Tribe in obtaining a gaming compact with the State of
Connecticut and numerous governmental approvals for Mohegan Sun. Trading Cove
Associates is 50% owned by Sun Cove Limited, a 100% controlled affiliate of Sun
International Hotels Limited, and 50% by Waterford Gaming L.L.C., whose
principals are primarily engaged in hotel management and real estate
development. Sun International Hotels Limited has extensive experience in the
development, construction, marketing and management of casinos and hotels
throughout the world. Senior management personnel of Sun International Hotels
Limited have been actively engaged in the gaming and lodging industries for the
last 25 years and are responsible for the development and operation of several
world-renowned resorts and casinos including Sun City, The Lost City, The
Carousel Casino, Entertainment World in South Africa and the Atlantis Resort
and Casino in the Bahamas. See "Other Material Agreements--Expansion
Development Services Agreement with Trading Cove Associates."
Other Members of the Development Team
Together with Trading Cove Associates, the Authority is assembling a team of
experienced individuals and firms to develop and build Mohegan Sun's expansion.
In addition to the firms listed below, the Tribe and the project developer are
currently in the process of selecting a construction manager and a retail
developer/manager. In an effort to minimize cost overruns, the Authority plans
to enter into only fixed price contracts with the professionals chosen to plan,
develop, design and build the expansion. Construction is not scheduled to
commence until the spring of 1999 so as to allow the architects to complete all
construction drawings and thereby minimize change orders. The Authority will
also implement other measures seeking to minimize the number of change orders
that could increase the cost of the project. The Authority has chosen the
following firms to assist with the expansion:
. Kohn Pedersen Fox Associates PC will coordinate the architectural design
of the expansion facilities. Kohn Pedersen Fox Associates PC is an
internationally recognized firm and has won numerous design awards,
including New Construction Building of the Year (1995), Federal Design
Achievement Award (1995) and the Dallas Urban Design Award (1993). Major
recent projects include the U.S. Courthouse in Foley Square, New York,
the Samsung Rodin Museum in Seoul, South Korea and the World Bank
Headquarters in Washington, D.C.
. Hanscomb Limited will provide cost, scheduling, planning and other
consulting services for the expansion. Hanscomb Limited has provided
cost and scheduling management services since 1946 on national and
international projects, including the Trump Taj Mahal Convention Center
Casino and Hotel in Atlantic City and the Lester B. Pearson
International Airport in Toronto, Canada.
. EDAW, Inc. has master planned the project to provide for expansion with
minimal construction disruption to the existing operations. EDAW is an
internationally recognized architectural firm and has worked on a number
of well known projects including the Centennial Olympic Park in Atlanta,
Georgia, Coors Field in Denver, Colorado and the Asia and Pacific Trade
Center in Fukuoka, Japan.
. Gordon Brant LV, LLC will be the retail consultant for the expansion.
Gordon Brant is headed by Sheldon Gordon, who is nationally recognized
for his ability to create high-profile retail complexes including the
ancient-Roman themed Forum Shops at Ceasar's Palace in Las Vegas, the
five level San Francisco Centre and the Beverly Center in Los Angeles,
California.
Budget
Trading Cove Associates, in consultation with the project architect,
construction manager, cost estimator and retail consultant, will prepare the
formal budget for Mohegan Sun's expansion subject to the Authority's final
approval. The budget will include all costs related to the design, construction
and equipping of the project, plus a contingency of 10% of the hard
construction costs. There will be no allocation of the contingency without
approval by the Authority. In addition, the Authority will be required to
approve any change orders in excess of (1) $750,000 in a single instance; (2)
$3.0 million in the aggregate in any one month; or (3) $12.0 million in the
aggregate for the life of the project.
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Construction Schedule
The Authority began construction of the expansion in the March, 1999, with
openings scheduled in phases. Phase I, which is expected to be completed in
January of 2000, will include the construction of new patron and employee
parking facilities. Phase II, which is expected to be completed in the summer
of 2001, will include the construction of new casino space and the expansion's
retail component. Phase III, the final phase of the expansion, which is
expected to be completed in the fall of 2001, will include the construction of
the convention and hotel facilities. Trading Cove Associates, and in particular
Sun International Hotels Limited, has demonstrated an ability to fast track
casino development projects. Sun International Hotels Limited's management team
built the $300 million Lost City project in South Africa in 26 months and
completed the $480 million development of Atlantis in the Bahamas in
approximately 28 months, despite the fact that the resort remained open
throughout the construction period. Mohegan Sun was designed, developed,
constructed and opened in 12 months. The Authority can give no assurance,
however, that the expansion will be completed as anticipated.
Regulatory Approvals
The Authority anticipates receiving all necessary approvals for the
agreements relating to the expansion from the federal agencies that oversee
Indian affairs. See "Government Regulation--BIA and NIGC Approvals." In
addition, as described below, the Authority is in the process of obtaining
certain other permits and approvals for the expansion of Mohegan Sun.
. Plans have been submitted to the U.S. Army Corps of Engineers for
regulatory activities within an inland wetland. The application has been
reviewed and the Authority has been informally notified that the
application complies with all requirements of the general programmatic
permit. Plans of wetlands mitigation have been submitted and accepted
and verbal approval has been granted. Final permitting is pending
submission of an overall site development plan to confirm that no
additional wetlands impacts will result as a part of this project. The
Authority expects to receive the necessary permits in a timely fashion.
. Permits are required for work associated with the upgrade of an existing
culvert beneath railroad properties located to the east of the expansion
site. Plans have been submitted to the Connecticut Department of
Environmental Protection. The Authority expects to receive the necessary
permits in a timely fashion.
. The Authority has obtained the necessary approvals for permits from the
Connecticut Traffic Commission relating to the expansion of Mohegan Sun.
In connection with the issuance of these permits, the Authority may be
required to make certain improvements to nearby local roadways. The
Authority believes these improvements will not cost in excess of $1.5
million.
Management Transition
The Authority engaged Trading Cove Associates to operate, manage and market
Mohegan Sun under a seven-year management contract commencing upon the casino's
opening in October 1996. In anticipation of the expansion of Mohegan Sun, the
Authority and Trading Cove Associates are now mutually terminating the
management and related agreements and are entering into certain new agreements.
Under the Relinquishment Agreement between the Authority and Trading Cove
Associates, the Authority will assume the management, operation and maintenance
of Mohegan Sun beginning on January 1, 2000. The Authority has previously
assumed many of Mohegan Sun's day-to-day management functions, and, under the
Relinquishment Agreement, Trading Cove Associates has committed to work closely
with the Authority to facilitate a smooth and effective transition. The
Authority expects that the senior management of Mohegan Sun, the top three of
whom collectively have 45 years of experience in the gaming and hotel industry,
will remain in place as employees of the Authority with long-term employment
contracts. See "The Authority" and "Other Material Agreements--Relinquishment
Agreement with Trading Cove Associates."
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Since the beginning of operations at Mohegan Sun, members of the Authority's
Management Board have gained experience with the gaming business through
membership on the Business Board of Mohegan Sun. The Business Board consists of
four members, two from the Authority and two from Trading Cove Associates. The
Authority believes this Business Board experience, coupled with the retention
of Mohegan Sun's current management will enable it to successfully manage
Mohegan Sun once Trading Cove Associates' tenure officially ends.
Market
The Authority believes that Mohegan Sun's location, ease of access, unique
design and reputation, together with the development and marketing of the
expansion, should enable Mohegan Sun to capture a significant share of the
gaming market in the Northeastern United States. The current market for Mohegan
Sun is primarily day-trip customers from New England and New York. According to
market research reports, in 1998 there were approximately 2.5 million adults
living within 50 miles of Mohegan Sun with an average household income of
$56,000, 10.3 million adults within 100 miles with an average household income
of $67,000 and 22.1 million adults within 150 miles with an average household
income of $64,000. The metropolitan areas of Hartford, New Haven, Springfield,
Worcester, Boston and Providence are within two hours driving time by
interstate highway. New York City is approximately 125 miles from Mohegan Sun.
Marketing Strategy
The Authority employs a comprehensive marketing program aimed at
establishing Mohegan Sun as a premier entertainment facility in the
Northeastern United States. Mohegan Sun seeks to distinguish itself by
emphasizing its uniquely themed gaming environment, its superior food
experience in a variety of settings, ease of access and attention to personal
service. The Authority will market the expanded facilities along these same
lines. With the addition of hotel and entertainment amenities, the Authority
will be able to market the Mohegan Sun as a premier destination resort complex.
In the past, the Authority has marketed primarily to guests living within
100 miles of Mohegan Sun. This excludes most of the New York City metropolitan
area. The Authority has recently begun a substantial marketing effort to tap a
wider market, including the entire New York City metropolitan area. As a result
of this marketing effort, the number of guests from New York State has grown
over 50% from the last fiscal year as measured by Mohegan Sun's guest database.
The Authority believes the majority of this increase can be attributed to
guests residing within the New York City metropolitan area and believes the New
York City market shows significant potential for additional growth. The
Authority also believes the expansion, particularly a large hotel, should draw
many additional customers from this and other more distant markets. See
"Business--Marketing Strategy."
Consistent with the current emphasis on the day-trip market, the Authority
organizes regular line and charter bus service to the major metropolitan areas
to attract gaming guests at all levels of play. The development of the casino
expansion, which will add substantial hotel and retail facilities as well as
the increased gaming capacity, will broaden Mohegan Sun's market to include
overnight customers. The Authority has begun to target this overnight market.
The Authority estimates that the current average length of time that guests
spend at Mohegan Sun is 110 minutes. Our strategy is to increase this time
significantly.
The Authority creates market awareness and customer loyalty through a wide
variety of activities such as those listed below:
. Direct mail to Mohegan Sun's . Public relations programs;
guest database;
. Sports arena and public
. Mohegan Sun Player's Club; transportation signage; and
. Print and broadcast . Billboard signage.
advertisements;
. Consumer promotions;
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The Authority spent a total of $23.3 million on marketing programs during
fiscal year 1998. Of this amount, $2.8 million was spent on print advertising,
$3.5 million on television advertisements, $2.1 million on radio advertising,
$10.7 million on marketing promotions and $4.2 million was spent on various
other advertising media. The Authority believes its marketing activities
contributed to the substantial growth in the Mohegan Sun Player's Club in
fiscal year 1998 as compared to fiscal year 1997. Total membership increased by
65% and active membership increased (defined as one visit per year) by 17%,
with the largest percentage growth coming from guests residing in the New York
metropolitan area.
[INSERT MAP]
[A portion of this page contains an untitled map of the Northeastern United
States from Delaware to Vermont. Mohegan Sun is located in the center of the
map with three concentric circles going out from Mohegan Sun showing geographic
locations that are fifty, one hundred and one hundred and fifty miles from the
casino. The map also shows in bold text the location of certain major
metropolitan areas including Albany, Boston and New York City.]
In addition to the fun and excitement of casino action, the Authority
promotes superior customer service and the quality and value of Mohegan Sun's
food offerings to attract repeat guests. Although Mohegan Sun seeks to
accommodate premium high-stakes players, the Authority does not spend
significant resources targeting the more demanding and costly premium player
market. With the addition of hotel rooms and suites, the Authority may target
higher end domestic customers.
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The Authority also promotes Mohegan Sun through special events held from
time to time, such as weekly fireworks displays, concerts by nationally known
performers and premier sporting events. The Authority believes it has been
innovative in terms of offering successful entertainment events that attract
guests to Mohegan Sun without the existence of a large dedicated entertainment
venue. The Authority has successfully established the 350-seat "Wolf Den
Lounge," situated strategically in the center of the casino as a popular
musical venue, hosting such artists as INXS, Duran Duran and the Brian Setzer
Orchestra. Performances by nationally known acts such as Ringo Starr, Lyle
Lovett and Tony Bennett were held in the bingo hall. In addition, the "Uncas
Pavillion," a temporary structure erected in Mohegan Sun's parking lot during
the fall months of 1998, hosted sold-out performances by Lynyrd Skynyrd and the
Steve Miller Band and a pay-for-view heavyweight title fight between Lennox
Lewis and Zeljko Mavrovic. We believe these events significantly enhanced our
revenue and profits. With new entertainment, convention, retail and restaurant
facilities provided by the expansion, the Authority anticipates substantially
enhanced promotional marketing opportunities.
Competition
The gaming industry is highly competitive. Mohegan Sun currently competes
primarily with the Foxwoods Resort Casino and, to a lesser extent, with casinos
in Atlantic City, New Jersey. Foxwoods is approximately 10 miles from Mohegan
Sun and is the largest gaming facility in the United States in terms of total
gaming positions. It is owned and operated by the Mashantucket Pequot Tribe
under a separate compact with the State of Connecticut. Foxwoods offers a
number of amenities that Mohegan Sun does not offer, including hotel
accommodations, extensive retail shopping and more expansive non-gaming
entertainment offerings. Foxwoods has been in operation for nearly seven years
and may have greater financial resources than the Authority or the Tribe.
Upon the completion of the expansion, the Authority intends to broaden
Mohegan Sun's market beyond day-trip customers to include guests making
overnight or extended stays. This means that Mohegan Sun will begin to compete
for customers with casinos in Atlantic City, New Jersey and, to a lesser
extent, gaming resorts such as those on the Gulf Coast of Mississippi and Las
Vegas, Nevada. Many of these casinos and other gaming resorts have greater
resources and greater name recognition than Mohegan Sun.
Outside of Atlantic City, New Jersey, casino gaming in the northeastern
United States may be conducted only by federally recognized Indian tribes
operating under federal Indian gaming law. Currently, (1) the Oneida Indian
Nation operates Turning Stone Casino Resort in Verona, New York, approximately
270 miles from Mohegan Sun and (2) the St. Regis Mohawk Tribe has initiatives
to develop gaming facilities both on its reservation in Hogansburg, New York
near the Canadian border and at the Monticello raceway in the Catskills,
located approximately 90 miles from New York City. In addition, at least two
other federally recognized tribes in New England are each seeking to establish
gaming operations. Several other tribes in New England are seeking federal
recognition to establish gaming operations. A number of states, including
Connecticut, have also investigated legalizing casino gaming by non-Indians in
one or more locations. The Authority cannot predict whether any of these other
tribes or other efforts to legalize casino gaming will be successful in
establishing gaming operations, and if established, whether such gaming
operations will have a material adverse effect on the Authority's operations.
See "Government Regulation."
The following is an assessment of the competitive prospects in Connecticut,
certain neighboring states and other states in the Northeast.
Connecticut
Currently, only the Tribe and the Mashantucket Pequot Tribe are authorized
to conduct gaming in Connecticut. As required by their state compacts, the
Tribe and the Mashantucket Pequots make semi-annual payments to the State of
Connecticut based on 25% of annual slot win. These payments, which totaled
$276.2 million for the 12 months ended December 31, 1998, are linked to an
exclusivity clause and will terminate if Connecticut legalizes other gaming
operations with slot machines or other casino table games within
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Connecticut, unless both tribes consent to such operations. There are currently
at least four tribes in Connecticut that are attempting to gain federal
recognition, a lengthy process managed by the Bureau of Indian Affairs. Two of
these are the Eastern Pequot and/or the Paucatuck Eastern Pequot Tribe, who
share a reservation located next to that of the Mashantucket Pequots. The
federal recognition process for these tribes is proceeding, but it is not clear
if or when recognition will be achieved. Even upon gaining recognition, a tribe
must have land taken into trust by the federal government, negotiate a compact
with the state and construct a facility before it can commence gaming
operations.
Rhode Island
There is no commercial gaming in Rhode Island although the state's two pari-
mutuel facilities, Lincoln Greyhound Park and Newport Grand Jai Alai, offer
approximately 1,800 video slot machines and have petitions pending before the
Rhode Island Lottery Commission for additional machines. In November 1994,
Rhode Island voters defeated numerous local and state-wide gaming referenda and
passed a referendum, which requires that any new gaming proposals will have to
be approved in a state-wide referendum. The Narragansett Tribe is the only
federally recognized Indian tribe in Rhode Island, but under specific federal
legislation the Narragansett Tribe is legally barred from opening a gaming
facility without obtaining both local and state-wide approvals. There is one
pending federal recognition petition from another Rhode Island tribe, filed by
the Pokanoket Tribe of the Wampanoag, located in Bristol, Rhode Island. It is
not clear if or when federal recognition for the Pokanoket Tribe will be
achieved.
Massachusetts
No commercial casinos operate in Massachusetts, and no significant
initiatives to legalize such casinos are currently underway. The Wampanoag
Tribe, located on the island of Martha's Vineyard, is currently the only
federally recognized Indian tribe in the state. This tribe has determined that
a casino on the island would not be economically feasible, and the State
Legislature has rejected proposals to locate an Indian casino off tribal lands.
This tribe originally announced plans to open a high-stakes bingo facility in
Fall River, Massachusetts, but due to significant hurdles, including the
failure to obtain approval from the state legislature, the Wampanoags have
recently been considering other sites in southeastern Massachusetts. In
addition, approximately five other petitions for federal recognition are
pending in Massachusetts. The Tribe believes potential recognition for any of
these tribes is at least several years away.
New York
No non-Indian casinos currently operate in New York and the establishment of
commercial casino operations would require the approval of two successive state
legislatures followed by the voters in a state-wide referendum. However,
gambling boats began operating out of the New York City area in January 1998.
These "cruises to nowhere" during which gaming activities are conducted on
board once the boat is in international waters, three miles offshore, are
permitted under federal law unless prohibited by the state from which they
operate. New York to date has not prohibited such operations. Only a small
number of operators have applied for licenses for off-shore gambling cruises,
and currently these cruises occur primarily in the summer and early fall
months, between June and October. Due to the difference in the gaming
experience, the Authority does not believe the "cruises to nowhere" are
significant competition to Mohegan Sun.
New York has seven federally recognized Indian tribes with reservations. Two
tribes, the Oneida Tribe and the St. Regis Mohawk Tribe, have executed compacts
with the state. These compacts allow casino table games, but no conventional
slot machines. The Oneida Tribe opened the Turning Stone Casino in July 1993 on
its reservation in Verona, near Syracuse. The facility has 3,500 video lottery
machines which operate on a pari-mutuel system as opposed to the traditional
fixed odds reel-type machines operated by most casinos, 150 table games, 285
hotel rooms, a conference center and a golf course. Turning Stone currently
draws primarily from the Syracuse, New York market. The Authority believes
Turning Stone does not pose a material direct
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competition with Mohegan Sun for customers. The St. Regis Mohawk Tribe, which
has a reservation in Hogansburg on the Canadian border, has not yet opened an
on reservation gaming facility. However, this tribe's agreement with a third
party to manage such gaming activities has been approved by the National Indian
Gaming Commission. In addition, the St. Regis Mohawk Tribe and officials from
Sullivan County have also signed an agreement that contemplates the
establishment of a tribally operated casino at Monticello Raceway in the
Catskills, located approximately 170 miles from Mohegan Sun and 90 miles north
of New York City. This estimated $500 million project would require land to be
taken into trust with specific approval from the Bureau of Indian Affairs and
the Governor of New York. While the St. Regis Mohawks have received initial
approval from the Eastern Area Office of the Bureau of Indian Affairs for the
project, final approval from the Central Office of the Bureau of Indian Affairs
is still pending. Furthermore, the Governor has not announced his support for
this project. In addition, the Seneca Nation of Indians have bingo operations
on two of their three reservations in western New York. These bingo halls are
located in Vandalia, and Gowanda, New York, both over 400 miles from Mohegan
Sun. Although preliminary discussions have occurred, the Seneca Indians have
not entered into a compact with the state of New York which would allow this
tribe to expand their gaming operations to include casino games.
Maine
There are no commercial casinos allowed in Maine, and there are no
significant initiatives currently underway to legalize such casinos. There are
four federally recognized tribes in Maine, one of which (the Penobscot Tribe)
has opened a high stakes bingo facility in the township of Albany in western
Maine. None of the federally recognized tribes has negotiated a tribal-state
compact or otherwise significantly begun the process of developing casino
operations.
New Hampshire
There are no casinos allowed in New Hampshire, and there are no significant
initiatives currently underway to legalize casinos. A bill to allow the state's
racetracks to offer slot machines was defeated in a House committee in May
1997, the fourth consecutive time that New Hampshire legislators voted against
gaming expansion. There are no federally recognized Indian tribes in the state
and no petitions for recognition pending.
Vermont
There are no casinos allowed in Vermont, and there are no significant
initiatives currently underway to legalize casinos. There are no federally
recognized tribes in the state, but there is a petition pending from the St.
Francis/Sokoki Band of Abenakis, in Swanton. We believe any approval is still
several years away.
Employees and Labor Relations
As of December 31, 1998, Mohegan Sun employed 5,070 full-time employees and
414 seasonal and part-time employees. Pursuant to its Management Agreement with
the Authority, Trading Cove Associates has been responsible for recruiting and
training employees to operate Mohegan Sun. In recruiting personnel, Trading
Cove Associates has been 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. Trading Cove Associates
has developed and implemented training programs to teach Mohegan Sun employees
necessary technical skills as well as to instill a commitment to the highest
levels of service in the industry. Training responsibilities and training
programs have been transitioned to the Authority. The Authority believes that
it will be able to hire and train employees to operate Mohegan Sun during and
after the expansion. Mohegan Sun employees are not covered by any collective
bargaining agreement. The Authority believes its relationship with its
employees is good.
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Environmental Matters
The Authority currently incurs and may continue to incur costs to comply
with environmental requirements such as those relating to discharges to air,
water and land, the handling and disposal of solid and hazardous waste, and the
cleanup of properties affected by hazardous substances. The site of Mohegan Sun
was formerly occupied by United Nuclear Corporation, a naval products
manufacturer of, among other things, nuclear reactor fuel components. United
Nuclear's facility was officially decommissioned on June 8, 1994 when the
Nuclear Regulatory Commission confirmed that all licensable quantities of such
nuclear material had been removed from the site and that any residual
contamination from such material was remediated according to the Nuclear
Regulatory Commission approved decommissioning plan. In addition, environmental
requirements address the impacts of development on wetlands areas. See
"Business--The Expansion."
From 1991 through 1993, United Nuclear commissioned environmental audits and
soil sampling programs which detected, among other things, volatile organic
chemicals, heavy metals and fuel hydrocarbons in the soil and groundwater. The
Connecticut Department of Environmental Protection (DEP) reviewed the
environmental audits and reports and established cleanup requirements for the
site. In December 1994, the DEP approved United Nuclear's remedial plan, which
determined that groundwater remediation was unnecessary because although the
groundwater beneath the site was contaminated, it met the applicable
groundwater criteria given the classification of the groundwater under the
site. In addition, 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.
Initial construction at the site also involved extensive soil excavation.
According to the data gathered in a 1995 environmental report commissioned by
United Nuclear, remediation is complete and is consistent with the applicable
Connecticut cleanup requirements. The DEP has reviewed and approved the cleanup
activities at the site, and, as part of the DEP's approval, United Nuclear was
required to perform post-closure groundwater monitoring at the site to insure
the adequacy of the cleanup.
In addition, under the terms of United Nuclear's environmental certification
and indemnity agreement with the Department of the Interior (which took the
former United Nuclear land into trust for the Mohegan Tribe), United Nuclear
agreed to indemnify the Department for environmental actions and expenses based
on acts or conditions existing or occurring as a result of United Nuclear's
activities on the property. Notwithstanding the foregoing, no assurance can be
given that any existing environmental studies reveal all environmental
liabilities, or that future laws, ordinances or regulations will not impose any
material environmental liability, or that a material environmental condition
does not otherwise currently exist or will be exposed due to the expansion.
Should soil or groundwater contamination be identified during the course of the
expansion, Connecticut remediation standard requirements will have to be met,
in addition to any other applicable environmental remediation requirements.
Under the Clean Air Act, the State of Connecticut has developed a State
Implementation Plan to ensure the achievement of air quality standards in the
state. In 1995, the Tribe and Trading Cove Associates commissioned a Draft
Environmental Assessment of Mohegan Sun, which concluded that emissions from
Mohegan Sun should not cause significant air quality impacts. The Environmental
Assessment's projection was based in part on the Tribe's and Trading Cove
Associates' pollution prevention plans and ability to obtain emission reduction
credits to offset emissions. Pursuant to the Connecticut State Implementation
Plan, the Tribe and the State of Connecticut in 1996 entered into a voluntary
agreement to offset volatile organic compound and nitrogen oxide emissions
resulting from transportation activity associated with the facility. The Tribe
currently purchases nitrogen oxide emission credits to offset these emissions.
Certain federal, state and local requirements govern the removal,
encapsulation and disturbance of asbestos-containing materials when those
materials are in poor condition or in the event of renovation, remodeling or
demolition. These requirements may impose liability for releases of asbestos-
containing materials and may enable third parties to seek recovery from owners
or operators of properties for personal
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injury associated with such materials. While there is no known asbestos-
containing material on the property, and there is only one remaining
unrenovated building, a full asbestos survey has not been conducted.
In addition to federal, state and local laws relating to hazardous or toxic
substances, the National Environmental Policy Act requires that, before taking
any federal action that may significantly affect the quality of the human
environment, the responsible federal agency must prepare an environmental
impact statement describing and quantifying, to the extent possible, such
effects. Upon the initial construction of Mohegan Sun, the Bureau of Indian
Affairs and the National Indian Gaming Commission determined that an
environmental impact statement was not necessary. The Authority does not
anticipate an environmental impact statement being required for the expansion.
Legal Proceedings
The Authority is involved in certain litigation incurred in the normal
course of business. In the opinion of the Authority, the aggregate liability,
if any, arising from such litigation will not have a material adverse effect on
its financial position or results of operations.
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THE AUTHORITY
General
The Tribe established the Authority in July 1995 to exercise all
governmental and proprietary powers of the Tribe over all gaming related
development. The Authority is governed by a nine-member Management Board which
consists of the same nine members as those of the Tribal Council (the governing
body of the Tribe). Any change in the composition of the Tribal Council results
in a corresponding change in the Authority's Management Board. See "Mohegan
Tribe of Indians of Connecticut."
The Authority has two major functions. The first, delegated to the
Management Board, is to direct the development, operation, management,
promotion and construction of the gaming enterprise and all related
development. The second major function 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. The Director of Regulation employs a staff that is responsible for
performing background investigation into gaming license applicants. The
Director of Regulation is also responsible for the issuance and revocation of
gaming licenses. The individual members of the Management Board do not receive
any direct compensation from the Authority. Management Board salaries are paid
by the Tribe.
Management Board and Executive Officers
The following table provides information as of December 31, 1998 with
respect to (1) the members of the Management Board, (2) each of the executive
officers of Mohegan Sun and (3) the Director of Regulation.
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Mark F. Brown........... 41 Member, Management Board
Mitchell Grossinger
Etess.................. 40 Senior Vice President, Marketing, Mohegan Sun
Jayne G. Fawcett........ 63 Vice Chair and Member, Management Board
Carlisle M. Fowler...... 70 Treasurer and Member, Management Board
Courtland C. Fowler..... 71 Member, Management Board
Roland J. Harris........ 51 Chairman and Member, Management Board
Jeffrey E. Hartmann..... 37 Senior Vice President, Finance and Chief Financial Officer, Mohegan Sun
Glenn R. LaVigne........ 38 Member, Management Board
Francis M. Mullen....... 64 Director of Regulation
Loretta F. Roberge...... 67 Corresponding Secretary and Member, Management Board
Maynard L. Strickland... 59 Member, Management Board
William J. Velardo...... 43 Executive Vice President and General Manager, Mohegan Sun
Shirley M. Walsh........ 54 Recording Secretary and Member, Management Board
</TABLE>
Mark F. Brown--Mr. Brown has been a member of the Management Board since
October 1995 and serves as the security liaison for the Tribal Council. Before
joining the Management Board, he served as a Law Enforcement officer and has
over ten years experience in this capacity. Mr. Brown worked with the Tribe's
historian during the period in which the Tribe was obtaining federal
recognition and also served on the Tribe's Constitutional Review Board from
1993 to 1994. Mr. Brown is a Tribal Council Member.
Mitchell Grossinger Etess--Mr. Etess has been Senior Vice President,
Marketing of Mohegan Sun since November 1995 and has 17 years experience in the
casino and hotel industry. Before his employment with the Authority, Mr. Etess
was Vice President of Marketing at Players Island and, from 1989 to 1994, was
Senior Vice President of Marketing and Hotel Operations at Trump Plaza Hotel
and Casino. Before that, Mr. Etess held various management positions in the
casino and hotel industry.
Jayne G. Fawcett--Ms. Fawcett has been Vice Chair of the Management Board
since December 1995 and a member of the Management Board since its inception in
July 1995. Ms. Fawcett is the Vice Chair of the
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Tribal Council and worked as a social worker for the State of Connecticut in
1987 and is a retired teacher after 27 years of service. Ms. Fawcett was a
Chairman of the Tribe's Constitutional Review Board from 1992 to 1993.
Currently, she oversees the Tribe's public relations.
Carlisle M. Fowler--Mr. Fowler has been the Treasurer and a member of the
Management Board since its inception in July 1995 and has been active in the
Tribe's government for over 30 years. Mr. Fowler is a Tribal Council Member.
Before his retirement in 1989, Mr. Fowler was an electronics technician for the
State of Connecticut and operated his own electronics business. Mr. Carlisle
Fowler is the brother of Mr. Courtland Fowler.
Courtland C. Fowler--Mr. Fowler has been a member of the Management Board
since its inception in July 1995 and was a major contributor to the cultural
research that led to the federal recognition of the Tribe. Mr. Fowler is a
Tribal Council Member and was previously employed as a chemical operator and
assistant foreman at Pfizer, Inc. until his retirement in 1990. He has served
as Vice Chairman of the Management Board, and as a member of the Tribe's
Constitutional Review Board. 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.
Roland J. Harris--Mr. Harris has been Chairman and a member of the
Management Board since October 1995. He is also Chairman of the Tribal Council.
Mr. Harris was the founder of the firm Harris and Clark, Inc., civil engineers,
land surveyors and land planners, which he subsequently sold to McFarland
Johnson, Inc. in May, 1998. Mr. Harris has served as First Selectman of the
Town of Griswold, Connecticut from 1993 to 1999. He has also served as Deputy
Chief of the Griswold Fire Department and as Fire Marshal of the Town of
Griswold. Before assuming the Chairmanship of the Management Board, Mr. Harris
served as the Tribal Planner.
Jeffrey E. Hartmann--Mr. Hartmann has been Senior Vice President of Finance
and the Chief Financial Officer of Mohegan Sun since December 1996 and has
seven years of experience in the casino and hotel industry. Before joining the
Authority, Mr. Hartmann worked for Foxwoods Resort Casino from August 1991 to
December 1996, most recently as Vice President of Finance for Foxwoods
Management Company. Mr. Hartmann was employed by PriceWaterhouseCoopers,
formerly Coopers and Lybrand, LLP, as an Audit Manager from 1984 to 1991. Mr.
Hartmann is a certified public accountant.
Glenn R. LaVigne--Mr. LaVigne has been a member of the Management Board
since January 1996. Mr. LaVigne is a Tribal Council Member and was previously
employed by the Town of Montville, Connecticut and oversaw building and
maintenance for Montville's seven municipal buildings.
Francis M. Mullen--Mr. Mullen has been Director of Regulation since October
1995 and has regulatory responsibility for the Tribal gaming operation. Mr.
Mullen had a 20-year FBI career, last serving in Washington, D.C. as Executive
Assistant Director of all FBI investigations. He later served as Director of
the United States Drug Enforcement Administration for four years before leaving
government service.
Loretta F. Roberge--Ms. Roberge has been Corresponding Secretary and a
member of the Management Board since its inception in July 1995. Ms. Roberge is
a Tribal Council Member and 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, Ms. Roberge assisted in the Tribe's federal
recognition effort and previously served as Secretary of the Tribe. Ms. Roberge
currently chairs the Mohegan Burial Committee.
Maynard L. Strickland--Mr. Strickland has been a member of the Management
Board since October 1995. Before that, Mr. Strickland owned and operated
several restaurants in Norwich, Connecticut and Florida. He is a Tribal Council
Member and serves as the Tribal Council liaison to Bingo. Mr. Strickland was
involved in the restructuring of Bingo which has resulted in a profitable Bingo
business.
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William J. Velardo--Mr. Velardo has been Executive Vice President, General
Manager of Mohegan Sun since October 1995 and has 21 years of experience in
gaming operations. Before his employment with the Authority, Mr. Velardo was
Chief Operating Officer for River City, a riverboat gaming joint venture in New
Orleans, Louisiana. From 1991 to 1994, Mr. Velardo served as Senior Vice
President, Casino Operations at Trump Plaza Hotel and Casino in New Jersey. Mr.
Velardo participated in the opening of the Mirage in Las Vegas where he served
as Vice President, Table Games from 1989 to 1991. Mr. Velardo also worked as
Assistant Casino Manager and Pit Manager for Caesar's Tahoe and Caesar's Palace
in Las Vegas.
Shirley M. Walsh--Ms. Walsh has been the Recording Secretary of the
Management Board since October 1995 and has been a member of the Management
Board since its inception in July 1995. Ms. Walsh is a Tribal Council Member
and serves as the social services liaison for the Tribe and has worked for the
Tribe in various capacities for seven years. Ms. Walsh chaired the Tribe's
Election Committee from 1994 to 1995 and has served on several other committees
for the Tribe.
Summary Compensation Table
The following table provides certain summary information concerning
compensation paid by the Authority to its senior executive officers.
<TABLE>
<CAPTION>
Annual
Compensation
-----------------
Name and Principal Position Fiscal Year Salary Bonus
--------------------------- ----------- -------- --------
<S> <C> <C> <C>
William J. Velardo............................... 1998 $400,000 $150,000
Executive Vice President and General Manager 1997 353,000 175,000
Mitchell Grossinger Etess........................ 1998 262,500 100,000
Senior Vice President, Marketing 1997 223,000 110,000
Jeffrey E. Hartmann..............................
Senior Vice President, Finance, and Chief 1998 210,000 100,000
Financial Officer 1997(1) 130,000 60,000
</TABLE>
- --------
(1) Mr. Hartmann commenced employment with the Authority on December 30, 1996.
Business Board
The Authority and Trading Cove Associates have overseen the management of
Mohegan Sun through a Business Board, which reports directly to the Management
Board of the Authority. The Business Board consists of four members, two from
the Authority and two from Trading Cove Associates. The Authority's Business
Board members for the past two years have been (1) the Tribe's Chief of Staff
(with the Deputy Chief of Staff as an alternate) and (2) a member of the
Authority's Management Board. The latter position rotates every six months so
as to give direct gaming enterprise experience to a number of members of the
Authority's Management Board. Trading Cove Associates' Business Board Members
have been the same individuals, one each from Sun International Hotels Limited
and Waterford Gaming L.L.C., for the past two years. As part of the
Relinquishment Agreement, the Business Board will terminate on January 1, 2000.
See "Other Material Agreements--Relinquishment Agreement with Trading Cove
Associates."
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Tribe provides governmental and administrative services to the Authority
in conjunction with the operation of Mohegan Sun. For the fiscal year ended
September 30, 1998, the Authority incurred $7.7 million of expenses for such
services.
The Tribe, through two limited liability companies, has entered into various
land lease agreements with the Authority for access, parking and related
purposes for Mohegan Sun. These lease payments are approximately $636,000 per
year. The Tribe, through Little People L.L.C., one of its limited liability
companies, has sold approximately $413,000 worth of Native American related
goods to the Authority for resale at its retail location.
Under terms of its agreements with the Authority, Trading Cove Associates
must award service contracts or purchase services from qualified members of the
Tribe if the costs of these services are competitive with the local market and
give hiring preference first to members of the Tribe then to other Native
Americans. The Authority uses McFarland Johnson, Inc. for surveyance, civil
engineering and professional design services. Roland Harris, Chairman of the
Management Board, is a consultant for this firm for a fixed fee. For the fiscal
year ended September 30, 1998, the Authority paid $54,354 in fees to McFarland
Johnson, Inc. The Authority believes the terms of this engagement are
comparable to those that would pertain to an arms length engagement of an
unaffiliated firm. As of September 30, 1998, 190 employees of the Authority
were Mohegan tribal members. See "Other Material Agreements."
The Tribe has established a $40 million construction reserve account that,
in certain circumstances, will be used to pay costs in excess of the expansion
budget.
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MOHEGAN TRIBE OF INDIANS OF CONNECTICUT
General
The Mohegan Tribe of Indians of Connecticut became a federally recognized
Indian tribe in 1994. The Tribe currently has approximately 1,300 members and
approximately 750 adult voting members. Although it only recently received
federal recognition, the Tribe has lived in a cohesive community for hundreds
of years 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 Mohegan Sun.
Although the Tribe is a sovereign entity, it has sought to work with, and
gain the support of, local communities in establishing Mohegan Sun. For
example, the Tribe gave up its claim to extensive tracts of land that had 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 Mohegan Sun. This philosophy of cooperation,
rather than confrontation, has enabled the Tribe to build a solid alliance
among local, state and federal officials to achieve its goal of building
Mohegan Sun.
Governance of the Tribe
The Tribe's Constitution provides for the governance of the Tribe by a
Tribal Council, consisting of nine members and a Council of Elders, consisting
of seven members. All members of the Tribal Council and the Council of Elders
are elected by the registered voters of the Tribe and serve terms of five
years. Members of the Tribal Council must be at least 18, and members of the
Council of Elders must be at least 55 when elected. The current terms for the
Tribal Council and the Council of Elders expire in October 2000. The members of
the Tribal Council are the same individuals who serve on the Management Board
of the Authority. See "The Authority--Management Board and Executive Officers."
The Tribe's Constitution vests all legislative and executive powers of the
Tribe in the Tribal Council. These powers include the powers to establish an
executive branch departmental structure with agencies and sub-divisions and
delegate appropriate powers to such agencies and sub-divisions.
The Council of Elders acts in the capacity of an appellate court of final
review and may hear appeals of any case or controversy arising under the
Tribe's Constitution, except those matters which relate to Mohegan Sun,
including the Notes, which are required to be submitted to the Gaming Disputes
Court.
Gaming Disputes Court
The Tribal Council has established the Gaming Disputes Court by Tribal
ordinance and vested it with exclusive jurisdiction for the Tribe over all
disputes related to gaming at Mohegan Sun. The Gaming Disputes Court is
composed of a Trial Division and an Appellate Branch. A single judge presides
over cases at the trial level. Trial Division 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.
The Gaming Disputes Court has jurisdiction over all disputes or
controversies related to gaming between any person or entity and the Authority,
the Tribe or Trading Cove Associates. The Gaming Disputes Court also has
jurisdiction of all disputes arising out of the Authority's regulatory powers,
including licensing actions. The Tribe has adopted the substantive law of the
State of Connecticut as the applicable law of the Gaming Disputes Court to the
extent such law is not in conflict with Mohegan Tribal Law. Also, the Tribe has
adopted all of Connecticut's rules of civil and appellate procedure,
professional and judicial conduct to govern the Gaming Disputes Court.
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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, who are appointed by the Chief Justice of the
Connecticut Supreme Court, each of whom must remain licensed to practice law in
the State of Connecticut. Judges are selected sequentially from this 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
Tribe at an agreed rate of pay commensurate with their duties and
responsibilities. Such rate cannot be diminished during a judge's tenure.
Below is a description of certain information regarding judges currently
serving on the Gaming Disputes Court, each of whom has been serving since 1996:
Jane W. Freeman, Chief Judge. Age: 48. Judge, Mashantucket Pequot Tribal
Court, 1992 to 1995; professional law practice for 22 years. Judge Freeman is a
Connecticut Attorney Trial Referee.
Emmet L. Cosgrove, Judge. Age: 50. Professional law practice for 23 years.
Judge Cosgrove is a Connecticut Attorney Trial Referee.
F. Owen Eagan, Judge. Age: 68. U.S. Magistrate Judge from 1975 to 1996.
Formerly, Assistant U.S. Attorney for the District of Connecticut and U.S.
Attorney for the District of Connecticut, and member and chairman of Draft
Appeal Board. Adjunct law faculty member at Western New England School from
1978 to the present.
Paul M. Guernsey, Judge. Age: 48. Fact Finder for the New London Judicial
District from 1990 to 1992. Special Master at the Special Masters Pre-Trial
Conference Program in 1985. State Attorney Trial Referee, Judicial District of
New London, 1992 to the present. Chairman of the Criminal Law and Public
Defender Committee. Professional law practice for 23 years.
Thomas B. Wilson, Judge. Age: 59. Partner/director at Suisman, Shapiro,
Wool, Brennan & Gray, P.C. for 31 years. State Attorney Trial Referee from 1988
to the present. Member of the New London County Standing Committee on
Recommendations for Admission to the Bar. Town Attorney for the Town of Ledyard
from 1971 to 1979; 1983 to 1991; and 1995 to the present.
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OTHER MATERIAL AGREEMENTS
The following discussion summarizes significant terms of certain material
agreements to which either the Tribe or the Authority are parties. This summary
does not purport to be complete and is qualified in its entirety by reference
to each of the full agreements. The Authority will provide you a copy of any of
these agreements without charge upon written or oral request by contacting the
Authority at 1 Mohegan Sun Boulevard, Uncasville, CT 06382, Tel: (860) 204-
8000, attention: Roland Harris, Chairman.
Gaming Compact with the State of Connecticut
The Tribe and the State of Connecticut agreed in April 1994 to resolve all
land disputes and differences and enter into a gaming compact to authorize and
regulate the Tribe's conduct of gaming on the Tribe's lands. This agreement,
the Mohegan Compact, is substantively similar to the agreement governing gaming
operations of the Mashantucket Pequot Tribe in Connecticut and provides, among
other things, as follows:
(1) The Tribe is authorized to conduct certain Class III gaming
activities on its reservation. The forms of Class III gaming authorized
under the Mohegan Compact include (i) certain games of chance, (ii) video
facsimiles of such authorized games of chance (i.e., slot machines), (iii)
off-track pari-mutuel betting on animal races, (iv) pari-mutuel betting,
through simulcasting, on animal races and (v) certain types of pari-mutuel
betting on games and races conducted at the gaming facility (some types of
which currently are, together with off-track pari-mutuel telephone betting
on animal races, under a moratorium).
(2) The Tribe must establish standards of operations and management of
all gaming operations to protect the public interest, insure the fair and
honest operation of gaming activities and maintain the integrity of all
Class III gaming activities. The first of such standards were shown in the
Mohegan Compact and approved by the State gaming agency. State gaming
agency approval is required for any revision to such standards. The Tribe
must supervise the implementation of these standards by regulation through
a Tribal gaming agency.
(3) Law enforcement matters relating to the Tribe's Class III gaming
activities will be under the jurisdiction of both the State and the Tribe.
(4) All gaming employees must obtain and maintain a gaming license
issued by the State gaming agency.
(5) Any enterprise providing gaming services or gaming equipment to the
Tribe is required to hold a current valid registration issued by the
Connecticut Division of Special Revenue.
(6) The State will assess the Tribe annually for the costs attributable
to the State's regulation of the Tribe's gaming operations and for the
provision of law enforcement at the Tribe's gaming facilities.
(7) Net revenues from the Tribe's gaming operations may be applied only
for the certain purposes related to Tribal operations and welfare,
charitable contributions and payments to local governmental agencies.
(8) Tribal ordinances and regulations governing health and safety
standards at the gaming facilities may be no less rigorous than the
applicable laws and regulations of the State.
(9) Service of alcoholic beverages within the Tribe's gaming facilities
is subject to regulation by the State.
(10) The Tribe waives any defense which it may have by virtue of
sovereign immunity with respect to any action in United States District
Court to enforce the Mohegan Compact.
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In addition, together with the Mohegan Compact, the Tribe and the State
entered into a memorandum of understanding providing for the payment of a
portion of the Authority's slot machine revenues to the State. Commencing July
1, 1995, for each fiscal year such payment to the State must 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) $80.0 million. These payments will
not be required if there is a change in the law to permit the operation of
commercial casino games by any other person in the State (other than the
Mashantucket Pequot Tribe and the Mohegan Tribe). The Authority expensed $102.3
million for the slot win contribution to the State for the fiscal year ended
September 30, 1998.
Agreement with the Town of Montville
In June 1994, the Tribe and the neighboring town of Montville entered into
an agreement whereby the Tribe makes annual payments of $500,000 to the town to
minimize the impact to Montville resulting from decreased tax revenues on the
land taken into trust for the Tribe's reservation. The Tribe also agreed to pay
Montville $3.0 million for infrastructure improvements to the town's water
system and to pay for its use of the town's disposal and wastewater collection
and treatment systems. Finally, the Tribe agreed to make payments instead of
taxes to Montville on lands that the Tribe acquires outside of its current
reservation. The Tribe has assigned its rights and obligations under this
agreement to the Authority.
Land Lease from the Tribe to the Authority
The land in Uncasville, Connecticut upon which Mohegan Sun is situated and
the expansion will be constructed is held in trust for the Tribe by the United
States of America. The Tribe and the Authority have entered into a land lease
under which the Tribe is leasing to the Authority the property and all
buildings, improvements and related facilities (e.g., Mohegan Sun and the
expansion) constructed or installed on the property. The lease was approved by
the Secretary of the Interior. Below we summarize certain key provisions of
this lease.
Term
The term of the lease is for 25 years with an option, exercisable by the
Authority, to extend the term for one additional 25-year period. Upon the
termination of the lease, the Authority will be required to surrender to the
Tribe possession of the property and improvements, excluding any equipment,
furniture, trade fixtures or other personal leased property.
Rent; Expenses
The Authority is required to pay to the Tribe annual rent in the amount of
$1.00. For any period when the Tribe or another agency or instrumentality of
the Tribe is not the tenant under the lease, the rent will be 8% of the
tenant's gross revenues from the premises. The Authority is responsible for the
payment of all costs of owning, operating, constructing, maintaining,
repairing, replacing and insuring the leased property.
Use of Leased Property
The Authority may use the leased property and improvements solely for the
construction and operation of Mohegan Sun, 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 or any transfer of such interest to
the holder of such mortgage instead of foreclosure, the leased property and
improvements may be used for any lawful purposes, subject only to applicable
codes and governmental regulations; provided, however, that a non-Indian holder
of the leased property may in no event conduct gaming operations thereon.
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Permitted Mortgages and Rights of Permitted Mortgagees
The Authority may not mortgage, pledge or otherwise encumber its leasehold
estate in the leased property except to a holder of a permitted mortgage. Under
the lease, a "permitted mortgage" includes the leasehold mortgage securing the
Authority's obligations under the Bank Credit Facility as well as any other
mortgage granted by the Authority that provides, among other things, that (1)
the Tribe shall have the right to notice of, and to cure, any default of the
Authority thereunder, (2) the Tribe shall have the right to prior notice of an
intention by the holder to foreclose on such permitted mortgage and the right
to purchase such mortgage instead of any foreclosure, and (3) such permitted
mortgage is subject and subordinated to any and all access and utility
easements granted by the Tribe under the lease. As provided in the lease, each
holder of a permitted mortgage has the right to notice of any default of the
Authority under the lease and the opportunity to cure such default within any
applicable cure period.
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 holder of a permitted mortgage under (1) a foreclosure by such holder, (2)
a transfer instead of foreclosure, (3) the exercise of any right or remedy
granted by such holder or (4) any purchase by a third party at a foreclosure or
other sale. In no event, however, will a holder of a permitted mortgage (or any
assignee, sublessee, purchaser or transferee of such holder) be permitted to
transfer any interest in the lease or its leasehold interest in the leased
property and improvements to any person or entity engaged by the Tribe or the
Authority to manage a gaming enterprise.
Default; Remedies
The Authority will be in default under the lease if, subject to certain
notice provisions, it fails to make lease payments or to comply with its
covenants under the lease or if it pledges, encumbers or conveys its interest
in the lease in violation of the terms of the lease. Following a default, the
Tribe may, with approval from the Secretary of the Interior, terminate the
Lease unless a permitted mortgage remains outstanding with respect to the
leased property. In that case, the Tribe may not (1) terminate the lease or the
Authority's right to possession of the leased property, (2) exercise any right
of re-entry, (3) take possession of and/or relet the leased property or any
portion thereof, or (4) enforce any other right or remedy which may materially
and adversely affect the rights of the holder of the permitted mortgage, unless
the default triggering such rights was a monetary default which such holder
failed to cure after notice.
Expansion Development Services Agreement with Trading Cove Associates
General
The Authority entered into a Development Services Agreement with Trading
Cove Associates on February 7, 1998 whereby Trading Cove Associates agreed to
oversee the design, construction, furnishing, equipping and staffing of the
casino expansion for a $14.0 million development fee.
Design Phase--Architect and Construction Manager Selection; Plans and
Specifications
During the design phase, Trading Cove Associates will assist the Authority
in the engagement of the architect and the construction manager, the
preparation of design, construction, and furnishings budgets, preliminary
program evaluation, design development and the approval of final detailed plans
and specifications prepared by the architect. The Authority has chosen Kohn
Pedersen Fox Associates PC as the architect for the expansion. The Authority
has agreed to assign to Trading Cove Associates its responsibilities under any
architectural and/or engineering agreements to allow Trading Cove Associates to
supervise and administer directly the duties of the architect and/or engineer
thereunder.
The Development Agreement provides that the design and construction of the
expansion must comply with all federal and Connecticut statutes and regulations
that otherwise would apply if the expansion were located outside the
jurisdictional boundaries of the Tribe's land.
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Construction Phase
During the construction phase, Trading Cove Associates will be responsible
for the administration and supervision of the construction manager and the
entire construction process. Trading Cove Associates will act as the
Authority's representative in connection with construction contracts that are
approved by the Authority. Specifically, Trading Cove Associates will be
responsible for overseeing all persons performing work on the expansion site,
inspecting the progress of construction, determining completion dates and
reviewing contractor payment requests submitted to the Authority. The
Development Agreement specifically gives Trading Cove Associates the right to
include provisions in construction contracts that impose liquidated damage
payments in the event of failure to meet construction schedules.
Retail Facilities
As permitted by the Development Agreement, the Authority has elected to
engage a retail consultant to oversee the design and construction of the retail
facilities in the expansion. This work will be under the overall supervision of
Trading Cove Associates, which will integrate the design and construction of
the retail facilities with that of the other components of the expansion.
Engagement of Certified Entities; Staffing the Expansion
The Development Agreement requires Trading Cove Associates to implement
procedures described in the Tribal Employment Rights Ordinance. In effect, this
requires Trading Cove Associates to give preference to business entities or
persons which have been approved by the Authority in the selection of all
contractors, vendors and suppliers engaged in the development of the expansion.
In addition, in staffing the operation of the expansion, the Development
Agreement requires that Trading Cove Associates give preference to qualified
members of the Tribe (and their spouses and children) and thereafter to
enrolled members of other federally recognized Indian tribes.
Equipping the Expansion
The Authority will purchase equipment, furniture and furnishings required to
operate the expanded facilities from vendors selected by Trading Cove
Associates or lease such equipment, furniture and furnishings on terms arranged
by Trading Cove Associates and approved by the Authority.
Payment of the Development Fee
The Authority will pay a portion of the development fee to Trading Cove
Associates quarterly beginning on January 15, 2000 until the completion date of
the expansion, such quarterly payment to be based on incremental completion of
the expansion as of each payment date.
Termination and Disputes
The Development Agreement terminates after the earlier of completion of the
expansion or 10 years. In addition, each party has the right to terminate the
Development Agreement if there is a default or failure to perform by the other
party. The parties must submit disputes arising under the agreement to
arbitration and have agreed that punitive damages may not be awarded to either
party by any arbitrator. The Authority has also waived sovereign immunity for
the purposes of permitting, compelling or enforcing arbitration and has agreed
to be sued by Trading Cove Associates in any court of competent jurisdiction
for the purposes of compelling arbitration or enforcing any arbitration or
judicial award arising out of the Development Agreement.
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Relinquishment Agreement with Trading Cove Associates
General
Under a relinquishment agreement dated February 7, 1998, the Authority and
Trading Cove Associates have agreed to terminate the existing agreement with
Trading Cove Associates under which Trading Cove Associates manages the
Authority's gaming operations (described in greater detail in the following
section). This termination will occur as of January 1, 2000, at which time the
Authority will assume day-to-day management of Mohegan Sun. To compensate
Trading Cove Associates for terminating its management rights, the Authority
has agreed to pay to Trading Cove Associates 5% of the gross revenues generated
by Mohegan Sun and the planned expansion during the 15-year period commencing
on January 1, 2000.
Relinquishment Payments
The payments under the Relinquishment Agreement will be divided into Senior
Relinquishment Payments and Junior Relinquishment Payments, each of which will
be 2.5% of "Revenues," as defined in the Relinquishment Agreement. Senior
Relinquishment Payments will be payable quarterly in arrears commencing on
April 25, 2000 and the Junior Relinquishment Payments will be payable semi-
annually in arrears commencing on July 25, 2000. "Revenues" are defined as
gross gaming revenues (other than Class II gaming revenue) and all other
facility revenues (including, without limitation, hotel revenues, food and
beverage sales, parking revenues, ticket revenues and other fees or receipts
from the convention/events center in the expansion and all rental or other
receipts from lessees, licensees and concessionaires operating in the facility
but not the gross receipts of such lessees, licensees and concessionaires).
Subordination of Relinquishment Payments/Minimum Priority Distribution to the
Tribe
The Relinquishment Agreement provides that each of the Senior and Junior
Relinquishment Payments are subordinated in right of payment to payment of
senior secured obligations, including the Bank Credit Facility, and that the
Junior Relinquishment Payments are further subordinated to payment of all other
senior obligations, including the Senior Exchange Notes. The Relinquishment
Agreement also provides that all relinquishment payments are subordinated in
right of payment to an annual minimum priority distribution of $14 million to
the Tribe from the operations of Mohegan Sun. The minimum priority distribution
will be adjusted annually to reflect the cumulative increase in the Consumer
Price Index.
Covenants of the Authority
Under the Relinquishment Agreement, the Authority makes certain covenants
for the benefit of Trading Cove Associates, including the following.
(1) Payments to Tribe. Except for payments of the minimum priority
distributions and reasonable charges for utilities or other governmental
services supplied by the Tribe to the Authority, the Authority may not make
any distributions to the Tribe or its members at any time any
Relinquishment Payments are outstanding.
(2) Affiliate Transactions. Except for payments of the minimum priority
distributions and reasonable charges for utilities or other governmental
services supplied by the Tribe to the Authority, the Authority agrees to
abide by certain restrictions on transactions with the Tribe and its
members, all as shown in the Relinquishment Agreement.
(3) Replacement/Restoration of Mohegan Sun. If any portion of Mohegan
Sun's facilities is damaged by fire or other casualty, the Authority shall
replace or restore such facilities to substantially the same condition as
before such casualty, but only to the extent insurance proceeds are
available to do so. If sufficient insurance proceeds are not available, the
Authority will use reasonable efforts to obtain the required financing, on
commercially reasonable terms, to undertake and complete such replacement
or restoration.
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(4) Business Purpose. The Authority has agreed that during the term of
the Relinquishment Agreement it will only engage in the casino gaming and
resort business (and any incidental business or activity) and will continue
to operate Mohegan Sun as currently operated.
Orderly Transition/Employee Solicitation
Under the Relinquishment Agreement, the Authority and Trading Cove
Associates agree to cooperate with each other to effect an orderly transition
of the operations of Mohegan Sun to the Authority. Each of the parties also
agrees that it will not solicit any employee of the other party or any
affiliate of the other party for five years.
Marks
Trading Cove Associates has granted to the Authority an exclusive and
perpetual license with respect to trademarks and other similar rights,
including the "Mohegan Sun" name, used at or developed for Mohegan Sun. The
Authority has agreed, however, that it will only use the word "Sun" in
conjunction with the Mohegan Sun resort and together with "Mohegan" or "Mohegan
Tribe."
Waiver of Immunity from Unconsented Suit
With certain limitations shown in the Relinquishment Agreement, both the
Tribe and the Authority waive immunity from unconsented suit for certain
enforcement rights of Trading Cove Associates arising under the Relinquishment
Agreement.
Existing Management Agreement with Trading Cove Associates
General
Until January 1, 2000, Trading Cove Associates will continue as the
exclusive manager of Mohegan Sun. Under the Management Agreement, Trading Cove
Associates is responsible for the day-to-day management, operation and
maintenance of Mohegan Sun. Trading Cove Associates is obligated to manage and
operate the facility in compliance with all Tribal legal requirements and other
applicable laws. Certain major decision-making and oversight duties have been
delegated to the Business Board, a committee comprised of an equal number of
representatives of the Authority and of Trading Cove Associates. Actions by the
Business Board require the unanimous approval of its members or their
respective designees.
Staffing the Facility
Trading Cove Associates has the exclusive responsibility and authority to
select, retain, train and discharge all employees hired to perform services at
Mohegan Sun; however, all employees are the employees of the Authority and not
Trading Cove Associates. It is anticipated that substantially all of these
employees will remain in place following termination of the Management
Agreement. Members of the Tribe are to be given preference in the recruiting,
employment and training of personnel in all job categories in connection with
the operation of Mohegan Sun.
Operating and Capital Budgets; Replacement Reserve Fund
Trading Cove Associates must annually submit to the Tribal Council, for its
approval, a detailed proposed annual operating budget for the facility. In
addition to an annual operating budget, Trading Cove Associates must annually
submit to the Tribal Council, for its approval, a recommended annual capital
budget for the furnishings, equipment and ordinary capital replacement items
required to operate Mohegan Sun. Trading Cove Associates must manage and
operate the facility according to the then-current approved operating budget
and capital reserve budget. The Management Agreement further requires Trading
Cove Associates to establish a
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replacement reserve fund for the purpose of funding approved budgeted capital
expenditures. This Reserve Fund is funded monthly by the Authority and Trading
Cove Associates according to a schedule determined by the Business Board, with
all required amounts (up to an aggregate total of $3 million) being funded 60%
by the Authority and 40% by Trading Cove Associates. The Authority's deposits
to the Reserve Fund are deemed capital expenditures and do not reduce Net
Revenues (as defined in the Management Agreement); deposits made on behalf of
Trading Cove Associates reduce monthly management fee amounts distributable to
Trading Cove Associates.
Books and Records; Accounting Procedures
The Management Agreement requires Trading Cove Associates to maintain,
according to generally accepted accounting principles, books and records
reflecting the operations of Mohegan Sun and to prepare monthly, quarterly and
annual statements for the Authority. An annual audit of Mohegan Sun is required
by a nationally-recognized independent certified public accounting firm with
experience in the casino industry.
Management Fee
The Management Agreement authorizes Trading Cove Associates to pay itself a
management fee in monthly installments based on 30% to 40% of Net Revenues
depending on profitability levels. "Net Revenues" are generally defined as
gross gaming revenues (other than Class II gaming revenue) and all other
facility revenues, less operating expenses other than the management fee. The
management fees for the 12 months ended September 30, 1998 and for the quarter
ended December 31, 1998 were $47.4 million and $13.6 million, respectively.
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GOVERNMENT REGULATION
General
The Authority is subject to special federal, state and tribal laws
applicable to both commercial relationships with Indians generally and to
Indian gaming and the management and financing of Indian casinos specifically.
In addition, the Authority is regulated by federal and state laws 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 operates is only a summary and not a complete
recitation of all applicable law. Moreover, since this particular regulatory
environment is more susceptible to changes in public policy considerations than
others, it is impossible to predict how certain provisions will be interpreted
from time to time or whether they will remain intact. Changes in such laws
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 Mohegan
Sun.
Waiver of Sovereign Immunity; Jurisdiction; Exhaustion of Tribal Remedies
Indian tribes enjoy sovereign immunity from unconsented suit similar to that
of the states and the United States. To sue an Indian tribe (or an agency or
instrumentality of an Indian tribe, such as the Authority), 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 in 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 jurisdiction of the tribal forum exists, the tribal court
must first rule as to the limits of its own jurisdiction.
In connection with the offering of the Outstanding Notes and the Exchange
Offers for the Exchange Notes, the Tribe has 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 Trustees under the Indentures or, as to the Authority, under
certain circumstances by the holders of the Exchange Notes to enforce repayment
of the Exchange Notes. The Tribe has also adopted a constitutional restraint
against any action by the Tribe or its officers which impairs contractual
obligations. If such waiver of
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sovereign immunity is held to be ineffective, the Trustees and the Exchange
Note holders could be precluded from judicially enforcing their rights and
remedies against the Tribe or the Authority. If the waiver of the rule
requiring exhaustion of tribal remedies is held to be ineffective, the Trustees
and the Exchange 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 operation of casinos and of all gaming on Indian land is subject to the
Indian Gaming Regulatory Act of 1988. The Indian Gaming Regulatory Act (IGRA)
is administered by the National Indian Gaming Commission, an independent
agency, within the U.S. Department of Interior, exercising primary federal
regulatory responsibility over Indian gaming. The National Indian Gaming
Commission (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 Bureau of Indian Affairs. The BIA also has
responsibility to review and approve land leases and other agreements relating
to Indian lands. 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 Class II Indian
gaming, to hold hearings, issue subpoenas, take depositions, adopt regulations
and assess fees and impose civil penalties for violations of IGRA. IGRA also
prohibits illegal gaming on Indian land and theft from Indian gaming
facilities. The NIGC has adopted 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 their facilities in a manner that
adequately protects the environment and the public health and safety. These
rules also set out review and reporting procedures for tribal licensing of
gaming operation employees.
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 a 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 (1) the ownership, security, personnel background, recordkeeping,
and auditing of a tribe's gaming enterprises; (2) the use of the revenues from
such gaming; and (3) the protection of the environment and the public health
and safety. The Tribe adopted its gaming ordinance in July 1994, and the NIGC
approved the gaming ordinance in November 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
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individuals as part of, or in connection with, tribal ceremonies or
celebrations. "Class II Gaming" includes bingo, pulltabs, lotto, punch boards,
tip jars, certain non-banked card games (if such games are played legally
elsewhere in the state), 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 pari-mutuel wagering).
Class I Gaming on Indian lands is within the exclusive jurisdiction of the
Indian tribes and is not subject to IGRA. Class II Gaming is permitted on
Indian lands if (1) the state in which the Indian lands lie permits such gaming
for any purpose by any person, organization or entity; (2) the gaming is not
otherwise specifically prohibited on Indian lands by federal law; (3) the
gaming is conducted according to a tribal ordinance or resolution which has
been approved by the NIGC; (4) an Indian tribe has sole proprietary interest
and responsibility for the conduct of gaming; (5) the primary management
officials and key employees are tribally licensed; and (6) 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 tribal-state Compact (a written
agreement between the tribal government and the government of the state within
whose boundaries the tribe's lands lie).
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
gaming activities in amounts comparable to those amounts assessed by the state
for comparable activities, remedies for breach of compacts, standards for the
operation of gaming and maintenance of the gaming facility, including
licensing, and any other subjects that are directly related to the operation of
gaming activities. While the terms of tribal-state compacts vary from state to
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, approved by the Secretary of
the Interior in 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.
Tribal-state compacts have been the subject of litigation in a number of
states, including Alabama, California, Florida, Kansas, Michigan, Mississippi,
New Mexico, New York, Oklahoma, Oregon, South Dakota, Wisconsin and Washington.
Among the issues litigated have been the constitutionality of the provision of
IGRA which entitles tribes to sue in federal court to force states to negotiate
tribal-state compacts. Federal district courts in Alabama, Michigan and
Washington recently have held that the Eleventh Amendment to the United States
Constitution immunizes states from suit by Indian tribes in federal court
unless the state consents to such suit. Federal appellate courts have divided
over this issue. The United States Supreme Court recently held that the Indian
commerce clause of IGRA does not grant Congress authority to abrogate a state's
sovereign immunity. Accordingly, IGRA does not grant jurisdiction over a state
that did not consent to be sued.
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 and Kansas 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 and Kansas cases, the courts held that compacting is a
legislative function under the respective state constitutions. The court in the
New Mexico case also held that state law does not permit casino-style gaming.
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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 the New Mexico or
Kansas cases would apply. The Connecticut Attorney General has issued a formal
opinion 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 Mashantucket Pequot Tribe, that Connecticut law authorizes casino gaming.
After execution of the Mohegan Compact, the Connecticut Legislature passed a
law requiring that future gaming compacts 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. While
there have been a number of technical amendments to the law, to date there have
been no material changes to the IGRA. Any amendment of IGRA could change the
governmental structure and requirements within which the Tribe could conduct
gaming.
BIA and NIGC Approvals
Mohegan Sun is built on lands held in trust for the Tribe by the United
States of America, which are leased by the Tribe to the Authority. See "Other
Material Agreements--Land Lease from the Tribe to the Authority." Such lease,
and modifications or amendments to such lease, must be and have been approved
by the BIA. In addition, federal law requires that all contracts "by any person
with any tribe of Indians" which are "relative to their lands" must be approved
by the BIA. Federal courts can void agreements that have not been approved by
the BIA and grant full restitution of all amounts paid to the non-Indian party
by the tribe. BIA approved the Indentures and the Bank Credit Facility in
February, 1999 in connection with the closing of the offering of the
Outstanding Notes.
Before 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 jurisdiction.
The full scope of required review and approval for gaming management agreements
is not fully or precisely defined. The regulations and guidelines which the
NIGC and the BIA use to interpret their respective responsibilities are
incomplete and evolving. The federal law in this area has been the subject of
litigation and may be subject to further judicial or legislative
interpretation.
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DESCRIPTION OF OTHER INDEBTEDNESS
Bank Credit Facility
The Authority has a $425 million reducing, revolving, secured credit
facility with a syndicate of lenders led by Bank of America National Trust and
Savings Association ("Bank of America"). The Bank Credit Facility is currently
undrawn, with reductions to the total amounts available under the Bank Credit
Facility to begin on the earlier of March 31, 2002 or the end of the first
fiscal quarter after the completion date. In addition, the Authority has the
right, within two years following the closing of the Bank Credit Facility, to
arrange for increases in the Bank Credit Facility to an aggregate amount of
$500 million. The Authority will use the Bank Credit Facility for (1) the
Mohegan Sun expansion, (2) general working capital, and (3) general corporate
purposes of the Authority. The Bank Credit Facility is secured by, among other
things, a lien on substantially all of the Authority's assets. This
indebtedness is effectively senior in right of payment to the Exchange Notes.
The loan agreement subjects the Authority to a number of restrictive covenants
including financial covenants. These financial covenants relate to the
permitted maximums of the Authority's total debt and senior debt leverage
ratios, its minimum fixed charge coverage ratio, and maximum capital
expenditures. The Bank Credit Facility includes other affirmative and negative
covenants customarily found in loan agreements for similar transactions, many
of which will be similar to those included in the indenture for the Senior
Exchange Notes. Such covenants include provisions that:
. the Tribe preserve its existence as a federally recognized Indian Tribe;
. the Authority continually operate Mohegan Sun in compliance with all
applicable laws;
. except under certain conditions, the Authority not sell or dispose of
assets, incur other debt or contingent obligations, extend credit, make
investments, or commingle its assets with other tribal assets of the
Tribe; and
. permit a construction monitoring services group to inspect and review
the proposed expansion and all budgets, plans, designs and
specifications on a quarterly basis.
At the Authority's option, interest will accrue on the basis of a base rate
formula or a Reserve Adjusted LIBOR based formula plus applicable spreads. The
base rate is the higher of the rate as publicly announced by Bank of America as
its "Reference Rate" or the Federal Funds Rate plus one-half of one percent per
annum. The Reserve Adjusted LIBOR Rate is the London Interbank Offered Rate for
one, two, three or six month dollar deposits as offered by Bank of America to
prime international banks in the offshore dollar market, adjusted for reserve
requirements. The Bank Credit Facility will terminate and all outstanding
amounts will become due on March 3, 2004.
Lines of Credit
The Authority currently has a $2.5 million line of credit and letter of
credit arrangement with Fleet National Bank, an affiliate of Fleet Securities,
Inc. Borrowings are collateralized by a security interest in all of the
Authority's cash deposit accounts with Fleet National Bank. The line of credit
provides for interest based on various floating indexes. As of September 30,
1998, the Authority had outstanding letters of credit totalling $1.9 million
and had no other borrowings outstanding under the line of credit. No further
borrowings will be made under the line of credit. The first extension of credit
under the Bank Credit Facility, which will include the issuance of letters of
credit to replace the letters of credit outstanding under the line of credit.
The line of credit and the security interests collateralizing the line of
credit will be terminated at that time.
Equipment Financing
The Authority currently has three agreements for equipment financing with
CIT Group/Equipment Financing, Inc. or its affiliates:
(1) The Authority has $23.0 million of gaming equipment financing.
Principal payments are over 48 months and commenced December 1996.
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(2) The Authority has a second agreement for equipment financing of $5.0
million. Principal payments are over 48 months and commenced December 1996.
(3) The Authority has a third agreement for equipment financing of an
aggregate amount of $10.0 million. The principal payments are made over 48
months from the commencement of each draw.
The Authority has also received equipment financing of $4.0 million from
Phoenixcor, Inc. The principal payments are over 48 months and commenced
November 1996.
The Authority received equipment financing of $3.0 million from Fleet
Capital Corporation, an affiliate of Fleet Securities, Inc. The principal
payments are over 48 months and commenced July 1997. As of September 30, 1997
this agreement has been assigned to KeyCorp Leasing.
The Authority's equipment financing bears a weighted average interest of
9.1%. As of December 31, 1998, the future minimum lease payments, including
principal and interest, of the Authority's equipment financing are as follows
(in thousands):
<TABLE>
<CAPTION>
Fiscal Year Ending September 30
-------------------------------
<S> <C>
1999............................................................. $ 9,756
2000............................................................. 13,008
2001............................................................. 5,557
2002............................................................. 2,358
2003............................................................. 64
-------
$30,743
=======
</TABLE>
Junior Subordinated Notes
In conjunction with its initial opening of Mohegan Sun, the Authority
obtained a total of $90.0 million of subordinated financing from Sun
International Hotels Limited and Waterford Gaming L.L.C. including (1) $20.0
million of junior subordinated notes to each of Sun International Hotels
Limited and Waterford Gaming L.L.C., bearing interest at 15.0% per year, and
(2) $50.0 million of junior subordinated notes to Sun International Hotels
Limited evidencing draws made by the Authority under a secured completion
guarantee provided by Sun International Hotels Limited relating to the original
development of Mohegan Sun. Each junior subordinated note issued under the Sun
International Hotels Limited secured completion guarantee bears interest at the
rate per annum then most recently announced by Chase Manhattan Bank of New York
as its prime rate plus 1%, which shall be set and revised at intervals of six
months. The interest rates were 9.5% at both September 30, 1998 and September
30, 1997. Interest on junior subordinated notes is payable semi-annually.
Accrued and deferred interest payable on junior subordinated notes was $31.5
million and $17.9 million at September 30, 1998 and 1997, respectively. All
junior subordinated notes are due 2003 but may be redeemed at the Authority's
discretion commencing on January 1, 2000. During October 1998 and October 1997,
a total of $5.0 million of junior subordinated notes issued to Sun
International Hotels Limited pursuant to its secured completion guarantee were
purchased by Waterford Gaming L.L.C. from Sun International Hotels Limited.
The Authority decided to redeem its junior subordinated notes on January 1,
2000. To accomplish this, the Authority effected a defeasance of the junior
subordinated notes on March 3, 1999. The Authority established a segregated
trust account with a defeasance agent with cash equivalent funds estimated to
be sufficient to permit a redemption of its junior subordinated notes on
January 1, 2000. All junior subordinated notes are currently held by Sun
International Hotels Limited, the parent company of a partner in Trading Cove
Associates, and Waterford Gaming L.L.C., also a partner in Trading Cove
Associates.
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DESCRIPTION OF THE EXCHANGE NOTES
The Authority issued the Outstanding Senior Notes under the Senior Notes
Indenture among itself, the Tribe and First Union National Bank, as trustee
(the "Senior Trustee"), and the Outstanding Senior Subordinated Notes under the
Senior Subordinated Notes Indenture among itself, the Tribe and State Street
Bank and Trust Company, as trustee (the "Senior Subordinated Trustee", and
together with the Senior Trustee, the "Trustees"). The terms of the Outstanding
Notes included and the terms of the Exchange Notes will be those stated in
their respective Indentures and those made part of the Indentures by reference
to the Trust Indenture Act of 1939.
The terms of the Exchange Notes are identical in all material respects to
the Outstanding Notes, except that (1) the Exchange Notes will have been
registered under the Securities Act and therefore will not be subject to
certain restrictions on transfer applicable to the Outstanding Notes and (2)
Holders of the Exchange Notes will not be entitled to certain rights of Holders
of Outstanding Notes under the registration rights agreement. The terms of the
Exchange Notes include those stated in the Indentures and those made a part of
the Indentures by reference to the Trust Indenture Act of 1939 as in effect on
the date of the Indentures (the "Trust Indenture Act"). The Exchange Notes are
subject to all such terms, and Holders of the Exchange Notes are referred to
the Indentures and the Trust Indenture Act for a complete statement of such
terms. Copies of the Indentures are available from the Authority on request.
The statements and definitions of terms under this caption relating to the
Exchange Notes and the Indentures are summaries and do not purport to be
complete. Such summaries make use of certain terms defined in the Indentures
and are qualified in their entirety by express reference to the Indentures.
Certain terms used herein are defined below under "--Certain Definitions."
The following description is a summary of the material provisions of the
Indentures and the registration rights agreements. It does not restate those
agreements in their entirety. We urge you to read the Indentures and the
registration rights agreements because they, and not this description, define
your rights as holders of the Notes. Copies of the forms of Indentures and
registration rights agreements are available from the Authority upon request.
You can find the definitions of certain terms used in this section under the
subheading
"--Certain Definitions." Reference is made to the Indentures for all of such
terms, as well as any other capitalized terms used herein for which no
definition is provided.
Description of the Senior Exchange Notes
Ranking
These Senior Exchange Notes
. are unsecured general obligations of the Authority;
. are effectively subordinated to up to $500 million of secured
indebtedness under the Loan Agreement; and
. are senior in right of payment to all future subordinated Indebtedness
of the Authority (including the Senior Subordinated Exchange Notes).
Subsidiaries
As of the date of the Senior Notes Indenture, the Authority will have no
Subsidiaries. However, the Senior Notes Indenture will permit the Authority to
create Subsidiaries and will generally require that these Subsidiaries be
designated as Restricted Subsidiaries (i.e., subject to the terms of the Senior
Notes Indenture) unless certain conditions are met. If these conditions are
met, the Authority will be permitted to designate a Subsidiary as an
Unrestricted Subsidiary, and Unrestricted Subsidiaries will not be subject to
many of the restrictive covenants of the Senior Notes Indenture.
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Principal, Maturity and Interest
The Senior Exchange Notes will be limited to a maximum aggregate principal
amount of $200 million. The Authority will issue Senior Exchange Notes without
coupons and in fully registered form only, in minimum denominations of $1,000
and integral multiples of $1,000. The Senior Exchange Notes will mature on
January 1, 2006.
Interest on the Senior Exchange Notes will accrue at the rate of 8 1/8% per
annum and will be payable semi-annually in arrears on January 1 and July 1,
beginning on July 1, 1999. The Authority will make each interest payment to the
holders of record of these Senior Exchange Notes on the immediately preceding
December 15 and June 15.
Interest on the Senior Exchange Notes will accrue from the date of original
issuance or, if interest has already been paid, from the date it was most
recently paid. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
Optional Redemption
Except as otherwise shown in this section, the Authority will not have the
right to redeem the Senior Exchange Notes.
If, at any time after the Issue Date, any Gaming Regulatory Authority
requires a holder to be licensed or otherwise qualified under applicable gaming
laws in order for the Authority to maintain any of its gaming licenses or
franchises and the holder does not obtain such license or qualification within
the time periods described in the Senior Notes Indenture and at its own cost
and expense, then the Authority will have the right to either
. require the holder to dispose of its Senior Exchange Notes within the
time period specified by the Gaming Regulatory Authority or 30 days,
whichever is shorter; or
. redeem the holder's Senior Exchange Notes at a price equal to the lesser
of (1) the principal amount of the Senior Exchange Notes held by the
holder, (2) the price paid for the Senior Exchange Notes by the holder,
and (3) the current market price of the Senior Exchange Notes, in each
case, including all accrued and unpaid interest and Additional Interest,
if any, to the redemption date or the date a finding of unsuitability is
made by the applicable Gaming Regulatory Authority, if earlier.
The Authority will comply with the redemption procedures for the Senior
Exchange Notes described in the Senior Notes Indenture unless otherwise
required by a Gaming Regulatory Authority. In addition, the Authority may
redeem all or a part of these Senior Exchange Notes upon not less than 30 nor
more than 60 days' notice, at a redemption price (expressed as percentages of
principal amount) equal to 100% of the principal amount thereof plus the
Applicable Premium, if any, plus accrued and unpaid interest thereon, if any,
to the applicable redemption date.
The "Applicable Premium" of any redeemed Senior Note equals the excess of
(a) the present value at the date of redemption of 100% of the principal
amount of such Senior Exchange Note plus all required interest payments due
on such Senior Exchange Note through its Stated Maturity date (excluding
accrued but unpaid interest), calculated using a discount rate equal to the
Treasury Rate plus 50 basis points over
(b) the principal amount of such Senior Exchange Note, if greater.
If the period from the date of redemption to the Stated Maturity date is
greater than one year, the "Treasury Rate" will be equal to the yield to
maturity as of such date of redemption of United States Treasury securities
with a constant maturity (as complied and published in the most recent Federal
Reserve Statistical Release H.15 (519) that became publicly available at least
two business days prior to the date of redemption (or, if the Federal Reserve
Statistical Release H.15 (519) is no longer published, any publicly available
source of similar market data)) most nearly equal to the period from the date
of redemption to the Stated Maturity date.
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If the period from the date of redemption to the Stated Maturity date is
less than one year, the "Treasury Rate" will be equal to the weekly average
yield on actually traded United States Treasury securities adjusted to a
constant maturity of one year.
Selection and Notice
If less than all of the Senior Exchange Notes are to be redeemed at any
time, the Senior Trustee will select Senior Exchange Notes for redemption as
follows:
(1) if the Senior Exchange Notes are listed, in compliance with the
requirements of the principal national securities exchange on which the
Senior Exchange Notes are listed; or
(2) if the Senior Exchange Notes are not so listed, on a pro rata basis,
by lot or by such method as the Senior Trustee shall deem fair and
appropriate.
No Senior Exchange Notes of $1,000 or less shall be redeemed in part.
Notices of redemption shall be mailed by first class mail at least 30 but not
more than 60 days before the redemption date to each holder of Senior Exchange
Notes to be redeemed at its registered address. Notices of redemption may not
be conditional.
If any Senior Exchange Note is to be redeemed in part only, the notice of
redemption that relates to that Senior Exchange Note shall state the portion of
the principal amount thereof to be redeemed. A new Senior Note in principal
amount equal to the unredeemed portion of the original Senior Exchange Note
will be issued in the name of the holder thereof upon cancellation of the
original Senior Exchange Note. Senior Exchange Notes called for redemption
become due on the date fixed for redemption. On and after the redemption date,
interest ceases to accrue on Senior Exchange Notes or portions of them called
for redemption.
Repurchase at the Option of Holders
Change of Control
If a Change of Control occurs, each holder of the Senior Exchange Notes will
have the right to require the Authority to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of that holder's Senior Exchange Notes
pursuant to a Change of Control Offer. In the Change of Control Offer, the
Authority will offer a Change of Control Payment in cash equal to 101% of the
aggregate principal amount of Senior Exchange Notes repurchased plus accrued
and unpaid interest and Additional Interest, if any, thereon, to the date of
purchase.
Within 20 business days following any Change of Control, the Authority will
mail a notice to each holder describing the transaction or transactions that
constitute the Change of Control and offering to repurchase Senior Exchange
Notes on the Change of Control Payment Date specified in such notice, pursuant
to the procedures required by the Senior Notes Indenture and described in such
notice. 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 and regulations are applicable in connection with the
repurchase of the Senior Exchange Notes as a result of a Change of Control.
On the Change of Control Payment Date, the Authority will, to the extent
lawful
(1) accept for payment all Senior Exchange Notes or portions thereof
properly tendered pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Senior Exchange Notes or portions thereof
so tendered; and
(3) deliver or cause to be delivered to the Senior Trustee the Senior
Exchange Notes so accepted together with an Officers' Certificate stating
the aggregate principal amount of Senior Exchange Notes or portions thereof
being purchased by the Authority.
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The Paying Agent will promptly mail to each holder of Senior Exchange Notes
so tendered the Change of Control Payment for such Senior Exchange Notes, and
the Senior Trustee will promptly authenticate and mail (or cause to be
transferred by book entry) to each holder a new Senior Exchange Note equal in
principal amount to any unpurchased portion of the Senior Exchange Notes
surrendered, if any; provided that each such new Senior Exchange Note will be
in a principal amount of $1,000 or an integral multiple thereof. The Authority
will notify the Senior Trustee and will instruct the Senior Trustee to notify
the holders of the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
Except as described above with respect to a Change of Control, the Senior
Notes Indenture does not contain provisions that permit the holders of the
Senior Exchange Notes to require that the Authority repurchase or redeem the
Senior Exchange Notes in the event of a takeover, recapitalization or similar
transaction.
The Loan Agreement will prohibit the Authority from purchasing any Senior
Exchange Notes and also will provide that certain change of control events with
respect to the Authority will constitute a default under the Loan Agreement.
Any future credit agreements or other agreements relating to secured
indebtedness to which the Authority becomes a party may contain similar
restrictions and provisions. In the event a Change of Control occurs at a time
when the Authority is prohibited from purchasing Senior Exchange Notes, the
Authority could seek the consent of its lenders to the purchase of Senior
Exchange Notes or could attempt to refinance the borrowings that contain such
prohibition. If the Authority does not obtain such a consent or repay such
borrowings, the Authority will remain prohibited from purchasing Senior
Exchange Notes. In such case, the Authority's failure to purchase tendered
Senior Exchange Notes would constitute an Event of Default under the Senior
Notes Indenture which would, in turn, constitute a default under the Loan
Agreement.
The Authority will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements shown in
the Senior Notes Indenture applicable to a Change of Control Offer made by the
Authority and purchases all Senior Exchange Notes validly tendered and not
withdrawn under such Change of Control Offer.
Asset Sales
The Authority will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless
(1) the Authority (or its Restricted Subsidiary, as the case may be)
receives consideration at the time of such Asset Sale at least equal to the
fair market value (as determined in good faith by the Management Board and
evidenced by a resolution shown in an Officers' Certificate delivered to
the Senior Trustee) of the assets sold or otherwise disposed of; and
(2) except in the case of a Permitted Asset Swap, at least 75% of the
consideration therefor received by the Authority or such Restricted
Subsidiary is in the form of cash. For purposes of this provision, each of
the following shall be deemed to be cash:
(a) any liabilities that would appear on the Authority's or such
Restricted Subsidiary's balance sheet prepared according to GAAP (other
than contingent liabilities and liabilities that are by their terms
subordinated to the Senior Exchange Notes or any guarantee thereof)
that are assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Authority or such
Restricted Subsidiary from further liability; and
(b) any securities, notes or other obligations received by the
Authority or any such Restricted Subsidiary from such transferee that
are converted by the Authority or such Restricted Subsidiary into cash
(to the extent of the cash received) within 30 days of the receipt
thereof,
provided, however, that the Authority will not be permitted to make any Asset
Sale of Key Project Assets.
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Within 360 days after the receipt of any Net Proceeds from an Asset Sale,
the Authority may apply such Net Proceeds, at its option, to:
(1) repay permanently term Indebtedness under Credit Facilities of the
Authority or any Restricted Subsidiary;
(2) repay revolving credit Indebtedness under Credit Facilities and
correspondingly permanently reduce commitments with respect thereto;
(3) acquire a majority of the assets of, or a majority of the Voting
Stock of, an entity engaged in the Principal Business or a Related
Business;
(4) make capital expenditures or acquire other long-term assets that are
used or useful in the Principal Business or a Related Business;
(5) make an investment in the Principal Business or a Related Business
or in tangible long-term assets used or useful in the Principal Business or
a Related Business; or
(6) reduce permanently Indebtedness that is not Subordinated
Indebtedness.
Pending the final application of any such Net Proceeds, the Authority may
temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited by the Senior Notes Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph will be deemed to constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $15.0 million,
the Authority will make an Asset Sale Offer to all holders of Senior Exchange
Notes and all holders of other Indebtedness containing provisions similar to
those shown in the Senior Notes Indenture with respect to offers to purchase or
redeem with the proceeds of sales of assets to purchase the maximum principal
amount of Senior Exchange Notes and such other Indebtedness that may be
purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer
will be equal to 100% of the principal amount plus accrued and unpaid interest
and Additional Interest, if any, to the date of purchase and will be payable in
cash, according to the procedures shown in the Senior Notes Indenture and such
other Indebtedness. To the extent that any Excess Proceeds remain after
consummation of an Asset Sale Offer, the Authority may use such Excess Proceeds
for any purpose not otherwise prohibited by the Senior Notes Indenture. If the
aggregate principal amount of Senior Exchange Notes and such other Indebtedness
tendered into such Asset Sale Offer surrendered by holders thereof exceeds the
amount of Excess Proceeds, the Senior Trustee shall select the Senior Exchange
Notes and such other Indebtedness (to the extent that such other Indebtedness
permits such selection) to be purchased on a pro rata basis. Upon completion of
such offer to purchase, the amount of Excess Proceeds shall be reset at zero.
Certain Covenants
Restricted Payments
The Authority will not, and the Authority will not permit any of its
Restricted Subsidiaries, directly or indirectly, to
(1) make any payment on or with respect to any of the Authority's or any
of its Restricted Subsidiaries' Equity Interests;
(2) purchase, redeem, defease or otherwise acquire or retire for value
any Equity Interest in the Authority held by the Tribe or any Affiliate of
the Tribe;
(3) make any payment on or with respect to, or purchase, redeem, defease
or otherwise acquire or retire for value any Subordinated Indebtedness
(other than the defeasance and ultimate redemption of the junior
subordinated notes according to their terms and the terms of the Defeasance
Trust), except a payment of interest or principal at Stated Maturity
thereof;
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(4) 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 (other than Government Service
Payments); or
(5) make any Restricted Investment;
(all such payments and other actions shown in clauses (1) through (5) above are
collectively referred to as "Restricted Payments") unless, at the time of and
after giving effect to such Restricted Payment
(A) no Default or Event of Default shall have occurred and be continuing
or would occur as a consequence thereof;
(B) the Authority would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test shown in the first paragraph of the
covenant described below under the caption "--Incurrence of Indebtedness
and Issuance of Preferred Stock"; and
(C) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Authority and its Restricted
Subsidiaries after the date of the Senior Notes Indenture (excluding
Restricted Payments permitted by clauses (2), (3), (4) and (5) of the next
succeeding paragraph), is less than the sum, without duplication, of
(i) 50% of the Consolidated Net Income of the Authority for the
period (taken as one accounting period) from the beginning of the first
fiscal quarter commencing after the date of the Senior Notes Indenture
to the end of the Authority's most recently ended fiscal quarter for
which internal financial statements are available at the time of such
Restricted Payment (or, if such Consolidated Net Income for such period
is a deficit, less 100% of such deficit), plus (ii) 100% of the
aggregate net cash proceeds or fair market value (as determined in good
faith by the Management Board and evidenced by a resolution shown in an
Officers' Certificate delivered to the Senior Trustee) of assets or
property (other than cash) received by the Authority from capital
contributions from the Tribe that bear no mandatory obligation to repay
the Tribe and other than from a Restricted Subsidiary of the Authority,
plus (iii) to the extent that any Restricted Investment that was made
after the date of the Senior Notes Indenture is sold, liquidated or
otherwise disposed of for cash or an amount equal to the fair market
value thereof (as determined in good faith by the Management Board and
evidenced by a resolution shown in an Officers' Certificate delivered
to the Senior Trustee), the lesser of (a) the cash return of capital or
fair market value amount, as the case may be, with respect to such
Restricted Investment (less the cost of disposition, if any) and (b)
the initial amount of such Restricted Investment, plus (iv) to the
extent that any Unrestricted Subsidiary is redesignated as a Restricted
Subsidiary after the date of the Senior Notes Indenture, the lesser of
(a) the fair market value of the Authority's Investment in such
Subsidiary as of the date of such redesignation or (b) such fair market
value as of the date on which such Subsidiary was originally designated
as an Unrestricted Subsidiary.
So long as no Default has occurred and is continuing or would be caused
thereby, the preceding provisions will not prohibit
(1) the defeasance, redemption, repurchase or other acquisition of
Subordinated Indebtedness with the net cash proceeds from an incurrence of
Permitted Refinancing Indebtedness;
(2) the payment of any dividend by a Restricted Subsidiary of the
Authority to the holders of its common Equity Interests on a pro rata
basis;
(3) the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of any Restricted Subsidiary of the Authority
held by any member of the Authority's (or any of its Restricted
Subsidiaries') management pursuant to any management equity subscription
agreement or stock option agreement in effect as of the date of the Senior
Notes Indenture; provided that (a) the aggregate price paid
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for all such repurchased, redeemed, acquired or retired Equity Interests
shall not exceed $1.0 million in any 12-month period and (b) the aggregate
amount of all such repurchased, redeemed, acquired or retired Equity
Interests shall not in the aggregate exceed $3.0 million;
(4) the redemption or purchase of Subordinated Indebtedness of the
Authority if the holder of such Subordinated Indebtedness has failed to
qualify or be found suitable or otherwise be eligible by any Gaming
Regulatory Authority to remain a holder of such Subordinated Indebtedness;
(5) the redemption, defeasance, repurchase or other acquisition or
retirement of Subordinated Indebtedness with the net cash proceeds from a
substantially concurrent capital contribution from the Tribe (provided that
such capital contribution is not counted for purposes of clause (C)(ii)
above); and
(6) any other Restricted Payments in an amount not to exceed $20.0
million at any one time outstanding.
The Authority may designate any Restricted Subsidiary to be an Unrestricted
Subsidiary if such designation would not cause a Default; provided that in no
event shall (i) any entity (including any Subsidiary of the Authority or the
Authority or any operating division thereof) engaged in a Principal Business be
transferred to or held by an Unrestricted Subsidiary or (ii) any Key Project
Assets or Gaming Licenses be transferred to an Unrestricted Subsidiary. In the
event of such designation, all outstanding Investments owned by the Authority
and its Restricted Subsidiaries in the Subsidiary so designated will be deemed
to be an Investment made as of the time of such designation and will reduce the
amount available for Restricted Payments under the first paragraph of this
covenant unless the Investment constitutes a Permitted Investment. All such
outstanding Investments will be deemed to constitute Restricted Payments in an
amount equal to the fair market value of such Investments at the time of such
designation. Such designation will only be permitted if such Restricted Payment
would be permitted at such time and if such Restricted Subsidiary otherwise
meets the definition of an Unrestricted Subsidiary. The Authority may
redesignate an Unrestricted Subsidiary to be a Restricted Subsidiary if such
redesignation would not otherwise cause a Default.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Authority or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities that are required to be
valued by this covenant shall be determined by the Management Board whose
resolution with respect thereto shall be delivered to the Senior Trustee. Not
later than the date of making any Restricted Payment, the Authority shall
deliver to the Senior Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by the covenant "--Restricted Payments" were computed.
Subordination of Junior Payments Under the Relinquishment Agreement
All Obligations under the Senior Exchange Notes shall be "Senior
Obligations" as defined in the Relinquishment Agreement and will not be on
parity with, or subordinated in right of payment to, the Junior Relinquishment
Payments (as defined in the Relinquishment Agreement) and the Authority will
not amend Section 6.2 of the Relinquishment Agreement in a manner adverse to
the holders of the Senior Exchange Notes.
Incurrence of Indebtedness and Issuance of Preferred Stock
The Authority will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect
to (collectively, "incur") any Indebtedness (including Acquired Indebtedness)
and the Authority will not issue any Disqualified Stock and will not permit any
of its Subsidiaries to issue any shares of preferred stock; provided, however,
that the Authority may incur Indebtedness (including Acquired Indebtedness) or
issue shares of Disqualified Stock and the Authority's Subsidiaries may incur
Indebtedness or issue preferred stock if the Fixed Charge Coverage Ratio for
the Authority's most recently ended four full fiscal quarters for which
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internal financial statements are available immediately preceding the date on
which such additional Indebtedness is incurred would have been at least 2.0 to
1 if such Indebtedness is incurred before September 30, 2001 and 2.5 to 1 if
such indebtedness is incurred thereafter, determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred at the beginning of such four-quarter
period. Notwithstanding the foregoing, the Authority will not issue any
Disqualified Stock or any type of Capital Stock that would violate IGRA.
So long as no Default or Event of Default shall have occurred and be
continuing, or would be caused thereby, the first paragraph of this covenant
will not prohibit the incurrence of any of the following items of Indebtedness:
(1) the incurrence by the Authority or its Restricted Subsidiaries of
Indebtedness and letters of credit pursuant to Credit Facilities; provided
that the aggregate principal amount of all such Indebtedness and letters of
credit outstanding under all Credit Facilities, after giving effect to such
incurrence (with letters of credit being deemed to have a principal amount
equal to the maximum potential liability of the Authority thereunder), does
not exceed $500 million less the aggregate amount of all Net Proceeds of
Asset Sales applied by the Authority or any of its Restricted Subsidiaries
since the date of the Senior Notes Indenture to repay Indebtedness under
Credit Facilities pursuant to the covenant described above under the
caption "--Repurchase at the Option of Holders--Asset Sales";
(2) the incurrence by the Authority and its Restricted Subsidiaries of
the Existing Indebtedness;
(3) the incurrence by the Authority of Indebtedness represented by the
Senior Exchange Notes and the Senior Exchange Notes;
(4) the incurrence by the Authority of Indebtedness represented by the
Senior Subordinated Exchange Notes and the Senior Subordinated Exchange
Notes;
(5) the incurrence by the Authority or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case incurred
for the purpose of financing all or any part of the purchase price of
furniture, fixtures, equipment or similar assets used or useful in the
business of the Authority or such Restricted Subsidiary not to exceed 100%
of the lesser of cost or fair market value of the assets financed and, in
an aggregate principal amount under this clause not to exceed $25.0 million
at any time outstanding;
(6) the incurrence by the Authority or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to refund, refinance, renew, extend, defease
or replace Indebtedness that was permitted by the Senior Notes Indenture to
be incurred under the first paragraph of this covenant or clauses (1), (2)
(other than the junior subordinated notes), (3), (4) or (5) of this
paragraph;
(7) the incurrence by the Authority or any of its Restricted
Subsidiaries of 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 Senior Notes Indenture
to be outstanding;
(8) the guarantee by the Authority or any of its Restricted Subsidiaries
of any Indebtedness of the Authority or any of its Restricted Subsidiaries
that was permitted to be incurred by another provision of this covenant;
(9) the incurrence by a Wholly Owned Restricted Subsidiary of
Indebtedness owed to another Wholly Owned Restricted Subsidiary or to the
Authority; provided that if at any time any such Wholly Owned Restricted
Subsidiary ceases to be a Wholly Owned Restricted Subsidiary, any such
Indebtedness shall be deemed to be an incurrence of Indebtedness for the
purposes of this covenant;
(10) the incurrence by the Authority or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal amount
(or accreted value, as applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or replace
any Indebtedness incurred pursuant to this clause (10), not to exceed $25.0
million; or
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(11) the incurrence by the Authority's Unrestricted Subsidiaries of Non-
Recourse Debt, provided, however, that if any such Indebtedness ceases to
be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be
deemed to constitute an incurrence of Indebtedness by a Restricted
Subsidiary of the Authority that was not permitted by this clause (11).
For purposes of determining compliance with this "--Incurrence of
Indebtedness and Issuance of Preferred Stock" covenant, if an item of proposed
Indebtedness meets the criteria of more than one of the categories of Permitted
Indebtedness described in clauses (1) through (11) above or is entitled to be
incurred pursuant to the first paragraph of this covenant, the Authority shall,
in its sole discretion, classify such item of Indebtedness on the date of its
incurrence in any manner that complies with this covenant.
Limitation on Issuances and Sales of Equity Interests in Wholly Owned
Restricted Subsidiaries
The Authority (i) will not, and will not permit any Wholly Owned Restricted
Subsidiary of the Authority to, transfer, convey, sell, lease or otherwise
dispose of any Equity Interests in any Wholly Owned Restricted Subsidiary of
the Authority to any Person (other than the Authority or another Wholly Owned
Restricted Subsidiary of the Authority), unless (a) such transfer, conveyance,
sale, lease or other disposition is of all the Equity Interests in such Wholly
Owned Restricted Subsidiary and (b) the cash Net Proceeds from such transfer,
conveyance, sale, lease or other disposition are applied according to the
covenant described above under the caption "--Repurchase at the Option of
Holders--Asset Sales," and (ii) will not permit any Wholly Owned Restricted
Subsidiary of the Authority to issue any of its Equity Interests (other than,
if necessary, shares of its Capital Stock constituting directors' qualifying
shares) to any Person other than to the Authority or a Wholly Owned Restricted
Subsidiary of the Authority.
Liens
The Senior Notes Indenture will provide that the Authority will not, and
will not permit any of its Restricted Subsidiaries to, directly or indirectly,
create, incur, assume or otherwise cause or suffer to exist or become effective
any Lien of any kind (other than Permitted Liens) upon any of its property or
assets, now owned or hereafter acquired, unless all payments due under the
Senior Notes Indenture and the Senior Exchange Notes are secured on an equal
and ratable basis with the obligations so secured until such time as such
obligations are no longer secured by a Lien.
Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries
The Authority will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any encumbrance or restriction on the ability of any Restricted
Subsidiary to
(1) pay dividends or make any other distributions on its Capital Stock
to the Authority or any of the Authority's Restricted Subsidiaries, or with
respect to any other interest or participation in, or measured by, its
profits, or pay any indebtedness owed to the Authority or any of the
Authority's Restricted Subsidiaries;
(2) make loans or advances to the Authority or any of the Authority's
Restricted Subsidiaries; or
(3) transfer any of its properties or assets to the Authority or any of
the Authority's Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of
(1) Existing Indebtedness as in effect on the date of the Senior Notes
Indenture and any amendments, modifications, restatements, renewals,
extensions, increases, supplements, refundings, replacements or
refinancings thereof, provided that such amendments, modifications,
restatements, renewals, extensions,
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increases, supplements, refundings, replacements or refinancings are no
more restrictive, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in such Existing Indebtedness, as
in effect on the date of the Senior Notes Indenture;
(2) the Senior Notes Indenture and the Senior Exchange Notes;
(3) the Senior Subordinated Notes Indenture and the Senior Subordinated
Exchange Notes;
(4) the Credit Facilities;
(5) applicable law;
(6) any instrument governing Indebtedness or Capital Stock of a Person
acquired by the Authority or any of its Restricted Subsidiaries as in
effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person,
or the property or assets of the Person, so acquired, provided that, in the
case of Indebtedness, such Indebtedness was permitted by the terms of the
Senior Notes Indenture to be incurred;
(7) customary non-assignment provisions in leases or other contracts
entered into in the ordinary course of business and consistent with past
practices;
(8) purchase money obligations (including, without limitation, Capital
Lease Obligations) for property acquired in the ordinary course of business
that impose restrictions on the property so acquired of the nature
described in clause (3) of the preceding paragraph;
(9) any agreement for the sale or other disposition of a Restricted
Subsidiary that restricts distributions by such Restricted Subsidiary
pending its sale or other disposition;
(10) Permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing such Permitted Refinancing
Indebtedness are no more restrictive, taken as a whole, than those
contained in the agreements governing the Indebtedness being refinanced;
(11) Liens securing Indebtedness otherwise permitted to be incurred
pursuant to the provisions of the covenant described above under the
caption "--Liens" that limit the right of the Authority or any of its
Restricted Subsidiaries to dispose of the assets subject to such Lien;
(12) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements and other similar agreements
entered into in the ordinary course of business; and
(13) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business.
Transactions with Affiliates
The Authority will not, and the Authority will not permit any of its
Restricted Subsidiaries to, make any payment to, or 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 or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"),
unless
(1) such Affiliate Transaction is on terms that are no less favorable to
the Authority or the relevant Restricted Subsidiary than those that would
have been obtained in a comparable transaction by the Authority or such
Restricted Subsidiary with an unrelated Person; and
(2) the Authority delivers to the Senior Trustee:
(a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$5.0 million, a resolution of the Management Board shown in an
Officers' Certificate certifying that such Affiliate Transaction
complies with this covenant and that such Affiliate Transaction has
been approved by a majority of the disinterested members of the
Management Board; and
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(b) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$10.0 million, an opinion as to the fairness to the Authority or such
Restricted Subsidiary of such Affiliate Transaction from a financial
point of view issued by an accounting, appraisal or investment banking
firm of national standing.
The following items shall not be deemed to be Affiliate Transactions and,
therefore, will not be subject to the provisions of the prior paragraphs:
(1) any employment agreement or arrangement entered into by the
Authority or any of its Restricted Subsidiaries in the ordinary course of
business and consistent with the past practice of the Authority or such
Restricted Subsidiary;
(2) transactions between or among the Authority and/or its Restricted
Subsidiaries;
(3) payment of reasonable Management Board fees to members of the
Management Board;
(4) transactions with Persons in whom the Authority owns any Equity
Interests, so long as the remaining equity holders of such Person are not
Affiliates of the Authority or any of its Subsidiaries;
(5) Government Service Payments;
(6) transactions pursuant to the Development Services Agreement, the
Relinquishment Agreement and the Side Letters;
(7) Restricted Payments or Permitted Investments that are made in
compliance with the provisions of the Senior Notes Indenture described
above under the caption "--Restricted Payments;" and
(8) contractual arrangements existing on the date of the Senior Notes
Indenture and any renewals, extensions and modifications thereof that are
not materially adverse to holders.
Subsidiary Guarantees
The Senior Notes Indenture provides that if the Authority acquires or
creates any Restricted Subsidiary after the date of the Senior Notes Indenture,
then that newly acquired or created Restricted Subsidiary must become a
Subsidiary Guarantor and execute a supplemental indenture satisfactory to the
Senior Trustee and deliver an Opinion of Counsel to the Senior Trustee within
20 business days of the date on which it is acquired or created.
The obligations of each Subsidiary Guarantor under its Senior Subsidiary
Guarantee will be limited so as not to constitute a fraudulent conveyance under
applicable law.
No Subsidiary Guarantor may consolidate with or merge with or into (whether
or not such Subsidiary Guarantor is the surviving Person), another corporation,
Person or entity whether or not affiliated with such Subsidiary Guarantor
unless: (i) subject to the provisions of the following paragraph, the Person
formed by or surviving any such consolidation or merger (if other than such
Subsidiary Guarantor) assumes all the obligations of such Subsidiary Guarantor
pursuant to a supplemental indenture in form and substance reasonably
satisfactory to the Senior Trustee; and (ii) immediately after giving effect to
such transaction, no Default or Event of Default exists.
The Senior Notes Indenture will permit the merger of one or more Subsidiary
Guarantors with or into another Subsidiary Guarantor or with or into the
Authority; provided that in the case of a merger with or into the Authority,
the Authority is the surviving entity.
In the event of a sale or other disposition of all of the assets of any
Subsidiary Guarantor, by way of merger, consolidation or otherwise, or a sale
or other disposition of all of the capital stock of any Subsidiary
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Guarantor, or, if a Subsidiary Guarantor is designated as an Unrestricted
Subsidiary, then such Subsidiary Guarantor (in the event of a sale or other
disposition, by way of such a merger, consolidation or otherwise, of all of the
capital stock of or a redesignation of such Subsidiary Guarantor) or the entity
acquiring the property (in the event of a sale or other disposition of all of
the assets of such Subsidiary Guarantor) will be released and relieved of any
obligations under its Senior Subsidiary Guarantee; provided that the Net
Proceeds of such sale or other disposition are applied in accordance with or
the redesignation is accomplished in accordance with the applicable provisions
of the Senior Notes Indenture. See "--Repurchase at the Option of Holders--
Asset Sales."
The Authority currently has no Subsidiaries.
Sale and Leaseback Transactions
The Senior Notes Indenture will provide that the Authority will not, and
will not permit any of its Restricted Subsidiaries to, enter into any sale and
leaseback transaction involving the Resort; provided that the Authority or any
of its Restricted Subsidiaries may enter into a sale and leaseback transaction
if
(1) the Authority or such Restricted Subsidiary, as applicable, could
have (a) incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction pursuant to the Fixed
Charge Coverage Ratio test shown in the first paragraph of the covenant
described above under the caption "--Incurrence of Indebtedness and
Issuance of Preferred Stock" and (b) incurred a Lien to secure such
Indebtedness pursuant to the covenant described above under the caption "--
Liens";
(2) the gross cash proceeds of such sale and leaseback transaction are
at least equal to the fair market value, as determined in good faith by the
Management Board and shown in an Officers' Certificate delivered to the
Senior Trustee, of the property that is subject of such sale and leaseback
transaction; and
(3) the transfer of assets in such sale and leaseback transaction is
permitted by, and the Authority applies the proceeds of such transaction in
compliance with, the covenant described above under the caption "--
Repurchase at the Option of Holders--Asset Sales"; provided that, upon the
occurrence of a Rating Event Date and for so long as the covenants shown
under the caption entitled "--Changes in Covenants when Senior Exchange
Notes Rated Investment Grade" continue to be Suspended Covenants, the
following provisions shall replace the foregoing provisions with respect to
sale and leaseback transactions by the Authority and its Restricted
Subsidiaries: The Senior Notes Indenture will provide that Authority will
not, and will not permit any of its Restricted to Subsidiaries to, enter
into any sale and leaseback transaction involving the Resort; provided that
the Authority or any Restricted Subsidiary may enter into any sale and
leaseback transaction with an Attributable Value (when taken together with
all other sale and leaseback transactions of the Authority and its
Restricted Subsidiaries) that, at the time of such transaction, after
giving effect thereto, does not exceed 10% of Consolidated Net Tangible
Assets.
Construction
The Authority will use its commercially reasonable best efforts to cause
construction of the Expansion Project to be prosecuted with diligence and
continuity in good and workmanlike manner materially in accordance with the
plans relating to the Expansion Project as more fully described in this
Prospectus.
Restrictions on Leasing and Dedication of Property
Except as provided below, the Authority will not lease, sublease, or grant a
license, concession or other agreement to occupy, manage or use any material
portion of the Authority's property and assets owned or leased by the Authority
(each, a "Lease Transaction").
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The first paragraph of this covenant will not prohibit any of the following
Lease Transactions:
(1) The Authority may enter into a Lease Transaction with respect to any
space with any Person (including, without limitation, a lease in connection
with the Expansion Project for the purpose of developing, constructing,
operating and managing retail establishments within the Resort), provided
that:
(a) such Lease Transaction will not materially interfere with,
impair or detract from the operations of the Resort;
(b) such Lease Transaction contains rent and such other terms such
that the Lease Transaction, taken as a whole is commercially reasonable
in light of prevailing or comparable transactions in other casinos,
hotels, attractions or shopping venues; and
(c) such Lease Transaction complies with all applicable law,
including obtaining any consent of the BIA, if required;
(2) The Lease and any amendments, extensions, modifications or renewals
thereof which are not materially adverse to the holders;
(3) The Authority may enter into a management or operating agreement
with respect to any of the Authority's property and assets with any Person;
provided that
(a) the manager or operator has experience in managing or operating
similar operations; and
(b) such management or operating agreement is on commercially
reasonable and fair terms to the Authority; and
(4) The Relinquishment Agreement, the Development Services Agreement and
the Side Letters with the Manager and any amendments, extensions,
modifications or renewals thereof which are not materially adverse to the
holders.
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,
and no person other than the Authority may conduct gaming or casino operations
on any property which is the subject of a Lease Transaction.
Covenants of the Tribe
The Tribe shall not, and shall not permit any of its representatives,
political subunits or councils, agencies, instrumentalities, directly or
indirectly, except as required by federal or state law, to do any of the
following:
(1) increase or impose any tax or other payment obligation on the
Authority or on any patrons of, or any activity at, the Resort other than:
(a) payments which are due under any agreement in effect on the
Closing Date or payments which are not materially adverse to the
economic interests of holders;
(b) payments which the Authority has agreed to reimburse each holder
for the economic effect thereof, if any;
(c) payments which correspondingly reduce the Restricted Payments
otherwise payable to the Tribe;
(d) pursuant to the Tribal Tax Code; or
(e) Government Service Payments;
(2) amend the terms of the Lease in any material manner that would be
materially adverse to the economic interests of holders;
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(3) amend the Tribal Gaming Ordinance in effect on the Closing Date
(unless any such amendment is a legitimate effort to ensure that the
Authority and the Resort conduct gaming operations in a manner that is
consistent with applicable laws, rules and regulations or that protects the
environment, the public health and safety, or the integrity of the
Authority or the Resort), restrict or eliminate the exclusive right of the
Authority to conduct gaming operations on any property owned or controlled
by the Tribe in a manner that would be materially adverse to the economic
interests of holders; or
(4) take any other action, enter into any agreement, amend its
constitution or enact any ordinance, law, rule or regulation that would
have a material adverse effect on the economic interests of holders.
The Tribe shall comply with all material terms of a construction reserve
disbursement agreement and shall not amend and shall not permit any of its
representatives, political subunits or councils, agencies, instrumentalities,
directly or indirectly, to amend, except as required by federal or state law,
such construction reserve agreement in a manner that would have a material
adverse effect on the economic interests of holders.
Moreover, except with the consent of a majority in interest of holders 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 impose, tax or otherwise make a
charge on the Senior Exchange Notes, the Senior Notes Indenture or any payments
or deposits to be made thereunder.
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 Senior Exchange
Notes shall be entitled to receive payment in full in respect to all principal,
premium, interest and other amounts owing in respect of the Notes before any
payment or any distribution to the Tribe.
Changes in Covenants when Senior Exchange Notes Rated Investment Grade
Following the first date upon which the Senior Exchange Notes are rated Baa3
or better by Moody's Investors Service, Inc. ("Moody's") and BBB- or better by
Standard & Poor's Ratings Group ("S&P") (or, in either case, if such person
ceases to rate the Senior Exchange Notes for reasons outside of the control of
the Authority, the equivalent investment grade credit rating from any other
"nationally recognized statistical rating organization" (within the meaning of
Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act) selected by the Authority as a
replacement agency) (the "Rating Event Date") and provided no Event of Default
or event that with notice or the passage of time would constitute an Event of
Default shall exist on the Rating Event Date, the covenants specifically listed
under "--Repurchase at the Option of Holders--Asset Sales," "--Incurrence of
Indebtedness and Issuance of Preferred Stock," "--Restricted Payments," "--
Limitation on Issuances and Sales of Equity Interests in Wholly Owned
Restricted Subsidiaries," "--Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries," "--Construction," "--Restrictions on Leasing and
Dedication of Property," "--Provisions Common to Both Senior Exchange Notes and
Senior Subordinated Exchange Notes--Certain Common Covenants--Maintenance of
Insurance" and "--Transactions with Affiliates" in this Prospectus
(collectively, the "Suspended Covenants") will no longer be applicable to the
Senior Exchange Notes; provided however that if at any time after a Rating
Event Date, the Senior Exchange Notes shall be rated lower than Baa3 by Moody's
or lower than BBB- by S&P, or any equivalent rating by a successor agency to
Moody's or S&P, the Suspended Covenants shall be automatically reinstated (the
"Reinstated Covenants") and all transactions by the Authority that occurred
during the time that such covenants were suspended and that would have violated
such covenants had such covenants been in effect at the time shall be deemed
not to constitute a Default or an Event of Default, as the case may be, and
shall be deemed to have been in compliance with such covenants for all
purposes; provided further that thereafter all transactions by the Authority
occurring on or after the date on which the Suspended Covenants have been
reinstated shall be required to be in compliance with the Reinstated Covenants.
For purposes of interpreting the definition of "Permitted Liens" during the
time any Suspended Covenants are suspended, the definition should be read as if
the Suspended Covenants were not so suspended.
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There can be no assurance that a Rating Event Date will occur or, if one
occurs, that the Senior Exchange Notes will continue to maintain an investment
grade rating.
Description of the Senior Subordinated Exchange Notes
Ranking
These Senior Subordinated Exchange Notes
. are unsecured general obligations of the Authority; and
. are subordinated in right of payment to all existing and future Senior
Indebtedness of the Authority, including without limitation, up to $500
million of indebtedness under the Loan Agreement and $200 million in
principal amount of Senior Exchange Notes.
Subsidiaries
As of the date of the Senior Subordinated Notes Indenture, the Authority had
no Subsidiaries. However, the Senior Subordinated Notes Indenture permits the
Authority to create Subsidiaries and generally requires that these Subsidiaries
be designated as Restricted Subsidiaries (i.e., subject to the terms of the
Senior Subordinated Notes Indenture) unless certain conditions are met. If
these conditions are met, the Authority will be permitted to designate a
Subsidiary as an Unrestricted Subsidiary, and Unrestricted Subsidiaries will
not be subject to many of the restrictive covenants of the Senior Subordinated
Notes Indenture.
Principal, Maturity and Interest
The Authority will issue Senior Subordinated Exchange Notes with a maximum
aggregate principal amount of $300 million. The Authority will issue Senior
Subordinated Exchange Notes in denominations of $1,000 and integral multiples
of $1,000. The Senior Subordinated Exchange Notes will mature on January 1,
2009.
Interest on these Senior Subordinated Exchange Notes will accrue at the rate
of 8 3/4% per annum and will be payable semi-annually in arrears on January 1
and July 1, beginning on July 1, 1999. The Authority will make each interest
payment to the holders of record of these Senior Subordinated Exchange Notes on
the immediately preceding December 15 and June 15.
Interest on these Senior Subordinated Exchange Notes accrues from the date
of original issuance or, if interest has already been paid, from the date it
was most recently paid. Interest is computed on the basis of a 360-day year
comprised of twelve 30-day months.
Subordination
The payment of principal, premium and interest, if any, on the Senior
Subordinated Exchange Notes and the Senior Subordinated Subsidiary Guarantees,
if any, is subordinated to the prior payment in full of all Senior Indebtedness
of the Authority including, without limitation, the Senior Exchange Notes and
the Loan Agreement. In the event of any distribution to creditors
(1) in a liquidation or dissolution of the Authority or the Tribe;
(2) in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Authority, the Tribe or their respective
property;
(3) in an assignment for the benefit of creditors; or
(4) in any marshalling of the Authority's or the Tribe's assets and
liabilities;
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the holders of Senior Indebtedness will be entitled to receive payment in full
of all Obligations due in respect of Senior Indebtedness (including interest
after the commencement of any such proceeding at the rate specified in the
applicable Senior Indebtedness) before the holders of Senior Subordinated
Exchange Notes will be entitled to receive any payment with respect to the
Senior Subordinated Exchange Notes (except that holders of Senior Subordinated
Exchange Notes may receive and retain Permitted Junior Securities and payments
made from the trust described under "--Provisions Common to Both Senior
Exchange Notes and Senior Subordinated Exchange Notes--Legal Defeasance and
Covenant Defeasance").
The Authority also may not make any payment in respect of the Senior
Subordinated Exchange Notes (except in Permitted Junior Securities or from the
trust described under "--Provisions Common to Both Senior Exchange Notes and
Senior Subordinated Exchange Notes--Legal Defeasance and Covenant Defeasance")
if
(1) a payment default on Designated Senior Indebtedness occurs and is
continuing beyond any applicable grace period; or
(2) any other default occurs and is continuing on Designated Senior
Indebtedness that permits holders of the Designated Senior Indebtedness to
accelerate its maturity and the Senior Subordinated Trustee receives a
notice of such default (a "Payment Blockage Notice") from the Authority or
the holders of any Designated Senior Indebtedness.
Payments on the Senior Subordinated Exchange Notes may and shall be resumed
(1) in the case of a payment default, upon the date on which all Senior
Indebtedness is paid in full in cash or such default is cured or waived in
writing; and
(2) in case of a nonpayment default, the earlier of the date on which
such nonpayment default is cured or waived or 179 days after the date on
which the applicable Payment Blockage Notice is received, unless the
maturity of any Designated Senior Indebtedness has been accelerated.
No new Payment Blockage Notice may be delivered unless and until
(1) 360 days have elapsed since the effectiveness of the immediately
prior Payment Blockage Notice; and
(2) all scheduled payments of principal, premium and interest on the
Senior Subordinated Exchange Notes that have come due have been paid in
full in cash.
No nonpayment default that existed or was continuing on the date of delivery
of any Payment Blockage Notice to the Senior Subordinated Trustee shall be, or
be made, the basis for a subsequent Payment Blockage Notice unless such default
shall have been cured or waived for a period of not less than 180 days.
The Authority must promptly notify holders of Senior Indebtedness if payment
of the Senior Subordinated Exchange Notes is accelerated because of an Event of
Default.
As a result of the subordination provisions described above, in the event of
a bankruptcy, liquidation or reorganization of the Authority or the Tribe,
holders of these Senior Subordinated Exchange Notes may recover less ratably
than holders of Senior Indebtedness. See "Risk Factors--Unsecured Ranking and
Subordination to Existing Indebtedness--Senior Subordinated Exchange Notes."
Optional Redemption
If, at any time after the Issue Date, any Gaming Regulatory Authority
requires a holder to be licensed or otherwise qualified under applicable gaming
laws in order for the Authority to maintain any of its gaming licenses or
franchises and the holder does not obtain such license or qualification within
the time periods
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described in the Senior Subordinated Notes Indenture and at its own cost and
expense, then the Authority will have the right to either
. require the holder to dispose of its Senior Subordinated Exchange Notes
within the time period specified by the Gaming Regulatory Authority or
30 days, whichever is shorter; or
. redeem the holder's Senior Subordinated Exchange Notes at a price equal
to the lesser of (1) the principal amount of the Senior Subordinated
Exchange Notes held by the holder, (2) the price paid for the Senior
Subordinated Exchange Notes by the holder, and (3) the current market
price of the Senior Subordinated Exchange Notes, in each case, including
all accrued and unpaid interest and Additional Interest, if any, to the
redemption date or the date a finding of unsuitability is made by the
applicable Gaming Regulatory Authority, if earlier.
The Authority will comply with the redemption procedures for the Senior
Subordinated Exchange Notes described in the Senior Subordinated Notes
Indenture unless otherwise required by a Gaming Regulatory Authority.
Except as described above, the Senior Subordinated Exchange Notes will not
be redeemable at the Authority option before January 1, 2004.
On or after January 1, 2004, the Authority may redeem all or a part of these
Senior Subordinated Exchange Notes upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
shown below plus accrued and unpaid interest thereon, if any, to the applicable
redemption date, if redeemed during the 12-month period beginning on January 1
of the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2004.............................. 104.375%
2005.............................. 102.917%
2006.............................. 101.458%
2007 and thereafter............... 100.000%
</TABLE>
Selection and Notice
If less than all of the Senior Subordinated Exchange Notes are to be
redeemed at any time, the Senior Subordinated Trustee will select Senior
Subordinated Exchange Notes for redemption as follows:
(1) if the Senior Subordinated Exchange Notes are listed, in compliance
with the requirements of the principal national securities exchange on
which the Senior Subordinated Exchange Notes are listed; or
(2) if the Senior Subordinated Exchange Notes are not so listed, on a
pro rata basis, by lot or by such method as the Senior Subordinated Trustee
shall deem fair and appropriate.
No Senior Subordinated Exchange Notes of $1,000 or less shall be redeemed in
part. Notices of redemption shall be mailed by first class mail at least 30 but
not more than 60 days before the redemption date to each holder of Senior
Subordinated Exchange Notes to be redeemed at its registered address. Notices
of redemption may not be conditional.
If any Senior Subordinated Exchange Note is to be redeemed in part only, the
notice of redemption that relates to that Senior Subordinated Exchange Note
shall state the portion of the principal amount thereof to be redeemed. A new
Senior Subordinated Exchange Note in principal amount equal to the unredeemed
portion of the original Senior Subordinated Exchange Note will be issued in the
name of the holder thereof upon cancellation of the original Senior
Subordinated Exchange Note. Senior Subordinated Exchange Notes called for
redemption become due on the date fixed for redemption. On and after the
redemption date, interest ceases to accrue on Senior Subordinated Exchange
Notes or portions of them called for redemption.
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Repurchase at the Option of Holders
Change of Control
If a Change of Control occurs, each holder of the Senior Subordinated
Exchange Notes will have the right to require the Authority to repurchase all
or any part (equal to $1,000 or an integral multiple thereof) of that holder's
Senior Subordinated Exchange Notes pursuant to a Change of Control Offer. In
the Change of Control Offer, the Authority will offer a Change of Control
Payment in cash equal to 101% of the aggregate principal amount of Senior
Subordinated Exchange Notes repurchased plus accrued and unpaid interest and
Additional Interest, if any, thereon, to the date of purchase.
Within 20 business days following any Change of Control, the Authority will
mail a notice to each holder (and, unless the Senior Subordinated Trustee makes
the mailing on behalf of the Authority, to the Senior Subordinated Trustee)
describing the transaction or transactions that constitute the Change of
Control and offering to repurchase Senior Subordinated Exchange Notes on the
Change of Control Payment Date specified in such notice, pursuant to the
procedures required by the Indenture and described in such notice. If the
Authority wishes the Senior Subordinated Trustee to do the mailing, it will
give the Senior Subordinated Trustee adequate prior notice so that the Senior
Subordinated Trustee may do so. 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 and regulations are applicable
in connection with the repurchase of the Senior Subordinated Exchange Notes as
a result of a Change of Control.
On the Change of Control Payment Date, the Authority, to the extent lawful
will,
(1) accept for payment all Senior Subordinated Exchange Notes or
portions thereof properly tendered pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Senior Subordinated Exchange Notes or
portions thereof so tendered; and
(3) deliver or cause to be delivered to the Senior Subordinated Trustee
the Senior Subordinated Exchange Notes so accepted together with an
Officers' Certificate stating the aggregate principal amount of Senior
Subordinated Exchange Notes or portions thereof being purchased by the
Authority.
The Paying Agent will promptly mail to each holder of Senior Subordinated
Exchange Notes so tendered the Change of Control Payment for such Senior
Subordinated Exchange Notes, and the Senior Subordinated Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each holder
a new Senior Subordinated Note equal in principal amount to any unpurchased
portion of the Senior Subordinated Exchange Notes surrendered, if any; provided
that each such new Senior Subordinated Note will be in a principal amount of
$1,000 or an integral multiple thereof. The Authority will notify the Senior
Subordinated Trustee and will instruct the Senior Subordinated Trustee to
notify the holders of the results of the Change of Control Offer on or as soon
as practicable after the Change of Control Payment Date.
Except as described above with respect to a Change of Control, the Senior
Subordinated Notes Indenture does not contain provisions that permit the
holders of the Senior Subordinated Exchange Notes to require that the Authority
repurchase or redeem the Senior Subordinated Exchange Notes in the event of a
takeover, recapitalization or similar transaction.
The Loan Agreement will prohibit and the Senior Note Indenture may prohibit
the Authority from purchasing any Senior Subordinated Exchange Notes upon a
Change of Control. The Loan Agreement will also provide that certain change of
control events with respect to the Authority will constitute a default under
the Loan Agreement. Any future credit agreements or other agreements relating
to secured indebtedness to which
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the Authority becomes a party may contain similar restrictions and provisions.
In the event a Change of Control occurs at a time when the Authority is
prohibited from purchasing Senior Subordinated Exchange Notes, the Authority
could seek the consent of its lenders and other creditors to the purchase of
Senior Subordinated Exchange Notes or could attempt to refinance the borrowings
that contain such prohibition. If the Authority does not obtain such a consent
or repay such borrowings, the Authority will remain prohibited from purchasing
Senior Subordinated Exchange Notes. In such case, the Authority's failure to
purchase tendered Senior Subordinated Exchange Notes would constitute an Event
of Default under the Senior Subordinated Notes Indenture which would, in turn,
constitute a default under the Loan Agreement and the Senior Subordinated Notes
Indenture.
The Authority will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements shown in
the Senior Subordinated Notes Indenture applicable to a Change of Control Offer
made by the Authority and purchases all Senior Subordinated Exchange Notes
validly tendered and not withdrawn under such Change of Control Offer.
Asset Sales
The Authority will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless
(1) the Authority (or its Restricted Subsidiary, as the case may be)
receives consideration at the time of such Asset Sale at least equal to the
fair market value (as determined in good faith by the Management Board and
evidenced by a resolution shown in an Officers' Certificate delivered to
the Senior Subordinated Trustee) of the assets sold or otherwise disposed
of; and
(2) except in the case of a Permitted Asset Swap, at least 75% of the
consideration therefor received by the Authority or such Restricted
Subsidiary is in the form of cash. For purposes of this provision, each of
the following shall be deemed to be cash:
(a) any liabilities that would appear on the Authority's or such
Restricted Subsidiary's balance sheet prepared in accordance with GAAP
(other than contingent liabilities and liabilities that are by their
terms subordinated to the Senior Subordinated Exchange Notes or any
guarantee thereof) that are assumed by the transferee of any such
assets pursuant to a customary novation agreement that releases the
Authority or such Restricted Subsidiary from further liability; and
(b) any securities, notes or other obligations received by the
Authority or any such Restricted Subsidiary from such transferee that
are converted by the Authority or such Restricted Subsidiary into cash
(to the extent of the cash received) within 30 days of the receipt
thereof,
provided, however, that the Authority will not be permitted to make any Asset
Sale of Key Project Assets.
Within 360 days after the receipt of any Net Proceeds from an Asset Sale,
the Authority may apply such Net Proceeds, at its option, to
(1) repay permanently term Indebtedness under Credit Facilities of the
Authority or any Restricted Subsidiary;
(2) repay revolving credit Indebtedness under Credit Facilities and
correspondingly permanently reduce commitments with respect thereto;
(3) acquire a majority of the assets of, or a majority of the Voting
Stock of, an entity engaged in the Principal Business or a Related
Business;
(4) make capital expenditures or acquire other long-term assets that are
used or useful in the Principal Business or a Related Business;
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(5) make an investment in the Principal Business or a Related Business
or in tangible long-term assets used or useful in the Principal Business or
a Related Business; or
(6) reduce permanently Indebtedness (including the Senior Exchange
Notes) that is not Subordinated Indebtedness.
Pending the final application of any such Net Proceeds, the Authority may
temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited by the Senior Subordinated Notes
Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph will be deemed to constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $15.0 million,
the Authority will make an Asset Sale Offer to all holders of Senior
Subordinated Exchange Notes and all holders of other Indebtedness containing
provisions similar to those shown in the Senior Subordinated Notes Indenture
with respect to offers to purchase or redeem with the proceeds of sales of
assets to purchase the maximum principal amount of Senior Subordinated Exchange
Notes and such other Indebtedness that may be purchased out of the Excess
Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of the
principal amount plus accrued and unpaid interest and Additional Interest, if
any, to the date of purchase and will be payable in cash, in accordance with
the procedures shown in the Senior Subordinated Notes Indenture and such other
Indebtedness. To the extent that any Excess Proceeds remain after consummation
of an Asset Sale Offer, the Authority may use such Excess Proceeds for any
purpose not otherwise prohibited by the Senior Subordinated Notes Indenture. If
the aggregate principal amount of Senior Subordinated Exchange Notes and such
other Indebtedness tendered into such Asset Sale Offer surrendered by holders
thereof exceeds the amount of Excess Proceeds, the Senior Subordinated Trustee
shall select the Senior Subordinated Exchange Notes and such other Indebtedness
(to the extent that such other Indebtedness permits such selection) to be
purchased on a pro rata basis. Upon completion of such offer to purchase, the
amount of Excess Proceeds shall be reset at zero.
Certain Covenants
Restricted Payments
The Authority will not, and the Authority will not permit any of its
Restricted Subsidiaries, directly or indirectly, to
(1) make any payment on or with respect to any of the Authority's or any
of its Restricted Subsidiaries' Equity Interests;
(2) purchase, redeem, defease or otherwise acquire or retire for value
any Equity Interest in the Authority held by the Tribe or any Affiliate of
the Tribe;
(3) make any payment on or with respect to, or purchase, redeem, defease
or otherwise acquire or retire for value any Subordinated Indebtedness
(other than the defeasance and ultimate redemption of the junior
subordinated notes in accordance with their terms and the terms of the
Defeasance Trust, except a payment of interest or principal at Stated
Maturity thereof;
(4) 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 (other than Government Service
Payments); or
(5) make any Restricted Investment;
(all such payments and other actions shown in clauses (1) through (5) above are
collectively referred to as "Restricted Payments") unless, at the time of and
after giving effect to such Restricted Payment
(A) no Default or Event of Default shall have occurred and be continuing
or would occur as a consequence thereof;
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(B) the Authority would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test shown in the first paragraph of the
covenant described below under the caption "--Incurrence of Indebtedness
and Issuance of Preferred Stock"; and
(C) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Authority and its Restricted
Subsidiaries after the date of the Senior Subordinated Notes Indenture
(excluding Restricted Payments permitted by clauses (2), (3), (4) and (5)
of the next succeeding paragraph), is less than the sum, without
duplication, of
(i) 50% of the Consolidated Net Income of the Authority for the
period (taken as one accounting period) from the beginning of the first
fiscal quarter commencing after the date of the Senior Subordinated
Notes Indenture to the end of the Authority's most recently ended
fiscal quarter for which internal financial statements are available at
the time of such Restricted Payment (or, if such Consolidated Net
Income for such period is a deficit, less 100% of such deficit), plus
(ii) 100% of the aggregate net cash proceeds or fair market value (as
determined in good faith by the Management Board and evidenced by a
resolution shown in an Officers' Certificate delivered to the Senior
Subordinated Trustee) of assets or property (other than cash) received
by the Authority from capital contributions from the Tribe that bear no
mandatory obligation to repay the Tribe and other than from a
Restricted Subsidiary of the Authority, plus (iii) to the extent that
any Restricted Investment that was made after the date of the Senior
Subordinated Notes Indenture is sold, liquidated or otherwise disposed
of for cash or an amount equal to the fair market value thereof (as
determined in good faith by the Management Board and evidenced by a
resolution shown in an Officers' Certificate delivered to the Senior
Subordinated Trustee), the lesser of (a) the cash return of capital or
fair market value amount, as the case may be, with respect to such
Restricted Investment (less the cost of disposition, if any) and (b)
the initial amount of such Restricted Investment plus (iv) to the
extent that any Unrestricted Subsidiary is redesignated as a Restricted
Subsidiary after the date of the Senior Subordinated Notes Indenture,
the lesser of (a) the fair market value of the Authority's Investment
in such Subsidiary as of the date of such redesignation or (b) such
fair market value as of the date on which such Subsidiary was
originally designated as an Unrestricted Subsidiary.
So long as no Default has occurred and is continuing or would be caused
thereby, the preceding provisions will not prohibit
(1) the defeasance, redemption, repurchase or other acquisition of
Subordinated Indebtedness with the net cash proceeds from an incurrence of
Permitted Refinancing Indebtedness;
(2) the payment of any dividend by a Restricted Subsidiary of the
Authority to the holders of its common Equity Interests on a pro rata
basis;
(3) the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of any Restricted Subsidiary of the Authority
held by any member of the Authority's (or any of its Restricted
Subsidiaries') management pursuant to any management equity subscription
agreement or stock option agreement in effect as of the date of the Senior
Subordinated Notes Indenture; provided that (a) the aggregate price paid
for all such repurchased, redeemed, acquired or retired Equity Interests
shall not exceed $1.0 million in any 12-month period and (b) the aggregate
amount of all such repurchased, redeemed, acquired or retired Equity
Interests shall not in the aggregate exceed $3.0 million;
(4) the redemption or purchase of Subordinated Indebtedness of the
Authority if the holder of such Subordinated Indebtedness has failed to
qualify or be found suitable or otherwise be eligible by any Gaming
Regulatory Authority to remain a holder of such Subordinated Indebtedness;
(5) the redemption, defeasance, repurchase or other acquisition or
retirement of Subordinated Indebtedness with the net cash proceeds from a
substantially concurrent capital contribution from the Tribe (provided that
such capital contribution is not counted for purposes of clause (C)(ii)
above); and
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(6) any other Restricted Payments in an amount not to exceed $20.0
million at any one time outstanding.
The Authority may designate any Restricted Subsidiary to be an Unrestricted
Subsidiary if such designation would not cause a Default; provided that in no
event shall (i) any entity (including any Subsidiary of the Authority or the
Authority or any operating division thereof) engaged in a Principal Business be
transferred to or held by an Unrestricted Subsidiary or (ii) any Key Project
Assets or Gaming Licenses be transferred to an Unrestricted Subsidiary. In the
event of such designation, all outstanding Investments owned by the Authority
and its Restricted Subsidiaries in the Subsidiary so designated will be deemed
to be an Investment made as of the time of such designation and will reduce the
amount available for Restricted Payments under the first paragraph of this
covenant unless the Investment constitutes a Permitted Investment. All such
outstanding Investments will be deemed to constitute Restricted Payments in an
amount equal to the fair market value of such Investments at the time of such
designation. Such designation will only be permitted if such Restricted Payment
would be permitted at such time and if such Restricted Subsidiary otherwise
meets the definition of an Unrestricted Subsidiary. The Authority may
redesignate an Unrestricted Subsidiary to be a Restricted Subsidiary if such
redesignation would not otherwise cause a Default.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Authority or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities that are required to be
valued by this covenant shall be determined by the Management Board whose
resolution with respect thereto shall be delivered to the Senior Subordinated
Trustee. Not later than the date of making any Restricted Payment, the
Authority shall deliver to the Senior Subordinated Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by the covenant "--Restricted
Payments" were computed.
Ranking of Payments Under the Relinquishment Agreement
The Authority will not designate the Senior Relinquishment Payments (as
defined in the Relinquishment Agreement) as Designated Senior Indebtedness and
the Authority will not amend Section 6.2 of the Relinquishment Agreement in a
manner adverse to the holders of the Senior Subordinated Exchange Notes.
Incurrence of Indebtedness and Issuance of Preferred Stock
The Authority will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect
to (collectively, "incur") any Indebtedness (including Acquired Indebtedness)
and the Authority will not issue any Disqualified Stock and will not permit any
of its Subsidiaries to issue any shares of preferred stock; provided, however,
that the Authority may incur Indebtedness (including Acquired Indebtedness) or
issue shares of Disqualified Stock and the Authority's Subsidiaries may incur
Indebtedness or issue preferred stock if 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 on
which such additional Indebtedness is incurred would have been at least 2.0 to
1, determined on a pro forma basis (including a pro forma application of the
net proceeds therefrom), as if the additional Indebtedness had been incurred at
the beginning of such four-quarter period. Notwithstanding the foregoing, the
Authority will not issue any Disqualified Stock or any type of Capital Stock
that would violate IGRA.
So long as no Default or Event of Default shall have occurred and be
continuing, or would be caused thereby, the first paragraph of this covenant
will not prohibit the incurrence of any of the following items of Indebtedness:
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(1) the incurrence by the Authority or its Restricted Subsidiaries of
Indebtedness and letters of credit pursuant to Credit Facilities; provided
that the aggregate principal amount of all such Indebtedness and letters of
credit outstanding under all Credit Facilities, after giving effect to such
incurrence (with letters of credit being deemed to have a principal amount
equal to the maximum potential liability of the Authority thereunder), does
not exceed $500 million less the aggregate amount of all Net Proceeds of
Asset Sales applied by the Authority or any of its Restricted Subsidiaries
since the date of the Senior Subordinated Notes Indenture to repay
Indebtedness under Credit Facilities pursuant to the covenant described
above under the caption "--Repurchase at the Option of Holders--Asset
Sales";
(2) the incurrence by the Authority and its Restricted Subsidiaries of
the Existing Indebtedness;
(3) the incurrence by the Authority of Indebtedness represented by the
Outstanding Senior Notes and the Senior Exchange Notes;
(4) the incurrence by the Authority of Indebtedness represented by the
Outstanding Senior Subordinated Notes and the Senior Subordinated Exchange
Notes;
(5) the incurrence by the Authority or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case incurred
for the purpose of financing all or any part of the purchase price of
furniture, fixtures, equipment or similar assets used or useful in the
business of the Authority or such Restricted Subsidiary not to exceed 100%
of the lesser of cost or fair market value of the assets financed and, in
an aggregate principal amount under this clause not to exceed $25.0 million
at any time outstanding;
(6) the incurrence by the Authority or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to refund, refinance, renew, extend, defease
or replace Indebtedness that was permitted by the Senior Subordinated Notes
Indenture to be incurred under the first paragraph of this covenant or
clauses (1), (2) (other than the junior subordinated notes), (3), (4) or
(5) of this paragraph;
(7) the incurrence by the Authority or any of its Restricted
Subsidiaries of 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 Senior Subordinated
Notes Indenture to be outstanding;
(8) the guarantee by the Authority or any of its Restricted Subsidiaries
of any Indebtedness of the Authority or any of its Restricted Subsidiaries
that was permitted to be incurred by another provision of this covenant;
(9) the incurrence by a Wholly Owned Restricted Subsidiary of
Indebtedness owed to another Wholly Owned Restricted Subsidiary or to the
Authority; provided that if at any time any such Wholly Owned Restricted
Subsidiary ceases to be a Wholly Owned Restricted Subsidiary, any such
Indebtedness shall be deemed to be an incurrence of Indebtedness for the
purposes of this covenant;
(10) the incurrence by the Authority or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal amount
(or accreted value, as applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or replace
any Indebtedness incurred pursuant to this clause (10), not to exceed $25.0
million; or
(11) the incurrence by the Authority's Unrestricted Subsidiaries of Non-
Recourse Debt, provided, however, that if any such Indebtedness ceases to
be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be
deemed to constitute an incurrence of Indebtedness by a Restricted
Subsidiary of the Authority that was not permitted by this clause (11).
For purposes of determining compliance with this "--Incurrence of
Indebtedness and Issuance of Preferred Stock" covenant, if an item of proposed
Indebtedness meets the criteria of more than one of the categories of Permitted
Indebtedness described in clauses (1) through (11) above or is entitled to be
incurred
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pursuant to the first paragraph of this covenant, the Authority shall, in its
sole discretion, classify such item of Indebtedness on the date of its
incurrence in any manner that complies with this covenant.
Limitation on Issuances and Sales of Equity Interests in Wholly Owned
Restricted Subsidiaries
The Authority (i) will not, and will not permit any Wholly Owned Restricted
Subsidiary of the Authority to, transfer, convey, sell, lease or otherwise
dispose of any Equity Interests in any Wholly Owned Restricted Subsidiary of
the Authority to any Person (other than the Authority or another Wholly Owned
Restricted Subsidiary of the Authority), unless (a) such transfer, conveyance,
sale, lease or other disposition is of all the Equity Interests in such Wholly
Owned Restricted Subsidiary and (b) the cash Net Proceeds from such transfer,
conveyance, sale, lease or other disposition are applied in accordance with the
covenant described above under the caption "--Repurchase at the Option of
Holders--Asset Sales," and (ii) will not permit any Wholly Owned Restricted
Subsidiary of the Authority to issue any of its Equity Interests (other than,
if necessary, shares of its Capital Stock constituting directors' qualifying
shares) to any Person other than to the Authority or a Wholly Owned Restricted
Subsidiary of the Authority.
Liens
The Senior Subordinated Notes Indenture will provide that the Authority will
not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien of any kind (other than Permitted Liens) upon any of
its property or assets, or any proceeds therefrom, which secure either (a)
Subordinated Indebtedness, unless the Senior Subordinated Exchange Notes are
secured by a Lien on such property, assets or proceeds, which Lien is senior in
priority to the Liens securing such Subordinated Indebtedness or (b) pari passu
Indebtedness, unless the Senior Subordinated Exchange Notes are equally and
ratably secured with the Liens securing such pari passu Indebtedness.
Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries
The Authority will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any encumbrance or restriction on the ability of any Restricted
Subsidiary to
(1) pay dividends or make any other distributions on its Capital Stock
to the Authority or any of the Authority's Restricted Subsidiaries, or with
respect to any other interest or participation in, or measured by, its
profits, or pay any indebtedness owed to the Authority or any of the
Authority's Restricted Subsidiaries;
(2) make loans or advances to the Authority or any of the Authority's
Restricted Subsidiaries; or
(3) transfer any of its properties or assets to the Authority or any of
the Authority's Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of
(1) Existing Indebtedness as in effect on the date of the Senior
Subordinated Notes Indenture and any amendments, modifications,
restatements, renewals, extensions, increases, supplements, refundings,
replacements or refinancings thereof, provided that such amendments,
modifications, restatements, renewals, extensions, increases, supplements,
refundings, replacements or refinancings are no more restrictive, taken as
a whole, with respect to such dividend and other payment restrictions than
those contained in such Existing Indebtedness, as in effect on the date of
the Senior Subordinated Notes Indenture;
(2) the Senior Subordinated Notes Indenture and the Senior Subordinated
Exchange Notes;
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(3) the Senior Notes Indenture and the Senior Exchange Notes;
(4) the Credit Facilities;
(5) applicable law;
(6) any instrument governing Indebtedness or Capital Stock of a Person
acquired by the Authority or any of its Restricted Subsidiaries as in
effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person,
or the property or assets of the Person, so acquired, provided that, in the
case of Indebtedness, such Indebtedness was permitted by the terms of the
Senior Subordinated Notes Indenture to be incurred;
(7) customary non-assignment provisions in leases or other contracts
entered into in the ordinary course of business and consistent with past
practices;
(8) purchase money obligations (including, without limitation, Capital
Lease Obligations) for property acquired in the ordinary course of business
that impose restrictions on the property so acquired of the nature
described in clause (3) of the preceding paragraph;
(9) any agreement for the sale or other disposition of a Restricted
Subsidiary that restricts distributions by such Restricted Subsidiary
pending its sale or other disposition;
(10) Permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing such Permitted Refinancing
Indebtedness are no more restrictive, taken as a whole, than those
contained in the agreements governing the Indebtedness being refinanced;
(11) Liens securing Indebtedness otherwise permitted to be incurred
pursuant to the provisions of the covenant described above under the
caption "--Liens" that limit the right of the Authority or any of its
Restricted Subsidiaries to dispose of the assets subject to such Lien;
(12) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements and other similar agreements
entered into in the ordinary course of business; and
(13) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business.
Transactions with Affiliates
The Authority will not, and the Authority will not permit any of its
Restricted Subsidiaries to, make any payment to, or 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 or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"),
unless
(1) such Affiliate Transaction is on terms that are no less favorable to
the Authority or the relevant Restricted Subsidiary than those that would
have been obtained in a comparable transaction by the Authority or such
Restricted Subsidiary with an unrelated Person; and
(2) the Authority delivers to the Senior Subordinated Trustee
(a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$5.0 million, a resolution of the Management Board shown in an
Officers' Certificate certifying that such Affiliate Transaction
complies with this covenant and that such Affiliate Transaction has
been approved by a majority of the disinterested members of the
Management Board; and
(b) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$10.0 million, an opinion as to the fairness to the Authority or such
Restricted Subsidiary of such Affiliate Transaction from a financial
point of view issued by an accounting, appraisal or investment banking
firm of national standing.
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The following items shall not be deemed to be Affiliate Transactions and,
therefore, will not be subject to the provisions of the prior paragraphs:
(1) any employment agreement or arrangement entered into by the
Authority or any of its Restricted Subsidiaries in the ordinary course of
business and consistent with the past practice of the Authority or such
Restricted Subsidiary;
(2) transactions between or among the Authority and/or its Restricted
Subsidiaries;
(3) payment of reasonable Management Board fees to members of the
Management Board;
(4) transactions with Persons in whom the Authority owns any Equity
Interests, so long as the remaining equity holders of such Person are not
Affiliates of the Authority or any of its Subsidiaries;
(5) Government Service Payments;
(6) transactions pursuant to the Development Services Agreement, the
Relinquishment Agreement and the Side Letters;
(7) Restricted Payments or Permitted Investments that are made in
compliance with the provisions of the Senior Subordinated Notes Indenture
described above under the caption "--Restricted Payments;" and
(8) contractual arrangements existing on the date of the Senior
Subordinated Notes Indenture and any renewals, extensions and modifications
thereof that are not materially adverse to holders.
Subordinated Subsidiary Guarantees
The Senior Subordinated Notes Indenture will provide that if the Authority
acquires or creates any Restricted Subsidiary after the date of the Senior
Subordinated Notes Indenture, then that newly acquired or created Restricted
Subsidiary must become a Subsidiary Guarantor and execute a supplemental
indenture satisfactory to the Senior Subordinated Trustee and deliver an
Opinion of Counsel to the Senior Subordinated Trustee within 20 business days
of the date on which it is acquired or created.
The obligations of each Subsidiary Guarantor under its Senior Subordinated
Subsidiary Guarantee will be limited so as not to constitute a fraudulent
conveyance under applicable law. Any Senior Subordinated Subsidiary Guarantees
will be subordinated to Senior Indebtedness in the same manner and to the same
extent as the Senior Subordinated Exchange Notes.
No Subsidiary Guarantor may consolidate with or merge with or into (whether
or not such Subsidiary Guarantor is the surviving Person), another corporation,
Person or entity whether or not affiliated with such Subsidiary Guarantor
unless: (i) subject to the provisions of the following paragraph, the Person
formed by or surviving any such consolidation or merger (if other than such
Subsidiary Guarantor) assumes all the obligations of such Subsidiary Guarantor
pursuant to a supplemental indenture in form and substance reasonably
satisfactory to the Senior Subordinated Trustee; and (ii) immediately after
giving effect to such transaction, no Default or Event of Default exists.
The Senior Subordinated Notes Indenture will permit the merger of one or
more Subsidiary Guarantors with or into another Subsidiary Guarantor or with or
into the Authority; provided that in the case of a merger with or into the
Authority, the Authority is the surviving entity.
In the event of a sale or other disposition of all of the assets of any
Subsidiary Guarantor, by way of merger, consolidation or otherwise, or a sale
or other disposition of all of the capital stock of any Subsidiary Guarantor or
if a Subsidiary Guarantor is designated as an Unrestricted Subsidiary, then
such Subsidiary Guarantor (in the event of a sale or other disposition, by way
of such a merger, consolidation or otherwise, of all of the capital stock or a
redesignation of such Subsidiary Guarantor) or the entity acquiring the
property (in the event of a sale or other disposition of all of the assets of
such Subsidiary Guarantor) will be released and
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relieved of any obligations under its Senior Subordinated Subsidiary Guarantee;
provided that the Net Proceeds of such sale or other disposition are applied in
accordance with or the redesignation is accomplished in accordance with the
applicable provisions of the Senior Subordinated Notes Indenture. See "--
Repurchase at the Option of Holders--Asset Sales."
The Authority currently has no Subsidiaries.
Sale and Leaseback Transactions
The Senior Subordinated Notes Indenture will provide that the Authority will
not, and will not permit any of its Restricted Subsidiaries to, enter into any
sale and leaseback transaction involving the Resort; provided that the
Authority or any of its Restricted Subsidiaries may enter into a sale and
leaseback transaction if
(1) the Authority or such Restricted Subsidiary, as applicable, could
have (a) incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction pursuant to the Fixed
Charge Coverage Ratio test shown in the first paragraph of the covenant
described above under the caption "--Incurrence of Indebtedness and
Issuance of Preferred Stock" and (b) incurred a Lien to secure such
Indebtedness pursuant to the covenant described above under the caption "--
Liens";
(2) the gross cash proceeds of such sale and leaseback transaction are
at least equal to the fair market value, as determined in good faith by the
Management Board and shown in an Officers' Certificate delivered to the
Senior Subordinated Trustee, of the property that is subject of such sale
and leaseback transaction; and
(3) the transfer of assets in such sale and leaseback transaction is
permitted by, and the Authority applies the proceeds of such transaction in
compliance with, the covenant described above under the caption "--
Repurchase at the Option of Holders--Asset Sales."
Construction
The Authority will use its commercially reasonable best efforts to cause
construction of the Expansion Project to be prosecuted with diligence and
continuity in good and workmanlike manner materially in accordance with the
plans relating to the Expansion Project as more fully described in this
Prospectus.
Restrictions on Leasing and Dedication of Property
Except as provided below, the Authority will not lease, sublease, or grant a
license, concession or other agreement to occupy, manage or use any material
portion of the Authority's property and assets owned or leased by the Authority
(each, a "Lease Transaction").
The first paragraph of this covenant will not prohibit any of the following
Lease Transactions:
(1) The Authority may enter into a Lease Transaction with respect to any
space with any Person (including, without limitation, a lease in connection
with the Expansion Project for the purpose of developing, constructing,
operating and managing retail establishments within the Resort), provided
that:
(a) such Lease Transaction will not materially interfere with,
impair or detract from the operations of the Resort;
(b) such Lease Transaction contains rent and such other terms such
that the Lease Transaction, taken as a whole is commercially reasonable
in light of prevailing or comparable transactions in other casinos,
hotels, attractions or shopping venues; and
(c) such Lease Transaction complies with all applicable law,
including obtaining any consent of the BIA, if required;
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(2) The Lease and any amendments, extensions, modifications or renewals
thereof which are not materially adverse to the holders;
(3) The Authority may enter into a management or operating agreement
with respect to any of the Authority's property and assets with any Person;
provided that
(a) the manager or operator has experience in managing or operating
similar operations; and
(b) such management or operating agreement is on commercially
reasonable and fair terms to the Authority; and
(4) The Relinquishment Agreement, the Development Services Agreement and
the Side Letters with the Manager and any amendments, extensions,
modifications or renewals thereof which are not materially adverse to the
holders.
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,
and no person other than the Authority may conduct gaming or casino operations
on any property which is the subject of a Lease Transaction.
No Senior Subordinated Indebtedness
The Authority will not incur, create, issue, assume, guarantee or otherwise
become liable for any Indebtedness that is subordinate or junior in right of
payment to any Senior Indebtedness of the Authority and senior in any respect
in right of payment to the Senior Subordinated Exchange Notes. No Subordinated
Guarantor will incur, create, issue, assume, guarantee or otherwise become
liable for any Indebtedness that is subordinate or junior in right of payment
to any Senior Indebtedness of such Subordinated Guarantor and senior in any
respect in right of payment to such Subordinated Guarantor's Subsidiary
Subordinated Guarantee.
Covenants of the Tribe
The Tribe shall not, and shall not permit any of its representatives,
political subunits or councils, agencies, instrumentalities, directly or
indirectly, except as required by federal or state law, to do any of the
following:
(1) increase or impose any tax or other payment obligation on the
Authority or on any patrons of, or any activity at, the Resort other than:
(a) payments which are due under any agreement in effect on the
Closing Date or payments which are not materially adverse to the
economic interests of holders;
(b) payments which the Authority has agreed to reimburse each holder
for the economic effect thereof, if any;
(c) payments which correspondingly reduce the Restricted Payments
otherwise payable to the Tribe;
(d) pursuant to the Tribal Tax Code; or
(e) Government Service Payments;
(2) amend the terms of the Lease in any material manner that would be
materially adverse to the economic interests of holders;
(3) amend the Tribal Gaming Ordinance in effect on March 3, 1999 (unless
any such amendment is a legitimate effort to ensure that the Authority and
the Resort conduct gaming operations in a manner that is consistent with
applicable laws, rules and regulations or that protects the environment,
the public health and safety, or the integrity of the Authority or the
Resort), restrict or eliminate the exclusive right of the Authority to
conduct gaming operations on any property owned or controlled by the Tribe
in a manner that would be materially adverse to the economic interests of
holders; or
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(4) take any other action, enter into any agreement, amend its
constitution or enact any ordinance, law, rule or regulation that would
have a material adverse effect on the economic interests of holders.
The Tribe shall comply with all material terms of the construction reserve
agreement and shall not amend and shall not permit any of its representatives,
political subunits or councils, agencies, instrumentalities, directly or
indirectly, to amend, except as required by federal or state law, such a
construction reserve agreement in a manner that would have a material adverse
effect on the economic interests of holders.
Moreover, except with the consent of a majority in interest of holders 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 impose, tax or otherwise make a
charge on the Senior Subordinated Exchange Notes, the Senior Subordinated Notes
Indenture or any payments or deposits to be made thereunder.
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 in respect to all principal, premium,
interest and other amounts owing in respect of the Notes before any payment or
any distribution to the Tribe.
Provisions Common to Both Senior Exchange Notes and Senior Subordinated
Exchange Notes
Methods of Receiving Payments on the Notes
If a holder that holds at least $1.0 million in principal amount of Exchange
Notes has given wire transfer instructions to the Authority, the Authority will
make all principal, premium and interest payments, including Additional
Interest payments, if any, on those Exchange Notes in accordance with those
instructions. All other payments on these Exchange Notes will be made at the
office or agency of the Paying Agent and Registrar within the City and State of
New York unless the Authority elects to make interest payments by check mailed
to the holders at their address shown in the register of holders.
Paying Agent and Registrar for the Notes
The Trustees initially will act as Paying Agent and Registrar. The Authority
may change the Paying Agent or Registrar without prior notice to the holders of
the Notes, and the Authority may act as Paying Agent or Registrar.
Transfer and Exchange
A holder may transfer or exchange Exchange Notes in accordance with the
Indentures. The Registrar and the Trustees 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 Indentures. The Authority is not required to transfer or
exchange any Exchange Note selected for redemption. Also, the Authority is not
required to transfer or exchange any Exchange Note for a period of 15 days
before a selection of Exchange Notes to be redeemed.
The registered holder of an Exchange Note will be treated as the owner of it
for all purposes.
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Certain Common Covenants
Use of Proceeds
The Authority will use the net proceeds of the Outstanding Notes Offering
only for Permitted Proceed Uses.
Gaming Licenses
The Authority will 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 or any part of the
Resort as a result of any noncompliance with the 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 Trustees and provide holders of Exchange
Notes 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.
Ownership Interests in the Authority
Neither the Tribe nor the Authority shall permit any Person other than the
Tribe to acquire any Ownership Interest whatsoever in the Authority.
Existence of the Authority and Maintenance of the Lease
The Authority shall, and shall cause each of its Restricted Subsidiaries to,
do or cause to be done all things necessary to preserve and keep in full force
and effect their respective existence, in accordance with their respective
organizational documents and their respective rights (contractual, charter and
statutory), licenses and franchises; provided, however, that neither the
Authority nor any Restricted Subsidiary shall be required to preserve, with
respect to itself, any license, right or franchise and, with respect to its
Restricted Subsidiaries, any such existence, license, right or franchise, if
its Management Board or Board of Directors, or other governing body or officers
authorized to make such determination, as the case may be, shall determine that
the preservation thereof is no longer desirable in the conduct of the business
of the Authority or any Restricted Subsidiary, and that the loss thereof is not
adverse in any material respect to the holders. In addition, the Authority
shall do, or cause to be done, all things necessary to perform any material
covenants shown in the Lease to keep the Lease in full force and effect.
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.
Limitations on Lines of Business
The Authority shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in any business other than the Principal Business or a
Related Business.
Maintenance of Insurance
The Indentures provide that, until the Exchange 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, set insured amounts and coinsurance
provisions as are customarily carried by similar businesses of similar size,
including, without limitation, property and casualty.
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Customary insurance coverage shall be deemed to include the following:
(1) 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;
(2) comprehensive general liability insurance with minimum limits of
$2.0 million;
(3) umbrella or bumbershoot liability insurance providing excess
liability coverages over and above the foregoing underlying insurance
policies up to a minimum limit of $100.0 million; and
(4) property insurance protecting the property against loss or damage by
fire, lightning, wind-storm, 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)).
Payments for Consent
The Authority will not and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration, to or for the benefit of any holder of any Senior Exchange Notes
or Senior Subordinated Exchange Notes, as the case may be, for or as an
inducement to any consent, waiver or amendment of any of the terms or
provisions of either of the Indentures or the Senior Exchange Notes or Senior
Subordinated Exchange Notes, as the case may be, unless such consideration is
offered to be paid or is paid to all holders of the Senior Exchange Notes or
Senior Subordinated Exchange Notes, as the case may be, that consent, waive or
agree to amend in the time frame shown in the solicitation documents relating
to such consent, waiver or agreement.
Required Defeasance and Redemption of the Junior Subordinated Notes
The Authority will have established, as of the date of the Indentures, the
Defeasance Trust and deposit into the Defeasance Trust cash or government
securities estimated to be sufficient to pay all principal, premium and
interest on the Junior Subordinated Notes less $500,000 on January 1, 2000, the
first redemption date. The Authority will redeem the Junior Subordinated Notes
from the proceeds of the Defeasance Trust on January 1, 2000 at a price of 100%
of the principal amount, plus accrued and unpaid interest thereon, less
$500,000.
Designation of Designated Senior Indebtedness Under the Relinquished Agreement
The Authority will not designate any indebtedness as "Designated Senior
Indebtedness" under the Relinquishment Agreement that is not also designated as
Designated Senior Indebtedness under the Senior Subordinated Notes Indenture.
Reports
Whether or not required by the Commission, so long as any Exchange Notes are
outstanding, the Authority will furnish to the holders of Notes and the
Trustees within 15 days after the end of the time periods specified in the
Commission's rules and regulations for filings of current, quarterly and annual
reports:
(1) 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 Financial Condition and Results of
Operations" that describes the financial condition and results of
operations of the Authority and its consolidated Subsidiaries (showing in
reasonable detail, either on the face of the financial statements or in the
footnotes
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thereto and in Management's Discussion and Analysis of Financial Condition
and Results of Operations, the financial condition and results of
operations of the Authority and its Restricted Subsidiaries separate from
the financial condition and results of operations of the Unrestricted
Subsidiaries of the Authority, to the extent that would be required by the
rules, regulations or interpretive positions of the Commission) and, with
respect to the annual information only, a report thereon by the Authority's
independent public accountants; and
(2) all current 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, if the Authority consummates the Exchange Offers, whether or
not required by the rules and regulations of the Commission, the Authority
will file a copy of all such information and reports with the Commission for
public availability within the time periods specified in the Commission's
rules and regulations (unless the Commission will not accept such a filing)
and make such information available to securities analysts and prospective
investors upon request.
In addition, the Authority has agreed that, for so long as any Exchange
Notes remain outstanding, it will furnish to the holders and to securities
analysts and prospective investors, upon their request, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
The Authority shall file with the Trustees and provide to holders of
Exchange 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.
Events of Default and Remedies
With respect to each of the Senior Exchange Notes and the Senior
Subordinated Exchange Notes, respectively, each of the following is an Event
of Default:
(1) default for 30 days in the payment when due of interest on, or
Additional Interest with respect to, such Notes;
(2) default in payment when due of the principal of or premium, if any,
on such Exchange Notes;
(3) failure by the Authority or any of its Restricted Subsidiaries to
comply with the provisions described under the captions "--Description of
the Senior Exchange Notes--Repurchase at the Option of Holders--Asset
Sales," "--Description of the Senior Subordinated Exchange Notes--
Repurchase at the Option of Holders--Asset Sales" or "--Certain Common
Covenants--Liquidation or Dissolution";
(4) failure by the Authority or any of its Restricted Subsidiaries for
(i) 30 days after notice to comply with the provisions described under "--
Description of the Senior Exchange Notes--Certain Covenants--Restricted
Payments," "--Description of the Senior Subordinated Exchange Notes--
Certain Covenants--Restricted Payments," "--Description of the Senior
Exchange Notes--Certain Covenants--Incurrence of Indebtedness and Issuance
of Preferred Stock" and "Description of the Senior Subordinated Exchange
Notes--Certain Covenants--Incurrence of Indebtedness and Issuance of
Preferred Stock" or (ii) 60 days after notice to comply with any of the
other agreements in the respective Indentures or the Exchange Notes;
(5) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Authority or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Authority or any
of its Restricted Subsidiaries) whether such Indebtedness or guarantee now
exists, or is created after the date of the Indenture, if that default
(a) is caused by a failure to pay principal of or premium, if any, or
interest on such Indebtedness before the expiration of the grace period
provided in such Indebtedness on the date of such default (a "Payment
Default"); or
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(b) results in the acceleration of such Indebtedness before its
express maturity; and,
in each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there has
been a Payment Default or the maturity of which has been so accelerated,
aggregates $10.0 million or more;
(6) failure by the Authority or any of its Restricted Subsidiaries to
pay final judgments in amounts not covered by insurance or not adequately
reserved for in accordance with GAAP aggregating in excess of $10.0
million, which judgments are not paid, discharged or stayed (by reason of
pending appeal or otherwise) for a period of 60 days;
(7) certain events of bankruptcy or insolvency with respect to the
Authority or any of its Restricted Subsidiaries;
(8) 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;
(9) 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);
(10) the Lease ceases to be in full force and effect; and
(11) failure by the Tribe to comply with the provisions described under
"Covenants of the Tribe" for 30 days after notice to comply.
In the case of an Event of Default arising from certain events of bankruptcy
or insolvency with respect to the Authority, any Restricted Subsidiary that is
a Significant Subsidiary or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary, all outstanding Notes will
become due and payable immediately without further action or notice. If any
other Event of Default occurs and is continuing, a Trustee or the holders of at
least 25% in principal amount of the then outstanding Exchange Notes may
declare all the Exchange Notes to be due and payable immediately.
Holders of the Exchange Notes may not enforce their respective Indentures or
the Exchange Notes except as provided in the Indentures. Subject to certain
limitations, holders of a majority in principal amount of the then outstanding
Exchange Notes may direct a Trustee in its exercise of any trust or power. A
Trustee may withhold from holders of the Exchange 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) if it determines that
withholding notice is in their interest.
The holders of a majority in aggregate principal amount of the Exchange
Notes then outstanding by notice to a Trustee may on behalf of the holders of
all of the Exchange Notes waive any existing Default or Event of Default and
its consequences under the respective Indentures except a continuing Default or
Event of Default in the payment of interest on, or the principal of, the
Exchange Notes.
In the case of any Event of Default occurring 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 Subordinated
Exchange Notes pursuant to the optional redemption provisions of the Senior
Subordinated Notes Indenture, an equivalent premium shall also become and be
immediately due and payable to the extent permitted by law upon the
acceleration of the Senior Subordinated Exchange Notes. If an Event of Default
occurs before January 1, 2004 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 Subordinated Exchange
Notes before January 1, 2004, then the premium specified in the Senior
Subordinated Notes Indenture shall also become immediately due and payable to
the extent permitted by law upon the acceleration of the Senior Subordinated
Exchange Notes.
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The Authority will be required to deliver to each Trustee annually a
statement regarding compliance with the Indenture, and the Authority will be
required upon becoming aware of any Default or Event of Default, to deliver to
each Trustee a statement specifying such Default or Event of Default.
No Personal Liability of Limited Partners, Directors, Officers, Employees and
Stockholders
Neither the Tribe nor any director, officer, office holder, employee, agent,
representative or member of the Authority or the Tribe or holder of an
Ownership Interest of the Authority, any Subsidiary Guarantor or the Tribe, as
such, shall have any liability for any obligations of the Authority under the
Exchange Notes or the Indentures or for any claim based on, in respect of, or
by reason of, such obligations or their creation. Each holder of Exchange Notes
by accepting an Exchange Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Exchange
Notes. Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the Commission that such a waiver is
against public policy.
Legal Defeasance and Covenant Defeasance
The Authority may, at its option and at any time, elect to have all of its
obligations discharged with respect to either or both of the outstanding Senior
Exchange Notes and Senior Subordinated Exchange Notes, ("Legal Defeasance")
except for
(1) the rights of holders of outstanding Exchange Notes to receive
payments in respect of the principal of, premium, if any, and interest and
Additional Interest, if any, on such Exchange Notes when such payments are
due from the trust referred to below;
(2) the Authority's obligations with respect to the Exchange Notes
concerning issuing temporary Exchange Notes, registration of Outstanding
Notes, mutilated, destroyed, lost or stolen Exchange Notes and the
maintenance of an office or agency for payment and money for security
payments held in trust;
(3) the rights, powers, trusts, duties and immunities of the Trustees,
and the Authority's obligations in connection with those rights, powers,
trusts, duties and immunities; and
(4) the Legal Defeasance provisions of the Indentures.
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 Indentures ("Covenant Defeasance") and
thereafter any omission to comply with such obligations shall not
constitute a Default or Event of Default with respect to the Exchange
Notes. In the event Covenant Defeasance occurs, certain events (not
including non-payment, bankruptcy, receivership, rehabilitation and
insolvency events) described under "--Events of Default and Remedies" will
no longer constitute an Event of Default with respect to the Exchange
Notes.
To exercise either Legal Defeasance or Covenant Defeasance
(1) the Authority shall have irrevocably deposited with the appropriate
Trustee, in trust, for the benefit of the holders of the Exchange 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, to pay the
principal of, premium, if any, and interest and Additional Interest on the
outstanding Exchange Notes on the stated maturity or on the applicable
redemption date, as the case may be, and the Authority must specify whether
the Exchange Notes are being defeased to maturity or to a particular
redemption date;
(2) in the case of Legal Defeasance, the Authority shall have delivered
to the Trustees an opinion of counsel in the United States reasonably
acceptable to the Trustees confirming that
(a) the Authority has received from, or there has been published by,
the Internal Revenue Service a ruling; or
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(b) since the date of the Indentures, there has been a change in the
applicable federal income tax law, in either case to the effect that,
and based thereon such opinion of counsel shall confirm that, the
holders of the Exchange Notes will not recognize income, gain or loss
for federal income tax purposes as a result of such Legal Defeasance
and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such
Legal Defeasance had not occurred;
(3) in the case of Covenant Defeasance, the Authority shall have
delivered to the Trustees an opinion of counsel in the United States
reasonably acceptable to the Trustees confirming that the holders of the
Exchange Notes will not recognize income, gain or loss for federal income
tax purposes as a result of such Covenant Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not
occurred;
(4) no Default or Event of Default shall have occurred and be continuing
on the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit) or
insofar as Events of Default from bankruptcy or insolvency events are
concerned, at any time in the period ending on the 91st day after the date
of deposit;
(5) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under any material
agreement or instrument (other than the Indentures) to which the Authority
or any of the Authority's Restricted Subsidiaries is a party or by which
the Authority or any of the Authority's Restricted Subsidiaries is bound;
(6) the Authority must have delivered to the Trustees an opinion of
counsel that after the 91st day following the deposit, the trust funds will
not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally;
(7) the Authority shall have delivered to the Trustees an Officers'
Certificate stating that the deposit was not made by the Authority with the
intent of preferring the holders of Exchange Notes over the other creditors
of the Authority with the intent of defeating, hindering, delaying or
defrauding creditors of the Authority or others; and
(8) the Authority shall have delivered to the Trustees an Officers'
Certificate and an opinion of counsel, each stating that all conditions
precedent provided for relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
Amendment, Supplement and Waiver
Except as provided in this section, the Authority, the Tribe and the Trustee
may amend or supplement the Exchange Notes with the consent of the holders of
at least a majority of the aggregate outstanding principal amount of each of
the Senior Exchange Notes or the Senior Subordinated Exchange Notes, as
applicable, provided that without the consent of each holder affected, an
amendment or waiver (with respect to any Exchange Notes held by a non-
consenting holder) may not
(1) reduce the principal amount of Exchange Notes whose holders must
consent to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any Exchange
Note or alter the provisions with respect to the redemption of the Exchange
Notes (other than provisions relating to the covenants described above
under the captions "--Description of the Senior Exchange Notes--Repurchase
at the Option of Holders" and "--Description of the Senior Subordinated
Exchange Notes--Repurchase at the Option of Holders");
(3) reduce the rate of or change the time for payment of interest on any
Exchange Note;
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(4) waive a Default or Event of Default in the payment of principal of
or premium, if any, or interest on the Exchange Notes (except a rescission
of acceleration of the Exchange Notes by the holders of at least a majority
in aggregate principal amount of the Exchange Notes and a waiver of the
payment default that resulted from such acceleration);
(5) make any Exchange Note payable in money other than that stated in
the Exchange Notes;
(6) make any change in the provisions of the Indentures relating to
waivers of past Defaults or the rights of holders of Exchange Notes to
receive payments of principal of or premium, if any, or interest on the
Exchange Notes;
(7) waive a redemption payment with respect to any Exchange Note (other
than a payment required by one of the covenants described above under the
captions "--Description of the Senior Exchange Notes--Repurchase at the
Option of Holders" and "--Description of the Senior Subordinated Exchange
Notes--Repurchase at the Option of Holders"); or
(8) make any change in the preceding amendment and waiver provisions.
Without the consent of holders of at least 66 2/3% of the aggregate
outstanding principal amount of each of the Senior Exchange Notes and the
Senior Subordinated Exchange Notes, as applicable, the Authority may not amend,
alter or waive the provisions shown in the sections entitled "--Description of
the Senior Exchange Notes--Repurchase at the Option of Holders--Change of
Control" and "--Description of the Senior Subordinated Exchange Notes--
Repurchase at the Option of Holders--Change of Control." In addition, any
amendment to the provisions of Article X of the Senior Subordinated Indenture
(which relate to subordination) will require the consent of holders of at least
75% in aggregate principal amount of Senior Subordinated Exchange Notes then
outstanding.
Notwithstanding the foregoing, without the consent of any holder of Exchange
Notes, and provided that any required governmental approval to ensure the
enforceability of the Exchange Notes and the Indentures, including that of the
NIGC or the BIA, is obtained, the Authority and the Trustee may amend or
supplement the Indentures or the Exchange Notes to
(1) cure any ambiguity, defect or inconsistency;
(2) provide for uncertificated Exchange Notes in addition to or in place
of certificated Exchange Notes;
(3) provide for the assumption of the Authority's obligations to holders
of Exchange Notes in the case of a merger or consolidation or sale of all
or substantially all of the Authority's assets;
(4) make any change that would provide any additional rights or benefits
to the holders of Exchange Notes or that does not adversely affect the
legal rights under the Indentures of any such holder; or
(5) comply with requirements of the Commission to effect or maintain the
qualification of the Indentures under the Trust Indenture Act.
Concerning the Trustees
If a Trustee becomes a creditor of the Authority or any Guarantor, the
Indentures limit its right to obtain payment of claims in certain cases, or to
realize on certain property received in respect of any such claim as security
or otherwise. Such 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 Commission for permission to continue or
resign.
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The holders of a majority in principal amount of the then outstanding
Exchange Notes will have the right to direct the time, method and place of
conducting any proceeding for exercising any remedy available to a Trustee,
subject to certain exceptions. The Indentures provide that in case an Event of
Default shall occur and be continuing, the Trustees will be required, in the
exercise of their power, to use the degree of care of a prudent man in the
conduct of his own affairs. Subject to such provisions, the Trustees will be
under no obligation to exercise any of their rights or powers under the
Indentures at the request of any holder of Exchange Notes, unless such holder
shall have offered to the Trustees security and indemnity satisfactory to each
of them against any loss, liability or expense.
Governing Law
The Indentures and the Notes will be, subject to certain exceptions,
governed by and construed in accordance with the internal laws of the State of
New York, without giving effect to the conflicts of law principles thereof
(other than Section 5-1401 of the New York General Obligations Law).
Additional Information
Anyone who receives this Prospectus may obtain a copy of the Indentures and
registration rights agreements without charge by writing to the Authority at 1
Mohegan Sun Boulevard, Uncasville, CT 06382 attention: Roland Harris.
Book-Entry, Delivery and Form
The Exchange Notes will initially be issued in registered, global form in
minimum denominations of $1,000 and integral multiples of $1,000 in excess
thereof, held in book-entry form. The Exchange Notes will be deposited with the
Trustees as custodian for The Depository Trust Authority ("DTC"), and DTC or
its nominee will initially be the sole registered holder of the Exchange Notes
for all purposes under the Indentures. Except as shown below, the Global Senior
Notes (as defined in the Senior Indenture) and Global Senior Subordinated Notes
(as defined in the Senior Subordinated Notes Indenture), (collectively, the
"Global Notes") may be transferred, in whole and not in part, only to another
nominee of DTC or to a successor of DTC or its nominee.
The Global Notes will be deposited upon issuance with the respective Trustee
as custodian for The Depository Trust Authority ("DTC"), in New York, New York,
and registered in the name of DTC or its nominee, in each case for credit to an
account of a direct or indirect participant in DTC as described below.
Beneficial interests in the Global Notes may not be exchanged for Exchange
Notes in certificated form except in the limited circumstances described below.
See "--Exchange of Books-Entry Notes for Certificated Notes." Except in the
limited circumstances described below, owners of beneficial interests in the
Global Notes will not be entitled to receive physical delivery of the
Certificated Notes (as defined below).
Initially, the Trustees will act as Paying Agent and Registrar. The Exchange
Notes may be presented for registration of transfer and exchange at the offices
of the Registrar.
Depository Procedures
The following description of the operations and procedures of DTC are
provided solely as a matter of convenience. These operations and procedures are
solely within the control of the respective settlement systems and are subject
to changes by them from time to time. The Authority takes no responsibility for
these operations and procedures and urges investors to contact the system or
their participants directly to discuss these matters.
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DTC has advised the Authority that DTC is a limited-purpose trust Authority
created to hold securities for its participating organizations (collectively,
the "Participants") and to facilitate the clearance and settlement of
transactions in those securities between Participants through electronic book-
entry changes in accounts of its Participants. The Participants include
securities brokers and dealers (including the Initial Purchasers), banks, trust
companies, clearing corporations and certain other organizations. Access to
DTC's system is also available to other entities such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly (collectively,
the Indirect Participants"). Persons who are not Participants may beneficially
own securities held by or on behalf of DTC only through the Participants or the
Indirect Participants. The ownership interests in, and transfers of ownership
interests in, each security held by or on behalf of DTC are recorded on the
records of the Participants and Indirect Participants.
DTC has also advised the Authority that, pursuant to procedures established
by it, (i) upon deposit of the Global Notes, DTC will credit the accounts of
Participants designated by the Initial Purchasers with portions of the
principal amounts of the Global Notes and (ii) ownership of such interests in
the Global Notes will be shown on, and the transfer of ownership thereof will
be effected only through, records maintained by DTC (with respect to the
Participants) or by the Participants and the Indirect Participants (with
respect to other owners of beneficial interest in the Global Notes).
All interests in a Global Note, may be subject to the procedures and
requirements of DTC. The laws of some states require that certain persons take
physical delivery in definitive form of securities that they own. Consequently,
the ability to transfer beneficial interests in Global Note to such persons
will be limited to that extent. Because DTC can act only on behalf of
Participants, which in turn act on behalf of Indirect Participants and certain
banks, the ability of a person having beneficial interests in a Global Note to
pledge such interests to persons or entities that do not participate in the DTC
system, or otherwise take actions in respect of such interests, may be affected
by the lack of a physical certificate evidencing such interests.
Except as described below, owners of interest in the Global Notes will not
have Exchange Notes registered in their names, will not receive physical
delivery of Exchange Notes in certificated form and will not be considered the
registered owners or "holders" thereof under the Indentures for any purpose.
Payments in respect of the principal of, and premium, if any Additional
Interest, if any, and interest on a Global Note registered in the name of DTC
or its nominee will be payable to DTC in its capacity as the registered holder
under the Indentures. Under the terms of the Indentures, the Authority and the
Trustees will treat the persons in whose names the Exchange Notes, including
the Global Notes are registered as the owners thereof for the purpose of
receiving such payments and for any and all other purposes whatsoever.
Consequently, neither the Authority, the Trustees nor any agent of the
Authority or the Trustees has or will have any responsibility or liability for
(i) any aspect of DTC's records or any Participant's or Indirect participant's
records relating to or payments made on account of beneficial ownership
interests in the Global Notes, or for maintaining, supervising or reviewing any
of DTC's records or any Participant's or Indirect Participant's records
relating to the beneficial ownership interests in the Global Notes or (ii) any
other matter relating to the actions and practices of DTC or any of its
Participants or Indirect Participants. DTC has advise the Authority that its
current practice, upon receipt of any payment in respect of securities such as
the Notes (including principal and interests), is to credit the accounts of the
relevent Participants with the payment on the payment date, in amounts
proportionate to their respective holdings in the principal amount of the
beneficial interest in the relevent security as shown on the records of DTC
unless DTC has reason to believe it will not receive payment on such payment
date. Payments by the Participants and the Indirect Participants to the
beneficial owners of the Exchange Notes will be governed by standing
instructions and customary practices and will be the responsibility of the
Participants or the Indirect Participants and will not be the responsibility of
the DTC, the Trustees or the Authority. Neither the Authority nor the Trustees
will be liable for any delay by DTC or any of its Participants in identifying
the beneficial owners of the Exchange Notes, and the Authority and the Trustees
may conclusively rely on and will be protected in relying on instructions from
DTC or its nominee for all purposes.
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Interest in the Global Notes are expected to be eligible to trade DTC's
Same-Day Funds Settlement System and secondary market trading activity in such
interests will, therefor, settle in immediately available funds, subject in all
cases to the rules and procedures of DTC and its Participants. See "--Same Day
Settlement and payment."
Subject to the transfer restrictions shown under "Notice to Investors, "
transfers between Participants in DTC will be effected in accordance with DTC's
procedures, and will be settled in same day funds.
DTC has advised the Authority that it will take any action permitted to be
taken by a holder of Exchange Notes only at the direction of one or more
Participants to whose account DTC has credited the interests in the Global
Notes and only in respect of such portion of the aggregate principal amount of
the Exchange Notes as to which such Participant or Participants has or have
given such direction. However, if there is an Event of Default under the
Exchange Notes, DTC reserves the right to exchange the Global Notes for
legended Exchange Notes in certificated form, and to distribute such Exchange
Notes to its Participants.
Exchange of Book-Entry Exchange Notes for Certificated Notes
A Global Note is exchangeable for definitive Exchange Notes in registered
certificated form ("Certificated Notes") if (i) DTC (x) notifies the Authority
that it is unwilling or unable to continue as depositary for the Global Notes
and the Authority thereupon fails to appoint a successor depositary or (y) has
ceased to be a clearing agency registered under the Exchange Act, (ii) the
Authority, at its option, notifies the applicable Trustee in writing that it
elects to cause the issuance of the Certificated Notes or (iii) there shall
have occurred and be continuing a Default or Event of Default with respect to
the Exchange Notes. In addition, beneficial interests in a Global Note may be
exchanged for Certificated Notes upon request but only upon prior written
notice given to the applicable Trustee by or on behalf of DTC in accordance
with the Indentures. In all cases, Certificated Notes delivered in exchange for
any Global Note or beneficial interests therein will be registered in the
names, and issued in any approved denominations, requested by or on behalf of
the depositary (in accordance with its customary procedures) and will bear the
applicable restrictive legend referred to in "Notice to Investors," unless the
Authority determines otherwise in compliance with applicable law.
Exchange of Certificated Exchange Notes for Book-Entry Notes
Exchange Notes in certificated form may not be exchanged for beneficial
interests in any Global Note unless the transferor first delivers to the
applicable Trustee a written certificate (in the form provided in the
Indentures) to the effect that such transfer will comply with the appropriate
transfer restrictions applicable to such Exchange Notes. See "Notice to
Investors."
Same Day Settlement and Payment
The Indentures require that payments in respect of the Exchange Notes
represented by the Global Notes (including principal, premium, if any, interest
and Additional Interest, if any) be made by wire transfer of immediately
available funds to the accounts specified by the Global Note holder. With
respect to Exchange Notes in certificated form, the Authority will make all
payments of principal, premium, if any, interest and Additional Interest, if
any, by wire transfer of immediately available funds to the accounts specified
by the holders thereof that holds at least $1.0 million in principal amount of
Exchange Notes or, if no such account is specified, by mailing a check to each
such holder's registered address.
Registration Rights; Additional Interest
The Authority and the Initial Purchasers entered into registration rights
agreements, pursuant to which, the Authority is filing with the Commission this
Exchange Offer Registration Statement under the Securities Act with respect to
the Exchange Notes. Upon the effectiveness of the Exchange Offer Registration
Statement, the Authority will offer to the holders of Transfer Restricted
Securities pursuant to the Exchange Offers who are
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able to make certain representations the opportunity to exchange their Transfer
Restricted Securities for Exchange Notes. If (i) the Authority is not required
to file the Exchange Offer Registration Statement or permitted to consummate an
Exchange Offer because such Exchange Offer is not permitted by applicable law
or Commission policy or (ii) any holder of Transfer Restricted Securities
notifies the Authority before the 20th day following consummation of an
Exchange Offer that (A) it is prohibited by law or Commission policy from
participating in such Exchange Offer or (B) that it may not resell the Exchange
Notes acquired by it in the Exchange Offers 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 owns Outstanding Notes acquired directly from the Authority
or an affiliate of the Authority, the Authority will file with the Commission a
Shelf Registration Statement to cover resales of the Outstanding Notes by the
holders thereof who satisfy certain conditions relating to the provision of
information in connection with the Shelf Registration Statement. The Authority
will use its best efforts to cause the applicable registration statement to be
declared effective as promptly as possible by the Commission. For purposes of
the foregoing, "Transfer Restricted Securities" means each Outstanding Note
until (i) the date on which such Outstanding Note has been exchanged by a
person other than a broker-dealer for an Exchange Note in the Exchange Offers,
(ii) following the exchange by a broker-dealer in an Exchange Offer of an
Outstanding Note for a Exchange Note, the date on which such Exchange Note is
sold to a purchaser who receives from such broker-dealer on or before the date
of such sale a copy of the prospectus contained in the Exchange Offer
Registration Statement, (iii) the date on which such Note has been effectively
registered under the Securities Act and disposed of in accordance with the
Shelf Registration Statement or (iv) the date on which such Note is distributed
to the public pursuant to Rule 144 under the Act.
The registration rights agreements each provide that (i) the Authority will
file an Exchange Offer Registration Statement with the Commission on or before
90 days after the Closing Date, (ii) the Authority will use its best efforts to
have the Exchange Offer Registration Statement declared effective by the
Commission on or before 150 days after the Closing Date, (iii) unless the
Exchange Offers would not be permitted by applicable law or Commission policy,
the Authority will commence the Exchange Offers and use its best efforts to
issue on or before 30 business days after the date on which the Exchange Offer
Registration Statement was declared effective by the Commission, Exchange Notes
in exchange for all Outstanding Notes tendered prior thereto in the Exchange
Offers and (iv) if obligated to file the Shelf Registration Statement, the
Authority will use its best efforts to file the Shelf Registration Statement
with the Commission on or before 30 days after such filing obligation arises
and to cause the Shelf Registration to be declared effective by the Commission
on or before 90 days after such obligation arises. If (a) the Authority fails
to file any of the Registration Statements required by the registration rights
agreements on or before the date specified for such filing, (b) any of such
Registration Statements is not declared effective by the Commission on or
before the date specified for such effectiveness (the "Effectiveness Target
Date"), or (c) the Authority fails to consummate the Exchange Offers within
30 business days of the Effectiveness Target Date with respect to the Exchange
Offer Registration Statement, or (d) the Shelf Registration Statement or the
Exchange Offer Registration Statement is declared effective but thereafter
ceases to be effective or usable in connection with resales of Transfer
Restricted Securities during the periods specified in the registration rights
agreements (each such event referred to in clauses (a) through (d) above a
"Registration Default"), then the Authority will pay Additional Interest to
each holder of Notes, with respect to the first 90-day period immediately
following the occurrence of the first Registration Default in an amount equal
to 25 basis points per 90-day period of the principal amount of Notes held by
such holder. The amount of the Additional Interest will increase by an
additional 25 basis points with respect to each subsequent 90-day period until
all Registration Defaults have been cured, up to a maximum amount of Additional
Interest of 1% per annum of the principal amount of Notes. All accrued
Additional Interest will be paid by the Authority on each date on which the
payment of Additional Interest is due (which date shall be the next Interest
Payment Date as provided in the Notes) to the Global Note holder by wire
transfer of immediately available funds or by federal funds check and to
holders of Certificated Securities by wire transfer to the accounts specified
by them or by mailing checks to their registered addresses if no such accounts
have been specified. Following the cure of all Registration Defaults, the
accrual of Additional Interest will cease.
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Holders of Outstanding Notes will be required to make certain
representations to the Authority (as described in the registration rights
agreement) to participate in the Exchange Offers and will be required to
deliver information to be used in connection with the Shelf Registration
Statement and to provide comments on the Shelf Registration Statement within
the time periods shown in the registration rights agreements to have their
Outstanding Notes included in the Shelf Registration Statement and benefit from
the provisions regarding Additional Interest shown above.
Certain Definitions
Shown below are certain defined terms used in the Indentures. Reference is
made to the Indentures for all of such terms, as well as any other capitalized
terms used herein for which no definition is provided. Cross references to
captions shall means the respective caption, as appropriate, under the
subsections "--Description of the Senior Exchange Notes" and "--Description of
the Senior Subordinated Exchange Notes."
"Acquired Indebtedness" means, with respect to any specified Person,
(1) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Subsidiary of such specified
Person, including, without limitation, Indebtedness incurred in connection
with, or in contemplation of, such other Person merging with or into or
becoming a Subsidiary of such specified Person; and
(2) Indebtedness secured by a Lien 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,"
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. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" shall have
correlative meanings.
"Asset Sale" means
(1) the sale, lease, conveyance or other disposition of any assets or
rights (including, without limitation, by way of a sale and leaseback)
other than sales of inventory in the ordinary course of business consistent
with past practices; provided that the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Authority and
its Restricted Subsidiaries taken as a whole will be governed by the
provisions of the respective Indentures described above under the captions
"--Repurchase at the Option of Holders--Change of Control" and not by the
provisions of the Asset Sale covenant; and
(2) the issuance by the Authority or any of its Restricted Subsidiaries
of Equity Interests of any of the Authority's or its Restricted
Subsidiaries' Restricted Subsidiaries or the sale by the Authority or any
of its Subsidiaries of any Equity Interests in any of their respective
Subsidiaries.
Notwithstanding the preceding, the following items shall not be deemed to be
Asset Sales:
(1) any single transaction or series of related transactions that: (a)
involves assets having a fair market value of less than $1.0 million; or
(b) results in net proceeds to the Authority and its Restricted
Subsidiaries of less than $1.0 million;
(2) a transfer of assets between or among the Authority and its Wholly
Owned Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Wholly Owned Restricted
Subsidiary to the Authority or to another Wholly Owned Restricted
Subsidiary;
(4) a Restricted Payment or Permitted Investment that is permitted by
the covenant described above under the captions "--Certain Covenants--
Restricted Payments;"
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(5) any Event of Loss; and
(6) any lease or sublease permitted under the covenant described under
the captions entitled "--Certain Covenants--Restrictions on Leasing and
Dedication of Property."
The Authority is prohibited from making an Asset Sale of Key Project Assets.
"Attributable Debt" in respect of a sale and leaseback transaction means, at
the time of determination, the present value of the obligation of the lessee
for net rental payments during the remaining term of the lease included in such
sale and leaseback transaction including any period for which such lease has
been extended (or may, at the option of the lessor, be extended). Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.
"Attributable Value" means, with respect to any sale and leaseback
transaction, as of the time of determination, the total obligation (discounted
to present value at the rate of interest equal to that of the terms of the
Senior Exchange Notes, compounded semi-annually) of the lessee for rental
payments (other than amounts required to be paid on account of property taxes)
during the remaining portion of the base terms of the lease included in such
sale and leaseback transaction.
"Authority" means the Mohegan Tribal Gaming Authority together with any
subdivision, agency or subunit that has no separate legal existence from the
Mohegan Tribal Gaming Authority, and any successor and assignee thereto.
"BIA" means the Bureau of Indian Affairs.
"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 on a balance sheet in
accordance with GAAP.
"Capital Stock" means
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(4) 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, the issuing Person; but excluding any interest under the
Relinquishment Agreement.
"Cash Equivalents" means
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured by the
United States government or any agency or instrumentality thereof (provided
that the full faith and credit of the United States is pledged in support
thereof) having maturities of not more than six months from the date of
acquisition;
(3) 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 lender party to the Credit Facilities or with any
domestic commercial bank having capital and surplus in excess of $500
million and a Thompson Bank Watch Rating of "B" or better,
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(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3) above
entered into with any financial institution meeting the qualifications
specified in clause (3) above;
(5) commercial paper having one of the two highest ratings obtainable
from Moody's or S&P and in each case maturing within six months after the
date of acquisition; and
(6) money market funds at least 95% of the assets of which constitute
Cash Equivalents of the kinds described in clauses (1)-(5) of this
definition.
"Change of Control" means the occurrence of any of the following:
(1) the Authority ceases to be a wholly-owned unit, instrumentality or
subdivision of the government of the Tribe;
(2) the Authority ceases to have the exclusive legal right to operate
gaming operations of the Tribe;
(3) 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, or
(4) the Authority sells, assigns, transfers, leases, conveys or
otherwise disposes of all or substantially all of its assets to, or
consolidates or merges with or into any other person.
"Code" means the Internal Revenue Code of 1986, as amended.
"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.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus
(1) an amount equal to any extraordinary loss (including without
limitation any non-cash charges or losses arising from adjustments relating
to the Relinquishment Agreement) plus any net loss realized in connection
with an Asset Sale, to the extent such losses were deducted in computing
such Consolidated Net Income; plus
(2) provision for taxes based on the income or profits of such Person
and its Subsidiaries for such period, to the extent that such provision for
taxes was included in computing such Consolidated Net Income; plus
(3) consolidated interest expense of such Person and its Subsidiaries
for such period, whether paid or accrued (including, without limitation,
amortization of debt issuance costs and original issue discount, non-cash
interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of
letter of credit or bankers' acceptance financings, and net payments, if
any, pursuant to Hedging Obligations), but excluding interest expense on
the Junior Subordinated Notes, to the extent that any such expense was
deducted in computing such Consolidated Net Income; plus
(4) depreciation, amortization (including amortization of goodwill and
other intangibles but excluding amortization of prepaid cash expenses that
were paid in a prior period), non-cash charges associated with equity
option plans and other non-cash expenses (excluding any such non-cash
expense to the extent that it represents an accrual of or reserve for cash
expenses in any future period or amortization of a prepaid cash expense
that was paid in a prior period) of such Person and its Subsidiaries for
such period to the extent that such depreciation, amortization and other
non-cash expenses were deducted in computing such Consolidated Net Income;
minus
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(5) non-cash items increasing such Consolidated Net Income for such
period (including without limitation any non-cash items arising from
adjustments relating to the Relinquishment Agreement), minus
(6) to the extent not included in computing such Consolidated Net
Income, any revenues received or accrued by the Authority or any of its
Subsidiaries from any Person (other than the Authority or any of its
Subsidiaries) in respect of any Investment for such period,
all determined on a consolidated basis and in accordance with GAAP.
Notwithstanding the preceding, the provision for taxes based on the income
or profits of, and the depreciation and amortization and other non-cash charges
of, a Subsidiary of a Person shall be added to Consolidated Net Income to
compute Consolidated Cash Flow only to the extent (and in the same proportion)
that the Net Income of such Subsidiary was included in calculating the
Consolidated Net Income of such Person and only if a corresponding amount would
be permitted at the date of determination to be dividended to such Person by
such Subsidiary without prior approval (that has not been obtained), pursuant
to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to
that Subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP;
provided that
(1) the Net Income of any Person that is not a Restricted Subsidiary or
that is accounted for by the equity method of accounting shall be included
only to the extent of the amount of dividends or distributions paid in cash
to the specified Person or a Wholly Owned Restricted Subsidiary thereof;
(2) the Net Income of any Restricted Subsidiary shall be excluded to the
extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at
the date of determination permitted without any prior governmental approval
(that has not been obtained) or, directly or indirectly, by operation of
the terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders;
(3) the Net Income of any Person acquired in a pooling of interests
transaction for any period before the date of such acquisition shall be
excluded;
(4) the cumulative effect of a change in accounting principles shall be
excluded;
(5) the Net Income shall be reduced by the amount of payments pursuant
to the Relinquishment Agreement, paid or payable, for such period based on
5% of the revenues (as defined in the Relinquishment Agreement) generated
in such period; and
(6) both the interest income related to the Defeasance Trust and the
interest expense on the Junior Subordinated Notes shall be excluded so long
as the payment of principal, premium and interest on the Junior
Subordinated Notes at redemption on January 1, 2000 is fully covered by the
amounts of the Defeasance Trust.
"Consolidated Net Tangible Assets" means, with respect to the Authority and
its Restricted Subsidiaries, taken as a whole, the aggregate amount of assets
(less applicable reserves and other items deducted in accordance with GAAP)
after deducting therefrom (a) all liabilities (other than liabilities incurred
with respect to the Relinquishment Agreement) and (b) all goodwill, trade
names, trademarks, patents, organization expenses and other like intangibles of
the Authority and its Restricted Subsidiaries, in each case, to the extent
included in the total amount of assets, all as shown on the most recent
consolidated balance sheet of the Authority and its Restricted Subsidiaries and
calculated in accordance with GAAP excluding assets in the Defeasance Trust and
the liabilities represented by the Junior Subordinated Notes.
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"Consumer Price Index" means The Consumer Price Index for All Urban
Consumers (CPI-U) for the U.S. City Average for All Items, 1982-1984=100 as
compiled and released by the Bureau of Labor Statistics.
"Credit Facilities" means, with respect to the Authority or any Restricted
Subsidiary, one or more debt facilities (including, without limitation, the
Loan Agreement) or commercial paper facilities with banks or other
institutional lenders providing for revolving credit loans, term loans,
receivables financing (including through the sale of receivables to such
lenders or to special purpose entities formed to borrow from such lenders
against such receivables) or letters of credit, in each case, as amended,
restated, modified, renewed, refunded, replaced or refinanced in whole or in
part from time to time. Indebtedness under Credit Facilities outstanding on the
date on which the Notes are first issued and authenticated under the Indentures
shall be deemed to have been incurred on such date in reliance on the exception
provided by clause (1) of the covenant described under the captions entitled
"--Certain Covenants--Incurrence of Indebtedness and Issuance of Preferred
Stock."
"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.
"Defeasance Trust" means that certain trust established pursuant to Section
12.04(a) of the Note Purchase Agreement under which the Junior Subordinated
Notes were issued for the covenant defeasance of the Junior Subordinated Notes
to their redemption date on January 1, 2000.
"Designated Senior Indebtedness" means Indebtedness under the Loan Agreement
and any other Indebtedness permitted under the Indentures the principal amount
of which is $20.0 million or more and that has been designated by the Authority
as "Designated Senior Indebtedness."
"Development Services Agreement" means that certain Development Services
Agreement dated February 7, 1998 among the Authority, the Tribe and TCA.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, at the option of the holder thereof), or upon the happening of
any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder thereof, in
whole or in part, on or before the date that is after the date on which the
Senior Exchange Notes or Senior Subordinated Exchange Notes, as the case may
be, mature; provided, however, that any Capital Stock that would constitute
Disqualified Stock solely because the holders thereof have the right to require
the Authority to repurchase such Capital Stock upon the occurrence of a Change
of Control or an Asset Sale shall not constitute Disqualified Stock if the
terms of such Capital Stock provide that the Authority may not repurchase or
redeem any such Capital Stock pursuant to such provisions unless such
repurchase or redemption complies with the covenant described above under the
caption "--Certain Covenants--Restricted Payments."
"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).
"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 instead of clause (ii) or
(iii) above.
"Exchange Notes" means, collectively, the Senior Exchange Notes and the
Senior Subordinated Exchange Notes.
"Existing Indebtedness" means up to $617.8 million in aggregate original
principal amount of Indebtedness of the Authority (other than Indebtedness
under the Loan Agreement) in existence on the date of the Indentures, until
such amounts are repaid.
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"Existing Secured Notes" means the Authority's 13 1/2% Senior Secured Notes
due 2002 with Cash Flow Participation Interest.
"Expansion Project" means the project to expand the existing Mohegan Sun
casino as more fully described in this Prospectus.
"Financing Lease" means any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.
"Fixed Charges" means, with respect to any Person for any period, the sum,
without duplication, of
(1) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued, including, without
limitation, amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any
deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect to
Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings,
and net payments, if any, pursuant to Hedging Obligations, but excluding
interest expense on the Junior Subordinated Notes so long as the principal,
premium and interest thereon at redemption on January 1, 2000 are covered
by amounts in the Defeasance Trust.; plus
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus
(3) any interest expense on Indebtedness of another Person that is
guaranteed by such Person or one of its Restricted Subsidiaries or secured
by a Lien on assets of such Person or one of its Restricted Subsidiaries,
whether or not such guarantee or Lien is called upon; plus
(4) the product of (a) all cash dividend payments or other distributions
(and non-cash dividend payments in the case of a Person that is a
Restricted Subsidiary) on any series of preferred equity of such Person,
times (b) a fraction, the numerator of which is one and the denominator of
which is one minus the then current combined federal, state and local
statutory tax rate of such Person, expressed as a decimal, in each case, on
a consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means, with respect to any specified Person
for any period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Fixed Charges of such Person for such period. If the specified
Person or any of its Restricted Subsidiaries incurs, assumes, guarantees,
repays or redeems any Indebtedness (other than revolving credit borrowings) or
issues or redeems preferred stock after the commencement of the period for
which the Fixed Charge Coverage Ratio is being calculated but before the date
on which 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,
repayment or redemption of Indebtedness, or such issuance or redemption of
preferred stock, as if the same had occurred at the beginning of the applicable
four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio
(1) acquisitions that have been made by the specified Person or any of
its Restricted Subsidiaries, including through mergers or consolidations
and including any related financing transactions, during the four-quarter
reference period or after such reference period and on or before the
Calculation Date shall be deemed to have occurred on the first day of the
four-quarter reference period and Consolidated Cash Flow for such reference
period shall be calculated without giving effect to clause (3) of the
proviso shown in the definition of Consolidated Net Income;
(2) the Consolidated Cash Flow attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses
disposed of before the Calculation Date, shall be excluded; and
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(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed
of before the Calculation Date, shall be excluded, but only to the extent
that the obligations giving rise to such Fixed Charges will not be
obligations of the specified Person or any of its Restricted Subsidiaries
following the Calculation Date.
"GAAP" means generally accepted accounting principles shown 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 ("FASB") or in such other statements by
such other entity as have been approved by a significant segment of the
accounting profession which are in effect on the date of the Indentures.
"Gaming" means any and all activities defined as Class II or Class III
Gaming under IGRA or authorized under the Compact.
"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.
"Government Service Payments" means (1) an annual payment to the Tribe by
the Authority in the amount of $14.0 million, which amount shall be adjusted
annually on the last day of each calendar year commencing with the year 2000 by
the Consumer Price Index as published for the applicable year and (2) amounts
equal to those reflected on each annual audited income statement of the
Authority as prepared in accordance with GAAP relating to payment for
governmental services (including charges for utilities, police and fire
department services, health and emergency medical services, the pro rata
portion of Tribal Council costs and salaries attributable to the operations of
the Authority, and similar pro rata costs of other tribal departments, in each
case, to the extent that the costs of such departments are attributable to the
operations of the Authority) by the Authority to the Tribe or any of its
representatives, political subunits, councils, agencies or instrumentalities.
"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, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof), of all or any part of any Indebtedness.
"Hedging Obligations" means, with respect to any Person,
(1) the obligations of such Person under interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements; and
(2) the obligations of such Person under other agreements or
arrangements designed to protect such Person against fluctuations in
interest rates.
"IGRA" means the Indian Gaming Regulatory Act of 1988, PL 100-497, U.S.C.
2701 et seq. as same may, from time to time, be amended.
"Indebtedness" means, with respect to any specified Person, any indebtedness
of such Person, whether or not contingent, in respect of
(1) borrowed money;
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(2) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof);
(3) banker's acceptances;
(4) Capital Lease Obligations;
(5) the balance deferred and unpaid of the purchase price of any
property, except any such balance that constitutes an accrued expense or
trade payable; or
(6) any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of
the specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the guarantee
by such Person of any Indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be
(1) the accreted value thereof, in the case of any Indebtedness issued
with original issue discount; and
(2) the principal amount thereof, together with any interest thereon
that is more than 30 days past due, in the case of any other Indebtedness.
"Indentures" means, collectively, the Senior Notes Indenture and the Senior
Subordinated Notes Indenture.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
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, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Authority or any Subsidiary of the Authority sells or otherwise disposes
of any Equity Interests of any direct or indirect Subsidiary of the Authority
such that, after giving effect to any such sale or disposition, such Person is
no longer a Subsidiary of the Authority, the Authority shall be deemed to have
made an Investment on the date of any such sale or disposition equal to the
fair market value of the Equity Interests of such Subsidiary not sold or
disposed of in an amount determined as provided in the final paragraph of the
covenant described above under the captions "--Restricted Payments."
"Junior Subordinated Notes" means the $90.0 million in aggregate original
principal amount (plus any accrued and unpaid interest) of junior subordinated
notes of the Authority.
"Key Project Assets" means
(1) the Lease and any real property or interest in real property
comprising the Resort held in trust for the Tribe by the United States,
(2) any improvements (including, without limitation the Resort) to the
leasehold estate under the Lease or such real property comprising the
Resort (but excluding any obsolete personal property or real property
improvements determined by the Authority to be no longer useful to the
operations of the Resort), and
(3) any business records of the Authority or the Tribe relating to the
operation of the Resort.
"Lease" means the Land Lease between the Tribe and the Authority, as the
same may be amended in accordance with the terms thereof and of the Indentures.
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"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).
"Loan Agreement" means that certain Loan Agreement, to be dated as of March
3, 1999, by and among the Authority, the Tribe, the lenders thereunder and
Bank of America National Trust and Savings Association as Administrative Agent
and the Documentation Agent and Syndication Agent referred to therein,
including any related notes, guarantees, instruments and agreements executed
in connection therewith, and in each case as amended, modified, renewed,
refunded, replaced or refinanced from time to time.
"Management Agreement" means the Amended and Restated Gaming Facility
Management Agreement dated August 30, 1995 by and between the Authority and
TCA 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 Indentures.
"Management Fee" means the Management Fee under the Management Agreement.
"Net Income" means, with respect to any Person for any period, the net
income (loss) of such Person for such period, determined in accordance with
GAAP and before any reduction in respect of dividends on preferred interests,
excluding, however,
(1) any gain or loss, together with any related provision for taxes on
such gain or loss, realized in connection with (A) any Asset Sale
(including, without limitation, dispositions pursuant to sale leaseback
transactions) or (B) the disposition of any securities by such Person or
any of its Restricted Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of its Restricted Subsidiaries; and
(2) any extraordinary or nonrecurring gain or loss, together with any
related provision for taxes on such extraordinary or nonrecurring gain or
loss, less
(3) in the case of any Person that is a partnership or a limited
liability company, the amount of withholding for tax purposes of such
Person for such period.
"Net Proceeds" means the aggregate cash proceeds received by the Authority
or any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of
any non-cash consideration received in any Asset Sale), net of the direct
costs relating to such Asset Sale including, without limitation, legal,
accounting and investment banking fees, and sales commissions and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof, in each case after taking into account any available tax
credits or deductions and any tax sharing arrangements and amounts required to
be applied to the repayment of Indebtedness (other than, in the case of the
Senior Subordinated Exchange Notes only, the repayment of Senior
Indebtedness), secured by a Lien on the asset or assets that were the subject
of such Asset Sale and any reserve for adjustment in respect of the sale price
of such asset or assets established in accordance with GAAP.
"NIGC" means the National Indian Gaming Commission.
"Non-Recourse Debt" means Indebtedness
(1) as to which neither the Authority nor any of its Restricted
Subsidiaries (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Indebtedness) or
(b) is directly or indirectly liable (as a guarantor or otherwise);
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(2) no default with respect to which (including any rights that the
holders thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit (upon notice, lapse of time or both) any holder of
any other Indebtedness of the Authority or any of its Restricted
Subsidiaries to declare a default on such other Indebtedness or cause the
payment thereof to be accelerated or payable before its stated maturity;
and
(3) as to which such Indebtedness specifies that the lenders thereunder
will not have any recourse to the stock or assets of the Authority or any
of its Restricted Subsidiaries.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"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.
"Permitted Asset Swap" means the exchange by the Authority or any Restricted
Subsidiary of any assets for other assets from a Person; provided that, the
assets received in such exchange are believed by the Authority in good faith to
be of substantially equivalent value and substantially all of which are either
(i) long term assets that are used or useful in the Principal Business, (ii)
cash or (iii) any combination of the foregoing clauses (i) and (ii).
"Permitted Investments" means
(1) any Investment in the Authority or in a Restricted Subsidiary of the
Authority that is engaged in a Principal Business or a Related Business;
(2) any Investment in cash or Cash Equivalents;
(3) any Investment by the Authority or any Restricted Subsidiary of the
Authority in a Person, if as a result of such Investment (a) such Person
becomes a Restricted Subsidiary of the Authority and a Subsidiary
Guarantor, and is engaged in a Principal Business or a Related Business or
(b) is merged, consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated into, the
Authority or a Restricted Subsidiary of the Authority;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with the covenant described above under the captions "--
Repurchase at the Option of Holders--Asset Sales";
(5) any Investment in any Person engaged in the Principal Business or a
Related Business having an aggregate fair market value (as determined in
good faith by the Management Board and measured as of the date of such
Investment, without giving effect to any subsequent increases or decreases
in value) not to exceed $25.0 million at any one time outstanding;
(6) Government Service Payments;
(7) payroll advances to employees of the Authority or its Restricted
Subsidiaries for travel, entertainment and relocation expenses in the
ordinary course of business in an aggregate amount not to exceed $250,000
at any one time outstanding;
(8) accounts and notes receivable if created or acquired in the ordinary
course of business and which are payable or dischargeable in accordance
with customary trade terms;
(9) Investments related to Hedging Obligations, so long as such Hedging
Obligations are not used for speculative purposes; and
(10) any investment in government securities to be held in the
Defeasance Trust to defease the Junior Subordinated Notes in accordance
with their terms.
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"Permitted Liens" means
(1) Liens securing Indebtedness that was permitted by the terms of the
respective Indenture to be incurred under clauses (1), (2), (5), (6), (7),
(8) (to the extent that the Indebtedness so guaranteed is permitted to be
secured by the respective Indenture) and (10) of the second paragraph of
the covenant described under the captions entitled "--Certain Covenants--
Incurrence of Indebtedness and Issuance of Preferred Stock";
(2) Liens in favor of the Authority or a Restricted Subsidiary;
(3) Liens to secure the performance of statutory obligations, surety or
appeal bonds, performance bonds or other obligations of a like nature
(including, without limitation, pledges or deposits made in connection with
obligatory workers' compensation laws, unemployment insurance or similar
laws) incurred in the ordinary course of business;
(4) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by clause (5) of the second paragraph of the covenant entitled
"--Certain Covenants--Incurrence of Indebtedness and Issuance of Preferred
Stock" covering only the assets acquired with such Indebtedness;
(5) Liens existing on the date of the Indentures;
(6) Liens arising as a result of survey exceptions, title defects,
encumbrances, easements, reservations of, or rights of others for, rights
of way, sewers, electric lines, telegraph and telephone lines and other
similar purposes or zoning or other restrictions as to the use of real
property not interfering with the ordinary conduct of the business of the
Authority or any of its Restricted Subsidiaries;
(7) Liens arising by operation of law in favor of carriers,
warehousemen, landlords, mechanics, materialmen, laborers, employees or
suppliers, incurred in the ordinary course of business for sums which are
not yet delinquent or are being contested in good faith by negotiations or
by appropriate proceedings which suspend the collection thereof;
(8) Liens incurred as a result of any interest or title of a lessor or
lessee under any lease of property (including any Lien granted by such
lessor or lessee but excluding any Lien arising in respect of a Financing
Lease);
(9) Liens in favor of the Tribe representing the ground lessor's
interest under the Lease;
(10) Liens on property existing at the time or acquisition thereof by
the Authority or a Restricted Subsidiary; provided, that such Liens were in
existence before the contemplation of such acquisition;
(11) Liens for taxes, assessments or governmental charges, claims or
rights 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;
(12) Liens securing Indebtedness permitted under clause (7) of the
second paragraph of the covenant described under the captions entitled "--
Certain Covenants--Incurrence of Indebtedness and Issuance of Preferred
Stock"; provided that such Liens are no more extensive that the liens
securing the Indebtedness so extended, refinanced, renewed, replaced,
defeased or refunded thereby; and
(13) Liens incurred in the ordinary course of business of the Authority
or a Restricted Subsidiary with respect to obligations that do not exceed
$500,000 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; 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,
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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, 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;
(14) Liens created by or resulting from any legal proceeding with
respect to which the Authority or a Restricted Subsidiary is prosecuting an
appeal proceeding for review and the Authority or such Restricted
Subsidiary is maintaining adequate reserves in connection with GAAP; and
(15) any Lien on the assets in the Defeasance Trust with respect to the
obligations of the Junior Subordinated Notes.
"Permitted Proceed Uses" means
(1) uses of the proceeds described in this Prospectus under "Use of
Proceeds;" and
(2) payments of principal, premium or interest on the Senior Exchange
Notes and the Senior Subordinated Exchange Notes.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Authority
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Authority or any of its Restricted
Subsidiaries; provided that
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount of
(or accreted value, if applicable), plus accrued interest on, the
Indebtedness so extended, refinanced, renewed, replaced, defeased or
refunded (plus the amount of prepayment premiums and reasonable expenses
incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and has 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, defeased or
refunded; provided that if the original maturity date of such Indebtedness
is after the Stated Maturity of the Senior Exchange Notes, then such
Permitted Refinancing Indebtedness shall have a maturity at least 180 days
after the Senior Exchange Notes;
(3) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the Senior
Exchange Notes, such Permitted Refinancing Indebtedness is subordinated in
right of payment to, the Senior Exchange Notes on terms at least as
favorable to the holders of Senior Exchange Notes as those contained in the
documentation governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded; and
(4) such Indebtedness is incurred either by the Authority or by the
Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"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.
"Related Business" means any business related to the Principal Business.
"Relinquishment Agreement" means the Relinquishment Agreement dated February
7, 1998 between the Authority and TCA.
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"Resort" means the multi-amenity gaming and entertainment resort located in
Uncasville, Connecticut and the convention center, retail facilities, arena,
hotel and improvements proposed to be constructed adjacent thereto, as
described in this Prospectus 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 and (ii) any equipment
leased from a third party in the ordinary course of business.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Senior Exchange Notes" means the Authority's 8 1/8% Senior Exchange Notes
due 2006 issued pursuant to the Senior Notes Registration Rights Agreement.
"Senior Indebtedness" means
(1) all Indebtedness outstanding under the Credit Facilities and all
Hedging Obligations with respect thereto including, without limitation, all
principal, interest, fees and other amounts payable with respect thereto,
including any interest which accrues following any bankruptcy or insolvency
of the Authority, the Tribe or any Subsidiary Guarantor;
(2) any other Indebtedness permitted to be incurred by the Authority
under the terms of the Indentures, unless the instrument under which such
Indebtedness is incurred expressly provides that it is on a parity with or
subordinated in right of payment to the Senior Subordinated Exchange Notes;
(3) all Obligations with respect to the foregoing; and
(4) at anytime, the Senior Relinquishment Payments (as defined in the
Relinquishment Agreement) to the extent then due and owing pursuant to the
terms of the Relinquishment Agreement at such time.
Notwithstanding anything to the contrary in the foregoing, Senior
Indebtedness will not include
(1) any Indebtedness of the Authority to any of its Restricted
Subsidiaries or other Affiliates; or
(2) any Indebtedness that is incurred in violation of the Indentures.
"Senior Exchange Notes" means the Authority's 8 1/8% Senior Exchange Notes
due 2006.
"Senior Subordinated Exchange Notes" means the Authority's 8 3/4% Senior
Subordinated Exchange Notes due 2009 issued pursuant to the Senior Subordinated
Notes Registration Rights Agreement.
"Senior Subsidiary Guarantee" means the joint and several guarantee by the
Authority's Subsidiaries of the Authority's obligations under the Senior
Exchange Notes, in substantially the form of such Senior Subsidiary Guarantee
attached as Exhibit E to the Senior Notes Indenture.
"Senior Subordinated Exchange Notes" means the Authority's 8 3/4% Senior
Subordinated Exchange Notes due 2009.
"Senior Subordinated Subsidiary Guarantee" means the joint and several
guarantee by the Authority's Subsidiaries of the Authority's obligations under
the Senior Subordinated Exchange Notes, in substantially the form of such
Senior Subordinated Subsidiary Guarantee attached as Exhibit E to the Senior
Subordinated Notes Indenture.
"Side Letters" means (i) that certain Side Letter, dated February 7, 1998
regarding the Junior Subordinated Notes, as amended; (ii) that certain Side
Letter, dated February 7, 1998 relating to various waivers under the existing
Management Agreement; (iii) that certain Side Letter, dated February 7, 1998,
regarding the use of TCA personnel following this termination of the Management
Agreement; (iv) that certain Side Letter, dated February 22, 1999, regarding
the previously proposed exchange of Junior Subordinated Notes for Senior
Subordinated Exchange Notes and (v) that certain Side Letter, dated February
22, 1999, regarding the earlier Side Letters, in connection with the defeasance
of the Junior Subordinated Notes.
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"Significant Subsidiary" means any subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such regulation is in effect on the date
hereof.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid including as a result of any
mandatory sinking fund payment or mandatory redemption in the documentation
governing such Indebtedness in effect on the date hereof or, if such
Indebtedness is incurred after the date of the Indentures, in the original
documentation governing such Indebtedness, and shall not include any contingent
obligations to repay, redeem or repurchase any such interest or principal
before the date originally scheduled for the payment thereof.
"Subordinated Indebtedness" means any Indebtedness which by its terms is
expressly subordinate in right of payment in any respect to the payment of any
obligation on, in the case of the Senior Exchange Notes, the Senior Exchange
Notes and, in the case of the Senior Subordinated Exchange Notes, the Senior
Subordinated Exchange Notes.
"Subsidiary" means:
(1) any instrumentality or subdivision or subunit of the Authority that
has a separate legal existence or status or whose property and assets would
not otherwise be bound to the terms of the Indentures; or
(2) with respect to any Person, any corporation, association or other
business entity of which more than 50% of the total voting power of the
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.
"Subsidiary Guarantor" means any Subsidiary of the Authority that executes a
Senior Subsidiary Guarantee or a Senior Subordinated Subsidiary Guarantee, as
the case may be, in accordance with the provisions of the respective
Indentures.
"Sun International" means Sun International Hotels Limited, a Bahamian
corporation or any of its affiliates.
"TCA" means Trading Cove Associates.
"Tender Offer" means the Tender Offer and the Consent Solicitation with
respect to $175.0 million aggregate principal amount of the Existing Secured
Notes.
"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 or authorize and regulate gaming on the Mohegan Reservation pursuant to
IGRA.
"Tribal Tax Code" means any sales, use, room occupancy and related excise
taxes, including admissions and cabaret taxes and any other tax (other than
income tax) that may be imposed by the State of Connecticut that the Tribe may
impose on the Authority, its patrons or operations; provided, however, that the
rate and scope of such taxes shall not be more onerous than those imposed by
the State of Connecticut.
"Tribal Council" means the Tribe's nine member elected council which
exercises all the legislative and executive powers of the Tribe.
"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. (S) 83.
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"Unrestricted Subsidiary" means any Subsidiary that is designated in writing
by the Authority as an Unrestricted Subsidiary, but only to the extent that
such Subsidiary
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or
understanding with the Authority or any Restricted Subsidiary of the
Authority unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Authority or such Restricted
Subsidiary than those that might be obtained at the time from Persons who
are not Affiliates of the Authority;
(3) is a Person with respect to which neither the Authority nor any of
its Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results;
(4) has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of the Authority or any of its
Restricted Subsidiaries; and
(5) has at least one director on its board of directors that is not a
director or executive officer of the Authority or any of its Restricted
Subsidiaries and has at least one executive officer that is not a director
or executive officer of the Authority or any of its Restricted
Subsidiaries.
Any such designation by the Management Board shall be evidenced to the
Trustees by filing with the Trustees a certified copy of the Board Resolution
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing conditions and was permitted by
the covenant described above under the captions "--Certain Covenants--
Restricted Payments." If, at any time, any Unrestricted Subsidiary would fail
to meet the foregoing requirements as an Unrestricted Subsidiary, it shall
thereafter cease to be an Unrestricted Subsidiary for purposes of the
Indentures and any Indebtedness of such Subsidiary shall be deemed to be
incurred by a Restricted Subsidiary of the Authority as of such date (and, if
such Indebtedness is not permitted to be incurred as of such date under the
covenant described under the caption "Incurrence of Indebtedness and Issuance
of Preferred Stock," the Authority shall be in default of such covenant). The
Authority may at any time designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided that such designation shall be deemed to be an
incurrence of Indebtedness by a Restricted Subsidiary of the Authority of any
outstanding Indebtedness of such Unrestricted Subsidiary and such designation
shall only be permitted if (i) such Indebtedness is permitted under the
covenant described under the captions "--Certain Covenants--Incurrence of
Indebtedness and Issuance of Preferred Stock," calculated on a pro forma basis
as if such designation had occurred at the beginning of the four-quarter
reference period, and (ii) no Default or Event of Default would be in existence
following such designation.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Management
Board or Board of Directors, as the case may be, of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing
(1) the sum of the products obtained by multiplying (a) the amount of
each then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest one-
twelfth) that will elapse between such date and the making of such payment,
by
(2) the then outstanding principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Subsidiary of
such Person all of the outstanding Capital Stock or other ownership interests
of which (other than directors' qualifying shares) shall at the time be owned
by such Person or by one or more Wholly Owned Restricted Subsidiaries of such
Person and one or more Wholly Owned Restricted Subsidiaries of such Person.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account pursuant
to the Exchange Offers must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. This Prospectus, as it may
be amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of Exchange Notes received in exchange for Outstanding
Notes where such Outstanding Notes were acquired as a result of market-making
activities or other trading activities. The Authority has agreed that, starting
on the Expiration Date and ending on the close of business on the first
anniversary of the Expiration Date, it will make this Prospectus, as amended or
supplemented, available to any broker-dealer for use in connection with any
such resale.
The Authority will not receive any proceeds from any sale or Exchange Notes
by broker-dealers. Exchange Notes received by broker-dealers for their own
accounts pursuant to the Exchange Offers may be sold from time to time in one
or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Exchange Notes or a
combination of such methods of resale, at market prices. Any such resale may be
made 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 Exchange Notes. Any broker-dealer that
resells Exchange Notes that were received by it for its own account pursuant to
the Exchange Offers and any broker or dealer that participates in a
distribution of such Exchange Notes may be deemed to be an "underwriter" within
the meaning of the Securities Act and any profit of any such resale of Exchange
Notes and any commissions 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 acknowledging that it will deliver and by delivering
a prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of one year after the Expiration Date, the Authority will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Authority has agreed to pay all expenses
incident to the Exchange Offers (including the expenses of one counsel for the
holders of the Outstanding Notes), other than commissions or concessions of any
brokers or dealers, and will indemnify the holders of the Outstanding Notes
(including any broker-dealers) against certain liabilities, including
liabilities under the Securities Act.
LEGAL MATTERS
Certain legal matters with regard to the validity of the Exchange Notes will
be passed upon for the Authority by Hogan & Hartson L.L.P., Washington, D.C.
Latham & Watkins, New York, New York, has acted as counsel for the initial
purchasers of the Outstanding Notes.
INDEPENDENT AUDITORS
The financial statements of the Authority at September 30, 1998 and
September 30, 1997, and for the fiscal years then ended, appearing in this
Prospectus have been audited by Arthur Andersen LLP, independent auditors, as
stated in their report, which is included herein.
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WHERE YOU CAN GET MORE INFORMATION
The Authority, although not subject to the informational requirements of the
Securities Exchange Act of 1934, has agreed, according to the terms of the
identures governing our Exchange Notes and which will govern the Exchange
Notes, to subject itself to the reporting requirements of the Exchange Act,
and, in conformance with our indentures, files information with the Securities
and Exchange Commission (the "SEC" or the "Commission"). You may read and copy
any of this information at the SEC's public reference rooms at:
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, NW 7 World Trade Center Citicorp Center
Washington, DC 200549 Suite 1300 500 West Madison Street
New York, New York 10048 Suite 1400
Chicago, Illinois 60661-
2511
You may call the SEC at 1-800-SEC-0330
130
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Public Accountants.................................. F-2
Financial Statements
Balance Sheets as of September 30, 1998 and 1997........................ F-3
Statements of Income (Loss) for the Year ended September 30, 1998 and
the Period October 12, 1996 (date of commencement of operations)
through September 30, 1997............................................. F-4
Statements of Capital for the Year ended September 30, 1998 and the
Period October 12, 1996 (date of commencement of operations) through
September 30, 1997..................................................... F-5
Statements of Cash Flows for the Years ended September 30, 1998 and
1997................................................................... F-6
Notes to Financial Statements........................................... F-7
Review Report of Independent Public Accountants........................... F-17
Unaudited Financial Statements
Balance Sheets as of December 31, 1998 and September 30, 1998 (audit-
ed).................................................................... F-18
Statements of Income for the Quarter Ended December 31, 1998 and 1997... F-19
Statements of Capital for the Quarter Ended December 31, 1998 and 1997.. F-20
Statements of Cash Flows for the Quarter Ended December 31, 1998 and
1997................................................................... F-21
Notes to Financial Statements........................................... F-22
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Mohegan Tribal Gaming Authority:
We have audited the accompanying balance sheets of the Mohegan Tribal Gaming
Authority (the Authority) as of September 30, 1998 and 1997, and the related
statements of income (loss) and capital for the year ended September 30, 1998
and for the period October 12, 1996 (date of commencement of operations),
through September 30, 1997 and statements of cash flows for the years ended
September 30, 1998 and 1997. These financial statements are the responsibility
of the Authority's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Mohegan Tribal Gaming
Authority as of September 30, 1998 and 1997, and the results of its operations
for the year ended September 30, 1998 and for the period October 12, 1996 (date
of commencement of operations), through September 30, 1997 and its cash flows
for the years ended September 30, 1998 and 1997, in conformity with generally
accepted accounting principles.
Arthur Andersen LLP
Hartford, Connecticut
December 21, 1998
F-2
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
September 30, September 30,
1998 1997
------------- -------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents (Note 3)............... $ 36,264 $ 40,387
Restricted cash (Note 4)......................... 74,466 48,457
Receivables, net (Note 5)........................ 3,067 1,140
Inventories...................................... 5,027 4,516
Other current assets............................. 2,136 1,263
--------- --------
Total current assets........................... 120,960 95,763
Non-Current Assets:
Property and equipment, net (Note 6)............. 296,380 280,216
Trademark........................................ 130,000 --
Other assets..................................... 7,140 10,995
--------- --------
Total assets................................... $ 554,480 $386,974
========= ========
LIABILITIES AND CAPITAL
Current Liabilities:
Current portion of capital lease obligations
(Note 9)........................................ $ 11,004 $ 9,200
Accounts payable and accrued expenses (Note 7)... 46,857 35,985
Accrued interest payable (Note 8)................ 14,692 12,912
--------- --------
Total current liabilities...................... 72,553 58,097
Non-Current Liabilities:
Long-term debt (Note 8).......................... 296,539 282,909
Relinquishment liability (Note 13)............... 549,125 --
Capital lease obligations, net of current portion
(Note 9)........................................ 18,563 24,037
--------- --------
Total liabilities.............................. 936,780 365,043
--------- --------
Commitments and Contingencies (Note 12)
Capital:
Total capital.................................... (382,300) 21,931
--------- --------
Total liabilities and capital.................... $ 554,480 $386,974
========= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
STATEMENTS OF INCOME (LOSS)
(in thousands)
<TABLE>
<CAPTION>
For the period
October 12,
1996 (date of
commencement
For the Fiscal of operations)
Year Ended through
September 30, September 30,
1998 1997
-------------- --------------
<S> <C> <C>
Revenues:
Gaming.......................................... $ 543,870 $440,540
Food and beverage............................... 55,544 46,925
Retail and other................................ 36,328 21,489
Bingo operations................................ 5,673 3,148
--------- --------
Gross revenues.................................. 641,415 512,102
Less--Promotional allowances.................... (66,272) (44,265)
--------- --------
Net revenues.................................... 575,143 467,837
--------- --------
Costs and Expenses:
Gaming.......................................... 237,946 209,086
Food and beverage............................... 21,212 24,168
Retail and other................................ 24,607 16,282
Bingo operations................................ 3,529 4,508
General and administration...................... 87,529 78,366
Management fee.................................. 47,442 23,243
Depreciation and amortization................... 17,528 32,155
--------- --------
Total costs and expenses...................... 439,793 387,808
--------- --------
Income from operations.......................... 135,350 80,029
--------- --------
Other income (expense):
Interest and other income....................... 2,400 1,795
Interest expense................................ (50,172) (45,137)
--------- --------
(47,772) (43,342)
--------- --------
Income before extraordinary items............... 87,578 36,687
Extraordinary items (Note 14)................... (419,457) --
--------- --------
Net income (loss)............................... $(331,879) $ 36,687
========= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
STATEMENTS OF CAPITAL
(in thousands)
<TABLE>
<CAPTION>
For the period
October 12,
1996 (date of
commencement
For the Fiscal of operations)
Year Ended through
September 30, September 30,
1998 1997
-------------- --------------
<S> <C> <C>
Beginning balance................................ $ 21,931 $ --
Net income (loss)................................ (331,879) 36,687
Distributions to Tribe........................... (72,352) (14,756)
--------- --------
Ending balance................................... $(382,300) $ 21,931
========= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
For the For the
Fiscal Fiscal
Year Ended Year Ended
September 30, September 30,
1998 1997
------------- -------------
<S> <C> <C>
Cash flows provided by operating activities:
Net income (loss)................................ $(331,879) $ 36,687
Adjustments to reconcile net income (loss) to net
cash flow provided by operating activities:
Depreciation and amortization.................. 17,528 32,155
Relinquishment expense......................... 419,125 --
Loss on early extinguishment of debt........... 332 --
Loss on asset disposal......................... 124 --
Provision for losses on receivables............ 523 231
Changes in operating assets and liabilities:
(Increase) decrease in receivables and other
assets........................................ (1,064) 177
Increase in accounts payable and accrued ex-
penses........................................ 29,886 47,970
--------- --------
Net cash flows provided by operating activi-
ties.......................................... 134,575 117,220
--------- --------
Cash flows used in investing activities:
Purchase of property and equipment............... (32,731) (13,010)
Decrease in construction payable................. (3,604) (40,646)
--------- --------
Net cash flows used in investing activities.... (36,335) (53,656)
--------- --------
Cash flows (used in) provided by financing activi-
ties:
Distributions to Tribe........................... (72,352) (14,756)
Increase in short-term borrowings................ -- 7,056
Proceeds from equipment financing................ 9,772 17,439
Payment on equipment financing and short-term
borrowings...................................... (13,774) (19,996)
Additional borrowing under Secured Completion
Guarantee....................................... -- 23,000
--------- --------
Net cash flows (used in) provided by financing
activities.................................... (76,354) 12,743
--------- --------
Net increase in cash and cash equivalents........ 21,886 76,307
Cash and cash equivalents at beginning of peri-
od.............................................. 88,844 12,537
--------- --------
Cash and cash equivalents at end of period....... $ 110,730 $ 88,844
========= ========
Supplemental disclosures:
Cash paid during the period for interest......... $ 34,763 $ 30,140
Debt assumed from acquisition of property........ $ -- $ 22,739
Trademark........................................ $ 130,000 $ --
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND 1997
Note 1--Organization and Basis of Presentation
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 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, 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 "Mohegan Compact") that has been approved by the U.S. Secretary of the
Interior. On October 12, 1996, the Authority opened a casino known as Mohegan
Sun ("Mohegan Sun").
The Authority is governed by a Management Board, which consists of the nine
members of the Tribal Council. The Management Board has engaged Trading Cove
Associates ("TCA"), a Connecticut general partnership, to manage the operation
of Mohegan Sun pursuant to a seven-year contract (the "Management Agreement").
TCA is 50% owned by Sun Cove Limited, an affiliate of Sun International Hotels
Limited ("Sun International"), and 50% owned by Waterford Gaming L.L.C. (See
Note 13 for discussion of Relinquishment Agreement between the Tribe and TCA).
Note 2--Summary of Significant Accounting Policies
Management's Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Authority classifies as cash all highly liquid investments with a
maturity of three months or less when purchased. Cash equivalents are carried
at cost, which approximates market value.
Inventories
Inventories are stated at the lower of the cost or market value. Cost is
determined by using the first-in, first-out method.
Property and Equipment
Property and equipment are stated at cost. Depreciation is provided over the
estimated useful lives of the assets using the straight-line basis over the
estimated useful lives of the assets as follows:
<TABLE>
<S> <C>
Buildings and land improvements.................................... 40 years
Furniture and equipment............................................ 3-7 years
</TABLE>
The costs of significant improvements are capitalized. Costs of normal
repairs are charged to expense as incurred. Gains or losses on disposition of
property and equipment are included in the determination of income.
Long-Lived Assets
The Authority adopted the provisions of Statement of Financial Accounting
Standards No. 121 "Accounting for the Impairment of Long-Lived Assets," ("SFAS
121"). SFAS 121 requires, among other
F-7
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
NOTES TO FINANCIAL STATEMENTS--(Continued)
things, that an entity review its long-lived assets and certain related
intangibles for impairment whenever changes in circumstances indicate that the
carrying amount of an asset may not be fully recoverable. As a result of its
review, the Authority does not believe that any asset impairment exists in the
recoverability of its long-lived assets as of September 30, 1998.
Fair Value of Financial Instruments
The fair value amounts disclosed below have been reported to meet the
disclosure requirements of SFAS No. 107, "Disclosures about Fair Values of
Financial Instruments" and are not necessarily indicative of the amounts that
the Authority could realize in a current market exchange.
The carrying amount of cash and cash equivalents, receivables, accounts
payables and accrued expenses, and capital lease obligations approximate fair
value.
At September 30, 1998, the fair value of the Authority's financing
facilities and related deferred interest ($31.5 million at September 30, 1998)
is as follows:
<TABLE>
<S> <C>
Existing Secured Notes......................................... $207 million
Junior Subordinated Notes...................................... $106 million
</TABLE>
Revenue Recognition
The Authority recognizes casino revenue as gaming wins less gaming losses.
Revenues from food and beverage, retail and special events are recognized at
the time the service is performed.
Promotional Allowances
The retail value of food and beverage and other services furnished to casino
guests without charge is included in gross revenue and then deducted as
promotional allowances.
The estimated value of providing such promotional allowances was included in
revenues as follows (in thousands):
<TABLE>
<CAPTION>
For the period
October 12, 1996
(date of commencement
For the year ended of operations) through
September 30, 1998 September 30, 1997
------------------ ----------------------
<S> <C> <C>
Food and beverage.................. $34,783 $26,871
Retail............................. 28,027 15,955
Other.............................. 3,462 1,439
------- -------
$66,272 $44,265
======= =======
</TABLE>
Advertising
The Authority expenses the production costs of advertising the first time
the advertising takes place, except for billboard advertising which is
capitalized and amortized over its expected period of future benefits. The
capitalized costs of the advertising are amortized over the terms of the
contract following the month in which it appears.
Trademarks
Trademarks are amortized on a straight-line basis over the estimated periods
benefited, but not exceeding 40 years.
F-8
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
NOTES TO FINANCIAL STATEMENTS--(Continued)
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 such, the
Authority has tax-exempt status with respect to federal and state income taxes.
New Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 130 ("SFAS No. 130"),
"Reporting Comprehensive Income." This statement establishes standards for
reporting and displaying of comprehensive income and its components in the
financial statements. Adoption of SFAS No. 130 is required for fiscal years
beginning after December 15, 1997. Management believes the adoption of SFAS No.
130 will not have a material impact on the Authority's financial position or
results of operations.
In June 1997, Statement of Financial Accounting Standards No. 131 ("SFAS No.
131"), "Disclosures about Segments of an Enterprise and Related Information"
was issued. This statement requires that public business enterprises report
certain information about operating segments in complete sets of financial
statements of the enterprise and in condensed financial statements of interim
periods issued to shareholders. It also requires that public business
enterprises report certain information about their products and services, the
geographic areas in which they operate, and their major customers. Adoption of
SFAS No. 131 is required for fiscal years beginning after December 15, 1997.
The Authority currently discloses financial data in accordance with existing
accounting and disclosure requirements. At the appropriate time the Authority
will modify its current presentation, if necessary, to meet the requirements of
SFAS No. 131. Management believes the adoption of SFAS No. 131 will have no
impact on the Authority's financial position or results of operations.
In June 1998, Statement of Financial Accounting Standards No. 133 ("SFAS No.
133"), "Accounting for Derivative Instruments and Hedging Activities" was
issued. This statement revises the accounting for derivative financial
instruments. The Authority is currently analyzing the impacts of this statement
which management does not expect to have a material impact on the Authority's
financial position or results of operations.
In April 1998, the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position 98-5 ("SOP 98-5"), "Reporting on the
Costs of Start-Up Activities," which revises the accounting for start-up costs
and will require the expensing of certain costs which the Authority has
historically capitalized. The Authority is currently analyzing the impacts of
this statement, which is effective for fiscal years beginning after December
15, 1998. Management does not expect this statement to have a material impact
on the Authority's financial position or results of operations.
Reclassifications
Certain amounts in the 1997 financial statements have been reclassified to
conform with the 1998 presentation.
Note 3--Cash and Cash Equivalents
At September 30, 1998 and 1997, the Authority had $5.3 million and $14.0
million, respectively invested in commercial paper. For reporting purposes,
cash equivalents include all operating cash as well as in-house funds.
F-9
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
NOTES TO FINANCIAL STATEMENTS--(Continued)
Note 4--Restricted Cash
Components of restricted cash were as follows (in thousands):
<TABLE>
<CAPTION>
September 30, September 30,
1998 1997
------------- -------------
<S> <C> <C>
Replacement reserve.............................. $ 250 $ 1,500
Cash maintenance................................. 10,000 4,500
Interest and excess cash flow.................... 64,216 42,457
------- -------
$74,466 $48,457
======= =======
</TABLE>
Replacement Reserve Fund
Pursuant to terms of the Management Agreement, TCA is required to establish
a Replacement Reserve Fund, which may be used to pay any approved budgeted
capital expenditures. Any portion of the Replacement Reserve Fund which remains
unused at the end of any fiscal year will be carried forward to the following
year. TCA and the Tribe are each required to make monthly contributions to the
Replacement Reserve Fund at the rate of 60% from the Tribe and 40% from TCA up
to a combined total of $3.0 million per year from both parties. As of September
30, 1998 and 1997, the unused balance in the Replacement Reserve Fund totaled
$250,000 and $1.5 million, respectively.
Cash Maintenance Account
The Existing Secured Notes provide that the Authority shall deposit into the
Cash Maintenance Account, on a monthly basis, 1/2 of $6.0 million, for each
calendar year, plus any amounts deferred from any prior month, no later than 25
days after the end of such calendar month. As required under the Existing
Secured Notes, $10.0 million and $4.5 million have been deposited in the Cash
Maintenance Account as of September 30, 1998 and 1997, respectively.
Interest and Excess Cash Flow Account
The Existing Secured Notes provide that the Authority shall 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 Secured Notes, 50% of the
Excess Cash Flow (as defined) for the prior month on the Existing Secured
Notes, 100% of all Deferred Subordinated Interest for the prior month, and the
amount of Cash Flow Participation Interest accrued for the prior month. Amounts
deposited into the Interest and Excess Cash Flow Account are invested only in
cash or cash equivalents (See Note 8).
Note 5--Accounts Receivable
The Authority maintains an allowance for doubtful accounts which is based on
management's estimate of the amount expected to be uncollectible considering
historical experience and the information management obtains regarding the
credit worthiness of the customer. The collectibility of these receivables
could be affected by future business or economic trends. Although management
believes the allowance is adequate, it is possible that the estimated amount of
cash collections could change.
At September 30, 1998 and 1997, the Authority established $348,000 and
$187,000, respectively in allowance for doubtful accounts.
F-10
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
NOTES TO FINANCIAL STATEMENTS--(Continued)
Note 6--Property and Equipment, Net
Components of property and equipment were as follows (in thousands):
<TABLE>
<CAPTION>
September 30, September 30,
1998 1997
------------- -------------
<S> <C> <C>
Land............................................. $ 28,581 $ 28,581
Land improvements................................ 47,350 41,016
Buildings........................................ 176,514 162,651
Furniture and equipment.......................... 64,153 55,014
Construction in progress......................... 8,576 5,445
-------- --------
325,174 292,707
Less: accumulated depreciation................... (28,794) (12,491)
-------- --------
$296,380 $280,216
======== ========
</TABLE>
Note 7--Accounts Payable and Accrued Expenses
Components of accounts payable and accrued expenses were as follows (in
thousands):
<TABLE>
<CAPTION>
September 30, September 30,
1998 1997
------------- -------------
<S> <C> <C>
Trade payables.......... $ 7,558 $ 5,054
Accrued payroll and re-
lated taxes and bene-
fits................... 9,931 9,955
Accrued gaming taxes.... 9,242 7,017
Other accrued liabili-
ties................... 20,126 13,959
------- -------
$46,857 $35,985
======= =======
</TABLE>
Note 8--Financing Facilities
The Authority has a $2.5 million line-of-credit and letter of credit
arrangement with Fleet National Bank. Interest is payable at the bank's base
rate or LIBOR option. Borrowings are collateralized by substantially all assets
of the Authority. This arrangement expires on March 31, 2000. As of September
30, 1998, the Authority has issued letters of credit of $1.9 million and has no
borrowings outstanding under the line of credit.
Financing facilities, as described below, consisted of the following (in
thousands):
<TABLE>
<CAPTION>
September 30, September 30,
1998 1997
------------- -------------
<S> <C> <C>
Existing Secured Notes........................... $175,000 $175,000
Junior Subordinated Notes........................ 121,539 107,909
-------- --------
$296,539 $282,909
======== ========
</TABLE>
Existing Secured Notes
On September 29, 1995, the Authority issued $175 million in senior secured
notes (the "Existing Secured Notes") with fixed interest payable at a rate of
13.50% per annum and Cash Flow Participation Interest, as defined therein, in
an aggregate amount of 5.0% of the Authority's Cash Flow up to, during any two
consecutive semi-annual periods, ending September 30, $250 million of the
Authority's Cash Flow. Fixed interest is payable semi-annually and commenced
May 15, 1996. The aggregate amount of Cash Flow
F-11
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
NOTES TO FINANCIAL STATEMENTS--(Continued)
Participation Interest payable will be reduced pro rata for reductions in
outstanding principal amount of Existing Secured Notes. The payment of Cash
Flow Participation Interest may be deferred if the Authority's Fixed Charge
Coverage Ratio, as defined, is less than 2.0 to 1.0. For the year ended
September 30, 1998 and for the period from October 12, 1996 (date of
commencement of operations) through September 30, 1997, the Authority's Fixed
Charge Coverage Ratio was 4.0 and 3.0 respectively. The Existing Secured Notes
are redeemable at set prices as set forth in the Existing Secured Notes after
November 15, 1999, at the option of the Authority. Upon the occurrence of
certain events (as specified in the Existing Secured Notes) each holder of
Existing Secured Notes can require the Authority to repurchase the notes at
prices specified.
Beginning with the fiscal year ending September 30, 1997, the Authority is
required within 120 days, under certain circumstances, to offer to purchase, at
set prices, certain amounts of Existing Secured Notes then outstanding, under
the Excess Cash Purchase Offer, as defined in the Existing Secured Notes (See
Excess Cash Purchase Offer below).
Subordinated Notes
The Authority has obtained $90.0 million of subordinated financing from Sun
International and Waterford Gaming L.L.C. in the form of notes ("Junior
Subordinated Notes"). The Authority has issued $20.0 million of Junior
Subordinated Notes to each of Sun International and Waterford Gaming L.L.C.,
which notes bear interest at 15.0% per year. The Authority also has issued
$50.0 million of Junior Subordinated Notes to Sun International evidencing
draws made by the Authority under the secured completion guarantee provided by
Sun International ("Secured Completion Guarantee"). Each Junior Subordinated
Note issued under the Secured Completion Guarantee bears interest at the rate
per annum then most recently announced by Chase Manhattan Bank (f/k/a Chemical
Bank of New York) as its prime rate plus 1% which shall be set and revised at
intervals of six months. The interest rates were 9.5% at September 30, 1998 and
September 30, 1997. Interest on the Junior Subordinated Notes is payable semi-
annually, provided, however that all such interest is deferred and will not be
paid until at least half of the Existing Secured Notes have been offered to be
repurchased or retired, pursuant to the terms of the Existing Secured Notes,
and certain other conditions have been fulfilled. Accrued and deferred interest
payable on the Junior Subordinated Notes is $31.5 million and $17.9 million at
September 30, 1998 and 1997, respectively. All Junior Subordinated Notes are
due 2003; however, principal cannot be paid until the Existing Secured Notes
have been paid in full, unless certain conditions are met. During October 1998
and October 1997, a total of $5.0 million of Junior Subordinated Notes issued
to Sun International pursuant to the Secured Completion Guarantee were
purchased by Waterford Gaming L.L.C.
In the event that the holders of the Existing Secured Notes reject all or
any portion of the Excess Cash Purchase Offer, as defined in the Existing
Secured Notes Indenture, the Authority is required to offer to purchase, at
par, certain amounts of the Junior Subordinated Notes then outstanding. See
Excess Cash Purchase Offer below for such offer made by the Authority.
Excess Cash Purchase Offer
Pursuant to the Existing Secured Notes, the Authority is required to make an
Excess Cash Purchase Offer to all holders of the Existing Secured Notes within
120 days after each fiscal year end of the Authority, commencing September 30,
1997. The Excess Cash Purchase Offer equals 50% of the Excess Cash Flow, as
defined, plus 100% of the Deferred Subordinated Interest.
An Excess Cash Purchase Offer of $29.1 million was made on January 28, 1998
for the period October 12, 1996 (date of commencement of operations) through
September 30, 1997. In accordance with the Existing Secured Notes Indenture,
the Authority offered to purchase the Existing Secured Notes at 113.5% of the
principal amount of the Existing Secured Notes plus accrued and unpaid interest
to the purchase date. The
F-12
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
NOTES TO FINANCIAL STATEMENTS--(Continued)
Excess Cash Purchase Offer expired, by its terms, on February 25, 1998, and
none of the holders of the Existing Secured Notes accepted the offer.
On March 12, 1998, pursuant to the Junior Subordinated Notes purchase
agreement, an offer to repurchase in the amount of the Excess Cash Purchase
Offer was made to the holders of the Junior Subordinated Notes. The offer
period concluded on April 2, 1998, and the holders of the Junior Subordinated
Notes also rejected the offer. On April 3, 1998, as permitted by the Existing
Secured Notes Indenture, the Authority distributed the Excess Cash Purchase
Offer of $29.1 million to the Tribe. The Authority will make an Excess Cash
Purchase Offer to all holders of the Existing Secured Notes within 120 days of
September 30, 1998, pursuant to the Existing Secured Notes. For the fiscal year
ended September 30, 1998, it is estimated that this offer will be approximately
$51.2 million.
Note 9--Leases
At September 30, 1998, the Authority was obligated under non-cancelable
operating leases and capital leases to make future minimum lease payments as
follows:
<TABLE>
<CAPTION>
Operating Capital
Fiscal Year Ending September 30, Leases Leases
-------------------------------- --------- --------
(In thousands)
<S> <C> <C>
1999..................................................... $3,600 $ 13,215
2000..................................................... 2,680 13,215
2001..................................................... 84 4,835
2002..................................................... -- 1,965
------ --------
Total minimum lease payment.............................. $6,364 33,230
======
Amount representing interest............................. (3,663)
--------
Total obligation under capital leases.................... 29,567
Less: Amount due within one year......................... (11,004)
--------
Amount due after one year................................ $ 18,563
========
</TABLE>
Rent expense on the non-cancelable operating leases was $3.6 million and
$11.1 million for the year ended September 30, 1998 and the period from October
12, 1996 (date of commencement of operations) through September 30, 1997,
respectively.
The Authority's debt agreements require, among other restrictions, the
maintenance of various financial covenants and terms including a fixed charge
coverage ratio, a debt to adjusted net worth ratio, and a debt service coverage
ratio.
Note 10--Related Party Transactions
The Tribe provided governmental and administrative services to the Authority
in conjunction with the operation of Mohegan Sun. For both the year ended
September 30, 1998 and for the period October 12, 1996 (date of commencement of
operations) through September 30, 1997, the Authority incurred $7.7 million of
expenses for such services, of which $7.4 million and $6.9 million was paid as
of September 30, 1998 and 1997, respectively.
The Tribe, through one of its limited liability companies, has provided
goods to the Authority for resale at its retail location.
F-13
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
NOTES TO FINANCIAL STATEMENTS--(Continued)
The Tribe, through two other limited liability companies, has entered into
various land lease agreements with the Authority for access, parking and
related purposes for Mohegan Sun.
The Authority engages McFarland Johnson, Inc. for surveyance, civil
engineering, and professional design services. Roland Harris, Chairman of the
Management Board is a consultant for this corporation for a fixed fee. For the
fiscal year ended September 30, 1998, the Authority incurred $54,354 for such
services.
Under terms of the Management Agreement, the Authority may award service
contracts or purchase services from qualified members of the Tribe if the costs
of services are competitive in the local market.
As of September 30, 1998, 190 employees of the Authority are Mohegan tribal
members.
The executive officers of Mohegan Sun have been granted stock options from
Sun International. The options vest over a seven-year period.
Note 11--Employee Benefit Plans
Effective February 10, 1997, the Authority adopted a retirement savings plan
for its employees under Section 401 of the Internal Revenue Code. The plan
allows employees of the Authority to defer up to the lesser of the maximum
amount prescribed by the Internal Revenue Code or 15% of their income on a pre-
tax basis, through contributions to this plan. The Authority matches 50% of
eligible employees' contributions up to a maximum of 4% of their individual
earnings. The Authority recorded matching contributions of approximately $1.4
million and $792,000, respectively, to this plan for the year ended September
30, 1998 and the period ended September 30, 1997.
Effective September 1, 1998, the Authority adopted the MTGA Non-Qualified
Deferred Compensation Plan. This plan allows highly compensated employees, as
defined in Section 414(q) of the Internal Revenue Code, to defer up to 100% of
their income to the plan. As of September 30, 1998 there have been no
contributions by eligible employees to this plan.
Note 12--Commitments and Contingencies
The Mohegan Compact
The Mohegan Compact stipulates that a portion of the revenues earned on slot
machines must be paid to the State of Connecticut ("Slot Win Contribution").
For each 12-month period commencing July 1, 1995, the Slot Win Contribution
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 million.
The Slot Win Contribution payments will not be required if the State of
Connecticut legalizes any other (except those consented to by the Mashantucket
Pequot Tribe and Mohegan Tribe) gaming operations with slot machines or other
commercial casino table games within Connecticut. The Authority has reflected
$102.3 million and $80.7 million, respectively of gaming expense in its
financial statements for the required Slot Win Contribution for the year ended
September 30, 1998 and for the period from October 12, 1996 (date of
commencement of operations) through September 30, 1997.
Town of Montville Agreement
On June 16, 1994, the Tribe and the Town of Montville (the "Town") entered
into an agreement whereby the Tribe agreed to pay to the Town an annual payment
of $500,000 to minimize the impact to the Town
F-14
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
NOTES TO FINANCIAL STATEMENTS--(Continued)
resulting from decreased tax revenues on reservation land held in trust. Two
annual $500,000 payments payable beginning one year after the commencement of
slot machine gaming activities, were remitted to the Town of Montville in
October 1998 and 1997, respectively. Additionally, the Tribe agreed to make a
one-time payment of $3.0 million towards infrastructure improvements to the
Town's water system. The Tribe has assigned its rights and obligations in this
agreement to the Authority. The Town is billing the Authority for the
infrastructure improvements as the Town's costs are incurred. As of September
30, 1998, the Authority has paid $1.1 million to the Town of Montville towards
improvements to the municipal water system, which has been included in other
assets in the accompanying balance sheet and will be amortized over 40 years.
Litigation
The Authority is a defendant in certain litigation incurred in the normal
course of business. In the opinion of management, based on the advice of
counsel, the aggregate liability, if any, arising from such litigation will not
have a material adverse effect on the Authority's financial position or results
of operations.
Note 13--TCA Agreements
Management Agreement
The Tribe and TCA 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 independent contractor basis, to operate,
manage and market Mohegan Sun.
The Tribe has assigned its rights and obligations under the Management
Agreement to the Authority. The term of the Management Agreement is seven
years. TCA holds responsibility to manage Mohegan Sun in exchange for payments
ranging from 30% to 40% of net income, before management fees, as defined,
depending upon profitability levels. Management fees totaled $47.4 million and
$23.2 million, respectively, for the year ended September 30, 1998 and for the
period ended September 30, 1997. As of September 30, 1998, $4.1 million was
owed to TCA in connection with the Management Agreement.
Relinquishment Agreement
In February 1998, the Authority and TCA entered into an agreement, (the
"Relinquishment Agreement"). The Relinquishment Agreement supersedes the
Management Agreement effective the later of January 1, 2000 (the
"Relinquishment Date"), or the date the existing Existing Secured Notes are
refinanced or repaid, and provides that the Authority shall make certain
payments to TCA out of, and determined as a percentage of, the gross revenues
generated by Mohegan Sun over a 15-year period commencing on the Relinquishment
Date. The payments ("Senior Relinquishment Payments" and the "Junior
Relinquishment Payments"), each of which are calculated as 2.5% of revenues, as
defined, have their own payment schedule and priority. Senior Relinquishment
Payments commence at the end of the first three-month period following the
Relinquishment Date and continue at the end of each three-month period
occurring thereafter until the fifteenth anniversary of the Relinquishment
Date. Junior Relinquishment Payments commence at the end of the first six-month
period following the Relinquishment Date and continue at the end of each six-
month period occurring thereafter until the fifteenth anniversary of the
Relinquishment Date. Each Senior Relinquishment Payment and Junior
Relinquishment Payment is an amount equal to 2.5% of the Revenues generated by
Mohegan Sun over the immediately preceding three-month or six-month payment
period, as the case may be. "Revenues" are defined as gross gaming revenues
(other than Class II gaming revenue) and all other facility revenues
(including, without limitation, hotel revenues, fees or receipts from
convention/events center in the expansion and all rental or other receipts from
lessees and concessionaires operating in the facility but not the gross
receipts of such
F-15
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
NOTES TO FINANCIAL STATEMENTS--(Continued)
lessees, licenses and concessionaires). The Authority, in accordance with
Financial Accounting Standards Board Statement No. 5, "Accounting for
Contingencies", has recorded a relinquishment liability of the estimated
present value of its obligations under the Relinquishment Agreement. The
liability was estimated at $549.1 million as of September 30, 1998 and will be
reassessed periodically. This amount was derived by discounting the present
value of 5% of projected gross revenues by the Authority's risk free investment
rate. The Authority has also recognized the value of the trademarks associated
with the Mohegan Sun brand name as of the September 30, 1998. The Mohegan Sun
trademarks, which were appraised by an independent consultant, are valued at
$130.0 million. TCA's services will be retained, however, in the development
and construction of the Phase II expansion (See "Development Agreement").
Development Agreement
The Authority has also negotiated a second agreement with TCA (the
"Development Agreement"), which will make TCA the exclusive developer of the
planned expansion of Mohegan Sun. Under the Development Agreement, TCA will
oversee the planning, design and construction of the expansion of Mohegan Sun
and will receive compensation of $14 million for such services.
Note 14--Extraordinary Items
The Authority incurred $419.5 million of extraordinary items for the year
ended September 30, 1998. Included in the expense is $332,000 related to the
early extinguishment of debt and $419.1 million related to the Relinquishment
Agreement discussed in Note 13.
Note 15--Subsequent Events
On December 7, 1998, the Authority opened a 4,000 square foot gas station
facility. The facility consists of 16 gasoline pumps, one diesel fuel pump, and
a convenience store that offers fresh baked goods and retail items. The cost of
the facility was approximately $5.9 million and is being financed through
equipment leasing and internally generated funds.
On December 23, 1998, the Authority borrowed the final $878,000 available in
equipment financing from CIT Group at an interest rate of 7.75% over 48 months.
The Tribe has announced an expansion of Mohegan Sun consisting of 100,000
square feet of additional gaming space, a luxury hotel with approximately 1,500
rooms, a convention/events center with seating for 10,000 patrons and 100,000
square feet of convention space. The expansion is estimated to cost $750
million (excluding capitalized interest and excluding a $50 million project
contingency). The Tribe has chosen a site master planning firm, an architect
and a project developer for the expansion. In connection with the expansion,
the Existing Secured Notes and Junior Subordinated Notes will be refinanced. It
is anticipated that a loss on the extinguishment of the Existing Secured Notes
and Junior Subordinated Notes will be reflected in the Authority's second
quarter financial statements for fiscal 1999.
Effective January 1, 1999, the Authority will change the employer
contribution match of its retirement savings plan to 100% of eligible employee
contributions up to a maximum of 3% of their individual earnings. This
retirement savings plan as discussed in Note 11, is pursuant to Section 401 of
the Internal Revenue Code.
F-16
<PAGE>
REVIEW REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Mohegan Tribal Gaming Authority:
We have reviewed the accompanying balance sheet of the Mohegan Tribal Gaming
Authority (the Authority) as of December 31, 1998, and the related statements
of income, capital and cash flows for the three-month periods ended December
31, 1998 and 1997. These financial statements are the responsibility of the
Authority's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the balance sheets of the Mohegan Tribal Gaming Authority as of
September 30, 1998 and 1997, and the related statements of income (loss) and
capital for the year ended September 30, 1998 and for the period October 12,
1996 (date of commencement of operations) through September 30, 1997 (not
presented herein) and statements of cash flows for the years ended September
30, 1998 and 1997 (not presented herein) and in our report dated December 21,
1998, we expressed an unqualified opinion on those financial statements. In our
opinion, the information set forth in the accompanying balance sheet of the
Mohegan Tribal Gaming Authority as of September 30, 1998, is fairly stated, in
all material respects, in relation to the balance sheet from which it has been
derived.
Arthur Andersen LLP
Hartford, Connecticut
February 2, 1999
F-17
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
December 31, September 30,
1998 1998
------------ -------------
(unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents......................... $ 28,328 $ 36,264
Restricted cash................................... 81,250 74,466
Receivables, net.................................. 1,735 3,067
Inventories....................................... 5,776 5,027
Other current assets.............................. 2,349 2,136
-------- --------
Total current assets............................ 119,438 120,960
Non-Current Assets:
Property and equipment, net....................... 298,181 296,440
Trademark......................................... 130,000 130,000
Other assets, net................................. 7,127 7,080
-------- --------
Total assets.................................... $554,746 $554,480
======== ========
LIABILITIES AND CAPITAL
Current Liabilities:
Current portion of capital lease obligations (Note
3)............................................... $ 11,463 $ 11,004
Accounts payable and accrued expenses............. 44,382 46,857
Accrued interest payable (Note 2)................. 5,541 14,692
-------- --------
Total current liabilities....................... 61,386 72,553
-------- --------
Non-Current Liabilities:
Long-term debt (Note 2)........................... 300,191 296,539
Relinquishment liability (Note 6)................. 549,125 549,125
Capital lease obligations, net of current portion
(Note 3)......................................... 16,344 18,563
-------- --------
Total liabilities............................... 927,046 936,780
-------- --------
Commitments and Contingencies (Note 4)
Capital:
Total capital..................................... (372,300) (382,300)
-------- --------
Total liabilities and capital..................... $554,746 $554,480
======== ========
</TABLE>
The accompanying accountants' review report and
notes to financial statements should be read in
conjunction with these financial statements
F-18
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
STATEMENTS OF INCOME
(in thousands)
<TABLE>
<CAPTION>
For the Quarter For the Quarter
Ended Ended
December 31, 1998 December 31, 1997
----------------- -----------------
(unaudited) (unaudited)
<S> <C> <C>
Revenues:
Gaming.................................... $152,672 $119,798
Food and beverage......................... 15,013 12,596
Retail and other.......................... 13,287 10,025
Bingo operations.......................... 3,442 929
-------- --------
Gross revenues............................ 184,414 143,348
Less--Promotional allowances.............. (20,556) (16,206)
-------- --------
Net revenues.............................. 163,858 127,142
-------- --------
Costs and Expenses:
Gaming.................................... 66,590 56,307
Food and beverage......................... 5,386 4,940
Retail and other.......................... 9,113 6,390
Bingo operations.......................... 3,377 703
General and administration................ 27,622 23,740
Management fee............................ 13,645 7,404
Depreciation and amortization............. 4,669 4,800
-------- --------
Total costs and expenses.................. 130,402 104,284
-------- --------
Income from operations.................... 33,456 22,858
-------- --------
Other income (expense):
Interest and other income................. 615 648
Interest expense.......................... (12,810) (11,778)
-------- --------
(12,195) (11,130)
-------- --------
Net income................................ $ 21,261 $ 11,728
======== ========
</TABLE>
The accompanying accountants' review report and
notes to financial statements should be read in
conjunction with these financial statements
F-19
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
STATEMENTS OF CAPITAL
(in thousands)
<TABLE>
<CAPTION>
For the Quarter Ended For the Quarter Ended
December 31, 1998 December 31, 1997
--------------------- ---------------------
(unaudited) (unaudited)
<S> <C> <C>
Beginning balance.................. $(382,300) $21,931
Net income......................... 21,261 11,728
Distributions to Tribe............. (11,261) (6,395)
--------- -------
Ending balance..................... $(372,300) $27,264
========= =======
</TABLE>
The accompanying accountants' review report and
notes to financial statements should be read in
conjunction with these financial statements
F-20
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
For the Quarter For the Quarter
Ended Ended
December 31, 1998 December 31, 1997
----------------- -----------------
(unaudited) (unaudited)
<S> <C> <C>
Cash flows provided by operating activi-
ties:
Net income............................... $ 21,261 $ 11,728
Adjustments to reconcile net income to
net cash flow provided by operating
activities:
Depreciation and amortization.......... 4,669 4,800
Provision for losses on receivables.... 83 19
Changes in operating assets and liabili-
ties:
(Increase) decrease in receivables and
other assets.......................... (56) 534
Decrease in accounts payable and ac-
crued expenses........................ (7,974) (7,120)
-------- --------
Net cash flows provided by operating
activities............................ 17,983 9,961
-------- --------
Cash flows used in investing activities:
Purchase of property and equipment....... (6,113) (17,909)
Decrease in construction payable......... -- (3,604)
-------- --------
Net cash flows used in investing activ-
ities................................. (6,113) (21,513)
-------- --------
Cash flows used in financing activities:
Distributions to Tribe................... (11,261) (6,395)
Increase in short-term borrowings........ -- 650
Proceeds from equipment financing........ 878 --
Payment on equipment financing and short-
term borrowings......................... (2,639) (2,212)
-------- --------
Net cash flows used in financing activ-
ities................................. (13,022) (7,957)
-------- --------
Net decrease in cash and cash equiva-
lents................................. (1,152) (19,509)
Cash and cash equivalents at beginning of
period.................................. 110,730 88,844
-------- --------
Cash and cash equivalents at end of peri-
od...................................... $109,578 $ 69,335
======== ========
Supplemental disclosures of cash flow in-
formation:
Cash paid during the period for inter-
est..................................... $ 18,309 $ 16,700
======== ========
</TABLE>
The accompanying accountants' review report and
notes to financial statements should be read in
conjunction with these financial statements
F-21
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
(Unaudited)
1. Basis of Presentation:
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 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, 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 "Mohegan Compact") that has been approved by the Secretary of the
Interior. On October 12, 1996, the Authority opened a casino known as Mohegan
Sun Casino ("Mohegan Sun").
The Authority is governed by a Management Board, which consists of the nine
members of the Tribal Council. The Management Board has engaged Trading Cove
Associates ("TCA"), a Connecticut general partnership, to manage the operation
of Mohegan Sun pursuant to a seven year contract (the "Management Agreement").
TCA is 50% owned by Sun Cove Limited, an affiliate of Sun International Hotels
Limited ("Sun International"), and 50% owned by Waterford Gaming L.L.C. (See
Note 6 for discussion of Relinquishment Agreement between the Tribe and TCA).
The accompanying financial statements have been prepared in accordance with
the accounting policies described in the Authority's 1998 Annual Report on Form
10-K and should be read in conjunction with the Notes to Financial Statements
which appear in that report. The Balance Sheet at September 30, 1998, contained
herein, was taken from the audited financial statements, but does not include
all disclosures contained in the Form 10-K and required by generally accepted
accounting principles.
Certain amounts in the financial statements have been reclassified. The
reclassification has no effect on the Authority's net income.
In the opinion of the Authority, all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the results for the
interim periods have been included. The results reflected in the financial
statements for the quarter ended December 31, 1998 are not necessarily
indicative of expected results for the full year, as the casino industry in
Connecticut is seasonal in nature.
2. Financing Facilities:
Line of Credit
The Authority has a $2.5 million line-of-credit and letter of credit
arrangement with Fleet National Bank. Interest is payable at the bank's base
rate or LIBOR option. Borrowings are collateralized by a security interest in
all of the Authority's cash deposit accounts with Fleet National Bank. This
arrangement expires on March 31, 2000. As of December 31, 1998, the Authority
has issued letters of credit of $1.9 million and has no borrowings outstanding
under the line-of-credit.
Financing facilities, as described below, consisted of the following (in
thousands):
<TABLE>
<CAPTION>
December 31, 1998 September 30, 1998
----------------- ------------------
(unaudited)
<S> <C> <C>
Existing Secured Notes.................. $175,000 $175,000
Junior Subordinated Notes............... 125,191 121,539
-------- --------
$300,191 $296,539
======== ========
</TABLE>
F-22
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1998
(Unaudited)
Existing Secured Notes
On September 29, 1995, the Authority issued $175 million in senior secured
notes (the "Existing Secured Notes") with fixed interest payable at a rate of
13.5% per annum and Cash Flow Participation Interest, as defined therein, in an
aggregate amount of 5% of the Authority's Cash Flow up to, during any two
consecutive semi-annual periods, ending September 30, $250 million of the
Authority's Cash Flow. Fixed interest is payable semi-annually and commenced
May 15, 1996. The aggregate amount of Cash Flow Participation Interest payable
will be reduced pro rata for reductions in the outstanding principal amount of
Existing Secured Notes. The payment of Cash Flow Participation Interest may be
deferred if the Authority's Fixed Charge Coverage Ratio, as defined, is less
than 2.0. For the quarters ended December 31, 1998 and 1997, the Authority's
Fixed Charge Coverage Ratio was 4.0 and 3.0, respectively. The Existing Secured
Notes are redeemable at set prices set forth in the Existing Secured Notes,
after November 15, 1999, at the option of the Authority (see Note 8 for a
discussion of the tender offer and consent solicitation). Upon the occurrence
of certain events (as specified in the Existing Secured Notes) each holder of
Existing Secured Notes can require the Authority to repurchase the notes at
prices specified.
Beginning with the fiscal year ended September 30, 1997, the Authority was
required within 120 days, under certain circumstances, to offer to purchase, at
set prices, certain amounts of Existing Secured Notes then outstanding, under
the Excess Cash Purchase Offer, as defined in the Existing Secured Notes. See
"Excess Cash Purchase Offer" below.
Junior Subordinated Notes
The Authority has obtained $90 million of subordinated financing from Sun
International and Waterford Gaming L.L.C. in the form of notes ("Junior
Subordinated Notes"). The Authority has issued $20 million of Junior
Subordinated Notes to each of Sun International and Waterford Gaming L.L.C.,
which notes bear interest at 15% per year. The Authority also has issued $50
million in Junior Subordinated Notes to Sun International evidencing draws made
by the Authority under the secured completion guarantee provided by Sun
International ("Secured Completion Guarantee"). Each Junior Subordinated Note
issued under the Secured Completion Guarantee bears interest at the rate per
annum then most recently announced by the Chase Manhattan Bank (f/k/a Chemical
Bank of New York) as its prime rate plus 1%, which shall be set and revised at
intervals of six months. The interest rates were 8.75% and 9.5% at December 31,
1998 and 1997, respectively. Interest on the Junior Subordinated Notes is
payable semi-annually, provided, however that all such interest is deferred and
will not be paid until at least half of the Existing Secured Notes have been
offered to be repurchased or retired, pursuant to the terms of the Existing
Secured Notes, and certain other conditions have been fulfilled. Accrued and
deferred interest payable on the Junior Subordinated Notes was $35.2 million
and $21.2 million as of December 31, 1998 and 1997, respectively. All Junior
Subordinated Notes are due 2003; however, principal cannot be paid until the
Existing Secured Notes have been paid in full, unless certain conditions are
met. During October 1998 and October 1997, a total of $5.0 million of Junior
Subordinated Notes, issued to Sun International pursuant to the Secured
Completion Guarantee were purchased by Waterford Gaming L.L.C.
In the event that the holders of the Existing Secured Notes reject all or
any portion of the Excess Cash Purchase Offer, as defined in the Existing
Secured Notes Indenture, the Authority is required to offer to purchase, at
par, certain amounts of the Junior Subordinated Notes then outstanding. See
"Excess Cash Purchase Offer" below.
F-23
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1998
(Unaudited)
Excess Cash Purchase Offer
Pursuant to the Existing Secured Notes, the Authority is required to make an
Excess Cash Purchase Offer to all holders of the Existing Secured Notes within
120 days after each fiscal year end of the Authority, commencing September 30,
1997. The Excess Cash Purchase Offer equals 50% of the Excess Cash Flow, as
defined, plus 100% of the Deferred Subordinated Interest.
An Excess Cash Purchase Offer of $51.2 million was made on December 30, 1998
for the year ended September 30, 1998. In accordance with the Existing Secured
Notes, the Authority offered to purchase the Existing Secured Notes at 112% of
the principal amount of the Existing Secured Notes plus accrued and unpaid
interest to the purchase date. The Excess Cash Purchase Offer expired, by its
terms, on January 29, 1999, and none of the holders of the Existing Secured
Notes accepted the offer.
On February 1, 1999, pursuant to the Junior Subordinated Note purchase
agreement, an offer to repurchase in the amount of the Excess Cash Purchase
Offer was made to the holders of the Junior Subordinated Notes. On February 1,
1999, the holders of the Junior Subordinated Notes rejected the offer. On
February 2, 1999, as permitted by the Existing Secured Notes Indenture, the
Authority distributed the Excess Cash Purchase Offer of $51.2 million to the
Tribe.
3. Leases:
At December 31, 1998, the Authority was obligated under non-cancelable
operating leases and capital leases to make future minimum lease payments as
follows (unaudited):
<TABLE>
<CAPTION>
Operating Capital
Fiscal Year Ending September 30, Leases Leases
-------------------------------- --------- -------
(In thousands)
<S> <C> <C>
1999...................................................... $2,700 $ 9,756
2000...................................................... 2,680 13,008
2001...................................................... 84 5,557
2002...................................................... -- 2,358
2003...................................................... -- 64
------ -------
Total minimum lease payment............................... $5,464 30,743
======
Amount representing interest.............................. (2,937)
-------
Total obligation under capital leases..................... 27,806
Less: Amount due within one year.......................... (11,463)
-------
Amount due after one year................................. $16,344
=======
</TABLE>
Rent expense on the non-cancelable operating leases was $900,000 for each of
the quarters ended December 31, 1998 and 1997.
The Authority's debt agreements require, among other restrictions, the
maintenance of various financial covenants and terms including a fixed charge
coverage ratio, a debt to adjusted net worth ratio, and a debt service coverage
ratio.
F-24
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1998
(Unaudited)
4. Commitments and Contingencies:
The Mohegan Compact
The Mohegan Compact stipulates that a portion of the revenues earned on slot
machines must be paid to the State of Connecticut ("Slot Win Contribution").
For each 12-month period commencing July 1, 1995, the Slot Win Contribution
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 million.
The Slot Win Contribution payments will not be required if the State of
Connecticut legalizes any other (except those consented to by the Mashantucket
Pequot Tribe and the Mohegan Tribe) gaming operations with slot machines or
other commercial casino games within Connecticut. The Authority has reflected
$28.4 million and $22.0 million of gaming expense in its financial statements
for the required Slot Win Contribution for the quarters ended December 31, 1998
and 1997, respectively.
Litigation
The Authority is a defendant in certain litigation incurred in the normal
course of business. In the opinion of management, based on the advice of
counsel, the aggregate liability, if any, arising from such litigation will not
have a material adverse effect on the Authority's financial position or results
of operations.
Town of Montville Agreement
On June 16, 1994, the Tribe and the Town of Montville (the "Town") entered
into an agreement whereby the Tribe agreed to pay to the Town an annual payment
of $500,000 to minimize the impact to the Town resulting from decreased tax
revenues on reservation land held in trust. Two annual $500,000 payments
payable beginning one year after the commencement of slot machine gaming
activities, were remitted to the Town of Montville in October 1998 and 1997,
respectively. Additionally, the Tribe agreed to make a payment of $3.0 million
towards infrastructure improvements to the Town's water system. The Tribe has
assigned its rights and obligations in this agreement to the Authority. The
Town is billing the Authority for the infrastructure improvements as the Town's
costs are incurred. As of December 31, 1998, the Authority has paid $1.6
million to the Town of Montville towards improvements to the municipal water
system, which has been included in other assets in the accompanying balance
sheet and will be amortized over 40 years.
5. Related Party Transactions:
The Tribe provides governmental and administrative services to the Authority
in conjunction with the operation of Mohegan Sun. For the quarters ended
December 31, 1998 and 1997, the Authority incurred expenses of $1.7 million and
$1.3 million, respectively, for such services.
6. TCA Agreements:
Management Agreement
The Tribe and TCA 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 independent contractor basis, to operate,
manage and market Mohegan Sun.
F-25
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1998
(Unaudited)
The Tribe has assigned its rights and obligations under the Management
Agreement to the Authority. The term of the Management Agreement is seven
years. TCA holds responsibility to manage Mohegan Sun in exchange for payments
ranging from 30% to 40% of net income, before management fees, as defined,
depending upon profitability levels. Management fees totaled $13.6 million and
$7.4 million, respectively, for the quarters ended December 31, 1998 and 1997.
At December 31, 1998, $3.7 million was owed to TCA in connection with the
Management Agreement.
Relinquishment Agreement
In February 1998, the Authority and TCA entered into an agreement, (the
"Relinquishment Agreement"). The Relinquishment Agreement supercedes the
Management Agreement effective the later of January 1, 2000, or the date the
Existing Secured Notes are refinanced or repaid (the "Relinquishment Date"),
and provides that the Authority shall make certain payments to TCA out of, and
determined as a percentage of, the gross revenues generated by the Mohegan Sun
over a 15-year period commencing on the Relinquishment Date. The payments
("Senior Relinquishment Payments" and "Junior Relinquishment Payments"), are
calculated as 2.5% of Revenues each, as defined, but each has its own payment
schedule and priority. Senior Relinquishment Payments commence at the end of
the first three-month period following the Relinquishment Date and continue at
the end of each three-month period occurring thereafter until the fifteenth
anniversary of the Relinquishment Date. Junior Relinquishment Payments commence
at the end of the first six-month period following the Relinquishment Date and
continue at the end of each six-month period occurring thereafter until the
fifteenth anniversary of the Relinquishment Date. Each Senior Relinquishment
Payment and Junior Relinquishment Payment is an amount equal to 2.5% of the
Revenues generated by Mohegan Sun over the immediately preceding three-month or
six-month payment period, as the case may be. "Revenues" are defined as gross
gaming revenues (other than Class II gaming revenue) and all other facility
revenues (including, without limitation, hotel revenues, fees or receipts from
convention/events center in the expansion and all rental or other receipts from
lessees and concessionaires operating in the facility but not the gross
receipts of such lessees, licenses and concessionaires). The Authority, in
accordance with Financial Accounting Standards Board Statement No. 5, ("SFAS
No. 5"), "Accounting for Contingencies", has recorded a relinquishment
liability of the estimated present value of its obligation under the
Relinquishment Agreement. The liability is estimated at $549.1 million as of
December 31, 1998 and will be reassessed periodically. This amount was derived
by discounting the present value of 5% of projected gross revenues by the
Authority's risk free investment rate. The Authority has also recognized the
value of the trademarks associated with the Mohegan Sun brand name. The Mohegan
Sun trademarks, which were appraised by an independent consultant, were valued
at $130.0 million at December 31, 1998. TCA's services will be retained,
however, in the development and construction of the expansion (See "Development
Agreement").
Development Agreement
The Authority has also negotiated a second agreement with TCA (the
"Development Agreement"), which will make TCA the exclusive developer of the
planned expansion of Mohegan Sun. Under the Development Agreement, TCA will
oversee the planning, design and construction of the expansion of Mohegan Sun
and will receive compensation of $14 million for such services.
7. Employee Benefits Plans
Effective January 1, 1999 pursuant to Section 401 of the Internal Revenue
Code, the Authority increased the employer matching contribution to match of
its retirement savings plan. The plan allows employees of the
F-26
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1998
(Unaudited)
Authority to defer up to the lesser of the maximum amount prescribed by the
Internal Revenue Code or 15% of their income on a pre-tax basis, through
contributions to this plan. The Authority now matches 100% of eligible
employees' contributions up to a maximum of 3% of their individual earnings.
8. Subsequent Events:
On January 15, 1999, the Authority initiated a Tender Offer and Consent
Solicitation for the repurchase of all of the Existing Secured Notes. The offer
will expire at 12:00 midnight, New York City time on February 12, 1999, unless
extended or terminated earlier. The tender offer price for the Existing Secured
Notes is expected to be approximately $214 million. Funding of the Tender Offer
and Consent Solicitation will require additional sources of funding, which may
include public and private debt and bank financing. There can be no assurance
that the Authority will be able to obtain such financing, although the
Authority believes that the current operating results of Mohegan Sun make such
financing a viable likelihood. As of January 29, 1999, holders of 99.9% of the
Existing Secured Notes have accepted the Tender Offer and Consent Solicitation.
F-27
<PAGE>
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- -------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary....................................................... 1
Risk Factors............................................................. 15
The Exchange Offers...................................................... 26
Use of Proceeds.......................................................... 34
Capitalization........................................................... 35
Selected Financial Data.................................................. 36
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 38
Business................................................................. 44
The Authority............................................................ 55
Certain Relationships and Related Transactions........................... 58
Mohegan Tribe of Indians of Connecticut.................................. 59
Other Material Agreements................................................ 61
Government Regulation.................................................... 68
Description of other Indebtedness........................................ 72
Description of the Exchange Notes........................................ 74
Plan of Distribution..................................................... 129
Legal Matters............................................................ 129
Independent Auditors..................................................... 129
Where You Can Get More Information....................................... 130
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
$500,000,000
Mohegan Tribal Gaming Authority
$200,000,000
8 1/8% Senior Exchange Notes
Due 2006
and
$300,000,000
8 3/4% Senior Subordinated Exchange Notes
Due 2009
[LOGOS]
----------------
PROSPECTUS
----------------
Dated , 1999
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. 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 21. Exhibits and Financial Statement Schedules
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
------- -------------------
<C> <S>
1.1 Purchase Agreement, dated as of February 24, 1999 between Salomon
Brothers Inc., as Representative of the Initial Purchasers, and the
Mohegan Tribal Gaming Authority.
*3.1 Constitution of the Mohegan Tribe of Indians of Connecticut ratified
by Tribal vote on April 12, 1996 (filed as Exhibit 3.1 to Registration
Statement on Form S-1, File No. 33-80655 (the "1996 Form S-1") and
incorporated herein by reference).
*3.2 Ordinance No. 95-7/15-1 of the Tribe for Gaming on Tribal Lands,
enacted on July 20, 1995 (filed as Exhibit 3.2 to the 1996 Form S-1
and incorporated herein by reference).
*4.1 Note Purchase Agreement dated September 29, 1995 between the Mohegan
Tribal Gaming Authority and Sun International Hotels Limited (filed as
Exhibit 10.10 to 1996 Form S-1 and incorporated herein by reference).
*4.2 Form of Junior Subordinated Note due 2003 of the Mohegan Tribal Gaming
Authority (contained in the Note Purchase Agreement filed as Exhibit
4.1).
4.3 Indenture dated March 3, 1999 among the Mohegan Tribal Gaming
Authority, the Mohegan Tribe of Indians of Connecticut and First Union
National Bank, as Trustee, relating to the 8 1/8% Senior Notes Due
2006 of the Mohegan Tribal Gaming Authority.
4.4 Form of Global 8 1/8% Senior Note Due 2006 of the Mohegan Tribal
Gaming Authority (contained in the Indenture filed as Exhibit 4.2).
4.5 Registration Agreement dated March 3, 1999 among The Mohegan Tribal
Gaming Authority, Salomon Smith Barney Inc., NationsBanc Montgomery
Securities, LLC, SG Cowen Securities Corporation, Bear, Stearns & Co.
Inc., BankBoston Robertson Stephens Inc. and Fleet Securities, Inc.
4.6 Indenture dated as of March 3, 1999 among the Mohegan Tribal Gaming
Authority, Mohegan Tribe of Indians of Connecticut and State Street
Bank and Trust Company, as Trustee, relating to the 8 3/4% Senior
Subordinated Notes Due 2009 of the Mohegan Tribal Gaming Authority.
4.7 Form of Global 8 3/4% Senior Subordinated Notes Due 2009 of the
Mohegan Tribal Gaming Authority (contained in the Indenture filed as
Exhibit 4.5).
4.8 Registration Agreement dated March 3, 1999 among the Mohegan Tribal
Gaming Authority, Salomon Smith Barney Inc., NationsBanc Montgomery
Securities LLC, SG Cowen Securities Corporation, Bear, Stearns & Co.
Inc., BankBoston Robertson Stephens Inc. and Fleet Securities, Inc.
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
------- -------------------
<C> <S>
5.1 Opinion of Hogan & Hartson L.L.P.
*10.1 The Mohegan Tribe--State of Connecticut Gaming Compact between the
Mohegan Tribe of Indians of Connecticut and the State of Connecticut
(filed as Exhibit 10.1 to the 1996 Form S-1 and incorporated herein by
reference).
*10.2 Agreement dated April 25, 1994 between the Mohegan Tribe of Indians of
Connecticut and the State of Connecticut resolving certain land claims
(filed as Exhibit 10.2 to the 1996 Form S-1 and incorporated herein by
reference).
*10.3 Memorandum of Understanding dated April 25, 1994 between the Mohegan
Tribe of Indians of Connecticut and the State of Connecticut regarding
implementation of the Compact and the Resolution Agreement (filed as
Exhibit 10.3 to the 1996 Form S-1 and incorporated herein by
reference).
*10.4 Agreement dated June 16, 1994 between the Mohegan Tribe of Indians of
Connecticut and the Town of Montville, Connecticut (filed as Exhibit
10.4 to the 1996 Form S-1 and incorporated herein by reference).
*10.5 Land Lease dated September 29, 1995 between the Mohegan Tribe of
Indians of Connecticut and the Mohegan Tribal Gaming Authority (filed
as Exhibit 10.5 to the 1996 Form S-1 and incorporated herein by
reference).
10.6 Amendment to the Land Lease dated February 19, 1999 between the
Mohegan Tribe of Indians of Connecticut and the Mohegan Tribal Gaming
Authority.
*10.7 Amended and Restated Gaming Facility Management Agreement dated August
30, 1995 between the Mohegan Tribe of Indians of Connecticut, the
Mohegan Tribal Gaming Authority and Trading Cove Associates (filed as
Exhibit 10.8 to the 1996 Form S-1 and incorporated herein by
reference).
*10.8 Development Services Agreement dated February 7, 1998 by and among the
Mohegan Tribal Gaming Authority, the Mohegan Tribe of Indians of
Connecticut and Trading Cove Associates (filed as Exhibit 10.15 to
Form 10-K, File No. 33-80655 (the "1998 Form 10-K") and incorporated
herein by reference).
*10.9 Relinquishment Agreement dated February 7, 1998 by and among the
Mohegan Tribal Gaming Authority, the Mohegan Tribe of Indians of
Connecticut and Trading Cove Associates (filed as Exhibit 10.14 to the
1998 Form 10-K and incorporated herein by reference).
10.10 The Loan Agreement dated as of March 3, 1999 by and among the Mohegan
Tribal Gaming Authority, the Tribe, Bank of America National Trust and
Savings Associations as administrative agent, and NationsBanc
Montgomery Securities as lead arranger.
10.11 Defeasance Escrow Deposit Agreement dated as of March 3, 1999 by and
among the Mohegan Tribal Gaming Authority, the Mohegan Tribe of
Indians of Connecticut and First Union National Bank.
10.12 Construction Reserve Disbursement Agreement dated March 3, 1999 among
the Mohegan Tribal Gaming Authority, the Mohegan Tribe of Indians of
Connecticut and Fleet National Bank.
*10.13 The Merrill Lynch Non-Qualified Deferred Compensation Plan Trust
Agreement dated September 1, 1998 between the Mohegan Tribal Gaming
Authority and Merrill Lynch Trust (filed as Exhibit 10.16 to the 1998
Form 10-K).
23.1 Consent of Hogan & Hartson L.L.P. (included in Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
24.1 Power of attorney (included on signature page).
25.1 Statement on Form T-1 of Eligibility of Senior Trustee.
25.2 Statement of Form T-1 of Eligibility of Senior Subordinated Trustee.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
- ------- -------------------
<S> <C>
99.1 Form of Senior Note Letter of Transmittal.
99.2 Form of Notice of Senior Note Guaranteed Delivery.
99.3 Form of Senior Note Letter to Brokers, Dealers, Commercial Banks, Trust Companies and other
Nominees.
99.4 Form of Senior Note Letter to Clients.
99.5 Form of Senior Subordinated Note Letter of Transmittal.
99.6 Form of Notice of Senior Subordinated Note Guaranteed Delivery.
99.7 Form of Senior Subordinated Note Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
other Nominees.
99.8 Form of Senior Subordinated Note Letter to Clients.
</TABLE>
- --------
* Previously filed.
(b) Financial Statement Schedules.
The following financial statement schedule was filed with the Authority's
Annual Report on Form 10-K (File No. 033-80655), filed with the Commission on
December 22, 1998, and is incorporated herein by reference:
Schedule II--Valuation and Qualifying Accounts
Schedules not listed above have been omitted because they are
inapplicable or the information required to be set forth therein is
contained, or incorporated by reference, in the Financial Statements of the
Authority or notes thereto.
II-3
<PAGE>
Item 22. Undertakings
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 foregoing provisions, 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 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
Securities Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of this Registration Statement through
the date of responding to the request.
The undersigned registrant hereby undertakes to supply by means of a post-
effective amendment all information concerning a transaction, and the company
being acquired involved therein, that was not the subject of and included in
this Registration Statement when it became effective.
The undersigned registrant hereby undertakes 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 of 1933 (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 hereof) which, individually or in the aggregate,
represents a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Securities and
Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in this Registration Statement when it becomes
effective; 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.
The undersigned registrant hereby undertakes 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.
The undersigned registrant hereby undertakes to remove from registration by
means of a post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act that is incorporated by reference in the registration statement
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.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of Securities Act, the Authority has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Uncasville, Connecticut,
on this 21st day of April, 1999.
Mohegan Tribal Gaming Authority
/s/ Roland J. Harris
By: _________________________________
Roland J. Harris
Chairman and Member, Management
Board
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Roland J. Harris, jointly and severally, each in
his own capacity, his true and lawful attorneys-in-fact, with full power of
substitution, for him and his name, place and stead, in any and all capacities,
to sign any and all amendments (including post-effective amendments) to this
Registration Statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents with full power and
authority to do so and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact, or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons, in the capacities
indicated below, on this day of April, 1999.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C> <C>
/s/ Roland J. Harris Chairman and Member,
______________________________________ Management Board
Roland J. Harris
/s/ Jayne G. Fawcett Vice-Chair and Member,
______________________________________ Management Board
Jayne G. Fawcett
/s/ William J. Velardo Executive Vice President
______________________________________ and General Manager,
William J. Velardo Mohegan Sun (Principal
Executive Officer)
/s/ Jeffrey E. Hartmann Senior Vice President and
______________________________________ Chief Financial Officer,
Jeffrey E. Hartmann Mohegan Sun (Principal
Financial and Accounting
Officer)
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Carlisle M. Fowler Treasurer and Member,
______________________________________ Management Board
Carlisle M. Fowler
/s/ Loretta F. Roberge Corresponding Secretary
______________________________________ and Member, Management
Loretta F. Roberge Board
/s/ Shirley M. Walsh Recording Secretary and
______________________________________ Member, Management Board
Shirley M. Walsh
/s/ Mark F. Brown Member, Management Board
______________________________________
Mark F. Brown
/s/ Courtland C. Fowler Member, Management Board
______________________________________
Courtland C. Fowler
/s/ Maynard L. Strickland Member, Management Board
______________________________________
Maynard L. Strickland
/s/ Glen R. LaVigne Member, Management Board
______________________________________
Glen R. LaVigne
</TABLE>
II-6
<PAGE>
INDEX TO EXHIBITS
Exhibit
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
------- -------------------
<C> <S>
1.1 Purchase Agreement, dated as of February 24, 1999 between Salomon
Brothers Inc., as Representative of the Initial Purchasers, and the
Mohegan Tribal Gaming Authority.
*3.1 Constitution of the Mohegan Tribe of Indians of Connecticut ratified
by Tribal vote on April 12, 1996 (filed as Exhibit 3.1 to Registration
Statement on Form S-1, File No. 33-80655 (the "1996 Form S-1") and
incorporated herein by reference).
*3.2 Ordinance No. 95-7/15-1 of the Tribe for Gaming on Tribal Lands,
enacted on July 20, 1995 (filed as Exhibit 3.2 to the 1996 Form S-1
and incorporated herein by reference).
*4.1 Note Purchase Agreement dated September 29, 1995 between the Mohegan
Tribal Gaming Authority and Sun International Hotels Limited (filed as
Exhibit 10.10 to 1996 Form S-1 and incorporated herein by reference).
*4.2 Form of Junior Subordinated Note due 2003 of the Mohegan Tribal Gaming
Authority (contained in the Note Purchase Agreement filed as Exhibit
4.1).
4.3 Indenture dated March 3, 1999 among the Mohegan Tribal Gaming
Authority, the Mohegan Tribe of Indians of Connecticut and First Union
National Bank, as Trustee, relating to the 8 1/8% Senior Notes Due
2006 of the Mohegan Tribal Gaming Authority.
4.4 Form of Global 8 1/8% Senior Note Due 2006 of the Mohegan Tribal
Gaming Authority (contained in the Indenture filed as Exhibit 4.2).
4.5 Registration Agreement dated March 3, 1999 among The Mohegan Tribal
Gaming Authority, Salomon Smith Barney Inc., NationsBanc Montgomery
Securities, LLC, SG Cowen Securities Corporation, Bear, Stearns & Co.
Inc., BankBoston Robertson Stephens Inc. and Fleet Securities, Inc.
4.6 Indenture dated as of March 3, 1999 among the Mohegan Tribal Gaming
Authority, Mohegan Tribe of Indians of Connecticut and State Street
Bank and Trust Company, as Trustee, relating to the 8 3/4%
Senior Subordinated Notes Due 2009 of the Mohegan Tribal Gaming
Authority.
4.7 Form of Global 8 3/4% Senior Subordinated Notes Due 2009 of the
Mohegan Tribal Gaming Authority (contained in the Indenture filed as
Exhibit 4.5).
4.8 Registration Agreement dated March 3, 1999 among the Mohegan Tribal
Gaming Authority, Salomon Smith Barney Inc., NationsBanc Montgomery
Securities LLC, SG Cowen Securities Corporation, Bear, Stearns & Co.
Inc., BankBoston Robertson Stephens Inc. and Fleet Securities, Inc.
5.1 Opinion of Hogan & Hartson L.L.P.
*10.1 The Mohegan Tribe--State of Connecticut Gaming Compact between the
Mohegan Tribe of Indians of Connecticut and the State of Connecticut
(filed as Exhibit 10.1 to the 1996 Form S-1 and incorporated herein by
reference).
*10.2 Agreement dated April 25, 1994 between the Mohegan Tribe of Indians of
Connecticut and the State of Connecticut resolving certain land claims
(filed as Exhibit 10.2 to the 1996 Form S-1 and incorporated herein by
reference).
*10.3 Memorandum of Understanding dated April 25, 1994 between the Mohegan
Tribe of Indians of Connecticut and the State of Connecticut regarding
implementation of the Compact and the Resolution Agreement (filed as
Exhibit 10.3 to the 1996 Form S-1 and incorporated herein by
reference).
</TABLE>
II-7
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
------- -------------------
<C> <S>
*10.4 Agreement dated June 16, 1994 between the Mohegan Tribe of Indians of
Connecticut and the Town of Montville, Connecticut (filed as Exhibit
10.4 to the 1996 Form S-1 and incorporated herein by reference).
*10.5 Land Lease dated September 29, 1995 between the Mohegan Tribe of
Indians of Connecticut and the Mohegan Tribal Gaming Authority (filed
as Exhibit 10.5 to the 1996 Form S-1 and incorporated herein by
reference).
10.6 Amendment to the Land Lease dated February 19, 1999 between the
Mohegan Tribe of Indians of Connecticut and the Mohegan Tribal Gaming
Authority.
*10.7 Amended and Restated Gaming Facility Management Agreement dated August
30, 1995 between the Mohegan Tribe of Indians of Connecticut, the
Mohegan Tribal Gaming Authority and Trading Cove Associates (filed as
Exhibit 10.8 to the 1996 Form S-1 and incorporated herein by
reference).
*10.8 Development Services Agreement dated February 7, 1998 by and among the
Mohegan Tribal Gaming Authority, the Mohegan Tribe of Indians of
Connecticut and Trading Cove Associates (filed as Exhibit 10.15 to
Form 10-K, File No. 33-80655 (the "1998 Form 10-K") and incorporated
herein by reference).
*10.9 Relinquishment Agreement dated February 7, 1998 by and among the
Mohegan Tribal Gaming Authority, the Mohegan Tribe of Indians of
Connecticut and Trading Cove Associates (filed as Exhibit 10.14 to the
1998 Form 10-K and incorporated herein by reference).
10.10 The Loan Agreement dated as of March 3, 1999 by and among the Mohegan
Tribal Gaming Authority, the Tribe, Bank of America National Trust and
Savings Associations as administrative agent, and NationsBanc
Montgomery Securities as lead arranger.
10.11 Defeasance Escrow Deposit Agreement dated as of March 3, 1999 by and
among the Mohegan Tribal Gaming Authority, the Mohegan Tribe of
Indians of Connecticut and First Union National Bank.
10.12 Construction Reserve Disbursement Agreement dated March 3, 1999 among
the Mohegan Tribal Gaming Authority, the Mohegan Tribe of Indians of
Connecticut and Fleet National Bank.
*10.13 The Merrill Lynch Non-Qualified Deferred Compensation Plan Trust
Agreement dated September 1, 1998 between the Mohegan Tribal Gaming
Authority and Merrill Lynch Trust (filed as Exhibit 10.16 to the 1998
Form 10-K).
23.1 Consent of Hogan & Hartson L.L.P. (included in Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
24.1 Power of attorney (included on signature page).
25.1 Statement on Form T-1 of Eligibility of Senior Trustee.
25.2 Statement on Form T-1 of Eligibility of Senior Subordinated Trustee.
99.1 Form of Senior Note Letter of Transmittal.
99.2 Form of Notice of Senior Note Guaranteed Delivery.
99.3 Form of Senior Note Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and other Nominees.
99.4 Form of Senior Note Letter to Clients.
99.5 Form of Senior Subordinated Note Letter of Transmittal.
99.6 Form of Notice of Senior Subordinated Note Guaranteed Delivery.
99.7 Form of Senior Subordinated Note Letter to Brokers, Dealers,
Commercial Banks, Trust Companies and other Nominees.
99.8 Form of Senior Subordinated Note Letter to Clients.
</TABLE>
- --------
* Previously filed.
II-8
<PAGE>
Exhibit 1.1
Execution Copy
MOHEGAN TRIBAL GAMING AUTHORITY
$200,000,000
8 1/8% Senior Notes Due 2006
$300,000,000
8 3/4% Senior Subordinated Notes Due 2009
Purchase Agreement
New York, New York
February 24, 1999
Salomon Smith Barney Inc.
As Representatives of the Initial Purchasers
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Mohegan Tribal Gaming Authority (the "Authority"), an instrumentality of the
Mohegan Tribe of Indians of Connecticut (the "Tribe"), proposes to issue and
sell to the several parties named in Schedule I hereto (the "Initial
Purchasers"), for whom you (the "Representatives") are acting as
representatives, $200,000,000 principal amount of its 8 1/8% Senior Notes due
2006 (the "Senior Securities") and $300,000,000 principal amount of its 8 3/4%
Senior Subordinated Notes due 2009 (the "Senior Subordinated Securities" and,
collectively with the Senior Securities, the "Securities"). The Senior
Securities are to be issued under an indenture (the "Senior Indenture") to be
dated as of March 3, 1999 among the Authority, the Tribe and First Union
National Bank as trustee (the "Senior Trustee"). The Senior Subordinated
Securities are to be issued under an indenture (the "Senior Subordinated
Indenture") to be dated as of March 3, 1999 among the Authority, the Tribe and
State Street Bank and Trust Company as trustee (the "Senior Subordinated
Trustee"). The Senior Indenture and the Senior Subordinated Indenture are
collectively referred to herein as the "Indentures", and the Senior Trustee and
the Senior Subordinated Trustee are collectively referred to herein as the
"Trustees". The Securities each have the benefit of a Registration Rights
Agreement (the "Senior Registration Rights Agreement" and the "Senior
Subordinated Registration Rights Agreement," collectively, the "Registration
Rights Agreements"), both to be dated as of March 3, 1999, between the Authority
and the Initial Purchasers, pursuant to which the Authority has agreed to
register under the Act another series of debt securities of the Authority each
with terms substantially identical to the Securities (collectively, the
"Exchange Securities") to be offered in exchange for the Securities (the
"Exchange Offer"), subject to the terms and conditions therein specified. To the
extent there
<PAGE>
are no additional parties listed on Schedule I other than you, the term
Representatives as used herein shall mean you as the Initial Purchasers, and the
terms Representatives and Initial Purchasers shall mean either the singular or
plural as the context requires. The use of the neuter in this Purchase Agreement
shall include the feminine and masculine wherever appropriate. Certain terms
used herein are defined in Section 19 hereof.
The offering of the Securities is being made in connection with the Tender
Offer and Consent Solicitation for the Authority's 13 1/2% Senior Secured Notes
with Cash Flow Participation Interest and the arrangement of a senior secured
bank credit facility (the "Bank Credit Facility") (the "Concurrent
Transactions").
The sale of the Securities to the Initial Purchasers will be made without
registration of the Securities under the Act in reliance upon exemptions from
the registration requirements of the Act.
In connection with the sale of the Securities, the Authority has prepared a
preliminary offering memorandum, dated February 3, 1999 (as amended or
supplemented at the Execution Time, including any and all exhibits thereto, the
"Preliminary Memorandum"), and a final offering memorandum, dated February 24,
1999 (as amended or supplemented at the Execution Time, including any and all
exhibits thereto the "Final Memorandum"). Each of the Preliminary Memorandum and
the Final Memorandum sets forth certain information concerning the Authority and
the Securities. The Authority hereby confirms that it has authorized the use of
the Preliminary Memorandum and the Final Memorandum, and any amendment or
supplement thereto, in connection with the offer and sale of the Securities by
the Initial Purchasers.
1. Representations and Warranties. The Authority represents and warrants to
each Initial Purchaser, as set forth below in this Section 1, and the Tribe
represents and warrants to each Initial Purchaser with respect to paragraphs
1(l),(o),(p) and (s) as set forth below.
(a) The Preliminary Memorandum, at the date thereof, did not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. At the Execution Time, on the
Closing Date or on any settlement date, as the case may be, the Final
Memorandum did not, and will not (and any amendment or supplement thereto,
at the date thereof, at the Closing Date and on any settlement date, will
not), contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Authority makes no representation or warranty as to the
information contained in or omitted from the Preliminary Memorandum or the
Final Memorandum, or any amendment or supplement thereto, in reliance upon
and in conformity with information furnished in writing to the Authority by
or on behalf of the Initial Purchasers through the Representatives
specifically for inclusion therein.
(b) Neither the Authority nor any of its Affiliates, nor any person
acting on its behalf (provided that no representation is made as to the
Initial Purchasers or any person acting on their behalf) has, directly or
indirectly, made offers or sales of any
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security, or solicited offers to buy any security, under circumstances that
would require the registration of the Securities under the Act.
(c) Neither the Authority nor any of its Affiliates, nor any person
acting on its behalf (provided that no representation is made as to the
Initial Purchasers or any person acting on their behalf) has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D) in connection with any offer or sale of the Securities in the
United States.
(d) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Act.
(e) Neither the Authority nor any of its Affiliates, nor any person
acting on its behalf (provided that no representation is made as to the
Initial Purchasers or any person acting on their behalf) has engaged in any
directed selling efforts with respect to the Securities, and each of them
has complied with the offering restrictions requirement of Regulation S
under the Act. Terms used in this paragraph have the meanings given to them
by Regulation S.
(f) The Authority expects to be advised by the NASD's PORTAL Market
that as of the Closing Date the Securities will have been designated
PORTAL-eligible securities in accordance with the rules and regulations of
the NASD.
(g) The Authority is not, and after giving effect to the offering and
sale of the Securities and the application of the net proceeds thereof as
described in the Final Memorandum will not be, an "investment company"
within the meaning of the Investment Company Act, without taking account of
any exemption arising out of the number of holders of the Authority's
securities.
(h) The Authority is in compliance with the reporting requirements of
Section 13 or 15(d) of the Exchange Act.
(i) The Authority has not paid or agreed to pay to any person any
compensation for soliciting another to purchase the Securities (except as
contemplated by this Purchase Agreement).
(j) The Authority has not taken, directly or indirectly, any action
designed to cause or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in the
stabilization or manipulation of the price of any security of the Authority
to facilitate the sale or resale of the Securities.
(k) The information provided by the Authority pursuant to Section 5(h)
hereof will not, at the date thereof, contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
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(l) The Tribe is a federally recognized Indian Tribe, with authority
to enter into and perform its obligations under the Agreements. The
Constitution of the Tribe, amended and restated in its entirety and
approved on April 12, 1996 (the "Constitution"), was validly adopted by the
Tribe, is effective according to its terms, and is the law of the Tribe.
(m) The Authority (A) has been duly established, is validly existing
under the Constitution, as amended, (B) has all requisite power and
authority to carry on its business as it is currently being conducted and
as described in the Final Memorandum and to own, lease and operate its
properties, and (C) is duly qualified and authorized to do business in each
jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification except, with respect to
this clause (C), where the failure to be so qualified or in good standing
does not and could not reasonably be expected to (x) individually or in
aggregate, result in a material adverse effect on the properties, business,
results of operations, condition (financial or otherwise), affairs or
prospects of the Authority, (y) interfere with or adversely affect the
issuance or marketability of the Securities pursuant hereto or (z) in any
manner draw into question the validity of this Purchase Agreement or any
agreements or the transactions described in the Final Memorandum under the
caption "Use of Proceeds". The Authority will have no direct or indirect
subsidiaries as of the Closing Date.
(n) The statements in the Final Memorandum under the headings "Certain
Federal Income Tax Consequences," "Description of Notes," "Business--The
Expansion," "Business--Environmental Matters," "Description of Other
Indebtedness," "Mohegan Tribe of Indians of Connecticut," "Government
Regulation" and "Other Material Agreements" fairly summarize the matters
therein described.
(o) This Purchase Agreement has been duly authorized, executed and
delivered by the Authority and the Tribe; the Senior Indenture and the
Senior Subordinated Indenture have each been duly authorized and, assuming
due authorization, execution and delivery thereof by the Trustee, when
executed and delivered by the Authority and the Tribe, will constitute
legal, valid, binding instruments enforceable against the Authority and the
Tribe in accordance with their terms (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally from time to time in
effect and to general principles of equity and public policy provided,
however that the Authority makes no representation as to the choice of
laws); the Securities have been duly authorized, and, when executed and
authenticated in accordance with the provisions of the Senior Indenture or
the Senior Subordinated Indenture, as the case may be, and delivered to and
paid for by the Initial Purchasers, will have been duly executed and
delivered by the Authority and will constitute the legal, valid and binding
obligations of the Authority entitled to the benefits of the Senior
Indenture or the Senior Subordinated Indenture, as the case may be
(subject, as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors'
rights generally from time to time in effect and to general principles of
equity and public policy provided, however, that the Authority makes no
representation as to the choice of laws); and the Senior Registration
Rights Agreement and the Senior Subordinated
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Registration Rights Agreement have been duly authorized and, when executed
and delivered by the Authority, will constitute legal, valid, binding and
enforceable instruments of the Authority (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally from time to time in
effect and to general principles of equity and public policy provided,
however, that the Authority makes no representation as to the choice of
laws).
(p) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required to be obtained or made by
the Authority or the Tribe in connection with the transactions contemplated
herein or in the Indentures, or the Registration Rights Agreements or the
Concurrent Transactions, except (A) such as will be obtained under the Act
and such as may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by the
Initial Purchasers in the manner contemplated herein and in the Final
Memorandum and the Registration Rights Agreements and (B) such as will be
obtained from the National Indian Gaming Commission ("NIGC") or its
Chairman, the Secretary of the Interior ("Secretary"), or the Bureau of
Indian Affairs ("BIA") prior to the Closing Date.
(q) None of the execution and delivery of the Indentures, this
Purchase Agreement or the Registration Rights Agreements, the issue and
sale of the Securities, the consummation of the Concurrent Transactions, or
the consummation of any other of the transactions herein or therein
contemplated, or the fulfillment of the terms hereof or thereof will
conflict with or result in (A) violation any of the organizational,
statutory or legal documents of the Authority or the Tribe, (B) default in
the performance of any bond, debenture, note, indenture, mortgage, deed of
trust note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Authority or the Tribe is
bound or any of their respective properties is subject, or (C) violation of
any local, tribal, state or federal law, statue, ordinance, rule,
regulation, requirement, judgment or court decree (including, without
limitation, any requirement, regulation or decree under the Indian Gaming
Regulatory Act of 1988 (collectively, "Gaming Regulations") applicable to
the Authority or any of its assets or properties (whether owned or
leased)), other than, in the case of clauses (B) and (C), any default or
violation that could not reasonably be expected to have a material adverse
effect on the Authority. To the best knowledge of the Authority, there
exists no condition that, with notice, the passage of time or otherwise,
would constitute a default under any such document or instrument.
(r) The historical financial statements and schedules of the Authority
included in the Final Memorandum present fairly in all material respects
the financial condition, results of operations and cash flows of the
Authority as of the dates and for the periods indicated, comply as to form
with the applicable accounting requirements of the Act and have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved (except as
otherwise noted therein); the selected financial data set forth under the
caption "Selected Financial Data" in the Final Memorandum fairly present,
on the basis stated in the Final Memorandum,
5
<PAGE>
the information included therein; the "As adjusted" financial information
included in the Final Memorandum includes assumptions that provide a
reasonable basis for presenting the significant effects directly
attributable to the transactions and events described therein, the related
"As adjusted" adjustments give appropriate effect to those assumptions, and
the "As adjusted" adjustments reflect the proper application of those
adjustments to the historical financial statement amounts in the "As
adjusted" financial information included in the Final Memorandum; the "As
adjusted" financial information included in the Final Memorandum complies
as to form in all material respects with the applicable accounting
requirements of Regulation S-X under the Act; and the "As adjusted"
adjustments have been properly applied to the historical amounts in the
compilation of that information.
(s) There is no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Authority, the Tribe or their respective property is pending or, to the
best knowledge of the Authority or the Tribe, threatened that (i) could
reasonably be expected to have a material adverse effect on the performance
of this Purchase Agreement, the Indentures, the Registration Rights
Agreements or the consummation of any of the transactions contemplated
hereby or thereby; or (ii) could reasonably be expected to have a material
adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Authority, except as set forth in
or contemplated in the Final Memorandum (exclusive of any amendment or
supplement thereto entered into after the date hereof).
(t) The Authority owns or leases all such properties as are necessary
to the conduct of its operations as presently conducted.
(u) The Authority is not (A) in violation any of the organizational,
statutory or legal documents of the Authority or the Tribe, (B) in default
in the performance of any bond, debenture, note, indenture, mortgage, deed
of trust note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Authority or the Tribe is
bound or any of their respective properties is subject, or (C) in violation
of any local, tribal, state or federal law, statue, ordinance, rule,
regulation, requirement, judgment or court decree (including, without
limitation, any Gaming Regulations applicable to the Authority or any of
its assets or properties (whether owned or leased)), other than, in the
case of clauses (B) and (C), any default or violation that could not
reasonably be expected to have a material adverse effect on the Authority.
To the best knowledge of the Authority, there exists no condition that,
with notice, the passage of time or otherwise, would constitute a default
under any such document or instrument other than a default that could not
reasonably be expected to have a material adverse effect.
(v) Arthur Andersen LLP, who have certified certain financial
statements of the Authority included in the Final Memorandum and delivered
their report with respect to the audited financial statements included in
the Final Memorandum, are independent public accountants with respect to
the Authority within the meaning of the Act and the applicable published
rules and regulations thereunder.
6
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(w) There are no stamp or other issuance or transfer taxes or duties
or other similar fees or charges required to be paid in connection with the
execution and delivery of this Purchase Agreement or the issuance or sale
by the Authority of the Securities.
(x) No action or proceeding with respect to any labor dispute with
employees of the Authority exists, or to the Authority's knowledge is
threatened or imminent.
(y) The Authority is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
prudent and customary in the businesses in which it is engaged; all
policies of insurance and fidelity or surety bonds insuring the Authority
or its business, assets, employees, officers and Management Board Members
are in full force and effect; the Authority is in compliance with the terms
of such policies and instruments in all material respects; and there are no
claims by the Authority under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of
rights clause; the Authority has not been refused any insurance coverage
sought or applied for; and the Authority has no reason to believe that it
will not be able to renew its existing insurance coverage as and when the
coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business at a cost that would not have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Authority whether or not
arising from transactions in the ordinary course of business, except as set
forth in or contemplated in the Final Memorandum (exclusive of any
amendment or supplement thereto).
(z) The Authority possesses all licenses, certificates, permits and
other authorizations issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct its business, and the Authority
has not received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect on the condition (financial
or otherwise), prospects, earnings, business or properties of the
Authority, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Final Memorandum
(exclusive of any amendment or supplement thereto).
(aa) The Authority maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
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(bb) The Authority (i) is in compliance with any and all applicable
tribal, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"); (ii) has received and is in compliance with all permits, licenses
or other approvals required of it under applicable Environmental Laws to
conduct its businesses; and (iii) has not received notice of any actual or
potential liability for the investigation or remediation of any disposal or
release of hazardous or toxic substances or wastes, pollutants or
contaminants; except where such non-compliance with Environmental Laws,
failure to receive required permits, licenses or other approvals, or
liability would not, individually or in the aggregate, have a material
adverse effect on the Authority, except as set forth in or contemplated in
the Final Memorandum (exclusive of any amendment or supplement thereto).
Except as set forth in the Final Memorandum, the Authority has not been
named as a "potentially responsible party" under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended.
(cc) In the ordinary course of its business, the Authority
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Authority, in the course of which it
identifies and evaluates associated costs and liabilities (including,
without limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws, or
any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties). On the basis of
such review, the Authority has reasonably concluded that such associated
costs and liabilities would not, singly or in the aggregate, have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Authority except as set
forth in or contemplated in the Final Memorandum (exclusive of any
amendment or supplement thereto).
(dd) The Authority owns, possesses, licenses or has other rights to
use on reasonable terms, all patents, patent applications, trade and
service marks, trade and service mark registrations, trade names,
copyrights, licenses, inventions, trade secrets, technology, know-how and
other intellectual property necessary for the conduct of its business as
now conducted or as proposed in the Final Memorandum to be conducted
(collectively, the "Intellectual Property"). Except as set forth in or
contemplated by the Final Memorandum (a) there are no rights of third
parties to any such Intellectual Property; (b) to the Authority's knowledge
there is no material infringement by third parties of any such Intellectual
Property; (c) there is no pending or, to the Authority`s knowledge,
threatened action, suit, proceeding or claim by others challenging the
Authority's rights in or to any such Intellectual Property, and the
Authority is unaware of any facts which would form a reasonable basis for
any such claim; (d) there is no pending or, to the Authority's knowledge,
threatened action, suit, proceeding or claim by others challenging the
validity or scope of any such Intellectual Property, and the Authority is
unaware of any facts which would form a reasonable basis for any such
claim; (e) there is no pending or, the Authority's knowledge threatened
action, suit, proceeding or claim by others that the Authority infringes or
otherwise violates any patent, trademark, copyright, trade secret or other
proprietary rights of others, and the Authority is unaware of any
8
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other fact which would form a reasonable basis for any such claim; (f) to
the Authority's knowledge, there is no U.S. patent or published U.S. patent
application which contains claims that dominate or may dominate any
Intellectual Property described in the Final Memorandum as being owned by
or licensed to the Authority or that interferes with the issued or pending
claims of any such Intellectual Property; and (g) there is no prior act of
which the Authority is aware that may render any U.S. patent held by the
Authority invalid or any U.S. patent application held by the Authority
unpatentable which has not been disclosed to the U.S. Patent and Trademark
Office.
(ee) The Authority has implemented a comprehensive, detailed program
to analyze and address the risk that the computer hardware and software
used by them may be unable to recognize and properly execute date-sensitive
functions involving certain dates prior to and any dates after December 31,
1999 (the "Year 2000 Problem"), and has determined that such risk will be
remedied on a timely basis and will not have a material adverse effect upon
the financial condition and results of operations of the Authority; and the
Authority believes, after due inquiry, that each supplier, vendor, customer
or financial service organization used or serviced by the Authority has
remedied or will remedy on a timely basis the Year 2000 Problem, except to
the extent that a failure to remedy by any such supplier, vendor, customer
or financial service organization would not have a material adverse effect
on the Authority. The Authority is in compliance with the Commission's
staff legal bulletin No. 5 dated January 12, 1998 related to Year 2000
compliance.
(ff) The statistical and market-related data included in the Final
Memorandum are based on or derived from sources which the Authority
believes to be reliable and accurate in all material respects.
Any certificate signed by any officer of the Authority and delivered to the
Representatives or counsel for the Initial Purchasers in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Authority (and not individually by such officer), as to matters covered thereby,
to each Initial Purchaser.
2. Purchase and Sale. Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Authority agrees
to sell to each Initial Purchaser, and each Initial Purchaser agrees, severally
and not jointly, to purchase from the Authority, at a purchase price of 8 1/8%
of the principal amount thereof with respect to the Senior Securities and at a
purchase price of 8 3/4% of the principal amount thereof with respect to the
Senior Subordinated Securities, in each case plus accrued interest, if any, from
February 24, 1999 to the Closing Date, the principal amount of such Securities
set forth opposite such Initial Purchaser's name in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the Securities shall
be made at 9:00 A.M., New York City time, on March 3, 1999, or at such time on
such later date (not later than March 10 1999) as the Representatives shall
designate, which date and time may be postponed by agreement between the
Representatives and the Authority or as provided in Section 9 hereof (such date
and time of delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Securities shall be made to the Representatives
for
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the respective accounts of the several Initial Purchasers against payment by the
several Initial Purchasers through the Representatives of the purchase price
thereof to or upon the order of the Authority by wire transfer payable in
same-day funds to the account specified by the Authority. Delivery of the
Securities shall be made through the facilities of The Depository Trust Company
unless the Representatives shall otherwise instruct.
4. Offering by Initial Purchasers. Each Initial Purchaser, severally and
not jointly, represents and warrants to and agrees with the Authority that:
(a) It has not offered or sold, and will not offer or sell, any
Securities except (i) to those it reasonably believes after due inquiry to
be qualified institutional buyers (as defined in Rule 144A under the Act)
and that, in connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of such Securities is aware
that such sale is being made in reliance on Rule 144A or (ii) in accordance
with the restrictions set forth in Exhibit A hereto.
(b) Neither it nor any of its Affiliates nor any person acting on its
or their behalf has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D) in connection with any
offer or sale of the Securities in the United States.
(c) Neither it nor any of its Affiliates nor any person acting on its
or their behalf has, directly or indirectly, made offers or sales of any
security, or solicited offers to buy any security, under circumstances that
would require the registration of the Securities under the Act.
5. Agreements. The Authority agrees with each Initial Purchaser that:
(a) The Authority will furnish to each Initial Purchaser and to
counsel for the Initial Purchasers, without charge, during the period
referred to in paragraph (c) below, as many copies of the Final Memorandum
and any amendments and supplements thereto as it may reasonably request.
(b) The Authority will not amend or supplement the Final Memorandum
without the prior written consent of the Representatives.
(c) If at any time prior to the completion of the sale of the
Securities by the Initial Purchasers (as determined by the
Representatives), any event occurs as a result of which the Final
Memorandum, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it should be necessary to amend
or supplement the Final Memorandum to comply with applicable law, the
Authority promptly (i) will notify the Representatives of any such event;
(ii) subject to the requirements of paragraph (b) of this Section 5, will
prepare an amendment or supplement that will correct such statement or
omission or effect such compliance; and (iii) will supply any supplemented
or amended Final Memorandum to the several Initial Purchasers and counsel
for the Initial Purchasers without charge in such quantities as you may
reasonably request.
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(d) The Authority will arrange, if necessary, for the qualification of
the Securities for sale by the Initial Purchasers under the laws of such
jurisdictions as the Initial Purchasers may designate and will maintain
such qualifications in effect so long as required for the sale of the
Securities; provided that in no event shall the Authority be obligated to
qualify to do business in any jurisdiction where it is not now so qualified
or to take any action that would subject it to service of process in suits,
other than those arising out of the offering or sale of the Securities, in
any jurisdiction where it is not now so subject. The Authority will
promptly advise the Representatives of the receipt by the Authority of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose.
(e) The Authority will not, and will not permit any of its Affiliates
to, resell any Securities that have been acquired by any of them.
(f) Neither the Authority nor any of its Affiliates, nor any person
acting on its behalf will, directly or indirectly, make offers or sales of
any Security, or solicit offers to buy any Security, under circumstances
that would require the registration of the Securities under the Act.
(g) Neither the Authority, nor any of its Affiliates, nor any person
acting on its behalf will engage in any form of general solicitation or
general advertising (within the meaning of Regulation D) in connection with
any offer or sale of the Securities in the United States.
(h) So long as any of the Securities are "restricted securities"
within the meaning of Rule 144(a)(3) under the Act, the Authority will,
during any period in which they are not subject to and in compliance with
Section 13 or 15(d) of the Exchange Act or they are not exempt from such
reporting requirements pursuant to and in compliance with Rule 12g3-2(b)
under the Exchange Act, provide to each holder of such restricted
securities and to each prospective purchaser (as designated by such holder)
of such restricted securities, upon the request of such holder or
prospective purchaser, any information required to be provided by Rule
144A(d)(4) under the Act. This covenant is intended to be for the benefit
of the holders, and the prospective purchasers designated by such holders,
from time to time of such restricted securities.
(i) So long as any of the Securities are outstanding, the Authority
will furnish to the Initial Purchasers (i) as soon as available, a copy of
each report of the Authority mailed to securityholders generally or filed
with any stock exchange or regulatory body and (ii) from time to time such
other information concerning the Authority as the Initial Purchasers may
reasonably request.
(j) Neither the Authority nor any of its Affiliates, nor any person
acting on its behalf will engage in any directed selling efforts with
respect to the Securities, and each of them will comply with the offering
restrictions requirement of Regulation S. Terms used in this paragraph have
the meanings given to them by Regulation S.
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(k) The Authority will cooperate with the Representatives and use its
best efforts to permit the Securities to be eligible for clearance and
settlement through The Depository Trust Company.
(l) The Authority will not for a period of 180 days following the
Execution Time, without the prior written consent of Salomon Smith Barney
Inc., offer, sell or contract to sell, or otherwise dispose of (or enter
into any transaction which is designed to, or might reasonably be expected
to, result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by the Authority
or any Affiliate of the Authority or any person in privity with the
Authority or any Affiliate of the Authority), directly or indirectly, or
announce the offering of, any debt securities issued or guaranteed by the
Authority (other than the Securities).
(m) The Authority will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any Security of the Authority to facilitate
the sale or resale of the Securities.
(n) The Authority agrees to pay the costs and expenses relating to the
following matters: (i) the preparation of the Indentures and the
Registration Rights Agreements, the issuance of the Securities and the fees
of the Trustee; (ii) the preparation, printing or reproduction of the
Preliminary Memorandum and Final Memorandum and each amendment or
supplement to either of them; (iii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting
and packaging) of such copies of the Preliminary Memorandum and Final
Memorandum, and all amendments or supplements to either of them, as may, in
each case, be reasonably requested for use in connection with the offering
and sale of the Securities; (iv) the preparation, printing, authentication,
issuance and delivery of certificates for the Securities, including any
stamp or transfer taxes in connection with the original issuance and sale
of the Securities; (v) the printing (or reproduction) and delivery of this
Purchase Agreement, any blue sky memorandum and all other agreements or
documents printed (or reproduced) and delivered in connection with the
offering of the Securities; (vi) any registration or qualification of the
Securities for offer and sale under the securities or blue sky laws of the
several states (including filing fees and the reasonable fees and expenses
of counsel for the Initial Purchasers relating to such registration and
qualification); (vii) admitting the Securities for trading in the PORTAL
Market; (viii) the transportation and other expenses incurred by or on
behalf of Authority representatives in connection with presentations to
prospective purchasers of the Securities; (ix) the fees and expenses of the
Authority's accountants and the fees and expenses of counsel (including
local and special counsel) for the Authority; and (x) all other costs and
expenses incident to the performance by the Authority of its obligations
hereunder.
(o) The Authority shall use the net proceeds received by it from the
sale of the Securities pursuant to this Purchase Agreement in the manner
specified in the Final Memorandum under the caption "Use of Proceeds."
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6. Conditions to the Obligations of the Initial Purchasers. The obligations
of the Initial Purchasers to purchase the Securities shall be subject to the
accuracy of the representations and warranties on the part of the Authority
contained herein at the Execution Time, the Closing Date and any settlement date
pursuant to Section 3 hereof to the accuracy of the statements of the Authority
made in any certificates pursuant to the provisions hereof, to the performance
by the Authority of its obligations hereunder and to the following additional
conditions:
(a) The Authority shall have requested and caused Hogan & Hartson LLP,
counsel for the Authority, to furnish to the Representatives its opinion,
dated the Closing Date and addressed to the Representatives, to the effect
that:
(i) the Tribe is a federally recognized Indian tribe with authority to
enter into and perform its obligations under the Agreements. The
Constitution of the Tribe, as amended and restated in its entirety and
approved on April 12, 1996 (the "Constitution"), is effective
according to its terms and is the law of the Tribe;
(ii) the Mohegan Tribal Council (the "Tribal Council") is the
governing body of the Tribe, with power to bind the Tribe and to cause
the Tribe to enter into the Agreements, except insofar as its power
regarding agreements relating to gaming was delegated to the Authority
by the 1995 Amendment, Article XIII, and Mohegan Ordinance No.
95-7/15-1, "An Ordinance Establishing the Mohegan Tribal Gaming
Authority" (the "Gaming Authority Ordinance"), which was adopted and
made effective July 15, 1995. The Tribal Council and other officers of
the Tribe and the Management Board and the other officers of the
Authority that have approved, authorized the execution, and executed
the Agreements and possess authority to execute the Agreements and to
bind the Tribe and Authority thereto;
(iii) the Senior Indenture and the Senior Subordinated Indenture have
each been duly authorized, executed and delivered on behalf of the
Tribe and the Authority, and each constitutes a valid and binding
obligation of the Authority and the Tribe, enforceable against the
Authority and the Tribe in accordance with its terms (except, as the
enforcement thereof may be limited by bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors' rights
(including, without limitation, the effect of statutory and other laws
regarding fraudulent conveyances, fraudulent transfers and
preferential transfers) and as may be limited by the exercise of
judicial discretion and the application of principles of equity
including, without limitation, requirements of good faith, fair
dealing, conscionability and materiality (regardless of whether the
Senior Indenture or Senior Subordinated Indenture is considered in a
proceeding at law or in equity) and conform in all material respects
to the descriptions thereof contained in the Final Memorandum under
the caption "Description of Notes;" the Senior Securities and the
Senior Subordinated Securities have
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each been duly authorized on behalf of the Authority and, assuming due
execution, authentication, issuance and delivery in accordance with
the provisions of the Senior Indenture or the Senior Subordinated
Indenture, as the case may be, will each constitute a valid and
binding obligation of the Authority entitled to the benefits of the
Senior Indenture or the Senior Subordinated Indenture, as the case may
be, in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors'
rights (including, without limitation, the effect of statutory and
other laws regarding fraudulent conveyances, fraudulent transfers and
preferential transfers) and as may be limited by the exercise of
judicial discretion and the application of principles of equity
including, without limitation, requirements of good faith, fair
dealing, conscionability and materiality (regardless of whether the
Senior Securities or Senior Subordinated Securities are considered in
a proceeding at law or in equity) and conform in all material respects
to the descriptions thereof contained in the Final Memorandum under
the caption "Description of Notes;" the Senior Registration Rights
Agreement and the Senior Subordinated Registration Rights Agreement
have each been duly authorized, executed and delivered on behalf of
the Authority and constitute a valid and binding obligation of the
Authority, enforceable in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors' rights
(including, without limitation, the effect of statutory and other laws
regarding fraudulent conveyances, fraudulent transfers and
preferential transfers) and as may be limited by the exercise of
judicial discretion and the application of principles of equity
including, without limitation, requirements of good faith, fair
dealing, conscionability and materiality (regardless of whether the
Senior Registration Rights Agreement or Senior Subordinated
Registration Rights Agreement is considered in a proceeding at law or
in equity) and conform in all material respects to the description
thereof contained in the Final Memorandum under the caption
"Description of Notes;"
(iv) the information in the Final Memorandum under the headings
"Certain Federal Income Tax Consequences," "Business--The Expansion,"
"Business--Environmental Matters," "Description of Other
Indebtedness," "Mohegan Tribe of Indians of Connecticut," "Government
Regulation" and "Other Material Agreements" insofar as such
information constitutes matters of law or legal conclusions, or
purports to describe certain provisions of specified documents, has
been reviewed by such counsel and is correct, in all material
respects;
(v) no consent, approval, authorization, filing with or order of any
federal court or governmental agency or body is required to be
obtained or made by the Authority or the Tribe in connection with the
execution, delivery or performance as of the date hereof by each of
the Authority or
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the Tribe of the Indentures and the Registration Rights Agreements
except (A) such as may be required under federal securities laws and
regulations or under the blue sky or securities laws of any
jurisdiction in connection with the purchase and sale of the
Securities by the Initial Purchasers in the manner contemplated in
this Purchase Agreement and the Final Memorandum and the Registration
Rights Agreements (B) such as may be required to be obtained or made
from or to the NIGC or its Chairman, the Secretary, or the BIA and
such other approvals (specified in such opinion) as have been
obtained;
(vi) the execution, delivery and performance as of the date hereof by
the Authority and the Tribe of the Indentures, this Purchase
Agreement, the Registration Rights Agreements, the issue and sale of
the Securities and the consummation as of the date hereof by the
Authority and the Tribe of the transactions contemplated thereby do
not (i) violate the Constitution, as amended, the Gaming Authority
Ordinance, Mohegan Ordinance No. 95-4 (adopted July 20, 1995), "An
Ordinance Establishing the Gaming Disputes Court" (the "Gaming
Disputes Court Ordinance"), the Mohegan Tribal Gaming Ordinance or the
Mohegan Compact; (ii) breach or constitute a default under certain
material contracts and agreements as enumerated by such counsel; or
(iii) to such counsel's knowledge, violate any federal statute or
regulation applicable to the Authority or the Tribe (other than
federal securities statutes and regulations, certain matters with
respect to which will be addressed elsewhere in such counsel's
opinion) or any existing judgment, order or decree of any court or
governmental agency that is binding on, the Authority or the Tribe;
(vii) assuming (A) the accuracy of the representations and warranties
of the Authority set forth in paragraphs (c), (d) and (e) in Section 1
of this Purchase Agreement and the Initial Purchasers set forth in
Section 4 of this Purchase Agreement, (B) the due performance by the
Authority of the covenants and agreements set forth in paragraphs (e),
(f), (g) and (j) of Section 5 of this Purchase Agreement and the due
performance by the Initial Purchasers of the covenants and agreements
set forth in Section 4 of this Purchase Agreement, (C) the Initial
Purchasers' compliance with the offering and transfer procedures
described in the Final Memorandum, (D) the accuracy of the
representations and warranties made in accordance with this Purchase
Agreement and the Final Memorandum by the Initial Purchasers and (E)
that each of the Initial Purchasers is either a "qualified
institutional buyer" as defined in Rule 144A of the Act or a person
who is not "U.S. person," in offers and sales outside the United
States made in reliance on Regulation S under the Act, it is not
necessary in connection with the offer, sale and delivery of the
Securities in the manner contemplated by this Purchase Agreement to
register the Securities under the Act or to qualify the Indentures
under the Trust Indenture Act of 1939,
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it being understood that no opinion need be expressed as to any resale
of Securities subsequent to the initial resale thereof by the Initial
Purchasers;
(viii) the Authority is not and, after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof
as described in the Final Memorandum, will not be an "investment
company" as defined in the Investment Company Act;
(ix) the waivers of sovereign immunity from unconsented suit by the
Tribe and the Authority contained in the Agreements, as applicable,
are in compliance in all material respects with applicable federal and
tribal law and constitute valid and binding obligations of the Tribe
and the Authority, enforceable against the Tribe and the Authority in
accordance with their respective terms (including, without limitation,
the effect of statutory and other laws regarding fraudulent
conveyances, fraudulent transfers and preferential transfers) and as
may be limited by the exercise of judicial discretion and the
application of principles of equity including, without limitation,
requirements of good faith, fair dealing, conscionability and
materiality (regardless of whether the Agreements are considered in a
proceeding at law or in equity);
(x) the choice of governing law by the Authority and the Tribe
contained in the Agreements is in compliance in all material respects
with applicable federal and tribal law and constitutes a valid and
binding obligation of the Tribe and the Authority, enforceable against
the Tribe and the Authority in accordance with its terms (including,
without limitation, the effect of statutory and other laws regarding
fraudulent conveyances, fraudulent transfers and preferential
transfers) and as may be limited by the exercise of judicial
discretion and the application of principles of equity including,
without limitation, requirements of good faith, fair dealing,
conscionability and materiality (regardless of whether the Agreements
are considered in a proceeding at law or in equity);
(xi) there is no requirement, under the Indian Gaming Regulatory Act
of 1988 that any Note Holder, solely in his or her capacity as a Note
Holder, apply for or receive any individual license, any individual
certificate, or any other individual authorization from any federal
authority to acquire or retain the rights of a Note Holder under the
Indentures; and
(xii) the Construction Reserve Disbursement Agreement has been duly
authorized, executed and delivered on behalf of the Authority and
Tribe and constitutes a valid and binding obligation of both the
Authority and the Tribe, enforceable against the Authority and the
Tribe in accordance with its terms, except as enforcement thereof may
be limited by bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights (including, without limitation,
the effect of statutory and other laws regarding fraudulent
conveyances, fraudulent
16
<PAGE>
transfers and preferential transfers) and as may be limited by the
exercise of judicial discretion and the application of principles of
equity including, without limitation, requirements of good faith, fair
dealing, conscionability and materiality (regardless of whether the
Construction Reserve Disbursement Agreement is considered in a
proceeding at law or in equity) and conform in all material respects
to the description thereof contained in the Final Memorandum under the
caption "Description of Notes."
Such counsel shall also indicate that while they have not undertaken to
determine independently and do not assume any responsibility for, the accuracy,
completeness, or fairness of the statements in the Final Memorandum, that no
facts have come to their attention which cause them to believe that (i) the
Final Memorandum, as of its date and as of the date hereof, contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, (ii) there are any
legal or governmental proceedings pending or threatened against the Tribe and
the Authority that are required to be disclosed in the Final Memorandum, other
than those disclosed therein, or (iii) there are any contracts or documents of a
character required to be described in the Final Memorandum that are not
described or referred to therein; provided that in making the foregoing
statements (which shall not constitute an opinion), such counsel need not
express any views as to the financial statements and supporting schedules and
other financial and statistical information and data included in or omitted from
the Final Memorandum.
In rendering such opinion, such counsel may rely as to matters of fact, to
the extent they deem proper on certificates of responsible officers of the
Authority and the Tribe. References to the Final Memorandum in this Section 6(a)
include any amendment or supplement thereto at the Closing Date.
(b) The Authority shall have requested and caused Rome McGuigan
Sabanosh, P.C., counsel for The Tribe, to furnish to the Representatives
its opinion, dated the Closing Date and addressed to the Representatives,
to the effect that:
(i) the Tribe is a federally recognized Indian tribe, with full
authority to enter into, and perform its obligations under, the
Agreements. The Constitution of the Tribe, amended and restated in its
entirety and approved on April 12, 1996 (the "Constitution"), was
validly adopted by the Tribe, is effective according to its terms, and
is the law of the Tribe;
(ii) the Tribal Council (the "Tribal Council") is the governing body
of the Tribe, with full power to bind the Tribe and to cause the Tribe
to enter into the Agreements, except insofar as its power regarding
agreements relating to gaming was delegated to the Authority by the
1995 Amendment to the Constitution, Article XIII, and Mohegan
Ordinance No. 95-7/15-1, "An Ordinance Establishing the Mohegan Tribal
Gaming Authority" (the "Gaming Authority Ordinance"), which was
adopted and made effective July 15, 1995. The Tribal Council and other
officers of the Tribe and the
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Management Board and the other officers of the Authority that have
approved, authorized the execution, and executed the Agreements, are
the duly elected or appointed officers of the Tribe and the Authority,
and possess full authority to execute the Agreements and to bind the
Tribe and Authority thereto;
(iii) the Gaming Authority Ordinance was validly adopted by the Tribal
Council, and is the governing law of the Tribe. The Authority is a
duly established and validly existing instrumentality of the Tribe;
(iv) the Mohegan Compact has been duly entered into and validly
authorized by the State of Connecticut and the Tribe, has been duly
approved by the Secretary of the Interior of the United States, such
approval has been duly published in the Federal Register, and no
further action is required to make the Mohegan Compact effective;
(v) the Mohegan Tribal Gaming Ordinance (the "Gaming Ordinance") was
validly adopted by the Tribal Council, and validly approved by the
National Indian Gaming Commission, and, as supplemented by the Gaming
Authority Ordinance and the Gaming Disputes Court Ordinance, is the
governing law of the Tribe;
(vi) the Gaming Disputes Court of the Tribe (the "Gaming Disputes
Court"), created by the Amendment to the Constitution and by Mohegan
Ordinance No. 95-4 (adopted July 20, 1995), "An Ordinance Establishing
the Gaming Disputes Court" (the "Gaming Disputes Court Ordinance"), is
a validly established judicial entity of the Tribe, having exclusive
jurisdiction for the Tribe over all disputes related to gaming on the
lands of the Tribe. The adoption by the Tribal Council in the Gaming
Disputes Ordinance of the rules of civil and appellate procedure, and
professional and judicial conduct, to govern the Gaming Disputes
Court, and the further adoption by the Tribal Council in "An Ordinance
Concerning Procedures for Appeal to the Gaming Disputes Court,"
Mohegan Ordinance No. 95-6 (adopted September 21, 1995) of procedures
for certain appeals to the Gaming Disputes Court, are valid and
effective acts of the Tribal Council, and those rules and procedures
are the law of the Tribe;
(vii) there is no requirement, under the Mohegan Compact, or the
Gaming Authority Ordinance, or the Gaming Ordinance, or any other law
of the Tribe, that any Note Holder, solely in his or her capacity as a
Note Holder, apply for or receive any individual license, any
individual certificate, or any other individual authorization from any
federal, state, or tribal governmental authority, to acquire or retain
the rights of a Note Holder under the Senior Indenture or the Senior
Subordinated Indenture; and
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<PAGE>
(viii) no consent, approval, authorization, filing with or order of
any tribal or Connecticut court or governmental agency or body is
required to be obtained or made by the Authority or the Tribe in
connection with the execution, delivery or performance as of the date
hereof by each of the Authority or the Tribe of the Senior Indenture,
the Senior Subordinated Indenture, the Senior Registration Rights
Agreement, the Senior Subordinated Registration Rights Agreement and
the Concurrent Transactions, except (A) such as may be required under
federal securities laws and regulations or under the blue sky or
securities laws of any jurisdiction in connection with the purchase
and sale of the Securities by the Initial Purchasers in the manner
contemplated in this Purchase Agreement and the Final Memorandum and
the Registration Rights Agreements (B) such as may be required to be
obtained or made from or to the NIGC or its Chairman, the Secretary,
or the BIA and such other approvals (specified in such opinion) as
have been obtained.
(c) Representatives shall have received from Latham & Watkins, counsel
for the Initial Purchasers, such opinion or opinions, dated the Closing
Date and addressed to the Representatives, with respect to the issuance and
sale of the Securities, the Indentures, the Registration Rights Agreements,
the Final Memorandum (as amended or supplemented at the Closing Date) and
other related matters as the Representatives may reasonably require, and
the Authority shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(d) The Authority shall have furnished to the Representatives a
certificate of the Authority, signed by the Chairman of the Management
Board dated the Closing Date to the effect that he has carefully examined
the Final Memorandum, any amendment or supplement to the Final Memorandum
and this Purchase Agreement and that:
(i) the representations and warranties of the Authority in this
Purchase Agreement are true and correct in all material respects on
and as of the Closing Date with the same effect as if made on the
Closing Date, and the Authority has complied with all the agreements
and satisfied all the conditions on their its part to be performed or
satisfied hereunder at or prior to the Closing Date;
(ii) since the date of the most recent financial statements included
in the Final Memorandum (exclusive of any amendment or supplement
thereto), there has been no material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties
of the Authority, whether or not arising from transactions on the
ordinary course of business except as set forth in or contemplated by
the Final Memorandum (exclusive of any amendment or supplement
thereto); and
(iii) no action has been taken and no statute, rule, regulation or
order has been enacted, adopted or issued by any governmental agency
which
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would, as of the date hereof, prevent the issuance of the Senior Notes
and the Senior Subordinated Notes. No action, suit or proceeding had
been commenced and is pending against or affecting or, to the best
knowledge of the Authority, threatened against the Authority before
any court or arbitrator or any governmental body, agency or official
that, if adversely determined, could reasonably be expected to result
in a material adverse effect on the Authority.
(e) At the Execution Time, the Representatives shall have received
from Arthur Andersen LLP, a letter, dated as of the Execution Time, in form
and substance satisfactory to the Representatives, confirming that they are
independent accountants within the meaning of the Act and the Exchange Act
and the applicable rules and regulations thereunder, containing statements
and information of the type ordinarily included in an accountant's "comfort
letters" to Representatives, delivered according to Statement of Auditing
Standards Nos. 72 and 76 (or any successor bulletins), with respect to the
audited and unaudited financial statements and certain financial
information contained in the Final Memorandum.
(f) At the Closing Date, the Representatives shall have received from
Arthur Andersen LLP, a "bring down comfort letter," dated as of the Closing
Date.
References to the Final Memorandum in Sections 6(e) - 6(f) include any
amendment or supplement thereto at the date of the applicable letter.
(g) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Final Memorandum (exclusive of any
amendment or supplement thereto), there shall not have been (i) any change
or decrease specified in the letter or letters referred to in paragraphs
(e) and (f) of this Section 6; or (ii) any change, or any development
involving a prospective change, in or affecting the condition (financial or
otherwise), prospects, earnings, business or properties of the Authority,
except as set forth in or contemplated in the Final Memorandum (exclusive
of any amendment or supplement thereto) the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the sole judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to market the Securities as contemplated by the Final
Memorandum (exclusive of any amendment or supplement thereto).
(h) The Securities shall have been designated as PORTAL-eligible
securities in accordance with the rules and regulations of the NASD, and
the Securities shall be eligible for clearance and settlement through The
Depositary Trust Company.
(j) Prior to the Closing Date, the Authority shall have furnished to
the Representatives such further information, certificates and documents as
the Representatives may reasonably request.
(k) The Authority shall have entered into (i) the Bank Credit
Facility; (ii) the Registration Rights Agreements; (iii) the Construction
Reserve Disbursement
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Agreement; (iv) the Indentures; and (v) the Initial Purchasers shall have
received executed counterparts thereof.
(l) The Authority shall have (i) purchased, simultaneous with the
Offering, all of the Authority's 13 1/2% Senior Secured Notes due 2002 with
Cash Flow Participation Interest (the "Existing Secured Notes") that were
tendered pursuant to the Offer to Purchase and Consent Solicitation, dated
as of January 15, 1999 (the "Offer to Purchase"), and the Initial
Purchasers shall have received such documentation as they may reasonably
request to evidence the purchase thereof and (ii) executed the Supplemental
Indenture, between the Authority and First Union National Bank, as
specified in the Offer to Purchase.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Purchase
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Purchase Agreement shall not be in all material respects
reasonably satisfactory in form and substance to the Representatives and counsel
for the Initial Purchasers, this Purchase Agreement and all obligations of the
Initial Purchasers hereunder may be canceled at, or at any time prior to, the
Closing Date by the Representatives. Notice of such cancellation shall be given
to the Authority in writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 will be delivered
at the office of counsel for the Initial Purchasers, at 885 Third Avenue, New
York, New York 10022 on the Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities provided for
herein is not consummated because any condition to the obligations of the
Initial Purchasers set forth in Section 6 hereof is not satisfied, because of
any termination pursuant to Section 10 hereof or because of any refusal,
inability or failure on the part of the Authority to perform any agreement
herein or comply with any provision hereof other than by reason of a default by
any of the Initial Purchasers, the Authority will reimburse the Initial
Purchasers severally through Salomon Smith Barney Inc. on demand for all
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the proposed purchase
and sale of the Securities.
8. Indemnification and Contribution.
(a) The Authority agrees to indemnify and hold harmless each Initial
Purchaser, the directors, officers, employees and agents of each Initial
Purchaser and each person who controls any Initial Purchaser within the meaning
of either the Act or the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Preliminary Memorandum, the Final Memorandum (or in any
supplement or amendment thereto) or any information provided by the Authority to
any holder or prospective purchaser of Securities pursuant to Section 5(h), or
in any amendment
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thereof or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Authority will
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made in the Preliminary
Memorandum or the Final Memorandum, or in any amendment thereof or supplement
thereto, in reliance upon and in conformity with written information relating to
an Initial Purchaser furnished to the Authority by or on behalf of any Initial
Purchaser through the Representatives specifically for inclusion therein; and
provided, further, that the foregoing indemnity agreement with respect to the
Final Memorandum shall not inure to the benefit of the Purchasers from whom the
person asserting or causing any such losses, claims, damages or liabilities
purchased Securities (or to the benefit of any person controlling any Initial
Purchaser or any directors, officers, employees and agents of any Initial
Purchaser), if a copy of the Final Memorandum (or the Final Memorandum as
amended or supplemented) (if the Authority shall have timely furnished the
Initial Purchasers with sufficient copies thereof) was not sent or given by or
on behalf of the Initial Purchasers to such person at or prior to the written
confirmation of the sale of the Securities to such person and if the Final
Memorandum (or the Final Memorandum as amended or supplemented) would have cured
the defect giving rise to such loss, claim, damage or liability. This indemnity
agreement will be in addition to any liability which the Authority may otherwise
have.
(b) Each Initial Purchaser severally and not jointly agrees to indemnify
and hold harmless the Authority, its directors, officers, and each controlling
person within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Authority to each Initial Purchaser,
but only with reference to written information relating to such Initial
Purchaser furnished to the Authority by or on behalf of such Initial Purchaser
through the Representatives specifically for inclusion in the Preliminary
Memorandum or the Final Memorandum (or in any amendment or supplement thereto).
This indemnity agreement will be in addition to any liability which any Initial
Purchaser may otherwise have. The Authority acknowledges that (i) the statements
set forth in the last paragraph of the cover page regarding the delivery of the
Securities, (ii) the legend on page (iii) concerning stabilization, syndicate
covering transactions and penalty bids and, the related disclosure under the
heading "Plan of Distribution," and (iii) the sentences related to concessions
and reallowances in the Preliminary Memorandum and the Final Memorandum,
constitute the only information furnished in writing by or on behalf of the
Initial Purchasers for inclusion in the Preliminary Memorandum or the Final
Memorandum (or in any amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses; and (ii) will not, in any
event,
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relieve the indemnifying party from any obligations to any indemnified party
other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel, which counsel shall be reasonably satisfactory to the
indemnified party, and the indemnifying party shall bear the reasonable fees,
costs and expenses of such separate counsel if (i) the use of counsel chosen by
the indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, in which case the indemnifying party may
select another counsel subject to this clause (i); (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party; (iii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution of
such action; or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 8 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Authority and the Initial Purchasers agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Authority and one or more
of the Initial Purchasers may be subject in such proportion as is appropriate to
reflect the relative benefits received by the Authority on the one hand and by
the Initial Purchasers on the other from the offering of the Securities;
provided, however, that in no case shall any Initial Purchaser (except as may be
provided in any agreement among the Initial Purchasers relating to the offering
of the Securities) be responsible for any amount in excess of the purchase
discount or commission applicable to the Securities purchased by such Initial
Purchaser hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Authority and the Initial Purchasers
shall contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Authority on the one hand
and of the Initial Purchasers on the other in connection with the statements or
omissions which resulted in such Losses, as well as any other relevant equitable
considerations. Benefits received by the Authority shall be deemed to be equal
to the total net proceeds from the offering (before deducting expenses) received
by them, and benefits received by the Initial Purchasers shall be deemed to be
equal to the total purchase discounts and commissions in each case set forth on
the
23
<PAGE>
cover of the Final Memorandum. Relative fault shall be determined by reference
to, among other things, whether any untrue or any alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information provided by the Authority on the one hand or the Initial
Purchasers on the other, the intent of the parties and their relative knowledge,
information and opportunity to correct or prevent such untrue statement or
omission. The Authority and the Initial Purchasers agree that it would not be
just and equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Initial Purchaser within the meaning
of either the Act or the Exchange Act and each director, officer, employee and
agent of an Initial Purchaser shall have the same rights to contribution as such
Initial Purchaser, and each person who controls the Authority within the meaning
of either the Act or the Exchange Act and each officer and director of the
Authority shall have the same rights to contribution as the Authority subject in
each case to the applicable terms and conditions of this paragraph (d).
9. Default by an Initial Purchaser. If any one or more Initial Purchasers
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Purchase Agreement, the remaining Initial Purchasers shall be obligated
severally to take up and pay for (in the respective proportions which the amount
of Securities set forth opposite their names in Schedule I hereto bears to the
aggregate amount of Securities set forth opposite the names of all the remaining
Initial Purchasers) the Securities which the defaulting Initial Purchaser or
Initial Purchasers agreed but failed to purchase; provided, however, that in the
event that the aggregate amount of Securities which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase shall exceed 10%
of the aggregate amount of Securities set forth in Schedule I hereto, the
remaining Initial Purchasers shall have the right to purchase all, but shall not
be under any obligation to purchase any, of the Securities, and if such
nondefaulting Initial Purchasers do not purchase all the Securities, this
Purchase Agreement will terminate without liability to any nondefaulting Initial
Purchaser or the Authority. In the event of a default by any Initial Purchaser
as set forth in this Section 9, the Closing Date shall be postponed for such
period, not exceeding five Business Days, as the Representatives shall determine
in order that the required changes in the Final Memorandum or in any other
documents or arrangements may be effected. Nothing contained in this Purchase
Agreement shall relieve any defaulting Initial Purchaser of its liability, if
any, to the Authority or any nondefaulting Initial Purchaser for damages
occasioned by its default hereunder.
10. Termination. This Purchase Agreement shall be subject to termination in
the absolute discretion of the Representatives, by notice given to the Authority
prior to delivery of and payment for the Securities, if at any time prior to
such time (i) trading in securities generally on the New York Stock Exchange
shall have been suspended or limited or minimum prices shall have been
established on such Exchange; (ii) a banking moratorium shall have been declared
either by Federal or New York State authorities; or (iii) there shall have
occurred any outbreak or escalation of hostilities, declaration by the United
States of a national emergency or war or other calamity or crisis the effect of
which on financial markets is such as to make it, in
24
<PAGE>
the sole judgment of the Representatives, impracticable or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Final Memorandum (exclusive of any amendment or supplement thereto).
11. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Authority
or its officers and of the Initial Purchasers set forth in or made pursuant to
this Purchase Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of the Initial Purchasers or the Authority or
any of the officers, directors or controlling persons referred to in Section 8
hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Purchase Agreement.
12. Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Representatives, will be mailed, delivered
or telefaxed to the Salomon Smith Barney Inc. General Counsel (fax no. (212)
816-7912) and confirmed to the General Counsel, Salomon Smith Barney Inc. at 388
Greenwich Street, New York, New York 10013 Attention: General Counsel; or, if
sent to the Authority, will be mailed, delivered or telefaxed to the Mohegan
Tribal Gaming Authority, (fax no. (860) 204-7167), 1 Mohegan Sun Boulevard,
Uncasville, CT 06382, Attn: Roland J. Harris.
13. No Personal Liability. Neither the Tribe nor any director, officer,
office holder, employee or agent, representative or member of the Authority or
the Tribe or holder of an ownership interest of the Authority or the Tribe, as
such in their individual capacities, shall have any liability for any
obligations of the Authority or the Tribe under this Purchase Agreement.
14. 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
consent to the enforcement and execution of any judgment, whether obtained as a
result of judicial, administrative, or arbitrational proceeding, against any
assets of the Authority. Subject to the foregoing, the Tribe and Authority waive
their respective 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 Purchase Agreement and to enforce and execute any
judgment resulting therefrom against the Authority or the assets of the
Authority. Notwithstanding any provisions 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 to out of this Purchase
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 Purchase 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
25
<PAGE>
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. ss. 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 rule 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 Purchase Agreement and to award and enforce the award of any
damages against the Authority 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.
15. Successors. This Purchase Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and,
except as expressly set forth in Section 5(h) hereof, no other person will have
any right or obligation hereunder.
16. Applicable Law. This Purchase Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
17. Counterparts. This Purchase Agreement may be executed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.
18. Headings. The section headings used herein are for convenience only and
shall not affect the construction hereof.
19. Definitions. The terms which follow, when used in this Purchase
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
"Affiliate" shall have the meaning specified in Rule 501(b) of Regulation
D.
"Agreements" shall mean the Indentures, the Registration Rights Agreements
and the Construction Reserve Disbursement Agreement.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in The City of New York.
26
<PAGE>
"Closing Date" shall mean March 3, 1999.
"Commission" shall mean the Securities and Exchange Commission.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Execution Time" shall mean, the date and time that this Purchase Agreement
is executed and delivered by the parties hereto.
"Investment Company Act" shall mean the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Regulation D" shall mean Regulation D under the Act.
"Regulation S" shall mean Regulation S under the Act.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission promulgated thereunder.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
Purchase Agreement and your acceptance shall represent a binding agreement
between the Authority and the several Initial Purchasers.
[Purchase Agreement Signature Pages Follow]
27
<PAGE>
Very truly yours,
Mohegan Tribal Gaming Authority
By
--------------------------------------
Name: Roland J. Harris
Title: Chairman
28
<PAGE>
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Smith Barney Inc.
By: Salomon Smith Barney Inc.
By
-------------------------------
Name:
Title:
For themselves and the other several Initial
Purchasers named in Schedule I to
the foregoing Agreement.
29
<PAGE>
Accepted and Agreed to as of the date above written
MOHEGAN TRIBE OF INDIANS OF CONNECTICUT
By
-------------------------------
Roland J. Harris
Chair of Tribal Council
30
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Principal Amount of Senior
Initial Purchasers Securities to be Purchased
- ------------------ --------------------------
<S> <C>
Salomon Smith Barney Inc............................ $130,000,000
NationsBanc Montgomery Securities LLC............... $ 35,000,000
SG Cowen Securities Corporation..................... $ 15,000,000
Bear, Stearns & Co. Inc. ........................... $ 10,000,000
BancBoston Robertson Stephens Inc. ................. $ 5,000,000
Fleet Securities, Inc. $ 5,000,000
------------
Total.................... $200,000,000
<CAPTION>
Principal Amount of Senior
Initial Purchasers Subordinated Securities
- ----------------- to be Purchased
--------------------------
<S> <C>
Salomon Smith Barney Inc............................ $195,000,000
NationsBanc Montgomery Securities LLC............... $ 52,500,000
SG Cowen Securities Corporation..................... $ 22,500,000
Bear, Stearns & Co. Inc............................. $ 15,000,000
BancBoston Robertson Stephens Inc................... $ 7,500,000
Fleet Securities, Inc. $ 7,500,000
------------
Total.................... $300,000,000
</TABLE>
31
<PAGE>
EXHIBIT A
Selling Restrictions for Offers and
Sales outside the United States
(1)
(a) The Securities have not been and will not be registered under the Act
and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except in accordance with Regulation S under
the Act or pursuant to an exemption from the registration requirements of the
Act. Each Initial Purchaser represents and agrees that, except as otherwise
permitted by Section 4(a)(i) of the Agreement to which this is an exhibit, it
has offered and sold the Securities, and will offer and sell the Securities, (i)
as part of their distribution at any time; and (ii) otherwise until 40 days
after the later of the commencement of the offering and the Closing Date, only
in accordance with Rule 903 of Regulation S under the Act. Accordingly, each
Initial Purchaser represents and agrees that neither it, nor any of its
Affiliates nor any person acting on its or their behalf has engaged or will
engage in any directed selling efforts with respect to the Securities, and that
it and they have complied and will comply with the offering restrictions
requirement of Regulation S. Each Initial Purchaser agrees that, at or prior to
the confirmation of sale of Securities (other than a sale of Securities pursuant
to Section 4(a)(i) of the Agreement to which this is an exhibit), it shall have
sent to each distributor, dealer or person receiving a selling concession, fee
or other remuneration that purchases Securities from it during the distribution
compliance period a confirmation or notice to substantially the following
effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Act") and may not be offered or sold within
the United States or to, or for the account or benefit of, U.S. persons (i)
as part of their distribution at any time or (ii) otherwise until 40 days
after the later of the commencement of the offering and February __, 1999,
except in either case in accordance with Regulation S or Rule 144A under
the Act. Terms used above have the meanings given to them by Regulation S."
(b) Each Initial Purchaser also represents and agrees that it has not
entered and will not enter into any contractual arrangement with any distributor
with respect to the distribution of the Securities, except with its Affiliates
or with the prior written consent of the Authority.
(c) Terms used in this section have the meanings given to them by
Regulation S.
(2) Each Initial Purchaser represents and agrees that (i) it has not
offered or sold, and will not offer or sell, in the United Kingdom, by means of
any document, any Securities other than to persons whose ordinary business it is
to buy or sell shares or debentures, whether as principal or as agent (except in
circumstances which do not constitute an offer to the public within the meaning
of the Companies Act 1989 of Great Britain); (ii) it has complied and will
comply with all applicable provisions of the Financial Services Act 1986 of the
United Kingdom
A-1
<PAGE>
with respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom; and (iii) it has only issued or passed
on and will only issue or pass on in the United Kingdom any document received by
it in connection with the issue of the Securities to a person who is of a kind
described in Article 9(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom the document may
otherwise lawfully be issued or passed on.
A-2
<PAGE>
Exhibit 4.3
- --------------------------------------------------------------------------------
MOHEGAN TRIBAL GAMING AUTHORITY
ISSUER
$200,000,000
in aggregate principal amount
8 1/8% SENIOR NOTES DUE 2006
----------
INDENTURE
Dated as of March 3, 1999
----------
Mohegan Tribal Gaming Authority of the Mohegan Tribe of Indians of Connecticut
Mohegan Tribe of Indians of Connecticut
----------
First Union National Bank
Trustee
----------
- --------------------------------------------------------------------------------
Senior Notes
<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)(2).................................................... 7.06
(c)....................................................... 7.06; 11.02
(d)....................................................... 7.06
314(a)....................................................... 4.03; 11.05
(c)(1).................................................... 11.04
(c)(2).................................................... 11.04
(c)(3).................................................... N.A.
(e)....................................................... 11.05
(f)....................................................... NA
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)....................................................... N.A.
(c)....................................................... 2.12
317(a)(1).................................................... 6.08
(a)(2).................................................... 6.09
(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.
Senior Notes
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE
<S> <C>
Section 1.01. Definitions..................................................................1
Section 1.02. Other Definitions...........................................................20
Section 1.03. Incorporation by Reference of Trust Indenture Act...........................21
Section 1.04. Rules of Construction.......................................................21
ARTICLE 2 THE SENIOR NOTES
Section 2.01. Form and Dating.............................................................22
Section 2.02. Execution and Authentication................................................23
Section 2.03. Registrar and Paying Agent..................................................23
Section 2.04. Paying Agent to Hold Money in Trust.........................................24
Section 2.05. Holder Lists................................................................24
Section 2.06. Transfer and Exchange.......................................................24
Section 2.07. Replacement Senior Notes....................................................35
Section 2.08. Outstanding Senior Notes....................................................36
Section 2.09. Treasury Senior Notes.......................................................36
Section 2.10. Temporary Senior Notes......................................................36
Section 2.11. Cancellation................................................................36
Section 2.12. Defaulted Interest..........................................................37
Section 2.13. CUSIP Numbers...............................................................37
ARTICLE 3 REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee..........................................................37
Section 3.02. Selection of Senior Notes to Be Redeemed....................................37
Section 3.03. Notice of Redemption........................................................38
Section 3.04. Effect of Notice of Redemption..............................................38
Section 3.05. Deposit of Redemption Price.................................................39
Section 3.06. Senior Notes Redeemed in Part...............................................39
Section 3.07. Optional Redemption.........................................................39
Section 3.08. Redemption Pursuant to Gaming Law...........................................39
Section 3.09. Mandatory Redemption........................................................40
Section 3.10. Offer to Purchase by Application of Excess Proceeds.........................40
ARTICLE 4 COVENANTS
Section 4.01. Payment of Senior Notes.....................................................42
Section 4.02. Maintenance of Office or Agency.............................................42
Section 4.03. Reports.....................................................................42
Section 4.04. Compliance Certificate......................................................43
Section 4.05. Taxes.......................................................................44
Section 4.06. Stay, Extension and Usury Laws..............................................44
Section 4.07. Restricted Payments.........................................................44
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries..............46
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock..................47
Section 4.10. Asset Sales.................................................................49
Section 4.11. Transactions with Affiliates................................................50
</TABLE>
i
Senior Notes
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
Section 4.12. Liens.......................................................................51
Section 4.13. Line of Business............................................................51
Section 4.14. Existence of the Authority and Maintenance of the Lease.....................51
Section 4.15. Offer to Repurchase Upon Change of Control..................................51
Section 4.16. Limitation on Sale and Leaseback Transactions...............................52
Section 4.17. Limitation on Issuances and Sales of Equity Interests
in Wholly Owned Restricted Subsidiaries...................................53
Section 4.18. Limitation on Issuances of Senior Guarantees of Indebtedness................53
Section 4.19. Payments for Consent........................................................53
Section 4.20. Senior Subsidiary Guarantees................................................53
Section 4.21. Ownership Interests in the Authority........................................54
Section 4.22. Subordination of Junior Payments Under the Relinquishment Agreement.........54
Section 4.23. Construction................................................................54
Section 4.24. Restrictions on Leasing and Dedication of Property..........................54
Section 4.25. Maintenance of Insurance....................................................55
Section 4.26. Changes in Covenants when Senior Notes Rated Investment Grade...............55
Section 4.27. Gaming Licenses.............................................................56
Section 4.28. Required Defeasance and Redemption of the Junior Subordinated Notes.........57
Section 4.29. Designation of Designated Senior Indebtedness Under
the Relinquished Agreement...............................................57
ARTICLE 5 SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets....................................56
ARTICLE 6 DEFAULTS AND REMEDIES
Section 6.01. Events of Default...........................................................56
Section 6.02. Acceleration................................................................58
Section 6.03. Other Remedies..............................................................59
Section 6.04. Waiver of Past Defaults.....................................................59
Section 6.05. Control by Majority.........................................................59
Section 6.06. Limitation on Suits.........................................................59
Section 6.07. Rights of Holders of Senior Notes to Receive Payment........................60
Section 6.08. Collection Suit by Trustee..................................................60
Section 6.09. Trustee May File Proofs of Claim............................................60
Section 6.10. Priorities..................................................................61
Section 6.11. Undertaking for Costs.......................................................61
ARTICLE 7 TRUSTEE
Section 7.01. Duties of Trustee...........................................................61
Section 7.02. Rights of Trustee...........................................................62
Section 7.03. Individual Rights of Trustee................................................63
Section 7.04. Trustee's Disclaimer........................................................63
Section 7.05. Notice of Defaults..........................................................63
Section 7.06. Reports by Trustee to Holders of the Senior Notes...........................63
Section 7.07. Compensation and Indemnity..................................................64
Section 7.08. Replacement of Trustee......................................................65
Section 7.09. Successor Trustee by Merger, etc............................................66
Section 7.10. Eligibility; Disqualification...............................................66
Section 7.11. Preferential Collection of Claims Against Authority.........................66
</TABLE>
ii
Senior Notes
<PAGE>
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE
<TABLE>
<CAPTION>
Page
<S> <C>
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance....................66
Section 8.02. Legal Defeasance and Discharge..............................................66
Section 8.03. Covenant Defeasance.........................................................67
Section 8.04. Conditions to Legal or Covenant Defeasance..................................67
Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions............................................68
Section 8.06. Repayment to Authority......................................................69
Section 8.07. Reinstatement...............................................................69
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Senior Notes..................................70
Section 9.02. With Consent of Holders of Senior Notes.....................................70
Section 9.03. Compliance with Trust Indenture Act.........................................72
Section 9.04. Revocation and Effect of Consents...........................................72
Section 9.05. Notation on or Exchange of Senior Notes.....................................72
Section 9.06. Trustee to Sign Amendments, etc.............................................72
ARTICLE 10 COVENANTS OF THE TRIBE
Section 10.01. Covenants of the Tribe.....................................................73
Section 10.02. Additional Covenants of the Tribe..........................................73
ARTICLE 11 MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls...............................................75
Section 11.02. Notices....................................................................75
Section 11.03. Communication by Holders of Senior Notes with Other
Holders of Senior Notes.................................................76
Section 11.04. Certificate and Opinion as to Conditions Precedent.........................76
Section 11.05. Statements Required in Certificate or Opinion..............................77
Section 11.06. Rules by Trustee and Agents................................................77
Section 11.07. Dispute Resolution and Consent to Suit.....................................77
Section 11.08. No Personal Liability of Directors, Officers, Employees
and Stockholders........................................................78
Section 11.09. Governing Law..............................................................78
Section 11.10. No Adverse Interpretation of Other Agreements..............................78
Section 11.11. Successors.................................................................78
Section 11.12. Severability...............................................................79
Section 11.13. Counterpart Originals......................................................79
Section 11.14. Table of Contents, Headings, etc...........................................79
</TABLE>
iii
Senior Notes
<PAGE>
Page
EXHIBITS
Exhibit A-1 FORM OF NOTE
Exhibit A-2 FORM OF REGULATION S TEMPORARY GLOBAL SENIOR NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF NOTATION OF SUBSIDIARY GUARANTEE ON SENIOR NOTE
Exhibit E FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT
SUBSIDIARY GUARANTORS
iv
Senior Notes
<PAGE>
INDENTURE dated as of March 3, 1999 among the Mohegan Tribal Gaming
Authority of the Mohegan Tribe of Indians of Connecticut (the "Authority"), the
Mohegan Tribe of Indians of Connecticut (the "Tribe"), and First Union National
Bank, as trustee (the "Trustee").
The Authority and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of the 81/8% Senior
Notes due 2006:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.
"144A Global Senior Note" means a global senior note substantially in the
form of Exhibit A-1 hereto bearing the Global Senior Note Legend and the Private
Placement Legend and deposited with or on behalf of, and registered in the name
of, the Depositary or its nominee that will be issued in a denomination equal to
the outstanding principal amount of the Senior Notes sold in reliance on Rule
144A.
"Acquired Indebtedness" means, with respect to any specified Person: (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person; and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Additional Interest" means all Additional Interest then owing pursuant to
the terms of the Senior Notes.
"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,"
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. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" shall have
correlative meanings.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Premium" means, for any redeemed Senior Note, the excess of:
(i) the present value at the date of redemption of 100% of the principal amount
of such Senior Note plus all required interest payments due on such Senior Note
through its Stated Maturity date (excluding accrued but unpaid interest),
calculated using a discount rate equal to the Treasury Rate plus 50 basis points
over (ii) the principal amount of such Senior Note, if greater.
"Applicable Procedures" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Senior Note, the rules and procedures
of the Depositary, Euroclear and Cedel that apply to such transfer or exchange.
"Asset Sale" means: (i) the sale, lease, conveyance or other disposition of
any assets or rights (including, without limitation, by way of a sale and
leaseback) other than sales of inventory in the
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ordinary course of business consistent with past practices; provided that the
sale, lease, conveyance or other disposition of all or substantially all of the
assets of the Authority and its Restricted Subsidiaries taken as a whole will be
governed by Section 4.15 and not Section 4.10; and (ii) the issuance by the
Authority or any of its Restricted Subsidiaries of Equity Interests of any of
the Authority's or its Restricted Subsidiaries' Restricted Subsidiaries or the
sale by the Authority or any of its Subsidiaries of any Equity Interests in any
of their respective Subsidiaries.
Notwithstanding the preceding, the following items shall not be deemed to
be Asset Sales: (i) any single transaction or series of related transactions
that: (a) involves assets having a fair market value of less than $1.0 million;
or (b) results in net proceeds to the Authority and its Restricted Subsidiaries
of less than $1.0 million; (ii) a transfer of assets between or among the
Authority and its Wholly Owned Restricted Subsidiaries; (iii) an issuance of
Equity Interests by a Wholly Owned Restricted Subsidiary to the Authority or to
another Wholly Owned Restricted Subsidiary; (iv) a Restricted Payment or
Permitted Investment that is permitted by Section 4.07; (v) any Event of Loss;
and (vi) any lease or sublease permitted by Section 4.24.
"Attributable Debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value of the obligation of the lessee
for net rental payments during the remaining term of the lease included in such
sale and leaseback transaction including any period for which such lease has
been extended (or may, at the option of the lessor, be extended). Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.
"Attributable Value" means, with respect to any sale and leaseback
transaction, as of the time of determination, the total obligation (discounted
to present value at the rate of interest equal to that of the terms of the
Senior Notes, compounded semi-annually) of the lessee for rental payments (other
than amounts required to be paid on account of property taxes) during the
remaining portion of the base terms of the lease included in such sale and
leaseback transaction.
"Authority" means the Mohegan Tribal Gaming Authority together with any
subdivision, agency or subunit that has no separate legal existence from the
Mohegan Tribal Gaming Authority, and any successor and assignee thereto.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"BIA" means the Bureau of Indian Affairs.
"Broker-Dealer" has the meaning set forth in the Senior Registration Rights
Agreement.
"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 on a balance sheet in accordance with
GAAP.
"Capital Stock" means: (i) in the case of a corporation, corporate stock;
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock; (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited); and
(iv) any other interest or
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participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person, but
excluding any interest under the Relinquishment Agreement.
"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 (provided that the full faith and credit
of the United States is pledged in support 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 lender party to the Credit
Facilities or with any domestic commercial bank having capital and surplus in
excess of $500 million and a Thompson Bank Watch Rating of "B" or better; (iv)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (ii) and (iii) above entered into
with any financial institution meeting the qualifications specified in clause
(iii) above; (v) commercial paper having one of the two highest ratings
obtainable from Moody's or S&P and in each case maturing within six months after
the date of acquisition; and (vi) money market funds at least 95% of the assets
of which constitute Cash Equivalents of the kinds described in clauses (i) - (v)
of this definition.
"Cedel" means Cedel Bank, SA.
"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; or (iv) the
Authority sells, assigns, transfers, leases, conveys or otherwise disposes of
all or substantially all of its assets to, or consolidates or merges with or
into any other Person.
"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.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus:
(i) an amount equal to any extraordinary loss (including, without
limitation, any non-cash charges or losses arising from adjustments
relating to the Relinquishment Agreement) plus any net loss realized
in connection with an Asset Sale, to the extent such losses were
deducted in computing such Consolidated Net Income; plus
(ii) provision for taxes based on the income or profits of such Person and
its Subsidiaries for such period, to the extent that such provision
for taxes was included in computing such Consolidated Net Income; plus
(iii) consolidated interest expense of such Person and its Subsidiaries for
such period, whether paid or accrued (including, without limitation,
amortization of debt issuance costs and original issue discount,
non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated
with Capital Lease Obligations, imputed interest with respect to
Attributable Debt,
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commissions, discounts and other fees and charges incurred in respect
of letter of credit or bankers' acceptance financings, and net
payments, if any, pursuant to Hedging Obligations) but excluding
interest expense on the Junior Subordinated Notes, to the extent that
any such expense was deducted in computing such Consolidated Net
Income; plus
(iv) depreciation, amortization (including amortization of goodwill and
other intangibles, but excluding amortization of prepaid cash expenses
that were paid in a prior period), non-cash charges associated with
equity option plans and other non-cash expenses (excluding any such
non-cash expense to the extent that it represents an accrual of or
reserve for cash expenses in any future period or amortization of a
prepaid cash expense that was paid in a prior period) of such Person
and its Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash expenses were deducted
in computing such Consolidated Net Income; minus
(v) non-cash items increasing such Consolidated Net Income for such period
(including, without limitation, any non-cash items arising from
adjustments relating to the Relinquishment Agreement); minus
(vi) to the extent not included in computing such Consolidated Net Income,
any revenues received or accrued by the Authority or any of its
Subsidiaries from any Person (other than the Authority or any of its
Subsidiaries) in respect of any Investment for such period,
all determined on a consolidated basis and in accordance with GAAP.
Notwithstanding the preceding, the provision for taxes based on the income
or profits of, and the depreciation and amortization and other non-cash charges
of, a Subsidiary of a Person shall be added to Consolidated Net Income to
compute Consolidated Cash Flow only to the extent (and in the same proportion)
that the Net Income of such Subsidiary was included in calculating the
Consolidated Net Income of such Person and only if a corresponding amount would
be permitted at the date of determination to be dividended to such Person by
such Subsidiary without prior approval (that has not been obtained), pursuant to
the terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to that
Subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP,
provided that:
(i) the Net Income of any Person that is not a Restricted Subsidiary
or that is accounted for by the equity method of accounting shall
be included only to the extent of the amount of dividends or
distributions paid in cash to the specified Person or a Wholly
Owned Restricted Subsidiary thereof;
(ii) the Net Income of any Restricted Subsidiary shall be excluded to
the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is
not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree,
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order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders;
(iii) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition
shall be excluded;
(iv) the cumulative effect of a change in accounting principles shall
be excluded;
(v) the Net Income shall be reduced by the amount of payments pursuant
to the Relinquishment Agreement, paid or payable, for such period
based on 5% of the revenues (as defined in the Relinquishment
Agreement) generated in such period; and
(vi) both the interest income related to the Defeasance Trust and the
interest expense on the Junior Subordinated Notes shall be
excluded so long as the payment of principal, premium and interest
on the Junior Subordinated Notes at redemption on January 1, 2000
is fully covered by the amounts of the Defeasance Trust.
"Consolidated Net Tangible Assets" means, with respect to the Authority and
its Restricted Subsidiaries, taken as a whole, the aggregate amount of assets
(less applicable reserves and other items deducted in accordance with GAAP)
after deducting therefrom (a) all liabilities (other than liabilities incurred
with respect to the Relinquishment Agreement) and (b) all goodwill, trade names,
trademarks, patents, organization expenses and other like intangibles of the
Authority and its Restricted Subsidiaries, in each case, to the extent included
in the total amount of all assets, all as set forth on the most recent
consolidated balance sheet of the Authority and its Restricted Subsidiaries and
calculated in accordance with GAAP.
"Construction Reserve Disbursement Agreement" means that certain agreement,
dated the date hereof, among the Authority, the Tribe and Fleet National Bank,
as escrow agent, regarding the disbursement of a $40 million reserve account to
pay certain costs in excess of the construction budget.
"Consumer Price Index" means the Consumer Price Index for All Urban
Consumers (CPI-U) for the U.S. City Average for All Items, 1982-1984=100 as
compiled and released by the Bureau of Labor Statistics.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.02 hereof or such other address as to which the
Trustee may give notice to the Authority.
"Credit Facilities" means, with respect to the Authority or any Restricted
Subsidiary, one or more debt facilities (including, without limitation, the Loan
Agreement) or commercial paper facilities with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
of credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time. Indebtedness under
Credit Facilities outstanding on the date on which Senior Notes are first issued
and authenticated under this Indenture shall be deemed to have been incurred on
such date in reliance on the exception provided by Section 4.09(b)(i).
"Custodian" means the Trustee, as custodian with respect to the Senior
Notes in global form, or any successor entity thereto.
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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.
"Defeasance Trust" means that certain trust established pursuant to Section
12.04(a) of the Note Purchase Agreement under which the Junior Subordinated
Notes were issued for the covenant defeasance of the Junior Subordinated Notes
to their redemption date on January 1, 2000.
"Definitive Senior Note" means a certificated Senior Note registered in the
name of the Holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of Exhibit A-1 hereto except that such Senior Note
shall not bear the Global Senior Note Legend and shall not have the "Schedule of
Exchanges of Interests in the Global Senior Note" attached thereto.
"Depositary" means, with respect to the Senior Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Senior Notes, and any and all successors
thereto appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Development Services Agreement" means that certain Development Services
Agreement dated February 7, 1998 among the Authority, the Tribe and TCA.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, at the option of the holder thereof), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder thereof, in
whole or in part, on or prior to the date that is after the date on which the
Senior Notes mature; provided, however, that any Capital Stock that would
constitute Disqualified Stock solely because the holders thereof have the right
to require the Authority to repurchase such Capital Stock upon the occurrence of
a Change of Control or an Asset Sale shall not constitute Disqualified Stock if
the terms of such Capital Stock provide that the Authority may not repurchase or
redeem any such Capital Stock pursuant to such provisions unless such repurchase
or redemption complies with Section 4.07.
"Distribution Compliance Period" has the same meaning as defined in
Regulation S.
"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).
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
"Event of Loss" means, with respect to any property or asset (tangible or
intangible, real or personal), any of the following: (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.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" has the meaning set forth in the Senior Registration
Rights Agreement.
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"Exchange Offer Registration Statement" has the meaning set forth in the
Senior Registration Rights Agreement.
"Existing Indebtedness" means up to $617.8 million in aggregate original
principal amount of Indebtedness of the Authority (other than Indebtedness under
the Loan Agreement) in existence on the date of this Indenture, until such
amounts are repaid.
"Existing Secured Notes" means the Authority's 13 1/2% Senior Secured Notes
due 2002 with Cash Flow Participation Interest.
"Expansion Project" means the project to expand the existing Mohegan Sun
casino as more fully described in the Authority's Offering Memorandum, dated
February 24, 1999.
"Financing Lease" means any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.
"Fixed Charges" means, with respect to any Person for any period, the sum,
without duplication, of:
(i) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued,
including, without limitation, amortization of debt issuance costs
and original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease
Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings, and
net payments, if any, pursuant to Hedging Obligations but
excluding interest expense on the Junior Subordinated Notes so
long as the principal, premium and interest thereon at redemption
on January 1, 2000 are covered by amounts in the Defeasance Trust;
plus
(ii) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus
(iii) any interest expense on Indebtedness of another Person that is
guaranteed by such Person or one of its Restricted Subsidiaries or
secured by a Lien on assets of such Person or one of its
Restricted Subsidiaries, whether or not such guarantee or Lien is
called upon; plus
(iv) the product of (a) all cash dividend payments or other
distributions (and non-cash dividend payments in the case of a
Person that is a Restricted Subsidiary) on any series of preferred
equity of such Person, times (b) a fraction, the numerator of
which is one and the denominator of which is one minus the then
current combined federal, state and local statutory tax rate of
such Person, expressed as a decimal, in each case, on a
consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means, with respect to any specified Person
for any period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Fixed Charges of such Person for such period. In the event that
the specified Person or any of its Restricted Subsidiaries incurs, assumes,
guarantees, repays or redeems any Indebtedness (other than revolving credit
borrowings) or
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issues or redeems preferred stock subsequent to the commencement of the period
for which the Fixed Charge Coverage Ratio is being calculated but prior to the
date on which 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, repayment or redemption of Indebtedness, or such issuance or
redemption of preferred stock, as if the same had occurred at the beginning of
the applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(i) acquisitions that have been made by the specified Person or any of
its Restricted Subsidiaries, including through mergers or
consolidations and including any related financing transactions,
during the four-quarter reference period or subsequent to such
reference period and on or prior to the Calculation Date shall be
deemed to have occurred on the first day of the four-quarter
reference period and Consolidated Cash Flow for such reference
period shall be calculated without giving effect to clause (iii)
of the proviso set forth in the definition of Consolidated Net
Income;
(ii) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be
excluded; and
(iii) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded, but
only to the extent that the obligations giving rise to such Fixed
Charges will not be obligations of the specified Person or any of
its Restricted Subsidiaries following the Calculation Date.
"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 ("FASB") or in such other statements by
such other entity as have been approved by a significant segment of the
accounting profession, which are in effect on the date of this Indenture.
"Gaming" means any and all activities defined as Class II or Class III
Gaming under IGRA or authorized under the Compact.
"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 Senior Note Legend" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Senior Notes issued
under this Indenture.
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"Global Senior Notes" means, individually and collectively, each of the
Restricted Global Senior Notes and the Unrestricted Global Senior Notes,
substantially in the form of Exhibit A-1 hereto issued in accordance with
Section 2.01, 2.06(b)(iv), 2.06(d)(ii) or 2.06(f) hereof.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"Government Service Payments" means: (i) an annual payment to the Tribe by
the Authority in the amount of $14.0 million, which amount shall be adjusted
annually on the last day of each calendar year commencing with the year 2000 by
the Consumer Price Index as published for the applicable year; and (ii) amounts
equal to those reflected on each annual audited income statement of the
Authority as prepared in accordance with GAAP relating to payment for
governmental services (including charges for utilities, police and fire
department services, health and emergency medical services, the pro rata portion
of Tribal Council costs and salaries attributable to the operations of the
Authority, and similar pro rata costs of other tribal departments, in each case,
to the extent that the costs of such departments are attributable to the
operations of the Authority) by the Authority to the Tribe or any of its
representatives, political subunits, councils, agencies or instrumentalities.
"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, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof), of all or any part of any Indebtedness.
"Hedging Obligations" means, with respect to any Person: (i) the
obligations of such Person under interest rate swap agreements, interest rate
cap agreements and interest rate collar agreements; and (ii) the obligations of
such Person under other agreements or arrangements designed to protect such
Person against fluctuations in interest rates.
"Holder" means a Person in whose name a Senior Note is registered.
"IGRA" means the Indian Gaming Regulatory Act of 1988, PL 100-497, U.S.C.
2701 et seq. as same may, from time to time, be amended.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent, in respect of: (i)
borrowed money; (ii) evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof); (iii) banker's acceptances; (iv) Capital Lease Obligations; (v) the
balance, deferred and unpaid, of the purchase price of any property, except any
such balance that constitutes an accrued expense or trade payable; or (vi) any
Hedging Obligations, if and to the extent any of the preceding items (other than
letters of credit and Hedging Obligations) would appear as a liability upon a
balance sheet of the specified Person prepared in accordance with GAAP. In
addition, the term "Indebtedness" includes all Indebtedness of others secured by
a Lien on any asset of the specified Person (whether or not such Indebtedness is
assumed by the specified Person) and, to the extent not otherwise included, the
guarantee by such Person of any Indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be:
(i) the accreted value thereof, in the case of any Indebtedness issued
with original issue discount; and
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(ii) the principal amount thereof, together with any interest thereon
that is more than 30 days past due, in the case of any other
Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Indirect Participant" means a Person who holds a beneficial interest in a
Global Senior Note through a Participant.
"Initial Senior Notes" means the $200,000,000 aggregate principal amount of
Senior Notes under this Indenture on the date hereof.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
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, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Authority or any Subsidiary of the Authority sells or otherwise disposes
of any Equity Interests of any direct or indirect Subsidiary of the Authority
such that, after giving effect to any such sale or disposition, such Person is
no longer a Subsidiary of the Authority, the Authority shall be deemed to have
made an Investment on the date of any such sale or disposition equal to the fair
market value of the Equity Interests of such Subsidiary not sold or disposed of
in an amount determined as provided in Section 4.07(d).
"Junior Subordinated Notes" means the $90.0 million in aggregate original
principal amount (plus any accrued and unpaid interest) of junior subordinated
notes of the Authority.
"Key Project Assets" means: (i) the Lease and any real property or interest
in real property comprising the Resort held in trust for the Tribe by the United
States; (ii) any improvements (including, without limitation the Resort) to the
leasehold estate under the Lease or such real property comprising the Resort
(but excluding any obsolete personal property or real property improvements
determined by the Authority to be no longer useful to the operations of the
Resort); and (iii) any business records of the Authority or the Tribe relating
to the operation of the Resort.
"Lease" means the Land Lease between the Tribe and the Authority dated
September 29, 1995, as the same may be amended in accordance with the terms
thereof and of this Indenture.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be prepared by
the Authority and sent to all Holders of the Senior Notes for use by such
Holders in connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any
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filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction).
"Loan Agreement" means that certain Loan Agreement, dated as of March 3,
1999, by and among the Authority, the Tribe, the lenders thereunder and Bank of
America National Trust and Savings Association, as Administrative Agent, and the
Documentation Agent and Syndication Agent referred to therein, including any
related notes, guarantees, instruments and agreements executed in connection
therewith, and in each case as amended, modified, renewed, refunded, replaced or
refinanced from time to time.
"Management Agreement" means the Amended and Restated Gaming Facility
Management Agreement dated August 30, 1995 by and between the Authority and TCA
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.
"Moody's" means Moody's Investors Service, Inc.
"Net Income" means, with respect to any Person for any period, the net
income (loss) of such Person for such period, determined in accordance with GAAP
and before any reduction in respect of dividends on preferred interests,
excluding, however:
(i) any gain or loss, together with any related provision for taxes on
such gain or loss, realized in connection with (A) any Asset Sale
(including, without limitation, dispositions pursuant to sale
leaseback transactions) or (B) the disposition of any securities
by such Person or any of its Restricted Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its
Restricted Subsidiaries; and
(ii) any extraordinary or nonrecurring gain or loss, together with any
related provision for taxes on such extraordinary or nonrecurring
gain or loss, less
(iii) in the case of any Person that is a partnership or a limited
liability company, the amount of withholding for tax purposes of
such Person for such period.
"Net Proceeds" means the aggregate cash proceeds received by the Authority
or any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale, including, without limitation, legal, accounting
and investment banking fees, and sales commissions and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof, in each
case after taking into account any available tax credits or deductions and any
tax sharing arrangements and amounts required to be applied to the repayment of
Indebtedness, secured by a Lien on the asset or assets that were the subject of
such Asset Sale and any reserve for adjustment in respect of the sale price of
such asset or assets established in accordance with GAAP.
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<PAGE>
"NIGC" means the National Indian Gaming Commission.
"Non-Recourse Debt" means Indebtedness: (i) as to which neither the
Authority nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness) or (b) is directly or indirectly liable (as a guarantor
or otherwise); (ii) no default with respect to which (including any rights that
the holders thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit (upon notice, lapse of time or both) any holder of any
other Indebtedness of the Authority or any of its Restricted Subsidiaries to
declare a default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity; and (iii) as to which such
Indebtedness specifies that the lenders thereunder will not have any recourse to
the stock or assets of the Authority or any of its Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the offering of the Senior Notes and the Senior
Subordinated 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 11.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 11.05 hereof.
The counsel may be an employee of or counsel to the Authority, any Subsidiary of
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.
"Participant" means, with respect to the Depositary, Euroclear or Cedel, a
Person who has an account with the Depositary, Euroclear or Cedel, respectively
(and, with respect to DTC, shall include Euroclear and Cedel).
"Permitted Asset Swap" means the exchange by the Authority or any
Restricted Subsidiary of any assets for other assets from a Person; provided
that, the assets received in such exchange are believed by the Authority in good
faith to be of substantially equivalent value and substantially all of which are
either (i) long term assets that are used or useful in the Principal Business,
(ii) cash or (iii) any combination of the foregoing clauses (i) and (ii).
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Senior Notes
<PAGE>
"Permitted Investments" means:
(i) any Investment in the Authority or in a Restricted Subsidiary of
the Authority that is engaged in a Principal Business or a Related
Business;
(ii) any Investment in cash or Cash Equivalents;
(iii) any Investment by the Authority or any Restricted Subsidiary of
the Authority in a Person, if as a result of such Investment (a)
such Person becomes a Restricted Subsidiary of the Authority and a
Subsidiary Guarantor and is engaged in a Principal Business or a
Related Business or (b) is merged, consolidated or amalgamated
with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Authority or a Restricted
Subsidiary of the Authority;
(iv) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with Section 3.10;
(v) any Investment in any Person engaged in the Principal Business or
a Related Business having an aggregate fair market value (as
determined in good faith by the Management Board and measured as
of the date of such Investment, without giving effect to any
subsequent increases or decreases in value) not to exceed $25.0
million at any one time outstanding;
(vi) Government Service Payments;
(vii) payroll advances to employees of the Authority or its Restricted
Subsidiaries for travel, entertainment and relocation expenses in
the ordinary course of business in an aggregate amount not to
exceed $250,000 at any one time outstanding;
(viii) accounts and notes receivable if created or acquired in the
ordinary course of business and which are payable or dischargeable
in accordance with customary trade terms;
(ix) Investments related to Hedging Obligations, so long as such
Hedging Obligations are not used for speculative purposes; and
(x) any Investment in government securities to be held in the
Defeasance Trust to defease the Junior Subordinated Notes in
accordance with their terms.
"Permitted Liens" means:
(i) Liens securing Indebtedness permitted by the terms of this
Indenture to be incurred under clauses (i), (ii), (v), (vi),
(vii), (viii) (to the extent that the Indebtedness so guaranteed
is permitted to be secured by this Indenture) and (x) of Section
4.09(b);
(ii) Liens in favor of the Authority or a Restricted Subsidiary;
(iii) Liens to secure the performance of statutory obligations, surety
or appeal bonds, performance bonds or other obligations of a like
nature (including, without limitation, pledges or deposits made in
connection with obligatory workers' compensation laws,
unemployment insurance or similar laws) incurred in the ordinary
course of business;
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Senior Notes
<PAGE>
(iv) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by clause (v) of Section 4.09(b) covering only the
assets acquired with such Indebtedness;
(v) Liens existing on the date of this Indenture;
(vi) Liens arising as a result of survey exceptions, title defects,
encumbrances, easements, reservations of, or rights of others for,
rights of way, sewers, electric lines, telegraph and telephone
lines and other similar purposes or zoning or other restrictions
as to the use of real property not interfering with the ordinary
conduct of the business of the Authority or any of its Restricted
Subsidiaries;
(vii) Liens arising by operation of law in favor of carriers,
warehousemen, landlords, mechanics, materialmen, laborers,
employees or suppliers, incurred in the ordinary course of
business for sums which are not yet delinquent or are being
contested in good faith by negotiations or by appropriate
proceedings which suspend the collection thereof;
(viii) Liens incurred as a result of any interest or title of a lessor or
lessee under any lease of property (including any Lien granted by
such lessor or lessee but excluding any Lien arising in respect of
a Financing Lease);
(ix) Liens in favor of the Tribe representing the ground lessor's
interest under the Lease;
(x) Liens on property existing at the time or acquisition thereof by
the Authority or a Restricted Subsidiary; provided that, such
Liens were in existence prior to the contemplation of such
acquisition;
(xi) Liens for taxes, assessments or governmental charges, claims or
rights 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;
(xii) Liens securing Indebtedness permitted under clause (vii) of
Section 4.09(b); provided that such Liens are no more extensive
that the liens securing the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded thereby;
(xiii) Liens incurred in the ordinary course of business of the Authority
or a Restricted Subsidiary with respect to obligations that do not
exceed $500,000 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, 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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Senior Notes
<PAGE>
(xiv) Liens created by or resulting from any legal proceeding with
respect to which the Authority or a Restricted Subsidiary is
prosecuting an appeal proceeding for review and the Authority or
such Restricted Subsidiary is maintaining adequate reserves in
connection with GAAP; and
(xv) a Lien on the assets in the Defeasance Trust with respect to the
obligations of the Junior Subordinated Notes.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Authority or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Authority or any of its Restricted
Subsidiaries; provided that:
(i) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal
amount of (or accreted value, if applicable), plus accrued
interest on, the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus the amount of prepayment
premiums and reasonable expenses incurred in connection
therewith);
(ii) such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and has 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, defeased or refunded; provided that if the
original maturity date of such Indebtedness is after the Stated
Maturity of the Senior Notes, then such Permitted Refinancing
Indebtedness shall have a maturity at least 180 days after the
Senior Notes;
(iii) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the
Senior Notes, such Permitted Refinancing Indebtedness is
subordinated in right of payment to, the Senior Notes on terms at
least as favorable to the Holders of Senior Notes as those
contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and
(iv) such Indebtedness is incurred either by the Authority or by the
Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or agency or political subdivision
thereof (including any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or business).
"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.
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Senior Notes
<PAGE>
"Private Placement Legend" means the legend set forth in Section 2.06(g)(i)
to be placed on all Senior Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Senior Note" means a Regulation S Temporary Global
Senior Note or Regulation S Permanent Global Senior Note, as appropriate.
"Regulation S Permanent Global Senior Note" means a permanent global Senior
Note in the form of Exhibit A-1 hereto bearing the Global Senior Note Legend and
the Private Placement Legend and deposited with or on behalf of and registered
in the name of the Depositary or its nominee, issued in a denomination equal to
the outstanding principal amount of the Regulation S Temporary Global Senior
Note upon expiration of the Distribution Compliance Period.
"Regulation S Temporary Global Senior Note" means a temporary global Senior
Note in the form of Exhibit A-2 hereto bearing the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee, issued in a denomination equal to the outstanding principal amount
of the Senior Notes initially sold in reliance on Rule 903 of Regulation S.
"Related Business" means any business related to the Principal Business.
"Relinquishment Agreement" means the Relinquishment Agreement dated
February 7, 1998 between the Authority and TCA.
"Resort" means the multi-amenity gaming and entertainment resort located in
Uncasville, Connecticut and the convention center, retail facilities, arena,
hotel and improvements proposed to be constructed adjacent thereto, as described
in the Offering Memorandum of the Authority dated February 24, 1999 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 and (ii) any equipment leased from a third
party in the ordinary course of business.
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration department of the Trustee (or
any successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Definitive Senior Note" means a Definitive Senior Note bearing
the Private Placement Legend.
"Restricted Global Senior Note" means a Global Senior Note bearing the
Private Placement Legend.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Rule 144" means Rule 144 promulgated under the Securities Act.
16
Senior Notes
<PAGE>
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"S&P" means Standard & Poor's Ratings Group.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Exchange Notes" means the Authority's 81/8% Senior Notes due 2006
to be issued in exchange for the Initial Senior Notes pursuant to the Senior
Registration Rights Agreement and issued under this Indenture pursuant to
Section 2.02, a registration rights agreement substantially identical to the
Senior Registration Rights Agreement.
"Senior Notes" means, collectively, the Initial Senior Notes and the Senior
Exchange Notes, treated as a single class of securities as amended or
supplemented from time to time in accordance with the terms hereof, in each case
as issued pursuant to this Indenture.
"Senior Registration Rights Agreement" means the Senior Registration Rights
Agreement, dated as of March 3, 1999, by and among the Authority and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time.
"Senior Subordinated Note Indenture" means that certain indenture, dated as
of the date hereof, among the Authority, the Tribe and State Street Bank and
Trust Company, as trustee, as amended or supplemented from time to time,
relating to the Senior Subordinated Notes.
"Senior Subordinated Notes" means, collectively, the Initial Senior
Subordinated Notes and the Senior Subordinated Exchange Notes (as those terms
are defined in the Senior Subordinated Note Indenture), treated as a single
class of securities as amended or supplemented from time to time in accordance
with the terms hereof, in each case as issued pursuant to the Senior
Subordinated Note Indenture.
"Senior Subsidiary Guarantee" means the joint and several guarantee by the
Authority's Restricted Subsidiaries of the Authority's obligations under the
Senior Notes, in substantially the form of such Subsidiary Guarantee attached as
Exhibit D to this Indenture.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in the Senior Registration Rights Agreement.
"Side Letters" means (i) that certain Side Letter, dated February 7, 1998
regarding the Junior Subordinated Notes, as amended December 15, 1998; (ii) that
certain Side Letter, dated February 7, 1998 relating to various waivers under
the existing Management Agreement; (iii) that certain Side Letter, dated
February 7, 1998, regarding the use of TCA personnel following this termination
of the Management Agreement; (iv) that certain Side Letter, dated February 22,
1999 regarding the previously proposed exchange of Junior Subordinated Notes for
Senior Subordinated Notes and (v) that certain Side Letter, dated February 22,
1999, regarding the earlier Side Letters, in connection with the defeasance of
the Junior Subordinated Notes.
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Senior Notes
<PAGE>
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date of
this Indenture.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid including as a result of any
mandatory sinking fund payment or mandatory redemption in the documentation
governing such Indebtedness in effect on the date hereof or, if such
Indebtedness is incurred after the date of this Indenture, in the original
documentation governing such Indebtedness, and shall not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof.
"Subordinated Indebtedness" means any Indebtedness which by its terms is
expressly subordinate in right of payment in any respect to the payment of any
obligation on the Senior Notes.
"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 otherwise be bound to the terms of this Indenture; 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 the 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.
"Subsidiary Guarantor" means any Subsidiary of the Authority that executes
a Senior Subsidiary Guarantee in accordance with the provisions of this
Indenture and its respective successors and assigns.
"Sun International" means Sun International Hotels Limited, a Bahamian
corporation or any of its affiliates.
"TCA" means Trading Cove Associates.
"Tender Offer" means the Tender Offer and the Consent Solicitation with
respect to $175.0 million aggregate principal amount of the Existing Secured
Notes.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.ss.ss.77aaa-77bbbb)
as in effect on the date on which this Indenture is qualified under the TIA.
"Treasury Rate" equals (i) if the period from the date of redemption to the
Stated Maturity Date is greater than one year, the yield to maturity as of such
date of redemption of United States Treasury securities with a constant maturity
(as complied and published in the most recent Federal Reserve Statistical
Release H.15 (519) that became publicly available at least two business days
prior to the date of redemption (or, if the Federal Reserve Statistical Release
H.15 (519) is no longer published, any publicly available source of similar
market data)) most nearly equal to the period from the date of redemption to the
Stated Maturity Date or (ii) if the period from the date of redemption to the
Stated Maturity Date is less than one year, the weekly average yield on actually
traded United States Treasury securities adjusted to a constant maturity of one
year.
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Senior Notes
<PAGE>
"Tribal Council" means the Tribe's nine member elected council which
exercises all the legislative and executive powers of the Tribe.
"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 or authorize and regulate gaming on the Mohegan Reservation pursuant to
IGRA.
"Tribal Tax Code" means any sales, use, room occupancy and related excise
taxes, including admissions and cabaret taxes and any other tax (other than
income tax) that may be imposed by the State of Connecticut that the Tribe may
impose on the Authority, its patrons or operations; provided, however, that the
rate and scope of such taxes shall not be more onerous than those imposed by the
State of Connecticut.
"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. ss. 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.
"Unrestricted Definitive Senior Note" means one or more Definitive Senior
Notes that do not bear and are not required to bear the Private Placement
Legend.
"Unrestricted Global Senior Note" means a permanent global Senior Note
substantially in the form of Exhibit A-1 attached hereto that bears the Global
Senior Note Legend and that has the "Schedule of Exchanges of Interests in the
Global Senior Note" attached thereto, and that is deposited with or on behalf of
and registered in the name of the Depositary, representing a series of Senior
Notes that do not bear the Private Placement Legend.
"Unrestricted Subsidiary" means any Subsidiary that is designated in
writing by the Authority as an Unrestricted Subsidiary, but only to the extent
that such Subsidiary: (i) has no Indebtedness other than Non-Recourse Debt; (ii)
is not party to any agreement, contract, arrangement or understanding with the
Authority or any Restricted Subsidiary of the Authority unless the terms of any
such agreement, contract, arrangement or understanding are no less favorable to
the Authority or such Restricted Subsidiary than those that might be obtained at
the time from Persons who are not Affiliates of the Authority; (iii) is a Person
with respect to which neither the Authority nor any of its Restricted
Subsidiaries has any direct or indirect obligation (a) to subscribe for
additional Equity Interests or (b) to maintain or preserve such Person's
financial condition or to cause such Person to achieve any specified levels of
operating results; (iv) has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Authority or any of its
Restricted Subsidiaries; and (v) has at least one director on its board of
directors that is not a director or executive officer of the Authority or any of
its Restricted Subsidiaries and has at least one executive officer that is not a
director or executive officer of the Authority or any of its Restricted
Subsidiaries.
Any such designation by the Management Board shall be evidenced to the
Trustee by filing with the Trustee a certified copy of the Board Resolution
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing conditions and was permitted by
Section 4.07. If, at any time, any Unrestricted Subsidiary would fail to meet
the foregoing requirements as an Unrestricted Subsidiary, it shall thereafter
cease to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a
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Senior Notes
<PAGE>
Restricted Subsidiary of the Authority as of such date (and, if such
Indebtedness is not permitted to be incurred as of such date under Section 4.09,
the Authority shall be in default of such Section). The Authority may at any
time designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided that such designation shall be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of the Authority of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (a) such Indebtedness is permitted by Section 4.09, calculated on a
pro forma basis as if such designation had occurred at the beginning of the
four-quarter reference period, and (b) no Default or Event of Default would be
in existence following such designation.
"U.S. Person" means a U.S. person as defined in Rule 902(k) under the
Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Management
Board or Board of Directors, as the case may be, of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing:
(i) the sum of the products obtained by multiplying (a) the amount of each
then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity,
in respect thereof, by (b) the number of years (calculated to the
nearest one-twelfth) that will elapse between such date and the making
of such payment, by
(ii) the then outstanding principal amount of such Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.
"Wholly Owned Restricted Subsidiary" of any Person means a Subsidiary of
such Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Restricted Subsidiaries of such
Person and one or more Wholly Owned Restricted Subsidiaries of such Person.
Section 1.02 Other Definitions.
Defined in
Term Section
---- ---------
"Affiliate Transaction"..................................... 4.11
"Asset Sale"................................................ 4.10
"Asset Sale Offer".......................................... 3.10
"Authentication Order"...................................... 2.02
"Bankruptcy Law"............................................ 4.01
"Change of Control Offer"................................... 4.15
"Change of Control Payment"................................. 4.15
"Change of Control Payment Date"............................ 4.15
"Covenant Defeasance"....................................... 8.03
"DTC"....................................................... 2.03
"Event of Default".......................................... 6.01
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<PAGE>
Defined in
Term Section
---- ---------
"Excess Proceeds"........................................... 4.10
"incur"..................................................... 4.09
"Lease Transaction"......................................... 4.24
"Legal Defeasance".......................................... 8.02
"Offer Amount".............................................. 3.10
"Offer Period".............................................. 3.10
"Paying Agent".............................................. 2.03
"Payment Default"........................................... 6.01
"Purchase Date"............................................. 3.10
"Rating Event Date"......................................... 4.26
"Registrar"................................................. 2.03
"Reinstated Provisions"..................................... 4.26
"Restricted Payments"....................................... 4.07
"Suspended Provisions"...................................... 4.26
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 Senior Notes;
"indenture security Holder" means a Holder of a Senior Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Senior Notes and any Senior Note Guarantees means the
Authority and any successor obligor upon the Senior Notes and any Senior Note
Guarantees, respectively.
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:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural include the
singular;
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(e) provisions apply to successive events and transactions; and
(f) references to sections of or rules under the Securities Act shall be
deemed to include substitute, replacement of successor sections or rules adopted
by the SEC from time to time.
ARTICLE 2
THE SENIOR NOTES
Section 2.01 Form and Dating.
(a) General. The Senior Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The
Senior Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Senior Note shall be dated the date of its
authentication. The Senior Notes shall be in denominations of $1,000 and
integral multiples thereof.
The terms and provisions contained in the Senior 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. However, to the extent any
provision of any Senior Note conflicts with the express provisions of this
Indenture, the provisions of this Indenture shall govern and be controlling.
(b) Global Senior Notes. Senior Notes issued in global form shall be
substantially in the form of Exhibit A-1 or A-2 attached hereto (including the
Global Senior Note Legend thereon and the "Schedule of Exchanges of Interests in
the Global Senior Note" attached thereto). Senior Notes issued in definitive
form shall be substantially in the form of Exhibit A-1 attached hereto (but
without the Global Senior Note Legend thereon and without the "Schedule of
Exchanges of Interests in the Global Senior Note" attached thereto). Each Global
Senior Note shall represent such of the outstanding Senior Notes as shall be
specified therein and each shall provide that it shall represent the aggregate
principal amount of outstanding Senior Notes from time to time endorsed thereon
and that the aggregate principal amount of outstanding Senior Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Senior Note to
reflect the amount of any increase or decrease in the aggregate principal amount
of outstanding Senior Notes represented thereby shall be made by the Trustee or
the Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06 hereof.
(c) Temporary Global Senior Notes. Senior Notes offered and sold in
reliance on Regulation S shall be issued initially in the form of the Regulation
S Temporary Global Senior Note, which shall be deposited on behalf of the
purchasers of the Senior Notes represented thereby with the Trustee, at its New
York office, as custodian for the Depositary, and registered in the name of the
Depositary or the nominee of the Depositary for the accounts of designated
agents holding on behalf of Euroclear or Cedel Bank, duly executed by the
Authority and authenticated by the Trustee as hereinafter provided. The
Distribution Compliance Period shall be terminated upon the receipt by the
Trustee of (i) a written certificate from the Depositary, together with copies
of certificates from Euroclear and Cedel Bank certifying that they have received
certification of non-United States beneficial ownership of 100% of the aggregate
principal amount of the Regulation S Temporary Global Senior Note (except to the
extent of any beneficial owners thereof who acquired an interest therein during
the Distribution Compliance Period pursuant to another exemption from
registration under the Securities Act and who will take delivery of a beneficial
ownership interest in a 144A Global Senior Note bearing a Private Placement
Legend, all as contemplated by Section 2.06(a)(ii) hereof), and (ii) an
Officers' Certificate from the Authority. Following the termination of the
Distribution Compliance Period, beneficial
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interests in the Regulation S Temporary Global Senior Note shall be exchanged
for beneficial interests in Regulation S Permanent Global Senior Notes pursuant
to the Applicable Procedures. Simultaneously with the authentication of
Regulation S Permanent Global Senior Notes, the Trustee shall cancel the
Regulation S Temporary Global Senior Note. The aggregate principal amount of the
Regulation S Temporary Global Senior Note and the Regulation S Permanent Global
Senior Notes may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depositary or its nominee, as the case may
be, in connection with transfers of interest as hereinafter provided.
(d) Euroclear and Cedel Procedures Applicable. The provisions of the
"Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank"
and "Customer Handbook" of Cedel Bank shall be applicable to transfers of
beneficial interests in the Regulation S Temporary Global Senior Note and the
Regulation S Permanent Global Senior Notes that are held by Participants through
Euroclear or Cedel Bank.
Section 2.02 Execution and Authentication.
Two Officers of the Authority shall sign the Senior Notes for the Authority
by manual or facsimile signature.
If an Officer whose signature is on a Senior Note no longer holds that
office at the time a Senior Note is authenticated, the Senior Note shall
nevertheless be valid.
A Senior Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Senior Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Authority signed by two
Officers of the Authority (an "Authentication Order"), authenticate Senior Notes
for original issue up to the aggregate principal amount not to exceed
$200,000,000 (other than as provided in Section 2.07 hereof) in one or more
series, which order shall specify whether such notes are Initial Senior Notes or
Senior Exchange Notes.
The Senior Notes shall be issued only in fully registered form, without
coupons and only in denominations of $1,000 and any integral multiple thereof.
All Senior Notes issued under this Indenture shall vote and consent together on
all matters as one class and no series of Senior Notes will have the right to
vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent acceptable to the Authority
to authenticate Senior Notes. An authenticating agent may authenticate Senior
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Authority.
Section 2.03 Registrar and Paying Agent.
The Authority shall maintain an office or agency where Senior Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Senior Notes may be presented for payment ("Paying
Agent"). The Registrar shall keep a register of the Senior Notes and of their
transfer and exchange. The Authority may appoint one or more co-registrars and
one or more
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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 or any of its Restricted Subsidiaries may act as Paying Agent or
Registrar.
The Authority initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Senior Notes.
The Authority initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Senior 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 Additional Interest, if any, or interest on the Senior
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 a
Restricted Subsidiary or an Affiliate) shall have no further liability for the
money. If the Authority or a Restricted Subsidiary acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the Holders
all money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Authority, the Trustee shall serve as Paying Agent
for the Senior 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 ss. 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
Senior Notes and the Authority shall otherwise comply with TIA ss. 312(a).
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Senior Notes. A Global Senior Note may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global
Senior Notes will be exchanged by the Authority for Definitive Senior Notes if
(i) the Authority delivers to the Trustee notice from the Depositary that it is
unwilling or unable to continue to act as Depositary or that it is no longer a
clearing agency registered under the Exchange Act and, in either case, a
successor Depositary is not appointed by the Authority within 120 days after the
date of such notice from the Depositary or (ii) the Authority in its sole
discretion determines that the Global Senior Notes (in whole but not in part)
should be exchanged for Definitive Senior Notes and delivers a written notice to
such effect to the Trustee; provided that in no event shall the Regulation S
Temporary Global Senior Note be exchanged by the Authority for Definitive Senior
Notes prior to (x) the expiration of the Distribution Compliance
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Period and (y) the receipt by the Registrar of any certificates required
pursuant to Rule 903(c)(3)(ii)(B) under the Securities Act. Upon the occurrence
of either of the preceding events in (i) or (ii) above, Definitive Senior Notes
shall be issued in such names as the Depositary shall instruct the Trustee.
Global Senior Notes also may be exchanged or replaced, in whole or in part, as
provided in Sections 2.07 and 2.10 hereof. Every Senior Note authenticated and
delivered in exchange for, or in lieu of, a Global Senior Note or any portion
thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be
authenticated and delivered in the form of, and shall be, a Global Senior Note.
A Global Senior Note may not be exchanged for another Senior Note other than as
provided in this Section 2.06(a), however, beneficial interests in a Global
Senior Note may be transferred and exchanged as provided in Section 2.06(b), (c)
or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Senior
Notes. The transfer and exchange of beneficial interests in the Global Senior
Notes shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial interests
in the Restricted Global Senior Notes shall be subject to restrictions on
transfer comparable to those set forth herein to the extent required by the
Securities Act. Transfers of beneficial interests in the Global Senior Notes
also shall require compliance with either subparagraph (i) or (ii) below, as
applicable, as well as one or more of the other following subparagraphs, as
applicable:
(i) Transfer of Beneficial Interests in the Same Global Senior Note.
Beneficial interests in any Restricted Global Senior Note may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in the same Restricted Global Senior Note in accordance
with the transfer restrictions set forth in the Private Placement Legend;
provided, however, that prior to the expiration of the Distribution
Compliance Period, transfers of beneficial interests in the Temporary
Regulation S Global Senior Note may not be made to a U.S. Person or for the
account or benefit of a U.S. Person (other than an Initial Purchaser).
Beneficial interests in any Unrestricted Global Senior Note may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Senior Note. No written
orders or instructions shall be required to be delivered to the Registrar
to effect the transfers described in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Senior Notes. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.06(b)(i) above, the
transferor of such beneficial interest must deliver to the Registrar either
(A) (1) a written order from a Participant or an Indirect Participant given
to the Depositary in accordance with the Applicable Procedures directing
the Depositary to credit or cause to be credited a beneficial interest in
another Global Senior Note in an amount equal to the beneficial interest to
be transferred or exchanged and (2) instructions given in accordance with
the Applicable Procedures containing information regarding the Participant
account to be credited with such increase or (B) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to cause
to be issued a Definitive Senior Note in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given by the
Depositary to the Registrar containing information regarding the Person in
whose name such Definitive Senior Note shall be registered to effect the
transfer or exchange referred to in (1) above; provided that in no event
shall Definitive Senior Notes be issued upon the transfer or exchange of
beneficial interests in the Regulation S Temporary Global Senior Note prior
to (x) the expiration of the Distribution Compliance Period and (y) the
receipt by the Registrar of any certificates required pursuant to Rule 903
under the Securities Act. Upon consummation of an Exchange Offer by the
Authority in accordance with Section 2.06(f) hereof, the requirements of
this Section 2.06(b)(ii) shall be deemed to have been satisfied upon
receipt by the Registrar of the instructions contained in the Letter of
Transmittal delivered by the Holder of such beneficial interests in the
Restricted Global
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Senior Notes. Upon satisfaction of all of the requirements for transfer or
exchange of beneficial interests in Global Senior Notes contained in this
Indenture and the Senior Notes or otherwise applicable under the Securities
Act, the Trustee shall adjust the principal amount of the relevant Global
Senior Note(s) pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Senior Note. A beneficial interest in any Restricted Global Senior Note may
be transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Senior Note if the
transfer complies with the requirements of Section 2.06(b)(ii) above and
the Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Senior Note, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof; and
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Temporary Global Senior Note
or the Regulation S Global Senior Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof;
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Senior Note for Beneficial Interests in the Unrestricted Global
Senior Note. A beneficial interest in any Restricted Global Senior Note may
be exchanged by any Holder thereof for a beneficial interest in an
Unrestricted Global Senior Note or transferred to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Senior Note if the exchange or transfer complies with the
requirements of Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Senior Registration Rights
Agreement and the holder of the beneficial interest to be transferred,
in the case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal that it is
not (1) a broker-dealer, (2) a Person participating in the distribution
of the Senior Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Authority;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Senior Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the Senior
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Senior Note proposes to exchange such
beneficial interest for a beneficial interest in an
Unrestricted Global Senior Note, a certificate from such
holder in the form of Exhibit C hereto, including the
certifications in item (1)(a) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Senior Note proposes to transfer such
beneficial interest to a Person who shall take delivery
thereof in the
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form of a beneficial interest in an Unrestricted Global
Senior Note, a certificate from such holder in the form of
Exhibit B hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require,
an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are
no longer required in order to maintain compliance with the
Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Senior Note has not yet been
issued, the Authority shall issue and, upon receipt of an Authentication
Order in accordance with Section 2.02 hereof, the Trustee shall
authenticate one or more Unrestricted Global Senior Notes in an aggregate
principal amount equal to the aggregate principal amount of beneficial
interests transferred pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Senior Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the
form of, a beneficial interest in a Restricted Global Senior Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Senior
Notes.
(i) Beneficial Interests in Restricted Global Senior Notes to
Restricted Definitive Senior Notes. If any holder of a beneficial interest
in a Restricted Global Senior Note proposes to exchange such beneficial
interest for a Restricted Definitive Senior Note or to transfer such
beneficial interest to a Person who takes delivery thereof in the form of a
Restricted Definitive Senior Note, then, upon receipt by the Registrar of
the following documentation:
(A) if the holder of such beneficial interest in a Restricted
Global Senior Note proposes to exchange such beneficial interest for a
Restricted Definitive Senior Note, a certificate from such holder in
the form of Exhibit C hereto, including the certifications in item
(2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the certifications
in item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2)
thereof;
(D) if such beneficial interest is being transferred pursuant to
an exemption from the registration requirements of the Securities Act
in accordance with Rule 144 under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the certifications
in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to the
Authority or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(b)
thereof; or
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(F) if such beneficial interest is being transferred pursuant to
an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable
Global Senior Note to be reduced accordingly pursuant to Section 2.06(h)
hereof, and the Authority shall execute and the Trustee shall authenticate
and deliver to the Person designated in the instructions a Definitive
Senior Note in the appropriate principal amount. Any Definitive Senior Note
issued in exchange for a beneficial interest in a Restricted Global Senior
Note pursuant to this Section 2.06(c) shall be registered in such name or
names and in such authorized denomination or denominations as the holder of
such beneficial interest shall instruct the Registrar through instructions
from the Depositary and the Participant or Indirect Participant. The
Trustee shall deliver such Definitive Senior Notes to the Persons in whose
names such Senior Notes are so registered. Any Definitive Senior Note
issued in exchange for a beneficial interest in a Restricted Global Senior
Note pursuant to this Section 2.06(c)(i) shall bear the Private Placement
Legend and shall be subject to all restrictions on transfer contained
therein.
(ii) Beneficial Interests in Regulation S Temporary Global Senior Note
to Definitive Senior Notes. Notwithstanding Sections 2.06(c)(i)(A) and (C)
hereof, a beneficial interest in the Regulation S Temporary Global Senior
Note may not be exchanged for a Definitive Senior Note or transferred to a
Person who takes delivery thereof in the form of a Definitive Senior Note
prior to (x) the expiration of the Distribution Compliance Period and (y)
the receipt by the Registrar of any certificates required pursuant to Rule
903(c)(3)(ii)(B) under the Securities Act, except in the case of a transfer
pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 903 or Rule 904.
(iii) Beneficial Interests in Restricted Global Senior Notes to
Unrestricted Definitive Senior Notes. A holder of a beneficial interest in
a Restricted Global Senior Note may exchange such beneficial interest for
an Unrestricted Definitive Senior Note or may transfer such beneficial
interest to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Senior Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Senior Registration Rights
Agreement and the holder of such beneficial interest, in the case of
an exchange, or the transferee, in the case of a transfer, certifies
in the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
Senior Exchange Notes or (3) a Person who is an affiliate (as defined
in Rule 144) of the Authority;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Senior Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the Senior
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note that does not bear the Private
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Placement Legend, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item (1)(b)
thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a Definitive Note that does not bear the Private Placement
Legend, a certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(iv) Beneficial Interests in Unrestricted Global Senior Notes to
Unrestricted Definitive Senior Notes. If any holder of a beneficial
interest in an Unrestricted Global Senior Note proposes to exchange such
beneficial interest for a Definitive Senior Note or to transfer such
beneficial interest to a Person who takes delivery thereof in the form of a
Definitive Senior Note, then, upon satisfaction of the conditions set forth
in Section 2.06(b)(ii) hereof, the Trustee shall cause the aggregate
principal amount of the applicable Global Senior Note to be reduced
accordingly pursuant to Section 2.06(h) hereof, and the Authority shall
execute and the Trustee shall authenticate and deliver to the Person
designated in the instructions a Definitive Senior Note in the appropriate
principal amount. Any Definitive Senior Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(iv) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Senior
Notes to the Persons in whose names such Senior Notes are so registered.
Any Definitive Senior Note issued in exchange for a beneficial interest
pursuant to this Section 2.06(c)(iv) shall not bear the Private Placement
Legend.
(d) Transfer and Exchange of Definitive Senior Notes for Beneficial
Interests.
(i) Restricted Definitive Senior Notes to Beneficial Interests in
Restricted Global Senior Notes. If any Holder of a Restricted Definitive
Senior Note proposes to exchange such Senior Note for a beneficial interest
in a Restricted Global Senior Note or to transfer such Restricted
Definitive Senior Notes to a Person who takes delivery thereof in the form
of a beneficial interest in a Restricted Global Senior Note, then, upon
receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Senior Note
proposes to exchange such Senior Note for a beneficial interest in a
Restricted Global Senior Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item (2)(b)
thereof;
(B) if such Restricted Definitive Senior Note is being
transferred to a QIB in accordance with Rule 144A under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such Restricted Definitive Senior Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
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(D) if such Restricted Definitive Senior Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144 under
the Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Senior Note is being
transferred to the Authority or any of its Subsidiaries, a certificate
to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(F) if such Restricted Definitive Senior Note is being
transferred pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Senior Note, increase or
cause to be increased the aggregate principal amount of, in the case of
clause (A) above, the appropriate Restricted Global Senior Note, in the
case of clause (B) above, the 144A Global Senior Note, in the case of
clause (C) above, the Regulation S Global Senior Note.
(ii) Restricted Definitive Senior Notes to Beneficial Interests in
Unrestricted Global Senior Notes. A Holder of a Restricted Definitive
Senior Note may exchange such Senior Note for a beneficial interest in an
Unrestricted Global Senior Note or transfer such Restricted Definitive
Senior Note to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Senior Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Senior Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Senior Exchange Notes or (3)
a Person who is an affiliate (as defined in Rule 144) of the
Authority;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Senior Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the Senior
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Senior Notes proposes
to exchange such Senior Notes for a beneficial interest in the
Unrestricted Global Senior Note, a certificate from such Holder
in the form of Exhibit C hereto, including the certifications in
item (1)(c) thereof; or
(2) if the Holder of such Definitive Senior Notes proposes
to transfer such Senior Notes to a Person who shall take delivery
thereof in the form of a beneficial interest in the Unrestricted
Global Senior Note, a certificate from such Holder in the form of
Exhibit B hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and
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that the restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.06(d)(ii), the Trustee shall cancel the Definitive Senior
Notes and increase or cause to be increased the aggregate principal amount
of the Unrestricted Global Senior Note.
(iii) Unrestricted Definitive Senior Notes to Beneficial Interests in
Unrestricted Global Senior Notes. A Holder of an Unrestricted Definitive
Senior Note may exchange such Senior Note for a beneficial interest in an
Unrestricted Global Senior Note or transfer such Definitive Senior Notes to
a Person who takes delivery thereof in the form of a beneficial interest in
an Unrestricted Global Senior Note at any time. Upon receipt of a request
for such an exchange or transfer, the Trustee shall cancel the applicable
Unrestricted Definitive Senior Note and increase or cause to be increased
the aggregate principal amount of one of the Unrestricted Global Senior
Notes.
If any such exchange or transfer from a Definitive Senior Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D)
or (iii) above at a time when an Unrestricted Global Senior Note has not
yet been issued, the Authority shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the Trustee
shall authenticate one or more Unrestricted Global Senior Notes in an
aggregate principal amount equal to the principal amount of Definitive
Senior Notes so transferred.
(e) Transfer and Exchange of Definitive Senior Notes for Definitive Senior
Notes. Upon request by a Holder of Definitive Senior Notes and such Holder's
compliance with the provisions of this Section 2.06(e), the Registrar shall
register the transfer or exchange of Definitive Senior Notes. Prior to such
registration of transfer or exchange, the requesting Holder shall present or
surrender to the Registrar the Definitive Senior Notes duly endorsed or
accompanied by a written instruction of transfer in form satisfactory to the
Registrar duly executed by such Holder or by its attorney, duly authorized in
writing. In addition, the requesting Holder shall provide any additional
certifications, documents and information, as applicable, required pursuant to
the following provisions of this Section 2.06(e).
(i) Restricted Definitive Senior Notes to Restricted Definitive Senior
Notes. Any Restricted Definitive Senior Note may be transferred to and
registered in the name of Persons who take delivery thereof in the form of
a Restricted Definitive Senior Note if the Registrar receives the
following:
(A) if the transfer will be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (1)
thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof;
and
(C) if the transfer will be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable.
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(ii) Restricted Definitive Senior Notes to Unrestricted Definitive
Senior Notes. Any Restricted Definitive Senior Note may be exchanged by the
Holder thereof for an Unrestricted Definitive Senior Note or transferred to
a Person or Persons who take delivery thereof in the form of an
Unrestricted Definitive Senior Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Senior Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Senior Exchange Notes or (3)
a Person who is an affiliate (as defined in Rule 144) of the
Authority;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Senior Registration
Rights Agreement;
(C) any such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Senior Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Senior Notes
proposes to exchange such Senior Notes for an Unrestricted
Definitive Senior Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(1)(d) thereof; or
(2) if the Holder of such Restricted Definitive Senior Notes
proposes to transfer such Senior Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive Senior
Note, a certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Authority to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.
(iii) Unrestricted Definitive Senior Notes to Unrestricted Definitive
Senior Notes. A Holder of Unrestricted Definitive Senior Notes may transfer
such Senior Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Senior Note. Upon receipt of a request to register
such a transfer, the Registrar shall register the Unrestricted Definitive
Senior Notes pursuant to the instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of an Exchange Offer in accordance
with the Senior Registration Rights Agreement, the Authority shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02, the
Trustee shall authenticate (i) one or more Unrestricted Global Senior Notes in
an aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Senior Notes tendered for acceptance by
Persons that certify in the applicable Letters of Transmittal that (x) they are
not broker-dealers, (y) they are not participating in a distribution of the
Senior Exchange Notes and (z) they are not affiliates (as defined in Rule 144)
of the Authority, and accepted for exchange in the Exchange Offer and (ii)
Definitive Senior Notes in an aggregate principal amount equal to the principal
amount of the Restricted Definitive Senior Notes accepted for
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exchange in the Exchange Offer. Concurrently with the issuance of such Senior
Notes, the Trustee shall cause the aggregate principal amount of the applicable
Restricted Global Senior Notes to be reduced accordingly, and the Authority
shall execute and the Trustee shall authenticate and deliver to the Persons
designated by the Holders of Definitive Senior Notes so accepted Definitive
Senior Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all Global
Senior Notes and Definitive Senior Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global Senior
Note and each Definitive Senior Note (and all Senior Notes issued in
exchange therefor or substitution thereof) shall bear the legend in
substantially the following form.
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
IN ACCORDANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (SUBJECT TO THE DELIVERY OF SUCH EVIDENCE, IF ANY, REQUIRED
UNDER THE INDENTURE PURSUANT TO WHICH THIS NOTE IS ISSUED) AND IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER JURISDICTION. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER
EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE AUTHORITY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(a) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE AUTHORITY SO
REQUESTS), SUBJECT TO THE RECEIPT BY THE REGISTRAR OF A CERTIFICATION OF THE
TRANSFEROR AND AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, (2) TO THE AUTHORITY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE
RESALE RESTRICTION SET FORTH IN (A) ABOVE."
(B) Notwithstanding the foregoing, any Global Senior Note or
Definitive Senior Note issued pursuant to subparagraphs (b)(iv), (c)(ii),
(c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or
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(f) to this Section 2.06 (and all Senior Notes issued in exchange therefor
or substitution thereof) shall not bear the Private Placement Legend.
(ii) Global Senior Note Legend. Each Global Senior Note shall bear a
legend in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT
NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE
MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE
INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY
WITH THE PRIOR WRITTEN CONSENT OF THE AUTHORITY."
(iii) Regulation S Temporary Global Senior Note Legend. The Regulation
S Temporary Global Senior Note shall bear a legend in substantially the
following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON."
(h) Cancellation and/or Adjustment of Global Senior Notes. At such time as
all beneficial interests in a particular Global Senior Note have been exchanged
for Definitive Senior Notes or a particular Global Senior Note has been
redeemed, repurchased or canceled in whole and not in part, each such Global
Senior Note shall be returned to or retained and canceled by the Trustee in
accordance with Section 2.11 hereof. At any time prior to such cancellation, if
any beneficial interest in a Global Senior Note is exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Senior Note or for Definitive Senior Notes, the principal
amount of Senior Notes represented by such Global Senior Note shall be reduced
accordingly and an endorsement shall be made on such Global Senior Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Senior Note, such other Global Senior Note shall be increased
accordingly and an endorsement shall be made on such Global Senior Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
increase.
(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 Global Senior Notes and
Definitive Senior Notes upon the Authority's order or at the Registrar's
request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Senior Note or to a Holder of a Definitive Senior Note
for any registration of transfer or exchange, but the Authority may require
payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such
transfer taxes or similar governmental
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charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06,
3.10, 4.10, 4.15 and 9.05 hereof).
(iii) The Registrar shall not be required to register the transfer of
or exchange any Senior Note selected for redemption in whole or in part,
except the unredeemed portion of any Senior Note being redeemed in part.
(iv) All Global Senior Notes and Definitive Senior Notes issued upon
any registration of transfer or exchange of Global Senior Notes or
Definitive Senior Notes shall be the valid obligations of the Authority,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Global Senior Notes or Definitive Senior 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 any Senior Notes during a period beginning at
the opening of business 15 days before the day of any selection of Senior
Notes for redemption under Section 3.02 hereof and ending at the close of
business on the day of selection, (B) to register the transfer of or to
exchange any Senior Note so selected for redemption in whole or in part,
except the unredeemed portion of any Senior Note being redeemed in part or
(C) to register the transfer of or to exchange a Senior 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 Senior Note, the Trustee, any Agent and the Authority may deem and
treat the Person in whose name any Senior Note is registered as the
absolute owner of such Senior Note for the purpose of receiving payment of
principal of and interest on such Senior Notes and for all other purposes,
and none of the Trustee, any Agent or the Authority shall be affected by
notice to the contrary.
(vii) The Trustee shall authenticate Global Senior Notes and
Definitive Senior Notes in accordance with the provisions of Section 2.02
hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a registration of transfer or exchange may be submitted by
facsimile.
Section 2.07. Replacement Senior Notes.
If any mutilated Senior Note is surrendered to the Trustee or the Authority
and the Trustee receives evidence to its satisfaction of the destruction, loss
or theft of any Senior Note, the Authority shall issue and the Trustee, upon
receipt of an Authentication Order, shall authenticate a replacement Senior Note
in accordance with the requirements of the Trustee set forth herein. 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 Senior Note is replaced. The Authority
may charge for its expenses in replacing a Senior Note.
Every replacement Senior 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 Senior Notes duly issued hereunder.
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Section 2.08. Outstanding Senior Notes.
The Senior Notes outstanding at any time are all the Senior Notes
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest in a Global Senior Note
effected by the Trustee in accordance with the provisions hereof, and those
described in this Section as not outstanding. Except as set forth in Section
2.09 hereof, a Senior Note does not cease to be outstanding because the
Authority or an Affiliate of the Authority holds the Senior Note.
If a Senior 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 Senior Note is held by a bona fide purchaser.
If the principal amount of any Senior Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Authority, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Senior Notes payable on that date, then on and after that date such
Senior Notes shall be deemed to be no longer outstanding and shall cease to
accrue interest.
Section 2.09. Treasury Senior Notes.
In determining whether the Holders of the required principal amount of
Senior Notes have concurred in any direction, waiver or consent, Senior Notes
owned by the Authority, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Authority,
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 Senior Notes that the Trustee actually knows
are so owned shall be so disregarded.
Section 2.10. Temporary Senior Notes.
Until certificates representing Senior Notes are ready for delivery, the
Authority may prepare and the Trustee, upon receipt of an Authentication Order,
shall authenticate temporary Senior Notes. Temporary Senior Notes shall be
substantially in the form of certificated Senior Notes but may have variations
that the Authority considers appropriate for temporary Senior Notes and as shall
be reasonably acceptable to the Trustee. Without unreasonable delay, the
Authority shall prepare and the Trustee shall authenticate definitive Senior
Notes in exchange for temporary Senior Notes.
Holders of temporary Senior Notes shall be entitled to all of the benefits
of this Indenture.
Section 2.11. Cancellation.
The Authority at any time may deliver Senior Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Senior Notes surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel all Senior Notes surrendered
for registration of transfer, exchange, payment, replacement or cancellation and
shall destroy canceled Senior Notes (subject to the record retention requirement
of the Exchange Act). Certification of the destruction of all canceled Senior
Notes shall be delivered to the Authority. The Authority may not issue new
Senior Notes to replace Senior Notes that it has paid or that have been
delivered to the Trustee for cancellation.
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Section 2.12. Defaulted Interest.
If the Authority defaults in a payment of interest on the Senior Notes, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Senior Notes and in Section 4.01 hereof. The Authority shall notify the
Trustee in writing of the amount of defaulted interest proposed to be paid on
each Senior 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 to be paid.
Section 2.13. CUSIP Numbers.
The Authority in issuing the Senior Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use CUSIP numbers in notices of
redemption as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the Senior Notes or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Senior Notes, and any such redemption shall not be affected by any defect in
or the omission of such numbers. The Authority will promptly notify the Trustee
of any change in the CUSIP numbers.
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee.
If the Authority elects to redeem Senior Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Senior Notes to be redeemed and (iv) the redemption price.
Section 3.02. Selection of Senior Notes to Be Redeemed.
If less than all of the Senior Notes are to be redeemed or purchased in an
offer to purchase at any time, the Trustee shall select the Senior Notes to be
redeemed or purchased among the Holders of the Senior Notes 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 in accordance with any other method the Trustee considers
fair and appropriate. In the event of partial redemption by lot, the particular
Senior Notes to be redeemed shall be selected, unless otherwise provided herein,
not less than 30 nor more than 60 days prior to the redemption date by the
Trustee from the outstanding Senior Notes not previously called for redemption.
The Trustee shall promptly notify the Authority in writing of the Senior
Notes selected for redemption and, in the case of any Senior Note selected for
partial redemption, the principal amount thereof to be redeemed. Senior Notes
and portions of Senior Notes selected shall be in amounts of $1,000 or whole
multiples of $1,000, except that if all of the Senior Notes of a Holder are to
be
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redeemed, the entire outstanding amount of Senior Notes held by such Holder,
even if not a multiple of $1,000, shall be redeemed. Except as provided in the
preceding sentence, provisions of this Indenture that apply to Senior Notes
called for redemption also apply to portions of Senior Notes called for
redemption.
Section 3.03. Notice of Redemption.
Subject to the provisions of Section 3.10 hereof, at least 30 days but not
more than 60 days before a redemption date, the Authority shall mail or cause to
be mailed, by first class mail, a notice of redemption to each Holder whose
Senior Notes are to be redeemed at its registered address.
The notice shall identify the Senior Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Senior Note is being redeemed in part, the portion of the
principal amount of such Senior Note to be redeemed and that, after the
redemption date upon surrender of such Senior Note, a new Senior Note or Senior
Notes in principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Senior Note;
(d) the name and address of the Paying Agent;
(e) that Senior 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 Senior Notes called for redemption ceases to accrue on and after the
redemption date;
(g) the paragraph of the Senior Notes and/or Section of this Indenture
pursuant to which the Senior 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 Senior 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 (unless a shorter period shall be satisfactory to the Trustee),
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,
Senior 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.
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Section 3.05. Deposit of Redemption Price.
One Business Day prior to the redemption date, the Authority shall deposit
with the Trustee or with the Paying Agent money sufficient to pay the redemption
price of and accrued interest on all Senior Notes to be redeemed on that 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 redemption price of, and accrued interest on, all
Senior Notes to be redeemed.
If the Authority complies with the provisions of the preceding paragraph,
on and after the redemption date, interest shall cease to accrue on the Senior
Notes or the portions of Senior Notes called for redemption. If a Senior Note is
redeemed on or after an interest record date but on or prior to the related
interest payment date, then any accrued and unpaid interest shall be paid to the
Person in whose name such Senior Note was registered at the close of business on
such record date. If any Senior Note called for redemption shall not be so paid
upon surrender for redemption because of the failure of the Authority to comply
with the preceding paragraph, interest shall be paid on the unpaid principal,
from the redemption date until such principal is paid, and to the extent lawful
on any interest not paid on such unpaid principal, in each case at the rate
provided in the Senior Notes and in Section 4.01 hereof.
Section 3.06. Senior Notes Redeemed in Part.
Upon surrender of a Senior Note that is 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 Senior Note
equal in principal amount to the unredeemed portion of the Senior Note
surrendered.
Section 3.07. Optional Redemption.
The Authority may redeem all or a part of these Senior Notes upon not less
than 30 nor more than 60 days' notice, at a redemption price (expressed as
percentages of principal amount) equal to 100% of the principal amount thereof
plus the Applicable Premium, if any, plus accrued and unpaid interest thereon,
if any, to the applicable redemption date.
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 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) 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 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 (ii) to call for redemption of the Senior Notes of such Holder or beneficial
owner at a redemption price equal to the lesser of (1) the principal amount
thereof or (2) the price at which such
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Holder or beneficial owner acquired the Senior Notes or (3) the current market
price of the Senior Notes, together with, in each case, accrued and unpaid
interest and Additional 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
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 Senior Notes who is required to apply for 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 payments
with respect to the Senior Notes.
Section 3.10. Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Authority shall be
required to commence an offer to all Holders to purchase Senior Notes (an "Asset
Sale Offer"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Offer Period"). No later than five
Business Days after the termination of the Offer Period (the "Purchase Date"),
the Authority shall purchase the principal amount of Senior Notes required to be
purchased pursuant to Section 4.10 hereof (the "Offer Amount") or, if less than
the Offer Amount has been tendered, all Senior Notes tendered in response to the
Asset Sale Offer. Payment for any Senior 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 shall
be paid to the Person in whose name a Senior Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Senior Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale 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 Senior Notes pursuant to the Asset
Sale Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section 3.10
and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain
open;
(b) the Offer Amount, the purchase price and the Purchase Date;
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(c) that any Senior Note not tendered or accepted for payment shall
continue to accrue interest;
(d) that, unless the Authority defaults in making such payment, any Senior
Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue
interest after the Purchase Date;
(e) that Holders electing to have a Senior Note purchased pursuant to an
Asset Sale Offer may elect to have Senior Notes purchased in integral multiples
of $1,000 only;
(f) that Holders electing to have a Senior Note purchased pursuant to any
Asset Sale Offer shall be required to surrender the Senior Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Senior Note
completed, or transfer by book-entry transfer, 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;
(g) that Holders shall be entitled to withdraw 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 Senior Note the Holder delivered for purchase and a statement that
such Holder is withdrawing his election to have such Senior Note purchased;
(h) that, if the aggregate principal amount of Senior Notes surrendered by
Holders exceeds the Offer Amount, the Authority shall select the Senior Notes to
be purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Authority so that only Senior Notes in denominations of
$1,000, or integral multiples thereof, shall be purchased); and
(i) that Holders whose Senior Notes were purchased only in part shall be
issued new Senior Notes equal in principal amount to the unpurchased portion of
the Senior Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Authority shall, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Senior Notes or portions thereof tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount has been tendered, all Senior Notes
tendered, and shall deliver to the Trustee an Officers' Certificate stating that
such Senior Notes or portions thereof were accepted for payment by the Authority
in accordance with the terms of this Section 3.10. The Authority, the Depositary
or the Paying Agent, as the case may be, shall promptly (but in any case not
later than five Business Days after the Purchase Date) mail or deliver to each
tendering Holder an amount equal to the purchase price of the Senior Notes
tendered by such Holder and accepted by the Authority for purchase, and the
Authority shall promptly issue a new Senior Note, and the Trustee, upon written
request from the Authority shall authenticate and mail or deliver such new
Senior Note to such Holder, in a principal amount equal to any unpurchased
portion of the Senior Note surrendered. Any Senior 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 Asset Sale 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.
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ARTICLE 4
COVENANTS
Section 4.01. Payment of Senior Notes.
(a) The Authority shall pay or cause to be paid the principal of, premium,
if any, and interest on the Senior Notes on the dates and in the manner provided
in the Senior Notes. Principal, premium, if any, and interest and Additional
Interest, if any, shall be considered paid on the date due if the Paying Agent,
if other than the Authority or a Subsidiary thereof, 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 and Additional Interest, if any, then due. The Authority
shall pay all Additional Interest, if any, in the same manner, on the same dates
and in the amounts set forth in the first paragraph of the Senior Notes.
(b) 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 Senior
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.
(a) 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 Senior 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 Senior 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.
(b) The Authority may also from time to time designate one or more other
offices or agencies where the Senior 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 designation or
rescission and of any change in the location of any such other office or agency.
(c) 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.
(a) Whether or not required by the SEC, so long as any Senior Notes are
outstanding, the Authority will furnish to the Holders of Senior Notes within 15
days after the end of the time periods specified in the SEC's rules and
regulations for filings of current, quarterly and annual reports:
(i) all quarterly and annual financial information that would be required
to be contained in a filing with the SEC on Forms 10-Q and 10-K if the
Authority were required to file
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such Forms, including a "Management's Discussion and Analysis of
Financial Condition and Results of Operations" that describes the
financial condition and results of operations of the Authority and its
consolidated Subsidiaries (showing in reasonable detail, either on the
face of the financial statements or in the footnotes thereto and in
Management's Discussion and Analysis of Financial Condition and
Results of Operations, the financial condition and results of
operations of the Authority and its Restricted Subsidiaries separate
from the financial condition and results of operations of the
Unrestricted Subsidiaries of the Authority, to the extent that would
be required by the rules, regulations or interpretive positions of the
SEC) and, with respect to the annual information only, a report
thereon by the Authority's independent public accountants; and
(ii) all current reports that would be required to be filed with the SEC on
Form 8-K if the Authority were required to file such reports.
(b) In the event that the Authority consummates an Exchange Offer, whether
or not required by the rules and regulations of the SEC, the Authority will file
a copy of all such information and reports with the SEC for public availability
within the time periods specified in the SEC's rules and regulations (unless the
SEC will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request.
(c) The Authority has agreed that, for so long as any Senior Notes remain
outstanding, it will furnish to the Holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(d) The Authority shall 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.
(e) The Authority shall at all times comply with TIA ss. 314(a).
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 and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Authority has kept, observed, performed and fulfilled
its obligations under this Indenture, and further stating, as to each such
Officer signing such certificate, that to the best of his or her knowledge the
Authority has kept, observed, performed and fulfilled each and every covenant
contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions of this Indenture (or,
if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and what
action the Authority is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Senior Notes is prohibited or if such event has
occurred, a description of the event and what action the Authority is taking or
proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Authority's independent public accountants
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(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
has violated any provisions of Article 4 or Article 5 hereof or, if any such
violation has occurred, specifying the nature and period of existence thereof,
it being understood that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of any such
violation.
(c) The Authority shall, so long as any of the Senior Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Authority is taking or proposes
to take with respect thereto.
Section 4.05. Taxes.
The Authority shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Senior 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.
(a) The Authority will not, and the Authority will not permit any of its
Restricted Subsidiaries, directly or indirectly, to: (i) make any payment on or
with respect to any of the Authority's or any of its Restricted Subsidiaries'
Equity Interests; (ii) purchase, redeem, defease or otherwise acquire or retire
for value any Equity Interest in the Authority held by the Tribe or any
Affiliate of the Tribe; (iii) make any payment on or with respect to, or
purchase, redeem, defease or otherwise acquire or retire for value any
Subordinated Indebtedness (other than the defeasance and the ultimate redemption
of the Junior Subordinated Notes in accordance with their terms and the terms of
the Defeasance Trust), except a payment of interest or principal at Stated
Maturity thereof; (iv) 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 (other than Government Service
Payments); or (v) make any Restricted Investment; (all such payments and other
actions set forth in clauses (i) through (v) are collectively referred to as
"Restricted Payments") unless, at the time of and after giving effect to such
Restricted Payment:
(A) no Default or Event of Default shall have occurred and be continuing
or would occur as a consequence thereof;
(B) the Authority would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been
made at the beginning of the
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applicable four-quarter period, have been permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in Section 4.09(a); and
(C) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Authority and its Restricted
Subsidiaries after the date of this Indenture (excluding Restricted
Payments permitted by clauses (ii), (iii), (iv) and (v) of Section
4.07(b)), is less than the sum, without duplication, of (1) 50% of the
Consolidated Net Income of the Authority for the period (taken as one
accounting period) from the beginning of the first fiscal quarter
commencing after the date of this Indenture to the end of the
Authority's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit), plus (2) 100% of the aggregate
net cash proceeds or fair market value (as determined in good faith by
the Management Board and evidenced by a resolution set forth in an
Officers' Certificate delivered to the Trustee) of assets or property
(other than cash) received by the Authority from capital contributions
from the Tribe that bear no mandatory obligation to repay the Tribe
and other than from a Restricted Subsidiary of the Authority, plus (3)
to the extent that any Restricted Investment that was made after the
date of this Indenture is sold, liquidated or otherwise disposed of
for cash or an amount equal to the fair market value thereof (as
determined in good faith by the Management Board and evidenced by a
resolution set forth in an Officers' Certificate delivered to the
Trustee), the lesser of (I) the cash return of capital or fair market
value amount, as the case may be, with respect to such Restricted
Investment (less the cost of disposition, if any) and (II) the initial
amount of such Restricted Investment, plus (4) to the extent that any
Unrestricted Subsidiary is redesignated as a Restricted Subsidiary
after the date of this Indenture, the lesser of (I) the fair market
value of the Authority's Investment in such Subsidiary as of the date
of such redesignation or (II) such fair market value as of the date on
which such Subsidiary was originally designated as an Unrestricted
Subsidiary.
(b) So long as no Default has occurred and is continuing or would be caused
thereby, the preceding provisions will not prohibit: (i) the defeasance,
redemption, repurchase or other acquisition of Subordinated Indebtedness with
the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness;
(ii) the payment of any dividend by a Restricted Subsidiary of the Authority to
the holders of its common Equity Interests on a pro rata basis; (iii) the
repurchase, redemption or other acquisition or retirement for value of any
Equity Interests of any Restricted Subsidiary of the Authority held by any
member of the Authority's (or any of its Restricted Subsidiaries') management
pursuant to any management equity subscription agreement or stock option
agreement in effect as of the date of this Indenture; provided that (a) the
aggregate price paid for all such repurchased, redeemed, acquired or retired
Equity Interests shall not exceed $1.0 million in any 12-month period and (b)
the aggregate amount of all such repurchased, redeemed, acquired or retired
Equity Interests shall not in the aggregate exceed $3.0 million; (iv) the
redemption or purchase of Subordinated Indebtedness of the Authority in the
event that the holder of such Subordinated Indebtedness has failed to qualify or
be found suitable or otherwise be eligible by any Gaming Regulatory Authority to
remain a holder of such Subordinated Indebtedness; (v) the redemption,
defeasance, repurchase or other acquisition or retirement of Subordinated
Indebtedness with the net cash proceeds from a substantially concurrent capital
contribution from the Tribe (provided that such capital contribution is not
counted for purposes of Section 4.07(a)(C)(2); and (vi) any other Restricted
Payments in an amount not to exceed $20.0 million at any one time outstanding.
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(c) The Authority may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default; provided
that in no event shall (i) any entity (including any Subsidiary of the Authority
or the Authority or any operating division thereof) engaged in a Principal
Business be transferred to or held by an Unrestricted Subsidiary or (ii) any Key
Project Assets or Gaming Licenses be transferred to an Unrestricted Subsidiary.
In the event of such designation, all outstanding Investments owned by the
Authority and its Restricted Subsidiaries in the Subsidiary so designated will
be deemed to be an Investment made as of the time of such designation and will
reduce the amount available for Restricted Payments under Section 4.07(a) unless
the Investment constitutes a Permitted Investment. All such outstanding
Investments will be deemed to constitute Restricted Payments in an amount equal
to the fair market value of such Investments at the time of such designation.
Such designation will only be permitted if such Restricted Payment would be
permitted at such time and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary. The Authority may redesignate an
Unrestricted Subsidiary to be a Restricted Subsidiary if such redesignation
would not otherwise cause a Default.
(d) The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Authority or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities that are required to be valued
by this Section 4.07 shall be determined by the Management Board whose
resolution with respect thereto shall be delivered to the Trustee. Not later
than the date of making any Restricted Payment, the Authority shall deliver to
the Trustee an Officers' Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this Section 4.07 were computed.
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries.
(a) Except as set forth in Section 4.08(b), the Authority will not, and
will not permit any of its Restricted Subsidiaries to, directly or indirectly,
create or permit to exist or become effective any encumbrance or restriction on
the ability of any Restricted Subsidiary to: (i) pay dividends or make any other
distributions on its Capital Stock to the Authority or any of the Authority's
Restricted Subsidiaries, or with respect to any other interest or participation
in, or measured by, its profits, or pay any indebtedness owed to the Authority
or any of the Authority's Restricted Subsidiaries; (ii) make loans or advances
to the Authority or any of the Authority's Restricted Subsidiaries; or (iii)
transfer any of its properties or assets to the Authority or any of the
Authority's Restricted Subsidiaries.
(b) The provisions of Section 4.08(a) will not apply to encumbrances or
restrictions existing under or by reason of:
(i) Existing Indebtedness as in effect on the date of this Indenture
and any amendments, modifications, restatements, renewals,
extensions, increases, supplements, refundings, replacements or
refinancings thereof, provided that such amendments,
modifications, restatements, renewals, extensions, increases,
supplements, refundings, replacements or refinancings are no more
restrictive, taken as a whole, with respect to such dividend and
other payment restrictions than those contained in such Existing
Indebtedness, as in effect on the date of this Indenture;
(ii) this Indenture and the Senior Notes;
(iii) the Senior Subordinated Notes Indenture and the Senior
Subordinated Notes;
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(iv) the Credit Facilities;
(v) applicable law;
(vi) any instrument governing Indebtedness or Capital Stock of a Person
acquired by the Authority or any of its Restricted Subsidiaries as
in effect at the time of such acquisition (except to the extent
such Indebtedness was incurred in connection with or in
contemplation of such acquisition), which encumbrance or
restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or
assets of the Person, so acquired, provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of this
Indenture to be incurred;
(vii) customary non-assignment provisions in leases or other contracts
entered into in the ordinary course of business and consistent
with past practices;
(viii) purchase money obligations (including, without limitation, Capital
Lease Obligations) for property acquired in the ordinary course of
business that impose restrictions on the property so acquired of
the nature described in clause (iii) of Section 4.08(a);
(ix) any agreement for the sale or other disposition of a Restricted
Subsidiary that restricts distributions by such Restricted
Subsidiary pending its sale or other disposition;
(x) Permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing such Permitted Refinancing
Indebtedness are no more restrictive, taken as a whole, than those
contained in the agreements governing the Indebtedness being
refinanced;
(xi) Liens securing Indebtedness otherwise permitted to be incurred
pursuant to Section 4.12 that limit the right of the Authority or
any of its Restricted Subsidiaries to dispose of the assets
subject to such Lien;
(xii) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements and other similar
agreements entered into in the ordinary course of business; and
(xiii) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of
business.
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.
(a) The Authority will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Indebtedness) and
the Authority will not issue any Disqualified Stock and will not permit any of
its Subsidiaries to issue any shares of preferred stock; provided, however, that
the Authority may incur Indebtedness (including Acquired Indebtedness) or issue
shares of Disqualified Stock and the Authority's Subsidiaries may incur
Indebtedness or issue preferred stock if 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 on which such
additional Indebtedness is incurred would have been at least 2.0 to 1 if such
Indebtedness is incurred prior to September 30, 2001
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and 2.5 to 1 if such indebtedness is incurred thereafter, determined on a pro
forma basis (including a pro forma application of the net proceeds therefrom),
as if the additional Indebtedness had been incurred at the beginning of such
four-quarter period. Notwithstanding the foregoing, the Authority will not issue
any Disqualified Stock or any type of Capital Stock that would violate IGRA.
(b) So long as no Default or Event of Default shall have occurred and be
continuing, or would be caused thereby, Section 4.09(a) will not prohibit the
incurrence of any of the following items of Indebtedness:
(i) the incurrence by the Authority or its Restricted Subsidiaries of
Indebtedness and letters of credit pursuant to Credit Facilities;
provided that the aggregate principal amount of all such
Indebtedness and letters of credit outstanding under all Credit
Facilities, after giving effect to such incurrence (with letters
of credit being deemed to have a principal amount equal to the
maximum potential liability of the Authority thereunder), does not
exceed $500.0 million less the aggregate amount of all Net
Proceeds of Asset Sales applied by the Authority or any of its
Restricted Subsidiaries since the date of this Indenture to repay
Indebtedness under Credit Facilities permitted under Section 4.10;
(ii) the incurrence by the Authority and its Restricted Subsidiaries of
the Existing Indebtedness;
(iii) the incurrence by the Authority of Indebtedness represented by the
Senior Notes and the Senior Exchange Notes;
(iv) the incurrence by the Authority of Indebtedness represented by the
Senior Subordinated Notes and the Senior Subordinated Exchange
Notes;
(v) the incurrence by the Authority or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease
Obligations, mortgage financings or purchase money obligations, in
each case incurred for the purpose of financing all or any part of
the purchase price of furniture, fixtures, equipment or similar
assets used or useful in the business of the Authority or such
Restricted Subsidiary not to exceed 100% of the lesser of cost or
fair market value of the assets financed and, in an aggregate
principal amount under this clause (v) not to exceed $25.0 million
at any time outstanding;
(vi) the incurrence by the Authority or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange
for, or the net proceeds of which are used to refund, refinance,
renew, extend, defease or replace Indebtedness that was permitted
by this Indenture to be incurred under Section 4.09(a) or clauses
(i), (ii) (other than the Junior Subordinated Notes), (iii), (iv)
or (v) of this Section 4.09(b);
(vii) the incurrence by the Authority or any of its Restricted
Subsidiaries of 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;
(viii) the guarantee by the Authority or any of its Restricted
Subsidiaries of any Indebtedness of the Authority or any of its
Restricted Subsidiaries that was permitted to be incurred by
another provision of this Section 4.09;
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(ix) the incurrence by a Wholly Owned Restricted Subsidiary of
Indebtedness owed to another Wholly Owned Restricted Subsidiary or
to the Authority; provided that if at any time any such Wholly
Owned Restricted Subsidiary ceases to be a Wholly Owned Restricted
Subsidiary, any such Indebtedness shall be deemed to be an
incurrence of Indebtedness for the purposes of this Section 4.09;
(x) the incurrence by the Authority or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal
amount (or accreted value, as applicable) at any time outstanding,
including all Permitted Refinancing Indebtedness incurred to
refund, refinance or replace any Indebtedness incurred pursuant to
this clause (x), not to exceed $25.0 million; or
(xi) the incurrence by the Authority's Unrestricted Subsidiaries of
Non-Recourse Debt, provided, however, that if any such
Indebtedness ceases to be Non-Recourse Debt of an Unrestricted
Subsidiary, such event shall be deemed to constitute an incurrence
of Indebtedness by a Restricted Subsidiary of the Authority that
was not permitted by this clause (xi).
For purposes of determining compliance with this Section 4.09 in the event
that an item of proposed Indebtedness meets the criteria of more than one of the
categories of Indebtedness described in clauses (i) through (xi) above or is
entitled to be incurred pursuant to Section 4.09(a), the Authority shall, in its
sole discretion, classify such item of Indebtedness on the date of its
incurrence in any manner that complies with this Section 4.09.
Section 4.10. Asset Sales.
(a) The Authority will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless: (i) the Authority (or its
Restricted Subsidiary, as the case may be) receives consideration at the time of
such Asset Sale at least equal to the fair market value (as determined in good
faith by the Management Board and evidenced by a resolution set forth in an
Officers' Certificate delivered to the Trustee) of the assets sold or otherwise
disposed of; and (ii) except in the case of a Permitted Asset Swap, at least 75%
of the consideration therefor received by the Authority or such Restricted
Subsidiary is in the form of cash. For purposes of this provision, each of the
following shall be deemed to be cash: (A) any liabilities that would appear on
the Authority's or such Restricted Subsidiary's balance sheet prepared in
accordance with GAAP (other than contingent liabilities and liabilities that are
by their terms subordinated to the Senior Notes or any guarantee thereof) that
are assumed by the transferee of any such assets pursuant to a customary
novation agreement that releases the Authority or such Restricted Subsidiary
from further liability; and (B) any securities, notes or other obligations
received by the Authority or any such Restricted Subsidiary from such transferee
that are converted by the Authority or such Restricted Subsidiary into cash (to
the extent of the cash received) within 30 days of the receipt thereof,
provided, however, that the Authority will not be permitted to make any Asset
Sale of Key Project Assets.
(b) Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Authority may apply such Net Proceeds, at its option, to: (i) repay
permanently term Indebtedness under Credit Facilities of the Authority or any
Restricted Subsidiary; (ii) repay revolving credit Indebtedness under Credit
Facilities and correspondingly permanently reduce commitments with respect
thereto; (iii) acquire a majority of the assets of, or a majority of the Voting
Stock of, an entity engaged in the Principal Business or a Related Business;
(iv) make capital expenditures or acquire other long-term assets that are used
or useful in the Principal Business or a Related Business; (v) make an
investment in the Principal
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Business or a Related Business or in tangible long-term assets used or useful in
the Principal Business or a Related Business; or (vi) reduce permanently
Indebtedness that is not Subordinated Indebtedness.
Pending the final application of any such Net Proceeds, the Authority may
temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited by this Indenture.
(c) Any Net Proceeds from Asset Sales that are not applied or invested as
provided in Section 4.10(b) will be deemed to constitute "Excess Proceeds." When
the aggregate amount of Excess Proceeds exceeds $15.0 million, the Authority
will make an Asset Sale Offer to all Holders of Senior Notes and all holders of
other Indebtedness containing provisions similar to those set forth in this
Indenture with respect to offers to purchase or redeem with the proceeds of
sales of assets to purchase the maximum principal amount of Senior Notes and
such other Indebtedness that may be purchased out of the Excess Proceeds. The
offer price in any Asset Sale Offer will be equal to 100% of the principal
amount plus accrued and unpaid interest and Additional Interest, if any, to the
date of purchase and will be payable in cash, in accordance with the procedures
set forth in this Indenture and such other Indebtedness. To the extent that any
Excess Proceeds remain after consummation of an Asset Sale Offer, the Authority
may use such Excess Proceeds for any purpose not otherwise prohibited by this
Indenture. If the aggregate principal amount of Senior Notes and such other
Indebtedness tendered into such Asset Sale Offer surrendered by holders thereof
exceeds the amount of Excess Proceeds, the Trustee shall select the Senior Notes
and such other Indebtedness (to the extent that such other Indebtedness permits
such selection) to be purchased on a pro rata basis. Upon completion of such
offer to purchase, the amount of Excess Proceeds shall be reset at zero.
Section 4.11. Transactions with Affiliates.
(a) The Authority will not, and the Authority will not permit any of its
Restricted Subsidiaries to, make any payment to, or 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 or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"),
unless: (i) such Affiliate Transaction is on terms that are no less favorable to
the Authority or the relevant Restricted Subsidiary than those that would have
been obtained in a comparable transaction by the Authority or such Restricted
Subsidiary with an unrelated Person; and (ii) the Authority delivers to the
Trustee: (A) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $5.0
million, a resolution of the Management Board set forth in an Officers'
Certificate certifying that such Affiliate Transaction complies with this
Section 4.11 and that such Affiliate Transaction has been approved by a majority
of the disinterested members of the Management Board; and (B) with respect to
any Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $10.0 million, an opinion as to the
fairness to the Authority or such Restricted Subsidiary of such Affiliate
Transaction from a financial point of view issued by an accounting, appraisal or
investment banking firm of national standing.
(b) The following items shall not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of Section 4.11(a): (i)
any employment agreement or arrangement entered into by the Authority or any of
its Restricted Subsidiaries in the ordinary course of business and consistent
with the past practice of the Authority or such Restricted Subsidiary; (ii)
transactions between or among the Authority and/or its Restricted Subsidiaries;
(iii) payment of reasonable Management Board fees to members of the Management
Board; (iv) transactions with Persons in whom the Authority owns any Equity
Interests, so long as the remaining equity holders of such Person are not
Affiliates
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of the Authority or any of its Subsidiaries; (v) Government Service Payments;
(vi) transactions pursuant to the Development Services Agreement, the
Relinquishment Agreement and the Side Letters; (vii) Restricted Payments or
Permitted Investments that are made in compliance with the provisions of Section
4.07; and (viii) contractual arrangements existing on the date of this Indenture
and renewals, extensions and any modifications thereof that are not materially
adverse to Holders.
Section 4.12. Liens.
The Authority will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or otherwise
cause or suffer to exist or become effective any Lien of any kind (other than
Permitted Liens) upon any of its property or assets, now owned or hereafter
acquired, unless all payments due under this Indenture and the Senior Notes are
secured on an equal and ratable basis with the obligations so secured until such
time as such obligations are no longer secured by a Lien.
Section 4.13. Line of Business.
The Authority shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in any business other than the Principal Business or a
Related Business.
Section 4.14. Existence of the Authority and Maintenance of the Lease.
(a) The Authority shall, and shall cause each of its Restricted
Subsidiaries to, do or cause to be done all things necessary to preserve and
keep in full force and effect their respective existence, in accordance with
their respective organizational documents and their respective rights
(contractual, charter and statutory), licenses and franchises; provided,
however, that neither the Authority nor any Restricted Subsidiary shall be
required to preserve, with respect to itself, any license, right or franchise
and, with respect to its Restricted Subsidiaries, any such existence, license,
right or franchise, if its Management Board or Board of Directors, or other
governing body or officers authorized to make such determination, as the case
may be, shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Authority or any Restricted Subsidiary, and
that the loss thereof is not adverse in any material respect to the Holders.
(b) The Authority shall do, or cause to be done, all things necessary to
perform any material covenants set forth in the Lease in order to keep the Lease
in full force and effect.
Section 4.15. Offer to Repurchase Upon Change of Control.
(a) If a Change of Control occurs, each Holder of the Senior Notes will
have the right to require the Authority to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of that Holder's Senior Notes pursuant
to a Change of Control Offer. In the Change of Control Offer, the Authority will
offer a Change of Control Payment in cash equal to 101% of the aggregate
principal amount of Senior Notes repurchased plus accrued and unpaid interest
and Additional Interest, if any, thereon, to the date of purchase.
(b) Within 20 Business Days following any Change of Control, the Authority
will mail a notice to each Holder describing the transaction or transactions
that constitute the Change of Control and offering to repurchase Senior Notes on
the Change of Control Payment Date specified in such notice, pursuant to the
procedures required by this Indenture and described in such notice. The
Authority will comply with the requirements of Rule 14e-1 under the Exchange Act
and any other securities laws and
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regulations thereunder to the extent such laws and regulations are applicable in
connection with the repurchase of the Senior Notes as a result of a Change of
Control.
(c) On the Change of Control Payment Date, the Authority will, to the
extent lawful: (i) accept for payment all Senior Notes or portions thereof
properly tendered pursuant to the Change of Control Offer; (ii) deposit with the
Paying Agent an amount equal to the Change of Control Payment in respect of all
Senior Notes or portions thereof so tendered; and (iii) deliver or cause to be
delivered to the Trustee the Senior Notes so accepted together with an Officers'
Certificate stating the aggregate principal amount of Senior Notes or portions
thereof being purchased by the Authority.
(d) The Paying Agent will promptly mail to each Holder of Senior Notes so
tendered the Change of Control Payment for such Senior Notes, and the Trustee
will promptly authenticate and mail (or cause to be transferred by book entry)
to each Holder a new Senior Note equal in principal amount to any unpurchased
portion of the Senior Notes surrendered, if any; provided that each such new
Senior Note will be in a principal amount of $1,000 or an integral multiple
thereof. The Authority will notify the Trustee and will instruct the Trustee to
notify the Holders of the results of the Change of Control Offer on or as soon
as practicable after the Change of Control Payment Date.
(e) Notwithstanding anything to the contrary in this Section 4.15, the
Authority shall not be required to make a Change of Control Offer upon a Change
of Control if a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this
Section 4.15 and Section 3.10 hereof and all other provisions of this Indenture
applicable to a Change of Control Offer made by the Authority and purchases all
Senior Notes validly tendered and not withdrawn under such Change of Control
Offer.
Section 4.16. Limitation on Sale and Leaseback Transactions.
The Authority will not, and will not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction involving the
Resort; provided that the Authority or any of its Restricted Subsidiaries may
enter into a sale and leaseback transaction if: (i) the Authority or such
Restricted Subsidiary, as applicable, could have (a) incurred Indebtedness in an
amount equal to the Attributable Debt relating to such sale and leaseback
transaction pursuant to the Fixed Charge Coverage Ratio test set forth in
Section 4.09(a) and (b) incurred a Lien to secure such Indebtedness pursuant to
Section 4.12; (ii) the gross cash proceeds of such sale and leaseback
transaction are at least equal to the fair market value, as determined in good
faith by the Management Board and set forth in an Officers' Certificate
delivered to the Trustee, of the property that is subject of such sale and
leaseback transaction; and (iii) the transfer of assets in such sale and
leaseback transaction is permitted by, and the Authority applies the proceeds of
such transaction in compliance with Section 4.10; provided that, upon the
occurrence of a Rating Event Date and for so long as the covenants set forth in
Section 4.26 continue to be Suspended Provisions, the following provisions shall
replace the foregoing provisions with respect to sale and leaseback transactions
by the Authority and its Restricted Subsidiaries: The Authority will not, and
will not permit any of its Restricted Subsidiaries to, enter into any sale and
leaseback transaction involving the Resort; provided that the Authority or any
Restricted Subsidiary may enter into any sale and leaseback transaction with an
Attributable Value (when taken together with all other sale and leaseback
transactions of the Authority and its Restricted Subsidiaries) that, at the time
of such transaction, after giving effect thereto, does not exceed 10% of
Consolidated Net Tangible Assets.
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Section 4.17. Limitation on Issuances and Sales of Equity Interests in Wholly
Owned Restricted Subsidiaries.
The Authority (i) will not, and will not permit any Wholly Owned Restricted
Subsidiary of the Authority to, transfer, convey, sell, lease or otherwise
dispose of any Equity Interests in any Wholly Owned Restricted Subsidiary of the
Authority to any Person (other than the Authority or another Wholly Owned
Restricted Subsidiary of the Authority), unless (a) such transfer, conveyance,
sale, lease or other disposition is of all the Equity Interests in such Wholly
Owned Restricted Subsidiary and (b) the cash Net Proceeds from such transfer,
conveyance, sale, lease or other disposition are applied in accordance with
Section 4.10, and (ii) will not permit any Wholly Owned Restricted Subsidiary of
the Authority to issue any of its Equity Interests (other than, if necessary,
shares of its Capital Stock constituting directors' qualifying shares) to any
Person other than to the Authority or a Wholly Owned Restricted Subsidiary of
the Authority.
Section 4.18. Limitation on Issuances of Senior Guarantees of Indebtedness.
The Authority shall not permit any Subsidiary, directly or indirectly, to
guarantee or pledge any assets to secure the payment of any other Indebtedness
of the Authority unless such Subsidiary simultaneously executes and delivers a
supplemental indenture to this Indenture providing for the guarantee of the
payment of the Senior Notes by such Subsidiary, which Senior Subsidiary
Guarantee shall be senior to or pari passu with such Subsidiary's guarantee of
or pledge to secure such other Indebtedness. Notwithstanding the foregoing, any
such Senior Subsidiary Guarantee by a Subsidiary of the Senior Notes shall
provide by its terms that it shall be automatically and unconditionally released
and discharged upon any sale, exchange or transfer, to any Person not an
Affiliate of the Authority, of all of the Authority's stock in, or all or
substantially all the assets of, such Subsidiary, which sale, exchange or
transfer is made in compliance with the applicable provisions of this Indenture.
The form of such Senior Subsidiary Guarantee is attached as Exhibit D hereto.
Section 4.19. Payments for Consent.
Neither the Authority nor any of its Restricted Subsidiaries shall,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any Holder of any Senior Notes for or as
an inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Senior Notes unless such consideration is
offered to be paid or is paid to all Holders of the Senior Notes that consent,
waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or agreement.
Section 4.20. Senior Subsidiary Guarantees.
If the Authority shall acquire or create a Restricted Subsidiary after the
date of this Indenture, then such newly acquired or created Restricted
Subsidiary shall execute a Senior Subsidiary Guarantee in the form of a
Supplemental Indenture and deliver an Opinion of Counsel, in accordance with the
terms of this Indenture, except for (i) all Subsidiaries organized outside of
the United States and its territories and (ii) all Subsidiaries that have
properly been designated as Unrestricted Subsidiaries in accordance with this
Indenture for so long as they continue to constitute Unrestricted Subsidiaries.
The form of such Senior Subsidiary Guarantee is attached as Exhibit E hereto.
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Section 4.21. Ownership Interests in the Authority.
Neither the Tribe nor the Authority shall permit any Person other than the
Tribe to acquire any Ownership Interest whatsoever in the Authority.
Section 4.22. Subordination of Junior Payments Under the Relinquishment
Agreement.
All Obligations under the Senior Notes shall be "Senior Obligations" as
defined in the Relinquishment Agreement and will not be on parity with, or
subordinated in right of payment to, the Junior Relinquishment Payments (as
defined in the Relinquishment Agreement) and the Authority will not amend
Section 6.2 of the Relinquishment Agreement in a manner adverse to the Holders
of the Senior Notes.
Section 4.23. Construction.
The Authority will use its commercially reasonable best efforts to cause
construction of the Expansion Project to be prosecuted with diligence and
continuity in good and workmanlike manner materially in accordance with the
plans relating to the Expansion Project as more fully described in the Offering
Memorandum of the Authority dated February 24, 1999.
Section 4.24. Restrictions on Leasing and Dedication of Property.
(a) Except as provided in Section 4.24(b), the Authority will not lease,
sublease, or grant a license, concession or other agreement to occupy, manage or
use any material portion of the Authority's property and assets owned or leased
by the Authority (each, a "Lease Transaction").
(b) Section 4.24(a) will not prohibit any of the following Lease
Transactions:
(i) The Authority may enter into a Lease Transaction with respect to
any space with any Person (including, without limitation, a lease
in connection with the Expansion Project for the purpose of
developing, constructing, operating and managing retail
establishments within the Resort), provided that: (A) such Lease
Transaction will not materially interfere with, impair or detract
from the operations of the Resort; (B) such Lease Transaction
contains rent and such other terms such that the Lease
Transaction, taken as a whole is commercially reasonable in light
of prevailing or comparable transactions in other casinos, hotels,
attractions or shopping venues; and (C) such Lease Transaction
complies with all applicable law, including obtaining any consent
of the BIA, if required;
(ii) the Lease and any amendments, extensions, modifications or
renewals thereof which are not materially adverse to the Holders;
(iii) the Authority may enter into a management or operating agreement
with respect to any of the Authority's property and assets with
any Person; provided that (A) the manager or operator has
experience in managing or operating similar operations; and (B)
such management or operating agreement is on commercially
reasonable and fair terms to the Authority; and
(iv) the Relinquishment Agreement, the Development Services Agreement
and the Side Letters with the Manager and any amendments,
extensions, modifications or renewals thereof which are not
materially adverse to the Holders.
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(c) 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,
and no person other than the Authority may conduct gaming or casino operations
on any property which is the subject of a Lease Transaction.
Section 4.25. 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, set
insured amounts and coinsurance provisions as are customarily carried by similar
businesses of similar size, including, without limitation, property and
casualty.
Customary insurance coverage shall be deemed to include the following:
(a) 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;
(b) comprehensive general liability insurance with minimum limits of $2.0
million;
(c) umbrella or bumbershoot liability insurance providing excess liability
coverages over and above the foregoing underlying insurance policies
up to a minimum limit of $100.0 million; and
(d) property insurance protecting the property against loss or damage by
fire, lightning, wind-storm, 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)).
Section 4.26. Changes in Covenants when Senior Notes Rated Investment Grade.
Following the first date upon which the Senior Notes are rated Baa3 or
better by Moody's and BBB- or better by S&P (or, in either case, if such person
ceases to rate the Senior Notes for reasons outside of the control of the
Authority, the equivalent investment grade credit rating from any other
"nationally recognized statistical rating organization" (within the meaning of
Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act) selected by the Authority as a
replacement agency) (the "Rating Event Date") and provided no Event of Default
or event that with notice or the passage of time would constitute an Event of
Default shall exist on the Rating Event Date, Sections 4.07, 4.08, 4.09, 4.10,
4.11, 4.17, 4.23, 4.24 and 4.25 in this Indenture (collectively, the "Suspended
Provisions") will no longer be applicable to the Senior Notes; provided,
however, that in the event that at any time after a Rating Event Date, the
Senior Notes shall be rated lower than Baa3 by Moody's or lower than BBB- by
S&P, or any equivalent rating by a successor agency to Moody's or S&P, the
Suspended Sections shall be automatically reinstated (the "Reinstated
Provisions") and all transactions by the Authority that occurred during the time
that such sections were suspended and that would have violated such sections had
such sections been in effect at the time shall be deemed not to constitute a
Default or an Event of Default, as the case may be, and shall be deemed to have
been in compliance with such sections for all purposes; provided
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further that thereafter all transactions by the Authority occurring on or after
the date on which the Suspended Provisions have been reinstated shall be
required to be in compliance with the Reinstated Provisions. For purposes of
interpreting the definition of "Permitted Liens" during the time any such
Sections are suspended, the definition should be read as if the Sections were
not so suspended.
Section 4.27. Gaming Licenses
The Authority will 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 or any part of the Resort as
a result of any noncompliance with the 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 Senior
Notes 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 4.28. Required Defeasance and Redemption of the Junior Subordinated
Notes.
The Authority will establish, as of the date of the Indentures, the
Defeasance Trust and deposit into the Defeasance Trust cash or government
securities estimated to be sufficient to pay all principal, premium and interest
on the Junior Subordinated Notes less $500,000 on January 1, 2000, the first
redemption date. The Authority will redeem the Junior Subordinated Notes from
the proceeds of the Defeasance Trust as of January 1, 2000 at a price of 100% of
the principal amount, plus accrued and unpaid interest thereon, less $500,000.
Section 4.29. Designation of Designated Senior Indebtedness Under the
Relinquished Agreement.
The Authority will not designate any indebtedness as "Designated Senior
Indebtedness" under the Relinquishment Agreement that is not also designated as
Designated Senior Indebtedness under the Senior Subordinated Notes Indenture.
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.
The Authority shall not, directly or indirectly, consolidate or merge with
or into (whether or not the Authority is the surviving entity), or sell, assign,
transfer, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions to, another Person.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An Event of Default occurs if:
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(a) the Authority defaults for 30 days in the payment when due of interest
on, or Additional Interest with respect to, the Senior Notes;
(b) the Authority defaults in payment when due of the principal of or
premium, if any, on the Senior Notes;
(c) the Authority or any of its Restricted Subsidiaries fails to comply
with any of the provisions of Section 4.10 or 5.01 hereof;
(d) the Authority or any of its Restricted Subsidiaries fails to observe
or perform (i) any covenant described in Section 4.07 or 4.09 for 30
days after notice to the Authority by the Trustee or the Holders of at
least 25% in aggregate principal amount of the Senior Notes then
outstanding voting as a single class or (ii) any other covenant,
representation, warranty or other agreement in this Indenture or the
Senior Notes for 60 days after notice to the Authority by the Trustee
or the Holders of at least 25% in aggregate principal amount of the
Senior Notes then outstanding voting as a single class;
(e) default under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Authority or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the
Authority or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date of
this Indenture, if that default (i) is caused by a failure to pay
principal of or premium, if any, or interest on such Indebtedness
prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default"); or
(ii) results in the acceleration of such Indebtedness prior to its
express maturity; and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $10.0 million or
more;
(f) failure by the Authority or any of its Restricted Subsidiaries to pay
final judgments in amounts not covered by insurance or not adequately
reserved for in accordance with GAAP aggregating in excess of $10.0
million, which judgments are not paid, discharged or stayed (by reason
of pending appeal or otherwise) for a period of 60 days;
(g) the Authority or any of its Restricted Subsidiaries that are
Significant Subsidiaries or any group of Restricted Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary pursuant
to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in
an involuntary case,
(iii) consents to the appointment of a custodian of it or for all
or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally is not paying its debts as they become due; or
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(h) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(i) is for relief against the Authority or any of its
Restricted Subsidiaries that are Significant Subsidiaries
or any group of Restricted Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary in an
involuntary case;
(ii) appoints a custodian of the Authority or any of its
Restricted Subsidiaries that are Significant Subsidiaries
or any group of Restricted Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary or for all
or substantially all of the property of the Authority or
any of its Restricted Subsidiaries that are Significant
Subsidiaries or any group of Restricted Subsidiaries that,
taken as a whole, would constitute a Significant
Subsidiary; or
(iii) orders the liquidation of the Authority or any of its
Restricted Subsidiaries that are Significant Subsidiaries
or any group of Restricted Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days;
(i) 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;
(j) 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);
(k) the Lease ceases to be in full force and effect;
(l) except as permitted by this Indenture, any Senior Subsidiary Guarantee
is held in any judicial proceeding to be unenforceable or invalid or
shall cease for any reason to be in full force and effect or any
Subsidiary Guarantor, or any Person acting on behalf of any Subsidiary
Guarantor, shall deny or disaffirm its obligations under such
Subsidiary Guarantor's Senior Subsidiary Guarantee; or
(m) failure by the Tribe to comply with the provisions of Article 10 for
30 days after notice to the Authority and the Tribe by the Trustee or
the Holders of at least 25% in aggregate principal amount of the
Senior Notes then outstanding voting as a single class.
Section 6.02. Acceleration.
If any Event of Default (other than an Event of Default specified in clause
(g) or (h) of Section 6.01 hereof with respect to the Authority, any Restricted
Subsidiary that is a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary)
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Senior Notes may declare all the Senior
Notes to be due and payable immediately. Upon any such declaration, the Senior
Notes shall become due and payable immediately. Notwithstanding the foregoing,
if an Event of Default specified in clause (g) or (h) of Section 6.01 hereof
occurs with respect to the Authority, any of its Restricted Subsidiaries that
are Significant Subsidiaries or any group of Restricted Subsidiaries that, taken
as a whole, would constitute a Significant Subsidiary, all outstanding
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Senior 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 Senior 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.
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 Senior Notes or to enforce the performance of any provision of
the Senior Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Senior Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Senior 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 Senior Notes by notice to the Trustee may on behalf of the
Holders of all of the Senior Notes waive an existing Default or Event of Default
and its consequences hereunder, except a continuing Default or Event of Default
in the payment of the principal of, premium and Additional Interest , if any, or
interest on, the Senior 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 Senior 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 Senior
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. 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 Senior Notes or that may involve
the Trustee in personal liability.
Section 6.06. Limitation on Suits.
A Holder of a Senior Note may pursue a remedy with respect to this
Indenture or the Senior Notes only if:
(a) the Holder of a Senior Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then outstanding
Senior Notes make a written request to the Trustee to pursue the remedy;
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(c) such Holder of a Senior Note or Holders of Senior 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 Senior Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Senior Note may not use this Indenture to prejudice the
rights of another Holder of a Senior Note or to obtain a preference or priority
over another Holder of a Senior Note.
Section 6.07. Rights of Holders of Senior Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Senior Note to receive payment of principal, premium and Additional
Interest, if any, and interest on the Senior Note, on or after the respective
due dates expressed in the Senior Note (including in connection with an offer to
purchase), or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
such Holder.
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 and Additional Interest, if any, and interest remaining
unpaid on the Senior Notes and interest on overdue principal and, to the extent
lawful, interest and such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Senior Notes allowed in any judicial proceedings relative to the
Authority (or any other obligor upon the Senior 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
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composition affecting the Senior 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 Senior Notes for amounts due and unpaid on the
Senior Notes for principal, premium and Additional Interest, if any, and
interest, ratably, without preference or priority of any kind, according to
the amounts due and payable on the Senior Notes for principal, premium and
Additional Interest, if any, and interest, respectively; and
Third: 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 Senior 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 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 Senior Note pursuant
to Section 6.07 hereof, or a suit by Holders of more than 10% in principal
amount of the then outstanding Senior Notes.
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the express
provisions of this Indenture and the Trustee need perform only those
duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
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(ii) in the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received
by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), and (c) of this Section 7.01.
(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 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. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
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.
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(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 unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Senior Notes and may otherwise deal with the Authority or any
Affiliate of 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 or the Senior Notes, it shall not be
accountable for the Authority's use of the proceeds from the Senior Notes or any
money paid to the Authority or upon the Authority's direction under any
provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Senior Notes or any other document in connection with the sale
of the Senior Notes or pursuant to this Indenture other than its certificate of
authentication.
Section 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Senior Notes a notice
of the Default or Event of Default within 90 days after it occurs. Except in the
case of a Default or Event of Default in payment of principal of, premium, if
any, or interest on any Senior Note, the Trustee may withhold the notice if and
so long as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of the Holders of the Senior Notes.
Section 7.06. Reports by Trustee to Holders of the Senior Notes.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, and for so long as Senior Notes remain outstanding, the
Trustee shall mail to the Holders of the Senior Notes a brief report dated as of
such reporting date that complies with TIA ss. 313(a) (but if no event described
in TIA ss. 313(a) has occurred within the twelve months preceding the reporting
date, no report need be transmitted). The Trustee also shall comply with TIA ss.
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders of Senior
Notes shall be mailed to the Authority and filed with the SEC and each stock
exchange on which the Senior Notes are listed in accordance with TIA ss. 313(d).
The Authority shall promptly notify the Trustee when the Senior 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 Senior
Notes to any Gaming Regulatory Authority when requested to do so by the
Authority.
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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 Senior 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 Senior 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. 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.
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, including the
costs and expenses of enforcing this Indenture 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.
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To secure the Authority's payment obligations in this Section 7.07, the
Trustee shall have a Lien prior to the Senior Notes on all money or property
held or collected by the Trustee, except that held in trust to pay principal and
interest on particular Senior 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(g) or (h) 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.
Section 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
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 a majority in
principal amount of the then outstanding Senior 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
(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. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Senior Notes may
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
reasonable 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 at least a majority in principal amount of the then outstanding
Senior Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by the Holders of a majority in
principal amount the then outstanding Senior Notes, fails to comply with Section
7.10, such Holder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
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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. 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.
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 supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 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 ss.310(a)(1), (2) and (5). The Trustee is subject to TIA ss.310(b).
Section 7.11. Preferential Collection of Claims Against Authority.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
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 Management Board, evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Senior Notes
upon compliance with the conditions set forth below in this Article 8.
Section 8.02. Legal Defeasance and Discharge.
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 its obligations with respect to all outstanding Senior
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 entire Indebtedness represented
by the outstanding Senior Notes, 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 Senior Notes
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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 Senior Notes to
receive solely from the trust fund described in Section 8.04 hereof, and as more
fully set forth in such Section, payments in respect of the principal of,
premium, if any, and interest on such Senior Notes when such payments are due,
(b) the Authority's obligations with respect to such Senior 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 8. Subject to compliance with this Article 8, 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 its obligations under the covenants contained in Sections 4.07, 4.08, 4.09,
4.10, 4.11, 4.12, 4.13, 4.14(b), 4.15, 4.16, 4.17, 4.18, 4.20, 4.21, 4.22, 4.23,
4.24, 4.25 and 4.27 hereof and Section 5.01 hereof with respect to the
outstanding Senior Notes on and after the date the conditions set forth in
Section 8.04 are satisfied (hereinafter, "Covenant Defeasance"), and the Senior
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 Senior Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Senior 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, 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 Senior Notes shall be unaffected thereby. In addition, upon
the Authority's exercise under Section 8.01 hereof of the option applicable to
this Section 8.03 hereof, subject to the satisfaction of the conditions set
forth in Section 8.04 hereof, Sections 6.01(c) through 6.01(f) and Sections
6.01(i) through 6.01(m) hereof shall not constitute Events of Default.
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 Senior 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 (reasonably acceptable to the Trustee) of a
nationally recognized firm of independent public accountants, to pay the
principal of, premium and Additional Interest, if any, and interest on the
outstanding Senior Notes on the stated date for payment thereof or on the
applicable redemption date, as the case may be;
(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
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that (A) the Authority has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of this Indenture, there
has been a change in the applicable federal income tax law, in either case to
the effect that, and based thereon such Opinion of Counsel shall confirm that,
the Holders of the outstanding Senior Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such Legal Defeasance and
will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Legal Defeasance had
not occurred;
(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 the Holders of the
outstanding Senior Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be subject
to federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be continuing on
the date of such deposit (other than a Default or Event of Default resulting
from the incurrence of Indebtedness all or a portion of the proceeds of which
will be used to defease the Senior Notes pursuant to this Article 8 concurrently
with such incurrence) or insofar as Sections 6.01(g) or 6.01(h) hereof is
concerned, at any time in the period ending on the 91st day after the date of
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 or any of its
Restricted Subsidiaries is a party or by which the Authority or any of its
Restricted Subsidiaries is bound;
(f) the Authority must have delivered to the Trustee an Opinion of Counsel
(which may be subject to customary exceptions) to the effect that after the 91st
day following the deposit, the trust funds will not be subject to the effect of
any applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;
(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 of preferring the Holders over any other creditors of the Authority or
with the intent 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, 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 Senior
Notes shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Senior 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 Senior Notes of
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all sums due and to become due thereon in respect of principal, premium, if any,
and interest, but such money need not be segregated from other funds except to
the extent required by law.
The 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 Senior
Notes.
Anything in this Article 8 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 Senior Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Authority on its request or (if then held by the Authority) shall be
discharged from such trust; and the Holder of such Senior Note shall thereafter
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 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
Senior 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 makes
any payment of principal of, premium, if any, or interest on any Senior Note
following the reinstatement of its obligations, the Authority shall be
subrogated to the rights of the Holders of such Senior Notes to receive such
payment from the money held by the Trustee or Paying Agent.
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ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Senior Notes.
Notwithstanding Section 9.02 of this Indenture, provided that any required
governmental approval to ensure the enforceability of the Senior Notes and this
Indenture, including that of the BIA is obtained, the Authority, the Subsidiary
Guarantors, if any, and the Trustee may amend or supplement this Indenture, the
Senior Subsidiary Guarantees, if any, or the Senior Notes without the consent of
any Holder of a Senior Note to:
(a) cure any ambiguity, defect or inconsistency;
(b) provide for uncertificated Senior Notes in addition to or in place of
certificated Senior Notes or to alter the provisions of Article 2 hereof
(including the related definitions) in a manner that does not materially
adversely affect any Holder;
(c) provide for the assumption of the Authority's or a Subsidiary
Guarantor's obligations to the Holders of the Senior Notes by a successor to the
Authority or such Subsidiary Guarantor;
(d) 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 hereunder of any Holder of the Senior Notes;
(e) comply with requirements of the SEC in order to effect or maintain the
qualification of this Indenture under the TIA; or
(f) allow any Subsidiary to execute a supplemental indenture and/or a
Senior Subsidiary Guarantee with respect to the Senior Notes.
Upon the request of the Authority accompanied by a resolution of its
Management Board authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Authority and the Subsidiary
Guarantors, if any, in the execution of any amended or supplemental Indenture
authorized or permitted by the terms of this Indenture and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into such amended or supplemental
Indenture that affects its own rights, duties or immunities under this Indenture
or otherwise.
Section 9.02. With Consent of Holders of Senior Notes.
(a) Except as provided below in this Section 9.02, the Authority and the
Trustee may amend or supplement this Indenture (including Sections 3.10 and 4.10
hereof), the Senior Subsidiary Guarantees, if any, and the Senior Notes may be
amended or supplemented:
(i) with the consent of the Holders of at least a majority in principal
amount of the Senior Notes then outstanding voting as a single class (including
consents obtained in connection with a tender offer or exchange offer for, or
purchase of, the Senior Notes), and, subject to Sections 6.04 and 6.07 hereof,
any existing Default or Event of Default (other than a Default or Event of
Default in the payment of the principal of, premium, if any, or interest on the
Senior Notes, except a payment default resulting from an acceleration that has
been rescinded) or compliance with any provision of this Indenture, the
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Senior Subsidiary Guarantees 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 voting as a single class (including consents obtained in connection with a
tender offer or exchange offer for, or purchase of, the Senior Notes);
(ii) without the consent of at least 66 2/3% of the aggregate principal
amount of Senior Notes then outstanding (including consents obtained in
connection with a tender offer or exchange offer for, or purchase of, such
Senior Notes), no waiver or amendment to this Indenture may make a change in the
provisions of Section 4.15 hereof that adversely affects the rights of any
Holder of Senior Notes.
(b) Section 2.08 hereof shall determine which Senior Notes are considered
to be "outstanding" for purposes of this Section 9.02.
(c) Upon the request of the Authority accompanied by a resolution of its
Management Board authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Senior 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 unless such amended or supplemental Indenture directly
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.
(d) It shall not be necessary for the consent of the Holders of Senior
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.
(e) After an amendment, supplement or waiver under this Section becomes
effective, the Authority shall mail to the Holders of Senior 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 or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Senior Notes then
outstanding voting as a single class may waive compliance in a particular
instance by the Authority with any provision of this Indenture or the Senior
Notes. However, without the consent of each Holder affected, an amendment or
waiver under this Section 9.02 may not (with respect to any Senior Notes held by
a non-consenting Holder):
(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 any of the provisions with respect to the redemption of
the Senior Notes except as provided above with respect to Sections 3.10, 4.10
and 4.15 hereof;
(iii) reduce the rate of or change the time for payment of interest,
including default interest, on any Senior Note;
(iv) waive a Default or Event of Default in the payment of principal of or
premium, if any, or interest 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);
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(v) make any Senior Note payable in money other than that stated in the
Senior Notes;
(vi) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Senior Notes to receive
payments of principal of or interest on the Senior Notes;
(vii) waive a redemption payment with respect to any Note (other than a
payment required by Sections 3.10, 4.10 and 4.15 hereof);
(viii) make any change in Section 6.04 or 6.07 hereof or in the foregoing
amendment and waiver provisions; or
(ix) release any Subsidiary Guarantor from any of its obligations under its
Senior Subsidiary Guarantee or this Indenture, except in accordance with the
terms of its Senior Subsidiary Guarantee.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Senior Notes shall
be set forth in a amended or supplemental Indenture that complies with the TIA
as then in effect.
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 Senior Note is a continuing consent by the Holder of a Senior
Note and every subsequent Holder of a Senior Note or portion of a Senior Note
that evidences the same debt as the consenting Holder's Senior Note, even if
notation of the consent is not made on any Senior Note. However, any such Holder
of a Senior Note or subsequent Holder of a Senior Note may revoke the consent as
to its Senior 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 Senior Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Senior Note thereafter authenticated. The Authority
in exchange for all Senior Notes may issue and the Trustee shall, upon receipt
of an Authentication Order, authenticate new Senior Notes that reflect the
amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Senior 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 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 until the
Management Board approves it. In executing any amended or supplemental
indenture, the Trustee shall be entitled to receive and (subject to Section 7.01
hereof) shall be fully protected in relying upon, in addition to the documents
required by Section 11.04 hereof, an Officer's Certificate and an Opinion of
Counsel stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.
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<PAGE>
Article 10
Covenants of the Tribe
Section 10.01. Covenants of the Tribe. The Tribe shall not, and shall not permit
any of its representatives, political subunits or councils, agencies,
instrumentalities, directly or indirectly, except as required by federal or
state law, to do any of the following:
(a) increase or impose any tax or other payment obligation on the
Authority or on any patrons of, or any activity at, the Resort other
than:
(i) payments which are due under any agreement in effect on the
Closing Date or payments which are not materially adverse
to the economic interests of Holders;
(ii) payments which the Authority has agreed to reimburse each
Holder for the economic effect thereof, if any;
(iii) payments which correspondingly reduce the Restricted
Payments otherwise payable to the Tribe;
(iv) pursuant to the Tribal Tax Code; or
(v) Government Service Payments;
(b) amend the terms of the Lease in any material manner that would be
materially adverse to the economic interests of Holders;
(c) amend the Tribal Gaming Ordinance in effect on the Closing Date
(unless any such amendment is a legitimate effort to ensure that the
Authority and the Resort conduct gaming operations in a manner that is
consistent with applicable laws, rules and regulations or that
protects the environment, the public health and safety, or the
integrity of the Authority or the Resort), restrict or eliminate the
exclusive right of the Authority to conduct gaming operations on any
property owned or controlled by the Tribe in a manner that would be
materially adverse to the economic interests of Holders; or
(d) take any other action, enter into any agreement, amend its
constitution or enact any ordinance, law, rule or regulation that
would have a material adverse effect on the economic interests of
Holders.
Moreover, except with the consent of a majority in interest of Holders 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 impose, tax or otherwise make a
charge on the Senior Notes, this Indenture or any payments or deposits to be
made thereunder.
Section 10.02. Additional Covenants of the Tribe.
(a) Any action taken by the Tribe to comply with federal or state law that
would otherwise violate Section 10.01 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
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extent possible under the federal or state law, the Tribe shall give the Trustee
at least 30 days' prior written notice of any such action.
(b) 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.
(c) 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.
(d) 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.
(e) 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
Holders provided for in this Indenture or the Senior Notes.
(f) 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 Lease (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 affect on the rights of the Trustee or the Holders under this
Indenture or the Senior Notes.
(g) 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 Senior
Notes shall be entitled to receive payment in full in respect to all principal,
premium, interest and other amounts owing in respect of the Notes before any
payment or any distribution to the Tribe.
(h) 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.
(i) The Tribe shall comply with all material terms of the Construction
Reserve Disbursement Agreement and shall not amend and shall not permit any of
its representatives, political subunits or councils, agencies,
instrumentalities, directly or indirectly, to amend, except as required by
federal or state law, such Construction Reserve Disbursement Agreement in a
manner that would have a material adverse effect on the economic interests of
Holders.
Any action taken in violation of this Article 10 shall be deemed in
contravention of Article XIV ("Non-Impairment of Contracts") of the Constitution
of the Tribe.
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ARTICLE 11
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA ss.318(c), the imposed duties shall control.
Section 11.02. Notices.
Any notice or communication by the Authority, any Subsidiary Guarantor 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
1 Mohegan Sun Boulevard
Uncasville, CT 06382
Telecopier No.: (860) 204-6153
Attention: Roland J. Harris
With a copy to:
Hogan & Hartson LLP
555 Thirteenth Street, NW
Washington, DC 20004
Telecopier No.: (202) 637-5910
Attention: David B. H. Martin, Jr., Esq.
If to the Tribe:
The Mohegan Tribe of Indians of Connecticut
1 Mohegan Sun Boulevard
Uncasville, CT 06382
Telecopier No.: (860) 204-6153
Attention: Roland J. Harris
With a copy to:
Rome McGuigan Sabanosh, P.C.
One State Street
Hartford, CT 06103-3103
Telecopier No.: (203) 724-3921
Attention: Lewis B. Rome, Esq.
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If to the Trustee:
First Union National Bank
10 Statehouse Square
Hartford, CT 06103-3698
Telecopier No.: (860) 247-1356
Attention: W. Jeffrey Kramer
With a copy to:
Edwards & Angell
90 State House Square, 9th Floor
Hartford, CT 06104
Telecopier No.: (860) 547-1035
Attention: Justin M. Sullivan Esq.
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 ss. 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
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 11.03. Communication by Holders of Senior Notes with Other Holders of
Senior Notes.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders with
respect to their rights under this Indenture or the Senior Notes. The Authority,
the Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
Section 11.04. 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 11.05
hereof) stating that, in the opinion of the
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signers, all conditions precedent and covenants, if any, provided for in this
Indenture relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory to
the Trustee (which shall include the statements set forth in Section 11.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
Section 11.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA ss.
314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has read
such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been satisfied.
Section 11.06. 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 11.07. 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 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 or to compel the Tribe to return any prohibited payment made to the
Tribe as described in Section 10.02(d). Subject to the foregoing, the Tribe and
the Authority waive their respective 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 Indenture or the
Senior 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 or the Senior 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 and
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the Senior 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 Authority to submit to binding arbitration; and (iv) adjudicate any
claim under the Indian Civil Rights Act of 1968, 25 U.S.C. ss. 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 and the Senior 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.
Section 11.08. No Personal Liability of Directors, Officers, Employees and
Stockholders.
Neither the Tribe nor any director, officer, office holder, employee,
agent, representative or member of the Authority or the Tribe or holder of an
Ownership Interest of the Authority, any Subsidiary Guarantor or the Tribe, as
such, shall have any liability for any obligations of the Authority or such
Subsidiary Guarantor under the Senior Notes, the Senior Subsidiary Guarantees,
if any, this Indenture 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. The waiver and release are part of the
consideration for issuance of the Senior Notes.
Section 11.09. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE SENIOR NOTES AND THE SENIOR SUBSIDIARY GUARANTEES
WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW PRINCIPLES THEREOF (OTHER THAN
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
Section 11.10. 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 its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 11.11. Successors.
All agreements of the Authority in this Indenture and the Senior Notes
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors. All agreements of each Subsidiary Guarantor in this
Indenture shall bind its successors.
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Section 11.12. Severability.
In case any provision in this Indenture or in the Senior Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 11.13. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 11.14. Table of Contents, Headings, etc.
The Table of Contents, Cross Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part 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 March ___, 1999
MOHEGAN TRIBAL GAMING AUTHORITY
By:___________________________________
Name:
Title:
Attest:
_______________________________
Name:
Title:
FIRST UNION NATIONAL BANK
By:___________________________________
Name:
Title:
Attest:
_______________________________
Authorized Signatory
Date:
MOHEGAN TRIBE OF INDIANS OF
CONNECTICUT
(solely with respect to its
obligations under Article 10 and
Sections 4.21 and 11.07)
By:___________________________________
Name:
Title:
Attest:
_______________________________
Authorized Signatory
Date:
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EXHIBIT A-1
[Face of Note]
================================================================================
CUSIP/CINS 608328 AA8/U60742 AA8
8 1/8% Senior Note due 2006
No. ___ $____________
MOHEGAN TRIBAL GAMING AUTHORITY
promises to pay to _____________________________________________________________
or registered assigns,
the principal sum of ___________________________________________________________
Dollars on January 1, 2006.
Interest Payment Dates: January 1 and July 1
Record Dates: December 15 and June 15
Dated: March 3, 1999
MOHEGAN TRIBAL GAMING AUTHORITY
By:___________________________________
Name:
Title:
By:___________________________________
Name:
Title:
This is one of the Senior Notes referred to
in the within-mentioned Indenture:
FIRST UNION NATIONAL BANK,
as Trustee
By: __________________________________
Authorized Signatory
================================================================================
A-1-1
Senior Notes
<PAGE>
[Back of Note]
8 1/8% Senior Note due 2006
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT
NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE
MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE
INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY
WITH THE PRIOR WRITTEN CONSENT OF THE AUTHORITY.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
IN ACCORDANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (SUBJECT TO THE DELIVERY OF SUCH EVIDENCE, IF ANY, REQUIRED
UNDER THE INDENTURE PURSUANT TO WHICH THIS NOTE IS ISSUED) AND IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER JURISDICTION. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER
EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE AUTHORITY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(a) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE AUTHORITY SO
REQUESTS), SUBJECT TO THE RECEIPT BY THE REGISTRAR OF A CERTIFICATION OF THE
TRANSFEROR AND AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, (2) TO THE AUTHORITY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE
RESALE RESTRICTION SET FORTH IN (A) ABOVE.
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST.
(a) The Mohegan Tribal Gaming Authority (the "Authority"), promises to pay
interest on the principal amount of this Senior Note at 8 1/8% per annum from
March 3, 1999 until maturity. The
A-1-2
Senior Notes
<PAGE>
Authority will pay interest and Additional Interest, if any, semi-annually in
arrears on January 1 and July 1 of each year, or if any such day is not a
Business Day, on the next succeeding Business Day (each an "Interest Payment
Date"). Interest on the Senior Notes will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
issuance; provided that if there is no existing Default in the payment of
interest, and if this Senior Note is authenticated between a record date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date; provided,
further, that the first Interest Payment Date shall be July 1, 1999. 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 interest and
Additional Interest, if any, (without regard to any applicable grace periods)
from time to time on demand at the same rate to the extent lawful. Interest will
be computed on the basis of a 360-day year of twelve 30-day months.
(b) The Holder of this Senior Note is entitled to the benefits of the
Senior Registration Rights Agreement dated as of the date hereof, among the
Authority and the Initial Purchasers named therein (the "Senior Registration
Rights Agreement"). If (i) the Authority fails to file any of the Registration
Statements required by the Registration Rights Agreements 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 of 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 in connection
with resales of Transfer Restricted Securities during 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 will pay
Additional Interest to each Holder of Senior Notes, with respect to the first
90-day period immediately following the occurrence of the first Registration
Default in an amount equal to 25 basis points per 90-day period of the principal
amount of Senior Notes held by such Holder. The amount of the Additional
Interest will increase by an additional 25 basis points with respect to each
subsequent 90-day period until all Registration Defaults have been cured, up to
a maximum amount of Additional Interest of 1% per annum of the principal amount
of Senior Notes.
(A) Except as expressly provided in this paragraph 1(b), Additional
Interest shall be treated as interest and any date on which Additional Interest
is due and payable shall be treated as an Interest Payment Date for all purposes
under this Senior Note and the Indenture.
(B) In the event that the Authority is required to pay Additional Interest
pursuant to this paragraph 1(b), the Authority shall notify the Trustee in
writing at least 15 days prior to the first Interest Payment Date upon which
such Additional Interest is due; provided that, in the event that the obligation
to pay such Additional Interest occurs less than 15 days prior to such
Additional Interest Date, such notice shall be provided by the Authority to the
Trustee as soon as reasonably practicable prior to such Interest Payment Date.
2. METHOD OF PAYMENT. The Authority will pay interest on the Senior Notes
(except defaulted interest) and Additional Interest, if any, to the Persons who
are registered Holders of Senior Notes at the close of business on the December
15 or June 15 next preceding the Interest Payment Date, even if such Senior
Notes are canceled after such record date and on or before such Interest Payment
Date, except as provided in Section 2.12 of the Indenture with respect to
defaulted interest. The Senior Notes will be payable as to principal, premium
and Additional Interest, if any, and interest at the office or agency of the
Authority maintained for such purpose within or without the City and State of
New
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<PAGE>
York, or, at the option of the Authority, payment of interest and Additional
Interest may be made by check mailed to the Holders at their addresses set forth
in the register of Holders, and provided that payment by wire transfer of
immediately available funds will be required with respect to principal of and
interest, premium and Additional Interest on, all Global Senior Notes and all
other Senior Notes the Holders of which shall hold at least $1.0 million in
principal amount of Senior Notes and 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 Union National Bank, the
Trustee under the Indenture, will act as Paying Agent and Registrar. The
Authority may change any Paying Agent or Registrar without notice to any Holder.
The Authority or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Authority issued the Senior Notes under an Indenture
dated as of March 3, 1999 ("Indenture") between the Authority and the Trustee.
The terms of the Senior 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 ss.ss. 77aaa-77bbbb). The Senior Notes are subject to all
such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. To the extent any provision of this Senior Note
conflicts with the express provisions of the Indenture, the provisions of the
indenture shall govern and be controlling.
5. OPTIONAL REDEMPTION.
(a) The Authority may redeem all or a part of these Senior Notes upon not
less than 30 nor more than 60 days' notice, at a redemption price (expressed as
percentages of principal amount) equal to 100% of the principal amount thereof
plus the Applicable Premium, if any, plus accrued and unpaid interest thereon,
if any, to the applicable redemption date.
(b) 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 Senior 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 Senior Notes
of such Holder or beneficial owner at a redemption price equal to the lesser of
(1) the principal amount thereof or (2) the price at which such Holder or
beneficial owner acquired the Senior Notes or (3) the current market price of
the Senior Notes, together with, in either case, accrued and unpaid interest and
Additional 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 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 shall be the obligation of such Holder or beneficial
owner.
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Senior Notes
<PAGE>
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Authority shall not be
required to make mandatory redemption payments with respect to the Senior Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Authority shall be required to
make an offer (a "Change of Control Offer") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Senior Notes at a
purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Additional Interest thereon, if any, to the date
of purchase (the "Change of Control Payment"). Within 20 Business Days following
any Change of Control, the Authority shall mail a notice to each Holder setting
forth the procedures governing the Change of Control Offer as required by the
Indenture.
(b) If the Authority or a Subsidiary consummates any Asset Sales, within
five Business Days of each date on which the aggregate amount of Excess Proceeds
exceeds $15.0 million, the Authority shall commence an offer to all Holders of
Senior Notes (as "Asset Sale Offer") pursuant to Section 3.10 of the Indenture
to purchase the maximum principal amount of Senior Notes 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 and Additional
Interest thereon, 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 Asset Sale Offer is
less than the Excess Proceeds, the Authority (or such Subsidiary) may use such
deficiency for any purpose not otherwise permitted by the Indenture. 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 on a pro rata basis. Holders of Senior Notes that are the
subject of an offer to purchase will receive an Asset Sale Offer from the
Authority prior to any related purchase date and may elect to have such Senior
Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Senior Notes.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Senior Notes are to be redeemed at its registered address. Senior Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Senior Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Senior
Notes or portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Senior Notes may be registered and Senior 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 Senior Note or portion of a Senior Note
selected for redemption, except for the unredeemed portion of any Senior Note
being redeemed in part. Also, the Authority need not exchange or register the
transfer of any Senior Notes for a period of 15 days before a selection of
Senior Notes to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Senior Note may be
treated as its owner for all purposes.
A-1-5
Senior Notes
<PAGE>
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture, the Senior Subsidiary Guarantees or the Senior Notes may be amended
or supplemented with the consent of the Holders of at least a majority in
principal amount of the then outstanding Senior Notes voting as a single class,
and any existing default or compliance with any provision of the Indenture, the
Senior Subsidiary Guarantees 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 voting as a single class. Without the consent of any Holder of a Senior
Note, the Indenture, the Senior Subsidiary Guarantees or the Senior Notes may be
amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Senior Notes in addition to or in place of
certificated Senior Notes, to provide for the assumption of the Authority's or
Subsidiary Guarantor's obligations to Holders of the Senior Notes by a successor
to the Authority or such Subsidiary Guarantor, 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, to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act, or to
allow any Subsidiary Guarantor to execute a supplemental indenture to the
Indenture and/or a Senior Subsidiary Guarantee with respect to the Senior Notes
provided that the Authority has obtained any required government approval to
ensure the enforceability of the Senior Notes and the Indenture.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest or Additional Interest on the Senior
Notes; (ii) default in payment when due of principal of or premium, if any, on
the Senior Notes when the same becomes due and payable at maturity, upon
redemption (including in connection with an offer to purchase) or otherwise;
(iii) failure by the Authority or any of its Restricted Subsidiaries to comply
with Section 4.10 or 5.01 of the Indenture; (iv) failure by the Authority or any
of its Restricted Subsidiaries to observe or perform (A) any covenant described
in Section 4.07 or 4.09 of the Indenture for 30 days after notice to the
Authority by the Trustee or the Holders of at least 25% in aggregate principal
amount of the Senior Notes then outstanding voting as a single class or (B) any
other covenant, representation, warranty or other agreement in the Indenture or
the Senior Notes for 60 days after notice to the Authority by the Trustee or the
Holders of at least 25% in aggregate principal amount of the Senior Notes then
outstanding voting as a single class; (v) default under certain other agreements
relating to Indebtedness of the Authority or any of its Restricted Subsidiaries
which default results in the acceleration of such Indebtedness prior to its
express maturity; (vi) certain final judgments for the payment of money that
remain undischarged for a period of 60 days; (vii) certain events of bankruptcy
or insolvency with respect to the Authority or any of its Restricted
Subsidiaries; (viii) 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; (ix) 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); (x)
the Lease ceases to be in full force and effect; (xi) except as permitted by the
Indenture, any Senior Subsidiary Guarantee shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to be in
full force and effect or any Subsidiary Guarantor or any Person acting on its
behalf shall deny or disaffirm its obligations under such Subsidiary Guarantor's
Senior Subsidiary Guarantee; and (xii) failure by the Tribe to comply with the
provisions of Article 10 of the Indenture for 30 days after notice to the
Authority and the Tribe by the Trustee or the Holders of at least 25% in
aggregate principal amount of the Senior Notes then outstanding voting as a
single class. 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 Senior
Notes may declare all the Senior 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 Senior Notes will become due and
payable without further action or notice. Holders 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. The
Trustee may withhold from Holders of the Senior Notes notice of any
A-1-6
Senior Notes
<PAGE>
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the 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 on, or the
principal of, the Senior Notes. The Authority is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and the
Authority is required upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default.
13. TRUSTEE DEALINGS WITH AUTHORITY. 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. A controlling person, director, officer,
employee or holder of an Ownership Interest of the Authority, as such, shall not
have any liability for any obligations of the Authority under the Senior Notes
or the Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Senior Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Senior Notes.
15. AUTHENTICATION. This Senior 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 OF RESTRICTED GLOBAL SENIOR NOTES AND
RESTRICTED DEFINITIVE SENIOR NOTES. In addition to the rights provided to
Holders of Senior Notes under the Indenture, Holders of Restricted Global Senior
Notes and Restricted Definitive Senior Notes shall have all the rights set forth
in the Senior Registration Rights Agreement dated as of March 3, 1999, between
the Authority and the parties named on the signature pages thereof (the "Senior
Registration Rights Agreement").
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 Senior 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 Senior Notes or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
The Authority will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Senior Registration Rights Agreement.
Requests may be made to:
Mohegan Tribal Gaming Authority
1 Mohegan Sun Boulevard
Uncasville, CT 06382
Attention: Roland J. Harris
A-1-7
Senior Notes
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:______________________________
(Insert assignee's legal name)
- --------------------------------------------------------------------------------
(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*:
______________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-1-8
Senior Notes
<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 or 4.15 of the Indenture, check the appropriate box below:
|_| Section 4.10 |_| Section 4.15
If you want to elect to have only part of the Note purchased by the
Authority pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$_______________________
Date:______________________
Your Signature:_______________________________________
(Sign exactly as your name appears on the face of this Note)
Tax Indentification No.:______________________________
Signature Guarantee*:
______________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-1-9
Senior Notes
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL SENIOR NOTE
The following exchanges of a part of this Global Senior Note for an
interest in another Global Senior Note or for a Definitive Senior Note, or
exchanges of a part of another Global Senior Note or Definitive Senior Note for
an interest in this Global Senior Note, have been made:
<TABLE>
<CAPTION>
Principal Amount of Signature of
Amount of decrease in Amount of increase in this Global Senior Note authorized officer of
Principal Amount of Principal Amount of following such decrease Trustee or Senior
Date of Exchange this Global Senior Note this Global Senior Note (or increase) Note Custodian
---------------- ----------------------- ----------------------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
</TABLE>
A-1-10
Senior Notes
<PAGE>
EXHIBIT A-2
[Face of Regulation S Temporary Global Senior Note]
CUSIP/CINS U60742 AA8
8 1/8% Senior Note due 2006
No. ___ $___________
MOHEGAN TRIBAL GAMING AUTHORITY
promises to pay to______________________________________________________________
or registered assigns,
the principal sum of__________________________________________________
Dollars on January 1, 2006.
Interest Payment Dates: January 1, and July 1
Record Dates: December 15, and June 15
Dated: March 3, 1999
MOHEGAN TRIBAL GAMING AUTHORITY
By:___________________________________
Name:
Title:
By:___________________________________
Name:
Title:
This is one of the Senior Notes referred to
in the within-mentioned Indenture:
FIRST UNION NATIONAL BANK,
as Trustee
By: __________________________________
Authorized Signatory
================================================================================
A-2-1
Senior Notes
<PAGE>
[Back of Regulation S Temporary Global Senior Note]
8 1/8% Senior Note due 2006
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL SENIOR NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED SENIOR NOTES,
ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR
THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL SENIOR NOTE SHALL BE
ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SENIOR NOTES IN
DEFINITIVE FORM, THIS SENIOR NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY
TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR
ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"),
TO THE AUTHORITY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
IN ACCORDANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (SUBJECT TO THE DELIVERY OF SUCH EVIDENCE, IF ANY, REQUIRED
UNDER THE INDENTURE PURSUANT TO WHICH THIS NOTE IS ISSUED) AND IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER JURISDICTION. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER
EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE AUTHORITY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(a) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE AUTHORITY SO
REQUESTS), SUBJECT TO THE RECEIPT BY THE REGISTRAR OF A CERTIFICATION OF THE
TRANSFEROR AND AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, (2) TO THE AUTHORITY OR (3) PURSUANT
A-2-2
Senior Notes
<PAGE>
TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE
RESALE RESTRICTION SET FORTH IN (A) ABOVE.
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST.
(a) The Mohegan Tribal Gaming Authority (the "Authority"), promises to pay
interest on the principal amount of this Senior Note at 81/8% per annum from
March 3 1999 until maturity. The Authority will pay interest and Additional
Interest, if any, semi-annually in arrears on January 1 and July 1 of each year,
or if any such day is not a Business Day, on the next succeeding Business Day
(each an "Interest Payment Date"). Interest on the Senior Notes will accrue from
the most recent date to which interest has been paid or, if no interest has been
paid, from the date of issuance; provided that if there is no existing Default
in the payment of interest, and if this Senior Note is authenticated between a
record date referred to on the face hereof and the next succeeding Interest
Payment Date, interest shall accrue from such next succeeding Interest Payment
Date; provided, further, that the first Interest Payment Date shall be July 1,
1999. 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 interest and
Additional Interest, if any, (without regard to any applicable grace periods)
from time to time on demand at the same rate to the extent lawful. Interest will
be computed on the basis of a 360-day year of twelve 30-day months.
(b) The Holder of this Senior Note is entitled to the benefits of the
Senior Registration Rights Agreement dated as of the date hereof, among the
Authority and the Initial Purchasers named therein (the "Senior Registration
Rights Agreement"). If (i) the Authority fails to file any of the Registration
Statements required by the Registration Rights Agreements 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 of 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 in connection
with resales of Transfer Restricted Securities during 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 will pay
Additional Interest to each Holder of Senior Notes, with respect to the first
90-day period immediately following the occurrence of the first Registration
Default in an amount equal to 25 basis points per 90-day period of the principal
amount of Senior Notes held by such Holder. The amount of the Additional
Interest will increase by an additional 25 basis points with respect to each
subsequent 90-day period until all Registration Defaults have been cured, up to
a maximum amount of Additional Interest of 1% per annum of the principal amount
of Senior Notes.
(A) Except as expressly provided in this paragraph 1(b), Additional
Interest shall be treated as interest and any date on which Additional Interest
is due and payable shall be treated as an Interest Payment Date for all purposes
under this Senior Note and the Indenture.
(B) In the event that the Authority is required to pay Additional Interest
pursuant to this paragraph 1(b), the Authority shall notify the Trustee in
writing at least 15 days prior to the first Interest
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Payment Date upon which such Additional Interest is due; provided that, in the
event that the obligation to pay such Additional Interest occurs less than 15
days prior to such Additional Interest Date, such notice shall be provided by
the Authority to the Trustee as soon as reasonably practicable prior to such
Interest Payment Date.
2. METHOD OF PAYMENT. The Authority will pay interest on the Senior Notes
(except defaulted interest) and Additional Interest to the Persons who are
registered Holders of Senior Notes at the close of business on the December 15
or June 15 next preceding the Interest Payment Date, even if such Senior Notes
are canceled after such record date and on or before such Interest Payment Date,
except as provided in Section 2.12 of the Indenture with respect to defaulted
interest. The Senior Notes will be payable as to principal, premium and
Additional Interest, if any, and interest 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 and Additional
Interest, if any, 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 Additional Interest on, all Global Senior Notes and all
other Senior Notes the Holders of which shall hold at least $1.0 million in
principal amount of Senior Notes and 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 Union National Bank, the
Trustee under the Indenture, will act as Paying Agent and Registrar. The
Authority may change any Paying Agent or Registrar without notice to any Holder.
The Authority or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Authority issued the Senior Notes under an Indenture
dated as of March 3, 1999 ("Indenture") between the Authority and the Trustee.
The terms of the Senior 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 ss.ss. 77aaa-77bbbb). The Senior Notes are subject to all
such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. To the extent any provision of this Senior Note
conflicts with the express provisions of the Indenture, the provisions of the
indenture shall govern and be controlling.
5. OPTIONAL REDEMPTION.
(a) The Authority may redeem all or a part of these Senior Notes upon not
less than 30 nor more than 60 days' notice, at a redemption price (expressed as
percentages of principal amount) equal to 100% of the principal amount thereof
plus the Applicable Premium, if any, plus accrued and unpaid interest thereon,
if any, to the applicable redemption date.
(b) 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 Senior 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
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<PAGE>
Gaming Regulatory Authority); or (ii) to call for redemption of the Senior Notes
of such Holder or beneficial owner at a redemption price equal to the lesser of
(1) the principal amount thereof or (2) the price at which such Holder or
beneficial owner acquired the Senior Notes or (3) the current market price of
the Senior Notes, together with, in either case, accrued and unpaid interest and
Additional 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 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 shall be the obligation of such Holder or beneficial
owner.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Authority shall not be
required to make mandatory redemption payments with respect to the Senior Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Authority shall be required to
make an offer (a "Change of Control Offer") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Senior Notes at a
purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Additional Interest thereon, if any, to the date
of purchase (the "Change of Control Payment"). Within 20 Business Days following
any Change of Control, the Authority shall mail a notice to each Holder setting
forth the procedures governing the Change of Control Offer as required by the
Indenture.
(b) If the Authority or a Subsidiary consummates any Asset Sales, within
five Business Days of each date on which the aggregate amount of Excess Proceeds
exceeds $15.0 million, the Authority shall commence an offer to all Holders of
Senior Notes (as "Asset Sale Offer") pursuant to Section 3.10 of the Indenture
to purchase the maximum principal amount of Senior Notes 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 and Additional
Interest thereon, 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 Asset Sale Offer is
less than the Excess Proceeds, the Authority (or such Subsidiary) may use such
deficiency for any purpose not otherwise permitted by the Indenture. 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 on a pro rata basis. Holders of Senior Notes that are the
subject of an offer to purchase will receive an Asset Sale Offer from the
Authority prior to any related purchase date and may elect to have such Senior
Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Senior Notes.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Senior Notes are to be redeemed at its registered address. Senior Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Senior Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Senior
Notes or portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Senior
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<PAGE>
Notes may be registered and Senior 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 Senior Note or portion of a Senior Note selected for redemption,
except for the unredeemed portion of any Senior Note being redeemed in part.
Also, the Authority need not exchange or register the transfer of any Senior
Notes for a period of 15 days before a selection of Senior Notes to be redeemed
or during the period between a record date and the corresponding Interest
Payment Date.
This Regulation S Temporary Global Note is exchangeable in whole or in part
for one or more Global Notes only (i) on or after the termination of the 40-day
restricted period (as defined in Regulation S) and (ii) upon presentation of
certificates (accompanied by an Opinion of Counsel, if applicable) required by
Article 2 of the Indenture. Upon exchange of this Regulation S Temporary Global
Note for one or more Global Notes, the Trustee shall cancel this Regulation S
Temporary Note.
10. PERSONS DEEMED OWNERS. The registered Holder of a Senior Note may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture, the Senior Subsidiary Guarantees or the Senior Notes may be amended
or supplemented with the consent of the Holders of at least a majority in
principal amount of the then outstanding Senior Notes voting as a single class,
and any existing default or compliance with any provision of the Indenture, the
Senior Subsidiary Guarantees 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 voting as a single class. Without the consent of any Holder of a Senior
Note, the Indenture, the Senior Subsidiary Guarantees or the Senior Notes may be
amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Senior Notes in addition to or in place of
certificated Senior Notes, to provide for the assumption of the Authority's or
Subsidiary Guarantor's obligations to Holders of the Senior Notes by a successor
to the Authority or such Subsidiary Guarantor, 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, to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act, or to
allow any Subsidiary Guarantor to execute a supplemental indenture to the
Indenture and/or a Senior Subsidiary Guarantee with respect to the Senior Notes
provided that the Authority has obtained any required government approval to
ensure the enforceability of the Senior Notes and the Indenture.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest or Additional Interest on the Senior
Notes; (ii) default in payment when due of principal of or premium, if any, on
the Senior Notes when the same becomes due and payable at maturity, upon
redemption (including in connection with an offer to purchase) or otherwise;
(iii) failure by the Authority or any of its Restricted Subsidiaries to comply
with Section 4.10 or 5.01 of the Indenture; (iv) failure by the Authority or any
of its Restricted Subsidiaries to observe or perform (A) any covenant described
in Section 4.07 or 4.09 of the Indenture for 30 days after notice to the
Authority by the Trustee or the Holders of at least 25% in aggregate principal
amount of the Senior Notes then outstanding voting as a single class or (B) any
other covenant, representation, warranty or other agreement in the Indenture or
the Senior Notes for 60 days after notice to the Authority by the Trustee or the
Holders of at least 25% in aggregate principal amount of the Senior Notes then
outstanding voting as a single class; (v) default under certain other agreements
relating to Indebtedness of the Authority or any of
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<PAGE>
its Restricted Subsidiaries which default results in the acceleration of such
Indebtedness prior to its express maturity; (vi) certain final judgments for the
payment of money that remain undischarged for a period of 60 days; (vii) certain
events of bankruptcy or insolvency with respect to the Authority or any of its
Restricted Subsidiaries; (viii) 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; (ix) 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); (x)
the Lease ceases to be in full force and effect; (xi) except as permitted by the
Indenture, any Senior Subsidiary Guarantee shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to be in
full force and effect or any Subsidiary Guarantor or any Person acting on its
behalf shall deny or disaffirm its obligations under such Subsidiary Guarantor's
Senior Subsidiary Guarantee; and (xii) failure by the Tribe to comply with the
provisions of Article 10 of the Indenture for 30 days after notice to the
Authority and the Tribe by the Trustee or the Holders of at least 25% in
aggregate principal amount of the Senior Notes then outstanding voting as a
single class. 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 Senior
Notes may declare all the Senior 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 Senior Notes will become due and
payable without further action or notice. Holders 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. The
Trustee may withhold from Holders of the Senior 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) if it determines that withholding notice
is in their interest. 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 on, or the principal of, the Senior
Notes. The Authority is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Authority is required upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.
13. TRUSTEE DEALINGS WITH AUTHORITY. 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. A controlling person, director, officer,
employee, or holder of an Ownership Interest of the Authority, as such, shall
not have any liability for any obligations of the Authority under the Senior
Notes or the Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder by accepting a Senior Note
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Senior Notes.
15. AUTHENTICATION. This Senior 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 OF RESTRICTED GLOBAL SENIOR NOTES AND
RESTRICTED DEFINITIVE SENIOR NOTES. In addition to the rights provided to
Holders of Senior Notes under the Indenture, Holders of Restricted Global Senior
Notes and Restricted Definitive Senior Notes shall have all the rights set forth
in the Senior Registration Rights Agreement dated as of March 3, 1999, between
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<PAGE>
the Authority and the parties named on the signature pages thereof (the "Senior
Registration Rights Agreement").
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 Senior 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 Senior Notes or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
The Authority will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Senior Registration Rights Agreement.
Requests may be made to:
Mohegan Tribal Gaming Authority
1 Mohegan Sun Boulevard
Uncasville, CT 06382
Attention: Roland J. Harris
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Senior Notes
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:______________________________
(Insert assignee's legal name)
- --------------------------------------------------------------------------------
(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*:
______________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
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Senior Notes
<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 or 4.15 of the Indenture, check the appropriate box below:
|_| Section 4.10 |_| Section 4.15
If you want to elect to have only part of the Note purchased by the
Authority pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$_______________________
Date:______________________
Your Signature:_______________________________________
(Sign exactly as your name appears on the face of this Note)
Tax Indentification No.:______________________________
Signature Guarantee*:
______________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
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<PAGE>
SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL SENIOR NOTE
The following exchanges of a part of this Regulation S Temporary Global
Senior Note for an interest in another Global Senior Note, or of other
Restricted Global Senior Notes for an interest in this Regulation S Temporary
Global Senior Note, have been made:
<TABLE>
<CAPTION>
Principal Amount of Signature of
Amount of decrease in Amount of increase in this Global Senior Note authorized officer of
Principal Amount of Principal Amount of following such decrease Trustee or Senior
Date of Exchange this Global Senior Note this Global Senior Note (or increase) Note Custodian
---------------- ----------------------- ----------------------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
</TABLE>
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Senior Notes
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Mohegan Tribal Gaming Authority
1 Mohegan Sun Boulevard
Uncasville, CT 06382
First Union National Bank
10 Statehouse Square
Hartford, CT 06103-3698
Re: 8 1/8 % Senior Notes due 2006
Reference is hereby made to the Indenture, dated as of March 3, 1999 (the
"Indenture"), between the Mohegan Tribal Gaming Authority, as issuer (the
"Authority"), and First Union National Bank, as trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the Indenture.
___________________, (the "Transferor") owns and proposes to transfer the
Senior Note[s] or interest in such Senior Note[s] specified in Annex A hereto,
in the principal amount of $___________ in such Senior Note[s] or interests (the
"Transfer"), to ___________________________ (the "Transferee"), as further
specified in Annex A hereto. In connection with the Transfer, the Transferor
hereby certifies that:
[CHECK ALL THAT APPLY]
1. |_| Check if Transferee will take delivery of a beneficial interest in
the 144A Global Senior Note or a Definitive Senior Note Pursuant to Rule 144A.
The Transfer is being effected pursuant to and in accordance with Rule 144A
under the United States Securities Act of 1933, as amended (the "Securities
Act"), and, accordingly, the Transferor hereby further certifies that the
beneficial interest or Definitive Senior Note is being transferred to a Person
that the Transferor reasonably believed and believes is purchasing the
beneficial interest or Definitive Senior Note for its own account, or for one or
more accounts with respect to which such Person exercises sole investment
discretion, and such Person and each such account is a "qualified institutional
buyer" within the meaning of Rule 144A in a transaction meeting the requirements
of Rule 144A and such Transfer is in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Senior Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the 144A Global Senior Note and/or the Definitive Senior Note and in the
Indenture and the Securities Act.
2. |_| Check if Transferee will take delivery of a beneficial interest in
the Temporary Regulation S Global Senior Note, the Regulation S Global Senior
Note or a Definitive Senior Note pursuant to Regulation S. The Transfer is being
effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and, accordingly, the Transferor hereby further certifies that
(i) the Transfer is not being made to a person in the United States and (x) at
the time the buy order was originated, the Transferee was outside the United
States or such Transferor and any Person acting on its behalf reasonably
believed and believes that the Transferee was outside the United States or (y)
the transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the United
States, (ii) no directed selling efforts have been made in contravention of the
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<PAGE>
requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities
Act; (iii) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act and (iv) if the proposed
transfer is being made prior to the expiration of the Distribution Compliance
Period, the transfer is not being made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of
the proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Senior Note will be subject to the
restrictions on Transfer enumerated in the Private Placement Legend printed on
the Regulation S Global Senior Note, the Temporary Regulation S Global Senior
Note and/or the Definitive Senior Note and in the Indenture and the Securities
Act.
3. |_| Check and complete if Transferee will take delivery of a beneficial
interest in the Definitive Senior Note pursuant to any provision of the
Securities Act other than Rule 144A or Regulation S. The Transfer is being
effected in compliance with the transfer restrictions applicable to beneficial
interests in Restricted Global Senior Notes and Restricted Definitive Senior
Notes and pursuant to and in accordance with the Securities Act and any
applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):
(a) |_| such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
or
(b) |_|such Transfer is being effected to the Authority or a
subsidiary thereof;
or
(c) |_| such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
4.|_| Check if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Senior Note or of an Unrestricted Definitive Senior Note.
(a) |_| Check if Transfer is pursuant to Rule 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Senior Note will no longer be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Global Senior Notes,
on Restricted Definitive Senior Notes and in the Indenture.
(b) |_| Check if Transfer is Pursuant to Regulation S. (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Senior Note will no longer be subject to the restrictions on transfer
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<PAGE>
enumerated in the Private Placement Legend printed on the Restricted Global
Senior Notes, on Restricted Definitive Senior Notes and in the Indenture.
(c) |_| Check if Transfer is Pursuant to Other Exemption. (i) The Transfer
is being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903 or
Rule 904 and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Senior Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Senior Notes or Restricted Definitive Senior Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Authority.
________________________________________
[Insert Name of Transferor]
By: ____________________________________
Name:
Title:
Dated:_____________________
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ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) |_| a beneficial interest in the:
(i) |_| 144A Global Senior Note (CUSIP 608328 AA8), or
(ii) |_| Regulation S Global Senior Note (CUSIP U60742 AA8), or
(b) |_| a Restricted Definitive Senior Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) |_| a beneficial interest in the:
(i) |_| 144A Global Senior Note (CUSIP 608328 AA8), or
(ii) |_| Regulation S Global Senior Note (CUSIP U60742 AA8), or
(iii) |_| Unrestricted Global Senior Note (CUSIP _______); or
(b) |_| a Restricted Definitive Senior Note; or
(c) |_| an Unrestricted Definitive Senior Note,
in accordance with the terms of the Indenture.
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EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Mohegan Tribal Gaming Authority
1 Mohegan Sun Boulevard
Uncasville, CT 06382
First Union National Bank
10 Statehouse Square
Hartford, CT 06103-3698
Re: 8 1/8% Senior Notes due 2006
(CUSIP 608328 AA8/U60742 AA8)
Reference is hereby made to the Indenture, dated as of March 3, 1999 (the
"Indenture"), between the Mohegan Tribal Gaming Authority, as issuer (the
"Authority"), and First Union National Bank, as trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the Indenture.
__________________________, (the "Owner") owns and proposes to exchange the
Senior Note[s] or interest in such Senior Note[s] specified herein, in the
principal amount of $____________ in such Senior Note[s] or interests (the
"Exchange"). In connection with the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Senior Notes or Beneficial Interests
in a Restricted Global Senior Note for Unrestricted Definitive Senior Notes or
Beneficial Interests in an Unrestricted Global Senior Note
(a) |_| Check if Exchange is from beneficial interest in a Restricted
Global Senior Note to beneficial interest in an Unrestricted Global Senior Note.
In connection with the Exchange of the Owner's beneficial interest in a
Restricted Global Senior Note for a beneficial interest in an Unrestricted
Global Senior Note in an equal principal amount, the Owner hereby certifies (i)
the beneficial interest is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to the Global Senior Notes and pursuant to and in
accordance with the United States Securities Act of 1933, as amended (the
"Securities Act"), (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest in an
Unrestricted Global Senior Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
(b) |_| Check if Exchange is from beneficial interest in a Restricted
Global Senior Note to Unrestricted Definitive Senior Note. In connection with
the Exchange of the Owner's beneficial interest in a Restricted Global Senior
Note for an Unrestricted Definitive Senior Note, the Owner hereby certifies (i)
the Definitive Senior Note is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to the Restricted Global Senior Notes and pursuant to
and in accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the Definitive
Senior Note is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.
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<PAGE>
EXHIBIT C
(c) |_| Check if Exchange is from Restricted Definitive Senior Note to
beneficial interest in an Unrestricted Global Senior Note. In connection with
the Owner's Exchange of a Restricted Definitive Senior Note for a beneficial
interest in an Unrestricted Global Senior Note, the Owner hereby certifies (i)
the beneficial interest is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to Restricted Definitive Senior Notes and pursuant to
and in accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
(d) |_| Check if Exchange is from Restricted Definitive Senior Note to
Unrestricted Definitive Senior Note. In connection with the Owner's Exchange of
a Restricted Definitive Senior Note for an Unrestricted Definitive Senior Note,
the Owner hereby certifies (i) the Unrestricted Definitive Senior Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Senior Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Unrestricted Definitive Senior
Note is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
2. Exchange of Restricted Definitive Senior Notes or Beneficial Interests
in Restricted Global Senior Notes for Restricted Definitive Senior Notes or
Beneficial Interests in Restricted Global Senior Notes
(a) |_| Check if Exchange is from beneficial interest in a Restricted
Global Senior Note to Restricted Definitive Senior Note. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Senior Note
for a Restricted Definitive Senior Note with an equal principal amount, the
Owner hereby certifies that the Restricted Definitive Senior Note is being
acquired for the Owner's own account without transfer. Upon consummation of the
proposed Exchange in accordance with the terms of the Indenture, the Restricted
Definitive Senior Note issued will continue to be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Definitive Senior Note and in the Indenture and the Securities Act.
(b) |_| Check if Exchange is from Restricted Definitive Senior Note to
beneficial interest in a Restricted Global Senior Note. In connection with the
Exchange of the Owner's Restricted Definitive Senior Note for a beneficial
interest in the [CHECK ONE] 144A Global Senior Note, Regulation S Global Senior
Note with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Senior Notes and
pursuant to and in accordance with the Securities Act, and in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Exchange in accordance with the terms of the
Indenture, the beneficial interest issued will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the relevant
Restricted Global Senior Note and in the Indenture and the Securities Act.
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<PAGE>
EXHIBIT C
This certificate and the statements contained herein are made for your
benefit and the benefit of the Authority.
________________________________________
[Insert Name of Transferor]
By: ____________________________________
Name:
Title:
Dated:_____________________
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<PAGE>
EXHIBIT D
FORM OF NOTATION OF SUBSIDIARY GUARANTEE ON SENIOR NOTE
Each Subsidiary Guarantor (as defined in the Indenture) has jointly and
severally unconditionally guaranteed (a) the due and punctual payment of the
principal of, premium, if any, and interest on the Senior Notes, whether at
maturity or an Interest Payment Date, by acceleration, call for redemption or
otherwise, (b) the due and punctual payment of interest on the overdue principal
and premium of, and interest, to the extent lawful, on the Senior Notes and (c)
that in case of any extension of time of payment or renewal of any Senior Notes
or any of such other obligations, the same will be promptly paid in full when
due in accordance with the terms of the extension of renewal, whether at stated
maturity, by acceleration or otherwise.
Notwithstanding the foregoing, in the event that the Senior Subsidiary
Guarantee would constitute or result in a violation of any applicable fraudulent
conveyance or similar law of any relevant jurisdiction, the liability of the
Subsidiary Guarantor under its Senior Subsidiary Guarantee shall be limited to
such amount as will not, after giving effect thereto, and to all other
liabilities of the Subsidiary Guarantor, result in such amount constituting a
fraudulent transfer or conveyance.
The Senior Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Senior Note upon which
the Senior Subsidiary Guarantee is noted shall have been executed by the Trustee
under the Indenture by the manual or facsimile signature of one of its
authorized officers.
Dated: ________________, ___________ [SUBSIDIARY GUARANTOR]
By:___________________________________
Name:
Title:
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<PAGE>
EXHIBIT E
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT SUBSIDIARY GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, among __________________ (the "Subsidiary Guarantor"), a
subsidiary of the Mohegan Tribal Gaming Authority (or its permitted successor),
(the "Authority"), the Authority, the other Subsidiary Guarantors (as defined in
the Indenture referred to herein) and ____________________, as trustee under the
Indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Authority has heretofore executed and delivered to the Trustee
an indenture (the "Indenture"), dated as of March 3, 1999 providing for the
issuance of an aggregate principal amount of up to $200,000,000 of 8 1/8% Senior
Notes due 2006 (the "Senior Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Subsidiary Guarantor shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Subsidiary Guarantor shall unconditionally
guarantee all of the Authority's Obligations under the Senior Notes and the
Indenture on the terms and conditions set forth herein (the "Senior Subsidiary
Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Subsidiary Guarantor and the Trustee mutually covenant and agree for the equal
and ratable benefit of the Holders of the Senior Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. INDENTURE PROVISION PURSUANT TO WHICH GUARANTEE IS GIVEN. This
Supplemental Indenture is being executed and delivered pursuant to Section 4.20
of the Indenture.
3. AGREEMENT TO GUARANTEE. The Subsidiary Guarantor hereby agrees as
follows:
(a) The Subsidiary Guarantor, jointly and severally with all other
Subsidiary Guarantors, if any, unconditionally guarantees to each Holder of
a Senior Note authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, the Senior Notes or the obligations of the
Authority hereunder or thereunder, that:
(i) the principal of and interest on the Senior Notes will be
promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and
interest on the Senior Notes, if any, if lawful, and all other
obligations of the Authority to the Holders or the Trustee hereunder
or thereunder will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and
(ii) in case of any extension of time of payment or renewal of
any Senior Notes or any of such other obligations, that same will be
promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise. Failing payment when due of any amount so
guaranteed or any
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Senior Notes
<PAGE>
performance so guaranteed for whatever reason, the Subsidiary
Guarantors shall be jointly and severally obligated to pay the same
immediately.
Notwithstanding the foregoing, in the event that this Subsidiary Guarantee
would constitute or result in a violation of any applicable fraudulent
conveyance or similar law of any relevant jurisdiction, the liability of the
Subsidiary Guarantor under this Supplemental Indenture and its Senior Subsidiary
Guarantee shall be limited to such amount as will not, after giving effect
thereto, and to all other liabilities of the Subsidiary Guarantor, result in
such amount constituting a fraudulent transfer or conveyance.
4. EXECUTION AND DELIVERY OF SENIOR SUBSIDIARY GUARANTEES
(a) To evidence its Senior Subsidiary Guarantee set forth in this
Supplemental Indenture, the Subsidiary Guarantor hereby agrees that a
notation of such Senior Subsidiary Guarantee substantially in the form of
Annex A hereto shall be endorsed by an officer of such Subsidiary Guarantor
on each Senior Note authenticated and delivered by the Trustee after the
date hereof.
(b) Notwithstanding the foregoing, the Subsidiary Guarantor hereby
agrees that its Senior Subsidiary Guarantee set forth herein shall remain
in full force and effect notwithstanding any failure to endorse on each
Senior Note a notation of such Senior Subsidiary Guarantee.
(c) If an officer whose signature is on this Supplemental Indenture or
on the Senior Subsidiary Guarantee no longer holds that office at the time
the Trustee authenticates the Senior Note on which a Senior Subsidiary
Guarantee is endorsed, the Senior Subsidiary Guarantee shall be valid
nevertheless.
(d) The delivery of the Senior Note by the Trustee, after the
authentication thereof under the Indenture, shall constitute due delivery
of the Senior Subsidiary Guarantee set forth in this Supplemental Indenture
on behalf of the Subsidiary Guarantor.
(e) The Subsidiary Guarantor hereby agrees that its obligations
hereunder shall be unconditional, regardless of the validity, regularity or
enforceability of the Senior Notes or the Indenture, the absence of any
action to enforce the same, any waiver or consent by any Holder of the
Senior Notes with respect to any provisions hereof or thereof, the recovery
of any judgment against the Authority, any action to enforce the same or
any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor.
(f) The Subsidiary Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency
or bankruptcy of the Authority, any right to require a proceeding first
against the Authority, protest, notice and all demands whatsoever and
covenants that its Senior Subsidiary Guarantee made pursuant to this
Supplemental Indenture will not be discharged except by complete
performance of the obligations contained in the Senior Notes and the
Indenture or pursuant to Section 5(b) of this Supplemental Indenture.
(g) If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Supplemental Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then, and in every
such case, subject to any determination in such proceeding, the Subsidiary
Guarantor, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights
and remedies of the Subsidiary Guarantor, the Trustee and the Holders shall
continue as though no such proceeding had been instituted.
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<PAGE>
(h) The Subsidiary Guarantor hereby waives and will not in any manner
whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the
Authority or any other Subsidiary Guarantor as a result of any payment by
such Subsidiary Guarantor under its Senior Subsidiary Guarantee. The
Subsidiary Guarantor further agrees that, as between the Subsidiary
Guarantors, on the one hand, and the Holders and the Trustee, on the other
hand:
(i) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 6 of the Indenture for the purposes
of the Senior Subsidiary Guarantee made pursuant to this Supplemental
Indenture, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed
hereby; and
(ii) in the event of any declaration of acceleration of such
obligations as provided in Article 6, such obligations (whether or not
due and payable) shall forthwith become due and payable by the
Subsidiary Guarantor for the purpose of the Senior Subsidiary
Guarantee made pursuant to this Supplemental Indenture.
(i) The Subsidiary Guarantor shall have the right to seek contribution
from any other non-paying Subsidiary Guarantor, if any, so long as the
exercise of such right does not impair the rights of the Holders under the
Senior Subsidiary Guarantee made pursuant to this Supplemental Indenture.
(j) The Subsidiary Guarantor covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or 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, which may affect the covenants or the performance of the Indenture
or this Senior Subsidiary Guarantee; and the Subsidiary Guarantor (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law
had been enacted.
5. SUBSIDIARY GUARANTOR MAY CONSOLIDATE, ETC. ON CERTAIN TERMS
(a) Nothing contained in the Indenture, this Supplemental Indenture or
in the Senior Notes shall prevent any consolidation or merger of the
Subsidiary Guarantor with or into the Authority or any other Subsidiary
Guarantor or shall prevent any transfer, sale or conveyance of the property
of the Subsidiary Guarantor as an entirety or substantially as an entirety,
to the Authority or any other Subsidiary Guarantor.
(b) Except as set forth in Article 5 of the Indenture, upon the sale
or disposition of all of the Capital Stock of the Subsidiary Guarantor by
the Authority or a Subsidiary of the Authority, or upon the consolidation
or merger of the Subsidiary Guarantor with or into any Person, or if a
Subsidiary Guarantor is designated as an Unrestricted Subsidiary, or the
sale of all or substantially all of the assets of the Subsidiary Guarantor
(in each case, other than with or to an Affiliate of the Authority), or
upon a legal defeasance or covenant defeasance of the Notes, such
Subsidiary Guarantor shall be deemed automatically and unconditionally
released and discharged from all obligations under this Senior Subsidiary
Guarantee without any further action required on the part of the Trustee or
any Holder if no Default shall have occurred and be continuing; provided
that in the event of an Asset Sale, the Net Cash Proceeds therefrom are
treated in accordance with Section 4.10 of the Indenture and provided
further that in the event of a redesignation of a Subsidiary, that the
transaction is in compliance with Section 4.07 of the Indenture. Except
with respect to transactions
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<PAGE>
set forth in the preceding sentence, the Authority and the Subsidiary
Guarantor covenant and agree that upon any such consolidation, merger or
transfer of assets, the performance of all covenants and conditions of this
Supplemental Indenture to be performed by such Subsidiary Guarantor shall
be expressly assumed by supplemental indenture satisfactory in form to the
Trustee, by the corporation formed by such consolidation, or into which the
Subsidiary Guarantor shall have merged, or by the corporation which shall
have acquired such property. Upon receipt of an Officer's Certificate of
the Authority or the Subsidiary Guarantor, as the case may be, to the
effect that the Authority or such Subsidiary Guarantor has complied with
the first sentence of this Section 5(b), the Trustee shall execute any
documents reasonably requested by the Authority or the Subsidiary
Guarantor, at the cost of the Authority or such Subsidiary Guarantor, as
the case may be, in order to evidence the release of such Subsidiary
Guarantor from its obligations under its Senior Subsidiary Guarantee
endorsed on the Senior Notes and under the Indenture and this Supplemental
Indenture.
6. NEW YORK LAW TO GOVERN. The internal law of the State of New York shall
govern and be used to construe this Supplemental Indenture.
7. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
8. EFFECT OF HEADINGS. The Section headings herein are for convenience only
and shall not effect the construction hereof.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _______________, ____
[SUBSIDIARY GUARANTOR]
By: __________________________________
Name:
Title:
MOHEGAN TRIBAL GAMING AUTHORITY
By: __________________________________
Name:
Title:
[EXISTING SUBSIDIARY GUARANTORS]
By:___________________________________
Name:
Title:
FIRST UNION NATIONAL BANK,
as Trustee
By:___________________________________
Authorized Signatory
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<PAGE>
Attachment to Indenture
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 of Connecticut
Address: 1 Mohegan Sun Boulevard
Uncasville, CT 06382
Occupation: Indian Tribe
Party in Interest: Mohegan Tribal Gaming Authority
Address: 1 Mohegan Sun Boulevard
Uncasville, CT 06382
Occupation: Tribal Gaming Authority
Party in Interest: First Union National Bank
10 State House Square
Hartford, CT 06103-3698
Occupation: Commercial Bank and Trust Company
Fixed limited time to run: The Senior Notes become due January 1, 2006.
The Chairman of the Mohegan Tribe of Indians of Connecticut (the "Tribe") is
authorized to execute the attached document by Resolution No. 99-03 of the
Tribal Council of the Tribe, dated February 18, 1999. 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 (the
"Management Board") is authorized to execute the attached document by Resolution
No. TGA 99-04 of the Management Board, dated February 18, 1999. 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 ___ (time) on March __, 1999 at
___________________ (place), for the particular purpose set forth above.
The undersigned parties agree that the foregoing agreement is in compliance with
25 U.S.C. ss. 81.
Senior Notes
<PAGE>
WITNESS:
Mohegan Tribe of Indians of Connecticut
_____________________________ By: __________________________________
Roland J. Harris
Title:
Mohegan Tribal Gaming Authority
_____________________________ By: __________________________________
Roland J. Harris
Title:
First Union National Bank
_____________________________ By: __________________________________
Name:
Title:
Approved Pursuant to 25 U.S.C. ss. 81
United States Department of Interior
Bureau of Indian Affairs:
Date: March __, 1999 By: __________________________________
Name:
Title:
Eastern Area Office
Bureau of Indian Affairs
for the Secretary of the Interior and
the Commissioner of Indian Affairs,
acting under delegated authority
Senior Notes
<PAGE>
Exhibit 4.5
SENIOR
REGISTRATION RIGHTS AGREEMENT
Dated as of March 3, 1999
by and among
MOHEGAN TRIBAL GAMING AUTHORITY
and
SALOMON SMITH BARNEY INC.
NATIONSBANC MONTGOMERY SECURITIES LLC
SG COWEN SECURITIES CORPORATION
BEAR, STEARNS & CO. INC.
BANCBOSTON ROBERTSON STEPHENS INC.
FLEET SECURITIES, INC.
<PAGE>
This Senior Registration Rights Agreement (this "Agreement") is made and
entered into as of March 3, 1999, by and among the Mohegan Tribal Gaming
Authority (the "Authority") an instrumentality of the Mohegan Tribe of Indians
of Connecticut (the "Tribe"), and Salomon Smith Barney Inc., NationsBanc
Montgomery Securities LLC, SG Cowen Securities Corporation, Bear, Stearns & Co.
Inc., BancBoston Robertson Stephens Inc. and Fleet Securities, Inc. (each an
"Initial Purchaser" and, collectively, the "Initial Purchasers"), each of whom
has agreed to purchase the Authority's 8 1/8% Initial Senior Notes due 2006 (the
"Initial Senior Notes") pursuant to the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated February
24, 1999, (the "Purchase Agreement"), by and among the Authority, the Tribe and
the Initial Purchasers. In order to induce the Initial Purchasers to purchase
the Initial Senior Notes, the Authority has agreed to provide the registration
rights set forth in this Agreement. The execution and delivery of this Agreement
is a condition to the obligations of the Initial Purchasers set forth in Section
6 of the Purchase Agreement. Capitalized terms used herein and not otherwise
defined shall have the meaning assigned to them in the Senior Notes Indenture,
dated March 3, 1999, between the Authority, the Tribe and First Union National
Bank, as Trustee, relating to the Initial Senior Notes and the Senior Exchange
Notes (the "Senior Notes Indenture").
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
following meanings.
Act: The Securities Act of 1933, as amended.
Affiliate: As defined in Rule 144 of the Act.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Business Day: Any day except a Saturday, Sunday or other day in the City of
New York, or in the city of the corporate trust office of the Trustee, on which
banks are authorized to not open for business.
Certificated Securities: Definitive Senior Notes, as defined in the Senior
Notes Indenture.
Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Consummate: An Exchange Offer shall be deemed "Consummated" for purposes of
this Agreement upon the occurrence of (a) the filing and effectiveness under the
Act of the Exchange Offer Registration Statement relating to the Senior Exchange
Notes to be issued in the Exchange Offer, (b) the maintenance of such Exchange
Offer Registration Statement continuously effective and the keeping of the
Exchange Offer open for a period not less than the period required pursuant to
Section 3(b) hereof and (c) the delivery by the Authority to the Registrar under
the Senior Notes Indenture of Senior Exchange Notes in the same aggregate
principal amount as the aggregate principal amount of Initial Senior Notes
tendered by Holders thereof pursuant to the Exchange Offer.
Consummation Deadline: As defined in Section 3(b) hereof.
Effectiveness Deadline: As defined in Section 3(a) and 4(a) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended.
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<PAGE>
Exchange Notes: The Authority's 8 1/8% Senior Exchange Notes due 2006 to be
issued pursuant to the Senior Notes Indenture: (i) in the Exchange Offer or (ii)
as contemplated by Section 4 hereof.
Exchange Offer: (A) The exchange and issuance by the Authority of a
principal amount of Senior Exchange Notes (which shall be registered pursuant to
the Exchange Offer Registration Statement) equal to the outstanding principal
amount of Initial Senior Notes that are tendered by such Holders in connection
with such exchange and issuance and (B) the exchange and issuance by the
Authority of a principal amount of Senior Subordinated Exchange Notes (which
shall be registered pursuant to the Exchange Offer Registration Statement) equal
to the outstanding principal amount of Initial Senior Subordinated Notes that
are tendered by such Holders in connection with such exchange and issuance.
Exchange Offer Registration Statement: The Registration Statement relating
to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchasers propose to
sell the Initial Senior Notes to certain "qualified institutional buyers," as
such term is defined in Rule 144A under the Act, and pursuant to Regulation S
under the Act.
Filing Deadline: As defined in Sections 3(a) and 4(a) hereof.
Holders: As defined in Section 2 hereof.
Prospectus: The prospectus included in a Registration Statement at the time
such Registration Statement is declared effective, as amended or supplemented by
any prospectus supplement and by all other amendments thereto, including
post-effective amendments, and all material incorporated by reference into such
Prospectus.
Recommencement Date: As defined in Section 6(d) hereof.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Authority
relating to (a) an offering of Senior Exchange Notes pursuant to an Exchange
Offer or (b) the registration for resale of Transfer Restricted Securities
pursuant to the Shelf Registration Statement, in each case, (i) that is filed
pursuant to the provisions of this Agreement and (ii) including the Prospectus
included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
Regulation S: Regulation S promulgated under the Act.
Rule 144: Rule 144 promulgated under the Act.
Shelf Registration Statement: As defined in Section 4 hereof.
Suspension Notice: As defined in Section 6(d) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Transfer Restricted Securities: Each (A) Initial Senior Note, until the
earliest to occur of (i) the date on which such Initial Senior Note is exchanged
in the Exchange Offer for a Senior Exchange Note which is entitled to be resold
to the public by the Holder thereof without complying with the prospectus
delivery requirements of the Act, (ii) the date on which such Initial Senior
Note has been disposed of in
2
<PAGE>
accordance with a Shelf Registration Statement (and the purchasers thereof have
been issued Senior Exchange Notes), or (iii) the date on which such Initial
Senior Note is distributed to the public pursuant to Rule 144 under the Act and
each (B) Senior Exchange Note held by a Broker Dealer until the date on which
such Senior Exchange Note is disposed of by a Broker-Dealer pursuant to the
"Plan of Distribution" contemplated by the Exchange Offer Registration Statement
(including the delivery of the Prospectus contained therein).
Tribe: 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.
SECTION 2. HOLDERS
A person is deemed to be a holder of Transfer Restricted Securities (each,
a "Holder") whenever such person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable federal
law (after the procedures set forth in Section 6(a)(i) below have been complied
with), the Authority shall (i) cause the Exchange Offer Registration Statement
to be filed with the Commission as soon as practicable after the Closing Date,
but in no event later than 90 days after the Closing Date (such 90th day being
the "Filing Deadline"), (ii) use its best efforts to cause such Exchange Offer
Registration Statement to become effective at the earliest possible time, but in
no event later than 150 days after the Closing Date (such 150th day being the
"Effectiveness Deadline"), (iii) in connection with the foregoing, (A) file all
pre-effective amendments to such Exchange Offer Registration Statement as may be
necessary in order to cause it to become effective, (B) file, if applicable, a
post-effective amendment to such Exchange Offer Registration Statement pursuant
to Rule 430A under the Act and (C) cause all necessary filings, if any, in
connection with the registration and qualification of the Senior Exchange Notes
to be made under the Blue Sky laws of such jurisdictions as are necessary to
permit Consummation of the Exchange Offer, and (iv) upon the effectiveness of
such Exchange Offer Registration Statement, commence and Consummate the Exchange
Offer. The Exchange Offer shall be on the appropriate form permitting (i)
registration of the Senior Exchange Notes to be offered in exchange for the
Initial Senior Notes that are Transfer Restricted Securities and (ii) resales of
Senior Exchange Notes by Broker-Dealers that tendered into the Exchange Offer
Initial Senior Notes that such Broker-Dealer acquired for its own account as a
result of market making activities or other trading activities (other than
Initial Senior Notes acquired directly from the Authority or any of its
Affiliates) as contemplated by Section 3(c) below.
(b) The Authority shall use its best efforts to cause the Exchange Offer
Registration Statement to be effective continuously, and shall keep the Exchange
Offer open for a period of not less than the minimum period required under
applicable federal and state securities laws to Consummate the Exchange Offer;
provided, however, that in no event shall such period be less than 20 Business
Days. The Authority shall cause the Exchange Offer to comply with all applicable
federal and state securities laws. No securities other than the Senior Exchange
Notes and the Senior Subordinated Exchange Notes shall be included in the
Exchange Offer Registration Statement. The Authority shall use its best efforts
to cause the Exchange Offer to be Consummated on the earliest practicable date
after the Exchange Offer Registration Statement has become effective, but in no
event later than 30 Business Days thereafter (such 30th day being the
"Consummation Deadline").
(c) The Authority shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Transfer Restricted Securities that
were acquired for the account of such Broker-Dealer as a result of market-making
activities or other trading activities (other than Initial Senior Notes acquired
directly from the Authority or any Affiliate of the Authority), may exchange
such Transfer Restricted Securities pursuant to the Exchange
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Offer. Such "Plan of Distribution" section shall also contain all other
information with respect to such sales by such Broker-Dealers that the
Commission may require in order to permit such sales pursuant thereto, but such
"Plan of Distribution" shall not name any such Broker-Dealer or disclose the
amount of Transfer Restricted Securities held by any such Broker-Dealer, except
to the extent required by the Commission as a result of a change in policy,
rules or regulations after the date of this Agreement.
Because such Broker-Dealer may be deemed to be an "underwriter" within the
meaning of the Act and must, therefore, deliver a prospectus meeting the
requirements of the Act in connection with its initial sale of any Senior
Exchange Notes received by such Broker-Dealer in the Exchange Offer, the
Authority shall permit the use of the Prospectus contained in the Exchange Offer
Registration Statement by such Broker-Dealer to satisfy such prospectus delivery
requirement. To the extent necessary to ensure that the prospectus contained in
the Exchange Offer Registration Statement is available for sales of Senior
Exchange Notes by Broker-Dealers, the Authority agrees to use its best efforts
to keep the Exchange Offer Registration Statement continuously effective,
supplemented, amended and current as required by and subject to the provisions
of Section 6(a) and (c) hereof and in conformity with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of one year from the Consummation
Deadline or such shorter period as will terminate when all Transfer Restricted
Securities covered by such Registration Statement have been sold pursuant
thereto. The Authority shall provide sufficient copies of the latest version of
such Prospectus to such Broker-Dealers, promptly upon request, and in no event
later than one day after such request, at any time during such period.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Exchange Offer is not permitted by
applicable law (after the Authority has complied with the procedures set forth
in Section 6(a)(i) below) or (ii) if any Holder of Transfer Restricted
Securities shall notify the Authority within 20 Business Days following the
Consummation Deadline that (A) such Holder was prohibited by law or Commission
policy from participating in the Exchange Offer or (B) such Holder may not
resell the Senior Exchange 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 by such Holder or (C) such Holder is a Broker-Dealer and holds Initial
Senior Notes acquired directly from the Authority or any of its Affiliates, then
the Authority shall
(x) cause to be filed, on or prior to 30 days after the earlier of (i) the
date on which the Authority determines that the Exchange Offer Registration
Statement cannot be filed as a result of clause (a)(i) above and (ii) the date
on which the Authority receives the notice specified in clause (a)(ii) above,
(such earlier date, the "Filing Deadline"), a shelf registration statement
pursuant to Rule 415 under the Act (which may be an amendment to the Exchange
Offer Registration Statement (the "Shelf Registration Statement")), relating to
all Transfer Restricted Securities, and
(y) shall use its best efforts to cause such Shelf Registration Statement
to become effective on or prior to 90 days after the Filing Deadline for the
Shelf Registration Statement (such 90th day the "Effectiveness Deadline").
If, after the Authority has filed an Exchange Offer Registration Statement
that satisfies the requirements of Section 3(a) above, the Authority is required
to file and make effective a Shelf Registration Statement solely because the
Exchange Offer is not permitted under applicable federal law (i.e. clause (a)(i)
above), then the filing of the Exchange Offer Registration Statement shall be
deemed to satisfy the requirements of clause (x) above; provided that, in such
event, the Authority shall remain obligated to meet the Effectiveness Deadline
set forth in clause (y).
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To the extent necessary to ensure that the Shelf Registration Statement is
available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a) and the other securities required
to be registered therein pursuant to Section 6(b)(ii) hereof, the Authority
shall use its best efforts to keep any Shelf Registration Statement required by
this Section 4(a) continuously effective, supplemented, amended and current as
required by and subject to the provisions of Sections 6(b) and (c) hereof and in
conformity with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of at least two years (as extended pursuant to Section 6(c)(i)) following
the Closing Date, or such shorter period as will terminate when all Transfer
Restricted Securities covered by such Shelf Registration Statement have been
sold pursuant thereto.
(b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Authority in writing, within 20 days after receipt of a request therefor,
the information specified in Item 507 or 508 of Regulation S-K, as applicable,
of the Act for use in connection with any Shelf Registration Statement or
Prospectus or preliminary Prospectus included therein. No Holder of Transfer
Restricted Securities shall be entitled to additional interest pursuant to
Section 5 hereof unless and until such Holder shall have provided all such
information. Each selling Holder agrees to furnish promptly additional
information required to be disclosed in order to make the information previously
furnished to the Authority by such Holder not materially misleading.
SECTION 5. ADDITIONAL INTEREST
If (i) any Registration Statement required by this Agreement is not filed
with the Commission on or prior to the applicable Filing Deadline, (ii) any such
Registration Statement has not been declared effective by the Commission on or
prior to the applicable Effectiveness Deadline, (iii) the Exchange Offer has not
been Consummated on or prior to the Consummation Deadline or (iv) any
Registration Statement required by this Agreement is filed and declared
effective but shall thereafter cease to be effective or fail to be usable for
its intended purpose without being succeeded within 2 days by a post-effective
amendment to such Registration Statement that cures such failure and that is
itself declared effective within 5 days of filing such post-effective amendment
to such Registration Statement (each such event referred to in clauses (i)
through (iv), a "Registration Default"), then the Authority hereby agrees to pay
to each Holder of Transfer Restricted Securities affected thereby additional
interest in an amount equal to 25 basis points per 90-day period of the
principal amount of Transfer Restricted Securities held by such Holder for the
90-day period or portion thereof that the Registration Default continues for the
first 90-day period immediately following the occurrence of such Registration
Default. The amount of the additional interest shall increase by an additional
25 basis points with respect to each subsequent 90-day period until all
Registration Defaults have been cured, up to a maximum amount of additional
interest of 1% per annum of the principal amount of Transfer Restricted
Securities; provided that the Authority shall in no event be required to pay
additional interest for more than one Registration Default at any given time.
Notwithstanding anything to the contrary set forth herein, (1) upon filing of
the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of (i) above, (2) upon the effectiveness of
the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of (ii) above, (3) upon Consummation of the
Exchange Offer, in the case of (iii) above, or (4) upon the filing of a
post-effective amendment to the Registration Statement or an additional
Registration Statement that causes the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement) to again be declared
effective or made usable in the case of (iv) above, the additional interest
payable with respect to the Transfer Restricted Securities as a result of such
clause (i), (ii), (iii) or (iv), as applicable, shall cease.
All accrued additional interest shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the Senior Notes
Indenture and the Senior Notes, on each Interest Payment Date, as more fully set
forth in the Senior Notes Indenture and the Senior Notes. Notwithstanding the
fact
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that any securities for which additional interest is due cease to be Transfer
Restricted Securities, all obligations of the Authority to pay additional
interest with respect to securities shall survive until such time as such
obligations with respect to such securities shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the Exchange
Offer, the Authority shall (x) comply with all applicable provisions of Section
6(c) below, (y) use its best efforts to effect such exchange and to permit the
resale of Senior Exchange Notes by Broker-Dealers that tendered in the Exchange
Offer Initial Senior Notes that such Broker-Dealer acquired for its own account
as a result of its market making activities or other trading activities (other
than Initial Senior Notes acquired directly from the Authority or any of its
Affiliates) being sold in accordance with the intended method or methods of
distribution thereof, and (z) comply with all of the following provisions:
(i) If, following the date hereof there has been announced a change in
Commission policy with respect to exchange offers such as the Exchange
Offer, that in the reasonable opinion of counsel to the Authority raises a
substantial question as to whether the Exchange Offer is permitted by
applicable federal law, the Authority hereby agrees to seek a no-action
letter or other favorable decision from the Commission staff allowing the
Authority to Consummate a Exchange Offer for such Transfer Restricted
Securities. In connection with the foregoing, the Authority hereby agrees
to take all actions as may be required in connection with the issuance of
such decision, including without limitation (A) participating in telephonic
conferences with the Commission, (B) delivering to the Commission staff an
analysis prepared by counsel to the Authority setting forth the legal
bases, if any, upon which such counsel has concluded that such an Exchange
Offer should be permitted and (C) diligently pursuing a resolution (which
need not be favorable) by the Commission staff.
(ii) As a condition to its participation in the Exchange Offer, each
Holder of Transfer Restricted Securities (including, without limitation,
any Holder who is a Broker-Dealer) shall furnish, upon the request of the
Authority, prior to the Consummation of the Exchange Offer, a written
representation to the Authority (which may be contained in the letter of
transmittal contemplated by the Exchange Offer Registration Statement) to
the effect that (A) it is not an Affiliate of the Authority, (B) it is not
engaged in, and does not intend to engage in, and has no arrangement or
understanding with any person to participate in, a distribution of the
Senior Exchange Notes to be issued in the Exchange Offer and (C) it is
acquiring the Senior Exchange Notes in its ordinary course of business. As
a condition to its participation in the Exchange Offer, each Holder using
the Exchange Offer to participate in a distribution of the Senior Exchange
Notes shall acknowledge and agree that, if the resales are of Senior
Exchange Notes obtained by such Holder in exchange for Initial Senior Notes
acquired directly from the Authority or an Affiliate thereof, it (1) could
not, under Commission policy as in effect on the date of this Agreement,
rely on the position of the Commission enunciated in Exxon Capital Holdings
Corporation (available May 13, 1988) and Morgan Stanley and Co., Inc.
(available June 5, 1991), as interpreted in the Commission's letter to
Shearman & Sterling dated July 2, 1993, and similar no-action letters
(including, if applicable, any no-action letter obtained pursuant to clause
(i) above), and (2) must comply with the registration and prospectus
delivery requirements of the Act in connection with a secondary resale
transaction and that such a secondary resale transaction must be covered by
an effective registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation S-K.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Authority shall provide a supplemental letter to the
Commission (A) stating that the Authority is registering the Exchange Offer
in reliance on the position of the Commission enunciated in Exxon Capital
Holdings Corporation (available May 13, 1988), and Morgan Stanley and Co.,
Inc. (available
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June 5, 1991), as interpreted in the Commission's letter to Shearman &
Sterling dated July 2, 1993, and, if applicable, any no-action letter
obtained pursuant to clause (i) above, (B) including a representation that
the Authority has not entered into any arrangement or understanding with
any person to distribute the Senior Exchange Notes to be received in the
Exchange Offer and that, to the best of the Authority's information and
belief, each Holder participating in the Exchange Offer is acquiring the
Senior Exchange Notes in its ordinary course of business and has no
arrangement or understanding with any person to participate in the
distribution of the Senior Exchange Notes received in the Exchange Offer
and (C) any other undertaking or representation required by the Commission
as set forth in any no-action letter obtained pursuant to clause (i) above,
if applicable.
(b) Shelf Registration Statement. In connection with the Shelf Registration
Statement, the Authority shall
(i) comply with all the provisions of Section 6(c) below and use its
best efforts to effect such registration to permit the sale of the Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution thereof (as indicated in the information furnished
to the Authority pursuant to Section 4(b) hereof), and pursuant thereto the
Authority will prepare and file with the Commission a Registration
Statement relating to the registration on any appropriate form under the
Act, which form shall be available for the sale of the Transfer Restricted
Securities in accordance with the intended method or methods of
distribution thereof within the time periods and otherwise in accordance
with the provisions hereof, and
(ii) issue, upon the request of any Holder or purchaser of Initial
Senior Notes covered by any Shelf Registration Statement contemplated by
this Agreement, Senior Exchange Notes having an aggregate principal amount
equal to the aggregate principal amount of Initial Senior Notes sold
pursuant to the Shelf Registration Statement and surrendered to the
Authority for cancellation. The Authority shall register Senior Exchange
Notes on the Shelf Registration Statement for this purpose and issue the
Senior Exchange Notes to the purchaser(s) of securities subject to the
Shelf Registration Statement in the names as such purchaser(s) shall
designate.
(c) General Provisions. In connection with any Registration Statement and
any related Prospectus required by this Agreement, the Authority shall
(i) use its best efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements for
the period specified in Section 3 or 4 of this Agreement, as applicable.
Upon the occurrence of any event that would cause any such Registration
Statement or the Prospectus contained therein (A) to contain an untrue
statement of material fact or omit to state any material fact necessary to
make the statements therein not misleading or (B) not to be effective and
usable for resale of Transfer Restricted Securities during the period
required by this Agreement, the Authority shall file promptly an
appropriate amendment to such Registration Statement curing such defect,
and, if Commission review is required, use its best efforts to cause such
amendment to be declared effective as soon as practicable;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the applicable Registration Statement as may
be necessary to keep such Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, as the case may be,
cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under
the Act, and to comply fully with Rules 424, 430A and 462, as applicable,
under the Act in a timely manner; and comply with the provisions of the Act
with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with the
intended method or methods of distribution by the sellers thereof set forth
in such Registration Statement or supplement to the Prospectus;
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<PAGE>
(iii) advise each Holder promptly and, if requested by such Holder,
confirm such advice in writing, (A) when the Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with respect to
any applicable Registration Statement or any post-effective amendment
thereto, when the same has become effective, (B) of any request by the
Commission for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information relating
thereto, (C) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement under the Act or of the
suspension by any state securities commission of the qualification of the
Transfer Restricted Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for any of the preceding purposes, (D) of
the existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any document
incorporated by reference therein untrue, or that requires the making of
any additions to or changes in the Registration Statement in order to make
the statements therein not misleading, or that requires the making of any
additions to or changes in the Prospectus in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the
Transfer Restricted Securities under state securities or Blue Sky laws, the
Authority shall use its best efforts to obtain the withdrawal or lifting of
such order at the earliest possible time;
(iv) subject to Section 6(c)(i), if any fact or event contemplated by
Section 6(c)(iii)(D) above shall exist or have occurred, prepare a
supplement or post-effective amendment to the Registration Statement or
related Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(v) furnish to each Holder in connection with such exchange or sale,
if any, before filing with the Commission, copies of any Registration
Statement or any Prospectus included therein or any amendments or
supplements to any such Registration Statement or Prospectus (including all
documents incorporated by reference after the initial filing of such
Registration Statement), which documents will be subject to the review and
comment of such Holders in connection with such sale, if any, for a period
of at least five Business Days, and the Authority will use its best efforts
to reflect in each such Registration Statement or Prospectus or any
amendment or supplement to any such Registration Statement or Prospectus
(including all such documents incorporated by reference) when so filed with
the Commission, such comments proposed by such Holders. A Holder shall be
deemed to have objected to such filing if such Registration Statement,
amendment, Prospectus or supplement, as applicable, as proposed to be
filed, contains an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading or
fails to comply with the applicable requirements of the Act;
(vi) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
provide copies of such document to each Holder in connection with such
exchange or sale, if any, make the Authority's representatives available
for discussion of such document and other customary due diligence matters,
and include such information in such document prior to the filing thereof
as such Holders may reasonably request;
(vii) make available, at reasonable times, for inspection by each
Holder and any attorney or accountant retained by such Holders, all
financial and other records, pertinent corporate documents of the Authority
and cause the Authority's officers, board members and employees to supply
all information reasonably requested by any such Holder, attorney or
accountant in
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connection with such Registration Statement or any post-effective amendment
thereto subsequent to the filing thereof and prior to its effectiveness;
(viii) if requested by any Holders in connection with such exchange or
sale, promptly include in any Registration Statement or Prospectus,
pursuant to a supplement or post-effective amendment if necessary, such
information as such Holders may reasonably request to have included
therein, including, without limitation, information relating to the "Plan
of Distribution" of the Transfer Restricted Securities, and make all
required filings of such Prospectus supplement or post-effective amendment
as soon as practicable after the Authority is notified of the matters to be
included in such Prospectus supplement or post-effective amendment;
(ix) furnish to each Holder in connection with such exchange or sale,
without charge, at least one copy of the Registration Statement, as first
filed with the Commission, and of each amendment thereto, including all
documents incorporated by reference therein and all exhibits (including
exhibits incorporated therein by reference);
(x) deliver to each Holder without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons reasonably may request; the Authority
hereby consents to the use (in accordance with law) of the Prospectus and
any amendment or supplement thereto by each selling Holder in connection
with the offering and the sale of the Transfer Restricted Securities
covered by the Prospectus or any amendment or supplement thereto;
(xi) upon the request of any Holder, enter into such agreements
(including underwriting agreements) and make such representations and
warranties and take all such other actions in connection therewith in order
to expedite or facilitate the disposition of the Transfer Restricted
Securities pursuant to any applicable Registration Statement contemplated
by this Agreement as may be reasonably requested by any Holder in
connection with any sale or resale pursuant to any applicable Registration
Statement. In such connection, the Authority shall
(A) upon request of any Holder, furnish (or in the case of
paragraphs (2) and (3), use its best efforts to cause to be furnished)
to each Holder, upon Consummation of the Exchange Offer or upon the
effectiveness of the Shelf Registration Statement, as the case may be:
(1) a certificate, dated such date, signed on behalf of the
Authority by the Chairman of the Management Board confirming, as
of the date thereof, the matters set forth in Section 6(d) of the
Purchase Agreement and such other similar matters as such Holders
may reasonably request;
(2) an opinion, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, of counsel for the
Authority covering such matters as such Holder may reasonably
request and are customarily given in similar offerings; and
(3) a customary comfort letter, dated the date of
Consummation of the Exchange Offer, or as of the date of
effectiveness of the Shelf Registration Statement, as the case
may be, from the Authority's independent accountants, in the
customary form and covering matters of the type customarily
covered in comfort letters to underwriters in connection with
underwritten offerings, and affirming the matters set forth in
the comfort letters delivered pursuant to Section 6(e) of the
Purchase Agreement; and
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(B) deliver such other documents and certificates as may be
reasonably requested by the selling Holders to evidence compliance
with the matters covered in clause (A) above and with any customary
conditions contained in the any agreement entered into by the
Authority pursuant to this clause (xi);
(xii) prior to any public offering of Transfer Restricted Securities,
cooperate with the selling Holders and their counsel in connection with the
registration and qualification of the Transfer Restricted Securities under
the securities or Blue Sky laws of such jurisdictions as the selling
Holders may request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Transfer
Restricted Securities covered by the applicable Registration Statement;
provided, however, that the Authority shall not be required to register or
qualify as a foreign corporation where it is not now so qualified or to
take any action that would subject it to the service of process in suits or
to taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so subject;
(xiii) in connection with any sale of Transfer Restricted Securities
that will result in such securities no longer being Transfer Restricted
Securities, cooperate with the Holders to facilitate the timely preparation
and delivery of certificates representing Transfer Restricted Securities to
be sold and not bearing any restrictive legends; and to register such
Transfer Restricted Securities in such denominations and such names as the
selling Holders may request at least two Business Days prior to such sale
of Transfer Restricted Securities;
(xiv) use its best efforts to cause the disposition of the Transfer
Restricted Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof to
consummate the disposition of such Transfer Restricted Securities, subject
to the proviso contained in clause (xii) above;
(xv) provide a CUSIP number for all Transfer Restricted Securities not
later than the effective date of a Registration Statement covering such
Transfer Restricted Securities and provide the Trustee under the Senior
Notes Indenture with printed certificates for the Transfer Restricted
Securities which are in a form eligible for deposit with the Depository
Trust Company;
(xvi) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to
its security holders with regard to any applicable Registration Statement,
as soon as practicable, a consolidated earnings statement meeting the
requirements of Rule 158 (which need not be audited) covering a 12-month
period beginning after the effective date of the Registration Statement (as
such term is defined in paragraph (c) of Rule 158 under the Act);
(xvii) cause the Senior Notes Indenture to be qualified under the TIA
not later than the effective date of the first Registration Statement
required by this Agreement and, in connection therewith, cooperate with the
Trustee and the Holders to effect such changes to the Senior Notes
Indenture as may be required for such Senior Notes Indenture to be so
qualified in accordance with the terms of the TIA; and execute and use its
best efforts to cause the Trustee to execute, all documents that may be
required to effect such changes and all other forms and documents required
to be filed with the Commission to enable such Senior Notes Indenture to be
so qualified in a timely manner; and
(xviii) provide promptly to each Holder, upon request, each document
filed with the Commission pursuant to the requirements of Section 13 or
15(d) of the Exchange Act.
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(d) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 6(c)(iii)(C) or any notice from the Authority of the existence of any
fact of the kind described in Section 6(c)(iii)(D) hereof (in each case, a
"Suspension Notice"), such Holder will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to the applicable Registration Statement
until (i) such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such Holder is
advised in writing by the Authority that the use of the Prospectus may be
resumed, and has received copies of any additional or supplemental filings that
are incorporated by reference in the Prospectus (in each case, the
"Recommencement Date"). Each Holder receiving a Suspension Notice hereby agrees
that it will either (i) destroy any Prospectuses, other than permanent file
copies, then in such Holder's possession which have been replaced by the
Authority with more recently dated Prospectuses or (ii) deliver to the Authority
(at the Authority's expense) all copies, other than permanent file copies, then
in such Holder's possession of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of the Suspension Notice. The
time period regarding the effectiveness of such Registration Statement set forth
in Section 3 or 4 hereof, as applicable, shall be extended by a number of days
equal to the number of days in the period from and including the date of
delivery of the Suspension Notice to the date of delivery of the Recommencement
Date.
(e) Underwritten Offerings. No Holder may participate in any underwritten
Shelf Registration Statement hereunder unless such Holder (i) agrees to sell
such Holder's Transfer Restricted Securities on the basis provided in any
underwriting arrangements entered into in connection therewith and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Authority's performance of or compliance
with this Agreement will be borne by the Authority, regardless of whether a
Registration Statement becomes effective, including without limitation: (i) all
registration and filing fees and expenses; (ii) all fees and expenses of
compliance with federal securities and state Blue Sky or securities laws; (iii)
all expenses of printing (including printing certificates for the Senior
Exchange Notes to be issued in the Exchange Offer and printing of Prospectuses),
messenger and delivery services and telephone; (iv) all fees and disbursements
of counsel for the Authority and the Holders of Transfer Restricted Securities;
(v) all application and filing fees in connection with listing the Senior
Exchange Notes on a national securities exchange or automated quotation system
pursuant to the requirements hereof; and (vi) all fees and disbursements of
independent certified public accountants of the Authority (including the
expenses of any special audit and comfort letters required by or incident to
such performance).
The Authority will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any person, including special experts, retained by the
Authority.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Authority will reimburse
the Initial Purchasers and the Holders of Transfer Restricted Securities who are
tendering Initial Senior Notes into the Exchange Offer and/or selling or
reselling Initial Senior Notes or Senior Exchange Notes pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or the
Shelf Registration Statement, as applicable, for the reasonable fees and
disbursements of not more than one counsel, as may be chosen by the Holders of a
majority in principal amount of the Transfer Restricted Securities for whose
benefit such Registration Statement is being prepared. Notwithstanding the
foregoing, the Holders of any Initial Senior Notes or Exchange Senior Notes
being registered on the Shelf Registration Statement shall pay all agency or
brokerage fees and commissions and
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underwriting discounts and commissions attributable to the sale of such Initial
Senior Notes or Exchange Senior Notes and the fees and disbursements of any
counsel retained by such Holders other than counsel referred to above.
SECTION 8. INDEMNIFICATION
(a) The Authority agrees to indemnify and hold harmless each Holder, its
directors, officers and each person, if any, who controls such Holder (within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act), from
and against any and all losses, claims, damages, liabilities, judgments,
(including without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action that
could give rise to any such losses, claims, damages, liabilities or judgments)
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement, preliminary prospectus or Prospectus
(or any amendment or supplement thereto) provided by the Authority to any Holder
or any prospective purchaser of Senior Exchange Notes or registered Initial
Senior Notes, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or judgments are caused by an untrue statement or omission or
alleged untrue statement or omission that is based upon information relating to
any of the Holders furnished in writing to the Authority by any of the Holders.
(b) Each Holder of Transfer Restricted Securities agrees, severally and not
jointly, to indemnify and hold harmless the Authority and its directors and
officers, and each person, if any, who controls (within the meaning of Section
15 of the Act or Section 20 of the Exchange Act) the Authority to the same
extent as the foregoing indemnity from the Authority set forth in section (a)
above, but only with reference to information relating to such Holder furnished
in writing to the Authority by such Holder expressly for use in any Registration
Statement. In no event shall any Holder, its directors, officers or any person
who controls such Holder be liable or responsible for any amount in excess of
the amount by which the total amount received by such Holder with respect to its
sale of Transfer Restricted Securities pursuant to a Registration Statement
exceeds (i) the amount paid by such Holder for such Transfer Restricted
Securities and (ii) the amount of any damages that such Holder, its directors,
officers or any person who controls such Holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission.
(c) In case any action shall be commenced involving any person in respect
of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying person") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), a Holder shall not be required to assume the
defense of such action pursuant to this Section 8(c), but may employ separate
counsel and participate in the defense thereof, but the fees and expenses of
such counsel, except as provided below, shall be at the expense of the Holder).
Any indemnified party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general
12
<PAGE>
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) for all
indemnified parties and all such fees and expenses shall be reimbursed as they
are incurred. Such firm shall be designated in writing by a majority of the
Holders, in the case of the parties indemnified pursuant to Section 8(a), and by
the Authority, in the case of parties indemnified pursuant to Section 8(b). The
indemnifying party shall indemnify and hold harmless the indemnified party from
and against any and all losses, claims, damages, liabilities and judgments by
reason of any settlement of any action (i) effected with its written consent or
(ii) effected without its written consent if the settlement is entered into more
than 20 Business Days after the indemnifying party shall have received a request
from the indemnified party for reimbursement for the fees and expenses of
counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent that the indemnification provided for in this Section 8
is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Authority, on the
one hand, and the Holders, on the other hand, from their sale of Transfer
Restricted Securities or (ii) if the allocation provided by clause 8(d)(i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause 8(d)(i) above but also the
relative fault of the Authority, on the one hand, and of the Holder, on the
other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative fault of the Authority, on the
one hand, and of the Holder, on the other hand, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Authority, on the one hand, or by the
Holder, on the other hand, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and judgments referred to above shall be deemed to include,
subject to the limitations set forth in the second paragraph of Section 8(a),
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim.
The Authority and each Holder agree that it would not be just and equitable
if contribution pursuant to this Section 8(d) were determined by pro rata
allocation (even if the Holders were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or judgments referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any matter, including any action
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 8, no Holder, its
directors, its officers or any person, if any, who controls such Holder shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the total received by such Holder with respect to the sale of Transfer
Restricted Securities pursuant to a Registration Statement exceeds (i) the
amount paid by such Holder for such Transfer Restricted Securities and (ii) the
amount of any damages which such Holder has
13
<PAGE>
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Holders' obligations to contribute pursuant to this
Section 8(d) are several in proportion to the respective principal amount of
Transfer Restricted Securities held by each Holder hereunder and not joint.
SECTION 9. RULE 144A and RULE 144
The Authority agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding and during any period in which the
Authority (i) is not subject to Section 13 or 15(d) of the Exchange Act, to make
available, upon request of any Holder, to such Holder or beneficial owner of
Transfer Restricted Securities in connection with any sale thereof and any
prospective purchaser of such Transfer Restricted Securities designated by such
Holder or beneficial owner, the information required by Rule 144A(d)(4) under
the Act in order to permit resales of such Transfer Restricted Securities
pursuant to Rule 144A, and (ii) is subject to Section 13 or 15 (d) of the
Exchange Act, to make all filings required thereby in a timely manner in order
to permit resales of such Transfer Restricted Securities pursuant to Rule 144.
SECTION 10. CONSENT TO SUIT
The Authority 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 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 Authority intends 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 Authority waives its immunity from
unconsented suit to permit the maintenance of the following actions:
(i) Courts. The Authority waives its 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
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 Authority has been
improperly granted or unreasonably withheld; (iii) enforce any judgment
prohibiting the Authority from taking any action, or mandating or
obligating the Authority to take any action, including a judgment
compelling the Authority to submit to binding arbitration; and (iv)
adjudicate any claim under the Indian Civil Rights Act of 1968, 25 U.S.C.
ss. 1302 (or any successor statute).
(ii) Arbitration. The Authority waives its 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
Authority, to: (i) enforce and interpret the terms of this Agreement and to
award and enforce the award of any damages owing as a consequence thereof;
(ii) determine whether any consent or approval of the Authority has been
unreasonably withheld; and (iii) enforce any judgment prohibiting the
Authority from taking any action, or mandating or obligating the Authority
to take any action, including a judgment compelling the Authority to submit
to binding arbitration.
SECTION 11. MISCELLANEOUS
(a) Remedies. The Authority acknowledges and agrees that any failure by the
Authority to comply with its obligations under Sections 3 and 4 hereof may
result in material irreparable injury to the
14
<PAGE>
Initial Purchasers or the Holders for which there is no adequate remedy at law,
that it will not be possible to measure damages for such injuries precisely and
that, in the event of any such failure, the Initial Purchasers or any Holder may
obtain such relief as may be required to specifically enforce the Authority's
obligations under Sections 3 and 4 hereof. The Authority further agrees to waive
the defense in any action for specific performance that a remedy at law would be
adequate.
(b) No Inconsistent Agreements. The Authority will not, on or after the
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Authority's securities under any
agreement in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless (i) in the case of Section 5
hereof and this Section 11(c)(i), the Authority has obtained the written consent
of Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Authority has obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities (excluding Transfer Restricted Securities held by the
Authority or its Affiliates). Notwithstanding the foregoing, a waiver or consent
to departure from the provisions hereof that relates exclusively to the rights
of Holders whose Transfer Restricted Securities are being tendered pursuant to
the Exchange Offer, and that does not affect directly or indirectly the rights
of other Holders whose Transfer Restricted Securities are not being tendered
pursuant to such Exchange Offer, may be given by the Holders of a majority of
the outstanding principal amount of Transfer Restricted Securities subject to
such Exchange Offer.
(d) Third Party Beneficiary. The Holders shall be third party beneficiaries
to the agreements made hereunder between the Authority, on the one hand, and the
Initial Purchasers, on the other hand, and shall have the right to enforce such
agreements directly to the extent they may deem such enforcement necessary or
advisable to protect its rights or the rights of Holders hereunder.
(e) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Registrar under the Senior Notes Indenture, with a copy to the Registrar
under the Senior Notes Indenture; and
(ii) if to the Authority:
Mohegan Tribal Gaming Authority
1 Mohegan Sun Boulevard
Uncasville, CT 06382
Telecopier No.: (860) 204-6153
Attention: Roland J. Harris
With a copy to:
Hogan & Hartson LLP
555 Thirteenth Street, NW
Washington, DC 20004
Telecopier No.: (202) 637-5910
Attention: David B.H. Martin, Jr., Esq.
15
<PAGE>
All such notices and communications 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 receipt
acknowledged, if telecopied; and on the next Business Day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the person giving the same to the Trustee at the
address specified in the Senior Notes Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders; provided, that nothing herein shall be deemed to permit any assignment,
transfer or other disposition of Transfer Restricted Securities in violation of
the terms hereof or of the Purchase Agreement or the Senior Notes Indenture. If
any transferee of any Holder shall acquire Transfer Restricted Securities in any
manner, whether by operation of law or otherwise, such Transfer Restricted
Securities shall be held subject to all of the terms of this Agreement, and by
taking and holding such Transfer Restricted Securities such person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement, including the restrictions on resale set
forth in this Agreement and, if applicable, the Purchase Agreement, and such
person shall be entitled to receive the benefits hereof.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW).
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
16
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
MOHEGAN TRIBAL GAMING AUTHORITY
_______________________________
By:
Name:
Title:
SALOMON SMITH BARNEY INC.
By:___________________________________
Name:
Title:
NATIONSBANC MONTGOMERY SECURITIES LLC
By:___________________________________
Name:
Title:
SG COWEN SECURITIES CORPORATION
By:___________________________________
Name:
Title:
BEAR, STEARNS & CO. INC.
By:___________________________________
Name:
Title:
17
<PAGE>
BANCBOSTON ROBERTSON STEPHENS INC.
By:___________________________________
Name:
Title:
FLEET SECURITIES, INC.
By:___________________________________
Name:
Title:
18
<PAGE>
================================================================================
CUSIP/CINS 608328 AA8
8 1/8% Senior Note due 2006
No. 1 $197,120,000
MOHEGAN TRIBAL GAMING AUTHORITY
promises to pay to Cede & Co.
or registered assigns,
the principal sum of One Hundred Ninety Seven Million, One Hundred Twenty
Thousand Dollars on January 1, 2006.
Interest Payment Dates: January 1 and July 1
Record Dates: December 15 and June 15
Dated: March 3, 1999
MOHEGAN TRIBAL GAMING AUTHORITY
By:___________________________________
Name:
Title:
By:___________________________________
Name:
Title:
This is one of the Senior Notes referred to
in the within-mentioned Indenture:
FIRST UNION NATIONAL BANK,
as Trustee
By: __________________________________
Authorized Signatory
================================================================================
<PAGE>
8 1/8% Senior Note due 2006
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT
NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE
MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE
INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY
WITH THE PRIOR WRITTEN CONSENT OF THE AUTHORITY.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
IN ACCORDANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (SUBJECT TO THE DELIVERY OF SUCH EVIDENCE, IF ANY, REQUIRED
UNDER THE INDENTURE PURSUANT TO WHICH THIS NOTE IS ISSUED) AND IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER JURISDICTION. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER
EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE AUTHORITY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(a) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE AUTHORITY SO
REQUESTS), SUBJECT TO THE RECEIPT BY THE REGISTRAR OF A CERTIFICATION OF THE
TRANSFEROR AND AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, (2) TO THE AUTHORITY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE
RESALE RESTRICTION SET FORTH IN (A) ABOVE.
<PAGE>
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST.
(a) The Mohegan Tribal Gaming Authority (the "Authority"), promises to pay
interest on the principal amount of this Senior Note at 8 1/8% per annum from
March 3, 1999 until maturity. The Authority will pay interest and Additional
Interest, if any, semi-annually in arrears on January 1 and July 1 of each year,
or if any such day is not a Business Day, on the next succeeding Business Day
(each an "Interest Payment Date"). Interest on the Senior Notes will accrue from
the most recent date to which interest has been paid or, if no interest has been
paid, from the date of issuance; provided that if there is no existing Default
in the payment of interest, and if this Senior Note is authenticated between a
record date referred to on the face hereof and the next succeeding Interest
Payment Date, interest shall accrue from such next succeeding Interest Payment
Date; provided, further, that the first Interest Payment Date shall be July 1,
1999. 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 interest and
Additional Interest, if any, (without regard to any applicable grace periods)
from time to time on demand at the same rate to the extent lawful. Interest will
be computed on the basis of a 360-day year of twelve 30-day months.
(b) The Holder of this Senior Note is entitled to the benefits of the
Senior Registration Rights Agreement dated as of the date hereof, among the
Authority and the Initial Purchasers named therein (the "Senior Registration
Rights Agreement"). If (i) the Authority fails to file any of the Registration
Statements required by the Registration Rights Agreements 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 of 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 in connection
with resales of Transfer Restricted Securities during 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 will pay
Additional Interest to each Holder of Senior Notes, with respect to the first
90-day period immediately following the occurrence of the first Registration
Default in an amount equal to 25 basis points per 90-day period of the principal
amount of Senior Notes held by such Holder. The amount of the Additional
Interest will increase by an additional 25 basis points with respect to each
subsequent 90-day period until all Registration Defaults have been cured, up to
a maximum amount of Additional Interest of 1% per annum of the principal amount
of Senior Notes.
(A) Except as expressly provided in this paragraph 1(b), Additional
Interest shall be treated as interest and any date on which Additional Interest
is due and payable shall be treated as an Interest Payment Date for all purposes
under this Senior Note and the Indenture.
(B) In the event that the Authority is required to pay Additional Interest
pursuant to this paragraph 1(b), the Authority shall notify the Trustee in
writing at least 15 days
<PAGE>
prior to the first Interest Payment Date upon which such Additional Interest is
due; provided that, in the event that the obligation to pay such Additional
Interest occurs less than 15 days prior to such Additional Interest Date, such
notice shall be provided by the Authority to the Trustee as soon as reasonably
practicable prior to such Interest Payment Date.
2. METHOD OF PAYMENT. The Authority will pay interest on the Senior Notes
(except defaulted interest) and Additional Interest, if any, to the Persons who
are registered Holders of Senior Notes at the close of business on the December
15 or June 15 next preceding the Interest Payment Date, even if such Senior
Notes are canceled after such record date and on or before such Interest Payment
Date, except as provided in Section 2.12 of the Indenture with respect to
defaulted interest. The Senior Notes will be payable as to principal, premium
and Additional Interest, if any, and interest 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 and Additional
Interest may be made by check mailed to the Holders at their addresses set forth
in the register of Holders, and provided that payment by wire transfer of
immediately available funds will be required with respect to principal of and
interest, premium and Additional Interest on, all Global Senior Notes and all
other Senior Notes the Holders of which shall hold at least $1.0 million in
principal amount of Senior Notes and 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 Union National Bank, the
Trustee under the Indenture, will act as Paying Agent and Registrar. The
Authority may change any Paying Agent or Registrar without notice to any Holder.
The Authority or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Authority issued the Senior Notes under an Indenture
dated as of March 3, 1999 ("Indenture") between the Authority and the Trustee.
The terms of the Senior 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 ss.ss. 77aaa-77bbbb). The Senior Notes are subject to all
such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. To the extent any provision of this Senior Note
conflicts with the express provisions of the Indenture, the provisions of the
indenture shall govern and be controlling.
5. OPTIONAL REDEMPTION.
(a) The Authority may redeem all or a part of these Senior Notes upon not
less than 30 nor more than 60 days' notice, at a redemption price (expressed as
percentages of principal amount) equal to 100% of the principal amount thereof
plus the Applicable Premium, if any, plus accrued and unpaid interest thereon,
if any, to the applicable redemption date.
(b) 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
<PAGE>
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 Senior 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 Senior Notes of such
Holder or beneficial owner at a redemption price equal to the lesser of (1) the
principal amount thereof or (2) the price at which such Holder or beneficial
owner acquired the Senior Notes or (3) the current market price of the Senior
Notes, together with, in either case, accrued and unpaid interest and Additional
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 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 shall be the obligation of such Holder or beneficial owner.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Authority shall not be
required to make mandatory redemption payments with respect to the Senior Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Authority shall be required to
make an offer (a "Change of Control Offer") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Senior Notes at a
purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Additional Interest thereon, if any, to the date
of purchase (the "Change of Control Payment"). Within 20 Business Days following
any Change of Control, the Authority shall mail a notice to each Holder setting
forth the procedures governing the Change of Control Offer as required by the
Indenture.
(b) If the Authority or a Subsidiary consummates any Asset Sales, within
five Business Days of each date on which the aggregate amount of Excess Proceeds
exceeds $15.0 million, the Authority shall commence an offer to all Holders of
Senior Notes (as "Asset Sale Offer") pursuant to Section 3.10 of the Indenture
to purchase the maximum principal amount of Senior Notes 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 and Additional
Interest thereon, 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 Asset Sale Offer is
less than the Excess Proceeds, the Authority (or such Subsidiary) may use such
deficiency for any purpose not otherwise permitted by the Indenture. 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 on a pro rata basis. Holders of Senior Notes that are the
subject of an offer to purchase will receive an Asset Sale Offer from the
Authority prior to any related purchase date and may elect to have such Senior
Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Senior Notes.
<PAGE>
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Senior Notes are to be redeemed at its registered address. Senior Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Senior Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Senior
Notes or portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Senior Notes may be registered and Senior 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 Senior Note or portion of a Senior Note
selected for redemption, except for the unredeemed portion of any Senior Note
being redeemed in part. Also, the Authority need not exchange or register the
transfer of any Senior Notes for a period of 15 days before a selection of
Senior Notes to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Senior Note may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture, the Senior Subsidiary Guarantees or the Senior Notes may be amended
or supplemented with the consent of the Holders of at least a majority in
principal amount of the then outstanding Senior Notes voting as a single class,
and any existing default or compliance with any provision of the Indenture, the
Senior Subsidiary Guarantees 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 voting as a single class. Without the consent of any Holder of a Senior
Note, the Indenture, the Senior Subsidiary Guarantees or the Senior Notes may be
amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Senior Notes in addition to or in place of
certificated Senior Notes, to provide for the assumption of the Authority's or
Subsidiary Guarantor's obligations to Holders of the Senior Notes by a successor
to the Authority or such Subsidiary Guarantor, 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, to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act, or to
allow any Subsidiary Guarantor to execute a supplemental indenture to the
Indenture and/or a Senior Subsidiary Guarantee with respect to the Senior Notes
provided that the Authority has obtained any required government approval to
ensure the enforceability of the Senior Notes and the Indenture.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest or Additional Interest on the Senior
Notes; (ii) default in payment when due of principal of or premium, if any, on
the Senior Notes when the same becomes due and payable at maturity, upon
redemption (including in connection with an offer to purchase) or otherwise;
(iii) failure by the Authority or any of its Restricted Subsidiaries to comply
with Section 4.10 or 5.01 of the Indenture; (iv) failure by the Authority or any
of its Restricted Subsidiaries to observe or perform (A) any covenant described
in Section 4.07 or 4.09
<PAGE>
of the Indenture for 30 days after notice to the Authority by the Trustee or the
Holders of at least 25% in aggregate principal amount of the Senior Notes then
outstanding voting as a single class or (B) any other covenant, representation,
warranty or other agreement in the Indenture or the Senior Notes for 60 days
after notice to the Authority by the Trustee or the Holders of at least 25% in
aggregate principal amount of the Senior Notes then outstanding voting as a
single class; (v) default under certain other agreements relating to
Indebtedness of the Authority or any of its Restricted Subsidiaries which
default results in the acceleration of such Indebtedness prior to its express
maturity; (vi) certain final judgments for the payment of money that remain
undischarged for a period of 60 days; (vii) certain events of bankruptcy or
insolvency with respect to the Authority or any of its Restricted Subsidiaries;
(viii) 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; (ix)
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); (x) the Lease ceases to
be in full force and effect; (xi) except as permitted by the Indenture, any
Senior Subsidiary Guarantee shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect or any Subsidiary Guarantor or any Person acting on its behalf shall deny
or disaffirm its obligations under such Subsidiary Guarantor's Senior Subsidiary
Guarantee; and (xii) failure by the Tribe to comply with the provisions of
Article 10 of the Indenture for 30 days after notice to the Authority and the
Tribe by the Trustee or the Holders of at least 25% in aggregate principal
amount of the Senior Notes then outstanding voting as a single class. 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 Senior Notes may declare
all the Senior 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 Senior Notes will become due and payable without
further action or notice. Holders 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. The Trustee may
withhold from Holders of the Senior 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) if it determines that withholding notice is in their
interest. 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 on, or the principal of, the Senior Notes. The
Authority is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Authority is required upon becoming aware
of any Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.
13. TRUSTEE DEALINGS WITH AUTHORITY. 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. A controlling person, director, officer,
employee or holder of an Ownership Interest of the Authority, as such, shall not
have any liability for any obligations of the Authority under the Senior Notes
or the Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by
<PAGE>
accepting a Senior Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Senior Notes.
15. AUTHENTICATION. This Senior 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 OF RESTRICTED GLOBAL SENIOR NOTES AND
RESTRICTED DEFINITIVE SENIOR NOTES. In addition to the rights provided to
Holders of Senior Notes under the Indenture, Holders of Restricted Global Senior
Notes and Restricted Definitive Senior Notes shall have all the rights set forth
in the Senior Registration Rights Agreement dated as of March 3, 1999, between
the Authority and the parties named on the signature pages thereof (the "Senior
Registration Rights Agreement").
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 Senior 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 Senior Notes or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
The Authority will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Senior Registration Rights Agreement.
Requests may be made to:
Mohegan Tribal Gaming Authority
1 Mohegan Sun Boulevard
Uncasville, CT 06382
Attention: Roland J. Harris
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:______________________________
(Insert assignee's legal name)
________________________________________________________________________________
(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*:
______________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
<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 or 4.15 of the Indenture, check the appropriate box below:
|_| Section 4.10 |_| Section 4.15
If you want to elect to have only part of the Note purchased by the
Authority pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$_______________________
Date:______________________
Your Signature:_______________________________________
(Sign exactly as your name appears on the face of this Note)
Tax Indentification No.:______________________________
Signature Guarantee*:
______________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL SENIOR NOTE
The following exchanges of a part of this Global Senior Note for an
interest in another Global Senior Note or for a Definitive Senior Note, or
exchanges of a part of another Global Senior Note or Definitive Senior Note for
an interest in this Global Senior Note, have been made:
<TABLE>
<CAPTION>
Principal Amount of Signature of
Amount of decrease in Amount of increase in this Global Senior Note authorized officer of
Principal Amount of Principal Amount of following such decrease Trustee or Senior
Date of Exchange this Global Senior Note this Global Senior Note (or increase) Note Custodian
---------------- ----------------------- ----------------------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
</TABLE>
<PAGE>
CUSIP/CINS U60742 AA8
8 1/8% Senior Note due 2006
No. 1 $2,880,000
MOHEGAN TRIBAL GAMING AUTHORITY
promises to pay to Cede & Co.
or registered assigns,
the principal sum of Two Million Eight Hundred Eighty Thousand Dollars on
January 1, 2006.
Interest Payment Dates: January 1, and July 1
Record Dates: December 15, and June 15
Dated: March 3, 1999
MOHEGAN TRIBAL GAMING AUTHORITY
By:___________________________________
Roland J. Harris
Chairman
By:___________________________________
Jayne G. Fawcett
Vice Chair
This is one of the Senior Notes referred to
in the within-mentioned Indenture:
FIRST UNION NATIONAL BANK,
as Trustee
By: __________________________________
Authorized Signatory
================================================================================
<PAGE>
8 1/8% Senior Note due 2006
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL SENIOR NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED SENIOR NOTES,
ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR
THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL SENIOR NOTE SHALL BE
ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SENIOR NOTES IN
DEFINITIVE FORM, THIS SENIOR NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY
TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR
ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"),
TO THE AUTHORITY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
IN ACCORDANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (SUBJECT TO THE DELIVERY OF SUCH EVIDENCE, IF ANY, REQUIRED
UNDER THE INDENTURE PURSUANT TO WHICH THIS NOTE IS ISSUED) AND IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER JURISDICTION. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER
EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE AUTHORITY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(a) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE
<PAGE>
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), SUBJECT TO THE RECEIPT BY THE REGISTRAR OF A
CERTIFICATION OF THE TRANSFEROR AND AN OPINION OF COUNSEL TO THE EFFECT THAT
SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (2) TO THE AUTHORITY OR
(3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED
HEREBY OF THE RESALE RESTRICTION SET FORTH IN (A) ABOVE.
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST.
(a) The Mohegan Tribal Gaming Authority (the "Authority"), promises to pay
interest on the principal amount of this Senior Note at 8 1/8% per annum from
March 3, 1999 until maturity. The Authority will pay interest and Additional
Interest, if any, semi-annually in arrears on January 1 and July 1 of each year,
or if any such day is not a Business Day, on the next succeeding Business Day
(each an "Interest Payment Date"). Interest on the Senior Notes will accrue from
the most recent date to which interest has been paid or, if no interest has been
paid, from the date of issuance; provided that if there is no existing Default
in the payment of interest, and if this Senior Note is authenticated between a
record date referred to on the face hereof and the next succeeding Interest
Payment Date, interest shall accrue from such next succeeding Interest Payment
Date; provided, further, that the first Interest Payment Date shall be July 1,
1999. 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 interest and
Additional Interest, if any, (without regard to any applicable grace periods)
from time to time on demand at the same rate to the extent lawful. Interest will
be computed on the basis of a 360-day year of twelve 30-day months.
(b) The Holder of this Senior Note is entitled to the benefits of the
Senior Registration Rights Agreement dated as of the date hereof, among the
Authority and the Initial Purchasers named therein (the "Senior Registration
Rights Agreement"). If (i) the Authority fails to file any of the Registration
Statements required by the Registration Rights Agreements 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 of 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 in connection
with resales of Transfer Restricted Securities during 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 will pay
Additional Interest to each Holder of Senior
<PAGE>
Notes, with respect to the first 90-day period immediately following the
occurrence of the first Registration Default in an amount equal to 25 basis
points per 90-day period of the principal amount of Senior Notes held by such
Holder. The amount of the Additional Interest will increase by an additional 25
basis points with respect to each subsequent 90-day period until all
Registration Defaults have been cured, up to a maximum amount of Additional
Interest of 1% per annum of the principal amount of Senior Notes.
(A) Except as expressly provided in this paragraph 1(b), Additional
Interest shall be treated as interest and any date on which Additional Interest
is due and payable shall be treated as an Interest Payment Date for all purposes
under this Senior Note and the Indenture.
(B) In the event that the Authority is required to pay Additional Interest
pursuant to this paragraph 1(b), the Authority shall notify the Trustee in
writing at least 15 days prior to the first Interest Payment Date upon which
such Additional Interest is due; provided that, in the event that the obligation
to pay such Additional Interest occurs less than 15 days prior to such
Additional Interest Date, such notice shall be provided by the Authority to the
Trustee as soon as reasonably practicable prior to such Interest Payment Date.
2. METHOD OF PAYMENT. The Authority will pay interest on the Senior Notes
(except defaulted interest) and Additional Interest, if any, to the Persons who
are registered Holders of Senior Notes at the close of business on the December
15 or June 15 next preceding the Interest Payment Date, even if such Senior
Notes are canceled after such record date and on or before such Interest Payment
Date, except as provided in Section 2.12 of the Indenture with respect to
defaulted interest. The Senior Notes will be payable as to principal, premium
and Additional Interest, if any, and interest 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 and Additional
Interest may be made by check mailed to the Holders at their addresses set forth
in the register of Holders, and provided that payment by wire transfer of
immediately available funds will be required with respect to principal of and
interest, premium and Additional Interest on, all Global Senior Notes and all
other Senior Notes the Holders of which shall hold at least $1.0 million in
principal amount of Senior Notes and 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 Union National Bank, the
Trustee under the Indenture, will act as Paying Agent and Registrar. The
Authority may change any Paying Agent or Registrar without notice to any Holder.
The Authority or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Authority issued the Senior Notes under an Indenture
dated as of March 3, 1999 ("Indenture") between the Authority and the Trustee.
The terms of the Senior 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 ss.ss. 77aaa-77bbbb). The Senior Notes are subject to all
such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. To the extent any provision of this Senior Note
conflicts with the express provisions of the Indenture, the provisions of the
indenture shall govern and be controlling.
<PAGE>
5. OPTIONAL REDEMPTION.
(a) The Authority may redeem all or a part of these Senior Notes upon not
less than 30 nor more than 60 days' notice, at a redemption price (expressed as
percentages of principal amount) equal to 100% of the principal amount thereof
plus the Applicable Premium, if any, plus accrued and unpaid interest thereon,
if any, to the applicable redemption date.
(b) 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 Senior 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 Senior Notes
of such Holder or beneficial owner at a redemption price equal to the lesser of
(1) the principal amount thereof or (2) the price at which such Holder or
beneficial owner acquired the Senior Notes or (3) the current market price of
the Senior Notes, together with, in either case, accrued and unpaid interest and
Additional 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 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 shall be the obligation of such Holder or beneficial
owner.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Authority shall not be
required to make mandatory redemption payments with respect to the Senior Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Authority shall be required to
make an offer (a "Change of Control Offer") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Senior Notes at a
purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Additional Interest thereon, if any, to the date
of purchase (the "Change of Control Payment"). Within 20 Business Days following
any Change of Control, the Authority shall mail a notice to each Holder setting
forth the procedures governing the Change of Control Offer as required by the
Indenture.
(b) If the Authority or a Subsidiary consummates any Asset Sales, within
five Business Days of each date on which the aggregate amount of Excess Proceeds
exceeds $15.0 million, the Authority shall commence an offer to all Holders of
Senior Notes (as "Asset Sale Offer") pursuant to Section 3.10 of the Indenture
to purchase the maximum principal amount of
<PAGE>
Senior Notes 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 and Additional Interest thereon, 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 Asset Sale Offer is less than the Excess Proceeds, the Authority
(or such Subsidiary) may use such deficiency for any purpose not otherwise
permitted by the Indenture. 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 on a pro rata basis.
Holders of Senior Notes that are the subject of an offer to purchase will
receive an Asset Sale Offer from the Authority prior to any related purchase
date and may elect to have such Senior Notes purchased by completing the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Senior
Notes.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Senior Notes are to be redeemed at its registered address. Senior Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Senior Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Senior
Notes or portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Senior Notes may be registered and Senior 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 Senior Note or portion of a Senior Note
selected for redemption, except for the unredeemed portion of any Senior Note
being redeemed in part. Also, the Authority need not exchange or register the
transfer of any Senior Notes for a period of 15 days before a selection of
Senior Notes to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.
This Regulation S Temporary Global Note is exchangeable in whole or in part
for one or more Global Notes only (i) on or after the termination of the 40-day
restricted period (as defined in Regulation S) and (ii) upon presentation of
certificates (accompanied by an Opinion of Counsel, if applicable) required by
Article 2 of the Indenture. Upon exchange of this Regulation S Temporary Global
Note for one or more Global Notes, the Trustee shall cancel this Regulation S
Temporary Note.
10. PERSONS DEEMED OWNERS. The registered Holder of a Senior Note may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture, the Senior Subsidiary Guarantees or the Senior Notes may be amended
or supplemented with the consent of the Holders of at least a majority in
principal amount of the then outstanding Senior Notes voting as a single class,
and any existing default or compliance with any provision of the Indenture, the
Senior Subsidiary Guarantees 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 voting as a single class. Without the consent of any Holder of a Senior
<PAGE>
Note, the Indenture, the Senior Subsidiary Guarantees or the Senior Notes may be
amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Senior Notes in addition to or in place of
certificated Senior Notes, to provide for the assumption of the Authority's or
Subsidiary Guarantor's obligations to Holders of the Senior Notes by a successor
to the Authority or such Subsidiary Guarantor, 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, to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act, or to
allow any Subsidiary Guarantor to execute a supplemental indenture to the
Indenture and/or a Senior Subsidiary Guarantee with respect to the Senior Notes
provided that the Authority has obtained any required government approval to
ensure the enforceability of the Senior Notes and the Indenture.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest or Additional Interest on the Senior
Notes; (ii) default in payment when due of principal of or premium, if any, on
the Senior Notes when the same becomes due and payable at maturity, upon
redemption (including in connection with an offer to purchase) or otherwise;
(iii) failure by the Authority or any of its Restricted Subsidiaries to comply
with Section 4.10 or 5.01 of the Indenture; (iv) failure by the Authority or any
of its Restricted Subsidiaries to observe or perform (A) any covenant described
in Section 4.07 or 4.09 of the Indenture for 30 days after notice to the
Authority by the Trustee or the Holders of at least 25% in aggregate principal
amount of the Senior Notes then outstanding voting as a single class or (B) any
other covenant, representation, warranty or other agreement in the Indenture or
the Senior Notes for 60 days after notice to the Authority by the Trustee or the
Holders of at least 25% in aggregate principal amount of the Senior Notes then
outstanding voting as a single class; (v) default under certain other agreements
relating to Indebtedness of the Authority or any of its Restricted Subsidiaries
which default results in the acceleration of such Indebtedness prior to its
express maturity; (vi) certain final judgments for the payment of money that
remain undischarged for a period of 60 days; (vii) certain events of bankruptcy
or insolvency with respect to the Authority or any of its Restricted
Subsidiaries; (viii) 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; (ix) 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); (x)
the Lease ceases to be in full force and effect; (xi) except as permitted by the
Indenture, any Senior Subsidiary Guarantee shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to be in
full force and effect or any Subsidiary Guarantor or any Person acting on its
behalf shall deny or disaffirm its obligations under such Subsidiary Guarantor's
Senior Subsidiary Guarantee; and (xii) failure by the Tribe to comply with the
provisions of Article 10 of the Indenture for 30 days after notice to the
Authority and the Tribe by the Trustee or the Holders of at least 25% in
aggregate principal amount of the Senior Notes then outstanding voting as a
single class. 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 Senior
Notes may declare all the Senior 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 Senior Notes will become due and
payable without further action or notice. Holders 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
<PAGE>
any trust or power. The Trustee may withhold from Holders of the Senior 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) if it determines
that withholding notice is in their interest. 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 on,
or the principal of, the Senior Notes. The Authority is required to deliver to
the Trustee annually a statement regarding compliance with the Indenture, and
the Authority is required upon becoming aware of any Default or Event of
Default, to deliver to the Trustee a statement specifying such Default or Event
of Default.
13. TRUSTEE DEALINGS WITH AUTHORITY. 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. A controlling person, director, officer,
employee or holder of an Ownership Interest of the Authority, as such, shall not
have any liability for any obligations of the Authority under the Senior Notes
or the Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Senior Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Senior Notes.
15. AUTHENTICATION. This Senior 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 OF RESTRICTED GLOBAL SENIOR NOTES AND
RESTRICTED DEFINITIVE SENIOR NOTES. In addition to the rights provided to
Holders of Senior Notes under the Indenture, Holders of Restricted Global Senior
Notes and Restricted Definitive Senior Notes shall have all the rights set forth
in the Senior Registration Rights Agreement dated as of March 3, 1999, between
the Authority and the parties named on the signature pages thereof (the "Senior
Registration Rights Agreement").
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 Senior 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 Senior Notes or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
The Authority will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Senior Registration Rights Agreement.
Requests may be made to:
<PAGE>
Mohegan Tribal Gaming Authority
1 Mohegan Sun Boulevard
Uncasville, CT 06382
Attention: Roland J. Harris
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:______________________________
(Insert assignee's legal name)
________________________________________________________________________________
(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*:
______________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
<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 or 4.15 of the Indenture, check the appropriate box below:
|_| Section 4.10 |_| Section 4.15
If you want to elect to have only part of the Note purchased by the
Authority pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$_______________________
Date:______________________
Your Signature:_______________________________________
(Sign exactly as your name appears on the face of this Note)
Tax Indentification No.:______________________________
Signature Guarantee*:
______________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL SENIOR NOTE
The following exchanges of a part of this Global Senior Note for an
interest in another Global Senior Note or for a Definitive Senior Note, or
exchanges of a part of another Global Senior Note or Definitive Senior Note for
an interest in this Global Senior Note, have been made:
<TABLE>
<CAPTION>
Principal Amount of Signature of
Amount of decrease in Amount of increase in this Global Senior Note authorized officer of
Principal Amount of Principal Amount of following such decrease Trustee or Senior
Date of Exchange this Global Senior Note this Global Senior Note (or increase) Note Custodian
---------------- ----------------------- ----------------------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
</TABLE>
<PAGE>
Exhibit 4.6
- --------------------------------------------------------------------------------
MOHEGAN TRIBAL GAMING AUTHORITY
ISSUER
$300,000,000
in aggregate principal amount
8 3/4% SENIOR SUBORDINATED NOTES DUE 2009
----------------------------------------
INDENTURE
Dated as of March 3, 1999
----------------------------------------
Mohegan Tribal Gaming Authority of the Mohegan Tribe of Indians of Connecticut
Mohegan Tribe of Indians of Connecticut
----------------------------------------
State Street Bank and Trust Company
Trustee
----------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
- ----------- -----------------
<S> <C>
310(a)(1)..................................................... 7.10
(a)(2)..................................................... 7.10
(a)(3)..................................................... N.A.
(a)(4)..................................................... N.A.
(a)(5)..................................................... 7.10
(b)........................................................ 7.10
(c)........................................................ N.A.
311(a)........................................................ 7.11
(b)........................................................ 7.11
(c)........................................................ N.A.
312(a)........................................................ 2.05
(b)........................................................ 12.03
(c)........................................................ 12.03
313(a)........................................................ 7.06
(b)(2)..................................................... 7.06
(c)........................................................ 7.06; 12.02
(d)........................................................ 7.06
314(a)........................................................ 4.03; 12.05
(c)(1)..................................................... 12.04
(c)(2)..................................................... 12.04
(c)(3)..................................................... N.A.
(e)........................................................ 12.05
(f)........................................................ N.A.
315(a)........................................................ 7.01
(b)........................................................ 7.05, 12.02
(c)........................................................ 7.01
(d)........................................................ 7.01
(e)........................................................ 6.11
316(a)(last sentence)......................................... 2.09
(a)(1)(A).................................................. 6.05
(a)(1)(B).................................................. 6.04
(a)(2)..................................................... N.A.
(b)........................................................ N.A.
(c)........................................................ 2.12
317(a)(1)..................................................... 6.08
(a)(2)..................................................... 6.09
(b)........................................................ 2.04
318(a)........................................................ 12.01
(b)........................................................ N.A.
(c)........................................................ 12.01
</TABLE>
- ----------
N.A. means not applicable.
* This Cross-Reference Table is not part of the Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE
<S> <C> <C>
Section 1.01. Definitions....................................................................1
Section 1.02. Other Definitions.............................................................20
Section 1.03. Incorporation by Reference of Trust Indenture Act.............................20
Section 1.04. Rules of Construction.........................................................21
ARTICLE 2 THE SENIOR SUBORDINATED NOTES
Section 2.01. Form and Dating...............................................................21
Section 2.02. Execution and Authentication..................................................22
Section 2.03. Registrar and Paying Agent....................................................23
Section 2.04. Paying Agent to Hold Money in Trust...........................................23
Section 2.05. Holder Lists..................................................................24
Section 2.06. Transfer and Exchange.........................................................24
Section 2.07. Replacement Senior Subordinated Notes.........................................35
Section 2.08. Outstanding Senior Subordinated Notes.........................................36
Section 2.09. Treasury Senior Subordinated Notes............................................36
Section 2.10. Temporary Senior Subordinated Notes...........................................36
Section 2.11. Cancellation..................................................................36
Section 2.12. Defaulted Interest............................................................37
Section 2.13. CUSIP Numbers.................................................................37
ARTICLE 3 REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee............................................................37
Section 3.02. Selection of Senior Subordinated Notes to Be Redeemed.........................37
Section 3.03. Notice of Redemption..........................................................38
Section 3.04. Effect of Notice of Redemption................................................39
Section 3.05. Deposit of Redemption Price...................................................39
Section 3.06. Senior Subordinated Notes Redeemed in Part....................................39
Section 3.07. Optional Redemption...........................................................39
Section 3.08. Redemption Pursuant to Gaming Law.............................................40
Section 3.09. Mandatory Redemption..........................................................40
Section 3.10. Offer to Purchase by Application of Excess Proceeds...........................40
ARTICLE 4 COVENANTS
Section 4.01. Payment of Senior Subordinated Notes..........................................42
Section 4.02. Maintenance of Office or Agency...............................................42
Section 4.03. Reports.......................................................................43
Section 4.04. Compliance Certificate........................................................43
Section 4.05. Taxes.........................................................................44
Section 4.06. Stay, Extension and Usury Laws................................................44
Section 4.07. Restricted Payments...........................................................44
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries................46
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock....................48
</TABLE>
i
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<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C> <C>
Section 4.10. Asset Sales...................................................................49
Section 4.11. Transactions with Affiliates..................................................50
Section 4.12. Liens.........................................................................51
Section 4.13. Line of Business..............................................................51
Section 4.14. Existence of the Authority and Maintenance of the Lease.......................51
Section 4.15. Offer to Repurchase Upon Change of Control....................................52
Section 4.16. No Senior Subordinated Debt...................................................52
Section 4.17. Limitation on Sale and Leaseback Transactions.................................53
Section 4.18. Limitation on Issuances and Sales of Equity Interests in
Wholly Owned Restricted Subsidiaries........................................53
Section 4.19. Payments for Consent..........................................................53
Section 4.20. Senior Subordinated Subsidiary Guarantees.....................................53
Section 4.21. Ownership Interests in the Authority..........................................54
Section 4.22. Subordination of Junior Payments Under the Relinquishment Agreement...........54
Section 4.23. Construction..................................................................54
Section 4.24. Restrictions on Leasing and Dedication of Property............................54
Section 4.25. Maintenance of Insurance......................................................55
Section 4.26. Gaming Licenses...............................................................55
Section 4.27. Required Defeasance and Redemption of the Junior
Subordinated Notes..........................................................57
Section 4.28. Designation of Designated Senior Indebtedness Under the
Relinquished Agreement......................................................57
ARTICLE 5 SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets......................................56
ARTICLE 6 DEFAULTS AND REMEDIES
Section 6.01. Events of Default.............................................................56
Section 6.02. Acceleration..................................................................58
Section 6.03. Other Remedies................................................................59
Section 6.04. Waiver of Past Defaults.......................................................59
Section 6.05. Control by Majority...........................................................59
Section 6.06. Limitation on Suits...........................................................59
Section 6.07. Rights of Holders of Senior Subordinated Notes to
Receive Payment.............................................................60
Section 6.08. Collection Suit by Trustee....................................................60
Section 6.09. Trustee May File Proofs of Claim..............................................60
Section 6.10. Priorities....................................................................61
Section 6.11. Undertaking for Costs.........................................................61
ARTICLE 7 TRUSTEE
Section 7.01. Duties of Trustee.............................................................61
Section 7.02. Rights of Trustee.............................................................62
Section 7.03. Individual Rights of Trustee..................................................63
Section 7.04. Trustee's Disclaimer..........................................................63
Section 7.05. Notice of Defaults............................................................64
Section 7.06. Reports by Trustee to Holders of the Senior Subordinated Notes................64
Section 7.07. Compensation and Indemnity....................................................65
Section 7.08. Replacement of Trustee........................................................65
Section 7.09. Successor Trustee by Merger, etc..............................................66
</TABLE>
ii
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<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C> <C>
Section 7.10. Eligibility; Disqualification.................................................67
Section 7.11. Preferential Collection of Claims Against Authority...........................67
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance......................67
Section 8.02. Legal Defeasance and Discharge................................................67
Section 8.03. Covenant Defeasance...........................................................68
Section 8.04. Conditions to Legal or Covenant Defeasance....................................68
Section 8.05. Deposited Money and Government Securities to be
Held in Trust; Other Miscellaneous Provisions...............................69
Section 8.06. Repayment to Authority........................................................70
Section 8.07. Reinstatement.................................................................70
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Senior Subordinated Notes.......................70
Section 9.02. With Consent of Holders of Senior Subordinated Notes..........................71
Section 9.03. Compliance with Trust Indenture Act...........................................73
Section 9.04. Revocation and Effect of Consents.............................................73
Section 9.05. Notation on or Exchange of Senior Subordinated Notes..........................73
Section 9.06. Trustee to Sign Amendments, etc...............................................73
ARTICLE 10 SUBORDINATION
Section 10.01. Agreement to Subordinate.....................................................73
Section 10.02. Certain Definitions..........................................................74
Section 10.03. Liquidation; Dissolution; Bankruptcy.........................................74
Section 10.04. Default on Designated Senior Indebtedness....................................74
Section 10.05. Acceleration of Securities...................................................75
Section 10.06. When Distribution Must Be Paid Over..........................................75
Section 10.07. Notice by Authority..........................................................76
Section 10.08. Subrogation..................................................................76
Section 10.09. Relative Rights..............................................................76
Section 10.10. Subordination May Not Be Impaired............................................76
Section 10.11. Distribution or Notice to Representative.....................................77
Section 10.12. Rights of Trustee and Paying Agent...........................................77
Section 10.13. Authorization to Effect Subordination........................................77
Section 10.14. Amendments...................................................................78
Article 11 Covenants of the Tribe
Section 11.01. Covenants of the Tribe.......................................................78
Section 11.02. Additional Covenants of the Tribe............................................79
ARTICLE 12 MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls.................................................80
Section 12.02. Notices......................................................................80
Section 12.03. Communication by Holders of Senior Subordinated
Notes with Other Holders of Senior Subordinated Notes......................81
</TABLE>
iii
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<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C> <C>
Section 12.04. Certificate and Opinion as to Conditions Precedent...........................81
Section 12.05. Statements Required in Certificate or Opinion................................82
Section 12.06. Rules by Trustee and Agents..................................................82
Section 12.07. Dispute Resolution and Consent to Suit.......................................82
Section 12.08. No Personal Liability of Directors, Officers,
Employees and Stockholders.................................................83
Section 12.09. Governing Law................................................................83
Section 12.10. No Adverse Interpretation of Other Agreements................................83
Section 12.11. Successors...................................................................83
Section 12.12. Severability.................................................................84
Section 12.13. Counterpart Originals........................................................84
Section 12.14. Table of Contents, Headings, etc.............................................84
EXHIBITS
Exhibit A-1 FORM OF NOTE
Exhibit A-2 FORM OF REGULATION S TEMPORARY GLOBAL SENIOR SUBORDINATED NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF NOTATION OF SUBSIDIARY GUARANTEE ON SENIOR SUBORDINATED NOTE
Exhibit E FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT SUBSIDIARY GUARANTORS
</TABLE>
iv
Senior Subordinated Notes
<PAGE>
INDENTURE dated as of March 3, 1999 among the Mohegan Tribal Gaming
Authority of the Mohegan Tribe of Indians of Connecticut (the "Authority"), the
Mohegan Tribe of Indians of Connecticut (the "Tribe") and State Street Bank and
Trust Company, as trustee (the "Trustee").
The Authority and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of the 8 3/4% Senior
Subordinated Notes due 2009:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
"144A Global Senior Subordinated Note" means a global senior subordinated
note substantially in the form of Exhibit A-1 hereto bearing the Global Senior
Subordinated Note Legend and the Private Placement Legend and deposited with or
on behalf of, and registered in the name of, the Depositary or its nominee that
will be issued in a denomination equal to the outstanding principal amount of
the Senior Subordinated Notes sold in reliance on Rule 144A.
"Acquired Indebtedness" means, with respect to any specified Person: (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person; and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Additional Interest" means all Additional Interest then owing pursuant to
the terms of the Senior Subordinated Notes.
"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,"
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. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" shall have
correlative meanings.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Senior Subordinated Note, the rules
and procedures of the Depositary, Euroclear and Cedel that apply to such
transfer or exchange.
"Asset Sale" means: (i) the sale, lease, conveyance or other disposition of
any assets or rights (including, without limitation, by way of a sale and
leaseback) other than sales of inventory in the ordinary course of business
consistent with past practices; provided that the sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Authority and
its Restricted Subsidiaries taken as a whole will be governed by Section 4.15
and not Section 4.10; and (ii) the issuance by the Authority or any of its
Restricted Subsidiaries of Equity Interests of any of the Authority's or its
Senior Subordinated Notes
<PAGE>
Restricted Subsidiaries' Restricted Subsidiaries or the sale by the Authority or
any of its Subsidiaries of any Equity Interests in any of their respective
Subsidiaries.
Notwithstanding the preceding, the following items shall not be deemed to
be Asset Sales: (i) any single transaction or series of related transactions
that: (a) involves assets having a fair market value of less than $1.0 million;
or (b) results in net proceeds to the Authority and its Restricted Subsidiaries
of less than $1.0 million; (ii) a transfer of assets between or among the
Authority and its Wholly Owned Restricted Subsidiaries; (iii) an issuance of
Equity Interests by a Wholly Owned Restricted Subsidiary to the Authority or to
another Wholly Owned Restricted Subsidiary; (iv) a Restricted Payment or
Permitted Investment that is permitted by Section 4.07; (v) any Event of Loss;
and (vi) any lease or sublease permitted by Section 4.24.
"Attributable Debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value of the obligation of the lessee
for net rental payments during the remaining term of the lease included in such
sale and leaseback transaction including any period for which such lease has
been extended (or may, at the option of the lessor, be extended). Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.
"Authority" means the Mohegan Tribal Gaming Authority together with any
subdivision, agency or subunit that has no separate legal existence from the
Mohegan Tribal Gaming Authority, and any successor and assignee thereto.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"BIA" means the Bureau of Indian Affairs.
"Broker-Dealer" has the meaning set forth in the Senior Subordinated
Registration Rights Agreement.
"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 on a balance sheet in accordance with
GAAP.
"Capital Stock" means: (i) in the case of a corporation, corporate stock;
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock; (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited); and
(iv) 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, the
issuing Person, but excluding any interest under the Relinquishment Agreement.
"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 (provided that the full faith and credit
of the United States is pledged in support 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'
2
Senior Subordinated Notes
<PAGE>
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any lender party to the Credit Facilities or with
any domestic commercial bank having capital and surplus in excess of $500
million and a Thompson Bank Watch Rating of "B" or better; (iv) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (ii) and (iii) above entered into with any
financial institution meeting the qualifications specified in clause (iii)
above; (v) commercial paper having one of the two highest ratings obtainable
from Moody's Investors Service, Inc. or Standard & Poor's Ratings Group and in
each case maturing within six months after the date of acquisition; and (vi)
money market funds at least 95% of the assets of which constitute Cash
Equivalents of the kinds described in clauses (i) - (v) of this definition.
"Cedel" means Cedel Bank, SA.
"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; or (iv) the
Authority sells, assigns, transfers, leases, conveys or otherwise disposes of
all or substantially all of its assets to, or consolidates or merges with or
into any other Person.
"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.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus:
(i) an amount equal to any extraordinary loss (including, without
limitation, any non-cash charges or losses arising from adjustments
relating to the Relinquishment Agreement) plus any net loss realized
in connection with an Asset Sale, to the extent such losses were
deducted in computing such Consolidated Net Income; plus
(ii) provision for taxes based on the income or profits of such Person
and its Subsidiaries for such period, to the extent that such
provision for taxes was included in computing such Consolidated Net
Income; plus
(iii) consolidated interest expense of such Person and its Subsidiaries
for such period, whether paid or accrued (including, without
limitation, amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any
deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with
respect to Attributable Debt, commissions, discounts and other fees
and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net payments, if any, pursuant to Hedging
Obligations), but excluding interest expense on the Junior
Subordinated Notes to the extent that any such expense was deducted
in computing such Consolidated Net Income; plus
(iv) depreciation, amortization (including amortization of goodwill and
other intangibles, but excluding amortization of prepaid cash
expenses that were paid in a prior period), non-cash charges
associated with equity option plans and other non-cash expenses
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(excluding any such non-cash expense to the extent that it
represents an accrual of or reserve for cash expenses in any future
period or amortization of a prepaid cash expense that was paid in a
prior period) of such Person and its Subsidiaries for such period to
the extent that such depreciation, amortization and other non-cash
expenses were deducted in computing such Consolidated Net Income;
minus
(v) non-cash items increasing such Consolidated Net Income for such
period (including, without limitation, any non-cash items arising
from adjustments relating to the Relinquishment Agreement); minus
(vi) to the extent not included in computing such Consolidated Net
Income, any revenues received or accrued by the Authority or any of
its Subsidiaries from any Person (other than the Authority or any of
its Subsidiaries) in respect of any Investment for such period,
all determined on a consolidated basis and in accordance with GAAP.
Notwithstanding the preceding, the provision for taxes based on the income
or profits of, and the depreciation and amortization and other non-cash charges
of, a Subsidiary of a Person shall be added to Consolidated Net Income to
compute Consolidated Cash Flow only to the extent (and in the same proportion)
that the Net Income of such Subsidiary was included in calculating the
Consolidated Net Income of such Person and only if a corresponding amount would
be permitted at the date of determination to be dividended to such Person by
such Subsidiary without prior approval (that has not been obtained), pursuant to
the terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to that
Subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP,
provided that:
(i) the Net Income of any Person that is not a Restricted Subsidiary or
that is accounted for by the equity method of accounting shall be
included only to the extent of the amount of dividends or
distributions paid in cash to the specified Person or a Wholly Owned
Restricted Subsidiary thereof;
(ii) the Net Income of any Restricted Subsidiary shall be excluded to the
extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is
not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or
its stockholders;
(iii) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition
shall be excluded;
(iv) the cumulative effect of a change in accounting principles shall be
excluded;
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(v) the Net Income shall be reduced by the amount of payments pursuant
to the Relinquishment Agreement, paid or payable, for such period
based on 5% of the revenues (as defined in the Relinquishment
Agreement) generated in such period; and
(vi) both the interest income related to the Defeasance Trust and the
interest expense on the Junior Subordinated Notes shall be excluded
so long as the payment of principal, premium and interest on the
Junior Subordinated Notes at redemption on January 1, 2000 is fully
covered by the amounts of the Defeasance Trust.
"Construction Reserve Disbursement Agreement" means that certain agreement,
dated the date hereof, among the Authority, the Tribe and Fleet National Bank,
as escrow agent, regarding the disbursement of a $40 million reserve account to
pay certain costs in excess of the construction budget.
"Consumer Price Index" means the Consumer Price Index for All Urban
Consumers (CPI-U) for the U.S. City Average for All Items, 1982-1984=100 as
compiled and released by the Bureau of Labor Statistics.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.02 hereof or such other address as to which the
Trustee may give notice to the Authority.
"Credit Facilities" means, with respect to the Authority or any Restricted
Subsidiary, one or more debt facilities (including, without limitation, the Loan
Agreement) or commercial paper facilities with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
of credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time. Indebtedness under
Credit Facilities outstanding on the date on which Senior Subordinated Notes are
first issued and authenticated under this Indenture shall be deemed to have been
incurred on such date in reliance on the exception provided by Section
4.09(b)(i).
"Custodian" means the Trustee, as custodian with respect to the Senior
Subordinated Notes in global form, or any successor entity thereto.
"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.
"Defeasance Trust" means that certain trust established pursuant to Section
12.04(a) of the Note Purchase Agreement under which the Junior Subordinated
Notes were issued for the covenant defeasance of the Junior Subordinated Notes
to their redemption date on January 1, 2000.
"Definitive Senior Subordinated Note" means a certificated Senior
Subordinated Note registered in the name of the Holder thereof and issued in
accordance with Section 2.06 hereof, substantially in the form of Exhibit A-1
hereto except that such Senior Subordinated Note shall not bear the Global
Senior Subordinated Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Senior Subordinated Note" attached thereto.
"Depositary" means, with respect to the Senior Subordinated Notes issuable
or issued in whole or in part in global form, the Person specified in Section
2.03 hereof as the Depositary with respect to the Senior Subordinated Notes, and
any and all successors thereto appointed as depositary hereunder and having
become such pursuant to the applicable provision of this Indenture.
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<PAGE>
"Designated Senior Indebtedness" means Indebtedness under the Loan
Agreement and any other Indebtedness permitted under this Indenture the
principal amount of which is $20.0 million or more and that has been designated
by the Authority as "Designated Senior Indebtedness".
"Development Services Agreement" means that certain Development Services
Agreement dated February 7, 1998 among the Authority, the Tribe and TCA.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, at the option of the holder thereof), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder thereof, in
whole or in part, on or prior to the date that is after the date on which the
Senior Subordinated Notes mature; provided, however, that any Capital Stock that
would constitute Disqualified Stock solely because the holders thereof have the
right to require the Authority to repurchase such Capital Stock upon the
occurrence of a Change of Control or an Asset Sale shall not constitute
Disqualified Stock if the terms of such Capital Stock provide that the Authority
may not repurchase or redeem any such Capital Stock pursuant to such provisions
unless such repurchase or redemption complies with Section 4.07.
"Distribution Compliance Period" has the same meaning as defined in
Regulation S.
"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).
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
"Event of Loss" means, with respect to any property or asset (tangible or
intangible, real or personal), any of the following: (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.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" has the meaning set forth in the Senior Subordinated
Registration Rights Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in the
Senior Subordinated Registration Rights Agreement.
"Existing Indebtedness" means up to $617.8 million in aggregate original
principal amount of Indebtedness of the Authority (other than Indebtedness under
the Loan Agreement) in existence on the date of this Indenture, until such
amounts are repaid.
"Existing Secured Notes" means the Authority's 13 1/2% Senior Secured Notes
due 2002 with Cash Flow Participation Interest.
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"Expansion Project" means the project to expand the existing Mohegan Sun
casino as more fully described in the Authority's Offering Memorandum, dated
February 24, 1999.
"Financing Lease" means any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.
"Fixed Charges" means, with respect to any Person for any period, the sum,
without duplication, of:
(i) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued, including,
without limitation, amortization of debt issuance costs and original
issue discount, non-cash interest payments, the interest component
of any deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations, imputed interest
with respect to Attributable Debt, commissions, discounts and other
fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net payments, if any, pursuant to Hedging
Obligations but excluding interest expense on the Junior
Subordinated Notes so long as the principal, premium and interest
thereof at redemption on January 1, 2000 are covered by amounts in
the Defeasance Trust; plus
(ii) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus
(iii) any interest expense on Indebtedness of another Person that is
guaranteed by such Person or one of its Restricted Subsidiaries or
secured by a Lien on assets of such Person or one of its Restricted
Subsidiaries, whether or not such guarantee or Lien is called upon;
plus
(iv) the product of (a) all cash dividend payments or other distributions
(and non-cash dividend payments in the case of a Person that is a
Restricted Subsidiary) on any series of preferred equity of such
Person, times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal,
state and local statutory tax rate of such Person, expressed as a
decimal, in each case, on a consolidated basis and in accordance
with GAAP.
"Fixed Charge Coverage Ratio" means, with respect to any specified Person
for any period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Fixed Charges of such Person for such period. In the event that
the specified Person or any of its Restricted Subsidiaries incurs, assumes,
guarantees, repays or redeems any Indebtedness (other than revolving credit
borrowings) or issues or redeems preferred stock subsequent to the commencement
of the period for which the Fixed Charge Coverage Ratio is being calculated but
prior to the date on which 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, repayment or redemption of Indebtedness, or such issuance
or redemption of preferred stock, as if the same had occurred at the beginning
of the applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(i) acquisitions that have been made by the specified Person or any of
its Restricted Subsidiaries, including through mergers or
consolidations and including any related
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<PAGE>
financing transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the
Calculation Date shall be deemed to have occurred on the first day
of the four-quarter reference period and Consolidated Cash Flow for
such reference period shall be calculated without giving effect to
clause (iii) of the proviso set forth in the definition of
Consolidated Net Income;
(ii) the Consolidated Cash Flow attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded; and
(iii) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded, but
only to the extent that the obligations giving rise to such Fixed
Charges will not be obligations of the specified Person or any of
its Restricted Subsidiaries following the Calculation Date.
"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 ("FASB") or in such other statements by
such other entity as have been approved by a significant segment of the
accounting profession, which are in effect on the date of this Indenture.
"Gaming" means any and all activities defined as Class II or Class III
Gaming under IGRA or authorized under the Compact.
"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 Senior Subordinated Note Legend" means the legend set forth in
Section 2.06(g)(ii), which is required to be placed on all Global Senior
Subordinated Notes issued under this Indenture.
"Global Senior Subordinated Notes" means, individually and collectively,
each of the Restricted Global Senior Subordinated Notes and the Unrestricted
Global Senior Subordinated Notes, substantially in the form of Exhibit A-1
hereto issued in accordance with Section 2.01, 2.06(b)(iv), 2.06(d)(ii) or
2.06(f) hereof.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"Government Service Payments" means: (i) an annual payment to the Tribe by
the Authority in the amount of $14.0 million, which amount shall be adjusted
annually on the last day of each calendar year commencing with the year 2000 by
the Consumer Price Index as published for the applicable year;
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<PAGE>
and (ii) amounts equal to those reflected on each annual audited income
statement of the Authority as prepared in accordance with GAAP relating to
payment for governmental services (including charges for utilities, police and
fire department services, health and emergency medical services, the pro rata
portion of Tribal Council costs and salaries attributable to the operations of
the Authority, and similar pro rata costs of other tribal departments, in each
case, to the extent that the costs of such departments are attributable to the
operations of the Authority) by the Authority to the Tribe or any of its
representatives, political subunits, councils, agencies or instrumentalities.
"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, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof), of all or any part of any Indebtedness.
"Hedging Obligations" means, with respect to any Person: (i) the
obligations of such Person under interest rate swap agreements, interest rate
cap agreements and interest rate collar agreements; and (ii) the obligations of
such Person under other agreements or arrangements designed to protect such
Person against fluctuations in interest rates.
"Holder" means a Person in whose name a Senior Subordinated Note is
registered.
"IGRA" means the Indian Gaming Regulatory Act of 1988, PL 100-497, U.S.C.
2701 et seq. as same may, from time to time, be amended.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent, in respect of: (i)
borrowed money; (ii) evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof); (iii) banker's acceptances; (iv) Capital Lease Obligations; (v) the
balance, deferred and unpaid, of the purchase price of any property, except any
such balance that constitutes an accrued expense or trade payable; or (vi) any
Hedging Obligations, if and to the extent any of the preceding items (other than
letters of credit and Hedging Obligations) would appear as a liability upon a
balance sheet of the specified Person prepared in accordance with GAAP. In
addition, the term "Indebtedness" includes all Indebtedness of others secured by
a Lien on any asset of the specified Person (whether or not such Indebtedness is
assumed by the specified Person) and, to the extent not otherwise included, the
guarantee by such Person of any Indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be: (i) the
accreted value thereof, in the case of any Indebtedness issued with original
issue discount; and (ii) the principal amount thereof, together with any
interest thereon that is more than 30 days past due, in the case of any other
Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Indirect Participant" means a Person who holds a beneficial interest in a
Global Senior Subordinated Note through a Participant.
"Initial Senior Subordinated Notes" means the $300,000,000 aggregate
principal amount of Senior Subordinated Notes issued under this Indenture on the
date hereof.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and
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<PAGE>
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, together with all items that are or would
be classified as investments on a balance sheet prepared in accordance with
GAAP. If the Authority or any Subsidiary of the Authority sells or otherwise
disposes of any Equity Interests of any direct or indirect Subsidiary of the
Authority such that, after giving effect to any such sale or disposition, such
Person is no longer a Subsidiary of the Authority, the Authority shall be deemed
to have made an Investment on the date of any such sale or disposition equal to
the fair market value of the Equity Interests of such Subsidiary not sold or
disposed of in an amount determined as provided in Section 4.07(d).
"Junior Subordinated Notes" means the $90.0 million in aggregate original
principal amount (plus any accrued and unpaid interest) of junior subordinated
notes of the Authority.
"Key Project Assets" means: (i) the Lease and any real property or interest
in real property comprising the Resort held in trust for the Tribe by the United
States; (ii) any improvements (including, without limitation the Resort) to the
leasehold estate under the Lease or such real property comprising the Resort
(but excluding any obsolete personal property or real property improvements
determined by the Authority to be no longer useful to the operations of the
Resort); and (iii) any business records of the Authority or the Tribe relating
to the operation of the Resort. "Lease" means the Land Lease between the Tribe
and the Authority dated September 29, 1995, as the same may be amended in
accordance with the terms thereof and of this Indenture.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be prepared by
the Authority and sent to all Holders of the Senior Subordinated Notes for use
by such Holders in connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Loan Agreement" means that certain Loan Agreement, dated as of March 3,
1999, by and among the Authority, the Tribe, the lenders thereunder and Bank of
America National Trust and Savings Association, as Administrative Agent, and the
Documentation Agent and Syndication Agent referred to therein, including any
related notes, guarantees, instruments and agreements executed in connection
therewith, and in each case as amended, modified, renewed, refunded, replaced or
refinanced from time to time.
"Management Agreement" means the Amended and Restated Gaming Facility
Management Agreement dated August 30, 1995 by and between the Authority and TCA
or any successor management agreement thereto.
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<PAGE>
"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.
"Net Income" means, with respect to any Person for any period, the net
income (loss) of such Person for such period, determined in accordance with GAAP
and before any reduction in respect of dividends on preferred interests,
excluding, however:
(i) any gain or loss, together with any related provision for taxes on
such gain or loss, realized in connection with (A) any Asset Sale
(including, without limitation, dispositions pursuant to sale
leaseback transactions) or (B) the disposition of any securities by
such Person or any of its Restricted Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its
Restricted Subsidiaries; and
(ii) any extraordinary or nonrecurring gain or loss, together with any
related provision for taxes on such extraordinary or nonrecurring
gain or loss, less
(iii) in the case of any Person that is a partnership or a limited
liability company, the amount of withholding for tax purposes of
such Person for such period.
"Net Proceeds" means the aggregate cash proceeds received by the Authority
or any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale including, without limitation, legal, accounting and
investment banking fees, and sales commissions and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof, in each
case after taking into account any available tax credits or deductions and any
tax sharing arrangements and amounts required to be applied to the repayment of
Indebtedness (other than the repayment of Senior Indebtedness), secured by a
Lien on the asset or assets that were the subject of such Asset Sale and any
reserve for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP.
"NIGC" means the National Indian Gaming Commission.
"Non-Recourse Debt" means Indebtedness: (i) as to which neither the
Authority nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness) or (b) is directly or indirectly liable (as a guarantor
or otherwise); (ii) no default with respect to which (including any rights that
the holders thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit (upon notice, lapse of time or both) any holder of any
other Indebtedness of the Authority or any of its Restricted Subsidiaries to
declare a default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity; and (iii) as to which such
Indebtedness specifies that the lenders thereunder will not have any recourse to
the stock or assets of the Authority or any of its Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
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"Offering" means the offering of the Senior Notes and the Senior
Subordinated 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 11.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 11.05 hereof.
The counsel may be an employee of or counsel to the Authority, any Subsidiary of
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.
"Participant" means, with respect to the Depositary, Euroclear or Cedel, a
Person who has an account with the Depositary, Euroclear or Cedel, respectively
(and, with respect to DTC, shall include Euroclear and Cedel).
"Permitted Asset Swap" means the exchange by the Authority or any
Restricted Subsidiary of any assets for other assets from a Person; provided
that, the assets received in such exchange are believed by the Authority in good
faith to be of substantially equivalent value and substantially all of which are
either (i) long term assets that are used or useful in the Principal Business,
(ii) cash or (iii) any combination of the foregoing clauses (i) and (ii).
"Permitted Investments" means:
(i) any Investment in the Authority or in a Restricted Subsidiary of the
Authority that is engaged in a Principal Business or a Related
Business;
(ii) any Investment in cash or Cash Equivalents;
(iii) any Investment by the Authority or any Restricted Subsidiary of the
Authority in a Person, if as a result of such Investment (a) such
Person becomes a Restricted Subsidiary of the Authority and a
Subsidiary Guarantor and is engaged in a Principal Business or a
Related Business or (b) is merged, consolidated or amalgamated with
or into, or transfers or conveys substantially all of its assets to,
or is liquidated into, the Authority or a Restricted Subsidiary of
the Authority;
(iv) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with Section 3.10;
(v) any Investment in any Person engaged in the Principal Business or a
Related Business having an aggregate fair market value (as
determined in good faith by the Management Board and measured as of
the date of such Investment, without giving effect to any
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Senior Subordinated Notes
<PAGE>
subsequent increases or decreases in value) not to exceed $25.0
million at any one time outstanding;
(vi) Government Service Payments;
(vii) payroll advances to employees of the Authority or its Restricted
Subsidiaries for travel, entertainment and relocation expenses in
the ordinary course of business in an aggregate amount not to exceed
$250,000 at any one time outstanding;
(viii) accounts and notes receivable if created or acquired in the ordinary
course of business and which are payable or dischargeable in
accordance with customary trade terms;
(ix) Investments related to Hedging Obligations, so long as such Hedging
Obligations are not used for speculative purposes; and
(x) any Investment in government securities to be held in the Defeasance
Trust to defease the Junior Subordinated Notes in accordance with
their terms.
"Permitted Liens" means:
(i) Liens securing Indebtedness permitted by the terms of this Indenture
to be incurred under clauses (i), (ii), (v), (vi), (vii), (viii) (to
the extent that the Indebtedness so guaranteed is permitted to be
secured by this Indenture) and (x) of Section 4.09(b);
(ii) Liens in favor of the Authority or a Restricted Subsidiary;
(iii) Liens to secure the performance of statutory obligations, surety or
appeal bonds, performance bonds or other obligations of a like
nature (including, without limitation, pledges or deposits made in
connection with obligatory workers' compensation laws, unemployment
insurance or similar laws) incurred in the ordinary course of
business;
(iv) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by clause (v) of Section 4.09(b) covering only the assets
acquired with such Indebtedness;
(v) Liens existing on the date of this Indenture;
(vi) Liens arising as a result of survey exceptions, title defects,
encumbrances, easements, reservations of, or rights of others for,
rights of way, sewers, electric lines, telegraph and telephone lines
and other similar purposes or zoning or other restrictions as to the
use of real property not interfering with the ordinary conduct of
the business of the Authority or any of its Restricted Subsidiaries;
(vii) Liens arising by operation of law in favor of carriers,
warehousemen, landlords, mechanics, materialmen, laborers, employees
or suppliers, incurred in the ordinary course of business for sums
which are not yet delinquent or are being contested in good faith by
negotiations or by appropriate proceedings which suspend the
collection thereof;
(viii) Liens incurred as a result of any interest or title of a lessor or
lessee under any lease of property (including any Lien granted by
such lessor or lessee but excluding any Lien arising in respect of a
Financing Lease);
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Senior Subordinated Notes
<PAGE>
(ix) Liens in favor of the Tribe representing the ground lessor's
interest under the Lease;
(x) Liens on property existing at the time or acquisition thereof by the
Authority or a Restricted Subsidiary; provided that such Liens were
in existence prior to the contemplation of such acquisition;
(xi) Liens for taxes, assessments or governmental charges, claims or
rights 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;
(xii) Liens securing Indebtedness permitted under clause (vii) of Section
4.09(b); provided that such Liens are no more extensive that the
liens securing the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded thereby;
(xiii) Liens incurred in the ordinary course of business of the Authority
or a Restricted Subsidiary with respect to obligations that do not
exceed $500,000 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, 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;
(xiv) Liens created by or resulting from any legal proceeding with respect
to which the Authority or a Restricted Subsidiary is prosecuting an
appeal proceeding for review and the Authority or such Restricted
Subsidiary is maintaining adequate reserves in connection with GAAP;
and
(xv) a Lien on the assets in the Defeasance Trust with respect to the
obligations of the Junior Subordinated Notes.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Authority or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Authority or any of its Restricted
Subsidiaries; provided that:
(i) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal
amount of (or accreted value, if applicable), plus accrued interest
on, the Indebtedness so extended, refinanced, renewed, replaced,
defeased or refunded (plus the amount of prepayment premiums and
reasonable expenses incurred in connection therewith);
(ii) such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life
to Maturity of, the Indebtedness being extended,
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Senior Subordinated Notes
<PAGE>
refinanced, renewed, replaced, defeased or refunded; provided that
if the original maturity date of such Indebtedness is after the
Stated Maturity of the Senior Subordinated Notes, then such
Permitted Refinancing Indebtedness shall have a maturity at least
180 days after the Senior Subordinated Notes;
(iii) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the
Senior Subordinated Notes, such Permitted Refinancing Indebtedness
is subordinated in right of payment to, the Senior Subordinated
Notes on terms at least as favorable to the Holders of Senior
Subordinated Notes as those contained in the documentation governing
the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and
(iv) such Indebtedness is incurred either by the Authority or by the
Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or agency or political subdivision
thereof (including any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or business).
"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.
"Private Placement Legend" means the legend set forth in Section 2.06(g)(i)
to be placed on all Senior Subordinated Notes issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Senior Subordinated Note" means a Regulation S
Temporary Global Senior Subordinated Note or Regulation S Permanent Global
Senior Subordinated Note, as appropriate.
"Regulation S Permanent Global Senior Subordinated Note" means a permanent
global Senior Subordinated Note in the form of Exhibit A-1 hereto bearing the
Global Senior Subordinated Note Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee, issued in a denomination equal to the outstanding principal amount
of the Regulation S Temporary Global Senior Subordinated Note upon expiration of
the Distribution Compliance Period.
"Regulation S Temporary Global Senior Subordinated Note" means a temporary
global Senior Subordinated Note in the form of Exhibit A-2 hereto bearing the
Private Placement Legend and deposited with or on behalf of and registered in
the name of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Senior Subordinated Notes initially sold in
reliance on Rule 903 of Regulation S.
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Senior Subordinated Notes
<PAGE>
"Related Business" means any business related to the Principal Business.
"Relinquishment Agreement" means the Relinquishment Agreement dated
February 7, 1998 between the Authority and TCA.
"Resort" means the multi-amenity gaming and entertainment resort located in
Uncasville, Connecticut and the convention center, retail facilities, arena,
hotel and improvements proposed to be constructed adjacent thereto, as described
in the Offering Memorandum of the Authority dated February 24, 1999 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 and (ii) any equipment leased from a third
party in the ordinary course of business.
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration department of the Trustee (or
any successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Definitive Senior Subordinated Note" means a Definitive Senior
Subordinated Note bearing the Private Placement Legend.
"Restricted Global Senior Subordinated Note" means a Global Senior
Subordinated Note bearing the Private Placement Legend.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means: (i) all Indebtedness outstanding under the
Credit Facilities and all Hedging Obligations with respect thereto, including,
without limitation, all principal, interest, fees and other amounts payable with
respect thereto, including any interest which accrues following any bankruptcy
or insolvency of the Authority, the Tribe or any Subsidiary Guarantor; (ii) any
other Indebtedness permitted to be incurred by the Authority under the terms of
this Indenture, unless the instrument under which such Indebtedness is incurred
expressly provides that it is on parity with or subordinated in right of payment
to the Senior Subordinated Notes; (iii) all Obligations with respect to the
foregoing; and (iv) at anytime the Senior Relinquishment Payments (as defined in
the Relinquishment Agreement) to the extent then due and owing pursuant to the
terms of the Relinquishment Agreement at such time.
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Senior Subordinated Notes
<PAGE>
Notwithstanding anything to the contrary in the foregoing, Senior
Indebtedness will not include: (i) any Indebtedness of the Authority to any of
its Restricted Subsidiaries or other Affiliates; or (ii) any Indebtedness that
is incurred in violation of this Indenture.
"Senior Notes" means, collectively, the Authority's 81/8% Initial Senior
Notes due 2006 issued pursuant to the Senior Note Indenture and the Authority's
Senior Exchange Notes (as such terms are defined in the Senior Note Indenture)
issued pursuant to the Exchange Offer.
"Senior Subordinated Exchange Notes" means the Authority's 83/4% Senior
Subordinated Notes due 2009 to be issued in exchange for the Initial Senior
Subordinated Notes pursuant to the Senior Subordinated Registration Rights
Agreement.
"Senior Subordinated Notes" means, collectively, the Initial Senior
Subordinated Notes and the Senior Subordinated Exchange Notes, treated as a
single class of securities as amended or supplemented from time to time in
accordance with the terms hereof, in each case as issued pursuant to this
Indenture.
"Senior Note Indenture" means that certain indenture, dated the date
hereof, among the Authority, the Tribe and First Union National Bank, as
Trustee, as amended or supplemented from time to time, relating to the Senior
Notes.
"Senior Subordinated Registration Rights Agreement" means the Senior
Subordinated Registration Rights Agreement, dated as of March 3, 1999, by and
among the Authority and the other parties named on the signature pages thereof,
as such agreement may be amended, modified or supplemented from time to time.
"Senior Subordinated Subsidiary Guarantee" means the joint and several
guarantee by the Authority's Restricted Subsidiaries of the Authority's
obligations under the Senior Subordinated Notes, in substantially the form of
such Subsidiary Guarantee attached as Exhibit D to this Indenture.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in the Senior Subordinated Registration Rights Agreement.
"Side Letters" means (i) that certain Side Letter, dated February 7, 1998
regarding the Junior Subordinated Notes, as amended December 15, 1998; (ii) that
certain Side Letter, dated February 7, 1998 relating to various waivers under
the existing Management Agreement; (iii) that certain Side Letter, dated
February 7, 1998, regarding the use of TCA personnel following this termination
of the Management Agreement; (iv) that certain Side Letter, dated February 22,
1999, regarding the previously proposed exchange of Junior Subordinated Notes
for Senior Subordinated Notes; and (v) that certain Side Letter, dated February
22, 1999, regarding the earlier Side Letters, in connection with the defeasance
of the Junior Subordinated Notes.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date of
this Indenture.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid including as a result of any
mandatory sinking fund payment or mandatory redemption in the documentation
governing such Indebtedness in effect on the date hereof or, if such
Indebtedness is incurred after the date of this Indenture, in the original
documentation governing such Indebtedness, and
17
Senior Subordinated Notes
<PAGE>
shall not include any contingent obligations to repay, redeem or repurchase any
such interest or principal prior to the date originally scheduled for the
payment thereof.
"Subordinated Indebtedness" means any Indebtedness which by its terms is
expressly subordinate in right of payment in any respect to the payment of any
obligation on the Senior Subordinated Notes.
"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 otherwise be bound to the terms of this Indenture; 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 the 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.
"Subsidiary Guarantor" means any Subsidiary of the Authority that executes
a Senior Subordinated Subsidiary Guarantee in accordance with the provisions of
this Indenture and its respective successors and assigns.
"Sun International" means Sun International Hotels Limited, a Bahamian
corporation or any of its affiliates.
"TCA" means Trading Cove Associates.
"Tender Offer" means the Tender Offer and the Consent Solicitation with
respect to $175.0 million aggregate principal amount of the Existing Secured
Notes.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.ss.ss.77aaa-77bbbb)
as in effect on the date on which this Indenture is qualified under the TIA.
"Tribal Council" means the Tribe's nine member elected council which
exercises all the legislative and executive powers of the Tribe.
"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 or authorize and regulate gaming on the Mohegan Reservation pursuant to
IGRA.
"Tribal Tax Code" means any sales, use, room occupancy and related excise
taxes, including admissions and cabaret taxes and any other tax (other than
income tax) that may be imposed by the State of Connecticut that the Tribe may
impose on the Authority, its patrons or operations; provided, however, that the
rate and scope of such taxes shall not be more onerous than those imposed by the
State of Connecticut.
"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. ss. 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.
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Senior Subordinated Notes
<PAGE>
"Unrestricted Definitive Senior Subordinated Note" means one or more
Definitive Senior Subordinated Notes that do not bear and are not required to
bear the Private Placement Legend.
"Unrestricted Global Senior Subordinated Note" means a permanent global
Senior Subordinated Note substantially in the form of Exhibit A-1 attached
hereto that bears the Global Senior Subordinated Note Legend and that has the
"Schedule of Exchanges of Interests in the Global Senior Subordinated Note"
attached thereto, and that is deposited with or on behalf of and registered in
the name of the Depositary, representing a series of Senior Subordinated Notes
that do not bear the Private Placement Legend.
"Unrestricted Subsidiary" means any Subsidiary that is designated in
writing by the Authority as an Unrestricted Subsidiary, but only to the extent
that such Subsidiary: (i) has no Indebtedness other than Non-Recourse Debt; (ii)
is not party to any agreement, contract, arrangement or understanding with the
Authority or any Restricted Subsidiary of the Authority unless the terms of any
such agreement, contract, arrangement or understanding are no less favorable to
the Authority or such Restricted Subsidiary than those that might be obtained at
the time from Persons who are not Affiliates of the Authority; (iii) is a Person
with respect to which neither the Authority nor any of its Restricted
Subsidiaries has any direct or indirect obligation (a) to subscribe for
additional Equity Interests or (b) to maintain or preserve such Person's
financial condition or to cause such Person to achieve any specified levels of
operating results; (iv) has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Authority or any of its
Restricted Subsidiaries; and (v) has at least one director on its board of
directors that is not a director or executive officer of the Authority or any of
its Restricted Subsidiaries and has at least one executive officer that is not a
director or executive officer of the Authority or any of its Restricted
Subsidiaries.
Any such designation by the Management Board shall be evidenced to the
Trustee by filing with the Trustee a certified copy of the Board Resolution
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing conditions and was permitted by
Section 4.07. If, at any time, any Unrestricted Subsidiary would fail to meet
the foregoing requirements as an Unrestricted Subsidiary, it shall thereafter
cease to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary of the Authority as of such date (and, if such Indebtedness is not
permitted to be incurred as of such date under Section 4.09, the Authority shall
be in default of such Section). The Authority may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Authority of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (a) such Indebtedness
is permitted by Section 4.09, calculated on a pro forma basis as if such
designation had occurred at the beginning of the four-quarter reference period,
and (b) no Default or Event of Default would be in existence following such
designation.
"U.S. Person" means a U.S. person as defined in Rule 902(k) under the
Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Management
Board or Board of Directors, as the case may be, of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing: (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated
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Senior Subordinated Notes
<PAGE>
to the nearest one-twelfth) that will elapse between such date and the making of
such payment, by (ii) the then outstanding principal amount of such
Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.
"Wholly Owned Restricted Subsidiary" of any Person means a Subsidiary of
such Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Restricted Subsidiaries of such
Person and one or more Wholly Owned Restricted Subsidiaries of such Person.
Section 1.02. Other Definitions.
<TABLE>
<CAPTION>
Defined in
Term Section
---- ----------
<S> <C>
"Affiliate Transaction"...................................... 4.11
"Asset Sale"................................................. 4.10
"Asset Sale Offer"........................................... 3.10
"Authentication Order"....................................... 2.02
"Bankruptcy Law"............................................. 4.01
"Change of Control Offer".................................... 4.15
"Change of Control Payment".................................. 4.15
"Change of Control Payment Date"............................. 4.15
"Covenant Defeasance"........................................ 8.03
"DTC"........................................................ 2.03
"Event of Default"........................................... 6.01
"Excess Proceeds"............................................ 4.10
"incur"...................................................... 4.09
"Lease Transaction".......................................... 4.24
"Legal Defeasance"........................................... 8.02
"Offer Amount"............................................... 3.10
"Offer Period"............................................... 3.10
"Paying Agent"............................................... 2.03
"Payment Default"............................................ 6.01
"Purchase Date".............................................. 3.10
"Registrar".................................................. 2.03
"Restricted Payments"........................................ 4.07
</TABLE>
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 Senior Subordinated Notes;
"indenture security Holder" means a Holder of a Senior Subordinated Note;
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Senior Subordinated Notes
<PAGE>
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Senior Subordinated Notes and any Senior Subordinated Note
Guarantees means the Authority and any successor obligor upon the Senior
Subordinated Notes and any Senior Subordinated Note Guarantees, respectively.
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:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural include the
singular;
(e) provisions apply to successive events and transactions; and
(f) references to sections of or rules under the Securities Act shall be
deemed to include substitute, replacement of successor sections or rules adopted
by the SEC from time to time.
ARTICLE 2
THE SENIOR SUBORDINATED NOTES
Section 2.01. Form and Dating.
(a) General. The Senior Subordinated Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The
Senior Subordinated Notes may have notations, legends or endorsements required
by law, stock exchange rule or usage. Each Senior Subordinated Note shall be
dated the date of its authentication. The Senior Subordinated Notes shall be in
denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Senior Subordinated 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. However,
to the extent any provision of any Senior Subordinated Note conflicts with the
express provisions of this Indenture, the provisions of this Indenture shall
govern and be controlling.
(b) Global Senior Subordinated Notes. Senior Subordinated Notes issued in
global form shall be substantially in the form of Exhibit A-1 or A-2 attached
hereto (including the Global Senior Subordinated Note Legend thereon and the
"Schedule of Exchanges of Interests in the Global Senior Subordinated Note"
attached thereto). Senior Subordinated Notes issued in definitive form shall be
substantially in the form of Exhibit A-1 attached hereto (but without the Global
Senior Subordinated Note Legend thereon and without the "Schedule of Exchanges
of Interests in the Global Senior Subordinated
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Senior Subordinated Notes
<PAGE>
Note" attached thereto). Each Global Senior Subordinated Note shall represent
such of the outstanding Senior Subordinated Notes as shall be specified therein
and each shall provide that it shall represent the aggregate principal amount of
outstanding Senior Subordinated Notes from time to time endorsed thereon and
that the aggregate principal amount of outstanding Senior Subordinated Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Senior Subordinated Note to reflect the amount of any increase or decrease in
the aggregate principal amount of outstanding Senior Subordinated Notes
represented thereby shall be made by the Trustee or the Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof.
(c) Temporary Global Senior Subordinated Notes. Senior Subordinated Notes
offered and sold in reliance on Regulation S shall be issued initially in the
form of the Regulation S Temporary Global Senior Subordinated Note, which shall
be deposited on behalf of the purchasers of the Senior Subordinated Notes
represented thereby with the Trustee, at its New York office, as custodian for
the Depositary, and registered in the name of the Depositary or the nominee of
the Depositary for the accounts of designated agents holding on behalf of
Euroclear or Cedel Bank, duly executed by the Authority and authenticated by the
Trustee as hereinafter provided. The Distribution Compliance Period shall be
terminated upon the receipt by the Trustee of (i) a written certificate from the
Depositary, together with copies of certificates from Euroclear and Cedel Bank
certifying that they have received certification of non-United States beneficial
ownership of 100% of the aggregate principal amount of the Regulation S
Temporary Global Senior Subordinated Note (except to the extent of any
beneficial owners thereof who acquired an interest therein during the
Distribution Compliance Period pursuant to another exemption from registration
under the Securities Act and who will take delivery of a beneficial ownership
interest in a 144A Global Senior Subordinated Note bearing a Private Placement
Legend, all as contemplated by Section 2.06(a)(ii) hereof), and (ii) an
Officers' Certificate from the Authority. Following the termination of the
Distribution Compliance Period, beneficial interests in the Regulation S
Temporary Global Senior Subordinated Note shall be exchanged for beneficial
interests in Regulation S Permanent Global Senior Subordinated Notes pursuant to
the Applicable Procedures. Simultaneously with the authentication of Regulation
S Permanent Global Senior Subordinated Notes, the Trustee shall cancel the
Regulation S Temporary Global Senior Subordinated Note. The aggregate principal
amount of the Regulation S Temporary Global Senior Subordinated Note and the
Regulation S Permanent Global Senior Subordinated Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee and the
Depositary or its nominee, as the case may be, in connection with transfers of
interest as hereinafter provided.
(d) Euroclear and Cedel Procedures Applicable. The provisions of the
"Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank"
and "Customer Handbook" of Cedel Bank shall be applicable to transfers of
beneficial interests in the Regulation S Temporary Global Senior Subordinated
Note and the Regulation S Permanent Global Senior Subordinated Notes that are
held by Participants through Euroclear or Cedel Bank.
Section 2.02. Execution and Authentication.
Two Officers of the Authority shall sign the Senior Subordinated Notes for
the Authority by manual or facsimile signature.
If an Officer whose signature is on a Senior Subordinated Note no longer
holds that office at the time a Senior Subordinated Note is authenticated, the
Senior Subordinated Note shall nevertheless be valid.
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A Senior Subordinated Note shall not be valid until authenticated by the
manual signature of the Trustee. The signature shall be conclusive evidence that
the Senior Subordinated Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Authority signed by two
Officers of the Authority (an "Authentication Order"), authenticate Senior
Subordinated Notes for original issue up to the aggregate principal amount not
to exceed $300,000,000 (other than as provided in Section 2.07 hereof) in one or
more series, which order shall specify whether such notes are Initial Senior
Subordinated Notes or Senior Subordinated Exchange Notes.
The Senior Subordinated Notes shall be issued only in fully registered
form, without coupons and only in denominations of $1,000 and any integral
multiple thereof. All Senior Subordinated Notes issued under this Indenture
shall vote and consent together on all matters as one class and no series of
Senior Subordinated Notes will have the right to vote or consent as a separate
class on any matter.
The Trustee may appoint an authenticating agent acceptable to the Authority
to authenticate Senior Subordinated Notes. An authenticating agent may
authenticate Senior Subordinated Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with Holders or an Affiliate of the Authority.
Section 2.03. Registrar and Paying Agent.
The Authority shall maintain an office or agency where Senior Subordinated
Notes may be presented for registration of transfer or for exchange
("Registrar") and an office or agency where Senior Subordinated Notes may be
presented for payment ("Paying Agent"). The Registrar shall keep a register of
the Senior Subordinated 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 or any
of its Restricted Subsidiaries may act as Paying Agent or Registrar.
The Authority initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Senior Subordinated Notes.
The Authority initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Senior
Subordinated 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 Additional Interest, if any, or interest on the Senior
Subordinated 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 a Restricted Subsidiary or an Affiliate) shall have no further
liability for the money. If the Authority or a Restricted Subsidiary acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
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benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy
or reorganization proceedings relating to the Authority, the Trustee shall serve
as Paying Agent for the Senior Subordinated 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 ss. 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
Senior Subordinated Notes and the Authority shall otherwise comply with TIA ss.
312(a).
Section 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Global Senior Subordinated Notes. A Global
Senior Subordinated Note may not be transferred as a whole except by the
Depositary to a nominee of the Depositary, by a nominee of the Depositary to the
Depositary or to another nominee of the Depositary, or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. All Global Senior Subordinated Notes will be exchanged by the
Authority for Definitive Senior Subordinated Notes if (i) the Authority delivers
to the Trustee notice from the Depositary that it is unwilling or unable to
continue to act as Depositary or that it is no longer a clearing agency
registered under the Exchange Act and, in either case, a successor Depositary is
not appointed by the Authority within 120 days after the date of such notice
from the Depositary or (ii) the Authority in its sole discretion determines that
the Global Senior Subordinated Notes (in whole but not in part) should be
exchanged for Definitive Senior Subordinated Notes and delivers a written notice
to such effect to the Trustee; provided that in no event shall the Regulation S
Temporary Global Senior Subordinated Note be exchanged by the Authority for
Definitive Senior Subordinated Notes prior to (x) the expiration of the
Distribution Compliance Period and (y) the receipt by the Registrar of any
certificates required pursuant to Rule 903(c)(3)(ii)(B) under the Securities
Act. Upon the occurrence of either of the preceding events in (i) or (ii) above,
Definitive Senior Subordinated Notes shall be issued in such names as the
Depositary shall instruct the Trustee. Global Senior Subordinated Notes also may
be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.10 hereof. Every Senior Subordinated Note authenticated and delivered in
exchange for, or in lieu of, a Global Senior Subordinated Note or any portion
thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be
authenticated and delivered in the form of, and shall be, a Global Senior
Subordinated Note. A Global Senior Subordinated Note may not be exchanged for
another Senior Subordinated Note other than as provided in this Section 2.06(a),
however, beneficial interests in a Global Senior Subordinated Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Senior
Subordinated Notes. The transfer and exchange of beneficial interests in the
Global Senior Subordinated Notes shall be effected through the Depositary, in
accordance with the provisions of this Indenture and the Applicable Procedures.
Beneficial interests in the Restricted Global Senior Subordinated Notes shall be
subject to restrictions on transfer comparable to those set forth herein to the
extent required by the Securities Act. Transfers of beneficial interests in the
Global Senior Subordinated Notes also shall require compliance with either
subparagraph (i) or (ii) below, as applicable, as well as one or more of the
other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Senior
Subordinated Note. Beneficial interests in any Restricted Global Senior
Subordinated Note may be transferred to Persons who take
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delivery thereof in the form of a beneficial interest in the same
Restricted Global Senior Subordinated Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Distribution Compliance Period,
transfers of beneficial interests in the Temporary Regulation S Global
Senior Subordinated Note may not be made to a U.S. Person or for the
account or benefit of a U.S. Person (other than an Initial Purchaser).
Beneficial interests in any Unrestricted Global Senior Subordinated Note
may be transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Senior Subordinated Note. No
written orders or instructions shall be required to be delivered to the
Registrar to effect the transfers described in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Senior Subordinated Notes. In connection with all transfers and
exchanges of beneficial interests that are not subject to Section
2.06(b)(i) above, the transferor of such beneficial interest must deliver
to the Registrar either (A) (1) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit or cause to be
credited a beneficial interest in another Global Senior Subordinated Note
in an amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant account to be
credited with such increase or (B) (1) a written order from a Participant
or an Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be issued a
Definitive Senior Subordinated Note in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given by the
Depositary to the Registrar containing information regarding the Person in
whose name such Definitive Senior Subordinated Note shall be registered to
effect the transfer or exchange referred to in (1) above; provided that in
no event shall Definitive Senior Subordinated Notes be issued upon the
transfer or exchange of beneficial interests in the Regulation S Temporary
Global Senior Subordinated Note prior to (x) the expiration of the
Distribution Compliance Period and (y) the receipt by the Registrar of any
certificates required pursuant to Rule 903 under the Securities Act. Upon
consummation of an Exchange Offer by the Authority in accordance with
Section 2.06(f) hereof, the requirements of this Section 2.06(b)(ii) shall
be deemed to have been satisfied upon receipt by the Registrar of the
instructions contained in the Letter of Transmittal delivered by the Holder
of such beneficial interests in the Restricted Global Senior Subordinated
Notes. Upon satisfaction of all of the requirements for transfer or
exchange of beneficial interests in Global Senior Subordinated Notes
contained in this Indenture and the Senior Subordinated Notes or otherwise
applicable under the Securities Act, the Trustee shall adjust the principal
amount of the relevant Global Senior Subordinated Note(s) pursuant to
Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Senior Subordinated Note. A beneficial interest in any Restricted Global
Senior Subordinated Note may be transferred to a Person who takes delivery
thereof in the form of a beneficial interest in another Restricted Global
Senior Subordinated Note if the transfer complies with the requirements of
Section 2.06(b)(ii) above and the Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Senior Subordinated Note, then
the transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof; and
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Temporary Global Senior
Subordinated Note or the Regulation S Global Senior Subordinated Note,
then the transferor must deliver a certificate in the form of Exhibit
B hereto, including the certifications in item (2) thereof;
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Senior Subordinated Notes
<PAGE>
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Senior Subordinated Note for Beneficial Interests in the
Unrestricted Global Senior Subordinated Note. A beneficial interest in any
Restricted Global Senior Subordinated Note may be exchanged by any Holder
thereof for a beneficial interest in an Unrestricted Global Senior
Subordinated Note or transferred to a Person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Senior
Subordinated Note if the exchange or transfer complies with the
requirements of Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Senior Subordinated Registration
Rights Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person participating in the
distribution of the Senior Subordinated Exchange Notes or (3) a Person
who is an affiliate (as defined in Rule 144) of the Authority;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Senior Subordinated Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the Senior
Subordinated Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Senior Subordinated Note proposes to exchange
such beneficial interest for a beneficial interest in an
Unrestricted Global Senior Subordinated Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (1)(a) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Senior Subordinated Note proposes to transfer
such beneficial interest to a Person who shall take delivery
thereof in the form of a beneficial interest in an Unrestricted
Global Senior Subordinated Note, a certificate from such holder
in the form of Exhibit B hereto, including the certifications in
item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Senior Subordinated Note has
not yet been issued, the Authority shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the Trustee
shall authenticate one or more Unrestricted Global Senior Subordinated
Notes in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to subparagraph (B) or
(D) above.
Beneficial interests in an Unrestricted Global Senior Subordinated
Note cannot be exchanged for, or transferred to Persons who take delivery
thereof in the form of, a beneficial interest in a Restricted Global Senior
Subordinated Note.
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<PAGE>
(c) Transfer or Exchange of Beneficial Interests for Definitive Senior
Subordinated Notes.
(i) Beneficial Interests in Restricted Global Senior Subordinated
Notes to Restricted Definitive Senior Subordinated Notes. If any holder of
a beneficial interest in a Restricted Global Senior Subordinated Note
proposes to exchange such beneficial interest for a Restricted Definitive
Senior Subordinated Note or to transfer such beneficial interest to a
Person who takes delivery thereof in the form of a Restricted Definitive
Senior Subordinated Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the holder of such beneficial interest in a Restricted
Global Senior Subordinated Note proposes to exchange such beneficial
interest for a Restricted Definitive Senior Subordinated Note, a
certificate from such holder in the form of Exhibit C hereto,
including the certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the certifications
in item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2)
thereof;
(D) if such beneficial interest is being transferred pursuant to
an exemption from the registration requirements of the Securities Act
in accordance with Rule 144 under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the certifications
in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to the
Authority or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(b)
thereof; or
(F) if such beneficial interest is being transferred pursuant to
an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable
Global Senior Subordinated Note to be reduced accordingly pursuant to
Section 2.06(h) hereof, and the Authority shall execute and the Trustee
shall authenticate and deliver to the Person designated in the instructions
a Definitive Senior Subordinated Note in the appropriate principal amount.
Any Definitive Senior Subordinated Note issued in exchange for a beneficial
interest in a Restricted Global Senior Subordinated Note pursuant to this
Section 2.06(c) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The Trustee shall
deliver such Definitive Senior Subordinated Notes to the Persons in whose
names such Senior Subordinated Notes are so registered. Any Definitive
Senior Subordinated Note issued in exchange for a beneficial interest in a
Restricted Global Senior Subordinated Note pursuant to this Section
2.06(c)(i) shall bear the Private Placement Legend and shall be subject to
all restrictions on transfer contained therein.
(ii) Beneficial Interests in Regulation S Temporary Global Senior
Subordinated Note to Definitive Senior Subordinated Notes. Notwithstanding
Sections 2.06(c)(i)(A) and (C) hereof, a
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<PAGE>
beneficial interest in the Regulation S Temporary Global Senior
Subordinated Note may not be exchanged for a Definitive Senior Subordinated
Note or transferred to a Person who takes delivery thereof in the form of a
Definitive Senior Subordinated Note prior to (x) the expiration of the
Distribution Compliance Period and (y) the receipt by the Registrar of any
certificates required pursuant to Rule 903(c)(3)(ii)(B) under the
Securities Act, except in the case of a transfer pursuant to an exemption
from the registration requirements of the Securities Act other than Rule
903 or Rule 904.
(iii) Beneficial Interests in Restricted Global Senior Subordinated
Notes to Unrestricted Definitive Senior Subordinated Notes. A holder of a
beneficial interest in a Restricted Global Senior Subordinated Note may
exchange such beneficial interest for an Unrestricted Definitive Senior
Subordinated Note or may transfer such beneficial interest to a Person who
takes delivery thereof in the form of an Unrestricted Definitive Senior
Subordinated Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Senior Subordinated Registration
Rights Agreement and the holder of such beneficial interest, in the
case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
Senior Subordinated Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Authority;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Senior Subordinated Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the Senior
Subordinated Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item (1)(b)
thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a Definitive Note that does not bear the Private Placement
Legend, a certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(iv) Beneficial Interests in Unrestricted Global Senior Subordinated
Notes to Unrestricted Definitive Senior Subordinated Notes. If any holder
of a beneficial interest in an Unrestricted Global Senior Subordinated Note
proposes to exchange such beneficial interest for a Definitive Senior
Subordinated Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Definitive Senior Subordinated
Note, then, upon satisfaction of the conditions set forth in
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<PAGE>
Section 2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal
amount of the applicable Global Senior Subordinated Note to be reduced
accordingly pursuant to Section 2.06(h) hereof, and the Authority shall
execute and the Trustee shall authenticate and deliver to the Person
designated in the instructions a Definitive Senior Subordinated Note in the
appropriate principal amount. Any Definitive Senior Subordinated Note
issued in exchange for a beneficial interest pursuant to this Section
2.06(c)(iv) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The Trustee shall
deliver such Definitive Senior Subordinated Notes to the Persons in whose
names such Senior Subordinated Notes are so registered. Any Definitive
Senior Subordinated Note issued in exchange for a beneficial interest
pursuant to this Section 2.06(c)(iv) shall not bear the Private Placement
Legend.
(d) Transfer and Exchange of Definitive Senior Subordinated Notes for
Beneficial Interests.
(i) Restricted Definitive Senior Subordinated Notes to Beneficial
Interests in Restricted Global Senior Subordinated Notes. If any Holder of
a Restricted Definitive Senior Subordinated Note proposes to exchange such
Senior Subordinated Note for a beneficial interest in a Restricted Global
Senior Subordinated Note or to transfer such Restricted Definitive Senior
Subordinated Notes to a Person who takes delivery thereof in the form of a
beneficial interest in a Restricted Global Senior Subordinated Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Senior
Subordinated Note proposes to exchange such Senior Subordinated Note
for a beneficial interest in a Restricted Global Senior Subordinated
Note, a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Senior Subordinated Note is
being transferred to a QIB in accordance with Rule 144A under the
Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (1) thereof;
(C) if such Restricted Definitive Senior Subordinated Note is
being transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such Restricted Definitive Senior Subordinated Note is
being transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144 under
the Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Senior Subordinated Note is
being transferred to the Authority or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(F) if such Restricted Definitive Senior Subordinated Note is
being transferred pursuant to an effective registration statement
under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Senior Subordinated
Note, increase or cause to be increased the aggregate principal amount of,
in the case of clause (A) above, the appropriate Restricted Global Senior
Subordinated Note, in the case of clause (B) above, the 144A Global Senior
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Senior Subordinated Notes
<PAGE>
Subordinated Note, in the case of clause (C) above, the Regulation S Global
Senior Subordinated Note.
(ii) Restricted Definitive Senior Subordinated Notes to Beneficial
Interests in Unrestricted Global Senior Subordinated Notes. A Holder of a
Restricted Definitive Senior Subordinated Note may exchange such Senior
Subordinated Note for a beneficial interest in an Unrestricted Global
Senior Subordinated Note or transfer such Restricted Definitive Senior
Subordinated Note to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Senior Subordinated Note only
if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Senior Subordinated Registration
Rights Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Senior Subordinated Exchange
Notes or (3) a Person who is an affiliate (as defined in Rule 144) of
the Authority;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Senior Subordinated Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the Senior
Subordinated Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Senior Subordinated
Notes proposes to exchange such Senior Subordinated Notes for a
beneficial interest in the Unrestricted Global Senior
Subordinated Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item (1)(c)
thereof; or
(2) if the Holder of such Definitive Senior Subordinated
Notes proposes to transfer such Senior Subordinated Notes to a
Person who shall take delivery thereof in the form of a
beneficial interest in the Unrestricted Global Senior
Subordinated Note, a certificate from such Holder in the form of
Exhibit B hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.06(d)(ii), the Trustee shall cancel the Definitive Senior
Subordinated Notes and increase or cause to be increased the aggregate
principal amount of the Unrestricted Global Senior Subordinated Note.
(iii) Unrestricted Definitive Senior Subordinated Notes to Beneficial
Interests in Unrestricted Global Senior Subordinated Notes. A Holder of an
Unrestricted Definitive Senior Subordinated Note may exchange such Senior
Subordinated Note for a beneficial interest in an Unrestricted Global
Senior Subordinated Note or transfer such Definitive Senior Subordinated
Notes to a Person who
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takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Senior Subordinated Note at any time. Upon receipt of a
request for such an exchange or transfer, the Trustee shall cancel the
applicable Unrestricted Definitive Senior Subordinated Note and increase or
cause to be increased the aggregate principal amount of one of the
Unrestricted Global Senior Subordinated Notes.
If any such exchange or transfer from a Definitive Senior Subordinated
Note to a beneficial interest is effected pursuant to subparagraphs
(ii)(B), (ii)(D) or (iii) above at a time when an Unrestricted Global
Senior Subordinated Note has not yet been issued, the Authority shall issue
and, upon receipt of an Authentication Order in accordance with Section
2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global
Senior Subordinated Notes in an aggregate principal amount equal to the
principal amount of Definitive Senior Subordinated Notes so transferred.
(e) Transfer and Exchange of Definitive Senior Subordinated Notes for
Definitive Senior Subordinated Notes. Upon request by a Holder of Definitive
Senior Subordinated Notes and such Holder's compliance with the provisions of
this Section 2.06(e), the Registrar shall register the transfer or exchange of
Definitive Senior Subordinated Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Senior Subordinated Notes duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar duly executed by
such Holder or by its attorney, duly authorized in writing. In addition, the
requesting Holder shall provide any additional certifications, documents and
information, as applicable, required pursuant to the following provisions of
this Section 2.06(e).
(i) Restricted Definitive Senior Subordinated Notes to Restricted
Definitive Senior Subordinated Notes. Any Restricted Definitive Senior
Subordinated Note may be transferred to and registered in the name of
Persons who take delivery thereof in the form of a Restricted Definitive
Senior Subordinated Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (1)
thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof;
and
(C) if the transfer will be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable.
(ii) Restricted Definitive Senior Subordinated Notes to Unrestricted
Definitive Senior Subordinated Notes. Any Restricted Definitive Senior
Subordinated Note may be exchanged by the Holder thereof for an
Unrestricted Definitive Senior Subordinated Note or transferred to a Person
or Persons who take delivery thereof in the form of an Unrestricted
Definitive Senior Subordinated Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Senior Subordinated Registration
Rights Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the
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Senior Subordinated Notes
<PAGE>
Senior Subordinated Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Authority;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Senior Subordinated
Registration Rights Agreement;
(C) any such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Senior Subordinated Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Senior
Subordinated Notes proposes to exchange such Senior Subordinated
Notes for an Unrestricted Definitive Senior Subordinated Note, a
certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive Senior
Subordinated Notes proposes to transfer such Senior Subordinated
Notes to a Person who shall take delivery thereof in the form of
an Unrestricted Definitive Senior Subordinated Note, a
certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Authority to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.
(iii) Unrestricted Definitive Senior Subordinated Notes to
Unrestricted Definitive Senior Subordinated Notes. A Holder of Unrestricted
Definitive Senior Subordinated Notes may transfer such Senior Subordinated
Notes to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Senior Subordinated Note. Upon receipt of a request to register
such a transfer, the Registrar shall register the Unrestricted Definitive
Senior Subordinated Notes pursuant to the instructions from the Holder
thereof.
(f) Exchange Offer. Upon the occurrence of an Exchange Offer in accordance
with the Senior Subordinated Registration Rights Agreement, the Authority shall
issue and, upon receipt of an Authentication Order in accordance with Section
2.02, the Trustee shall authenticate (i) one or more Unrestricted Global Senior
Subordinated Notes in an aggregate principal amount equal to the principal
amount of the beneficial interests in the Restricted Global Senior Subordinated
Notes tendered for acceptance by Persons that certify in the applicable Letters
of Transmittal that (x) they are not broker-dealers, (y) they are not
participating in a distribution of the Senior Subordinated Exchange Notes and
(z) they are not affiliates (as defined in Rule 144) of the Authority, and
accepted for exchange in the Exchange Offer and (ii) Definitive Senior
Subordinated Notes in an aggregate principal amount equal to the principal
amount of the Restricted Definitive Senior Subordinated Notes accepted for
exchange in the Exchange Offer. Concurrently with the issuance of such Senior
Subordinated Notes, the Trustee shall cause the aggregate principal amount of
the applicable Restricted Global Senior Subordinated Notes to be reduced
accordingly, and the Authority shall execute and the Trustee shall authenticate
and deliver to the Persons designated by the Holders of Definitive Senior
Subordinated Notes so accepted Definitive Senior Subordinated Notes in the
appropriate principal amount.
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Senior Subordinated Notes
<PAGE>
(g) Legends. The following legends shall appear on the face of all Global
Senior Subordinated Notes and Definitive Senior Subordinated Notes issued under
this Indenture unless specifically stated otherwise in the applicable provisions
of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global
Senior Subordinated Note and each Definitive Senior Subordinated Note
(and all Senior Subordinated Notes issued in exchange therefor or
substitution thereof) shall bear the legend in substantially the
following form.
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
IN ACCORDANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (SUBJECT TO THE DELIVERY OF SUCH EVIDENCE, IF ANY, REQUIRED
UNDER THE INDENTURE PURSUANT TO WHICH THIS NOTE IS ISSUED) AND IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER JURISDICTION. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER
EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE AUTHORITY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(a) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE AUTHORITY SO
REQUESTS), SUBJECT TO THE RECEIPT BY THE REGISTRAR OF A CERTIFICATION OF THE
TRANSFEROR AND AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, (2) TO THE AUTHORITY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE
RESALE RESTRICTION SET FORTH IN (A) ABOVE."
(B) Notwithstanding the foregoing, any Global Senior Subordinated
Note or Definitive Senior Subordinated Note issued pursuant to
subparagraphs (b)(iv), (c)(ii), (c)(iii), (c)(iv), (d)(ii), (d)(iii),
(e)(ii), (e)(iii) or (f) to this Section 2.06 (and all Senior
Subordinated Notes issued in exchange therefor or substitution
thereof) shall not bear the Private Placement Legend.
(ii) Global Senior Subordinated Note Legend. Each Global Senior
Subordinated Note shall bear a legend in substantially the following form:
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Senior Subordinated Notes
<PAGE>
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT
NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE
MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE
INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY
WITH THE PRIOR WRITTEN CONSENT OF THE AUTHORITY."
(iii) Regulation S Temporary Global Senior Subordinated Note Legend.
The Regulation S Temporary Global Senior Subordinated Note shall bear a
legend in substantially the following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON."
(h) Cancellation and/or Adjustment of Global Senior Subordinated Notes. At
such time as all beneficial interests in a particular Global Senior Subordinated
Note have been exchanged for Definitive Senior Subordinated Notes or a
particular Global Senior Subordinated Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Senior Subordinated Note
shall be returned to or retained and canceled by the Trustee in accordance with
Section 2.11 hereof. At any time prior to such cancellation, if any beneficial
interest in a Global Senior Subordinated Note is exchanged for or transferred to
a Person who will take delivery thereof in the form of a beneficial interest in
another Global Senior Subordinated Note or for Definitive Senior Subordinated
Notes, the principal amount of Senior Subordinated Notes represented by such
Global Senior Subordinated Note shall be reduced accordingly and an endorsement
shall be made on such Global Senior Subordinated Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such reduction; and if the
beneficial interest is being exchanged for or transferred to a Person who will
take delivery thereof in the form of a beneficial interest in another Global
Senior Subordinated Note, such other Global Senior Subordinated Note shall be
increased accordingly and an endorsement shall be made on such Global Senior
Subordinated Note by the Trustee or by the Depositary at the direction of the
Trustee to reflect such increase.
(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 Global Senior Subordinated
Notes and Definitive Senior Subordinated Notes upon the Authority's order
or at the Registrar's request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Senior Subordinated Note or to a Holder of a
Definitive Senior Subordinated Note for any registration of transfer or
exchange, but the Authority may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar governmental
charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06,
3.10, 4.10, 4.15 and 9.05 hereof).
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Senior Subordinated Notes
<PAGE>
(iii) The Registrar shall not be required to register the transfer of
or exchange any Senior Subordinated Note selected for redemption in whole
or in part, except the unredeemed portion of any Senior Subordinated Note
being redeemed in part.
(iv) All Global Senior Subordinated Notes and Definitive Senior
Subordinated Notes issued upon any registration of transfer or exchange of
Global Senior Subordinated Notes or Definitive Senior Subordinated Notes
shall be the valid obligations of the Authority, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Global
Senior Subordinated Notes or Definitive Senior Subordinated 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 any Senior Subordinated Notes during a period
beginning at the opening of business 15 days before the day of any
selection of Senior Subordinated Notes for redemption under Section 3.02
hereof and ending at the close of business on the day of selection, (B) to
register the transfer of or to exchange any Senior Subordinated Note so
selected for redemption in whole or in part, except the unredeemed portion
of any Senior Subordinated Note being redeemed in part or (C) to register
the transfer of or to exchange a Senior Subordinated 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 Senior Subordinated Note, the Trustee, any Agent and the Authority may
deem and treat the Person in whose name any Senior Subordinated Note is
registered as the absolute owner of such Senior Subordinated Note for the
purpose of receiving payment of principal of and interest on such Senior
Subordinated Notes and for all other purposes, and none of the Trustee, any
Agent or the Authority shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Global Senior Subordinated Notes
and Definitive Senior Subordinated Notes in accordance with the provisions
of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a registration of transfer or exchange may be submitted by
facsimile.
Section 2.07. Replacement Senior Subordinated Notes.
If any mutilated Senior Subordinated Note is surrendered to the Trustee or
the Authority and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Senior Subordinated Note, the Authority shall
issue and the Trustee, upon receipt of an Authentication Order, shall
authenticate a replacement Senior Subordinated Note in accordance with this
Indenture. 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 Senior
Subordinated Note is replaced. The Authority may charge for its expenses in
replacing a Senior Subordinated Note.
Every replacement Senior Subordinated 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 Senior Subordinated Notes duly issued
hereunder.
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Senior Subordinated Notes
<PAGE>
Section 2.08. Outstanding Senior Subordinated Notes.
The Senior Subordinated Notes outstanding at any time are all the Senior
Subordinated Notes authenticated by the Trustee except for those canceled by it,
those delivered to it for cancellation, those reductions in the interest in a
Global Senior Subordinated Note effected by the Trustee in accordance with the
provisions hereof, and those described in this Section as not outstanding.
Except as set forth in Section 2.09 hereof, a Senior Subordinated Note does not
cease to be outstanding because the Authority or an Affiliate of the Authority
holds the Senior Subordinated Note.
If a Senior Subordinated 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 Senior Subordinated Note is held by a bona fide purchaser.
If the principal amount of any Senior Subordinated Note is considered paid
under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases
to accrue.
If the Paying Agent (other than the Authority, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Senior Subordinated Notes payable on that date, then on and after that
date such Senior Subordinated Notes shall be deemed to be no longer outstanding
and shall cease to accrue interest.
Section 2.09. Treasury Senior Subordinated Notes.
In determining whether the Holders of the required principal amount of
Senior Subordinated Notes have concurred in any direction, waiver or consent,
Senior Subordinated Notes owned by the Authority, or by any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Authority, 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 Senior
Subordinated Notes that the Trustee actually knows are so owned shall be so
disregarded.
Section 2.10. Temporary Senior Subordinated Notes.
Until certificates representing Senior Subordinated Notes are ready for
delivery, the Authority may prepare and the Trustee, upon receipt of an
Authentication Order, shall authenticate temporary Senior Subordinated Notes.
Temporary Senior Subordinated Notes shall be substantially in the form of
certificated Senior Subordinated Notes but may have variations that the
Authority considers appropriate for temporary Senior Subordinated Notes and as
shall be reasonably acceptable to the Trustee. Without unreasonable delay, the
Authority shall prepare and the Trustee shall authenticate definitive Senior
Subordinated Notes in exchange for temporary Senior Subordinated Notes.
Holders of temporary Senior Subordinated Notes shall be entitled to all of
the benefits of this Indenture.
Section 2.11. Cancellation.
The Authority at any time may deliver Senior Subordinated Notes to the
Trustee for cancellation. The Registrar and Paying Agent shall forward to the
Trustee any Senior Subordinated Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel all
Senior Subordinated Notes surrendered for registration of transfer, exchange,
payment, replacement or cancellation and shall destroy canceled Senior
Subordinated Notes (subject to the record
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Senior Subordinated Notes
<PAGE>
retention requirement of the Exchange Act). Certification of the destruction of
all canceled Senior Subordinated Notes shall be delivered to the Authority. The
Authority may not issue new Senior Subordinated Notes to replace Senior
Subordinated Notes that it has paid or that have been delivered to the Trustee
for cancellation.
Section 2.12. Defaulted Interest.
If the Authority defaults in a payment of interest on the Senior
Subordinated Notes, it shall pay the defaulted interest in any lawful manner
plus, to the extent lawful, interest payable on the defaulted interest, to the
Persons who are Holders on a subsequent special record date, in each case at the
rate provided in the Senior Subordinated Notes and in Section 4.01 hereof. The
Authority shall notify the Trustee in writing of the amount of defaulted
interest proposed to be paid on each Senior Subordinated 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 to be paid.
Section 2.13. CUSIP Numbers.
The Authority in issuing the Senior Subordinated Notes may use "CUSIP"
numbers (if then generally in use), and, if so, the Trustee shall use CUSIP
numbers in notices of redemption as a convenience to Holders; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Senior Subordinated Notes or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Senior Subordinated Notes, and any such
redemption shall not be affected by any defect in or the omission of such
numbers. The Authority will promptly notify the Trustee of any change in the
CUSIP numbers.
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee.
If the Authority elects to redeem Senior Subordinated Notes pursuant to the
optional redemption provisions of Section 3.07 hereof, it shall furnish to the
Trustee, at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Senior Subordinated Notes to be redeemed, (iv) the redemption price
and (v) if applicable, any redemption requirements of the principal national
securities exchange on which the Senior Subordinated Notes are listed.
Section 3.02. Selection of Senior Subordinated Notes to Be Redeemed.
If less than all of the Senior Subordinated Notes are to be redeemed or
purchased in an offer to purchase at any time, the Trustee shall select the
Senior Subordinated Notes to be redeemed or purchased among the Holders of the
Senior Subordinated Notes in compliance with any requirements of the principal
national securities exchange, if any, on which the Senior Subordinated Notes are
listed as set forth in the Officers' Certificate delivered pursuant to Section
3.01 or, if the Senior Subordinated Notes are not so listed or if the
requirements are not set forth in such Officers' Certificate, on a pro rata
basis,
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<PAGE>
by lot or in accordance with any other method the Trustee considers fair and
appropriate. In the event of partial redemption by lot, the particular Senior
Subordinated Notes to be redeemed shall be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption date by
the Trustee from the outstanding Senior Subordinated Notes not previously called
for redemption.
The Trustee shall promptly notify the Authority in writing of the Senior
Subordinated Notes selected for redemption and, in the case of any Senior
Subordinated Note selected for partial redemption, the principal amount thereof
to be redeemed. Senior Subordinated Notes and portions of Senior Subordinated
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000,
except that if all of the Senior Subordinated Notes of a Holder are to be
redeemed, the entire outstanding amount of Senior Subordinated Notes held by
such Holder, even if not a multiple of $1,000, shall be redeemed. Except as
provided in the preceding sentence, provisions of this Indenture that apply to
Senior Subordinated Notes called for redemption also apply to portions of Senior
Subordinated Notes called for redemption.
Section 3.03. Notice of Redemption.
Subject to the provisions of Section 3.10 hereof, at least 30 days but not
more than 60 days before a redemption date, the Authority shall mail or cause to
be mailed, by first class mail, a notice of redemption to each Holder whose
Senior Subordinated Notes are to be redeemed at its registered address.
The notice shall identify the Senior Subordinated Notes to be redeemed and
shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Senior Subordinated Note is being redeemed in part, the portion
of the principal amount of such Senior Subordinated Note to be redeemed and
that, after the redemption date upon surrender of such Senior Subordinated Note,
a new Senior Subordinated Note or Senior Subordinated Notes in principal amount
equal to the unredeemed portion shall be issued upon cancellation of the
original Senior Subordinated Note;
(d) the name and address of the Paying Agent;
(e) that Senior Subordinated 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 Senior Subordinated Notes called for redemption ceases to accrue on
and after the redemption date;
(g) the paragraph of the Senior Subordinated Notes and/or Section of this
Indenture pursuant to which the Senior Subordinated 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 Senior
Subordinated 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 (unless a shorter period shall be satisfactory to the Trustee),
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.
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<PAGE>
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03 hereof,
Senior Subordinated Notes called for redemption become irrevocably due and
payable on the redemption date at the redemption price. A notice of redemption
may not be conditional.
Section 3.05. Deposit of Redemption Price.
One Business Day prior to the redemption date, the Authority shall deposit
with the Trustee or with the Paying Agent money sufficient to pay the redemption
price of and accrued interest on all Senior Subordinated Notes to be redeemed on
that 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 redemption price of, and
accrued interest on, all Senior Subordinated Notes to be redeemed.
If the Authority complies with the provisions of the preceding paragraph,
on and after the redemption date, interest shall cease to accrue on the Senior
Subordinated Notes or the portions of Senior Subordinated Notes called for
redemption. If a Senior Subordinated Note is redeemed on or after an interest
record date but on or prior to the related interest payment date, then any
accrued and unpaid interest shall be paid to the Person in whose name such
Senior Subordinated Note was registered at the close of business on such record
date. If any Senior Subordinated Note called for redemption shall not be so paid
upon surrender for redemption because of the failure of the Authority to comply
with the preceding paragraph, interest shall be paid on the unpaid principal,
from the redemption date until such principal is paid, and to the extent lawful
on any interest not paid on such unpaid principal, in each case at the rate
provided in the Senior Subordinated Notes and in Section 4.01 hereof.
Section 3.06. Senior Subordinated Notes Redeemed in Part.
Upon surrender of a Senior Subordinated Note that is 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 Senior
Subordinated Note equal in principal amount to the unredeemed portion of the
Senior Subordinated Note surrendered.
Section 3.07. Optional Redemption.
(a) Except as set forth in Section 3.08, the Authority shall not have the
option to redeem the Senior Subordinated Notes pursuant to this Section 3.07
prior to January 1, 2004. On or after such date, the Authority shall have the
option to redeem the Senior Subordinated Notes, in whole or in part, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest thereon, if any, to the applicable redemption
date, if redeemed during the twelve-month period beginning on January 1 of the
years indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2004....................................................... 104.375%
2005....................................................... 102.917%
2006....................................................... 101.458%
2007 and thereafter........................................ 100.000%
</TABLE>
Any redemption pursuant to this Section 3.07 shall be made pursuant to the
provisions of Section 3.01 through 3.06 hereof.
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<PAGE>
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 Senior
Subordinated 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)
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 Senior
Subordinated 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
Senior Subordinated Notes of such Holder or beneficial owner at a redemption
price equal to the lesser of (1) the principal amount thereof or (2) the price
at which such Holder or beneficial owner acquired the Senior Subordinated Notes
or (3) the current market price of the Senior Subordinated Notes, together with,
in each case, accrued and unpaid interest and Additional 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
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 Senior Subordinated Notes who is required to apply for 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 payments
with respect to the Senior Subordinated Notes.
Section 3.10. Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Authority shall be
required to commence an offer to all Holders to purchase Senior Subordinated
Notes (an "Asset Sale Offer"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Offer Period"). No later than five
Business Days after the termination of the Offer Period (the "Purchase Date"),
the Authority shall purchase the principal amount of Senior Subordinated Notes
required to be purchased pursuant to Section 4.10 hereof (the "Offer Amount")
or, if less than the Offer Amount has been tendered, all Senior Subordinated
Notes tendered in response to the Asset Sale Offer. Payment for any Senior
Subordinated 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 shall
be paid to the Person in whose name a Senior
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Senior Subordinated Notes
<PAGE>
Subordinated Note is registered at the close of business on such record date,
and no additional interest shall be payable to Holders who tender Senior
Subordinated Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale 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 Senior Subordinated Notes pursuant to
the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders. The
notice, which shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section 3.10
and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain
open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Senior Subordinated Note not tendered or accepted for payment
shall continue to accrue interest;
(d) that, unless the Authority defaults in making such payment, any Senior
Subordinated Note accepted for payment pursuant to the Asset Sale Offer shall
cease to accrue interest after the Purchase Date;
(e) that Holders electing to have a Senior Subordinated Note purchased
pursuant to an Asset Sale Offer may elect to have Senior Subordinated Notes
purchased in integral multiples of $1,000 only;
(f) that Holders electing to have a Senior Subordinated Note purchased
pursuant to any Asset Sale Offer shall be required to surrender the Senior
Subordinated Note, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Senior Subordinated Note completed, or transfer by
book-entry transfer, 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;
(g) that Holders shall be entitled to withdraw 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 Senior Subordinated Note the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have such Senior
Subordinated Note purchased;
(h) that, if the aggregate principal amount of Senior Subordinated Notes
surrendered by Holders exceeds the Offer Amount, the Authority shall select the
Senior Subordinated Notes to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Authority so that only Senior
Subordinated Notes in denominations of $1,000, or integral multiples thereof,
shall be purchased); and
(i) that Holders whose Senior Subordinated Notes were purchased only in
part shall be issued new Senior Subordinated Notes equal in principal amount to
the unpurchased portion of the Senior Subordinated Notes surrendered (or
transferred by book-entry transfer).
On or before the Purchase Date, the Authority shall, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Senior Subordinated Notes or portions thereof tendered pursuant to the
Asset Sale Offer, or if less than the Offer Amount has been tendered, all Senior
Subordinated Notes tendered, and shall deliver to the Trustee an Officers'
Certificate stating that such Senior Subordinated Notes or portions thereof were
accepted for payment by the Authority in
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accordance with the terms of this Section 3.10. The Authority, the Depositary or
the Paying Agent, as the case may be, shall promptly (but in any case not later
than five Business Days after the Purchase Date) mail or deliver to each
tendering Holder an amount equal to the purchase price of the Senior
Subordinated Notes tendered by such Holder and accepted by the Authority for
purchase, and the Authority shall promptly issue a new Senior Subordinated Note,
and the Trustee, upon written request from the Authority shall authenticate and
mail or deliver such new Senior Subordinated Note to such Holder, in a principal
amount equal to any unpurchased portion of the Senior Subordinated Note
surrendered. Any Senior Subordinated 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 Asset Sale 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.
ARTICLE 4
COVENANTS
Section 4.01. Payment of Senior Subordinated Notes.
(a) The Authority shall pay or cause to be paid the principal of, premium,
if any, and interest on the Senior Subordinated Notes on the dates and in the
manner provided in the Senior Subordinated Notes. Principal, premium, if any,
and interest and Additional Interest, if any, shall be considered paid on the
date due if the Paying Agent, if other than the Authority or a Subsidiary
thereof, 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 and Additional Interest, if
any, then due. The Authority shall pay all Additional Interest, if any, in the
same manner, on the same dates and in the amounts set forth in the first
paragraph of the Senior Subordinated Notes.
(b) 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 Senior
Subordinated 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.
(a) 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 Senior Subordinated
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 Senior
Subordinated 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.
(b) The Authority may also from time to time designate one or more other
offices or agencies where the Senior Subordinated 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
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give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
(c) 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.
(a) Whether or not required by the SEC, so long as any Senior Subordinated
Notes are outstanding, the Authority will furnish to the Holders of Senior
Subordinated Notes and the Trustee within 15 days after the end of the time
periods specified in the SEC's rules and regulations for filings of current,
quarterly and annual reports:
(i) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and
10-K if the Authority were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" that describes the financial condition and
results of operations of the Authority and its consolidated
Subsidiaries (showing in reasonable detail, either on the face of
the financial statements or in the footnotes thereto and in
Management's Discussion and Analysis of Financial Condition and
Results of Operations, the financial condition and results of
operations of the Authority and its Restricted Subsidiaries separate
from the financial condition and results of operations of the
Unrestricted Subsidiaries of the Authority, to the extent that would
be required by the rules, regulations or interpretive positions of
the SEC) and, with respect to the annual information only, a report
thereon by the Authority's independent public accountants; and
(ii) all current reports that would be required to be filed with the SEC
on Form 8-K if the Authority were required to file such reports.
(b) In the event that the Authority consummates an Exchange Offer, whether
or not required by the rules and regulations of the SEC, the Authority will file
a copy of all such information and reports with the SEC for public availability
within the time periods specified in the SEC's rules and regulations (unless the
SEC will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request.
(c) The Authority has agreed that, for so long as any Senior Subordinated
Notes remain outstanding, it will furnish to the Holders and to securities
analysts and prospective investors, upon their request, the information required
to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(d) The Authority shall file with the Trustee and provide to Holders of
Senior Subordinated 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.
(e) The Authority shall at all times comply with TIA ss. 314(a).
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 and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view
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to determining whether the Authority has kept, observed, performed and fulfilled
its obligations under this Indenture, and further stating, as to each such
Officer signing such certificate, that to the best of his or her knowledge the
Authority has kept, observed, performed and fulfilled each and every covenant
contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions of this Indenture (or,
if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and what
action the Authority is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Senior Subordinated Notes is prohibited or if such
event has occurred, a description of the event and what action the Authority is
taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the 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 has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Authority shall, so long as any of the Senior Subordinated Notes
are outstanding, deliver to the Trustee, forthwith upon any Officer becoming
aware of any Default or Event of Default, an Officers' Certificate specifying
such Default or Event of Default and what action the Authority is taking or
proposes to take with respect thereto.
Section 4.05. Taxes.
The Authority shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Senior Subordinated 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.
(a) The Authority will not, and the Authority will not permit any of its
Restricted Subsidiaries, directly or indirectly, to: (i) make any payment on or
with respect to any of the Authority's or any of its Restricted Subsidiaries'
Equity Interests; (ii) purchase, redeem, defease or otherwise acquire or retire
for
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value any Equity Interest in the Authority held by the Tribe or any Affiliate of
the Tribe; (iii) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Subordinated Indebtedness
(other than the defeasance and the ultimate redemption of the Junior
Subordinated Notes in accordance with their terms and the terms of the
Defeasance Trust), except a payment of interest or principal at Stated Maturity
thereof; (iv) 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 (other than Government Service
Payments); or (v) make any Restricted Investment; (all such payments and other
actions set forth in clauses (i) through (v) are collectively referred to as
"Restricted Payments") unless, at the time of and after giving effect to such
Restricted Payment:
(A) no Default or Event of Default shall have occurred and be continuing
or would occur as a consequence thereof;
(B) the Authority would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been
made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant
to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a);
and
(C) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Authority and its Restricted
Subsidiaries after the date of this Indenture (excluding Restricted
Payments permitted by clauses (ii), (iii), (iv) and (v) of Section
4.07(b)), is less than the sum, without duplication, of (1) 50% of the
Consolidated Net Income of the Authority for the period (taken as one
accounting period) from the beginning of the first fiscal quarter
commencing after the date of this Indenture to the end of the
Authority's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit), plus (2) 100% of the aggregate
net cash proceeds or fair market value (as determined in good faith by
the Management Board and evidenced by a resolution set forth in an
Officers' Certificate delivered to the Trustee) of assets or property
(other than cash) received by the Authority from capital contributions
from the Tribe that bear no mandatory obligation to repay the Tribe
and other than from a Restricted Subsidiary of the Authority, plus (3)
to the extent that any Restricted Investment that was made after the
date of this Indenture is sold, liquidated or otherwise disposed of
for cash or an amount equal to the fair market value thereof (as
determined in good faith by the Management Board and evidenced by a
resolution set forth in an Officers' Certificate delivered to the
Trustee), the lesser of (I) the cash return of capital or fair market
value amount, as the case may be, with respect to such Restricted
Investment (less the cost of disposition, if any) and (II) the initial
amount of such Restricted Investment, plus (4) to the extent that any
Unrestricted Subsidiary is redesignated as a Restricted Subsidiary
after the date of this Indenture, the lesser of (I) the fair market
value of the Authority's Investment in such Subsidiary as of the date
of such redesignation or (II) such fair market value as of the date on
which such Subsidiary was originally designated as an Unrestricted
Subsidiary.
(b) So long as no Default has occurred and is continuing or would be caused
thereby, the preceding provisions will not prohibit: (i) the defeasance,
redemption, repurchase or other acquisition of Subordinated Indebtedness with
the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness;
(ii) the payment of any dividend by a Restricted Subsidiary of the Authority to
the holders of its common Equity Interests on a pro rata basis; (iii) the
repurchase, redemption or other acquisition or retirement for value of any
Equity Interests of any Restricted Subsidiary of the Authority held by any
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member of the Authority's (or any of its Restricted Subsidiaries') management
pursuant to any management equity subscription agreement or stock option
agreement in effect as of the date of this Indenture; provided that (a) the
aggregate price paid for all such repurchased, redeemed, acquired or retired
Equity Interests shall not exceed $1.0 million in any 12-month period and (b)
the aggregate amount of all such repurchased, redeemed, acquired or retired
Equity Interests shall not in the aggregate exceed $3.0 million; (iv) the
redemption or purchase of Subordinated Indebtedness of the Authority in the
event that the holder of such Subordinated Indebtedness has failed to qualify or
be found suitable or otherwise be eligible by any Gaming Regulatory Authority to
remain a holder of such Subordinated Indebtedness; (v) the redemption,
defeasance, repurchase or other acquisition or retirement of Subordinated
Indebtedness with the net cash proceeds from a substantially concurrent capital
contribution from the Tribe (provided that such capital contribution is not
counted for purposes of Section 4.07(a)(C)(2)); and (vi) any other Restricted
Payments in an amount not to exceed $20.0 million at any one time outstanding.
(c) The Authority may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default; provided
that in no event shall (i) any entity (including any Subsidiary of the Authority
or the Authority or any operating division thereof) engaged in a Principal
Business be transferred to or held by an Unrestricted Subsidiary or (ii) any Key
Project Assets or Gaming Licenses be transferred to an Unrestricted Subsidiary.
In the event of such designation, all outstanding Investments owned by the
Authority and its Restricted Subsidiaries in the Subsidiary so designated will
be deemed to be an Investment made as of the time of such designation and will
reduce the amount available for Restricted Payments under Section 4.07(a) unless
the Investment constitutes a Permitted Investment. All such outstanding
Investments will be deemed to constitute Restricted Payments in an amount equal
to the fair market value of such Investments at the time of such designation.
Such designation will only be permitted if such Restricted Payment would be
permitted at such time and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary. The Authority may redesignate an
Unrestricted Subsidiary to be a Restricted Subsidiary if such redesignation
would not otherwise cause a Default.
(d) The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Authority or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities that are required to be valued
by this Section 4.07 shall be determined by the Management Board whose
resolution with respect thereto shall be delivered to the Trustee. Not later
than the date of making any Restricted Payment, the Authority shall deliver to
the Trustee an Officers' Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this Section 4.07 were computed.
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries.
(a) Except as set forth in Section 4.08(b), the Authority will not, and
will not permit any of its Restricted Subsidiaries to, directly or indirectly,
create or permit to exist or become effective any encumbrance or restriction on
the ability of any Restricted Subsidiary to: (i) pay dividends or make any other
distributions on its Capital Stock to the Authority or any of the Authority's
Restricted Subsidiaries, or with respect to any other interest or participation
in, or measured by, its profits, or pay any indebtedness owed to the Authority
or any of the Authority's Restricted Subsidiaries; (ii) make loans or advances
to the Authority or any of the Authority's Restricted Subsidiaries; or (iii)
transfer any of its properties or assets to the Authority or any of the
Authority's Restricted Subsidiaries.
(b) The provisions of Section 4.08(a) will not apply to encumbrances or
restrictions existing under or by reason of:
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(i) Existing Indebtedness as in effect on the date of this Indenture and
any amendments, modifications, restatements, renewals, extensions,
increases, supplements, refundings, replacements or refinancings
thereof, provided that such amendments, modifications, restatements,
renewals, extensions, increases, supplements, refundings,
replacements or refinancings are no more restrictive, taken as a
whole, with respect to such dividend and other payment restrictions
than those contained in such Existing Indebtedness, as in effect on
the date of this Indenture;
(ii) this Indenture and the Senior Subordinated Notes;
(iii) the Senior Notes Indenture and the Senior Notes;
(iv) the Credit Facilities;
(v) applicable law;
(vi) any instrument governing Indebtedness or Capital Stock of a Person
acquired by the Authority or any of its Restricted Subsidiaries as
in effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of
such acquisition), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person,
other than the Person, or the property or assets of the Person, so
acquired, provided that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of this Indenture to be
incurred;
(vii) customary non-assignment provisions in leases or other contracts
entered into in the ordinary course of business and consistent with
past practices;
(viii) purchase money obligations (including, without limitation, Capital
Lease Obligations) for property acquired in the ordinary course of
business that impose restrictions on the property so acquired of the
nature described in Section 4.08(a)(iii);
(ix) any agreement for the sale or other disposition of a Restricted
Subsidiary that restricts distributions by such Restricted
Subsidiary pending its sale or other disposition;
(x) Permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing such Permitted Refinancing
Indebtedness are no more restrictive, taken as a whole, than those
contained in the agreements governing the Indebtedness being
refinanced;
(xi) Liens securing Indebtedness otherwise permitted to be incurred
pursuant to Section 4.12 that limit the right of the Authority or
any of its Restricted Subsidiaries to dispose of the assets subject
to such Lien;
(xii) provisions with respect to the disposition or distribution of assets
or property in joint venture agreements and other similar agreements
entered into in the ordinary course of business; and
(xiii) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of
business.
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Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.
(a) The Authority will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Indebtedness) and
the Authority will not issue any Disqualified Stock and will not permit any of
its Subsidiaries to issue any shares of preferred stock; provided, however, that
the Authority may incur Indebtedness (including Acquired Indebtedness) or issue
shares of Disqualified Stock and the Authority's Subsidiaries may incur
Indebtedness or issue preferred stock if 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 on which such
additional Indebtedness is incurred would have been at least 2.0 to 1 determined
on a pro forma basis (including a pro forma application of the net proceeds
therefrom), as if the additional Indebtedness had been incurred at the beginning
of such four-quarter period. Notwithstanding the foregoing, the Authority will
not issue any Disqualified Stock or any type of Capital Stock that would violate
IGRA.
(b) So long as no Default or Event of Default shall have occurred and be
continuing, or would be caused thereby, Section 4.09(a) will not prohibit the
incurrence of any of the following items of Indebtedness:
(i) the incurrence by the Authority or its Restricted Subsidiaries of
Indebtedness and letters of credit pursuant to Credit Facilities;
provided that the aggregate principal amount of all such
Indebtedness and letters of credit outstanding under all Credit
Facilities, after giving effect to such incurrence (with letters of
credit being deemed to have a principal amount equal to the maximum
potential liability of the Authority thereunder), does not exceed
$500.0 million less the aggregate amount of all Net Proceeds of
Asset Sales applied by the Authority or any of its Restricted
Subsidiaries since the date of this Indenture to repay Indebtedness
under Credit Facilities permitted under Section 4.10;
(ii) the incurrence by the Authority and its Restricted Subsidiaries of
the Existing Indebtedness;
(iii) the incurrence by the Authority of Indebtedness represented by the
Senior Subordinated Notes and the Senior Subordinated Exchange
Notes;
(iv) the incurrence by the Authority of Indebtedness represented by the
Senior Notes and the Senior Exchange Notes;
(v) the incurrence by the Authority or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease
Obligations, mortgage financings or purchase money obligations, in
each case incurred for the purpose of financing all or any part of
the purchase price of furniture, fixtures, equipment or similar
assets used or useful in the business of the Authority or such
Restricted Subsidiary not to exceed 100% of the lesser of cost or
fair market value of the assets financed and, in an aggregate
principal amount under this clause (v) not to exceed $25.0 million
at any time outstanding;
(vi) the incurrence by the Authority or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for,
or the net proceeds of which are used to refund, refinance, renew,
extend, defease or replace Indebtedness that was permitted by
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this Indenture to be incurred under Section 4.09(a) or clauses (i),
(ii) (other than the Junior Subordinated Notes), (iii), (iv) or (v)
of Section 4.09(b);
(vii) the incurrence by the Authority or any of its Restricted
Subsidiaries of 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;
(viii) the guarantee by the Authority or any of its Restricted Subsidiaries
of any Indebtedness of the Authority or any of its Restricted
Subsidiaries that was permitted to be incurred by another provision
of this Section 4.09;
(ix) the incurrence by a Wholly Owned Restricted Subsidiary of
Indebtedness owed to another Wholly Owned Restricted Subsidiary or
to the Authority; provided that if at any time any such Wholly Owned
Restricted Subsidiary ceases to be a Wholly Owned Restricted
Subsidiary, any such Indebtedness shall be deemed to be an
incurrence of Indebtedness for the purposes of this Section 4.09;
(x) the incurrence by the Authority or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal
amount (or accreted value, as applicable) at any time outstanding,
including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this
clause (x), not to exceed $25.0 million; or
(xi) the incurrence by the Authority's Unrestricted Subsidiaries of
Non-Recourse Debt, provided, however, that if any such Indebtedness
ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such
event shall be deemed to constitute an incurrence of Indebtedness by
a Restricted Subsidiary of the Authority that was not permitted by
this clause (xi).
For purposes of determining compliance with this Section 4.09 in the event
that an item of proposed Indebtedness meets the criteria of more than one of the
categories of Indebtedness described in clauses (i) through (xi) above or is
entitled to be incurred pursuant to Section 4.09(a), the Authority shall, in its
sole discretion, classify such item of Indebtedness on the date of its
incurrence in any manner that complies with this Section 4.09.
Section 4.10. Asset Sales.
(a) The Authority will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless: (i) the Authority (or its
Restricted Subsidiary, as the case may be) receives consideration at the time of
such Asset Sale at least equal to the fair market value (as determined in good
faith by the Management Board and evidenced by a resolution set forth in an
Officers' Certificate delivered to the Trustee) of the assets sold or otherwise
disposed of; and (ii) except in the case of a Permitted Asset Swap, at least 75%
of the consideration therefor received by the Authority or such Restricted
Subsidiary is in the form of cash. For purposes of this provision, each of the
following shall be deemed to be cash: (A) any liabilities that would appear on
the Authority's or such Restricted Subsidiary's balance sheet prepared in
accordance with GAAP (other than contingent liabilities and liabilities that are
by their terms subordinated to the Senior Subordinated Notes or any guarantee
thereof) that are assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Authority or such Restricted
Subsidiary from further liability; and (B) any securities, notes or other
obligations received by the Authority or any such Restricted Subsidiary from
such transferee that
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are converted by the Authority or such Restricted Subsidiary into cash (to the
extent of the cash received) within 30 days of the receipt thereof, provided,
however, that the Authority will not be permitted to make any Asset Sale of Key
Project Assets.
(b) Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Authority may apply such Net Proceeds, at its option, to: (i) repay
permanently term Indebtedness under Credit Facilities of the Authority or any
Restricted Subsidiary; (ii) repay revolving credit Indebtedness under Credit
Facilities and correspondingly permanently reduce commitments with respect
thereto; (iii) acquire a majority of the assets of, or a majority of the Voting
Stock of, an entity engaged in the Principal Business or a Related Business;
(iv) make capital expenditures or acquire other long-term assets that are used
or useful in the Principal Business or a Related Business; (v) make an
investment in the Principal Business or a Related Business or in tangible
long-term assets used or useful in the Principal Business or a Related Business;
or (vi) reduce permanently Indebtedness (including the Senior Notes) that is not
Subordinated Indebtedness.
Pending the final application of any such Net Proceeds, the Authority may
temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited by this Indenture.
(c) Any Net Proceeds from Asset Sales that are not applied or invested as
provided in Section 4.10(b) will be deemed to constitute "Excess Proceeds." When
the aggregate amount of Excess Proceeds exceeds $15.0 million, the Authority
will make an Asset Sale Offer to all Holders of Senior Subordinated Notes and
all holders of other Indebtedness containing provisions similar to those set
forth in this Indenture with respect to offers to purchase or redeem with the
proceeds of sales of assets to purchase the maximum principal amount of Senior
Subordinated Notes and such other Indebtedness that may be purchased out of the
Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100%
of the principal amount plus accrued and unpaid interest and Additional
Interest, if any, to the date of purchase and will be payable in cash, in
accordance with the procedures set forth in this Indenture and such other
Indebtedness. To the extent that any Excess Proceeds remain after consummation
of an Asset Sale Offer, the Authority may use such Excess Proceeds for any
purpose not otherwise prohibited by this Indenture. If the aggregate principal
amount of Senior Subordinated Notes and such other Indebtedness tendered into
such Asset Sale Offer surrendered by holders thereof exceeds the amount of
Excess Proceeds, the Trustee shall select the Senior Subordinated Notes and such
other Indebtedness (to the extent that such other Indebtedness permits such
selection) to be purchased on a pro rata basis. Upon completion of such offer to
purchase, the amount of Excess Proceeds shall be reset at zero.
Section 4.11. Transactions with Affiliates.
(a) The Authority will not, and the Authority will not permit any of its
Restricted Subsidiaries to, make any payment to, or 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 or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"),
unless: (i) such Affiliate Transaction is on terms that are no less favorable to
the Authority or the relevant Restricted Subsidiary than those that would have
been obtained in a comparable transaction by the Authority or such Restricted
Subsidiary with an unrelated Person; and (ii) the Authority delivers to the
Trustee: (A) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $5.0
million, a resolution of the Management Board set forth in an Officers'
Certificate certifying that such Affiliate Transaction complies with this
Section 4.11 and that such Affiliate Transaction has been approved by a majority
of the disinterested members of the Management Board; and (B) with respect to
any Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in
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Senior Subordinated Notes
<PAGE>
excess of $10.0 million, an opinion as to the fairness to the Authority or such
Restricted Subsidiary of such Affiliate Transaction from a financial point of
view issued by an accounting, appraisal or investment banking firm of national
standing.
(b) The following items shall not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of Section 4.11(a): (i)
any employment agreement or arrangement entered into by the Authority or any of
its Restricted Subsidiaries in the ordinary course of business and consistent
with the past practice of the Authority or such Restricted Subsidiary; (ii)
transactions between or among the Authority and/or its Restricted Subsidiaries;
(iii) payment of reasonable Management Board fees to members of the Management
Board; (iv) transactions with Persons in whom the Authority owns any Equity
Interests, so long as the remaining equity holders of such Person are not
Affiliates of the Authority or any of its Subsidiaries; (v) Government Service
Payments; (vi) transactions pursuant to the Development Services Agreement, the
Relinquishment Agreement and the Side Letters; (vii) Restricted Payments or
Permitted Investments that are made in compliance with the provisions of Section
4.07; and (viii) contractual arrangements existing on the date of this Indenture
and renewals, extensions and any modifications thereof that are not materially
adverse to Holders.
Section 4.12. Liens.
The Authority will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or otherwise
cause or suffer to exist or become effective any Lien of any kind (other than
Permitted Liens) upon any of its property or assets or any proceeds therefrom,
which secure either (i) Subordinated Indebtedness, unless the Senior
Subordinated Notes are secured by a Lien on such property assets or proceeds,
which Lien is senior in priority to the Liens securing such Subordinated
Indebtedness or (ii) pari passu Indebtedness, unless the Senior Subordinated
Notes are equally and ratably secured with the Liens securing such pari passu
Indebtedness.
Section 4.13. Line of Business.
The Authority shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in any business other than the Principal Business or a
Related Business.
Section 4.14. Existence of the Authority and Maintenance of the Lease.
(a) The Authority shall, and shall cause each of its Restricted
Subsidiaries to, do or cause to be done all things necessary to preserve and
keep in full force and effect their respective existence, in accordance with
their respective organizational documents and their respective rights
(contractual, charter and statutory), licenses and franchises; provided,
however, that neither the Authority nor any Restricted Subsidiary shall be
required to preserve, with respect to itself, any license, right or franchise
and, with respect to its Restricted Subsidiaries, any such existence, license,
right or franchise, if its Management Board or Board of Directors, or other
governing body or officers authorized to make such determination, as the case
may be, shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Authority or any Restricted Subsidiary, and
that the loss thereof is not adverse in any material respect to the Holders.
(b) The Authority shall do, or cause to be done, all things necessary to
perform any material covenants set forth in the Lease in order to keep the Lease
in full force and effect.
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Senior Subordinated Notes
<PAGE>
Section 4.15. Offer to Repurchase Upon Change of Control.
(a) If a Change of Control occurs, each Holder of the Senior Subordinated
Notes will have the right to require the Authority to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of that Holder's Senior
Subordinated Notes pursuant to a Change of Control Offer. In the Change of
Control Offer, the Authority will offer a Change of Control Payment in cash
equal to 101% of the aggregate principal amount of Senior Subordinated Notes
repurchased plus accrued and unpaid interest and Additional Interest, if any,
thereon, to the date of purchase.
(b) Within 20 Business Days following any Change of Control, the Authority
will mail a notice to each Holder (and, unless the Trustee makes the mailing on
behalf of the Authority, to the Trustee) describing the transaction or
transactions that constitute the Change of Control and offering to repurchase
Senior Subordinated Notes on the Change of Control Payment Date specified in
such notice, pursuant to the procedures required by this Indenture and described
in such notice. If the Authority wishes the Trustee to do the mailing, it will
give the Trustee adequate prior notice so that the Trustee may do so. 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
and regulations are applicable in connection with the repurchase of the Senior
Subordinated Notes as a result of a Change of Control.
(c) On the Change of Control Payment Date, the Authority will, to the
extent lawful: (i) accept for payment all Senior Subordinated Notes or portions
thereof properly tendered pursuant to the Change of Control Offer; (ii) deposit
with the Paying Agent an amount equal to the Change of Control Payment in
respect of all Senior Subordinated Notes or portions thereof so tendered; and
(iii) deliver or cause to be delivered to the Trustee the Senior Subordinated
Notes so accepted together with an Officers' Certificate stating the aggregate
principal amount of Senior Subordinated Notes or portions thereof being
purchased by the Authority.
(d) The Paying Agent will promptly mail to each Holder of Senior
Subordinated Notes so tendered the Change of Control Payment for such Senior
Subordinated Notes, and the Trustee will promptly authenticate and mail (or
cause to be transferred by book entry) to each Holder a new Senior Subordinated
Note equal in principal amount to any unpurchased portion of the Senior
Subordinated Notes surrendered, if any; provided that each such new Senior
Subordinated Note will be in a principal amount of $1,000 or an integral
multiple thereof. The Authority will notify the Trustee and will instruct the
Trustee to notify the Holders of the results of the Change of Control Offer on
or as soon as practicable after the Change of Control Payment Date.
(e) Notwithstanding anything to the contrary in this Section 4.15, the
Authority shall not be required to make a Change of Control Offer upon a Change
of Control if a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this
Section 4.15 and Section 3.10 hereof and all other provisions of this Indenture
applicable to a Change of Control Offer made by the Authority and purchases all
Senior Subordinated Notes validly tendered and not withdrawn under such Change
of Control Offer.
Section 4.16. No Senior Subordinated Debt.
Notwithstanding the provisions of Section 4.09 hereof, (i) the Authority
shall not incur any Indebtedness that is subordinate or junior in right of
payment to any Senior Indebtedness and senior in any respect in right of payment
to the Senior Subordinated Notes, and (ii) no Subsidiary Guarantor shall incur
any Indebtedness that is subordinated or junior in right of payment to any
Senior Subsidiary Guarantees of Senior Indebtedness and senior in any respect in
right of payment to the Senior Subordinated Subsidiary Guarantees.
52
Senior Subordinated Notes
<PAGE>
Section 4.17. Limitation on Sale and Leaseback Transactions.
The Authority will not, and will not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction involving the
Resort; provided that the Authority or any of its Restricted Subsidiaries may
enter into a sale and leaseback transaction if: (i) the Authority or such
Restricted Subsidiary, as applicable, could have (a) incurred Indebtedness in an
amount equal to the Attributable Debt relating to such sale and leaseback
transaction pursuant to the Fixed Charge Coverage Ratio test set forth in
Section 4.09(a) and (b) incurred a Lien to secure such Indebtedness pursuant to
Section 4.12; (ii) the gross cash proceeds of such sale and leaseback
transaction are at least equal to the fair market value, as determined in good
faith by the Management Board and set forth in an Officers' Certificate
delivered to the Trustee, of the property that is subject of such sale and
leaseback transaction; and (iii) the transfer of assets in such sale and
leaseback transaction is permitted by, and the Authority applies the proceeds of
such transaction in compliance with Section 4.10.
Section 4.18. Limitation on Issuances and Sales of Equity Interests in Wholly
Owned Restricted Subsidiaries.
The Authority (i) will not, and will not permit any Wholly Owned Restricted
Subsidiary of the Authority to, transfer, convey, sell, lease or otherwise
dispose of any Equity Interests in any Wholly Owned Restricted Subsidiary of the
Authority to any Person (other than the Authority or another Wholly Owned
Restricted Subsidiary of the Authority), unless (a) such transfer, conveyance,
sale, lease or other disposition is of all the Equity Interests in such Wholly
Owned Restricted Subsidiary and (b) the cash Net Proceeds from such transfer,
conveyance, sale, lease or other disposition are applied in accordance with
Section 4.10, and (ii) will not permit any Wholly Owned Restricted Subsidiary of
the Authority to issue any of its Equity Interests (other than, if necessary,
shares of its Capital Stock constituting directors' qualifying shares) to any
Person other than to the Authority or a Wholly Owned Restricted Subsidiary of
the Authority.
Section 4.19. Payments for Consent.
Neither the Authority nor any of its Restricted Subsidiaries shall,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any Holder of any Senior Subordinated
Notes for or as an inducement to any consent, waiver or amendment of any of the
terms or provisions of this Indenture or the Senior Subordinated Notes unless
such consideration is offered to be paid or is paid to all Holders of the Senior
Subordinated Notes that consent, waive or agree to amend in the time frame set
forth in the solicitation documents relating to such consent, waiver or
agreement.
Section 4.20. Senior Subordinated Subsidiary Guarantees.
If the Authority shall acquire or create a Restricted Subsidiary after the
date of this Indenture, then such newly acquired or created Restricted
Subsidiary shall execute a Senior Subordinated Subsidiary Guarantee in the form
of a Supplemental Indenture and deliver an Opinion of Counsel, in accordance
with the terms of this Indenture, except for (i) all Subsidiaries organized
outside of the United States and its territories and (ii) all Subsidiaries that
have properly been designated as Unrestricted Subsidiaries in accordance with
this Indenture for so long as they continue to constitute Unrestricted
Subsidiaries. Any Senior Subordinated Guarantees will be subordinated to Senior
Indebtedness in the same manner and to the same extent as the Senior
Subordinated Notes. The form of such Senior Subordinated Subsidiary Guarantee is
attached as Exhibit D hereto.
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Senior Subordinated Notes
<PAGE>
Section 4.21. Ownership Interests in the Authority.
Neither the Tribe nor the Authority shall permit any Person other than the
Tribe to acquire any Ownership Interest whatsoever in the Authority.
Section 4.22. Subordination of Junior Payments Under the Relinquishment
Agreement.
The Authority will not designate the Senior Relinquishment Payments (as
defined in the Relinquishment Agreement) as Designated Senior Indebtedness and
the Authority will not amend Section 6.2 of the Relinquishment Agreement in a
manner adverse to the Holders of the Senior Subordinated Notes.
Section 4.23. Construction.
The Authority will use its commercially reasonable best efforts to cause
construction of the Expansion Project to be prosecuted with diligence and
continuity in good and workmanlike manner materially in accordance with the
plans relating to the Expansion Project as more fully described in the Offering
Memorandum of the Authority dated February 24, 1999.
Section 4.24. Restrictions on Leasing and Dedication of Property.
(a) Except as provided in Section 4.24(b), the Authority will not lease,
sublease, or grant a license, concession or other agreement to occupy, manage or
use any material portion of the Authority's property and assets owned or leased
by the Authority (each, a "Lease Transaction").
(b) Section 4.24(a) will not prohibit any of the following Lease
Transactions:
(i) The Authority may enter into a Lease Transaction with respect to any
space with any Person (including, without limitation, a lease in
connection with the Expansion Project for the purpose of developing,
constructing, operating and managing retail establishments within
the Resort), provided that: (A) such Lease Transaction will not
materially interfere with, impair or detract from the operations of
the Resort; (B) such Lease Transaction contains rent and such other
terms such that the Lease Transaction, taken as a whole is
commercially reasonable in light of prevailing or comparable
transactions in other casinos, hotels, attractions or shopping
venues; and (C) such Lease Transaction complies with all applicable
law, including obtaining any consent of the BIA, if required;
(ii) the Lease and any amendments, extensions, modifications or renewals
thereof which are not materially adverse to the Holders;
(iii) the Authority may enter into a management or operating agreement
with respect to any of the Authority's property and assets with any
Person; provided that (A) the manager or operator has experience in
managing or operating similar operations; and (B) such management or
operating agreement is on commercially reasonable and fair terms to
the Authority; and
(iv) the Relinquishment Agreement, the Development Services Agreement and
the Side Letters with the Manager and any amendments, extensions,
modifications or renewals thereof which are not materially adverse
to the Holders.
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Senior Subordinated Notes
<PAGE>
(c) 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,
and no person other than the Authority may conduct gaming or casino operations
on any property which is the subject of a Lease Transaction.
Section 4.25. 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, set
insured amounts and coinsurance provisions as are customarily carried by similar
businesses of similar size, including, without limitation, property and
casualty.
Customary insurance coverage shall be deemed to include the following:
(a) 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;
(b) comprehensive general liability insurance with minimum limits of $2.0
million;
(c) umbrella or bumbershoot liability insurance providing excess liability
coverages over and above the foregoing underlying insurance policies
up to a minimum limit of $100.0 million; and
(d) property insurance protecting the property against loss or damage by
fire, lightning, wind-storm, 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)).
Section 4.26. Gaming Licenses.
The Authority will 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 or any part of the Resort as
a result of any noncompliance with the 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 Senior
Subordinated Notes 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.
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Senior Subordinated Notes
<PAGE>
Section 4.27. Required Defeasance and Redemption of the Junior Subordinated
Notes.
The Authority will establish, as of the date of the Indentures, the
Defeasance Trust and deposit into the Defeasance Trust, cash or government
securities estimated to be sufficient to pay all principal, premium and interest
on the Junior Subordinated Notes less $500,000 on January 1, 2000, the first
redemption date. The Authority will redeem the Junior Subordinated Notes from
the proceeds of the Defeasance Trust as of January 1, 2000 at a price of 100% of
the principal amount, plus accrued and unpaid interest thereon, less $500,000.
Section 4.28. Designation of Designated Senior Indebtedness Under the
Relinquished Agreement.
The Authority will not designate any indebtedness as "Designated Senior
Indebtedness" under the Relinquishment Agreement that is not also designated as
Designated Senior Indebtedness under this Indenture.
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.
The Authority shall not, directly or indirectly, consolidate or merge with
or into (whether or not the Authority is the surviving entity), or sell, assign,
transfer, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions to, another Person.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An Event of Default occurs if:
(a) the Authority defaults for 30 days in the payment when due of interest
on, or Additional Interest with respect to, the Senior Subordinated
Notes;
(b) the Authority defaults in payment when due of the principal of or
premium, if any, on the Senior Subordinated Notes;
(c) the Authority or any of its Restricted Subsidiaries fails to comply
with any of the provisions of Section 4.10 or 5.01 hereof;
(d) the Authority or any of its Restricted Subsidiaries fails to observe
or perform (i) any covenant described in Section 4.07 or 4.09 for 30
days after notice to the Authority by the Trustee or the Holders of at
least 25% in aggregate principal amount of the Senior Subordinated
Notes then outstanding voting as a single class or (ii) any other
covenant, representation, warranty or other agreement in this
Indenture or the Senior Subordinated Notes for 60 days after notice to
the Authority by the Trustee or the Holders of at least 25% in
aggregate principal amount of the Senior Subordinated Notes then
outstanding voting as a single class;
(e) default under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Authority or any of its
Restricted Subsidiaries (or the payment of which is
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Senior Subordinated Notes
<PAGE>
guaranteed by the Authority or any of its Restricted Subsidiaries)
whether such Indebtedness or guarantee now exists, or is created after
the date of this Indenture, if that default (i) is caused by a failure
to pay principal of or premium, if any, or interest on such
Indebtedness prior to the expiration of the grace period provided in
such Indebtedness on the date of such default (a "Payment Default");
or (ii) results in the acceleration of such Indebtedness prior to its
express maturity; and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $10.0 million or
more;
(f) failure by the Authority or any of its Restricted Subsidiaries to pay
final judgments in amounts not covered by insurance or not adequately
reserved for in accordance with GAAP aggregating in excess of $10.0
million, which judgments are not paid, discharged or stayed (by reason
of pending appeal or otherwise) for a period of 60 days;
(g) the Authority or any of its Restricted Subsidiaries that are
Significant Subsidiaries or any group of Restricted Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary pursuant
to or within the meaning of the Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an
involuntary case,
(iii) consents to the appointment of a custodian of it or for all or
substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors, or
(v) generally is not paying its debts as they become due; or
(h) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(i) is for relief against the Authority or any of its Restricted
Subsidiaries that are Significant Subsidiaries or any group of
Restricted Subsidiaries that, taken as a whole, would constitute
a Significant Subsidiary in an involuntary case;
(ii) appoints a custodian of the Authority or any of its Restricted
Subsidiaries that are Significant Subsidiaries or any group of
Restricted Subsidiaries that, taken as a whole, would constitute
a Significant Subsidiary or for all or substantially all of the
property of the Authority or any of its Restricted Subsidiaries
that are Significant Subsidiaries or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary; or
(iii) orders the liquidation of the Authority or any of its Restricted
Subsidiaries that are Significant Subsidiaries or any group of
Restricted Subsidiaries that, taken as a whole, would constitute
a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days;
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<PAGE>
(i) 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;
(j) 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);
(k) the Lease ceases to be in full force and effect;
(l) except as permitted by this Indenture, any Senior Subordinated
Subsidiary Guarantee is held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full
force and effect or any Subsidiary Guarantor, or any Person acting on
behalf of any Subsidiary Guarantor, shall deny or disaffirm its
obligations under such Subsidiary Guarantor's Senior Subordinated
Subsidiary Guarantee; or
(m) failure by the Tribe to comply with the provisions of Article 11 for
30 days after notice to the Authority and the Tribe by the Trustee or
the Holders of at least 25% in aggregate principal amount of the
Senior Subordinated Notes then outstanding voting as a single class.
Section 6.02. Acceleration.
If any Event of Default (other than an Event of Default specified in clause
(g) or (h) of Section 6.01 hereof with respect to the Authority, any Restricted
Subsidiary that is a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary)
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Senior Subordinated Notes may declare
all the Senior Subordinated Notes to be due and payable immediately. Upon any
such declaration, the Senior Subordinated Notes shall become due and payable
immediately. Notwithstanding the foregoing, if an Event of Default specified in
clause (g) or (h) of Section 6.01 hereof occurs with respect to the Authority,
any of its Restricted Subsidiaries that are Significant Subsidiaries or any
group of Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary, all outstanding Senior Subordinated 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 Senior
Subordinated 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.
If an Event of Default occurs on or after January 1, 2004 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 Subordinated Notes pursuant to Section 3.07 hereof, then, upon
acceleration of the Senior Subordinated 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 Senior Subordinated Notes to the contrary
notwithstanding. If an Event of Default occurs prior to January 1, 2004 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 Subordinated Notes prior to such date, then, upon acceleration of the
Senior Subordinated Notes, an additional premium shall also become and be
immediately due and payable in an amount, for each of the years beginning on
January 1 of the years set forth below, as set forth below (expressed as a
percentage of the principal amount of the Senior Subordinated Notes on the date
of payment that would otherwise be due but for the provisions of this sentence):
58
Senior Subordinated Notes
<PAGE>
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
1999....................................................... 8.75%
2000....................................................... 7.875%
2001....................................................... 7.0%
2002....................................................... 6.15%
2003....................................................... 5.275%
</TABLE>
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 Senior Subordinated Notes or to enforce the performance of any
provision of the Senior Subordinated Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Senior Subordinated Notes or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Holder of a Senior Subordinated 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 Senior Subordinated Notes by notice to the Trustee may on
behalf of the Holders of all of the Senior Subordinated Notes waive an existing
Default or Event of Default and its consequences hereunder, except a continuing
Default or Event of Default in the payment of the principal of, premium and
Additional Interest , if any, or interest on, the Senior Subordinated 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
Senior Subordinated 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 Senior
Subordinated 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. 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 Senior Subordinated
Notes or that may involve the Trustee in personal liability.
Section 6.06. Limitation on Suits.
A Holder of a Senior Subordinated Note may pursue a remedy with respect to
this Indenture or the Senior Subordinated Notes only if:
(a) the Holder of a Senior Subordinated Note gives to the Trustee written
notice of a continuing Event of Default;
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(b) the Holders of at least 25% in principal amount of the then outstanding
Senior Subordinated Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Senior Subordinated Note or Holders of Senior
Subordinated 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 Senior Subordinated Notes do not give the Trustee a
direction inconsistent with the request.
A Holder of a Senior Subordinated Note may not use this Indenture to
prejudice the rights of another Holder of a Senior Subordinated Note or to
obtain a preference or priority over another Holder of a Senior Subordinated
Note.
Section 6.07. Rights of Holders of Senior Subordinated Notes to Receive
Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Senior Subordinated Note to receive payment of principal, premium
and Additional Interest, if any, and interest on the Senior Subordinated Note,
on or after the respective due dates expressed in the Senior Subordinated Note
(including in connection with an offer to purchase), or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
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 and Additional Interest, if any, and interest remaining
unpaid on the Senior Subordinated Notes and interest on overdue principal and,
to the extent lawful, interest and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Senior Subordinated Notes allowed in any judicial proceedings
relative to the Authority (or any other obligor upon the Senior Subordinated
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
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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 Senior Subordinated 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 Senior Subordinated Notes for amounts due and
unpaid on the Senior Subordinated Notes for principal, premium and
Additional Interest, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Senior Subordinated Notes for principal, premium and Additional Interest,
if any and interest, respectively; and
Third: 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 Senior Subordinated 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 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 Senior Subordinated
Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Senior Subordinated Notes.
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
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(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and 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 to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), and (c) of this Section 7.01.
(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 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. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
(g) Delivery of reports, information and documents to the Trustee under
Section 4.03 is for informational purposes only and the Trustee's receipt of the
foregoing shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Authority's compliance with any of their covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
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
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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 unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.
(g) Except with respect to Section 7.01 hereof, the Trustee shall have no
duty to inquire as to the performance of the Authority's covenants in Article 4
or Article 11 hereof. In addition, the Trustee shall not be deemed to have
knowledge of any Default or Event of Default except (i) any Event of Default
occurring pursuant to Sections 6.01 (a) or (b) or Section 4.01 hereof or (ii)
any Default or Event of Default of which a Responsible Officer of the Trustee
shall have received written notification or obtained actual knowledge.
(h) The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the Trustee
may, in its discretion, make such further inquiry or investigation into such
facts or matters as it may see fit and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Authority personally or by agent or attorney
during regular business hours.
(i) In the absence of a written direction to do so received by the Trustee
pursuant to Section 6.05 from Holders of a majority in principal amount of the
then outstanding Senior Subordinated Notes and indemnification from such Holders
for any costs incurred by the Trustee in acting pursuant to such direction, the
Trustee shall be under no duty to inquire into or to determine whether the
Authority has taken any "willful action" under Section 6.02.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Senior Subordinated Notes and may otherwise deal with the Authority
or any Affiliate of 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 or the Senior Subordinated Notes, it
shall not be accountable for the
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Authority's use of the proceeds from the Senior Subordinated Notes or any money
paid to the Authority or upon the Authority's direction under any provision of
this Indenture, it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Senior
Subordinated Notes or any other document in connection with the sale of the
Senior Subordinated Notes or pursuant to this Indenture other than its
certificate of authentication.
Section 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Senior Subordinated
Notes a notice of the Default or Event of Default within 90 days after it
occurs. Except in the case of a Default or Event of Default in payment of
principal of, premium, if any, or interest on any Senior Subordinated Note, the
Trustee may withhold the notice if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of the Holders of the Senior Subordinated Notes.
Section 7.06. Reports by Trustee to Holders of the Senior Subordinated Notes.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, and for so long as Senior Subordinated Notes remain
outstanding, the Trustee shall mail to the Holders of the Senior Subordinated
Notes a brief report dated as of such reporting date that complies with TIA ss.
313(a) (but if no event described in TIA ss. 313(a) has occurred within the
twelve months preceding the reporting date, no report need be transmitted). The
Trustee also shall comply with TIA ss. 313(b)(2). The Trustee shall also
transmit by mail all reports as required by TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders of Senior
Subordinated Notes shall be mailed to the Authority and filed with the SEC and
each stock exchange on which the Senior Subordinated Notes are listed in
accordance with TIA ss. 313(d). The Authority shall promptly notify the Trustee
when the Senior Subordinated 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 Senior
Subordinated 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 Senior Subordinated 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;
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(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 Senior Subordinated 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. 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.
The Authority shall indemnify the Trustee and its directors, officers,
employees and agents against any and all losses, liabilities or expenses
incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and
expenses of enforcing this Indenture against the 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 7.07, the
Trustee shall have a Lien prior to the Senior Subordinated Notes on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Senior Subordinated 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(g) or (h) 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.
Section 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
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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 a majority in
principal amount of the then outstanding Senior Subordinated 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
(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. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Senior Subordinated
Notes may 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 at least a majority in principal amount of the then outstanding
Senior Subordinated Notes may petition any court of competent jurisdiction for
the appointment of a successor Trustee.
If the Trustee, after written request by the Holders of a majority in
principal amount of the then outstanding Senior Subordinated Notes, fails to
comply with Section 7.10, such Holder may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the 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. 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 (including the trust created
by this Indenture) to, another corporation, the successor corporation without
any further act shall be the successor Trustee.
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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 supervision or examination by federal or state
authorities and that has, or together with all of its Subsidiaries and parent
entities has, a combined capital and surplus of at least $100 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 TIAss.310(a)(1), (2) and (5). The Trustee is subject to TIAss.310(b).
Section 7.11. Preferential Collection of Claims Against Authority.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
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 Management Board evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Senior
Subordinated Notes upon compliance with the conditions set forth below in this
Article 8.
Section 8.02. Legal Defeasance and Discharge.
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 its obligations with respect to all outstanding Senior
Subordinated 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 entire
Indebtedness represented by the outstanding Senior Subordinated Notes, 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 Senior
Subordinated 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
Senior Subordinated Notes to receive solely from the trust fund described in
Section 8.04 hereof, and as more fully set forth in such Section, payments in
respect of the principal of, premium, if any, and interest on such Senior
Subordinated Notes when such payments are due, (b) the Authority's obligations
with respect to such Senior Subordinated 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 8. Subject to compliance with this Article 8, the Authority may exercise
its option under this Section 8.02 notwithstanding the prior exercise of its
option under Section 8.03 hereof.
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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 its obligations under the covenants contained in Sections 4.07, 4.08, 4.09,
4.10, 4.11, 4.12, 4.13, 4.14(b), 4.15, 4.16, 4.17, 4.18, 4.20, 4.21, 4.22, 4.23,
4.24, 4.25 and 4.27 hereof and Section 5.01 hereof with respect to the
outstanding Senior Subordinated Notes on and after the date the conditions set
forth in Section 8.04 are satisfied (hereinafter, "Covenant Defeasance"), and
the Senior Subordinated 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 Senior Subordinated Notes shall not be deemed
outstanding for accounting purposes). For this purpose, Covenant Defeasance
means that, with respect to the outstanding Senior Subordinated 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, 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 Senior Subordinated
Notes shall be unaffected thereby. In addition, upon the Authority's exercise
under Section 8.01 hereof of the option applicable to this Section 8.03 hereof,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
Sections 6.01(c) through 6.01(f) and Sections 6.01(i) through 6.01(m) hereof
shall not constitute Events of Default.
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 Senior Subordinated 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, to pay the principal of, premium and Additional Interest, if any,
and interest on the outstanding Senior Subordinated Notes on the stated date for
payment thereof or on the applicable redemption date, as the case may be;
(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 (A) the Authority has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Senior Subordinated Notes will not recognize income, gain or loss
for federal income tax purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Legal Defeasance had not
occurred;
(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 the Holders of the
outstanding Senior Subordinated Notes will not recognize income, gain or loss
for federal income tax purposes as a result of such Covenant Defeasance and will
be subject to federal
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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 on
the date of such deposit (other than a Default or Event of Default resulting
from the incurrence of Indebtedness all or a portion of the proceeds of which
will be used to defease the Senior Subordinated Notes pursuant to this Article 8
concurrently with such incurrence) or insofar as Sections 6.01(g) or 6.01(h)
hereof is concerned, at any time in the period ending on the 91st day after the
date of 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 or any of its
Restricted Subsidiaries is a party or by which the Authority or any of its
Restricted Subsidiaries is bound;
(f) the Authority must have delivered to the Trustee an Opinion of Counsel
(which may be subject to customary exceptions) to the effect that after the 91st
day following the deposit, the trust funds will not be subject to the effect of
any applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;
(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 of preferring the Holders over any other creditors of the Authority or
with the intent 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, 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 Senior
Subordinated Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Senior Subordinated 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 Senior Subordinated Notes of all sums due and to become
due thereon in respect of principal, premium, if any, and interest, but such
money need not be segregated from other funds except to the extent required by
law.
The 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 Senior
Subordinated Notes.
Anything in this Article 8 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
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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 Senior Subordinated Note and remaining unclaimed for two years
after such principal, and premium, if any, or interest has become due and
payable shall be paid to the Authority on its request or (if then held by the
Authority) shall be discharged from such trust; and the Holder of such Senior
Subordinated Note shall thereafter 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 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
Senior Subordinated 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 makes any payment of principal of, premium, if any, or interest on any
Senior Subordinated Note following the reinstatement of its obligations, the
Authority shall be subrogated to the rights of the Holders of such Senior
Subordinated Notes to receive such payment from the money held by the Trustee or
Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Senior Subordinated Notes.
Notwithstanding Section 9.02 of this Indenture, provided that any required
governmental approval to ensure the enforceability of the Senior Subordinated
Notes and this Indenture, including that of the BIA is obtained, the Authority,
the Subsidiary Guarantors, if any, and the Trustee may amend or supplement this
Indenture, the Senior Subordinated Subsidiary Guarantees, if any, or the Senior
Subordinated Notes without the consent of any Holder of a Senior Subordinated
Note to:
(a) cure any ambiguity, defect or inconsistency;
(b) provide for uncertificated Senior Subordinated Notes in addition to or
in place of certificated Senior Subordinated Notes or to alter the provisions of
Article 2 hereof (including the related definitions) in a manner that does not
materially adversely affect any Holder;
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(c) provide for the assumption of the Authority's or a Subsidiary
Guarantor's obligations to the Holders of the Senior Subordinated Notes by a
successor to the Authority or such Subsidiary Guarantor;
(d) make any change that would provide any additional rights or benefits to
the Holders of the Senior Subordinated Notes or that does not adversely affect
the legal rights hereunder of any Holder of the Senior Subordinated Notes;
(e) comply with requirements of the SEC in order to effect or maintain the
qualification of this Indenture under the TIA; or
(f) allow any Subsidiary to execute a supplemental indenture and/or a
Senior Subordinated Subsidiary Guarantee with respect to the Senior Subordinated
Notes.
Upon the request of the Authority accompanied by a resolution of its
Management Board authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Authority and the Subsidiary
Guarantors, if any, in the execution of any amended or supplemental Indenture
authorized or permitted by the terms of this Indenture and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into such amended or supplemental
Indenture that affects its own rights, duties or immunities under this Indenture
or otherwise.
Section 9.02. With Consent of Holders of Senior Subordinated Notes.
(a) Except as provided below in this Section 9.02, the Authority and the
Trustee may amend or supplement this Indenture (including Sections 3.10 and 4.10
hereof), the Senior Subordinated Subsidiary Guarantees, if any, and the Senior
Subordinated Notes may be amended or supplemented:
(i) with the consent of the Holders of at least a majority in
principal amount of the Senior Subordinated Notes then outstanding voting
as a single class (including consents obtained in connection with a tender
offer or exchange offer for, or purchase of, the Senior Subordinated
Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default
or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium, if any, or interest on the Senior
Subordinated Notes, except a payment default resulting from an acceleration
that has been rescinded) or compliance with any provision of this
Indenture, the Senior Subordinated Subsidiary Guarantees or the Senior
Subordinated Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Senior Subordinated
Notes voting as a single class (including consents obtained in connection
with a tender offer or exchange offer for, or purchase of, the Senior
Subordinated Notes);
(ii) without the consent of at least 66 2/3% of the aggregate
principal amount of Senior Subordinated Notes then outstanding (including
consents obtained in connection with a tender offer or exchange offer for,
or purchase of, such Senior Subordinated Notes), no waiver or amendment to
this Indenture may make a change in the provisions of Section 4.15 hereof
that adversely affects the rights of any Holder of Senior Subordinated
Notes and
(iii) without the consent of at least 75% of the aggregate principal
amount of Senior Subordinated Notes then outstanding (including consents
obtained in connection with a tender offer or exchange offer for, or
purchase of, such Senior Subordinated Notes), no waiver or amendment to
this Indenture may make a change in the provisions of Article 10 hereof
that adversely affects the rights of any Holder of Senior Subordinated
Notes.
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(b) Section 2.08 hereof shall determine which Senior Subordinated Notes are
considered to be "outstanding" for purposes of this Section 9.02.
(c) Upon the request of the Authority accompanied by a resolution of its
Management Board authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Senior Subordinated 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 unless such amended or supplemental Indenture
directly affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such amended or supplemental Indenture.
(d) It shall not be necessary for the consent of the Holders of Senior
Subordinated 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.
(e) After an amendment, supplement or waiver under this Section becomes
effective, the Authority shall mail to the Holders of Senior Subordinated 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 or waiver. Subject to Sections 6.04 and 6.07 hereof,
the Holders of a majority in aggregate principal amount of the Senior
Subordinated Notes then outstanding voting as a single class may waive
compliance in a particular instance by the Authority with any provision of this
Indenture or the Senior Subordinated Notes. However, without the consent of each
Holder affected, an amendment or waiver under this Section 9.02 may not (with
respect to any Senior Subordinated Notes held by a non-consenting Holder):
(i) reduce the principal amount of Senior Subordinated Notes whose
Holders must consent to an amendment, supplement or waiver;
(ii) reduce the principal of or change the fixed maturity of any
Senior Subordinated Note or alter or waive any of the provisions with
respect to the redemption of the Senior Subordinated Notes except as
provided above with respect to Sections 3.10, 4.10 and 4.15 hereof;
(iii) reduce the rate of or change the time for payment of interest,
including default interest, on any Senior Subordinated Note;
(iv) waive a Default or Event of Default in the payment of principal
of or premium, if any, or interest on the Senior Subordinated Notes (except
a rescission of acceleration of the Senior Subordinated Notes by the
Holders of at least a majority in aggregate principal amount of the then
outstanding Senior Subordinated Notes and a waiver of the payment default
that resulted from such acceleration);
(v) make any Senior Subordinated Note payable in money other than that
stated in the Senior Subordinated Notes;
(vi) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Senior Subordinated
Notes to receive payments of principal of or interest on the Senior
Subordinated Notes;
(vii) waive a redemption payment with respect to any Note (other than
a payment required by 3.10, 4.10 and 4.15 hereof);
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(viii) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions; or
(ix) release any Subsidiary Guarantor from any of its obligations
under its Senior Subordinated Subsidiary Guarantee or this Indenture,
except in accordance with the terms of its Senior Subordinated Subsidiary
Guarantee.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Senior Subordinated
Notes shall be set forth in a amended or supplemental Indenture that complies
with the TIA as then in effect.
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 Senior Subordinated Note is a continuing consent by the Holder
of a Senior Subordinated Note and every subsequent Holder of a Senior
Subordinated Note or portion of a Senior Subordinated Note that evidences the
same debt as the consenting Holder's Senior Subordinated Note, even if notation
of the consent is not made on any Senior Subordinated Note. However, any such
Holder of a Senior Subordinated Note or subsequent Holder of a Senior
Subordinated Note may revoke the consent as to its Senior Subordinated 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 Senior Subordinated Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Senior Subordinated Note thereafter authenticated.
The Authority in exchange for all Senior Subordinated Notes may issue and the
Trustee shall, upon receipt of an Authentication Order, authenticate new Senior
Subordinated Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Senior Subordinated
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 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 until the
Management Board approves it. In executing any amended or supplemental
indenture, the Trustee shall be entitled to receive and (subject to Section 7.01
hereof) shall be fully protected in relying upon, in addition to the documents
required by Section 12.04 hereof, an Officer's Certificate and an Opinion of
Counsel stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.
ARTICLE 10
SUBORDINATION
Section 10.01. Agreement to Subordinate.
The Authority agrees, and each Holder by accepting a Senior Subordinated
Note agrees, that the Indebtedness evidenced by the Senior Subordinated Notes is
subordinated in right of payment, to the
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extent and in the manner provided in this Article 10, to the prior payment in
full of all Senior Indebtedness (whether outstanding on the date hereof or
hereafter created, incurred, assumed or guaranteed), and that the subordination
is for the benefit of the holders of Senior Indebtedness. The provisions of this
Article 10 are made for the benefit of the holders of any Senior Indebtedness,
each of which is made an obligee hereunder and any one or more of which may
enforce such provisions. The provisions of this Article 10 shall be reinstated
if at any time any payment made on account of any Senior Indebtedness is
rescinded or must otherwise be returned by the holder receiving payment thereof
or any representative of such holder upon the insolvency, bankruptcy or
reorganization of the Authority or otherwise.
Section 10.02. Certain Definitions.
"Permitted Junior Securities" means Equity Interests in the Authority or
any Senior Subordinated Guarantor or debt securities that are subordinated to
all Senior Indebtedness (and any debt securities issued in exchange for Senior
Indebtedness) to substantially the same extent as, or to a greater extent than,
the Senior Subordinated Notes are subordinated to Senior Indebtedness pursuant
to this Indenture.
"Representative" means the indenture trustee or other trustee, agent or
representative for any Senior Indebtedness.
Section 10.03. Liquidation; Dissolution; Bankruptcy.
Upon any distribution to creditors in a liquidation or dissolution of the
Authority or the Tribe, in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Authority, the Tribe or their
respective property, in an assignment for the benefit of creditors or in any
marshaling of the Authority's or the Tribe's assets and liabilities:
(i) holders of Senior Indebtedness shall be entitled to receive
payment in full of all Obligations due in respect of such Senior
Indebtedness (including interest after the commencement of any such
proceeding at the rate specified in the applicable Senior Indebtedness)
before Holders of the Senior Subordinated Notes shall be entitled to
receive any payment with respect to the Senior Subordinated Notes (except
that Holders of Senior Subordinated Notes may receive and retain (A)
Permitted Junior Securities and (B) payments and other distributions made
from any defeasance trust created pursuant to Section 8.01 hereof); and
(ii) until all Obligations with respect to Senior Indebtedness (as
provided in clause (i) above) are paid in full, any distribution to which
Holders would be entitled but for this Article 10 shall be made to holders
of Senior Indebtedness (except that Holders of Senior Subordinated Notes
may receive and retain (A) Permitted Junior Securities and (B) payments and
other distributions made from any defeasance trust created pursuant to
Section 8.01 hereof), as their interests may appear.
Section 10.04. Default on Designated Senior Indebtedness.
(a) The Authority may not make any payment or distribution to the Trustee
or any Holder in respect of Obligations with respect to the Senior Subordinated
Notes and may not acquire from the Trustee or any Holder any Senior Subordinated
Notes for cash or property (other than (A) Permitted Junior Securities and (B)
payments and other distributions made from any defeasance trust created pursuant
to Section 8.01 hereof) until all principal and other Obligations with respect
to the Senior Indebtedness have been paid in full if:
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(i) a default in the payment of any principal or other Obligations
with respect to Designated Senior Indebtedness occurs and is continuing
beyond any applicable grace period in the agreement, indenture or other
document governing such Designated Senior Indebtedness; or
(ii) a default, other than a payment default, on Designated Senior
Indebtedness occurs and is continuing that then permits holders of the
Designated Senior Indebtedness to accelerate its maturity and the Trustee
receives a notice of the default (a "Payment Blockage Notice") from a
Person who may give it pursuant to Section 10.12 hereof. If the Trustee
receives any such Payment Blockage Notice, no subsequent Payment Blockage
Notice shall be effective for purposes of this Section unless and until (A)
at least 360 days shall have elapsed since the effectiveness of the
immediately prior Payment Blockage Notice and (B) all scheduled payments of
principal, premium, if any, and interest on the Senior Subordinated Notes
that have come due have been paid in full in cash. No nonpayment default
that existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee shall be, or be made, the basis for a
subsequent Payment Blockage Notice unless such default shall have been
waived for a period of not less than 180 days.
(b) The Authority may and shall resume payments on and distributions in
respect of the Senior Subordinated Notes and may acquire them upon the earlier
of:
(i) the date upon which all Senior Indebtedness is paid in full and in
cash or the default is cured or waived in writing, or
(ii) in the case of a default referred to in clause (ii) of Section
10.04(a) hereof, 179 days pass after notice is received if the maturity of
such Designated Senior Indebtedness has not been accelerated,
if this Article 10 otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.
Section 10.05. Acceleration of Senior Subordinated Notes.
If payment of the Senior Subordinated Notes is accelerated because of an
Event of Default, the Authority shall promptly notify holders of Senior
Indebtedness of the acceleration.
Section 10.06. When Distribution Must Be Paid Over.
In the event that the Trustee or any Holder receives any payment of any
Obligations with respect to the Senior Subordinated Notes at a time when a
Responsible Officer of the Trustee or such Holder, as applicable, has actual
knowledge that such payment is prohibited by Section 10.04 hereof, such payment
shall be held by the Trustee or such Holder, in trust for the benefit of, and
shall be paid forthwith over and delivered, upon written request, to, the
holders of Senior Indebtedness as their interests may appear or their
Representative under the indenture or other agreement (if any) pursuant to which
Senior Indebtedness may have been issued, as their respective interests may
appear, for application to the payment of all Obligations with respect to Senior
Indebtedness remaining unpaid to the extent necessary to pay such Obligations in
full and in cash in accordance with their terms, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform only such obligations on the part of the Trustee as are specifically
set forth in this Article 10, and no implied covenants or obligations with
respect to the holders of Senior Indebtedness shall be read into this Indenture
against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty
to the holders
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of Senior Indebtedness, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or the Authority
or any other Person money or assets to which any holders of Senior Indebtedness
shall be entitled by virtue of this Article 10, except if such payment is made
as a result of the willful misconduct or gross negligence of the Trustee.
Section 10.07. Notice by Authority.
The Authority shall promptly notify the Trustee and the Paying Agent of any
facts known to the Authority that would cause a payment of any Obligations with
respect to the Senior Subordinated Notes to violate this Article 10, but failure
to give such notice shall not affect the subordination of the Senior
Subordinated Notes to Senior Indebtedness as provided in this Article 10.
Section 10.08. Subrogation.
After all Senior Indebtedness is paid in full and until the Senior
Subordinated Notes are paid in full, Holders of Senior Subordinated Notes shall
be subrogated (equally and ratably with all other Indebtedness pari passu with
the Senior Subordinated Notes) to the rights of holders of Senior Indebtedness
to receive distributions applicable to Senior Indebtedness to the extent that
distributions otherwise payable to the Holders of Senior Subordinated Notes have
been applied to the payment of Senior Indebtedness. A distribution made under
this Article 10 to holders of Senior Indebtedness that otherwise would have been
made to Holders of Senior Subordinated Notes is not, as between the Authority
and Holders, a payment by the Authority on the Senior Subordinated Notes.
Section 10.09. Relative Rights.
This Article 10 defines the relative rights of Holders of Senior
Subordinated Notes and holders of Senior Indebtedness. Nothing in this Indenture
shall:
(i) impair, as between the Authority and Holders of Senior
Subordinated Notes, the obligation of the Authority, which is absolute and
unconditional, to pay principal of and interest on the Senior Subordinated
Notes in accordance with their terms;
(ii) affect the relative rights of Holders of Senior Subordinated
Notes and creditors of the Authority other than their rights in relation to
holders of Senior Indebtedness; or
(iii) prevent the Trustee or any Holder of Senior Subordinated Notes
from exercising its available remedies upon a Default or Event of Default,
subject to the rights of holders and owners of Senior Indebtedness to
receive distributions and payments otherwise payable to Holders of Senior
Subordinated Notes.
If the Authority fails because of this Article 10 to pay principal of or
interest on a Senior Subordinated Note on the due date, the failure is still a
Default or Event of Default.
Section 10.10. Subordination May Not Be Impaired.
No right of any holder of Senior Indebtedness to enforce the subordination
of the Indebtedness evidenced by the Senior Subordinated Notes shall be impaired
by any act or failure to act by the Authority or any Holder or by the failure of
the Authority or any Holder to comply with this Indenture. No right of any
present or future holder of any Senior Indebtedness to enforce the subordination
provided in this Article 10 shall at any time or in any way be prejudiced or
impaired by any act or failure to act by such holder, or any non-compliance by
the Tribe, the Authority or any Subsidiary Guarantor with the terms of this
Indenture, regardless of any knowledge thereof which any such holder may have or
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otherwise be charged with. The holders of Senior Indebtedness may, without
notice to or consent of any Holders, (i) extend, renew, modify or amend the
terms of the Senior Indebtedness (including changing the terms of payment) or
any security therefor and release, sell or exchange such security or release any
person in any manner liable for such Senior Indebtedness, (ii) exercise or
refrain from exercising any rights against the Tribe, the Authority, any
Subsidiary Guarantor or any other person (including the holders), and (iii)
apply any sums by whomsoever paid, or howsoever realized to any Senior
Indebtedness in such manner as the holder of the Senior Indebtedness may
determine.
Section 10.11. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Authority referred to in
this Article 10, the Trustee and the Holders of Senior Subordinated Notes shall
be entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of Senior Subordinated Notes for the purpose of
ascertaining the Persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other Indebtedness of the Authority, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 10.
Section 10.12. Rights of Trustee and Paying Agent.
Notwithstanding the provisions of this Article 10 or any other provision of
this Indenture, the Trustee shall not be charged with knowledge of the existence
of any facts that would prohibit the making of any payment or distribution by
the Trustee, and the Trustee and the Paying Agent may continue to make payments
on the Senior Subordinated Notes, unless the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Senior Subordinated Notes to violate this Article 10. Only
the Authority or a Representative may give the notice. Nothing in this Article
10 shall impair the claims of, or payments to, the Trustee under or pursuant to
Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
Section 10.13. Authorization to Effect Subordination.
Each Holder of Senior Subordinated Notes, by the Holder's acceptance
thereof, authorizes and directs the Trustee on such Holder's behalf to take such
action as may be necessary or appropriate to effectuate the subordination as
provided in this Article 10, and appoints the Trustee to act as such Holder's
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 6.09 hereof at least 30 days before the expiration of the
time to file such claim, the Representatives are hereby authorized to file an
appropriate claim for and on behalf of the Holders of the Senior Subordinated
Notes. No holder of any Senior Indebtedness and no Representative of such holder
shall have (i) any duty to file any such proof of claim or proof of debt or (ii)
any liability to any Holder if any such proof of claim or proof of debt is for
any reason defective.
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Section 10.14. Amendments.
The provisions of this Article 10 shall not be amended or modified without
the written consent of the holders of all Senior Indebtedness.
ARTICLE 11
COVENANTS OF THE TRIBE
Section 11.01. Covenants of the Tribe. The Tribe shall not, and shall not permit
any of its representatives, political subunits or councils, agencies,
instrumentalities, directly or indirectly, except as required by federal or
state law, to do any of the following:
(a) increase or impose any tax or other payment obligation on the
Authority or on any patrons of, or any activity at, the Resort other
than:
(i) payments which are due under any agreement in effect on the
Closing Date or payments which are not materially adverse to the
economic interests of Holders;
(ii) payments which the Authority has agreed to reimburse each Holder
for the economic effect thereof, if any;
(iii) payments which correspondingly reduce the Restricted Payments
otherwise payable to the Tribe;
(iv) pursuant to the Tribal Tax Code; or
(v) Government Service Payments;
(b) amend the terms of the Lease in any material manner that would be
materially adverse to the economic interests of Holders;
(c) amend the Tribal Gaming Ordinance in effect on the Closing Date
(unless any such amendment is a legitimate effort to ensure that the
Authority and the Resort conduct gaming operations in a manner that is
consistent with applicable laws, rules and regulations or that
protects the environment, the public health and safety, or the
integrity of the Authority or the Resort), restrict or eliminate the
exclusive right of the Authority to conduct gaming operations on any
property owned or controlled by the Tribe in a manner that would be
materially adverse to the economic interests of Holders; or
(d) take any other action, enter into any agreement, amend its
constitution or enact any ordinance, law, rule or regulation that
would have a material adverse effect on the economic interests of
Holders.
Moreover, except with the consent of a majority in interest of Holders 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 impose, tax or otherwise make a
charge on the Senior Subordinated Notes, this Indenture or any payments or
deposits to be made thereunder.
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Section 11.02. Additional Covenants of the Tribe.
(a) Any action taken by the Tribe to comply with federal or state law that
would otherwise violate Section 11.01 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 the federal or state law, the Tribe shall give the Trustee at
least 30 days prior written notice of any such action.
(b) 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.
(c) 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.
(d) 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.
(e) 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
Holders provided for in this Indenture or the Senior Subordinated Notes.
(f) 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 Lease (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 affect on the rights of the Trustee or the Holders under this
Indenture or the Senior Subordinated Notes.
(g) 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 Senior
Subordinated Notes shall be entitled to receive payment in full in respect to
all principal, premium, interest and other amounts owing in respect of the Notes
before any payment or any distribution to the Tribe.
(h) 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.
(i) The Tribe shall comply with all material terms of the Construction
Reserve Disbursement Agreement and shall not amend and shall not permit any of
its representatives, political subunits or councils, agencies,
instrumentalities, directly or indirectly, to amend, except as required by
federal or state law, such Construction Reserve Disbursement Agreement in a
manner that would have a material adverse effect on the economic interests of
Holders.
79
Senior Subordinated Notes
<PAGE>
Any action taken in violation of this Article 11 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 ss.318(c), the imposed duties shall control.
Section 12.02. Notices.
Any notice or communication by the Authority, any Subsidiary Guarantor 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
1 Mohegan Sun Boulevard
Uncasville, CT 06382
Telecopier No.: (860) 204-6153
Attention: Roland J. Harris
With a copy to:
Hogan & Hartson LLP
555 Thirteenth Street, NW
Washington, DC 20004
Telecopier No.: (202) 637-5910
Attention: David B. H. Martin, Jr., Esq.
If to the Tribe:
The Mohegan Tribe of Indians of Connecticut
1 Mohegan Sun Boulevard
Uncasville, CT 06382
Telecopier No.: (860) 204-6153
Attention: Roland J. Harris
With a copy to:
Rome McGuigan Sabanosh, P.C.
One State Street
Hartford, CT 06103-3103
Telecopier No.: (203) 724-3921
Attention: Lewis B. Rome, Esq.
80
Senior Subordinated Notes
<PAGE>
If to the Trustee:
State Street Bank and Trust Company
Goodwin Square
225 Asylum Street
Hartford, CT 06103
Telecopier No.: (860) 244-1889
Attention: Corporate Trust Administration (Mohegan Tribal Gaming
Authority/8 3/4% Senior Subordinated Notes due 2009)
With a copy to:
Shipman & Goodwin LLP
One American Row
Hartford, CT 06103-2819
Telecopier No.: (860) 251-5999
Attention: Daniel P. Brown, Jr., Esq.
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 ss. 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
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 Senior Subordinated Notes with Other
Holders of Senior Subordinated Notes.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders with
respect to their rights under this Indenture or the Senior Subordinated Notes.
The Authority, the Trustee, the Registrar and anyone else shall have the
protection of TIA ss. 312(c).
Section 12.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Authority to the Trustee to take any
action under this Indenture, the Authority shall furnish to the Trustee:
81
Senior Subordinated Notes
<PAGE>
(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, provided for in this Indenture relating to the proposed
action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory to
the Trustee (which shall include the statements set forth in Section 12.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
Section 12.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA ss.
314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has read
such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been satisfied.
Section 12.06. Rules by 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 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 or to compel the Tribe to return any prohibited payment made to the
Tribe as described in Section 11.02(d). Subject to the foregoing, the Tribe and
the Authority waive their respective 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 Indenture or the
Senior Subordinated 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 or the Senior
Subordinated 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:
82
Senior Subordinated Notes
<PAGE>
(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 and the Senior Subordinated 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 Authority to submit to
binding arbitration; and (iv) adjudicate any claim under the Indian Civil Rights
Act of 1968, 25 U.S.C. ss. 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 and the Senior Subordinated 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.
Section 12.08. No Personal Liability of Directors, Officers, Employees and
Stockholders.
Neither the Tribe nor any director, officer, office holder, employee,
agent, representative or member of the Authority or the Tribe or holder of an
Ownership Interest of the Authority, any Subsidiary Guarantor or the Tribe, as
such, shall have any liability for any obligations of the Authority or such
Subsidiary Guarantor under the Senior Subordinated Notes, the Senior
Subordinated Subsidiary Guarantees, if any, this Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Senior Subordinated Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Senior Subordinated Notes.
Section 12.09. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE SENIOR SUBORDINATED NOTES AND THE SENIOR
SUBORDINATED SUBSIDIARY GUARANTEES WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW
PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).
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 its Subsidiaries 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 in this Indenture and the Senior
Subordinated Notes shall bind its successors. All agreements of the Trustee in
this Indenture shall bind its successors. All agreements of each Subsidiary
Guarantor in this Indenture shall bind its successors.
83
Senior Subordinated Notes
<PAGE>
Section 12.12. Severability.
In case any provision in this Indenture or in the Senior Subordinated 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]
84
<PAGE>
SIGNATURES
Dated as of March ___, 1999
MOHEGAN TRIBAL GAMING AUTHORITY
By:__________________________________
Name:
Title:
Attest:
__________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY
By:__________________________________
Name:
Title:
Attest:
__________________________________
Authorized Signatory
Date:
MOHEGAN TRIBE OF INDIANS OF CONNECTICUT
(solely with respect to its obligations
under Article 11 and Sections 4.21 and
12.07)
By:__________________________________
Name:
Title:
Attest:
__________________________________
Authorized Signatory
Date:
85
Senior Subordinated Notes
<PAGE>
EXHIBIT A-1
[Face of Note]
- --------------------------------------------------------------------------------
CUSIP/CINS 608328 AC4/U60742 AB6
8 3/4% Senior Subordinated Note due 2009
No. ___ $______________
MOHEGAN TRIBAL GAMING AUTHORITY
promises to pay to _____________________________________________________________
or registered assigns,
the principal sum of ___________________________________________________________
Dollars on January 1, 2009.
Interest Payment Dates: January 1 and July 1
Record Dates: December 15 and June 15
Dated: March 3, 1999
MOHEGAN TRIBAL GAMING AUTHORITY
By:__________________________________
Name:
Title:
By:__________________________________
Name:
Title:
This is one of the Senior Subordinated Notes
referred to in the within-mentioned Indenture:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:__________________________________
Authorized Signatory
- --------------------------------------------------------------------------------
A-1-1
<PAGE>
[Back of Note]
8 3/4% Senior Subordinated Note due 2009
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT
NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE
MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE
INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY
WITH THE PRIOR WRITTEN CONSENT OF THE AUTHORITY.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
IN ACCORDANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (SUBJECT TO THE DELIVERY OF SUCH EVIDENCE, IF ANY, REQUIRED
UNDER THE INDENTURE PURSUANT TO WHICH THIS NOTE IS ISSUED) AND IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER JURISDICTION. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER
EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE AUTHORITY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(a) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE AUTHORITY SO
REQUESTS), SUBJECT TO THE RECEIPT BY THE REGISTRAR OF A CERTIFICATION OF THE
TRANSFEROR AND AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, (2) TO THE AUTHORITY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE
RESALE RESTRICTION SET FORTH IN (A) ABOVE.
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST.
(a) The Mohegan Tribal Gaming Authority (the "Authority"), promises to pay
interest on the principal amount of this Senior Subordinated Note at 83/4% per
annum from March 3, 1999 until maturity.
A-1-2
<PAGE>
The Authority will pay interest and Additional Interest, if any, semi-annually
in arrears on January 1 and July 1 of each year, or if any such day is not a
Business Day, on the next succeeding Business Day (each an "Interest Payment
Date"). Interest on the Senior Subordinated Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of original issuance; provided that if there is no existing
Default in the payment of interest, and if this Senior Subordinated Note is
authenticated between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided, further, that the first Interest
Payment Date shall be July 1, 1999. 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 interest and Additional Interest, if any, (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
(b) The Holder of this Senior Subordinated Note is entitled to the benefits
of the Senior Subordinated Registration Rights Agreement dated as of the date
hereof, among the Authority and the Initial Purchasers named therein ( the
"Senior Subordinated Registration Rights Agreement"). If (i) the Authority fails
to file any of the Registration Statements required by the Registration Rights
Agreements 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 of 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 in connection with resales of Transfer Restricted Securities
during 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 will pay Additional Interest to each Holder of Senior
Subordinated Notes, with respect to the first 90-day period immediately
following the occurrence of the first Registration Default in an amount equal to
25 basis points per 90-day period of the principal amount of Senior Subordinated
Notes held by such Holder. The amount of the Additional Interest will increase
by an additional 25 basis points with respect to each subsequent 90-day period
until all Registration Defaults have been cured, up to a maximum amount of
Additional Interest of 1% per annum of the principal amount of Senior
Subordinated Notes.
(A) Except as expressly provided in this paragraph 1(b), Additional
Interest shall be treated as interest and any date on which Additional
Interest is due and payable shall be treated as an Interest Payment Date
for all purposes under this Senior Subordinated Note and the Indenture.
(B) In the event that the Authority is required to pay Additional
Interest pursuant to this paragraph 1(b), the Authority shall notify the
Trustee in writing at least 15 days prior to the first Interest Payment
Date upon which such Additional Interest is due; provided that, in the
event that the obligation to pay such Additional Interest occurs less than
15 days prior to such Additional Interest Date, such notice shall be
provided by the Authority to the Trustee as soon as reasonably practicable
prior to such Interest Payment Date.
2. METHOD OF PAYMENT. The Authority will pay interest on the Senior
Subordinated Notes (except defaulted interest) and Additional Interest, if any,
to the Persons who are registered Holders of Senior Subordinated Notes at the
close of business on the December 15 or June 15 next preceding the Interest
Payment Date, even if such Senior Subordinated Notes are canceled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The Senior
Subordinated Notes will be payable as to principal, premium and
A-1-3
<PAGE>
Additional Interest, if any, and interest 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 and Additional
Interest may be made by check mailed to the Holders at their addresses set forth
in the register of Holders, and provided that payment by wire transfer of
immediately available funds will be required with respect to principal of and
interest, premium and Additional Interest on, all Global Senior Subordinated
Notes and all other Senior Subordinated Notes the Holders of which shall hold at
least $1.0 million in principal amount of Senior Subordinated Notes and 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, State Street Bank and Trust
Company, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Authority may change any Paying Agent or Registrar without notice
to any Holder. The Authority or any of its Subsidiaries may act in any such
capacity.
4. INDENTURE. The Authority issued the Senior Subordinated Notes under an
Indenture dated as of March 3, 1999 ("Indenture") between the Authority and the
Trustee. The terms of the Senior Subordinated 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 ss.ss. 77aaa-77bbbb). The Senior
Subordinated Notes are subject to all such terms, and Holders are referred to
the Indenture and such Act for a statement of such terms. To the extent any
provision of this Senior Subordinated Note conflicts with the express provisions
of the Indenture, the provisions of the indenture shall govern and be
controlling.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Authority shall not have the option to redeem the Senior Subordinated Notes
prior to January 1, 2004. Thereafter, the Authority shall have the option to
redeem the Senior Subordinated 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 and Additional Interest thereon to the applicable redemption date, if
redeemed during the twelve-month period beginning on January 1 of the years
indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2004.................................................... 104.375%
2005.................................................... 102.917%
2006.................................................... 101.458%
2007 and thereafter..................................... 100.000%
</TABLE>
(b) 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 Senior Subordinated
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
Senior Subordinated Notes of such Holder or beneficial owner at a redemption
price equal to the lesser of (1) the principal amount
A-1-4
<PAGE>
thereof or (2) the price at which such Holder or beneficial owner acquired the
Senior Subordinated Notes or (3) the current market price of the Senior
Subordinated Notes, together with, in either case, accrued and unpaid interest
and Additional 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 Senior Subordinated 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.
Except as set forth in paragraph 7 below, the Authority shall not be
required to make mandatory redemption payments with respect to the Senior
Subordinated Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Authority shall be required to
make an offer (a "Change of Control Offer") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Senior Subordinated
Notes at a purchase price equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest and Additional Interest thereon, if
any, to the date of purchase (the "Change of Control Payment"). Within 20
Business Days following any Change of Control, the Authority shall mail a notice
to each Holder setting forth the procedures governing the Change of Control
Offer as required by the Indenture.
(b) If the Authority or a Subsidiary consummates any Asset Sales, within
five Business Days of each date on which the aggregate amount of Excess Proceeds
exceeds $15.0 million, the Authority shall commence an offer to all Holders of
Senior Subordinated Notes (as "Asset Sale Offer") pursuant to Section 3.10 of
the Indenture to purchase the maximum principal amount of Senior Subordinated
Notes 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 and Additional Interest thereon, 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 Subordinated Notes
tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the
Authority (or such Subsidiary) may use such deficiency for any purpose not
otherwise permitted by the Indenture. If the aggregate principal amount of
Senior Subordinated Notes surrendered by Holders thereof exceeds the amount of
Excess Proceeds, the Trustee shall select the Senior Subordinated Notes to be
purchased on a pro rata basis. Holders of Senior Subordinated Notes that are the
subject of an offer to purchase will receive an Asset Sale Offer from the
Authority prior to any related purchase date and may elect to have such Senior
Subordinated Notes purchased by completing the form entitled "Option of Holder
to Elect Purchase" on the reverse of the Senior Subordinated Notes.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Senior Subordinated Notes are to be redeemed at its registered address. Senior
Subordinated Notes in denominations larger than $1,000 may be redeemed in part
but only in whole multiples of $1,000, unless all of the Senior Subordinated
Notes held by a Holder are to be redeemed. On and after the redemption date
interest ceases to accrue on Senior Subordinated Notes or portions thereof
called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Subordinated Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of
A-1-5
<PAGE>
Senior Subordinated Notes may be registered and Senior Subordinated 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 Senior Subordinated Note or portion of
a Senior Subordinated Note selected for redemption, except for the unredeemed
portion of any Senior Subordinated Note being redeemed in part. Also, the
Authority need not exchange or register the transfer of any Senior Subordinated
Notes for a period of 15 days before a selection of Senior Subordinated Notes to
be redeemed or during the period between a record date and the corresponding
Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Senior Subordinated
Note may be treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture, the Senior Subordinated Subsidiary Guarantees or the Senior
Subordinated Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding
Senior Subordinated Notes, voting as a single class, and any existing default or
compliance with any provision of the Indenture, the Senior Subordinated
Subsidiary Guarantees or the Senior Subordinated Notes may be waived with the
consent of the Holders of a majority in principal amount of the then outstanding
Senior Subordinated Notes, voting as a single class. Without the consent of any
Holder of a Senior Subordinated Note, the Indenture, the Senior Subordinated
Subsidiary Guarantees or the Senior Subordinated Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Senior Subordinated Notes in addition to or in place of
certificated Senior Subordinated Notes, to provide for the assumption of the
Authority's or Subsidiary Guarantor's obligations to Holders of the Senior
Subordinated Notes by a successor to the Authority or such Subsidiary Guarantor,
to make any change that would provide any additional rights or benefits to the
Holders of the Senior Subordinated Notes or that does not adversely affect the
legal rights under the Indenture of any such Holder, to comply with the
requirements of the SEC in order to effect or maintain the qualification of the
Indenture under the Trust Indenture Act or to allow any Subsidiary Guarantor to
execute a supplemental indenture to the Indenture and/or a Senior Subordinated
Subsidiary Guarantee with respect to the Senior Subordinated Notes provided that
the Authority has obtained any required government approval to ensure the
enforceability of the Senior Subordinated Notes and the Indenture.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest or Additional Interest on the Senior
Subordinated Notes; (ii) default in payment when due of principal of or premium,
if any, on the Senior Subordinated Notes when the same becomes due and payable
at maturity, upon redemption (including in connection with an offer to purchase)
or otherwise; (iii) failure by the Authority or any of its Restricted
Subsidiaries to comply with Section 4.10 or 5.01 of the Indenture; (iv) failure
by the Authority or any of its Restricted Subsidiaries to observe or perform (A)
any covenant described in Section 4.07 or 4.09 of the Indenture for 30 days
after notice to the Authority by the Trustee or the Holders of at least 25% in
aggregate principal amount of the Senior Subordinated Notes then outstanding
voting as a single class or (B) any other covenant, representation, warranty or
other agreement in the Indenture or the Senior Subordinated Notes for 60 days
after notice to the Authority by the Trustee or the Holders of at least 25% in
aggregate principal amount of the Senior Subordinated Notes then outstanding
voting as a single class; (v) default under certain other agreements relating to
Indebtedness of the Authority or any of its Restricted Subsidiaries which
default results in the acceleration of such Indebtedness prior to its express
maturity; (vi) certain final judgments for the payment of money that remain
undischarged for a period of 60 days; (vii) certain events of bankruptcy or
insolvency with respect to the Authority or any of its Restricted Subsidiaries;
(viii) 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
A-1-6
<PAGE>
consecutive days at the Resort; (ix) 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); (x) the Lease ceases to be in full force and effect; (xi) except
as permitted by the Indenture, any Senior Subordinated Subsidiary Guarantee
shall be held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or any Subsidiary Guarantor
or any Person acting on its behalf shall deny or disaffirm its obligations under
such Subsidiary Guarantor's Senior Subordinated Subsidiary Guarantee; and (xii)
failure by the Tribe to comply with the provisions of Article 11 for 30 days
after notice to the Authority and the Tribe by the Trustee or the Holders of at
least 25% in aggregate principal amount of the Senior Subordinated Notes then
outstanding voting as a single class. 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 Senior Subordinated Notes may declare all the Senior
Subordinated 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 Senior Subordinated Notes will become due and
payable without further action or notice. Holders may not enforce the Indenture
or the Senior Subordinated Notes except as provided in the Indenture. Subject to
certain limitations, Holders of a majority in principal amount of the then
outstanding Senior Subordinated Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of the Senior
Subordinated 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)
if it determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Senior Subordinated Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Senior Subordinated 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 Senior Subordinated
Notes. The Authority is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Authority is required upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.
13. TRUSTEE DEALINGS WITH AUTHORITY. 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. A controlling person, director, officer,
employee or holder of an Ownership Interest of the Authority, as such, shall not
have any liability for any obligations of the Authority under the Senior
Subordinated Notes or the Indenture or for any claim based on, in respect of, or
by reason of, such obligations or their creation. Each Holder by accepting a
Senior Subordinated Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Senior
Subordinated Notes.
15. AUTHENTICATION. This Senior Subordinated 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 OF RESTRICTED GLOBAL SENIOR SUBORDINATED
NOTES AND RESTRICTED DEFINITIVE SENIOR SUBORDINATED NOTES. In addition to the
rights provided to Holders of Senior Subordinated Notes under the Indenture,
Holders of Restricted Global Senior Subordinated Notes and Restricted Definitive
Senior Subordinated Notes shall have all the rights set forth in the Senior
A-1-7
<PAGE>
Subordinated Registration Rights Agreement dated as of March 3, 1999, between
the Authority and the parties named on the signature pages thereof (the "Senior
Subordinated Registration Rights Agreement").
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 Senior Subordinated 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 Senior Subordinated Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.
The Authority will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Senior Subordinated Registration
Rights Agreement. Requests may be made to:
Mohegan Tribal Gaming Authority
1 Mohegan Sun Boulevard
Uncasville, CT 06382
Attention: Roland J. Harris
A-1-8
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:___________________________________
________________________________________________________________________________
(Insert assignee's legal name)
(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*: ________________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-1-9
<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 or 4.15 of the Indenture, check the appropriate box below:
|_| Section 4.10 |_| Section 4.15
If you want to elect to have only part of the Note purchased by the
Authority pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$_____________________
Date:______________________
Your Signature: ________________________________
(Sign exactly as your name appears
on the face of this Note)
Signature Guarantee*: ________________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-1-10
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL SENIOR SUBORDINATED NOTE
The following exchanges of a part of this Global Senior Subordinated Note
for an interest in another Global Senior Subordinated Note or for a Definitive
Senior Subordinated Note, or exchanges of a part of another Global Senior
Subordinated Note or Definitive Senior Subordinated Note for an interest in this
Global Senior Subordinated Note, have been made:
<TABLE>
<CAPTION>
Principal Amount of Signature of
Amount of decrease in Amount of increase in this Global Senior authorized officer of
Principal Amount of Principal Amount of Subordinated Note Trustee or Senior
Date of Exchange this Global Senior this Global Senior following such decrease Subordinated Note
Subordinated Note Subordinated Note (or increase) Custodian
- --------------------- ----------------------- ---------------------- ----------------------- ---------------------
<S> <C> <C> <C> <C>
</TABLE>
A-1-11
<PAGE>
EXHIBIT A-2
[Face of Regulation S Temporary Global Senior Subordinated Note]
- --------------------------------------------------------------------------------
CUSIP/CINS: U60742 AB6
8 3/4% Senior Subordinated Note due 2009
No. ___ $__________
MOHEGAN TRIBAL GAMING AUTHORITY
promises to pay to______________________________________________________________
or registered assigns,
the principal sum of ___________________________________________________________
Dollars on January 1, 2009
Interest Payment Dates: January 1, and July 1
Record Dates: December 15, and June 15
Dated: March 3, 1999
MOHEGAN TRIBAL GAMING AUTHORITY
By:____________________________
Name:
Title:
By:____________________________
Name:
Title:
This is one of the Senior Subordinated Notes
referred to in the within-mentioned Indenture:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: __________________________________
Authorized Signatory
- --------------------------------------------------------------------------------
A-2-1
<PAGE>
[Back of Regulation S Temporary Global Senior Subordinated Note]
8 3/4% Senior Subordinated Note due 2009
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL SENIOR SUBORDINATED
NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED
SENIOR SUBORDINATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED
HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S
TEMPORARY GLOBAL SENIOR SUBORDINATED NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT
OF INTEREST HEREON.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SENIOR SUBORDINATED
NOTES IN DEFINITIVE FORM, THIS SENIOR SUBORDINATED NOTE MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY
OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE
OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW
YORK, NEW YORK) ("DTC"), TO THE AUTHORITY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER
ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
IN ACCORDANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (SUBJECT TO THE DELIVERY OF SUCH EVIDENCE, IF ANY, REQUIRED
UNDER THE INDENTURE PURSUANT TO WHICH THIS NOTE IS ISSUED) AND IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER JURISDICTION. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER
EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE AUTHORITY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(a) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE AUTHORITY SO
REQUESTS), SUBJECT TO THE RECEIPT BY THE REGISTRAR OF A CERTIFICATION OF THE
TRANSFEROR AND AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS
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<PAGE>
IN COMPLIANCE WITH THE SECURITIES ACT, (2) TO THE AUTHORITY OR (3) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE
RESALE RESTRICTION SET FORTH IN (A) ABOVE.
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST.
(a) The Mohegan Tribal Gaming Authority (the "Authority"), promises to pay
interest on the principal amount of this Senior Subordinated Note at 83/4% per
annum from March 3, 1999 until maturity. The Authority will pay interest and
Additional Interest, if any, semi-annually in arrears on January 1 and July 1 of
each year, or if any such day is not a Business Day, on the next succeeding
Business Day (each an "Interest Payment Date"). Interest on the Senior
Subordinated Notes will accrue from the most recent date to which interest has
been paid or, if no interest has been paid, from the date of original issuance;
provided that if there is no existing Default in the payment of interest, and if
this Senior Subordinated Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be July 1, 1999. 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 interest and Additional Interest, if
any, (without regard to any applicable grace periods) from time to time on
demand at the same rate to the extent lawful. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
(b) The Holder of this Senior Subordinated Note is entitled to the benefits
of the Senior Subordinated Registration Rights Agreement dated as of the date
hereof, among the Authority and the Initial Purchasers named therein ( the
"Senior Subordinated Registration Rights Agreement"). If (i) the Authority fails
to file any of the Registration Statements required by the Registration Rights
Agreements 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 of 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 in connection with resales of Transfer Restricted Securities
during 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 will pay Additional Interest to each Holder of Senior
Subordinated Notes, with respect to the first 90-day period immediately
following the occurrence of the first Registration Default in an amount equal to
25 basis points per 90-day period of the principal amount of Senior Subordinated
Notes held by such Holder. The amount of the Additional Interest will increase
by an additional 25 basis points with respect to each subsequent 90-day period
until all Registration Defaults have been cured, up to a maximum amount of
Additional Interest of 1% per annum of the principal amount of Senior
Subordinated Notes.
(A) Except as expressly provided in this paragraph 1(b), Additional
Interest shall be treated as interest and any date on which Additional Interest
is due and payable shall be treated as an Interest Payment Date for all purposes
under this Senior Subordinated Note and the Indenture.
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<PAGE>
(B) In the event that the Authority is required to pay Additional Interest
pursuant to this paragraph 1(b), the Authority shall notify the Trustee in
writing at least 15 days prior to the first Interest Payment Date upon which
such Additional Interest is due; provided that, in the event that the obligation
to pay such Additional Interest occurs less than 15 days prior to such
Additional Interest Date, such notice shall be provided by the Authority to the
Trustee as soon as reasonably practicable prior to such Interest Payment Date.
2. METHOD OF PAYMENT. The Authority will pay interest on the Senior
Subordinated Notes (except defaulted interest) and Additional Interest, if any,
to the Persons who are registered Holders of Senior Subordinated Notes at the
close of business on the December 15 or June 15 next preceding the Interest
Payment Date, even if such Senior Subordinated Notes are canceled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The Senior
Subordinated Notes will be payable as to principal, premium and Additional
Interest, if any, and interest 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 and Additional Interest,
if any, 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 Additional Interest on, all Global Senior Subordinated
Notes and all other Senior Subordinated Notes the Holders of which shall hold at
least $1.0 million in principal amount of Senior Subordinated Notes and 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, State Street Bank and Trust
Company, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Authority may change any Paying Agent or Registrar without notice
to any Holder. The Authority or any of its Subsidiaries may act in any such
capacity.
4. INDENTURE. The Authority issued the Senior Subordinated Notes under an
Indenture dated as of March 3, 1999 ("Indenture") between the Authority and the
Trustee. The terms of the Senior Subordinated 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 ss.ss. 77aaa-77bbbb). The Senior
Subordinated Notes are subject to all such terms, and Holders are referred to
the Indenture and such Act for a statement of such terms. To the extent any
provision of this Senior Subordinated Note conflicts with the express provisions
of the Indenture, the provisions of the indenture shall govern and be
controlling.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Authority shall not have the option to redeem the Senior Subordinated Notes
prior to January 1, 2004. Thereafter, the Authority shall have the option to
redeem the Senior Subordinated 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 and Additional Interest thereon to the applicable redemption date, if
redeemed during the twelve-month period beginning on January 1 of the years
indicated below:
A-2-4
<PAGE>
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C> <C>
2004............................................. 104.375%
2005............................................. 102.917%
2006............................................. 101.458%
2007 and thereafter.............................. 100.000%
</TABLE>
(b) 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 Senior Subordinated
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
Senior Subordinated Notes of such Holder or beneficial owner at a redemption
price equal to the lesser of (1) the principal amount thereof or (2) the price
at which such Holder or beneficial owner acquired the Senior Subordinated Notes
or (3) the current market price of the Senior Subordinated Notes, together with,
in either case, accrued and unpaid interest and Additional 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 Senior Subordinated 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.
Except as set forth in paragraph 7 below, the Authority shall not be
required to make mandatory redemption payments with respect to the Senior
Subordinated Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Authority shall be required to
make an offer (a "Change of Control Offer") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Senior Subordinated
Notes at a purchase price equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest and Additional Interest thereon, if
any, to the date of purchase (the "Change of Control Payment"). Within 20
Business Days following any Change of Control, the Authority shall mail a notice
to each Holder setting forth the procedures governing the Change of Control
Offer as required by the Indenture.
(b) If the Authority or a Subsidiary consummates any Asset Sales, within
five Business Days of each date on which the aggregate amount of Excess Proceeds
exceeds $15.0 million, the Authority shall commence an offer to all Holders of
Senior Subordinated Notes (as "Asset Sale Offer") pursuant to Section 3.10 of
the Indenture to purchase the maximum principal amount of Senior Subordinated
Notes 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 and Additional Interest thereon, 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 Subordinated Notes
tendered pursuant to an Asset Sale
A-2-5
<PAGE>
Offer is less than the Excess Proceeds, the Authority (or such Subsidiary) may
use such deficiency for any purpose not otherwise permitted by the Indenture. If
the aggregate principal amount of Senior Subordinated Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Senior Subordinated Notes to be purchased on a pro rata basis. Holders of
Senior Subordinated Notes that are the subject of an offer to purchase will
receive an Asset Sale Offer from the Authority prior to any related purchase
date and may elect to have such Senior Subordinated Notes purchased by
completing the form entitled "Option of Holder to Elect Purchase" on the reverse
of the Senior Subordinated Notes.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Senior Subordinated Notes are to be redeemed at its registered address. Senior
Subordinated Notes in denominations larger than $1,000 may be redeemed in part
but only in whole multiples of $1,000, unless all of the Senior Subordinated
Notes held by a Holder are to be redeemed. On and after the redemption date
interest ceases to accrue on Senior Subordinated Notes or portions thereof
called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Subordinated Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Senior Subordinated Notes may be registered
and Senior Subordinated 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 Senior
Subordinated Note or portion of a Senior Subordinated Note selected for
redemption, except for the unredeemed portion of any Senior Subordinated Note
being redeemed in part. Also, the Authority need not exchange or register the
transfer of any Senior Subordinated Notes for a period of 15 days before a
selection of Senior Subordinated Notes to be redeemed or during the period
between a record date and the corresponding Interest Payment Date.
This Regulation S Temporary Global Note is exchangeable in whole or in part
for one or more Global Notes only (i) on or after the termination of the 40-day
restricted period (as defined in Regulation S) and (ii) upon presentation of
certificates (accompanied by an Opinion of Counsel, if applicable) required by
Article 2 of the Indenture. Upon exchange of this Regulation S Temporary Global
Note for one or more Global Notes, the Trustee shall cancel this Regulation S
Temporary Note.
10. PERSONS DEEMED OWNERS. The registered Holder of a Senior Subordinated
Note may be treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture, the Senior Subordinated Subsidiary Guarantees or the Senior
Subordinated Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding
Senior Subordinated Notes, voting as a single class, and any existing default or
compliance with any provision of the Indenture, the Senior Subordinated
Subsidiary Guarantees or the Senior Subordinated Notes may be waived with the
consent of the Holders of a majority in principal amount of the then outstanding
Senior Subordinated Notes, voting as a single class. Without the consent of any
Holder of a Senior Subordinated Note, the Indenture, the Senior Subordinated
Subsidiary Guarantees or the Senior Subordinated Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Senior Subordinated Notes in addition to or in place of
certificated Senior Subordinated Notes, to provide for the assumption of the
Authority's or Subsidiary Guarantor's obligations to Holders of the Senior
Subordinated Notes by a successor to the Authority or such Subsidiary Guarantor,
to make any change that would provide any additional rights or benefits to the
Holders of the Senior Subordinated Notes or that does not adversely affect the
legal rights under the
A-2-6
<PAGE>
Indenture of any such Holder, to comply with the requirements of the SEC in
order to effect or maintain the qualification of the Indenture under the Trust
Indenture Act or to allow any Subsidiary Guarantor to execute a supplemental
indenture to the Indenture and/or a Senior Subordinated Subsidiary Guarantee
with respect to the Senior Subordinated Notes provided that the Authority has
obtained any required government approval to ensure the enforceability of the
Senior Subordinated Notes and the Indenture.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest or Additional Interest on the Senior
Subordinated Notes; (ii) default in payment when due of principal of or premium,
if any, on the Senior Subordinated Notes when the same becomes due and payable
at maturity, upon redemption (including in connection with an offer to purchase)
or otherwise; (iii) failure by the Authority or any of its Restricted
Subsidiaries to comply with Section 4.10 or 5.01 of the Indenture; (iv) failure
by the Authority or any of its Restricted Subsidiaries to observe or perform (A)
any covenant described in Section 4.07 or 4.09 of the Indenture for 30 days
after notice to the Authority by the Trustee or the Holders of at least 25% in
aggregate principal amount of the Senior Subordinated Notes then outstanding
voting as a single class or (B) any other covenant, representation, warranty or
other agreement in the Indenture or the Senior Subordinated Notes for 60 days
after notice to the Authority by the Trustee or the Holders of at least 25% in
aggregate principal amount of the Senior Subordinated Notes then outstanding
voting as a single class; (v) default under certain other agreements relating to
Indebtedness of the Authority or any of its Restricted Subsidiaries which
default results in the acceleration of such Indebtedness prior to its express
maturity; (vi) certain final judgments for the payment of money that remain
undischarged for a period of 60 days; (vii) certain events of bankruptcy or
insolvency with respect to the Authority or any of its Restricted Subsidiaries;
(viii) 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; (ix)
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); (x) the Lease ceases to
be in full force and effect; (xi) except as permitted by the Indenture, any
Senior Subordinated Subsidiary Guarantee shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to be in
full force and effect or any Subsidiary Guarantor or any Person acting on its
behalf shall deny or disaffirm its obligations under such Subsidiary Guarantor's
Senior Subordinated Subsidiary Guarantee; and (xii) failure by the Tribe to
comply with the provisions in Article 11 for 30 days after notice to the
Authority and the Tribe by the Trustee or the Holders of at least 25% in
aggregate principal amount of the Senior Subordinated Notes then outstanding
voting as a single class. 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 Senior Subordinated Notes may declare all the Senior Subordinated
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 Senior Subordinated Notes will become due and payable without
further action or notice. Holders may not enforce the Indenture or the Senior
Subordinated Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Senior Subordinated Notes may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of the Senior Subordinated 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) if it determines
that withholding notice is in their interest. The Holders of a majority in
aggregate principal amount of the Senior Subordinated Notes then outstanding by
notice to the Trustee may on behalf of the Holders of all of the Senior
Subordinated 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 Senior Subordinated
Notes. The Authority is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Authority is required upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.
A-2-7
<PAGE>
13. TRUSTEE DEALINGS WITH AUTHORITY. 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. A controlling person, director, officer,
employee or holder of an Ownership Interest of the Authority, as such, shall not
have any liability for any obligations of the Authority under the Senior
Subordinated Notes or the Indenture or for any claim based on, in respect of, or
by reason of, such obligations or their creation. Each Holder by accepting a
Senior Subordinated Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Senior
Subordinated Notes.
15. AUTHENTICATION. This Senior Subordinated 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 OF RESTRICTED GLOBAL SENIOR SUBORDINATED
NOTES AND RESTRICTED DEFINITIVE SENIOR SUBORDINATED NOTES. In addition to the
rights provided to Holders of Senior Subordinated Notes under the Indenture,
Holders of Restricted Global Senior Subordinated Notes and Restricted Definitive
Senior Subordinated Notes shall have all the rights set forth in the Senior
Subordinated Registration Rights Agreement dated as of March 3, 1999, between
the Authority and the parties named on the signature pages thereof (the "Senior
Subordinated Registration Rights Agreement").
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 Senior Subordinated 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 Senior Subordinated Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.
The Authority will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Senior Subordinated Registration
Rights Agreement. Requests may be made to:
Mohegan Tribal Gaming Authority
1 Mohegan Sun Boulevard
Uncasville, CT 06382
Attention: Roland J. Harris
A-2-8
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:___________________________________
________________________________________________________________________________
(Insert assignee's legal name)
(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*: ________________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-2-9
<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 or 4.15 of the Indenture, check the appropriate box below:
|_| Section 4.10 |_| Section 4.15
If you want to elect to have only part of the Note purchased by the
Authority pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$_____________________
Date:______________________
Your Signature: ________________________________
(Sign exactly as your name appears
on the face of this Note)
Signature Guarantee*: ________________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-2-10
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL SENIOR SUBORDINATED NOTE
The following exchanges of a part of this Global Senior Subordinated Note
for an interest in another Global Senior Subordinated Note or for a Definitive
Senior Subordinated Note, or exchanges of a part of another Global Senior
Subordinated Note or Definitive Senior Subordinated Note for an interest in this
Global Senior Subordinated Note, have been made:
<TABLE>
<CAPTION>
Principal Amount of Signature of
Amount of decrease in Amount of increase in this Global Senior authorized officer of
Principal Amount of Principal Amount of Subordinated Note Trustee or Senior
Date of Exchange this Global Senior this Global Senior following such decrease Subordinated Note
Subordinated Note Subordinated Note (or increase) Custodian
- --------------------- ----------------------- ---------------------- ----------------------- ---------------------
<S> <C> <C> <C> <C>
</TABLE>
A-2-11
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Mohegan Tribal Gaming Authority
1 Mohegan Sun Boulevard
Uncasville, CT 06382
State Street Bank and Trust Company
Goodwin Square
225 Asylum Street
Hartford, CT 06103
Re: 8 3/4% Senior Subordinated Notes due 2009
Reference is hereby made to the Indenture, dated as of March 3, 1999 (the
"Indenture"), between the Mohegan Tribal Gaming Authority, as issuer (the
"Authority"), and State Street Bank and Trust Company, as trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.
___________________, (the "Transferor") owns and proposes to transfer the
Senior Subordinated Note[s] or interest in such Senior Subordinated Note[s]
specified in Annex A hereto, in the principal amount of $___________ in such
Senior Subordinated Note[s] or interests (the "Transfer"), to
___________________________ (the "Transferee"), as further specified in Annex A
hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [_] Check if Transferee will take delivery of a beneficial interest
in the 144A Global Senior Subordinated Note or a Definitive Senior
Subordinated Note Pursuant to Rule 144A. The Transfer is being effected
pursuant to and in accordance with Rule 144A under the United States
Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Senior Subordinated Note is being transferred to a
Person that the Transferor reasonably believed and believes is purchasing
the beneficial interest or Definitive Senior Subordinated Note for its own
account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account
is a "qualified institutional buyer" within the meaning of Rule 144A in a
transaction meeting the requirements of Rule 144A and such Transfer is in
compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Senior Subordinated Note will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the 144A
Global Senior Subordinated Note and/or the Definitive Senior Subordinated
Note and in the Indenture and the Securities Act.
2. [_] Check if Transferee will take delivery of a beneficial interest
in the Temporary Regulation S Global Senior Subordinated Note, the
Regulation S Global Senior Subordinated Note or a Definitive Senior
Subordinated Note pursuant to Regulation S. The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and, accordingly, the Transferor hereby further certifies
that (i) the Transfer is not being made to a person in the United States
and (x) at the time the buy order was originated, the Transferee was
outside the United States or such Transferor and any Person acting on its
behalf reasonably believed and believes that the Transferee was outside the
United States or (y) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf
B-1
<PAGE>
knows that the transaction was prearranged with a buyer in the United
States, (ii) no directed selling efforts have been made in contravention of
the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the
Securities Act; (iii) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act and (iv) if the
proposed transfer is being made prior to the expiration of the Distribution
Compliance Period, the transfer is not being made to a U.S. Person or for
the account or benefit of a U.S. Person (other than an Initial Purchaser).)
Upon consummation of the proposed transfer in accordance with the terms of
the Indenture, the transferred beneficial interest or Definitive Senior
Subordinated Note will be subject to the restrictions on Transfer
enumerated in the Private Placement Legend printed on the Regulation S
Global Senior Subordinated Note, the Temporary Regulation S Global Senior
Subordinated Note and/or the Definitive Senior Subordinated Note and in the
Indenture and the Securities Act.
3. [_] Check and complete if Transferee will take delivery of a
beneficial interest in the Definitive Senior Subordinated Note pursuant to
any provision of the Securities Act other than Rule 144A or Regulation S.
The Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Senior Subordinated
Notes and Restricted Definitive Senior Subordinated Notes and pursuant to
and in accordance with the Securities Act and any applicable blue sky
securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):
(a) [_] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) [_] such Transfer is being effected to the Authority or a
subsidiary thereof;
or
(c) [_] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with
the prospectus delivery requirements of the Securities Act;
or
4. [_] Check if Transferee will take delivery of a beneficial interest
in an Unrestricted Global Senior Subordinated Note or of an Unrestricted
Definitive Senior Subordinated Note.
(a) [_] Check if Transfer is pursuant to Rule 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained
in the Indenture and any applicable blue sky securities laws of any state
of the United States and (ii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Senior Subordinated Note will
no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Senior
Subordinated Notes, on Restricted Definitive Senior Subordinated Notes and
in the Indenture.
(b) [_] Check if Transfer is Pursuant to Regulation S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under the Securities Act and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky
securities laws of any state of the United States and (ii) the restrictions
on transfer contained in the Indenture and the Private
B-2
<PAGE>
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Senior Subordinated Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed
on the Restricted Global Senior Subordinated Notes, on Restricted
Definitive Senior Subordinated Notes and in the Indenture.
(c) [_] Check if Transfer is Pursuant to Other Exemption. (i) The
Transfer is being effected pursuant to and in compliance with an exemption
from the registration requirements of the Securities Act other than Rule
144, Rule 903 or Rule 904 and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of
any State of the United States and (ii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Senior
Subordinated Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Senior Subordinated Notes or Restricted Definitive Senior Subordinated
Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Authority.
-------------------------------------
[Insert Name of Transferor]
By:
----------------------------------
Name:
Title:
Dated:
--------------------
B-3
<PAGE>
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [_] a beneficial interest in the:
(i) [_] 144A Global Senior Subordinated Note (CUSIP 608328 AC4), or
(ii) [_] Regulation S Global Senior Subordinated Note (CUSIP U60742
AB6), or
(b) [_] a Restricted Definitive Senior Subordinated Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [_] a beneficial interest in the:
(i) [_] 144A Global Senior Subordinated Note (CUSIP 608328 AC4), or
(ii) [_] Regulation S Global Senior Subordinated Note (CUSIP U60742
AB6), or
(iii) [_] Unrestricted Global Senior Subordinated Note (CUSIP ); or
(b) [_] a Restricted Definitive Senior Subordinated Note; or
(c) [_] an Unrestricted Definitive Senior Subordinated Note,
in accordance with the terms of the Indenture.
B-4
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Mohegan Tribal Gaming Authority
1 Mohegan Sun Boulevard
Uncasville, CT 06382
State Street Bank and Trust Company
Goodwin Square
225 Asylum Street
Hartford, CT 06103
Re: 8 3/4% Senior Subordinated Notes due 2009
(CUSIP 608328 AC4/U60742 AB6)
Reference is hereby made to the Indenture, dated as of March 3, 1999 (the
"Indenture"), between the Mohegan Tribal Gaming Authority, as issuer (the
"Authority"), and State Street Bank and Trust Company, as trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.
__________________________, (the "Owner") owns and proposes to exchange the
Senior Subordinated Note[s] or interest in such Senior Subordinated Note[s]
specified herein, in the principal amount of $____________ in such Senior
Subordinated Note[s] or interests (the "Exchange"). In connection with the
Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Senior Subordinated Notes or
Beneficial Interests in a Restricted Global Senior Subordinated Note for
Unrestricted Definitive Senior Subordinated Notes or Beneficial Interests
in an Unrestricted Global Senior Subordinated Note
(a) [_] Check if Exchange is from beneficial interest in a Restricted
Global Senior Subordinated Note to beneficial interest in an Unrestricted
Global Senior Subordinated Note. In connection with the Exchange of the
Owner's beneficial interest in a Restricted Global Senior Subordinated Note
for a beneficial interest in an Unrestricted Global Senior Subordinated
Note in an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Global Senior Subordinated Notes
and pursuant to and in accordance with the United States Securities Act of
1933, as amended (the "Securities Act"), (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv)
the beneficial interest in an Unrestricted Global Senior Subordinated Note
is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
(b) [_] Check if Exchange is from beneficial interest in a Restricted
Global Senior Subordinated Note to Unrestricted Definitive Senior
Subordinated Note. In connection with the Exchange of the Owner's
beneficial interest in a Restricted Global Senior Subordinated Note for an
Unrestricted Definitive Senior Subordinated Note, the Owner hereby
certifies (i) the Definitive Senior Subordinated Note is being acquired for
the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the
Restricted Global Senior Subordinated Notes and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not
required in order to maintain
C-1
<PAGE>
compliance with the Securities Act and (iv) the Definitive Senior
Subordinated Note is being acquired in compliance with any applicable blue
sky securities laws of any state of the United States.
(c) [_] Check if Exchange is from Restricted Definitive Senior
Subordinated Note to beneficial interest in an Unrestricted Global Senior
Subordinated Note. In connection with the Owner's Exchange of a Restricted
Definitive Senior Subordinated Note for a beneficial interest in an
Unrestricted Global Senior Subordinated Note, the Owner hereby certifies
(i) the beneficial interest is being acquired for the Owner's own account
without transfer, (ii) such Exchange has been effected in compliance with
the transfer restrictions applicable to Restricted Definitive Senior
Subordinated Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance
with the Securities Act and (iv) the beneficial interest is being acquired
in compliance with any applicable blue sky securities laws of any state of
the United States.
(d) [_] Check if Exchange is from Restricted Definitive Senior
Subordinated Note to Unrestricted Definitive Senior Subordinated Note. In
connection with the Owner's Exchange of a Restricted Definitive Senior
Subordinated Note for an Unrestricted Definitive Senior Subordinated Note,
the Owner hereby certifies (i) the Unrestricted Definitive Senior
Subordinated Note is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to Restricted Definitive Senior
Subordinated Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance
with the Securities Act and (iv) the Unrestricted Definitive Senior
Subordinated Note is being acquired in compliance with any applicable blue
sky securities laws of any state of the United States.
2. Exchange of Restricted Definitive Senior Subordinated Notes or
Beneficial Interests in Restricted Global Senior Subordinated Notes for
Restricted Definitive Senior Subordinated Notes or Beneficial Interests in
Restricted Global Senior Subordinated Notes
(a) [_] Check if Exchange is from beneficial interest in a Restricted
Global Senior Subordinated Note to Restricted Definitive Senior
Subordinated Note. In connection with the Exchange of the Owner's
beneficial interest in a Restricted Global Senior Subordinated Note for a
Restricted Definitive Senior Subordinated Note with an equal principal
amount, the Owner hereby certifies that the Restricted Definitive Senior
Subordinated Note is being acquired for the Owner's own account without
transfer. Upon consummation of the proposed Exchange in accordance with the
terms of the Indenture, the Restricted Definitive Senior Subordinated Note
issued will continue to be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted
Definitive Senior Subordinated Note and in the Indenture and the Securities
Act.
(b) [_] Check if Exchange is from Restricted Definitive Senior
Subordinated Note to beneficial interest in a Restricted Global Senior
Subordinated Note. In connection with the Exchange of the Owner's
Restricted Definitive Senior Subordinated Note for a beneficial interest in
the [CHECK ONE] [_] 144A Global Senior Subordinated Note, [_] Regulation S
Global Senior Subordinated Note with an equal principal amount, the Owner
hereby certifies (i) the beneficial interest is being acquired for the
Owner's own account without transfer and (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the
Restricted Global Senior Subordinated Notes and pursuant to and in
accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon
consummation of the proposed Exchange in accordance with the terms of the
Indenture, the beneficial interest issued will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed
on the relevant Restricted Global Senior Subordinated Note and in the
Indenture and the Securities Act.
C-2
<PAGE>
This certificate and the statements contained herein are made for your
benefit and the benefit of the Authority.
-------------------------------------
[Insert Name of Transferor]
By:
----------------------------------
Name:
Title:
Dated:
--------------------
C-3
<PAGE>
EXHIBIT D
FORM OF NOTATION OF SUBSIDIARY GUARANTEE ON SENIOR SUBORDINATED NOTE
Each Subsidiary Guarantor (as defined in the Indenture) has jointly and
severally unconditionally guaranteed (a) the due and punctual payment of the
principal of, premium, if any, and interest on the Senior Subordinated Notes,
whether at maturity or an Interest Payment Date, by acceleration, call for
redemption or otherwise, (b) the due and punctual payment of interest on the
overdue principal and premium of, and interest, to the extent lawful, on the
Senior Subordinated Notes and (c) that in case of any extension of time of
payment or renewal of any Senior Subordinated Notes or any of such other
obligations, the same will be promptly paid in full when due in accordance with
the terms of the extension of renewal, whether at stated maturity, by
acceleration or otherwise.
Notwithstanding the foregoing, in the event that the Senior Subordinated
Subsidiary Guarantee would constitute or result in a violation of any applicable
fraudulent conveyance or similar law of any relevant jurisdiction, the liability
of the Subsidiary Guarantor under its Senior Subordinated Subsidiary Guarantee
shall be limited to such amount as will not, after giving effect thereto, and to
all other liabilities of the Subsidiary Guarantor, result in such amount
constituting a fraudulent transfer or conveyance.
The Senior Subordinated Subsidiary Guarantee shall not be valid or
obligatory for any purpose until the certificate of authentication on the Senior
Subordinated Note upon which the Senior Subordinated Subsidiary Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
or facsimile signature of one of its authorized officers.
Dated:________________, ______
[SUBSIDIARY GUARANTOR]
By:___________________________________
Name:
Title:
D-1
<PAGE>
EXHIBIT E
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT SUBSIDIARY GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, among __________________ (the "Subsidiary Guarantor"), a
subsidiary of the Mohegan Tribal Gaming Authority (or its permitted successor),
(the "Authority"), the Authority, the other Subsidiary Guarantors (as defined in
the Indenture referred to herein) and State Street Bank and Trust Company, as
trustee under the Indenture referred to below (the "Trustee").
W I T N E S S E T H:
WHEREAS, the Authority has heretofore executed and delivered to the Trustee
an indenture (the "Indenture"), dated as of March 3, 1999 providing for the
issuance of an aggregate principal amount of up to $300,000,000 of 8 3/4% Senior
Subordinated Notes due 2009 (the "Senior Subordinated Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Subsidiary Guarantor shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Subsidiary Guarantor shall unconditionally
guarantee all of the Authority's Obligations under the Senior Subordinated Notes
and the Indenture on the terms and conditions set forth herein (the "Senior
Subordinated Subsidiary Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Subsidiary Guarantor and the Trustee mutually covenant and agree for the equal
and ratable benefit of the Holders of the Senior Subordinated Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. INDENTURE PROVISION PURSUANT TO WHICH GUARANTEE IS GIVEN. This
Supplemental Indenture is being executed and delivered pursuant to Section
4.20 of the Indenture.
3. AGREEMENT TO GUARANTEE. The Subsidiary Guarantor hereby agrees as
follows:
(a) The Subsidiary Guarantor, jointly and severally with all
other Subsidiary Guarantors, if any, unconditionally guarantee to each
Holder of a Senior Subordinated Note authenticated and delivered by
the Trustee and to the Trustee and its successors and assigns, the
Senior Subordinated Notes or the obligations of the Authority
hereunder or thereunder, that:
(i) the principal of and interest on the Senior Subordinated
Notes will be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, and interest
on the overdue principal of and interest on the Senior
Subordinated Notes, if any, if lawful, and all other obligations
of the Authority to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and
(ii) in case of any extension of time of payment or renewal
of any Senior Subordinated Notes or any of such other
obligations, that same will be promptly paid in full when due or
performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or
otherwise. Failing payment when due of any amount so guaranteed
or any
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performance so guaranteed for whatever reason, the Subsidiary
Guarantors shall be jointly and severally obligated to pay the
same immediately.
Notwithstanding the foregoing, in the event that this Subsidiary Guarantee
would constitute or result in a violation of any applicable fraudulent
conveyance or similar law of any relevant jurisdiction, the liability of the
Subsidiary Guarantor under this Supplemental Indenture and its Senior
Subordinated Subsidiary Guarantee shall be limited to such amount as will not,
after giving effect thereto, and to all other liabilities of the Subsidiary
Guarantor, result in such amount constituting a fraudulent transfer or
conveyance.
4. EXECUTION AND DELIVERY OF SENIOR SUBORDINATED SUBSIDIARY GUARANTEES.
(a) To evidence its Senior Subordinated Subsidiary Guarantee set forth in
this Supplemental Indenture, the Subsidiary Guarantor hereby agrees that a
notation of such Senior Subordinated Subsidiary Guarantee shall be endorsed by
an officer of such Subsidiary Guarantor on each Senior Note authenticated and
delivered by the Trustee after the date hereof.
(b) Notwithstanding the foregoing, the Subsidiary Guarantor hereby agrees
that its Senior Subsidiary Guarantee set forth herein shall remain in full force
and effect notwithstanding any failure to endorse on each Senior Note a notation
of such Senior Subordinated Subsidiary Guarantee.
(c) If an officer whose signature is on this Supplemental Indenture or on
the Senior Subordinated Subsidiary Guarantee no longer holds that office at the
time the Trustee authenticates the Senior Subordinated Note on which a Senior
Subordinated Subsidiary Guarantee is endorsed, the Senior Subsidiary Guarantee
shall be valid nevertheless.
(d) The delivery of the Senior Subordinated Note by the Trustee, after the
authentication thereof under the Indenture, shall constitute due delivery of the
Senior Subordinated Subsidiary Guarantee set forth in this Supplemental
Indenture on behalf of the Subsidiary Guarantor.
(e) The Subsidiary Guarantor hereby agrees that its obligations hereunder
shall be unconditional, regardless of the validity, regularity or enforceability
of the Senior Subordinated Notes or the Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Senior Subordinated
Notes with respect to any provisions hereof or thereof, the recovery of any
judgment against the Authority, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor.
(f) The Subsidiary Guarantor hereby waives diligence, presentment, demand
of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Authority, any right to require a proceeding first against the
Authority, protest, notice and all demands whatsoever and covenants that its
Senior Subordinated Subsidiary Guarantee made pursuant to this Supplemental
Indenture will not be discharged except by complete performance of the
obligations contained in the Senior Subordinated Notes and the Indenture or
pursuant to Section 5(b) of this Supplemental Indenture.
(g) If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Supplemental Indenture and such proceeding has
been discontinued or abandoned for any reason, or has been determined adversely
to the Trustee or to such Holder, then, and in every such case, subject to any
determination in such proceeding, the Subsidiary Guarantor, the Trustee and the
Holders shall be restored severally and respectively to their former positions
hereunder and thereafter
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all rights and remedies of the Subsidiary Guarantor, the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
(h) The Subsidiary Guarantor hereby waives and will not in any manner
whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the
Authority or any other Subsidiary Guarantor as a result of any payment by such
Subsidiary Guarantor under its Senior Subordinated Subsidiary Guarantee. The
Subsidiary Guarantor further agrees that, as between the Subsidiary Guarantors,
on the one hand, and the Holders and the Trustee, on the other hand:
(i) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 6 of the Indenture for the purposes of
the Senior Subordinated Subsidiary Guarantee made pursuant to this
Supplemental Indenture, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby; and
(ii) in the event of any declaration of acceleration of such
obligations as provided in Article 6, such obligations (whether or not due
and payable) shall forthwith become due and payable by the Subsidiary
Guarantor for the purpose of the Senior Subordinated Subsidiary Guarantee
made pursuant to this Supplemental Indenture.
(i) The Subsidiary Guarantor shall have the right to seek contribution from
any other non-paying Subsidiary Guarantor, if any, so long as the exercise of
such right does not impair the rights of the Holders under the Senior
Subordinated Subsidiary Guarantee made pursuant to this Supplemental Indenture.
(j) The Subsidiary Guarantor covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, or 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, which may
affect the covenants or the performance of the Indenture or this Senior
Subordinated Subsidiary Guarantee; and the Subsidiary Guarantor (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
5. SUBSIDIARY GUARANTOR MAY CONSOLIDATE, ETC. ON CERTAIN TERMS
(a) Nothing contained in the Indenture, this Supplemental Indenture or in
the Senior Subordinated Notes shall prevent any consolidation or merger of the
Subsidiary Guarantor with or into the Authority or any other Subsidiary
Guarantor or shall prevent any transfer, sale or conveyance of the property of
the Subsidiary Guarantor as an entirety or substantially as an entirety, to the
Authority or any other Subsidiary Guarantor.
(b) Except as set forth in Article 5 of the Indenture, upon the sale or
disposition of all of the Capital Stock of the Subsidiary Guarantor by the
Authority or a Subsidiary of the Authority, or upon the consolidation or merger
of the Subsidiary Guarantor with or into any Person, or if a Subsidiary
Guarantor is designated as an Unrestricted Subsidiary, or the sale of all or
substantially all of the assets of the Subsidiary Guarantor (in each case, other
than with or to an Affiliate of the Authority), or upon a legal defeasance or
covenant defeasance of the Senior Subordinated Notes, such Subsidiary Guarantor
shall be deemed automatically and unconditionally released and discharged from
all obligations under this Senior Subordinated Subsidiary Guarantee without any
further action required on the part of the Trustee or any Holder if no Default
shall have occurred and be continuing; provided
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that in the event of an Asset Sale, the Net Cash Proceeds therefrom are treated
in accordance with Section 4.10 of the Indenture and provided further that in
the event of a resdesignation of a Subsidiary, that the transaction is in
compliance with Section 4.07 of the Indenture. Except with respect to
transactions set forth in the preceding sentence, the Authority and the
Subsidiary Guarantor covenant and agree that upon any such consolidation, merger
or transfer of assets, the performance of all covenants and conditions of this
Supplemental Indenture to be performed by such Subsidiary Guarantor shall be
expressly assumed by supplemental indenture satisfactory in form to the Trustee,
by the corporation formed by such consolidation, or into which the Subsidiary
Guarantor shall have merged, or by the corporation which shall have acquired
such property. Upon receipt of an Officers' Certificate of the Authority or the
Subsidiary Guarantor, as the case may be, to the effect that the Authority or
such Subsidiary Guarantor has complied with the first sentence of this Section
5(b), the Trustee shall execute any documents reasonably requested by the
Authority or the Subsidiary Guarantor, at the cost of the Authority or such
Subsidiary Guarantor, as the case may be, in order to evidence the release of
such Subsidiary Guarantor from its obligations under its Senior Subsidiary
Guarantee endorsed on the Senior Subordinated Notes and under the Indenture and
this Supplemental Indenture.
6. NEW YORK LAW TO GOVERN. The internal law of the State of New York shall
govern and be used to construe this Supplemental Indenture.
7. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
8. EFFECT OF HEADINGS. The Section headings herein are for convenience only
and shall not effect the construction hereof.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _______________, ____
[SUBSIDIARY GUARANTOR]
By:
-----------------------------------
Name:
Title:
MOHEGAN TRIBAL GAMING AUTHORITY
By:
-----------------------------------
Name:
Title:
[EXISTING SUBSIDIARY GUARANTORS]
By:
-----------------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
-----------------------------------
Authorized Signatory
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<PAGE>
Attachment to Indenture
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 of Connecticut
Address: 1 Mohegan Sun Boulevard
Uncasville, CT 06382
Occupation: Indian Tribe
Party in Interest: Mohegan Tribal Gaming Authority
Address: 1 Mohegan Sun Boulevard
Uncasville, CT 06382
Occupation: Tribal Gaming Authority
Party in Interest: State Street Bank and Trust Company
Goodwin Square
225 Asylum Street
Hartford, CT 06103
Occupation: Commercial Bank and Trust Company
Fixed limited time to run: The Senior Subordinated Notes
become due January 1, 2009.
The Chairman of the Mohegan Tribe of Indians of Connecticut (the "Tribe") is
authorized to execute the attached document by Resolution No. 99-03 of the
Tribal Council of the Tribe, dated February 18, 1999. 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 (the
"Management Board") is authorized to execute the attached document by Resolution
No. TGA 99-04 of the Management Board, dated February 18, 1999. 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 ___ (time) on March __, 1999 at
______________ (place), for the particular purpose set forth above.
The undersigned parties agree that the foregoing agreement is in compliance with
25 U.S.C. ss. 81.
<PAGE>
WITNESS:
Mohegan Tribe of Indians of Connecticut
By:
------------------------------------------
Roland J. Harris
Title:
Mohegan Tribal Gaming Authority
By:
------------------------------------------
Roland J. Harris
Title:
State Street Bank and Trust Company
By:
------------------------------------------
Name:
Title:
Approved Pursuant to 25 U.S.C. ss. 81
United States Department of Interior Bureau
of Indian Affairs:
Date: March __, 1999 By:
------------------------------------------
Name:
Title:
Eastern Area Office
Bureau of Indian Affairs
for the Secretary of the Interior and the
Commissioner of Indian Affairs, acting under
delegated authority
<PAGE>
Exhibit 4.8
SENIOR SUBORDINATED
REGISTRATION RIGHTS AGREEMENT
Dated as of March 3, 1999
by and among
MOHEGAN TRIBAL GAMING AUTHORITY
and
SALOMON SMITH BARNEY INC.
NATIONSBANC MONTGOMERY SECURITIES LLC
SG COWEN SECURITIES CORPORATION
BEAR, STEARNS & CO. INC.
BANCBOSTON ROBERTSON STEPHENS INC.
FLEET SECURITIES, INC.
<PAGE>
This Senior Subordinated Registration Rights Agreement (this "Agreement")
is made and entered into as of March 3, 1999, by and among the Mohegan Tribal
Gaming Authority (the "Authority") an instrumentality of the Mohegan Tribe of
Indians of Connecticut (the "Tribe"), and Salomon Smith Barney Inc., NationsBanc
Montgomery Securities LLC, SG Cowen Securities Corporation, Bear, Stearns & Co.
Inc., BancBoston Robertson Stephens Inc. and Fleet Securities, Inc. (each an
"Initial Purchaser" and, collectively, the "Initial Purchasers"), each of whom
has agreed to purchase the Authority's 8 3/4% Initial Senior Subordinated Notes
due 2009 (the "Initial Senior Subordinated Notes") pursuant to the Purchase
Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated February
24, 1999, (the "Purchase Agreement"), by and among the Authority, the Tribe and
the Initial Purchasers. In order to induce the Initial Purchasers to purchase
the Initial Senior Subordinated Notes, the Authority has agreed to provide the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the obligations of the Initial Purchasers set
forth in Section 6 of the Purchase Agreement. Capitalized terms used herein and
not otherwise defined shall have the meaning assigned to them in the Senior
Subordinated Notes Indenture, dated March 3, 1999, between the Authority, the
Tribe and State Street Bank and Trust Company, as Trustee, relating to the
Initial Senior Subordinated Notes and the Senior Subordinated Exchange Notes
(the "Senior Subordinated Notes Indenture").
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
following meanings.
Act: The Securities Act of 1933, as amended.
Affiliate: As defined in Rule 144 of the Act.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Business Day: Any day except a Saturday, Sunday or other day in the City of
New York, or in the city of the corporate trust office of the Trustee, on which
banks are authorized to not open for business.
Certificated Securities: Definitive Senior Subordinated Notes, as defined
in the Senior Subordinated Notes Indenture.
Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Consummate: An Exchange Offer shall be deemed "Consummated" for purposes of
this Agreement upon the occurrence of (a) the filing and effectiveness under the
Act of the Exchange Offer Registration Statement relating to the Senior
Subordinated Exchange Notes to be issued in the Exchange Offer, (b) the
maintenance of such Exchange Offer Registration Statement continuously effective
and the keeping of the Exchange Offer open for a period not less than the period
required pursuant to Section 3(b) hereof and (c) the delivery by the Authority
to the Registrar under the Senior Subordinated Notes Indenture of Senior
Subordinated Exchange Notes in the same aggregate principal amount as the
aggregate principal amount of Initial Senior Subordinated Notes tendered by
Holders thereof pursuant to the Exchange Offer.
Consummation Deadline: As defined in Section 3(b) hereof.
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Effectiveness Deadline: As defined in Section 3(a) and 4(a) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Notes: The Authority's 8 3/4% Senior Subordinated Exchange Notes
due 2009 to be issued pursuant to the Senior Subordinated Notes Indenture: (i)
in the Exchange Offer or (ii) as contemplated by Section 4 hereof.
Exchange Offer: (A) The exchange and issuance by the Authority of a
principal amount of Senior Subordinated Exchange Notes (which shall be
registered pursuant to the Exchange Offer Registration Statement) equal to the
outstanding principal amount of Initial Senior Subordinated Notes that are
tendered by such Holders in connection with such exchange and issuance and (B)
the exchange and issuance by the Authority of a principal amount of Senior
Exchange Notes (which shall be registered pursuant to the Exchange Offer
Registration Statement) equal to the outstanding principal amount of Initial
Senior Notes that are tendered by such Holders in connection with such exchange
and issuance.
Exchange Offer Registration Statement: The Registration Statement relating
to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchasers propose to
sell the Initial Senior Subordinated Notes to certain "qualified institutional
buyers," as such term is defined in Rule 144A under the Act, and pursuant to
Regulation S under the Act.
Filing Deadline: As defined in Sections 3(a) and 4(a) hereof.
Holders: As defined in Section 2 hereof.
Prospectus: The prospectus included in a Registration Statement at the time
such Registration Statement is declared effective, as amended or supplemented by
any prospectus supplement and by all other amendments thereto, including
post-effective amendments, and all material incorporated by reference into such
Prospectus.
Recommencement Date: As defined in Section 6(d) hereof.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Authority
relating to (a) an offering of Senior Subordinated Exchange Notes pursuant to an
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, in each case, (i) that
is filed pursuant to the provisions of this Agreement and (ii) including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
Regulation S: Regulation S promulgated under the Act.
Rule 144: Rule 144 promulgated under the Act.
Shelf Registration Statement: As defined in Section 4 hereof.
Suspension Notice: As defined in Section 6(d) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
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Transfer Restricted Securities: Each (A) Initial Senior Subordinated Note,
until the earliest to occur of (i) the date on which such Initial Senior
Subordinated Note is exchanged in the Exchange Offer for a Senior Subordinated
Exchange Note which is entitled to be resold to the public by the Holder thereof
without complying with the prospectus delivery requirements of the Act, (ii) the
date on which such Initial Senior Subordinated Note has been disposed of in
accordance with a Shelf Registration Statement (and the purchasers thereof have
been issued Senior Subordinated Exchange Notes), or (iii) the date on which such
Initial Senior Subordinated Note is distributed to the public pursuant to Rule
144 under the Act and each (B) Senior Subordinated Exchange Note held by a
Broker Dealer until the date on which such Senior Subordinated Exchange Note is
disposed of by a Broker-Dealer pursuant to the "Plan of Distribution"
contemplated by the Exchange Offer Registration Statement (including the
delivery of the Prospectus contained therein).
Tribe: 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.
SECTION 2. HOLDERS
A person is deemed to be a holder of Transfer Restricted Securities (each,
a "Holder") whenever such person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable federal
law (after the procedures set forth in Section 6(a)(i) below have been complied
with), the Authority shall (i) cause the Exchange Offer Registration Statement
to be filed with the Commission as soon as practicable after the Closing Date,
but in no event later than 90 days after the Closing Date (such 90th day being
the "Filing Deadline"), (ii) use its best efforts to cause such Exchange Offer
Registration Statement to become effective at the earliest possible time, but in
no event later than 150 days after the Closing Date (such 150th day being the
"Effectiveness Deadline"), (iii) in connection with the foregoing, (A) file all
pre-effective amendments to such Exchange Offer Registration Statement as may be
necessary in order to cause it to become effective, (B) file, if applicable, a
post-effective amendment to such Exchange Offer Registration Statement pursuant
to Rule 430A under the Act and (C) cause all necessary filings, if any, in
connection with the registration and qualification of the Senior Subordinated
Exchange Notes to be made under the Blue Sky laws of such jurisdictions as are
necessary to permit Consummation of the Exchange Offer, and (iv) upon the
effectiveness of such Exchange Offer Registration Statement, commence and
Consummate the Exchange Offer. The Exchange Offer shall be on the appropriate
form permitting (i) registration of the Senior Subordinated Exchange Notes to be
offered in exchange for the Initial Senior Subordinated Notes that are Transfer
Restricted Securities and (ii) resales of Senior Subordinated Exchange Notes by
Broker-Dealers that tendered into the Exchange Offer Initial Senior Subordinated
Notes that such Broker-Dealer acquired for its own account as a result of market
making activities or other trading activities (other than Initial Senior
Subordinated Notes acquired directly from the Authority or any of its
Affiliates) as contemplated by Section 3(c) below.
(b) The Authority shall use its best efforts to cause the Exchange Offer
Registration Statement to be effective continuously, and shall keep the Exchange
Offer open for a period of not less than the minimum period required under
applicable federal and state securities laws to Consummate the Exchange Offer;
provided, however, that in no event shall such period be less than 20 Business
Days. The Authority shall cause the Exchange Offer to comply with all applicable
federal and state securities laws. No securities other than the Senior
Subordinated Exchange Notes and the Senior Exchange Notes shall be included in
the Exchange Offer Registration Statement. The Authority shall use its best
efforts to cause the Exchange Offer to be Consummated on the earliest
practicable date after the Exchange Offer Registration Statement has become
effective, but in no event later than 30 Business Days thereafter (such 30th day
being the "Consummation Deadline").
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(c) The Authority shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Transfer Restricted Securities that
were acquired for the account of such Broker-Dealer as a result of market-making
activities or other trading activities (other than Initial Senior Subordinated
Notes acquired directly from the Authority or any Affiliate of the Authority),
may exchange such Transfer Restricted Securities pursuant to the Exchange Offer.
Such "Plan of Distribution" section shall also contain all other information
with respect to such sales by such Broker-Dealers that the Commission may
require in order to permit such sales pursuant thereto, but such "Plan of
Distribution" shall not name any such Broker-Dealer or disclose the amount of
Transfer Restricted Securities held by any such Broker-Dealer, except to the
extent required by the Commission as a result of a change in policy, rules or
regulations after the date of this Agreement.
Because such Broker-Dealer may be deemed to be an "underwriter" within the
meaning of the Act and must, therefore, deliver a prospectus meeting the
requirements of the Act in connection with its initial sale of any Senior
Subordinated Exchange Notes received by such Broker-Dealer in the Exchange
Offer, the Authority shall permit the use of the Prospectus contained in the
Exchange Offer Registration Statement by such Broker-Dealer to satisfy such
prospectus delivery requirement. To the extent necessary to ensure that the
prospectus contained in the Exchange Offer Registration Statement is available
for sales of Senior Subordinated Exchange Notes by Broker-Dealers, the Authority
agrees to use its best efforts to keep the Exchange Offer Registration Statement
continuously effective, supplemented, amended and current as required by and
subject to the provisions of Section 6(a) and (c) hereof and in conformity with
the requirements of this Agreement, the Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period of
one year from the Consummation Deadline or such shorter period as will terminate
when all Transfer Restricted Securities covered by such Registration Statement
have been sold pursuant thereto. The Authority shall provide sufficient copies
of the latest version of such Prospectus to such Broker-Dealers, promptly upon
request, and in no event later than one day after such request, at any time
during such period.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Exchange Offer is not permitted by
applicable law (after the Authority has complied with the procedures set forth
in Section 6(a)(i) below) or (ii) if any Holder of Transfer Restricted
Securities shall notify the Authority within 20 Business Days following the
Consummation Deadline that (A) such Holder was prohibited by law or Commission
policy from participating in the Exchange Offer or (B) such Holder may not
resell the Senior Subordinated Exchange 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 by such Holder or (C) such Holder is a Broker-Dealer and holds
Initial Senior Subordinated Notes acquired directly from the Authority or any of
its Affiliates, then the Authority shall
(x) cause to be filed, on or prior to 30 days after the earlier of (i) the
date on which the Authority determines that the Exchange Offer Registration
Statement cannot be filed as a result of clause (a)(i) above and (ii) the date
on which the Authority receives the notice specified in clause (a)(ii) above,
(such earlier date, the "Filing Deadline"), a shelf registration statement
pursuant to Rule 415 under the Act (which may be an amendment to the Exchange
Offer Registration Statement (the "Shelf Registration Statement")), relating to
all Transfer Restricted Securities, and
(y) shall use its best efforts to cause such Shelf Registration Statement
to become effective on or prior to 90 days after the Filing Deadline for the
Shelf Registration Statement (such 90th day the "Effectiveness Deadline").
If, after the Authority has filed an Exchange Offer Registration Statement
that satisfies the requirements of Section 3(a) above, the Authority is required
to file and make effective a Shelf Registration Statement solely because the
Exchange Offer is not permitted under applicable federal law (i.e. clause (a)(i)
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<PAGE>
above), then the filing of the Exchange Offer Registration Statement shall be
deemed to satisfy the requirements of clause (x) above; provided that, in such
event, the Authority shall remain obligated to meet the Effectiveness Deadline
set forth in clause (y).
To the extent necessary to ensure that the Shelf Registration Statement is
available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a) and the other securities required
to be registered therein pursuant to Section 6(b)(ii) hereof, the Authority
shall use its best efforts to keep any Shelf Registration Statement required by
this Section 4(a) continuously effective, supplemented, amended and current as
required by and subject to the provisions of Sections 6(b) and (c) hereof and in
conformity with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of at least two years (as extended pursuant to Section 6(c)(i)) following
the Closing Date, or such shorter period as will terminate when all Transfer
Restricted Securities covered by such Shelf Registration Statement have been
sold pursuant thereto.
(b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Authority in writing, within 20 days after receipt of a request therefor,
the information specified in Item 507 or 508 of Regulation S-K, as applicable,
of the Act for use in connection with any Shelf Registration Statement or
Prospectus or preliminary Prospectus included therein. No Holder of Transfer
Restricted Securities shall be entitled to additional interest pursuant to
Section 5 hereof unless and until such Holder shall have provided all such
information. Each selling Holder agrees to furnish promptly additional
information required to be disclosed in order to make the information previously
furnished to the Authority by such Holder not materially misleading.
SECTION 5. ADDITIONAL INTEREST
If (i) any Registration Statement required by this Agreement is not filed
with the Commission on or prior to the applicable Filing Deadline, (ii) any such
Registration Statement has not been declared effective by the Commission on or
prior to the applicable Effectiveness Deadline, (iii) the Exchange Offer has not
been Consummated on or prior to the Consummation Deadline or (iv) any
Registration Statement required by this Agreement is filed and declared
effective but shall thereafter cease to be effective or fail to be usable for
its intended purpose without being succeeded within 2 days by a post-effective
amendment to such Registration Statement that cures such failure and that is
itself declared effective within 5 days of filing such post-effective amendment
to such Registration Statement (each such event referred to in clauses (i)
through (iv), a "Registration Default"), then the Authority hereby agrees to pay
to each Holder of Transfer Restricted Securities affected thereby additional
interest in an amount equal to 25 basis points per 90-day period of the
principal amount of Transfer Restricted Securities held by such Holder for the
90-day period or portion thereof that the Registration Default continues for the
first 90-day period immediately following the occurrence of such Registration
Default. The amount of the additional interest shall increase by an additional
25 basis points with respect to each subsequent 90-day period until all
Registration Defaults have been cured, up to a maximum amount of additional
interest of 1% per annum of the principal amount of Transfer Restricted
Securities; provided that the Authority shall in no event be required to pay
additional interest for more than one Registration Default at any given time.
Notwithstanding anything to the contrary set forth herein, (1) upon filing of
the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of (i) above, (2) upon the effectiveness of
the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of (ii) above, (3) upon Consummation of the
Exchange Offer, in the case of (iii) above, or (4) upon the filing of a
post-effective amendment to the Registration Statement or an additional
Registration Statement that causes the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement) to again be declared
effective or made usable in the case of (iv) above, the additional interest
payable with respect to the Transfer Restricted Securities as a result of such
clause (i), (ii), (iii) or (iv), as applicable, shall cease.
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All accrued additional interest shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the Senior
Subordinated Notes Indenture and the Senior Subordinated Notes, on each Interest
Payment Date, as more fully set forth in the Senior Subordinated Notes Indenture
and the Senior Subordinated Notes. Notwithstanding the fact that any securities
for which additional interest is due cease to be Transfer Restricted Securities,
all obligations of the Authority to pay additional interest with respect to
securities shall survive until such time as such obligations with respect to
such securities shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the Exchange
Offer, the Authority shall (x) comply with all applicable provisions of Section
6(c) below, (y) use its best efforts to effect such exchange and to permit the
resale of Senior Subordinated Exchange Notes by Broker-Dealers that tendered in
the Exchange Offer Initial Senior Subordinated Notes that such Broker-Dealer
acquired for its own account as a result of its market making activities or
other trading activities (other than Initial Senior Subordinated Notes acquired
directly from the Authority or any of its Affiliates) being sold in accordance
with the intended method or methods of distribution thereof, and (z) comply with
all of the following provisions:
(i) If, following the date hereof there has been announced a change in
Commission policy with respect to exchange offers such as the Exchange
Offer, that in the reasonable opinion of counsel to the Authority raises a
substantial question as to whether the Exchange Offer is permitted by
applicable federal law, the Authority hereby agrees to seek a no-action
letter or other favorable decision from the Commission staff allowing the
Authority to Consummate a Exchange Offer for such Transfer Restricted
Securities. In connection with the foregoing, the Authority hereby agrees
to take all actions as may be required in connection with the issuance of
such decision, including without limitation (A) participating in telephonic
conferences with the Commission, (B) delivering to the Commission staff an
analysis prepared by counsel to the Authority setting forth the legal
bases, if any, upon which such counsel has concluded that such an Exchange
Offer should be permitted and (C) diligently pursuing a resolution (which
need not be favorable) by the Commission staff.
(ii) As a condition to its participation in the Exchange Offer, each
Holder of Transfer Restricted Securities (including, without limitation,
any Holder who is a Broker Dealer) shall furnish, upon the request of the
Authority, prior to the Consummation of the Exchange Offer, a written
representation to the Authority (which may be contained in the letter of
transmittal contemplated by the Exchange Offer Registration Statement) to
the effect that (A) it is not an Affiliate of the Authority, (B) it is not
engaged in, and does not intend to engage in, and has no arrangement or
understanding with any person to participate in, a distribution of the
Senior Subordinated Exchange Notes to be issued in the Exchange Offer and
(C) it is acquiring the Senior Subordinated Exchange Notes in its ordinary
course of business. As a condition to its participation in the Exchange
Offer, each Holder using the Exchange Offer to participate in a
distribution of the Senior Subordinated Exchange Notes shall acknowledge
and agree that, if the resales are of Senior Subordinated Exchange Notes
obtained by such Holder in exchange for Initial Senior Subordinated Notes
acquired directly from the Authority or an Affiliate thereof, it (1) could
not, under Commission policy as in effect on the date of this Agreement,
rely on the position of the Commission enunciated in Exxon Capital Holdings
Corporation (available May 13, 1988) and Morgan Stanley and Co., Inc.
(available June 5, 1991), as interpreted in the Commission's letter to
Shearman & Sterling dated July 2, 1993, and similar no-action letters
(including, if applicable, any no-action letter obtained pursuant to clause
(i) above), and (2) must comply with the registration and prospectus
delivery requirements of the Act in connection with a secondary resale
transaction and that such a secondary resale transaction must be covered by
an effective registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of
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Regulation S-K.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Authority shall provide a supplemental letter to the
Commission (A) stating that the Authority is registering the Exchange Offer
in reliance on the position of the Commission enunciated in Exxon Capital
Holdings Corporation (available May 13, 1988) and Morgan Stanley and Co.,
Inc. (available June 5, 1991) as interpreted in the Commission's letter to
Shearman & Sterling dated July 2, 1993, and, if applicable, any no-action
letter obtained pursuant to clause (i) above, (B) including a
representation that the Authority has not entered into any arrangement or
understanding with any person to distribute the Senior Subordinated
Exchange Notes to be received in the Exchange Offer and that, to the best
of the Authority's information and belief, each Holder participating in the
Exchange Offer is acquiring the Senior Subordinated Exchange Notes in its
ordinary course of business and has no arrangement or understanding with
any person to participate in the distribution of the Senior Subordinated
Exchange Notes received in the Exchange Offer and (C) any other undertaking
or representation required by the Commission as set forth in any no-action
letter obtained pursuant to clause (i) above, if applicable.
(b) Shelf Registration Statement. In connection with the Shelf Registration
Statement, the Authority shall
(i) comply with all the provisions of Section 6(c) below and use its
best efforts to effect such registration to permit the sale of the Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution thereof (as indicated in the information furnished
to the Authority pursuant to Section 4(b) hereof), and pursuant thereto the
Authority will prepare and file with the Commission a Registration
Statement relating to the registration on any appropriate form under the
Act, which form shall be available for the sale of the Transfer Restricted
Securities in accordance with the intended method or methods of
distribution thereof within the time periods and otherwise in accordance
with the provisions hereof, and
(ii) issue, upon the request of any Holder or purchaser of Initial
Senior Subordinated Notes covered by any Shelf Registration Statement
contemplated by this Agreement, Senior Subordinated Exchange Notes having
an aggregate principal amount equal to the aggregate principal amount of
Initial Senior Subordinated Notes sold pursuant to the Shelf Registration
Statement and surrendered to the Authority for cancellation. The Authority
shall register Senior Subordinated Exchange Notes on the Shelf Registration
Statement for this purpose and issue the Senior Subordinated Exchange Notes
to the purchaser(s) of securities subject to the Shelf Registration
Statement in the names as such purchaser(s) shall designate.
(c) General Provisions. In connection with any Registration Statement and
any related Prospectus required by this Agreement, the Authority shall:
(i) use its best efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements for
the period specified in Section 3 or 4 of this Agreement, as applicable.
Upon the occurrence of any event that would cause any such Registration
Statement or the Prospectus contained therein (A) to contain an untrue
statement of material fact or omit to state any material fact necessary to
make the statements therein not misleading or (B) not to be effective and
usable for resale of Transfer Restricted Securities during the period
required by this Agreement, the Authority shall file promptly an
appropriate amendment to such Registration Statement curing such defect,
and, if Commission review is required, use its best efforts to cause such
amendment to be declared effective as soon as practicable;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the applicable Registration Statement as may
be necessary to keep such
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Registration Statement effective for the applicable period set forth in
Section 3 or 4 hereof, as the case may be, cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 under the Act, and to comply fully with
Rules 424, 430A and 462, as applicable, under the Act in a timely manner;
and comply with the provisions of the Act with respect to the disposition
of all securities covered by such Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration
Statement or supplement to the Prospectus;
(iii) advise each Holder promptly and, if requested by such Holder,
confirm such advice in writing, (A) when the Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with respect to
any applicable Registration Statement or any post-effective amendment
thereto, when the same has become effective, (B) of any request by the
Commission for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information relating
thereto, (C) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement under the Act or of the
suspension by any state securities commission of the qualification of the
Transfer Restricted Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for any of the preceding purposes, (D) of
the existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any document
incorporated by reference therein untrue, or that requires the making of
any additions to or changes in the Registration Statement in order to make
the statements therein not misleading, or that requires the making of any
additions to or changes in the Prospectus in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the
Transfer Restricted Securities under state securities or Blue Sky laws, the
Authority shall use its best efforts to obtain the withdrawal or lifting of
such order at the earliest possible time;
(iv) subject to Section 6(c)(i), if any fact or event contemplated by
Section 6(c)(iii)(D) above shall exist or have occurred, prepare a
supplement or post-effective amendment to the Registration Statement or
related Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(v) furnish to each Holder in connection with such exchange or sale,
if any, before filing with the Commission, copies of any Registration
Statement or any Prospectus included therein or any amendments or
supplements to any such Registration Statement or Prospectus (including all
documents incorporated by reference after the initial filing of such
Registration Statement), which documents will be subject to the review and
comment of such Holders in connection with such sale, if any, for a period
of at least five Business Days, and the Authority will use its best efforts
to reflect in each such Registration Statement or Prospectus or any
amendment or supplement to any such Registration Statement or Prospectus
(including all such documents incorporated by reference) when so filed with
the Commission, such comments proposed by such Holders. A Holder shall be
deemed to have objected to such filing if such Registration Statement,
amendment, Prospectus or supplement, as applicable, as proposed to be
filed, contains an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading or
fails to comply with the applicable requirements of the Act;
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(vi) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
provide copies of such document to each Holder in connection with such
exchange or sale, if any, make the Authority's representatives available
for discussion of such document and other customary due diligence matters,
and include such information in such document prior to the filing thereof
as such Holders may reasonably request;
(vii) make available, at reasonable times, for inspection by each
Holder and any attorney or accountant retained by such Holders, all
financial and other records, pertinent corporate documents of the Authority
and cause the Authority's officers, board members and employees to supply
all information reasonably requested by any such Holder, attorney or
accountant in connection with such Registration Statement or any
post-effective amendment thereto subsequent to the filing thereof and prior
to its effectiveness;
(viii) if requested by any Holders in connection with such exchange or
sale, promptly include in any Registration Statement or Prospectus,
pursuant to a supplement or post-effective amendment if necessary, such
information as such Holders may reasonably request to have included
therein, including, without limitation, information relating to the "Plan
of Distribution" of the Transfer Restricted Securities, and make all
required filings of such Prospectus supplement or post-effective amendment
as soon as practicable after the Authority is notified of the matters to be
included in such Prospectus supplement or post-effective amendment;
(ix) furnish to each Holder in connection with such exchange or sale,
without charge, at least one copy of the Registration Statement, as first
filed with the Commission, and of each amendment thereto, including all
documents incorporated by reference therein and all exhibits (including
exhibits incorporated therein by reference);
(x) deliver to each Holder without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons reasonably may request; the Authority
hereby consents to the use (in accordance with law) of the Prospectus and
any amendment or supplement thereto by each selling Holder in connection
with the offering and the sale of the Transfer Restricted Securities
covered by the Prospectus or any amendment or supplement thereto;
(xi) upon the request of any Holder, enter into such agreements
(including underwriting agreements) and make such representations and
warranties and take all such other actions in connection therewith in order
to expedite or facilitate the disposition of the Transfer Restricted
Securities pursuant to any applicable Registration Statement contemplated
by this Agreement as may be reasonably requested by any Holder in
connection with any sale or resale pursuant to any applicable Registration
Statement. In such connection, the Authority shall
(A) upon request of any Holder, furnish (or in the case of
paragraphs (2) and (3), use its best efforts to cause to be furnished)
to each Holder, upon Consummation of the Exchange Offer or upon the
effectiveness of the Shelf Registration Statement, as the case may be:
(1) a certificate, dated such date, signed on behalf of the
Authority by the Chairman of the Management Board confirming, as
of the date thereof, the matters set forth in Section 6(d) of the
Purchase Agreement and such other similar matters as such Holders
may reasonably request;
(2) an opinion, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, of counsel for the
Authority covering such matters as such Holder may reasonably
request and are customarily given in similar offerings; and
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(3) a customary comfort letter, dated the date of
Consummation of the Exchange Offer, or as of the date of
effectiveness of the Shelf Registration Statement, as the case
may be, from the Authority's independent accountants, in the
customary form and covering matters of the type customarily
covered in comfort letters to underwriters in connection with
underwritten offerings, and affirming the matters set forth in
the comfort letters delivered pursuant to Section 6(e) of the
Purchase Agreement; and
(B) deliver such other documents and certificates as may be
reasonably requested by the selling Holders to evidence compliance
with the matters covered in clause (A) above and with any customary
conditions contained in the any agreement entered into by the
Authority pursuant to this clause (xi);
(xii) prior to any public offering of Transfer Restricted Securities,
cooperate with the selling Holders and their counsel in connection with the
registration and qualification of the Transfer Restricted Securities under
the securities or Blue Sky laws of such jurisdictions as the selling
Holders may request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Transfer
Restricted Securities covered by the applicable Registration Statement;
provided, however, that the Authority shall not be required to register or
qualify as a foreign corporation where it is not now so qualified or to
take any action that would subject it to the service of process in suits or
to taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so subject;
(xiii) in connection with any sale of Transfer Restricted Securities
that will result in such securities no longer being Transfer Restricted
Securities, cooperate with the Holders to facilitate the timely preparation
and delivery of certificates representing Transfer Restricted Securities to
be sold and not bearing any restrictive legends; and to register such
Transfer Restricted Securities in such denominations and such names as the
selling Holders may request at least two Business Days prior to such sale
of Transfer Restricted Securities;
(xiv) use its best efforts to cause the disposition of the Transfer
Restricted Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof to
consummate the disposition of such Transfer Restricted Securities, subject
to the proviso contained in clause (xii) above;
(xv) provide a CUSIP number for all Transfer Restricted Securities not
later than the effective date of a Registration Statement covering such
Transfer Restricted Securities and provide the Trustee under the Senior
Subordinated Notes Indenture with printed certificates for the Transfer
Restricted Securities which are in a form eligible for deposit with the
Depository Trust Company;
(xvi) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to
its security holders with regard to any applicable Registration Statement,
as soon as practicable, a consolidated earnings statement meeting the
requirements of Rule 158 (which need not be audited) covering a 12-month
period beginning after the effective date of the Registration Statement (as
such term is defined in paragraph (c) of Rule 158 under the Act);
(xvii) cause the Senior Subordinated Notes Indenture to be qualified
under the TIA not later than the effective date of the first Registration
Statement required by this Agreement and, in connection therewith,
cooperate with the Trustee and the Holders to effect such changes to the
Senior Subordinated Notes Indenture as may be required for such Senior
Subordinated Notes
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Indenture to be so qualified in accordance with the terms of the TIA; and
execute and use its best efforts to cause the Trustee to execute, all
documents that may be required to effect such changes and all other forms
and documents required to be filed with the Commission to enable such
Senior Subordinated Notes Indenture to be so qualified in a timely manner;
and
(xviii) provide promptly to each Holder, upon request, each document
filed with the Commission pursuant to the requirements of Section 13 or
Section 15(d) of the Exchange Act.
(d) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 6(c)(iii)(C) or any notice from the Authority of the existence of any
fact of the kind described in Section 6(c)(iii)(D) hereof (in each case, a
"Suspension Notice"), such Holder will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to the applicable Registration Statement
until (i) such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such Holder is
advised in writing by the Authority that the use of the Prospectus may be
resumed, and has received copies of any additional or supplemental filings that
are incorporated by reference in the Prospectus (in each case, the
"Recommencement Date"). Each Holder receiving a Suspension Notice hereby agrees
that it will either (i) destroy any Prospectuses, other than permanent file
copies, then in such Holder's possession which have been replaced by the
Authority with more recently dated Prospectuses or (ii) deliver to the Authority
(at the Authority's expense) all copies, other than permanent file copies, then
in such Holder's possession of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of the Suspension Notice. The
time period regarding the effectiveness of such Registration Statement set forth
in Section 3 or 4 hereof, as applicable, shall be extended by a number of days
equal to the number of days in the period from and including the date of
delivery of the Suspension Notice to the date of delivery of the Recommencement
Date.
(e) Underwritten Offerings. No Holder may participate in any underwritten
Shelf Registration Statement hereunder unless such Holder (i) agrees to sell
such Holder's Transfer Restricted Securities on the basis provided in any
underwriting arrangements entered into in connection therewith and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Authority's performance of or compliance
with this Agreement will be borne by the Authority, regardless of whether a
Registration Statement becomes effective, including without limitation: (i) all
registration and filing fees and expenses; (ii) all fees and expenses of
compliance with federal securities and state Blue Sky or securities laws; (iii)
all expenses of printing (including printing certificates for the Senior
Subordinated Exchange Notes to be issued in the Exchange Offer and printing of
Prospectuses), messenger and delivery services and telephone; (iv) all fees and
disbursements of counsel for the Authority and the Holders of Transfer
Restricted Securities; (v) all application and filing fees in connection with
listing the Senior Subordinated Exchange Notes on a national securities exchange
or automated quotation system pursuant to the requirements hereof; and (vi) all
fees and disbursements of independent certified public accountants of the
Authority (including the expenses of any special audit and comfort letters
required by or incident to such performance).
The Authority will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any person, including special experts, retained by the
Authority.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the
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Authority will reimburse the Initial Purchasers and the Holders of Transfer
Restricted Securities who are tendering Initial Senior Subordinated Notes into
the Exchange Offer and/or selling or reselling Initial Senior Subordinated Notes
or Senior Subordinated Exchange Notes pursuant to the "Plan of Distribution"
contained in the Exchange Offer Registration Statement or the Shelf Registration
Statement, as applicable, for the reasonable fees and disbursements of not more
than one counsel, as may be chosen by the Holders of a majority in principal
amount of the Transfer Restricted Securities for whose benefit such Registration
Statement is being prepared.
Notwithstanding the foregoing, the Holders of any Initial Senior
Subordinated Notes or Exchange Senior Subordinated Notes being registered on the
Shelf Registration Statement shall pay all agency or brokerage fees and
commissions and underwriting discounts and commissions attributable to the sale
of such Initial Senior Subordinated Notes or Exchange Senior Subordinated Notes
and the fees and disbursements of any counsel retained by such Holders other
than counsel referred to above.
SECTION 8. INDEMNIFICATION
(a) The Authority agrees to indemnify and hold harmless each Holder, its
directors, officers and each person, if any, who controls such Holder (within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act), from
and against any and all losses, claims, damages, liabilities, judgments,
(including without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action that
could give rise to any such losses, claims, damages, liabilities or judgments)
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement, preliminary prospectus or Prospectus
(or any amendment or supplement thereto) provided by the Authority to any Holder
or any prospective purchaser of Senior Subordinated Exchange Notes or registered
Initial Senior Subordinated Notes, or caused by any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages, liabilities or judgments are caused by an untrue statement or
omission or alleged untrue statement or omission that is based upon information
relating to any of the Holders furnished in writing to the Authority by any of
the Holders.
(b) Each Holder of Transfer Restricted Securities agrees, severally and not
jointly, to indemnify and hold harmless the Authority and its directors and
officers, and each person, if any, who controls (within the meaning of Section
15 of the Act or Section 20 of the Exchange Act) the Authority to the same
extent as the foregoing indemnity from the Authority set forth in section (a)
above, but only with reference to information relating to such Holder furnished
in writing to the Authority by such Holder expressly for use in any Registration
Statement. In no event shall any Holder, its directors, officers or any person
who controls such Holder be liable or responsible for any amount in excess of
the amount by which the total amount received by such Holder with respect to its
sale of Transfer Restricted Securities pursuant to a Registration Statement
exceeds (i) the amount paid by such Holder for such Transfer Restricted
Securities and (ii) the amount of any damages that such Holder, its directors,
officers or any person who controls such Holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission.
(c) In case any action shall be commenced involving any person in respect
of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying person") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), a Holder shall not be required to assume the
defense of such action pursuant to this Section 8(c), but may employ separate
counsel and participate in the defense thereof, but the fees and expenses of
such counsel, except as provided below, shall be at the expense of the Holder).
Any indemnified party shall have the right to employ separate counsel in any
such action and participate in the
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defense thereof, but the fees and expenses of such counsel shall be at the
expense of the indemnified party unless (i) the employment of such counsel shall
have been specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all indemnified parties
and all such fees and expenses shall be reimbursed as they are incurred. Such
firm shall be designated in writing by a majority of the Holders, in the case of
the parties indemnified pursuant to Section 8(a), and by the Authority, in the
case of parties indemnified pursuant to Section 8(b). The indemnifying party
shall indemnify and hold harmless the indemnified party from and against any and
all losses, claims, damages, liabilities and judgments by reason of any
settlement of any action (i) effected with its written consent or (ii) effected
without its written consent if the settlement is entered into more than 20
Business Days after the indemnifying party shall have received a request from
the indemnified party for reimbursement for the fees and expenses of counsel (in
any case where such fees and expenses are at the expense of the indemnifying
party) and, prior to the date of such settlement, the indemnifying party shall
have failed to comply with such reimbursement request. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement or compromise of, or consent to the entry of judgment with respect
to, any pending or threatened action in respect of which the indemnified party
is or could have been a party and indemnity or contribution may be or could have
been sought hereunder by the indemnified party, unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability on claims that are or could have been the subject
matter of such action and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of the
indemnified party.
(d) To the extent that the indemnification provided for in this Section 8
is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Authority, on the
one hand, and the Holders, on the other hand, from their sale of Transfer
Restricted Securities or (ii) if the allocation provided by clause 8(d)(i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause 8(d)(i) above but also the
relative fault of the Authority, on the one hand, and of the Holder, on the
other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative fault of the Authority, on the
one hand, and of the Holder, on the other hand, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Authority, on the one hand, or by the
Holder, on the other hand, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and judgments referred to above shall be deemed to include,
subject to the limitations set forth in the second paragraph of Section 8(a),
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim.
The Authority and each Holder agree that it would not be just and equitable
if contribution pursuant to this Section 8(d) were determined by pro rata
allocation (even if the Holders were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the
13
<PAGE>
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter, including any
action that could have given rise to such losses, claims, damages, liabilities
or judgments. Notwithstanding the provisions of this Section 8, no Holder, its
directors, its officers or any person, if any, who controls such Holder shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the total received by such Holder with respect to the sale of Transfer
Restricted Securities pursuant to a Registration Statement exceeds (i) the
amount paid by such Holder for such Transfer Restricted Securities and (ii) the
amount of any damages which such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Holders'
obligations to contribute pursuant to this Section 8(d) are several in
proportion to the respective principal amount of Transfer Restricted Securities
held by each Holder hereunder and not joint.
SECTION 9. RULE 144A and RULE 144
The Authority agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding and during any period in which the
Authority (i) is not subject to Section 13 or 15(d) of the Exchange Act, to make
available, upon request of any Holder, to such Holder or beneficial owner of
Transfer Restricted Securities in connection with any sale thereof and any
prospective purchaser of such Transfer Restricted Securities designated by such
Holder or beneficial owner, the information required by Rule 144A(d)(4) under
the Act in order to permit resales of such Transfer Restricted Securities
pursuant to Rule 144A, and (ii) is subject to Section 13 or 15 (d) of the
Exchange Act, to make all filings required thereby in a timely manner in order
to permit resales of such Transfer Restricted Securities pursuant to Rule 144.
SECTION 10. CONSENT TO SUIT
The Authority 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 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 Authority intends 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 Authority waives its immunity from
unconsented suit to permit the maintenance of the following actions:
(i) Courts. The Authority waives its 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
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 Authority has been
improperly granted or unreasonably withheld; (iii) enforce any judgment
prohibiting the Authority from taking any action, or mandating or
obligating the Authority to take any action, including a judgment
compelling the Authority to submit to binding arbitration; and (iv)
adjudicate any claim under the Indian Civil Rights Act of 1968, 25 U.S.C.
ss. 1302 (or any successor statute).
(ii) Arbitration. The Authority waives its immunity from unconsented
suit to permit arbitrators, appointed and acting under the commercial
arbitration rules of the American Arbitration
14
<PAGE>
Association, whenever and to the extent any agreement to submit a matter to
arbitration is made by the Authority, to: (i) enforce and interpret the
terms of this Agreement and to award and enforce the award of any damages
owing as a consequence thereof; (ii) determine whether any consent or
approval of the Authority has been unreasonably withheld; and (iii) enforce
any judgment prohibiting the Authority from taking any action, or mandating
or obligating the Authority to take any action, including a judgment
compelling the Authority to submit to binding arbitration.
SECTION 11. MISCELLANEOUS
(a) Remedies. The Authority acknowledges and agrees that any failure by the
Authority to comply with its obligations under Sections 3 and 4 hereof may
result in material irreparable injury to the Initial Purchasers or the Holders
for which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of any such
failure, the Initial Purchasers or any Holder may obtain such relief as may be
required to specifically enforce the Authority's obligations under Sections 3
and 4 hereof. The Authority further agrees to waive the defense in any action
for specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Authority will not, on or after the
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Authority's securities under any
agreement in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless (i) in the case of Section 5
hereof and this Section 11(c)(i), the Authority has obtained the written consent
of Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Authority has obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities (excluding Transfer Restricted Securities held by the
Authority or its Affiliates). Notwithstanding the foregoing, a waiver or consent
to departure from the provisions hereof that relates exclusively to the rights
of Holders whose Transfer Restricted Securities are being tendered pursuant to
the Exchange Offer, and that does not affect directly or indirectly the rights
of other Holders whose Transfer Restricted Securities are not being tendered
pursuant to such Exchange Offer, may be given by the Holders of a majority of
the outstanding principal amount of Transfer Restricted Securities subject to
such Exchange Offer.
(d) Third Party Beneficiary. The Holders shall be third party beneficiaries
to the agreements made hereunder between the Authority, on the one hand, and the
Initial Purchasers, on the other hand, and shall have the right to enforce such
agreements directly to the extent they may deem such enforcement necessary or
advisable to protect its rights or the rights of Holders hereunder.
(e) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Registrar under the Senior Subordinated Notes Indenture, with a copy to the
Registrar under the Senior Subordinated Notes Indenture; and
(ii) if to the Authority:
Mohegan Tribal Gaming Authority
1 Mohegan Sun Boulevard
15
<PAGE>
Uncasville, CT 06382
Telecopier No.: (860) 204-6153
Attention: Roland J. Harris
With a copy to:
Hogan & Hartson LLP
555 Thirteenth Street, NW
Washington, DC 20004
Telecopier No.: (202) 637-5910
Attention: David B.H. Martin, Jr., Esq.
All such notices and communications 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 receipt
acknowledged, if telecopied; and on the next Business Day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the person giving the same to the Trustee at the
address specified in the Senior Subordinated Notes Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders; provided, that nothing herein shall be deemed to permit any assignment,
transfer or other disposition of Transfer Restricted Securities in violation of
the terms hereof or of the Purchase Agreement or the Senior Subordinated Notes
Indenture. If any transferee of any Holder shall acquire Transfer Restricted
Securities in any manner, whether by operation of law or otherwise, such
Transfer Restricted Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Transfer Restricted Securities such
person shall be conclusively deemed to have agreed to be bound by and to perform
all of the terms and provisions of this Agreement, including the restrictions on
resale set forth in this Agreement and, if applicable, the Purchase Agreement,
and such person shall be entitled to receive the benefits hereof.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW).
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration
16
<PAGE>
rights granted with respect to the Transfer Restricted Securities. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
17
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
MOHEGAN TRIBAL GAMING AUTHORITY
-----------------------------------
By:
Name:
Title:
SALOMON SMITH BARNEY INC.
By:
--------------------------------
Name:
Title:
NATIONSBANC MONTGOMERY SECURITIES LLC
By:
--------------------------------
Name:
Title:
SG COWEN SECURITIES CORPORATION
By:
--------------------------------
Name:
Title:
BEAR, STEARNS & CO. INC.
By:
--------------------------------
Name:
Title:
BANCBOSTON ROBERTSON STEPHENS INC.
By:
--------------------------------
Name:
Title:
18
<PAGE>
FLEET SECURITIES, INC.
By:
--------------------------------
Name:
Title:
19
<PAGE>
Exhibit 5.1
_____________, 1999
Mohegan Tribal Gaming Authority
1 Mohegan Sun Boulevard
Uncasville, CT 06382
Ladies and Gentlemen:
This firm has acted as special counsel to the Mohegan Tribe of Indians
of Connecticut (the "Tribe") and the Mohegan Tribal Gaming Authority (the
"Authority"), an instrumentality of the Tribe, in connection with its
Registration Statement on Form S-4, (the "Registration Statement"), filed with
the Securities and Exchange Commission relating to the proposed offering of up
to $200,000,000 in aggregate principal amount of 8-1/8% Senior Notes due January
1, 2006 (the "Senior Exchange Notes") in exchange for up to $200,000,000 in
aggregate principal amount of the Authority's outstanding 8-1/8% Senior Notes
due January 1, 2006 (the "Senior Notes") and to the proposed offering of up to
$300,000,000 in aggregate principal amount of 8-3/4% Senior Subordinated Notes
due January 1, 2009 (the "Senior Subordinated Exchange Notes" and together with
the Senior Exchange Notes, the "Exchange Notes") in exchange for up to
$300,000,000 in aggregate principal amount of the Authority's outstanding 8-3/4%
Senior Subordinated Notes due January 1, 2009 (the "Senior Subordinated Notes").
This opinion letter is furnished to you at your request to enable you to fulfill
the requirements of Item 601(b)(5) of Regulation S-K, 17 C.F.R.
(S)229.601(b)(5), in connection with the Registration Statement.
For purposes of this opinion letter, we have examined copies of the
following documents:
1. An executed copy of the Registration Statement.
2. An executed copy of the Senior Notes Indenture dated March 3, 1999
(the "Senior Notes Indenture"), by and between the Authority and
First Union National Bank, including the form of Exchange
<PAGE>
Mohegan Tribal Gaming Authority
______________, 1999
Page 2
Note to be issued pursuant thereto, as filed as Exhibit 4.2 to the
Registration Statement.
3. An executed copy of the Indenture dated March 3, 1999 (the "Senior
Subordinated Notes Indenture"), by and between the Authority and
State Street Bank and Trust Company, including the form of Exchange
Note to be issued pursuant thereto, as filed as Exhibit 4.7 to the
Registration Statement.
4. The Constitution of the Mohegan Tribe, as certified by the Recording
Secretary of the Management Board of the Authority on the date
hereof as being complete, accurate and in effect.
5. The Mohegan Tribal Ordinance No. 95-2 "And Ordinance Establishing
the Mohegan Tribal Gaming Authority" dated July 15, 1995.
6. Resolutions of the Management Board of the Authority adopted on
February 18, 1999 as certified by the Recording Secretary of the
Management Board of the Authority on the date hereof as being
complete, accurate and in effect, relating to the issuance and sale
of the Exchange Notes and arrangements in connection therewith.
In our examination of the aforesaid documents, we have assumed the
genuineness of all signatures, the legal capacity of all natural persons, the
authenticity, accuracy and completeness of all documents submitted to us, and
the conformity with the original documents of all documents submitted to us as
certified, telecopied, photostatic or reproduced copies. This opinion letter is
given, and all statements herein are made, in the context of the foregoing.
This opinion letter is based as to matters of law solely on applicable
provisions of the contract law of the State of New York (but not including any
statutes, ordinances, administrative decisions, rules or regulations of any
political subdivision of the State of New York). We express no opinion herein as
to any other laws, statutes, ordinances, rules or regulations.
Based upon, subject to and limited by the foregoing, we are of the
opinion that the Exchange Notes have been duly authorized on behalf of the
Authority and that, (i) following the effectiveness of the Registration
Statement and receipt by the Authority of the Senior Notes in exchange for the
Senior Exchange
<PAGE>
Mohegan Tribal Gaming Authority
______________, 1999
Page 3
Notes and receipt by the Authority of the Senior Subordinated Notes in exchange
for the Senior Subordinated Exchange Notes as specified in the resolutions of
the Management Board referred to above, and (ii) assuming due execution,
authentication, issuance and delivery of the Senior Exchange Notes and Senior
Subordinated Exchange Notes as provided in the Senior Notes Indenture and Senior
Subordinated Notes Indenture (together, the "Indentures"), respectively, both
sets of Exchange Notes will constitute valid and binding obligations of the
Authority entitled to the benefits of the Indentures and enforceable in
accordance with their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights (including, without limitation, the effect of statutory and
other laws regarding fraudulent conveyances, fraudulent transfers and
preferential transfers) and as may be limited by the exercise of judicial
discretion and the application of principles of equity including without
limitation, requirements of good faith, fair dealing, conscionability and
materiality (regardless of whether the Exchange Notes are considered in a
proceeding in equity or at law).
The Opinion expressed in the Paragraph above shall be understood to mean
========================================================================
only that (i) if there is a default in performance of an obligation, (ii) if a
==============================================================================
failure to pay or other damage can be shown and (iii) if the defaulting party
=============================================================================
can be brought into a court which will hear the case and apply the governing
============================================================================
law, then, subject to the availability of defenses, and to the exceptions set
=============================================================================
forth in the Paragraph above, the court will provide a money damage (or perhaps
===============================================================================
injunctive or specific performance) remedy.
===========================================
We assume no obligation to advise you of any changes in the foregoing
subsequent to the delivery of this opinion letter. This opinion letter has been
prepared solely for your use in connection with the filing of the Registration
Statement on the date of this opinion letter and should not be quoted in whole
or in part or otherwise referred to, nor filed with or furnished to any
governmental agency or other person or entity, without the prior written consent
of this firm.
We hereby consent to the filing of this opinion letter as Exhibit 5.1
to the Registration Statement and to the reference to this firm under the
caption "Legal Matters" in the prospectus constituting a part of the
Registration Statement. In giving this consent, we do not thereby admit that we
are an "expert" within the meaning of the Securities Act of 1933, as amended.
<PAGE>
Mohegan Tribal Gaming Authority
______________, 1999
Page 4
Very truly yours,
HOGAN & HARTSON L.L.P.
<PAGE>
Exhibit 10.6
AMENDMENT TO LAND LEASE
This Amendment to Land Lease (this "Amendment") is entered into as of
this 18th day of February 1999, between the MOHEGAN TRIBE OF INDIANS OF
CONNECTICUT, a federally recognized Indian tribe (as lessor or landlord under
the Land Lease referred to below, being hereinafter referred to as the "Tribe"),
and the MOHEGAN TRIBAL GAMING AUTHORITY, an instrumentality of the Tribe (as
lessee or tenant under such Land Lease, being hereinafter referred to as the
"Authority").
WHEREAS, the Tribe and the Authority are parties to that certain Land
Lease, dated September 29, 1995, as amended (the "Land Lease");
WHEREAS, the Tribe and the Authority desire to obtain financing for
the purpose, among others, of expanding the Improvements, as defined in the Land
Lease;
WHEREAS, such financing is to be secured by, among other things, a
leasehold mortgage deed encumbering all property which is the subject of the
Land Lease together with all improvements now or hereafter located thereon, all
as more fully set forth in that certain Leasehold Mortgage (which term is
defined in Section 1 below) which has been approved by the Bureau of Indian
Affairs;
WHEREAS, the Tribe and the Authority desire to amend the Land Lease
for the purpose of providing that the Leasehold Mortgage is a Permitted
Mortgage, and that the Mortgagee referred to in the Leasehold Mortgage is a
Permitted Mortgagee, within the meaning of the Land Lease;
NOW, THEREFORE, in consideration of the foregoing and the agreements
of the parties hereinafter set forth, the parties hereto hereby agree as
follows:
1. The Land Lease is hereby amended by deleting Section 6(i) thereof
and by inserting in lieu thereof the following:
"(i) that certain Open-End Construction - Permanent Leasehold Mortgage
Deed, Assignment of Leases and Rents and Security Agreement (the "Leasehold
Mortgage") of even date herewith between the Authority, as Mortgagor, and Bank
of America National Trust and Savings Association, as Administrative Agent under
that certain Loan Agreement dated as of March 3, 1999 among Mortgagor, the
Mohegan Tribe of Indians of Connecticut, the Lenders,
<PAGE>
Documentation Agent and Syndication Agent referred to therein, as Mortgagee,
securing the Obligations, as defined in the Leasehold Mortgage, or"
2. The Authority and the Tribe acknowledge and agree that the Land
Lease, as amended pursuant to this Amendment, is in full force and effect.
3. This Amendment, 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
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).
IN WITNESS WHEREOF, this Amendment has been executed as of the date
first above written.
WITNESSES: MOHEGAN TRIBE OF INDIANS
OF CONNECTICUT
By:/s/ Roland J. Harris
__________________________________ -----------------------------
Roland J. Harris
Chairman, Tribal Council
__________________________________
MOHEGAN TRIBAL GAMING
AUTHORITY
By:/s/ Roland J. Harris
__________________________________ --------------------
Roland J. Harris
Chairman, Management Board
__________________________________
2
<PAGE>
STATE OF )
) ss.
COUNTY OF )
On March ____, 1999, __________, 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, afederally recognized Indian tribe, as his/her free act and deed
and the free act and deed of the Tribe.
_______________________________
Notary Public
My Commission expires:_________
STATE OF )
) ss.
COUNTY OF )
On March ___, 1999, __________, 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 TRIBAL GAMING AUTHORITY,
as his/her free act and deed and the free act and deed of the Authority.
_______________________________
Notary Public
My Commission expires:_________
3
<PAGE>
Attachment to Amendment 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 of Connecticut
Address: P.O. Box 488
67 Sandy Desert Road
Uncasville, CT 06382
Occupation: Indian Tribe
Party in Interest: Mohegan Tribal Gaming Authority
Address: 1 Mohegan Sun Boulevard
Uncasville, CT 06382
Occupation: Tribal Gaming Authority
Fixed limited time to run: 25 years, with option to renew for 25
years (pursuant to Section 3 of the Land
Lease referred to in the attached
document)
The Chairman of the Tribal Council of the Mohegan Tribe of Indians of
Connecticut ("Tribe") is authorized to execute the attached document by
Resolution No. 99-05 of the Tribal Council of the Tribe, dated February 18,
1999. The Chairman exercises his authority in this instance because the Tribal
Council 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. 99-07 of the Management Board, dated February 18, 1999. 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 Mohegan Tribal
Gaming Authority and the Tribe.
The document was executed on or about 9:00 a.m. on March 3, 1999, at
Uncasville, Connecticut, for the particular purpose set forth above.
4
<PAGE>
The undersigned parties agree that the foregoing agreement is in compliance with
25 U.S.C. (S)(S) 81 and 415 and 25 C.F.R. (S) 162.
WITNESS: Mohegan Tribe of Indians of Connecticut
_____________________________ By: /s/ Roland J. Harris
--------------------------------------
Roland J. Harris
Title: Chairman, Tribal Counsel
Mohegan Tribal Gaming Authority
_____________________________ By: /s/ Roland J. Harris
--------------------------------------
Roland J. Harris
Title: Chairman, Management Board
Approved Pursuant to U.S.C. (S)(S) 81 and
415 and 25 C.F.R. (S) 162
United States Department of Interior
Bureau of Indian Affairs:
Date: March 3, 1999 By: /s/ Franklin Keel
-------------------------------------
Franklin Keel
Eastern Area Director
Eastern Area Office
Bureau of Indian Affairs
for the Secretary of the Interior
and the Commissioner of Indian
Affairs, acting under delegated
authority
5
<PAGE>
STATE OF )
) ss.
COUNTY OF )
On ______________, 1999, personally appeared before me, __________ a Notary
Public in and for said County and State, ____________, 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 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.
_________________________________
Notary Public
My Commission expires:___________
6
<PAGE>
Exhibit 10.10
EXECUTION
================================================================================
LOAN AGREEMENT
Dated as of March 3, 1999
among
THE MOHEGAN TRIBAL GAMING AUTHORITY
(as the "Borrower"),
THE MOHEGAN TRIBE OF INDIANS OF CONNECTICUT,
(the "Tribe" as an additional obligor with respect to certain
representations, warranties and covenants)
the Lenders, Syndication Agent and Documentation Agent herein named
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
as Administrative Agent
NATIONSBANC MONTGOMERY SECURITIES, LLC,
as Lead Arranger and Sole Book Manager
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE 1. DEFINITIONS AND ACCOUNTING TERMS........................................................ 1
1.1 Defined Terms........................................................................... 1
1.2 Use of Defined Terms.................................................................... 28
1.3 Accounting Terms........................................................................ 28
1.4 Rounding................................................................................ 28
1.5 Exhibits and Schedules.................................................................. 29
1.6 Miscellaneous Terms..................................................................... 29
ARTICLE 2. LOANS AND LETTERS OF CREDIT............................................................. 30
2.1 Loans-General........................................................................... 30
2.2 Base Rate Loans......................................................................... 31
2.3 LIBOR Loans............................................................................. 31
2.4 Letters of Credit....................................................................... 32
2.5 Automatic Reduction of Commitment....................................................... 35
2.6 Voluntary Reduction of Commitment....................................................... 36
2.7 Optional Increases to the Commitment.................................................... 36
2.8 Administrative Agent's Right to Assume Funds Available for Advances..................... 37
2.9 Collateral.............................................................................. 38
ARTICLE 3. PAYMENTS AND FEES....................................................................... 39
3.1 Principal and Interest.................................................................. 39
3.2 Arrangement Fees........................................................................ 40
3.3 Annual Agency Fees...................................................................... 40
3.4 Facility Fees........................................................................... 40
3.5 Commitment Fees......................................................................... 40
3.6 Letter of Credit Fees................................................................... 41
3.7 Increased Commitment Costs.............................................................. 41
3.8 LIBOR Fees and Costs.................................................................... 41
3.9 Default Rate............................................................................ 44
3.10 Computation of Interest and Fees........................................................ 44
3.11 Non-Business Days....................................................................... 44
3.12 Manner and Treatment of Payments........................................................ 45
3.13 Funding Sources......................................................................... 45
3.14 Failure to Charge Not Subsequent Waiver................................................. 45
3.15 Administrative Agent's Right to Assume Payments Will be
Made by Borrower ....................................................................... 45
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C>
3.16 Authority to Charge Account............................................................. 46
3.17 Fee Determination Detail................................................................ 46
3.18 Survivability........................................................................... 46
3.19 Withholding Gross-Up.................................................................... 46
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE TRIBE............................................. 48
4.1 Existence and Qualification; Power; Compliance With Laws................................ 48
4.2 Authority; Compliance With Other Agreements and Instruments and Government Regulations.. 48
4.3 No Governmental Approvals Required...................................................... 49
4.4 The Nature of Borrower.................................................................. 49
4.5 No Management Contract.................................................................. 50
4.6 Title to and Location of Property....................................................... 50
4.7 Real Property........................................................................... 50
4.8 Governmental Regulation................................................................. 50
4.9 Binding Obligations..................................................................... 50
4.10 No Default.............................................................................. 50
4.11 Disclosure.............................................................................. 51
4.12 Gaming Laws............................................................................. 51
4.13 Security Interests...................................................................... 51
4.14 Arbitration............................................................................. 51
4.15 Recourse Obligations.................................................................... 51
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF THE BORROWER.......................................... 52
5.1 Existence and Qualification; Power; Compliance With Laws................................ 52
5.2 Authority; Compliance With Other Agreements and Instruments and Government Regulations.. 52
5.3 No Governmental Approvals Required...................................................... 53
5.4 The Nature of Borrower.................................................................. 53
5.5 No Management Contract.................................................................. 54
5.6 Financial Statements.................................................................... 54
5.7 Financial Statements of Borrower........................................................ 54
5.8 No Other Liabilities; No Material Adverse Effect........................................ 54
5.9 Title to and Location of Property....................................................... 54
5.10 Real Property........................................................................... 54
5.11 Intangible Assets....................................................................... 55
5.12 Governmental Regulation................................................................. 55
5.13 Litigation.............................................................................. 55
5.14 Binding Obligations..................................................................... 55
5.15 No Default.............................................................................. 56
5.16 ERISA................................................................................... 56
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C>
5.17 Regulations T, U and X; Investment Company Act.......................................... 56
5.18 Disclosure.............................................................................. 56
5.19 Tax Liability........................................................................... 56
5.20 Projections............................................................................. 56
5.21 Employee Matters........................................................................ 57
5.22 Gaming Laws............................................................................. 57
5.23 Security Interests...................................................................... 57
5.24 Hazardous Materials..................................................................... 57
5.25 Arbitration............................................................................. 57
5.26 Deposit Accounts........................................................................ 57
ARTICLE 6. AFFIRMATIVE COVENANTS OF BORROWER (OTHER THAN INFORMATION AND REPORTING REQUIREMENTS)... 58
6.1 Payment of Taxes and Other Potential Liens.............................................. 58
6.2 Maintenance of Properties............................................................... 58
6.3 Maintenance of Insurance................................................................ 58
6.4 Compliance With Laws.................................................................... 59
6.5 Preservation of Licenses and Permits.................................................... 59
6.6 Inspection Rights....................................................................... 59
6.7 Keeping of Records and Books of Account................................................. 60
6.8 Compliance With Agreements.............................................................. 60
6.9 Use of Proceeds......................................................................... 60
6.10 Hazardous Materials Laws................................................................ 60
6.11 Deposit and Brokerage Accounts.......................................................... 61
6.12 Proposed Expansion...................................................................... 61
6.13 Year 2000 Compliance.................................................................... 61
ARTICLE 7. NEGATIVE COVENANTS OF BORROWER (OTHER THAN INFORMATION AND REPORTING REQUIREMENTS)...... 62
7.1 Payment of Subordinated Obligations..................................................... 62
7.2 Disposition of Property................................................................. 62
7.3 Investments and Acquisitions............................................................ 62
7.4 Hostile Tender Offers................................................................... 63
7.5 Distributions........................................................................... 63
7.6 ERISA................................................................................... 64
7.7 Business of Borrower.................................................................... 64
7.8 Liens; Negative Pledges; Sales and Leasebacks........................................... 64
7.9 Indebtedness and Contingent Obligations................................................. 65
7.10 Transactions with Affiliates............................................................ 65
7.11 Authority Expenditures.................................................................. 66
7.12 Total Leverage Ratio.................................................................... 66
</TABLE>
-iii-
<PAGE>
<TABLE>
<S> <C>
7.13 Senior Leverage Ratio................................................................... 66
7.14 Fixed Charge Coverage Ratio............................................................. 67
7.15 Capital Expenditures.................................................................... 67
7.16 Deposit Accounts........................................................................ 68
ARTICLE 8. INFORMATION AND REPORTING REQUIREMENTS.................................................. 69
8.1 Financial and Business Information...................................................... 69
8.2 Compliance Certificates................................................................. 71
ARTICLE 9. COVENANTS OF THE TRIBE.................................................................. 72
9.1 Continual Operation of Mohegan Sun...................................................... 72
9.2 Remittance of Available Cash Flow....................................................... 72
9.3 Sovereign Immunity; Jurisdiction and Venue.............................................. 72
9.4 The Landlord Consent.................................................................... 72
9.5 Preservation of Existence; Operation.................................................... 72
9.6 Ownership of Mohegan Sun; Management.................................................... 73
9.7 Prohibited Transactions................................................................. 73
9.8 Amendments to Certain Documents......................................................... 73
9.9 Impairment of Contracts; Imposition of Governmental Charges............................. 74
9.10 Segregation of Authority Assets......................................................... 74
9.11 Trust Property.......................................................................... 74
9.12 Liens on Authority Property............................................................. 74
9.13 Bankruptcy Matters; Etc................................................................. 75
9.14 Impairment of Contracts................................................................. 75
ARTICLE 10. CONDITIONS.............................................................................. 76
10.1 Closing................................................................................. 76
10.2 Initial Advances........................................................................ 78
10.3 Any Increasing Advance.................................................................. 79
ARTICLE 11. EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT.................................... 81
11.1 Events of Default....................................................................... 81
11.2 Remedies Upon Event of Default.......................................................... 84
ARTICLE 12. THE ADMINISTRATIVE AGENT................................................................ 87
12.1 Appointment and Authorization........................................................... 87
12.2 Business Activities with the Tribe and Borrower......................................... 87
12.3 Proportionate Interest of the Lenders in any Collateral................................. 87
</TABLE>
-iv-
<PAGE>
<TABLE>
<S> <C>
12.4 Lenders' Credit Decisions............................................................... 88
12.5 Action by Administrative Agent.......................................................... 88
12.6 Liability of Administrative Agent....................................................... 89
12.7 Indemnification......................................................................... 90
12.8 Successor Administrative Agent.......................................................... 90
12.9 Performance of Conditions............................................................... 91
12.10 Collateral Matters...................................................................... 91
12.11 No Obligations of Borrower or the Tribe................................................. 92
ARTICLE 13. MISCELLANEOUS........................................................................... 93
13.1 Cumulative Remedies; No Waiver.......................................................... 93
13.2 Amendments; Consents.................................................................... 93
13.3 Costs, Expenses and Taxes............................................................... 94
13.4 Nature of the Lenders' Obligations...................................................... 94
13.5 Survival of Representations and Warranties.............................................. 95
13.6 Notices................................................................................. 95
13.7 Execution of Loan Documents............................................................. 95
13.8 Binding Effect; Assignment.............................................................. 95
13.9 Lien on Deposits and Property in Possession of any Lender............................... 98
13.10 Sharing of Setoffs...................................................................... 98
13.11 Indemnity by Borrower................................................................... 99
13.12 Nonliability of the Lenders............................................................. 100
13.13 No Third Parties Benefited.............................................................. 101
13.14 Confidentiality......................................................................... 101
13.15 Hazardous Materials Indemnity........................................................... 101
13.16 Further Assurances...................................................................... 102
13.17 Integration............................................................................. 102
13.18 Governing Law........................................................................... 102
13.19 Severability of Provisions.............................................................. 103
13.20 Independent Covenants................................................................... 103
13.21 Headings................................................................................ 103
13.22 Time of the Essence..................................................................... 103
13.23 Tax Withholding Exemption Certificates.................................................. 103
13.24 Arbitration Reference................................................................... 103
13.25 PURPORTED ORAL AMENDMENTS............................................................... 104
13.26 WAIVER OF RIGHT TO TRIAL BY JURY........................................................ 104
13.27 WAIVER OF SOVEREIGN IMMUNITY; CONSENT TO JURISDICTION .................................. 105
13.28 Lender Covenant......................................................................... 106
13.29 PREJUDGMENT REMEDY WAIVER............................................................... 107
13.30 Designated Senior Secured Indebtedness.................................................. 107
13.31 Compliance with 25 U.S.C.(S).81......................................................... 107
</TABLE>
-v-
<PAGE>
EXHIBITS
- --------
A - Assignment Agreement
B - Compliance Certificate
C - Deposit Account Letter
D - Note
E - Opinion - Tribal Counsel
F - Opinions - Hogan & Hartson and Rome McGuigan Sabanosh
G - Request for Letter of Credit
H - Request for Loan
SCHEDULES
- ---------
1.1 Pro Rata Shares of the Commitment
4.7 Mohegan Sun Real Property
5.13 Litigation
5.20 Projections
5.24 Hazardous Materials
5.26 Deposit and Brokerage Accounts
6.4 Real Property Insurance
7.8 Existing Liens and Rights of Others
7.9 Existing Indebtedness and Contingent Obligations
-vi-
<PAGE>
LOAN AGREEMENT
--------------
Dated as of March 3, 1999
This LOAN AGREEMENT ("Agreement") is entered into by and among The
Mohegan Tribe of Indians of Connecticut, a federally recognized Indian Tribe and
Native American sovereign nation (the "Tribe"), The Mohegan Tribal Gaming
Authority, a governmental instrumentality of the Tribe (the "Borrower"), Bank of
America National Trust and Savings Association ("Bank of America"), and each
other lender whose name is set forth on the signature pages hereof or which may
hereafter execute and deliver an Assignment Agreement with respect to this
Agreement pursuant to Section 13.8 (collectively, the "Lenders" and
individually, a "Lender"), Salomon Smith Barney, Inc., as Syndication Agent,
Societe Generale, as Documentation Agent and Bank of America, as Administrative
Agent. NationsBanc Montgomery Securities, LLC, is Lead Arranger and Sole Book
Manager for the credit facilities described herein, but is not a party to this
Agreement
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
ARTICLE 2.
DEFINITIONS AND ACCOUNTING TERMS
--------------------------------
2.1 Defined Terms. As used in this Agreement, the following terms
-------------
shall have the meanings set forth below:
"Acquisition" means any transaction, or any series of related
-----------
transactions, by which Borrower directly or indirectly (i) acquires any
going business or all or substantially all of the assets of any firm,
partnership, joint venture, corporation or division thereof, or any other
business entity, whether through purchase of assets, merger or otherwise,
or (ii) acquires (in one transaction or as the most recent transaction in a
series of transactions) control of at least a majority in ordinary voting
power of the securities of a corporation which have ordinary voting power
for the election of directors, or (iii) acquires (in one transaction or as
the most recent transaction in a series of transactions) control of a 50%
or more ownership interest in any partnership, joint venture or other
business entity.
"Adjusted EBITDA" means, for any period, (a) which does not
---------------
include any full Fiscal Quarters beginning following the Completion Date,
EBITDA for that period, and (b) which includes (i) only one full Fiscal
Quarter beginning following the Completion Date, EBITDA for that Fiscal
Quarter times four, (ii) two full Fiscal Quarters following the Completion
Date, EBITDA for those two Fiscal Quarters times two, (iii) three full
Fiscal Quarters following the Completion Date, EBITDA for those
-1-
<PAGE>
three Fiscal Quarters times one and one third, and (iv) which includes four
Fiscal Quarters following the Completion Date, EBITDA for the four most
recent Fiscal Quarters.
"Advance" means any Advance made or to be made by any Lender to
-------
Borrower as provided in Article 2.
"Administrative Agent" means Bank of America, when acting in its
--------------------
capacity as the Administrative Agent under any of the Loan Documents, and
any successor Administrative Agent appointed pursuant to Section 12.8.
"Administrative Agent's Office" means the Administrative Agent's
-----------------------------
address as set forth on the signature pages of this Agreement, or such
other address as the Administrative Agent hereafter may designate by
written notice to Borrower and the Lenders.
"Affiliate" means, as to any Person, any other Person which
---------
directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" (and the
correlative terms, "controlled by" and "under common control with") shall
mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise). Each enrolled member of the Tribe and their immediate family
members shall be deemed to be Affiliates of Borrower.
"Agreement" means this Loan Agreement, either as originally
---------
executed or as it may from time to time be supplemented, modified, amended,
restated or extended.
"Applicable Percentage" means, during each Pricing Period, (a) in
---------------------
the case of interest calculable with respect to each Base Rate Loan, the
percentage set forth below in the column headed "Base Rate", (b) in the
case of interest calculable with respect to each LIBOR Loan, the percentage
set forth in the column headed "LIBOR", and (c) in the case of Commitment
Fees, the percentage set forth in the column headed "Commitment Fees,"
provided that during the Pricing Period immediately following the last day
--------
of each Low Usage Quarter, the Commitment Fees set forth in the matrix
below shall be increased by 0.125% per annum:
<TABLE>
<CAPTION>
Total Leverage Base Commitment
Ratio Rate LIBOR Fees
----- ---- ----- ----
<S> <C> <C> <C>
Less than 0.000% 1.125% 0.300%
2.00:1.00
Greater than or 0.125% 1.375% 0.350%
equal to 2.00:1.00
</TABLE>
-2-
<PAGE>
<TABLE>
<S> <C> <C> <C>
but less than 2.50:1.00
Greater than or 0.375% 1.625% 0.400%
equal to 2.50:1.00
but less than 3.00:1.00
Greater than or 0.625% 1.875% 0.500%
equal to 3.00:1.00
but less than 3.50:1.00
Greater than or 0.875% 2.125% 0.500%
equal to 3.50:1.00
but less than 4.00:1.00
Greater than or 1.125% 2.375% 0.500%
equal to 4.00:1.00
but less than 4.50:1.00
Greater than or 1.375% 2.625% 0.500%
equal to 4.50:1.00
</TABLE>
The Applicable Percentage shall change as of the first day of the calendar month
following the receipt of a Compliance Certificate indicating a change in the
Total Leverage Ratio. Notwithstanding the provisions of this definition, in the
event that Borrower fails to deliver any Compliance Certificate on a timely
basis, the Applicable Percentage shall increase to the highest level set forth
above until such time as Borrower delivers a Compliance Certificate.
"Approved Swap Agreements" means one or more Swap Agreements with
------------------------
respect to the Indebtedness evidenced by this Agreement between Borrower and one
or more of the Lenders, on terms mutually acceptable to Borrower and that Lender
or Lenders. Each Approved Swap Agreement shall be a Loan Document and shall be
secured by the Liens created by the Collateral Documents to the extent set forth
in Section 2.9.
"Assignment Agreement" means an Assignment Agreement substantially in
--------------------
the form of Exhibit A.
"Authority Property" means any and all now owned or hereafter acquired
------------------
real, mixed and personal Property of the Borrower (whether or not otherwise
designated as property of the Borrower) which is reflected on the balance sheet
described in Section 5.6(a) or any subsequent balance sheet hereafter delivered
by Borrower to the Administrative Agent or the Lenders in connection herewith.
"Authority Property" in any event includes without limitation (i) the Mohegan
--------
Sun, all gaming revenues of Borrower, the revenues of Borrower, and (ii) all
tangible Property located within the area described on Schedule 4.7.
"Available Cash Flow" means, for any calendar month (a) EBITDA for
-------------------
that month, minus (b) the amount of Maintenance Capital Expenditures made during
-----
that month, minus (c) any principal repayments with respect to Indebtedness and
-----
-3-
<PAGE>
Capital Leases constituting Recourse Obligations required to be made during that
period in cash, and minus (d) the amount of cash Interest Charges during that
-----
month.
"Base Rate" means, as of any date of determination, the greater of (a)
--------- -------
the Reference Rate or (b) the Federal Funds Rate plus .50%.
----
"Base Rate Advance" means an Advance made hereunder as a part of a
-----------------
Base Rate Loan made in accordance with Article 2.
"Base Rate Loan" means a Loan made hereunder and designated as a Base
--------------
Rate Loan in accordance with Article 2.
"Borrower" means The Mohegan Tribal Gaming Authority.
--------
"Bureau of Indian Affairs" means the United States Department of the
------------------------
Interior, Bureau of Indian Affairs, and each successor agency.
"Business Day" means any Monday, Tuesday, Wednesday, Thursday or
------------
Friday, other than a day on which banks are authorized or required to be closed
----------
in California, Connecticut or New York.
"Capital Expenditure" means any expenditure that is considered a
-------------------
capital expenditure under Generally Accepted Accounting Principles, consistently
applied, including any amount that is required to be treated as an asset subject
---------
to a Capital Lease.
"Capital Lease" means, as to any Person, a lease of any Property by
-------------
that Person as lessee that is, or should be in accordance with Financial
Accounting Standards Board Statement No. 13, as amended from time to time, or if
such Statement is not then in effect, such other statement of Generally Accepted
Accounting Principles as may be applicable, recorded as a "capital lease" on the
balance sheet of that Person prepared in accordance with Generally Accepted
Accounting Principles.
"Cash" means, when used in connection with any Person, all monetary
----
and non-monetary items owned by that Person that are treated as cash in
accordance with Generally Accepted Accounting Principles.
"Cash Equivalents" means, when used in connection with any Person,
----------------
that Person's Investments in:
(a) Government Securities due within one year after the date of the making
of the Investment;
-4-
<PAGE>
(b) readily marketable direct obligations of any State of the United
States of America or any political subdivision of any such State given
on the date of such investment a credit rating of at least Aa by
Moody's Investors Service, Inc. or AA by Standard & Poor's Ratings
Group, in each case due within one year after the date of the making
of the Investment;
(c) certificates of deposit issued by, bank deposits in, eurodollar
deposits through, bankers' acceptances of, and reverse repurchase
agreements covering Government Securities executed by, any Lender or
any other bank, savings and loan or savings bank doing business in and
incorporated under the Laws of the United States of America or any
State thereof and having on the date of such Investment combined
capital, surplus and undivided profits of at least $250,000,000, in
each case due within one year after the date of the making of the
Investment;
(d) certificates of deposit issued by, bank deposits in, eurodollar
deposits through, bankers' acceptances of, and reverse repurchase
agreements covering Government Securities executed by, any branch or
office located in the United States of America of a bank incorporated
under the Laws of any jurisdiction outside the United States of
America having on the date of such Investment combined capital,
surplus and undivided profits of at least $500,000,000, in each case
due within one year after the date of the making of the Investment;
and
(e) readily marketable commercial paper of corporations doing business in
and incorporated under the Laws of the United States of America or any
State thereof given on the date of such Investment the highest credit
rating by Moody's Investors Service, Inc. and Standard & Poor's
Corporation, in each case due within 270 days after the date of the
making of the Investment.
"Change in Control" means the occurrence of any one or more of the
-----------------
following:
(a) Borrower ceases to be a wholly-owned unit, instrumentality or
subdivision of the government of the Tribe;
(b) Borrower ceases to have the exclusive legal right to operate the
gaming operations of the Tribe; or
-5-
<PAGE>
(c) Borrower sells, assigns, transfers, leases or otherwise disposes
of all or substantially all of its assets to, any Person (except for any
sale, assignment, transfer, lease or other disposition to a Subsidiary of
Borrower permitted hereby and by the Senior Note Indenture).
"Closing Date" means the time and Business Day on which the
------------
consummation of all of the transactions contemplated in Section 10.1 occurs.
"Code" means the Internal Revenue Code of 1986, as amended or replaced
----
and as in effect from time to time.
"Collateral" means, collectively, all of the collateral subject to the
----------
Liens, or intended to be subject to the Liens, created by the Collateral
Documents.
"Collateral Documents" means, collectively, the Security Agreement,
--------------------
each Deposit Account Agreement, any Leasehold Mortgage and any other pledge
agreement, hypothecation agreement, security agreement, assignment, deed of
trust, mortgage or similar instrument executed by Borrower in favor of the
Administrative Agent or any Creditor to secure the Obligations.
"Commission" means the National Indian Gaming Commission.
----------
"Commitment" means $425,000,000, or such lesser amount to which the
----------
lending commitment of the Lenders may be reduced in accordance with Sections 2.5
and 2.6. The respective Pro Rata Shares of each Lender with respect to the
Commitment as of the Closing Date are set forth in Schedule 1.1.
"Commitment Fees" means the fees referred to in Section 3.5.
---------------
"Compact" means the tribal-state Compact entered into between the
-------
Tribe and the State of Connecticut pursuant to IGRA, dated April 25, 1994, as
amended.
"Completion Date" means the first date upon which hotel guests utilize
---------------
the lodging services contemplated to be provided by the hotel tower described as
part of the Proposed Expansion.
"Compliance Certificate" means a certificate substantially in the form
----------------------
of Exhibit B, properly completed and signed by a Senior Officer of the Borrower.
"Constitution" means the Constitution of the Tribe adopted by the
------------
Tribe and ratified by the Tribe's members by Tribal Referendum dated April 12,
1996, as it may be amended from time to time.
-6-
<PAGE>
"Consumer Price Index" means the Consumer Price Index for All Urban
--------------------
Consumers (CPI-U) for the U.S. City Average for All Items, 1982-1984=100, as
compiled and released by the Bureau of Labor Statistics.
"Contingent Obligation" means, as to any Person, any (a) direct or
---------------------
indirect guarantee of Indebtedness of, or other obligation performable by, any
other Person, including any endorsement (other than for collection or deposit in
---------
the ordinary course of business), co-making or sale with recourse of the
obligations of any other Person or (b) contractual assurance (not arising solely
by operation of Law) given to an obligee with respect to the performance of an
obligation by, or the financial condition of, any other Person, whether direct,
indirect or contingent, including any purchase or repurchase agreement covering
---------
such obligation or any collateral security therefor, any agreement to provide
funds (by means of loans, capital contributions or otherwise) to such other
Person, any agreement to support the solvency or level of any balance sheet item
to such other Person, or any other arrangement of whatever nature having the
effect of assuring or holding harmless any obligee against loss with respect to
any obligation of such other Person including without limitation any "keep-
well", "take-or-pay" or "through put" agreement or arrangement. As of each date
of determination, the amount of any Contingent Obligation shall be deemed to be
an amount equal to the stated or determinable amount of the related primary
obligation (unless the Contingent Obligation is limited by its terms to a lesser
amount, in which case to the extent of such amount) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the Person in good faith.
"Construction Consultant" means a construction consultant designated
-----------------------
by the Administrative Agent and approved by Borrower, with such consent not to
be unreasonably withheld or delayed.
"Construction Progress Report" means a report prepared by the
----------------------------
Construction Consultant in a form which is reasonably acceptable to the
Administrative Agent describing the progress of construction of the Proposed
Expansion.
"Construction Reserve Disbursement Agreement" means the Construction
-------------------------------------------
Reserve Disbursement Agreement dated March 3, 1999 between the Tribe and Fleet
National Bank, as Escrow Agent, for the benefit of Borrower.
"Contractual Obligation" means, as to any Person, any provision of any
----------------------
outstanding Securities issued by that Person or of any material agreement,
instrument or undertaking to which that Person is a party or by which it or any
of its Property is bound.
-7-
<PAGE>
"Creditors" means, collectively, the Administrative Agent, the Issuing
---------
Lender, the Lenders, and the Lead Arranger, and their respective successors in
interest.
"Debtor Relief Laws" means the Bankruptcy Code of the United States of
------------------
America, as amended from time to time, and all other applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization, or similar debtor relief Laws from time to time in
effect affecting the rights of creditors generally.
"Default" means any event that, with the giving of any applicable
-------
notice or passage of time, or both, would be an Event of Default.
"Default Rate" means the interest rate set forth in Section 3.9.
------------
"Defeasance Deposit" means the irrevocable trust deposit made by
------------------
Borrower on the Closing Date with First Union National Bank pursuant to the
Escrow Deposit Agreement dated March 3, 1999 between Borrower and First Union
National Bank in the principal amount of $140,300,000 for the purpose of
providing for the covenant defeasance of the TCA Subordinated Notes, initially
consisting of United States Treasury Bills maturing December 12, 1999.
Notwithstanding any provision of the Loan Documents to the contrary the
Administrative Agent and the Lenders shall not claim any Lien in the Defeasance
Deposit.
"Deposit Account Agreement" means a letter agreement among Borrower,
-------------------------
the Administrative Agent and the depositary for each Operating Account,
substantially in the form of Exhibit C.
"Designated Deposit Account" means a deposit account to be maintained
--------------------------
by Borrower with the Administrative Agent, as from time to time designated by
Borrower by written notification to the Administrative Agent.
"Designated Market" means, for any LIBOR Loan, the London Eurodollar
-----------------
Market, provided that if the Administrative Agent determines that the London
--------
Eurodollar Market is unavailable or reasonably inconvenient, "Designated Market"
means such other offshore market for deposits in dollars as the Administrative
Agent may reasonably designate.
"Development Services Agreement" means the Development Services
------------------------------
Agreement dated February 7, 1998 between Borrower and Trading Cove Associates.
"Disposition" means the sale, transfer or other disposition of
-----------
Authority Property in any single transaction or series of related transactions
of any individual
-8-
<PAGE>
asset, or group of related assets, that has or have at the date of the
Disposition a book value or fair market value (which shall be deemed to be equal
to the sales price for such asset or assets upon a sale to a Person that is not
an Affiliate of the Tribe) of $10,000,000 or more, other than (i) the sale or
----- ----
other disposition of inventory in the ordinary course of business, (ii) the sale
or other disposition of equipment or other personal property that is replaced by
equipment or personal property, as the case may be, performing substantially the
same function not later than ninety (90) days after such sale or disposition and
(iii) the sale or other disposition of obsolete equipment.
"Distribution" means (a) any transfer of Cash or other Property from
------------
Borrower or any account of Borrower to the Tribe or any of its members or
Affiliates or to their respective accounts, (b) any retirement, redemption,
prepayment of principal, purchase or other acquisition for value by Borrower of
any Securities or other obligations of the Tribe or any of its Affiliates (or of
any other Person to the extent that such Securities or other obligations are
guaranteed by the Tribe or any of its Affiliates), (c) the declaration or
payment by Borrower of any dividend or distribution to the Tribe or any of its
members or any of its Affiliates in Cash or in Property (but not the making of
arm's length payments for goods and services provided by the Tribe or any of its
Affiliates to the Borrower in the manner contemplated by Section 7.10), (d) any
Investment (whether by means of loans, advances or otherwise) by Borrower in
Securities or other obligations of the Tribe or any of its Affiliates, or (e)
any other payment, assignment or transfer, whether in Cash or other Property,
from Borrower to the Tribe or any of its members or Affiliates, including the
payment of any tax, fee, charge or assessment imposed by the Tribe on Borrower,
its revenues or Properties, provided that, both (A) the making of payments by
-------- ----
Borrower to the Tribe or any of its Affiliates in consideration of goods and
services provided to Borrower by the Tribe or its Affiliates in the ordinary
course of business and in accordance with past practices, and (B) assessment by
the Tribe against Borrower of the regulatory costs and expenses of the Tribe
associated with Borrower in accordance with past practices, shall not be
considered a Distribution.
"Documentation Agent" means Societe Generale. The capacity of the
-------------------
Documentation Agent is solely titular in nature, and except to the extent
expressly set forth herein, the Documentation Agent shall not have any rights or
obligations under the Loan Documents by reason of such capacity.
"dollars" or "$" means United States dollars.
------- -
"EBITDA" means, for any period, (a) Net Income of Borrower for that
------
period, plus (b) Interest Charges of Borrower for that period, plus (c) (without
---- ----
duplication) the aggregate amount, if any, of federal and state taxes on or
measured by income of Borrower for that period (whether or not payable during
that period, and excluding any amount payable to the State of Connecticut under
the Compact), plus
----
-9-
<PAGE>
(d) depreciation and amortization of Borrower for that period, and minus (e)
-----
payments under the Relinquishment Agreement, in each case paid during that
period in cash, in each case as determined in accordance with Generally Accepted
Accounting Principles.
"Eligible Assignee" means (a) with respect to any Lender, another
-----------------
Lender (b) with respect to any Lender, any Affiliate of that Lender, (c) any
commercial bank having a combined capital and surplus of $100,000,000 or more,
(d) any (i) savings bank, savings and loan association or similar financial
institution or (ii) insurance company engaged in the business of writing
insurance which, in either case (A) has a net worth of $200,000,000 or more, (B)
is engaged in the business of lending money and extending credit under credit
facilities substantially similar to those extended under this Agreement and (C)
is operationally and procedurally able to meet the obligations of a Lender
hereunder to the same degree as a commercial bank and (e) any other financial
institution (including a mutual fund or other fund) having total assets of
---------
$250,000,000 or more which meets the requirements set forth in subclauses (B)
and (C) of clause (d) above; provided that each Eligible Assignee must either
--------
(a) be organized under the Laws of the United States of America, any State
thereof or the District of Columbia or (b) be organized under the Laws of the
Cayman Islands or any country which is a member of the Organization for Economic
Cooperation and Development, or a political subdivision of such a country, and
(i) act hereunder through a branch, agency or funding office located in the
United States of America and (ii) be exempt from withholding of tax on interest
and deliver the documents related thereto pursuant to Section 13.23.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
-----
any regulations issued pursuant thereto, as amended or replaced and as in effect
from time to time.
"ERISA Affiliate" means, with respect to any Person, any Person (or
---------------
any trade or business, whether or not incorporated) that is under common control
with that Person within the meaning of Section 414 of the Internal Revenue Code,
Title 26, U.S.C.
"Eurodollar Obligations" means eurocurrency liabilities, as defined in
----------------------
Regulation D.
"Event of Default" shall have the meaning provided in Section 11.1.
----------------
"Existing Senior Secured Notes" means Borrower's existing $175,000,000
-----------------------------
principal amount 13.50% Senior Secured Notes issued pursuant to the Indenture
dated as of September 29, 1995 among Borrower and First Fidelity Bank, as
Trustee, as amended.
-10-
<PAGE>
"Federal Funds Rate" means, as of any date of determination, a
------------------
fluctuating interest rate per annum equal to the federal funds effective rate
for the previous Business Day as quoted by the Federal Reserve Bank of New York
or, if such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by the Administrative Agent.
"Fiscal Quarter" means the fiscal quarter of Borrower consisting of a
--------------
three month fiscal period ending on each March 31, June 30, September 30 and
December 31.
"Fiscal Year" means the fiscal year of Borrower consisting of a twelve
-----------
month fiscal period ending on each September 30.
"Fixed Charge Coverage Ratio" means, as of each date of determination,
---------------------------
the ratio of (a) Adjusted EBITDA plus management fees paid in cash, in each case
----
for the four Fiscal Quarter period then ending, to (b) the sum of (i) Interest
---
Charges with respect to Recourse Obligations to the extent payable in cash
during that period, plus (ii) any principal repayments with respect to
----
Indebtedness and Capital Leases constituting Recourse Obligations required to be
made during that period in cash, plus (iii) Maintenance Capital Expenditures for
----
that period, plus (iv) Distributions made during that period to the Tribe in
----
accordance with Section 7.5 plus (v) payments under the Relinquishment Agreement
----
and management fees, in each case made in cash during that period (without any
annualization thereof).
"Gaming Authority Ordinance" means Ordinance No. 95-2 of the Tribe, as
--------------------------
enacted on July 15, 1995.
"Gaming Board" means, collectively, (a) The Mohegan Tribal Gaming
------------
Commission, (b) the Connecticut Division of Special Revenue, (c) the Commission,
and (d) any other Governmental Agency that holds licensing or permit authority
over gambling, gaming or casino activities conducted by the Borrower or the
Tribe within its jurisdiction.
"Gaming Laws" means IGRA, the Gaming Ordinance, the Gaming Authority
-----------
Ordinance and all other Laws pursuant to which any Gaming Board possesses
licensing or permit authority over gambling, gaming, or casino activities
conducted by the Borrower or the Tribe within its jurisdiction.
"Gaming Ordinance" means Ordinance 94-1 of the Tribe, as enacted on,
----------------
July 28, 1994.
-11-
<PAGE>
"Generally Accepted Accounting Principles" means, as of any date of
----------------------------------------
determination, accounting principles set forth as generally accepted in the
effective Statements of the Auditing Standards Board of the American Institute
of Certified Public Accountants as of the date of this Agreement, or if such
statements are not then in effect, accounting principles that are then approved
by a significant segment of the accounting profession in the United States of
America. The term "consistently applied," as used in connection therewith,
--------------------
means that the accounting principles applied are consistent in all material
respects to those applied at prior dates or for prior periods.
"Government Securities" means readily marketable direct full faith and
---------------------
credit obligations of the United States of America or obligations
unconditionally guaranteed by the full faith and credit of the United States of
America.
"Governmental Agency" means (a) any international, foreign, federal,
-------------------
tribal, state, county or municipal government, or political subdivision thereof,
(b) any governmental or quasi-governmental agency, authority, board, bureau,
commission, department, instrumentality or public body, (c) any court,
administrative tribunal or public utility, or (d) any arbitration tribunal or
other non-governmental authority to whose jurisdiction a Person has consented.
"Hazardous Materials" means substances defined as hazardous substances
-------------------
pursuant to the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 USC (S)9601, et seq., or as hazardous, toxic or pollutant
-------
pursuant to the Hazardous Materials Transportation Act, 49 USC (S)1801, et seq.,
-------
the Resource Conservation and Recovery Act, 42 USC (S)6901, et seq., or in any
-------
other applicable Hazardous Materials Law, in each case as such laws are amended
from time to time.
"Hazardous Materials Claims" means the matters described in clauses
--------------------------
(a) and (b) of Section 6.10.
"Hazardous Materials Laws" means all federal, tribal, Connecticut
------------------------
state or local laws, ordinances, rules or regulations governing the disposal of
Hazardous Materials, to the extent applicable.
"IGRA" means the federal Indian Gaming Regulatory Act of 1988, as
----
amended, codified at 25 U.S.C. (S)2701, et seq.
-- ---
"Indebtedness" means, as to any Person, without duplication, (a) all
------------
indebtedness of such Person for borrowed money, (b) that portion of the
obligations of such Person under Capital Leases which should properly be
recorded as a liability on a balance sheet of that Person prepared in accordance
with Generally Accepted
-12-
<PAGE>
Accounting Principles, (c) any obligation of such Person that is evidenced by a
promissory note or other instrument representing an extension of credit to such
Person, whether or not for borrowed money, (d) any obligation of such Person for
the deferred purchase price of Property or services (other than trade or other
----- ----
accounts payable in the ordinary course of business in accordance with customary
terms), (e) any obligation of such Person that is secured by a Lien on assets of
such Person, whether or not that Person has assumed such obligation or whether
or not such obligation is non-recourse to the credit of such Person, but only to
the extent of the lesser of (i) the outstanding principal amount of the
obligation (or, with respect to any letter of credit, the amount available for
drawing thereunder), and (ii) the fair market value of the assets so subject to
the Lien, (f) obligations of such Person arising under acceptance facilities or
under facilities for the discount of accounts receivable of such Person, (g)
obligations of such Person for unreimbursed draws under letters of credit issued
for the account of such Person and (h) any obligations of such Person under a
Swap Agreement, provided that (y) the obligations of Borrower under the
--------
Relinquishment Agreement shall not be treated as Indebtedness except to the
extent that the same are not paid when due, and (z) the obligations of Borrower
with respect to the TCA Subordinated Notes shall not be treated as Indebtedness
during any period with respect to which the Defeasance Deposit exists.
"Intangible Assets" means assets that are considered intangible assets
-----------------
under Generally Accepted Accounting Principles, including customer lists,
---------
goodwill, computer software and capitalized research and development costs.
"Interest Charges" means, with respect to any fiscal period, the sum
---------------- ---
of (a) all interest, fees, charges and related expenses payable with respect to
- --
that fiscal period to a lender in connection with borrowed money or the deferred
purchase price of assets that is treated as interest in accordance with
Generally Accepted Accounting Principles (other than any such interest, charges
and related expenses accruing with respect to the TCA Subordinated Notes
following the Closing Date to the extent provided for by the Defeasance
Deposit), plus (b) the portion of rent payable with respect to that fiscal
----
period under Capital Leases that should be treated as interest in accordance
with Generally Accepted Accounting Principles.
"Interest Differential" means, with respect to any prepayment of a
---------------------
LIBOR Loan on a day other than the last day of the applicable Interest Period
and with respect to the failure to borrow a LIBOR Loan on the date or in the
amount specified in a Request for Loan, (a) the per annum interest rate payable
pursuant to Section 3.1(c) with respect to that LIBOR Loan as of the date of the
prepayment or failure to borrow, minus (b) the LIBOR on or as near as
-----
practicable to the date of the prepayment or failure to borrow for a LIBOR Loan
commencing on such date and ending on the last day of the applicable Interest
Period; provided that if the LIBOR so prescribed is equal to or within 1/8% less
--------
than the LIBOR for the LIBOR Loan that
-13-
<PAGE>
was prepaid or not borrowed, then 1/8 of 1% shall be subtracted from the LIBOR
so prescribed. The determination of the Interest Differential by the
Administrative Agent shall be conclusive in the absence of manifest error.
"Interest Period" means, as to each LIBOR Loan, the period commencing
---------------
on the date specified by Borrower pursuant to Section 2.1(b) and ending 1, 2, 3
or 6 months thereafter, as specified by Borrower in the applicable Request for
Loan; provided that:
--------
(a) The first day of any Interest Period shall be a LIBOR Business Day;
(b) Any Interest Period that would otherwise end on a day that is not a
LIBOR Business Day shall be extended to the next succeeding LIBOR
Business Day unless such LIBOR Business Day falls in another calendar
month, in which case such Interest Period shall end on the next
preceding LIBOR Business Day; and
(c) No Interest Period shall extend beyond the Maturity Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, Title
---------------------
26, U.S.C., as amended or replaced and as in effect from time to time.
"Investment" means, when used in connection with any Person, any
----------
investment by or of that Person, whether by means of purchase or other
acquisition of capital stock or other Securities of any other Person or by means
of loan, advance, capital contribution, guaranty or other debt or equity
participation or interest, or otherwise, in any other Person, including any
---------
partnership and joint venture interests of such Person in any other Person. The
amount of any Investment shall be the amount actually invested, without
adjustment for increases or decreases in the value of such Investment.
"Issuing Lender" means Bank of America.
--------------
"Landlord Consent" means the consent, waiver and estoppel executed by
----------------
the Tribe on the Closing Date in favor of the Administrative Agent, either as
originally executed or as it may from time to time be supplemented, modified,
amended, restated or extended.
"Laws" means, collectively, all international, foreign, federal,
----
tribal, state and local constitutions, statutes, treaties, rules, regulations,
ordinances, codes and administrative or judicial precedents.
-14-
<PAGE>
"Lead Arranger" means NationsBanc Montgomery Securities, LLC and its
-------------
successors and assigns.
"Lease" means the Lease dated September 29, 1995 between the Tribe and
-----
Borrower, as amended by an amendment also dated September 29, 1995, with respect
to the real property underlying the Mohegan Sun and the improvements thereon.
"Leasehold Mortgage" means, collectively, the Leasehold Mortgage
------------------
executed by Borrower in favor of the Administrative Agent covering the leasehold
interest of Borrower under the Lease to the reservation real property described
on Schedule 4.7, the related improvements and fixtures used in connection with
Mohegan Sun, either as originally executed or as the same may from time to time
be supplemented, modified, amended, renewed, extended or supplanted.
"Lender" means each of the lenders party to this Agreement on the
------
Closing Date and each other lender which hereafter becomes a party hereto in
accordance with Section 13.8, provided that, for the purpose of the term
--------
"Approved Swap Agreement" the term "Lender" shall also include any Affiliate of
a Lender which enters into a Swap Agreement which expressly relates to the
Indebtedness evidenced by this Agreement and the Loan Documents.
"Letters of Credit" means any of the letters of credit issued by the
-----------------
Issuing Lender under the Commitment pursuant to Section 2.4, either as
originally issued or as the same may be supplemented, modified, amended,
renewed, extended or supplemented.
"LIBOR" means, with respect to any LIBOR Loan, the interest rate
-----
(rounded upward to the next 1/100 of 1%) determined to be equal to the LIBOR
Base Rate divided by the remainder of (a) 1 minus (b) the Reserve Percentage.
------- -- -----
"LIBOR Advance" means an Advance made hereunder as a part of a LIBOR
-------------
Loan made in accordance with Article 2.
"LIBOR Base Rate" means, with respect to any LIBOR Loan, the interest
---------------
rate per annum (determined solely by the Administrative Agent) at which deposits
in dollars are offered by Bank of America to prime banks in the Designated
Market at or about 11:00 a.m. local time in the Designated Market, two LIBOR
Business Days before the first day of the applicable Interest Period in an
aggregate amount approximately equal to the amount of such LIBOR Loan and for a
period of time comparable to the number of days in the applicable Interest
Period. The determination of the LIBOR Base Rate by the Administrative Agent
shall be conclusive in the absence of manifest error.
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<PAGE>
"LIBOR Business Day" means any Business Day on which dealings in
------------------
dollar deposits are conducted by and among banks in the Designated Market.
"LIBOR Lending Office" means, as to each Lender, its office or branch
--------------------
so designated by written notice to Borrower and the Administrative Agent as its
LIBOR Lending Office. If no LIBOR Lending Office is designated by a Lender, its
LIBOR Lending Office shall be its office at its address for purposes of notices
hereunder.
"LIBOR Loan" means a Loan made hereunder and designated as a LIBOR
----------
Loan in accordance with Article 2.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
----
assignment for security, security interest, encumbrance, lien or charge of any
kind, whether voluntarily incurred or arising by operation of Law or otherwise,
affecting any Property, including any agreement to grant any of the foregoing,
---------
any conditional sale or other title retention agreement, any lease in the nature
of a security interest, and/or the filing of or agreement to give any financing
statement under the Uniform Commercial Code or comparable Law of any
jurisdiction with respect to any Property.
"Loan" means the group of Advances made at any one time by the Lenders
----
in accordance with the Commitment pursuant to Article 2.
"Loan Documents" means, collectively, this Agreement, any Notes, each
--------------
Letter of Credit, the Collateral Documents, the Landlord Consent, any Request
for Loan, any Request for Letter of Credit and any other agreements of any type
or nature heretofore or hereafter executed and delivered by the Borrower, the
Tribe or any of its Affiliates to the Administrative Agent or to any Lender in
any way relating to or in furtherance of this Agreement, including any Approved
---------
Swap Agreement, in each case either as originally executed or as the same may
from time to time be supplemented, modified, amended, restated, extended or
supplanted.
"Low Usage Quarter" means each Fiscal Quarter ending prior to the
-----------------
Completion Date during which (a) the average daily amount of the Unused
Commitment is equal to or greater than (b) two thirds of the average Commitment
during that Fiscal Quarter.
"Maintenance Capital Expenditure" means a Capital Expenditure for the
-------------------------------
maintenance, repair, restoration or refurbishment of those portions of Mohegan
Sun which are open for business on the Closing Date (or, as of the date of the
Capital Expenditure have been open for business for a period in excess of one
year), but excluding any Capital Expenditure which adds to or further improves
---------
Mohegan Sun.
-16-
<PAGE>
"Management Board" means the Management Board of Borrower, as
----------------
established pursuant to the Gaming Authority Ordinance.
"Material Adverse Effect" means any set of circumstances or events
-----------------------
which (a) may reasonably be expected to have any material adverse effect
whatsoever upon the validity or enforceability of any Loan Document, (b) may
reasonably be expected to be material and adverse to the condition (financial or
otherwise) or business operations or Properties or to the prospects of
Borrower, (c) materially impairs or may reasonably be expected to materially
impair the ability of Borrower to perform its Obligations or (d) materially
impairs or could reasonably be expected to materially impair the ability of the
Lenders or the Administrative Agent to enforce the principal benefits intended
to be created and conveyed by the Loan Documents, including without limitation
the Liens created by the Collateral Documents.
"Material Documents" means, collectively, the Lease, the Construction
------------------
Reserve Disbursement Agreement, the Senior Unsecured Notes, the Senior Unsecured
Note Indenture, the Relinquishment Agreement, the New Subordinated Notes and the
New Subordinated Notes Indenture, the Constitution, the Compact, the Gaming
Ordinance, the Gaming Authority Ordinance, the Development Services Agreement,
the Town Agreement and the UCC Ordinance.
"Maturity Date" means March 3, 2004.
-------------
"Mohegan Sun" means the high stakes bingo and casino property and
-----------
related transportation, retail, dining and entertainment facilities and proposed
hotel described in the Gaming Ordinance and commonly known as "Mohegan Sun
Resort Casino" owned by the Borrower and located in Uncasville, Connecticut
(including any future expansions thereof), which facilities are located upon the
real property described on Schedule 4.7.
"Multiemployer Plan" means any employee benefit plan of the type
------------------
described in Section 4001(a)(3) of ERISA.
"Negative Pledge" means any covenant binding on the Tribe or Borrower
---------------
that prohibits the creation of Liens on any Authority Property, except a
------
covenant contained in an instrument creating a Permitted Encumbrance or
Permitted Right of Others on Authority Property that prohibits the creation of
other Liens on that Authority Property and no other Authority Property.
"Net Income" means, with respect to any fiscal period, the net income
----------
from continuing operations before extraordinary or non-recurring items of
Borrower for that period, determined in accordance with Generally Accepted
Accounting Principles, consistently applied.
-17-
<PAGE>
"New Subordinated Notes" means (a) Borrower's 8 3/4% Senior
----------------------
Subordinated Notes due 2009 issued on or about March 3, 1999 in the aggregate
principal amount of $300,000,000 pursuant to the New Subordinated Note
Indenture, and (b) any Senior Subordinated Exchange Notes issued pursuant to the
New Subordinated Note Indenture.
"New Subordinated Note Indenture" means the Indenture dated as of
-------------------------------
March 3, 1999 between Borrower and State Street Bank and Trust Company, as
Trustee, relating to the New Subordinated Notes.
"Non-Authority Property" means Property of the Tribe which is not
----------------------
Authority Property.
"Note" means any promissory note made by Borrower to a Lender
----
evidencing Advances under that Lender's Pro Rata Share of the Commitment,
substantially in the form of Exhibit D, either as originally executed or as the
same may from time to time be supplemented, modified, amended, renewed, extended
or supplanted.
"Obligations" means all present and future obligations of every kind
-----------
or nature of the Tribe, Borrower or any Party at any time and from time to time
owed to the Creditors or any one or more of them under any one or more of the
Loan Documents, whether due or to become due, matured or unmatured, liquidated
or unliquidated, or contingent or noncontingent, including obligations of
--------
performance as well as obligations of payment, and including interest that
---------
accrues after the commencement of any proceeding under any Debtor Relief Law by
or against the Tribe, Borrower or any such Party.
"Operating Accounts" means the deposit accounts of Borrower described
------------------
on Schedule 5.26, and each other deposit, savings, brokerage or similar account
hereafter established by Borrower.
"Party" means any Person other than the Creditors which now or
-----
hereafter is a party to any of the Loan Documents.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
----
thereof established under ERISA.
"Pension Plan" means any "employee pension benefit plan" that is
------------
subject to Title IV of ERISA and which is maintained for employees of Borrower
or any of its ERISA Affiliates, other than a Multiemployer Plan.
----- ----
-18-
<PAGE>
"Permitted Dispositions" means Dispositions made during the term of
----------------------
this Agreement of Authority Property which has, as of each date of
determination, an aggregate book value not in excess of 5% of the aggregate
value of the assets of Borrower determined, as of each such date, with reference
to the then most recent audited financial statements of Borrower, provided that
--------
no Disposition of Authority Property which is an operationally integral part of
Mohegan Sun shall be a treated as a Permitted Disposition without the prior
written consent of the Requisite Lenders.
"Permitted Encumbrances" means:
----------------------
(a) inchoate Liens incident to construction or maintenance of real
property, or Liens incident to construction or maintenance of real
property, now or hereafter filed of record for which adequate
accounting reserves have been set aside and which are being contested
in good faith by appropriate proceedings and have not proceeded to
judgment, provided that, by reason of nonpayment of the obligations
--------
secured by such Liens, no such real property is subject to a material
risk of loss or forfeiture;
(b) Liens for taxes and assessments on Property which are not yet past
due, or Liens for taxes and assessments on Property for which adequate
reserves have been set aside and are being contested in good faith by
appropriate proceedings and have not proceeded to judgment, provided
--------
that, by reason of nonpayment of the obligations secured by such
Liens, no such Property is subject to a material risk of loss or
forfeiture;
(c) minor defects and irregularities in title to any real property which
in the aggregate do not materially impair the fair market value or use
of the real property for the purposes for which it is or may
reasonably be expected to be held;
(d) easements, exceptions, reservations, or other agreements granted or
entered into after the date hereof for the purpose of pipelines,
conduits, cables, wire communication lines, power lines and
substations, streets, trails, walkways, drainage, irrigation, water,
and sewerage purposes, dikes, canals, ditches, the removal of oil,
gas, coal, or other minerals, and other like purposes affecting real
property which in the aggregate do not materially burden or impair the
fair market value or use of such real property for the purposes for
which it is or may reasonably be expected to be held;
(e) rights reserved to or vested in any Governmental Agency by Law to
control or regulate, or obligations or duties under Law to any
Governmental Agency with respect to, the use of any real property;
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<PAGE>
(f) rights reserved to or vested in any Governmental Agency by Law to
control or regulate, or obligations or duties under Law to any
Governmental Agency with respect to, any right, power, franchise,
grant, license, or permit;
(g) present or future zoning laws and ordinances or other laws and
ordinances restricting the occupancy, use, or enjoyment of real
property;
(h) statutory Liens, other than those described in clauses (a) or (b)
above, arising in the ordinary course of business with respect to
obligations which are not delinquent or are being contested in good
faith by appropriate proceedings, provided that, if delinquent,
--------
adequate reserves have been set aside with respect thereto and, by
reason of nonpayment, no Property is subject to a material risk of
loss or forfeiture;
(i) Liens consisting of pledges or deposits made in connection with
obligations under workers' compensation laws, unemployment insurance
or similar legislation, including Liens of judgments thereunder which
are not currently dischargeable;
(j) Liens consisting of pledges or deposits of Property to secure
performance in connection with operating leases made in the ordinary
course of business to which Borrower is a party as lessee, provided
--------
the aggregate value of all such pledges and deposits in connection
with any such lease does not at any time exceed 10% of the annual
fixed rentals payable under such lease;
(k) Liens consisting of deposits of Property to secure statutory
obligations of Borrower in the ordinary course of its business;
(l) Liens consisting of deposits of Property to secure (or in lieu of)
surety, appeal or customs bonds in proceedings to which Borrower is a
party in the ordinary course of its business; and
(m) Liens created by or resulting from any litigation or legal proceeding
involving Borrower in the ordinary course of its business which is
currently being contested in good faith by appropriate proceedings,
provided that adequate reserves have been set aside with respect
--------
thereto, and such Liens are discharged or stayed within 60 days of
creation and no Property is subject to a material risk of loss or
forfeiture.
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<PAGE>
"Permitted Right of Others" means a Right of Others consisting of (a)
-------------------------
an interest (other than a legal or equitable co-ownership interest, an option or
right to acquire a legal or equitable co-ownership interest and any interest of
a ground lessor under a ground lease) that does not materially impair the value
or use of property for the purposes for which it is or may reasonably be
expected to be held, (b) an option or right to acquire a Lien that would be a
Permitted Encumbrance, and (c) the reversionary interest of a landlord under a
lease of Property.
"Person" means any entity, whether an individual, trustee,
------
corporation, general partnership, limited partnership, limited liability
company, limited liability partnership, joint stock company, trust, estate,
unincorporated organization, business association, tribe, firm, joint venture,
Governmental Agency, or otherwise.
"Plans and Budget" means the plans, specifications, construction
----------------
budget, construction plan and timetable prepared by or for Borrower, as the same
may be amended or supplemented from time to time, all of which plans and
specifications describe and show the construction of the Proposed Expansion and
the labor and materials necessary for the construction thereof.
"Pricing Period" means the period of three months which commences on
--------------
the first day of each March, June, September and December, and ends on the last
day of the succeeding May, August, November and February.
"Priority Distributions" means Distributions made by Borrower to the
----------------------
Tribe in the aggregate amount of which do not exceed $14,000,000 in any calendar
year, plus for 2000 and each subsequent year, an annual adjustment in a
----
percentage equal to the Consumer Price Index adjustment published for that year.
"Projections" means the financial projections dated as of the Closing
-----------
Date heretofore furnished by the Borrower to the Lenders, true and correct
copies of which are attached hereto as Schedule 5.20.
"Property" means any interest in any kind of property or asset,
--------
whether real, personal or mixed, or tangible or intangible.
"Proposed Expansion" means the proposed expansion of the Mohegan Sun
------------------
generally consisting of a hotel with approximately 1500 hotel rooms,
approximately 9 new restaurants and lounges, approximately 100,000 square feet
of additional gaming space, approximately 100,000 square feet of convention
space, and an entertainment event center with seating for approximately 10,000,
and approximately 300,000 square feet of additional retail space, in a manner
consistent with the Plan and Budget.
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<PAGE>
"Pro Rata Share" means the percentage of the Commitment held by each
--------------
Lender on that date or, if the Commitment has been terminated, the percentage of
the Obligations held by that Lender, including in each case any holdings through
an SPC. As of the Closing Date, each Lender holds the percentage of the
Commitment set forth opposite the name of that Lender on Schedule 1.1. Such
Schedule shall be deemed to be automatically amended to reflect any assignments
of the Commitment made in accordance with Section 13.8.
"Quarterly Payment Date" means each March 31, June 30, September 30,
----------------------
and December 31, commencing with the first such date to occur subsequent to the
Closing Date.
"Real Property" means, collectively, the real property and
-------------
improvements underlying Mohegan Sun described on Schedule 4.7.
"Recourse Obligations" means, as of each date of determination, and
--------------------
without duplication, (a) all Indebtedness and Contingent Obligations as to which
Borrower has any direct or indirect liability or obligation (whether as the
primary obligor or as a surety, and whether or not Borrower is the nominal
obligor with respect thereto), including without limitation indebtedness for
borrowed money, obligations with respect to Capital Leases, amounts available
for drawing under letters of credit and other similar instruments, and the
aggregate amount drawn under letters of credit and other similar instruments not
then reimbursed, (b) all Indebtedness, Contingent Obligations and other
obligations secured by any Lien upon any Authority Property, and (c) all
Indebtedness, Contingent Obligations and other obligations held by any Person
who may take recourse to any Authority Property, the revenues of Borrower, or
any other Property of Borrower for the satisfaction of such Indebtedness and
other obligations. Without limitation on this definition, the Obligations, the
Senior Unsecured Notes and the New Subordinated Notes each constitute Recourse
Obligations.
"Reduction Amount" means the amount which is equal to 10% of the
----------------
principal amount of the Commitment (as in effect as of the first Reduction Date
to occur), provided that if the Commitment is thereafter increased in accordance
--------
with Section 2.7, then the Reduction Amount for each subsequent Reduction Date
shall be ratably increased.
"Reduction Date" means each Quarterly Payment Date beginning with the
--------------
earlier of (a) March 31, 2002 or (b) the last day of the first full Fiscal
Quarter following the Completion Date.
-22-
<PAGE>
"Reference Rate" means the rate of interest publicly announced from
--------------
time to time by Bank of America in San Francisco, California, as its "Reference
Rate." The Reference Rate is a rate set by Bank of America based upon various
factors, including Bank of America's costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans. Bank of America may price loans at, above or below the Reference Rate.
Any change in the Reference Rate shall take effect on the day specified in the
public announcement of such change.
"Regulations D, T, U and X" means Regulations D, T, U and X,
-------------------------
respectively, as at any time amended, of the Board of Governors of the Federal
Reserve System, or any other regulations in substance substituted therefor.
"Related Businesses" means (a) Class II and Class III Casino gaming
------------------
(as defined in IGRA), and (b) any resort business, any activity or business
incidental, directly related or similar thereto, or any business or activity
that is a reasonable extension, development or expansion thereof, including any
hotel, entertainment, recreation or other activity or business, in each case
designed to promote, market, support, develop, construct or enhance the casino
gaming and resort business operated by Borrower at Mohegan Sun.
"Relinquishment Agreement" means the Relinquishment Agreement dated as
------------------------
of February 7, 1998, among Borrower, the Tribe and TCA, as amended as of the
Closing Date.
"Request for Letter of Credit" means a written request for letter of
----------------------------
credit substantially in the form of Exhibit G, together with the standard form
of application for standby letters of credit, as applicable, used by the Issuing
Lender, signed by a Senior Officer of the Borrower and properly completed to
provide all information required to be included therein.
"Request for Loan" means a written request for a Loan substantially in
----------------
the form of Exhibit H, signed by a Senior Officer of the Borrower and properly
completed to provide all information required to be included therein.
"Requirement of Law" means, as to any Person, the constitution, the
------------------
articles or certificate of incorporation and bylaws, the partnership agreement
and any related certificate of partnership, or other organizational or governing
documents of such Person, and any Law, or judgment, order, award, decree, writ
or determination of a Governmental Agency, in each case applicable to or binding
upon such Person or any of its Property or to which such Person or any of its
Property is subject.
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"Requisite Lenders" means, as of any date of determination (a) Lenders
-----------------
whose aggregate Pro Rata Share is at least 51% of the then outstanding Loans and
Letters of Credit, or (b) if no Loans or Letters of Credit are outstanding,
Lenders whose aggregate Pro Rata Share is at least 51% of the Commitment, or (c)
if the Commitment has been terminated and no Loans or Letters of Credit or other
Obligations (other than under Approved Swap Agreements) are then outstanding,
Lenders then owed Specified Swap Amounts which are at least 51% of the aggregate
Specified Swap Amount owed to all Lenders.
"Reserve Percentage" means, with respect to any LIBOR Loan, the
------------------
percentage applicable as of the date of determination of the LIBOR Base Rate
representing the aggregate reserve requirements of the Administrative Agent
(disregarding any offsetting amounts that may be available to the Administrative
Agent to decrease such requirements to the extent that such offsetting amounts
arose out of transactions other than those contemplated by this Agreement) under
Regulation D and any other applicable Laws with respect to Eurodollar
Obligations in an aggregate amount equal to the amount of such LIBOR Loan and
for a time period comparable to the number of months in the applicable Interest
Period. The determination by the Administrative Agent of any applicable Reserve
Percentage shall be presumed correct in the absence of manifest error.
"Responsible Official" means, when used with reference to any Person,
--------------------
any Senior Officer and, in the case of Borrower, includes any member of the
Management Board. Any document or certificate hereunder that is signed or
executed by a Responsible Official of another Person shall be conclusively
presumed to have been authorized by all necessary corporate, partnership and/or
other action on the part of such other Person.
"Right of Others" means, as to any Property in which a Person has an
---------------
interest, (a) any legal or equitable right, title or other interest (other than
----- ----
a Lien) held by any other Person in or with respect to that Property, and (b)
any option or right held by any other Person to acquire any right, title or
other interest in or with respect to that Property, including any option or
---------
right to acquire a Lien.
"Securities" means any capital stock, share, voting trust certificate,
----------
bonds, debentures, notes or other evidences of indebtedness, limited partnership
interests, or any warrant, option or other right to purchase or acquire any of
the foregoing.
"Security Agreement" means the Security Agreement of even date
------------------
herewith executed by Borrower in favor of the Administrative Agent for the
ratable benefit of the Lenders, either as originally executed or as it may from
time to time be supplemented, modified, amended, restated or extended.
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"Senior Leverage Ratio" means, as of each date of determination, the
---------------------
ratio of (a) Total Debt as of that date minus Subordinated Obligations as of
-----
that date, to (b) Adjusted EBITDA for the four Fiscal Quarter period ending on
that date.
"Senior Officer" means (a) as to the Tribe, the Chairman and Vice-
--------------
Chairman of the Tribal Council of the Tribe, the Chief of Staff of the Tribe,
the Chief Financial Officer of the Tribe and the General Counsel of the Tribe,
and (b) as to Borrower, the Chief Executive Officer and the Senior Vice
President of Finance of Borrower. Each Senior Officer (whether denominated as
an officer of the Tribe or of Borrower) shall be conclusively presumed to be
authorized to act on behalf of the Borrower with respect to the transactions
contemplated by the Loan Documents.
"Senior Unsecured Notes" means (a) Borrowers 8 1/8% Senior Notes due
----------------------
2006 issued pursuant to the Senior Note Indenture in the aggregate principal
amount of $200,000,000, and (b) any Senior Exchange Notes issued pursuant to the
Senior Unsecured Note Indenture.
"Senior Unsecured Note Indenture" means the Indenture dated as of
-------------------------------
March 3, 1999 between Borrower and First Union National Bank, as Trustee,
relating to the Senior Unsecured Notes.
"SPC" has the meaning set forth in Section 13.8.
---
"Special Circumstance" means (a) the adoption of any Law by any
--------------------
Governmental Agency, central branch or comparable authority with respect to
activities in the Designated Market, or (b) any change in the interpretation or
administration of any existing Law by any Governmental Agency, central bank or
comparable authority charged with the interpretation or administration thereof,
or (c) compliance by any Lender or its LIBOR Lending Office with any request or
directive (whether or not having the force of Law) of any such Governmental
Agency, central bank or comparable authority, or (d) the existence or occurrence
of circumstances affecting the Designated Market generally that are beyond the
reasonable control of the Lenders.
"Specified Swap Amount" means, at any time, in respect of Swap
---------------------
Agreements to which any Lender is party, the Swap Termination Value relating
thereto; provided that for purposes of this definition, any Swap Termination
--------
Value that is negative as to (i.e., owing by) any Lender shall be deemed equal
to zero.
"Subordinated Obligations" means, collectively the New Subordinated
------------------------
Notes and each other Indebtedness of Borrower that is subordinated to the
Obligations, all of the provisions of which (including amount, maturity,
amortization, interest rate,
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covenants, defaults, remedies and subordination), have been approved in writing
as to form and substance by the Administrative Agent and designated in writing
as "Subordinated Obligations" by the Administrative Agent with the written
consent of the Requisite Lenders. The Senior Unsecured Notes are not
Subordinated Obligations.
"Subsidiary" means, as of any date of determination and with respect
----------
to any Person, any other corporation, partnership or other business entity
(whether or not, in either case, characterized as such or as a "joint venture"),
whether now existing or hereafter organized or acquired: (a) in the case of a
corporation, of which a majority of the securities having ordinary voting power
for the election of directors or other governing body (other than securities
having such power only by reason of the happening of a contingency) are at the
time beneficially owned by such Person and/or one or more Subsidiaries of such
Person, or (b) in the case of a partnership or other business entity, of which a
majority of the partnership or other ownership interests are at the time
beneficially owned by such Person and/or one or more of its Subsidiaries.
"Swap Agreements" means one or more written agreements between
---------------
Borrower and one or more financial institutions providing for "swap," "cap,"
"collar" or other interest rate protection with respect to any Indebtedness.
"Swap Termination Value" means, in respect of any one or more Swap
----------------------
Agreements, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Agreements, (a) for any date on or after
the date such Swap Agreements have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a) the amount(s) determined as the
mark-to-market value(s) for such Swap Agreements, as determined by the
Administrative Agent based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Swap Agreements
which may include any Lender.
"Syndication Agent" means Salomon Smith Barney, Inc. The capacity of
-----------------
the Syndication Agent is solely titular in nature, and except to the extent
expressly set forth herein, the Syndication Agent shall not have any rights or
obligations under the Loan Documents by reason of such capacity.
"TCA" means Trading Cove Associates, a Connecticut general
---
partnership, its successors and assigns.
"TCA Subordinated Notes" means subordinated notes issued in the
----------------------
aggregate principal amount of $90,000,000 pursuant to the Note Purchase
Agreement dated as of September 29, 1995, between Borrower and Sun International
Hotels Limited.
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<PAGE>
"Termination Event" means (a) a "reportable event" as defined in
-----------------
Section 4043 of ERISA (other than a reportable event that is not subject to the
----- ----
provision for 30 day notice to the PBGC), (b) the withdrawal of Borrower or any
of its ERISA Affiliates from a Pension Plan during any plan year in which it was
a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (c) the
filing of a notice of intent to terminate a Pension Plan or the treatment of an
amendment to a Pension Plan as a termination thereof pursuant to Section 4041 of
ERISA, (d) the institution of proceedings to terminate a Pension Plan by the
PBGC or (e) any other event or condition which might reasonably be expected to
constitute grounds under ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan.
"Title Company" means Chicago Title Insurance Company or such other
-------------
title insurance company as may be reasonably satisfactory to Administrative
Agent.
"to the best knowledge of" means, when modifying a representation,
------------------------
warranty or other statement of any Person, that the fact or situation described
therein is known by the Person (or, in the case of a Person other than a natural
Person, known by a Responsible Official of that Person) making the
representation, warranty or other statement, or with the exercise of reasonable
due diligence under the circumstances (in accordance with the standard of what a
reasonable Person in similar circumstances would have done) should have been
known by the Person (or, in the case of a Person other than a natural Person,
should have been known by a Responsible Official of that Person). In the case
of the Borrower and the Tribe, knowledge of any Responsible Official of the
Borrower shall be attributed to the Tribe, and knowledge of any Responsible
Official of the Tribe shall be imputed to the Tribe.
"Total Debt" means, as of each date of determination, all Recourse
----------
Obligations other than Borrower's liability for payments under the
----------
Relinquishment Agreement.
"Total Leverage Ratio" means, as of each date of determination, the
--------------------
ratio of (a) Total Debt as of that date, to (b) Adjusted EBITDA for the four
Fiscal Quarter period ending on that date.
"Town Agreement" means the Agreement dated as of June 16, 1994 between
--------------
the Tribe and the Town of Montville, Connecticut, as amended as of the Closing
Date.
"Tribal Council" means the Tribal Council of the Tribe elected in
--------------
accordance with the Constitution.
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<PAGE>
"Tribe" means The Mohegan Tribe of Indians of Connecticut, a federally
-----
recognized Indian Tribe.
"type", when used with respect to any Loan or Advance, means the
----
designation of whether such Loan or Advance is a Base Rate Loan or Advance
or a LIBOR Loan or Advance.
"UCC Ordinance" means the Tribe's Ordinance Number 98-7.
-------------
"Unused Commitment" means, as of each date of determination, the
-----------------
difference between (a) the aggregate Commitment on that date and (b) the
sum of (i) the outstanding principal amount of the Loans, (ii) the amount
---
available for drawing under outstanding Letters of Credit, and (iii) the
aggregate amount of all unreimbursed draws with respect to Letters of
Credit.
"Working Capital" means, as of each date of determination, the current
---------------
assets of Borrower other than Cash and Cash Equivalents minus the current
----- ---- -----
liabilities of Borrower, in each case determined in accordance with
Generally Accepted Accounting Principles, consistently applied.
2.2 Use of Defined Terms. Any defined term used in the plural shall refer
--------------------
to all members of the relevant class, and any defined term used in the singular
shall refer to any one or more of the members of the relevant class.
2.3 Accounting Terms. All accounting terms not specifically defined in
----------------
this Agreement shall be construed in conformity with, and all financial data
required to be submitted by this Agreement shall be prepared in conformity with,
Generally Accepted Accounting Principles applied on a consistent basis, except
------
as otherwise specifically prescribed herein. In the event that Generally
Accepted Accounting Principles change during the term of this Agreement such
that the financial covenants contained in Sections 7.12 through 7.15, inclusive,
would then be calculated in a different manner or with different components, (a)
Borrower, the Tribe and the Lenders agree to amend this Agreement in such
respects as are necessary to conform those covenants as criteria for evaluating
Borrower's financial condition to substantially the same criteria as were
effective prior to such change in Generally Accepted Accounting Principles and
(b) Borrower shall be deemed to be in compliance with the financial covenants
contained in such Sections during the 60 day period following any such change in
Generally Accepted Accounting Principles if and to the extent that Borrower
would have been in compliance therewith under Generally Accepted Accounting
Principles as in effect immediately prior to such change.
2.4 Rounding. Any financial ratios required to be maintained by Borrower
--------
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which
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<PAGE>
such ratio is expressed in this Agreement and rounding the result up or down to
the nearest number (with a round-up if there is no nearest number) to the number
of places by which such ratio is expressed in this Agreement.
2.5 Exhibits and Schedules. All Exhibits and Schedules to this Agreement,
----------------------
either as originally existing or as the same may from time to time be
supplemented, modified or amended, are incorporated herein by this reference. A
matter disclosed on any Schedule shall be deemed disclosed on all Schedules.
2.6 Miscellaneous Terms. The term "or" is disjunctive; the term "and" is
-------------------
conjunctive. The term "shall" is mandatory; the term "may" is permissive.
Masculine terms also apply to females; feminine terms also apply to males. The
term "including" is by way of example and not limitation.
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ARTICLE 3.
LOANS AND LETTERS OF CREDIT
---------------------------
3.1 Loans-General.
-------------
(a) Subject to the terms and conditions set forth in this Agreement,
at any time and from time to time from the Closing Date through the Maturity
Date, each Lender shall, pro rata according to its Pro Rata Share of the then
applicable Commitment, make revolving Advances to Borrower under the Commitment
in such amounts as Borrower may request that do not exceed in the aggregate at
any one time outstanding the amount of that Lender's Pro Rata Share of the then
applicable Commitment; provided that, giving effect to the Loan of which such
--------
Advance is a part, the sum of (i) the aggregate principal amount of the
---
outstanding Loans plus (ii) the aggregate amount available for drawing under the
----
outstanding Letters of Credit plus (iii) the aggregate amount of all
----
unreimbursed draws with respect to all Letters of Credit, shall not exceed the
then applicable Commitment. Subject to the limitations set forth herein,
Borrower may borrow, repay and reborrow under this Agreement without premium or
penalty.
(b) Each Loan shall be made pursuant to a Request for Loan which shall
specify the requested (i) date of such Loan, which shall be a Business Day in
the case of a Base Rate Loan and a LIBOR Business Day in the case of a LIBOR
Loan, (ii) amount of such Loan, (iii) type of such Loan, and (iv) in the case of
LIBOR Loans, the Interest Period for such Loan. Unless the Administrative Agent
has notified, in its sole and absolute discretion, Borrower to the contrary, a
Loan may be requested by telephone by a Senior Officer of Borrower. Borrower
shall immediately confirm each requested Loan by submitting a Request for Loan
conforming with the requirements of the preceding sentence to the Administrative
Agent by telecopier, with the original thereof to follow by mail. In the case
of the initial Loans to be made on the Closing Date, the Request for Loan to be
delivered by the Borrower shall be delivered to the Administrative Agent no
later than 12:00 noon, California time, one day before the Closing Date and such
Loans shall be Base Rate Loans only.
(c) Promptly following receipt of a Request for Loan, the
Administrative Agent shall notify each Lender by telephone, telecopier or telex
of the date of the Loan and that Lender's Pro Rata Share of the Loan. Not later
than 12:00 noon, California time, in the case where a Base Rate Loan is
requested, and 10:00 a.m. California time, in the case where a LIBOR Loan is
requested, on the date specified for any Loan, each Lender shall make its Pro
Rata Share of the Loan in immediately available funds available to the
Administrative Agent at the Administrative Agent's Office. Upon fulfillment of
the applicable conditions set forth in Article 10, all Advances shall be
credited in immediately available funds to the Designated Deposit Account.
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<PAGE>
(d) Unless the Requisite Lenders otherwise consent, each Loan under
the Commitment shall be in an integral multiple of $1,000,000 which is
equal to or greater than $5,000,000.
(e) Unless the Administrative Agent otherwise consents, no Request for
Loan may be revoked by Borrower after its submission to the Lenders by the
Administrative Agent. In the event that the Administrative Agent consents
to the revocation of any Request for Loan submitted by the Borrower,
Borrower agrees that it shall reimburse the Administrative Agent and each
Lender for any loss, cost, damage or expense associated with any
redeployment of funds caused by such revocation.
(f) If, as of the end of the Interest Period with respect to any LIBOR
Loan, Borrower has not submitted a Request for Loan or orally requested a
Base Rate Loan in accordance with Section 2.1(b), or if any Request for
Loan submitted by Borrower for a LIBOR Loan fails to satisfy the notice
periods specified in Section 2.3, then, in the absence of notice from
Borrower to the contrary, Borrower shall be deemed to have requested a Base
Rate Loan in an amount equal to the maturing LIBOR Loan, and the Lenders
shall make the Advances necessary to make such Loan notwithstanding
Sections 2.1(b) and 2.2.
(g) The Loans and Advances made by the Lenders pursuant to this
Agreement shall be evidenced hereby, without the requirement for the
issuance of any Note or promissory note to any Lender, provided however
-------- -------
that upon request from any Lender to Borrower submitted through the
Administrative Agent from time to time, Borrower shall issue a Note to such
Lender in the amount of that Lender's Pro Rata Share, which Note will
thereafter serve as evidence of that Lender's Advances.
3.2 Base Rate Loans. Each request by Borrower for a Base Rate Loan shall
---------------
be made pursuant to a Request for Loan or an oral request for loan submitted in
accordance with Section 2.1(b), in each case received at the Administrative
Agent's Office not later than 10:00 a.m. California time, on the Business Day
immediately preceding the Business Day upon which the requested Loan is to be
made.
3.3 LIBOR Loans.
-----------
(a) Each request by Borrower for a LIBOR Loan shall be made pursuant
to a Request for Loan or an oral request submitted in accordance with
Section 2.1(b), in each case received at the Administrative Agent's Office
not later than 9:00 a.m., California time, at least three LIBOR Business
Days before the first day of the applicable Interest Period.
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<PAGE>
(b) Two LIBOR Business Days prior to the first day of the applicable
Interest Period, the Administrative Agent shall determine the applicable LIBOR
(which determination shall be conclusive in the absence of manifest error) and
promptly shall give notice of the same to Borrower and the Lenders by telephone,
telecopier or telex.
(c) Unless all of the Lenders otherwise consent in writing, no LIBOR
Loan may be requested during the continuance of a Default or Event of Default.
(d) Nothing contained herein shall require any Lender to actually
obtain the funds needed to make any LIBOR Advance in the Designated Market.
(e) Unless the Administrative Agent otherwise consents, no more than
five LIBOR Loans shall be outstanding at any one time.
(f) No LIBOR Loan shall be made which would cause the aggregate
amount of all LIBOR Loans having Interest Periods ending after any Reduction
Date plus the aggregate face amount of all Letters of Credit having expiry dates
----
(including any mandatory extensions thereof) after that Reduction Date to be in
excess of the amount of the Commitment, as scheduled to be reduced pursuant to
Section 2.5 on that Reduction Date.
3.4 Letters of Credit.
-----------------
(a) Subject to the terms and conditions hereof, at any time and from
time to time from the Closing Date through the Maturity Date, the Issuing Lender
shall issue such Letters of Credit under the Commitment as Borrower may request
by a Request for Letter of Credit which do not result in the aggregate effective
face amount of all outstanding Letters of Credit being in excess of $25,000,000;
provided that after giving effect to all such Letters of Credit, the sum of (i)
- -------- ---
the aggregate principal amount of the outstanding Loans plus (ii) the aggregate
----
amount available for drawing under the outstanding Letters of Credit plus (iii)
----
the aggregate amount of all unreimbursed draws with respect to all Letters of
Credit, shall not exceed the then applicable Commitment. No Letter of Credit
shall be issued which would cause the aggregate amount of all LIBOR Loans having
Interest Periods ending after any Reduction Date plus the aggregate face amount
----
of all Letters of Credit having expiry dates (including any mandatory extensions
thereof) after that Reduction Date to be in excess of the amount of the
Commitment, as scheduled to be reduced pursuant to Section 2.5 on that Reduction
Date. Each Letter of Credit shall be in a form reasonably acceptable to the
Issuing Lender. Unless all the Lenders otherwise consent in a writing delivered
to the Administrative Agent, the terms of the Letters of Credit shall not exceed
12 months from the date of issuance thereof (or, in the case of any
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<PAGE>
renewal, 12 months from the date of such renewal) and no Letter of Credit or
renewal thereof shall have a term which exceeds the Maturity Date. Borrower will
not request any Letter of Credit which is not reasonably necessary in the
ordinary course of business of Borrower.
(b) Each Request for Letter of Credit shall be submitted to the
Issuing Lender, with a copy to the Administrative Agent, at least three Business
Days prior to the date upon which the related Letter of Credit is proposed to be
issued. The Administrative Agent shall promptly notify the Issuing Lender
whether such Request for Letter of Credit, and the issuance of a Letter of
Credit pursuant thereto, conforms to the requirements of this Agreement. Upon
issuance of a Letter of Credit, the Issuing Lender shall promptly notify the
Administrative Agent, and the Administrative Agent shall promptly notify the
Lenders, of the amount and terms thereof.
(c) Upon the issuance of a Letter of Credit, each Lender shall be
deemed to have purchased a pro rata participation from the Issuing Lender, in an
amount equal to that Lender's Pro Rata Share, of such Letter of Credit. Without
limiting the scope and nature of each Lender's participation in any Letter of
Credit, to the extent that the Issuing Lender has not been reimbursed by
Borrower for any payment required to be made by the Issuing Lender under any
Letter of Credit, each Lender shall, pro rata according to its Pro Rata Share,
reimburse the Issuing Lender promptly upon demand for the amount of such payment
through the Administrative Agent. The obligation of each Lender to so reimburse
the Issuing Lender shall be absolute and unconditional and shall not be affected
by the occurrence of an Event of Default or any other occurrence or event. Any
such reimbursement shall not relieve or otherwise impair the obligation of
Borrower to reimburse the Issuing Lender for the amount of any payment made by
the Issuing Lender under any Letter of Credit together with interest as
hereinafter provided.
(d) Borrower agrees to pay to the Issuing Lender through the
Administrative Agent an amount equal to any payment made by the Issuing Lender
with respect to each Letter of Credit upon the date of each drawing thereunder,
together with interest on such amount from the date of any payment made by the
Issuing Lender at the Default Rate (provided that, subject to the terms and
-------- ----
conditions hereof, Borrower may request a Base Rate Loan in accordance with this
Agreement to finance such amounts at the rate ordinarily applicable to Base Rate
Loans). The principal amount of any such payment shall be used to reimburse the
Issuing Lender for the payment made by it under the Letter of Credit. Each
Lender that has reimbursed the Issuing Lender pursuant to Section 2.4(c) for its
Pro-Rata Share of any payment made by the Issuing Lender under a Letter of
Credit shall thereupon acquire a pro-rata participation, to the extent of such
reimbursement, in the claim of the Issuing Lender against Borrower under this
Section 2.4(d) and shall share, in accordance with that pro-rata participation,
in any payment (including any payment of interest with respect
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<PAGE>
thereto) made by Borrower with respect to such claim, and the Administrative
Agent shall remit to each such Lender its Pro Rata Share thereof in immediately
available funds.
(e) If Borrower fails to make the payment required by Section 2.4(d)
upon demand, in lieu of the reimbursement to the Issuing Lender under Section
2.4(c) the Issuing Lender may (but is not required to) without notice to or the
consent of Borrower, instruct the Administrative Agent to cause Advances to be
made by the Lenders under the Commitment in accordance with their Pro Rata
Shares in an aggregate amount equal to the amount paid by the Issuing Lender
with respect to that Letter of Credit and, for this purpose, the conditions
precedent set forth in Article 10 shall not apply. The proceeds of such
Advances shall be paid to the Issuing Lender to reimburse it for the payment
made by it under the Letter of Credit. Such Advances shall be payable upon
demand and shall bear interest at the Default Rate.
(f) The issuance of any supplement, modification, amendment, renewal,
or extension to or of any Letter of Credit shall be treated in all respects the
same as the issuance of a new Letter of Credit.
(g) The obligation of Borrower to pay to the Issuing Lender the
amount of any payment made by the Issuing Lender under any Letter of Credit
shall be absolute, unconditional, and irrevocable, subject only to performance
by the Issuing Lender of its obligations to Borrower under Connecticut Uniform
Commercial Code Section 42a-5-109. Without limiting the foregoing, Borrower's
obligations shall not be affected by any of the following circumstances:
(i) any lack of validity or enforceability of the Letter of
Credit, this Agreement, or any other agreement or instrument relating
thereto;
(ii) any amendment or waiver of or any consent to departure
from the Letter of Credit, this Agreement, or any other agreement or
instrument relating thereto;
(iii) the existence of any claim, setoff, defense, or other
rights which Borrower may have at any time against the Issuing Lender, the
Administrative Agent or any Lender, any beneficiary of the Letter of Credit
or any other Person, whether in connection with the Letter of Credit,
this Agreement, or any other agreement or instrument relating thereto, or
any unrelated transactions;
(iv) any demand, statement, or any other document presented
under the Letter of Credit proving to be forged, fraudulent, invalid, or
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<PAGE>
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever;
(v) payment by the Issuing Lender in good faith under the
Letter of Credit against presentation of a draft or any accompanying
document which does not strictly comply with the terms of the Letter of
Credit;
(vi) the existence, character, quality, quantity, condition,
packing, value or delivery of any property purported to be represented by
documents presented in connection with any Letter of Credit or for any
difference between any such property and the character, quality, quantity,
condition, or value of such property as described in such documents;
(vii) the time, place, manner, order or contents of shipments or
deliveries of property as described in documents presented in connection
with any Letter of Credit or the existence, nature and extent of any
insurance relative thereto;
(viii) the solvency or financial responsibility of any party
issuing any documents in connection with a Letter of Credit;
(ix) any failure or delay in notice of shipments or arrival of
any property;
(x) any error in the transmission of any message relating to a
Letter of Credit not caused by the Issuing Lender, or any delay or
interruption in any such message;
(xi) any error, neglect or default of any correspondent of the
Issuing Lender in connection with a Letter of Credit;
(xii) any consequence arising from acts of God, war,
insurrection, civil unrest, disturbances, labor disputes, emergency
conditions or other causes beyond the control of the Issuing Lender;
(xiii) so long as the Issuing Lender in good faith determines
that the contract or document appears to comply with the terms of the
Letter of Credit, the form, accuracy, genuineness or legal effect of any
contract or document referred to in any document submitted to the Issuing
Lender in connection with a Letter of Credit; and
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<PAGE>
(xiv) where the Issuing Lender has acted in good faith and
observed general banking usage, customs or practices, any other
circumstances whatsoever.
(h) The Issuing Lender shall be entitled to the protection accorded
to the Administrative Agent pursuant to Section 12.6, mutatis mutandis.
------- --------
3.5 Automatic Reduction of Commitment. The Commitment shall
---------------------------------
automatically reduce by the Reduction Amount on each Reduction Date.
3.6 Voluntary Reduction of Commitment. Borrower shall have the
---------------------------------
right, at any time and from time to time, without penalty or charge, upon at
least five Business Days prior written notice to the Administrative Agent,
voluntarily to permanently and irrevocably reduce, in aggregate principal
amounts which are not less than $5,000,000 and in an integral multiple of
$1,000,000, or to terminate, the then undisbursed portion of the Commitment,
provided that (i) any such reduction or termination shall be accompanied by all
- --------
accrued and unpaid commitment fees with respect to any portion of the Commitment
being reduced or terminated, and (ii) no such reduction or termination shall
affect the further scheduled reductions of Commitment in accordance with Section
2.5.
3.7 Optional Increases to the Commitment.
------------------------------------
(a) Provided that no Default or Event of Default then exists,
--------
Borrower may, at any time prior to the date which is the second
anniversary of the Closing Date, request in writing that the then
effective Commitment be increased to an amount which is not greater than
-----
$500,000,000 minus the amount of any reductions to the Commitment which
have then occurred pursuant to Sections 2.5 or 2.6, in accordance with the
provisions of this Section. Any request under this Section shall be
submitted by Borrower to the Lenders through the Administrative Agent not
less than thirty days prior to the proposed increase, specify the proposed
effective date and amount of such increase and be accompanied by a
Certificate signed by a Senior Officer of Borrower (and consented to by the
Tribe acting through a Senior Officer), stating that no Default or Event of
Default exists as of the date of the request or will result from the
requested increase. Borrower may also specify any fees offered to those
Lenders which agree to an increase in the amount of their Pro Rata Share of
the Commitment (which fees may be variable based upon the amount which any
such Lender is willing to assume as an increase to the amount of its Pro
Rata Share of the increased Commitment). The consent of the Lenders, as
such, shall not be required for an increase in the amount of the Commitment
pursuant to this Section.
(b) Each Lender may approve or reject a request for an increase in
the amount of the Commitment in its sole and absolute discretion and, absent an
affirmative written response within thirty days after receipt of such request,
shall be
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<PAGE>
deemed to have rejected the request. The rejection of such a request by any
number of Lenders shall not affect Borrower's right to increase the Commitment
pursuant to this Section.
(c) In responding to a request under this Section, each Lender which is
willing to increase the amount of its Pro Rata Share of the increased Commitment
shall specify the amount of the proposed increase which it is willing to assume.
Each consenting Lender shall be entitled to participate ratably (based on its
Pro Rata Share of the Commitment before such increase) in any resulting increase
in the Commitment, subject to the right of the Administrative Agent to adjust
allocations of the increased Commitment so as to result in the amounts of the
Pro Rata Shares of the Lenders being in integral multiples of $100,000.
(d) If the aggregate principal amount offered to be assumed by the
consenting Lenders is less than the amount requested, Borrower may (i) reject
the proposed increase in its entirety, (ii) accept the offered amounts or (iii)
designate new lenders who qualify as Eligible Assignees and which are reasonably
acceptable to the Administrative Agent as additional Lenders hereunder in
accordance with clause (e) of this Section (each, a "New Lender"), which New
Lenders may assume the amount of the increase in the Commitment that has not
been assumed by the consenting Lenders.
(e) Each New Lender designated by Borrower and reasonably acceptable to
the Administrative Agent shall become an additional party hereto as a New Lender
concurrently with the effectiveness of the proposed increase in the Commitment
upon its execution of an instrument of joinder to this Agreement which is in
form and substance reasonably acceptable to the Administrative Agent and which,
in any event, contains the representations, warranties, indemnities and other
protections afforded to the Administrative Agent and the other Lenders which
would be granted or made by an Eligible Assignee by means of the execution of an
Assignment Agreement.
(f) Subject to the foregoing, any increase to the Commitment requested
under this Section shall be effective as of the date proposed by Borrower and
shall be in the principal amount equal to (i) the amount which consenting
Lenders are willing to assume as increases to the amount of their Pro Rata Share
plus (ii) the amount offered by any New Lenders. Upon the effectiveness of any
- ----
such increase, Borrower shall issue (x) replacement Notes to each affected
Lender and new Notes to each New Lender, and the percentage Pro Rata Shares of
each Lender will be adjusted to give effect to the increase in the Commitment
and set forth in a new Schedule 1.1 issued by the Administrative Agent, (y)
execute and deliver to the Administrative Agent such amendments to the Loan
Documents as the Administrative Agent may reasonably request relating to such
increase, including without limitation an amendment to the Leasehold Mortgage
executed by Borrower and the Tribe reflecting the increase of the amounts
secured thereby, and (z) Borrower shall provide to the Administrative Agent
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an endorsement to its ALTA lenders policy of title insurance, in form and
substance reasonably acceptable to the Administrative Agent, insuring the
continued priority and perfection of the Leasehold Mortgage.
3.8 Administrative Agent's Right to Assume Funds Available for Advances.
-------------------------------------------------------------------
Unless the Administrative Agent shall have been notified by any Lender prior to
the funding by the Administrative Agent of any Loan that such Lender does not
intend to make available to the Administrative Agent such Lender's Pro Rata
Share of the total amount of such Loan, the Administrative Agent may assume that
such Lender has made such amount available to the Administrative Agent on the
date of the Loan and the Administrative Agent may, in reliance upon such
assumption, make available to Borrower a corresponding amount. If the
Administrative Agent has made funds available to Borrower based on such
assumption and such corresponding amount is not in fact made available to the
Administrative Agent by such Lender, the Administrative Agent shall be entitled
to recover such corresponding amount on demand from such Lender, which demand
shall be made in a reasonably prompt manner. If such Lender does not pay such
corresponding amount forthwith upon the Administrative Agent's demand therefor,
the Administrative Agent promptly shall notify Borrower and Borrower shall pay
such corresponding amount to the Administrative Agent. The Administrative Agent
also shall be entitled to recover from such Lender interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to Borrower to the date
such corresponding amount is recovered by the Administrative Agent, at a rate
per annum equal to the Federal Funds Rate. Nothing herein shall be deemed to
relieve any Lender from its obligation to fulfill its Pro Rata Share or to
prejudice any rights which the Administrative Agent or Borrower may have against
any Lender as a result of any default by such Lender hereunder.
3.9 Collateral. The Loans, together with all other Obligations, shall be
----------
secured by the Liens created by the Collateral Documents. Each Approved Swap
Agreement shall be secured by the Lien of the Collateral Documents (a) on a pari
----
passu basis to the extent of the associated Swap Termination Value, and (b) to
- -----
the extent of any excess, on a basis which is in all respects subordinated to
all other Obligations.
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<PAGE>
ARTICLE 4.
PAYMENTS AND FEES
-----------------
4.1 Principal and Interest.
----------------------
(a) Interest shall be payable on the outstanding daily unpaid
principal amount of each Loan from the date thereof until payment in full is
made and shall accrue and be payable at the rates set forth herein before and
after default, before and after maturity, before and after judgment, and before
and after the commencement of any proceeding under any Debtor Relief Law. At
the option of the Requisite Lenders, interest on overdue interest shall itself
bear interest at the Default Rate, and shall be compounded with the principal
Obligations quarterly, to the fullest extent permitted by applicable Laws.
(b) Interest accrued with respect to Base Rate Loans shall be payable
quarterly in arrears on each Quarterly Payment Date. Except as otherwise
provided in Section 3.9, the unpaid principal amount of each Base Rate Loan
shall bear interest at a fluctuating rate per annum equal to the Base Rate plus
----
the Applicable Percentage for Base Rate Loans. Each change in the interest rate
hereunder shall take effect simultaneously with the corresponding change in the
Base Rate or the Applicable Percentage.
(c) Interest on each LIBOR Loan which is for a term of three months
or less shall be due and payable on the last day of the related Interest Period.
Interest accrued on each other LIBOR Loan shall be due and payable on the date
which is three months after the date such LIBOR Loan was made, every three
months thereafter and, in any event, on the last day of the related Interest
Period. Except as otherwise provided in Section 3.9, the unpaid principal
amount of any LIBOR Loan shall bear interest at a rate per annum equal to the
LIBOR for that LIBOR Loan plus the Applicable Percentage for LIBOR Loans. While
----
the LIBOR for each LIBOR Loan shall remain fixed for the entire related Interest
Period, the Applicable Percentage for each LIBOR Loan shall change
simultaneously with the corresponding change in Applicable Percentages
generally.
(d) If not sooner paid, the principal Indebtedness evidenced by the
Loan Documents shall be payable as follows:
(i) the principal amount of each LIBOR Loan shall be payable
on the last day of the Interest Period for such Loan;
(ii) the amount, if any, by which the aggregate principal
amount of the Loans plus the aggregate amount available for drawing under
----
outstanding Letters of Credit plus the aggregate amount of all
----
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<PAGE>
unreimbursed draws with respect to Letters of Credit at any time exceeds
the Commitment shall be payable immediately; and
(iii) the principal Indebtedness evidenced by the Loan Documents
shall in any event be payable on the Maturity Date.
(e) Subject to Section 3.8, the Loans may, at any time and from time
to time, voluntarily be paid or prepaid in whole or in part without premium or
penalty, provided that with respect to any voluntary prepayment of the Loans
--------
under this Section 3.1(e), (i) any partial prepayment shall be in an integral
multiple of $1,000,000 which is not less than $5,000,000, and (ii) the
Administrative Agent shall have received written notice of any prepayment prior
to 9:00 a.m. California time one Business Day (or, in the case of any prepayment
of any LIBOR Loan, three LIBOR Business Days) before the date of prepayment,
which notice shall identify the date and amount of the prepayment.
4.2 Arrangement Fees. On the Closing Date, Borrower shall pay to the
----------------
Administrative Agent for the account of the Lead Arranger a fee in the amount
set forth in a letter agreement dated March 3, 1999 between the Lead Arranger,
the Administrative Agent and Borrower. This fee is fully earned as of the
Closing Date, is solely for the account of Lead Arranger and is non-refundable.
4.3 Annual Agency Fees. On the Closing Date and on each anniversary
------------------
thereof, Borrower shall pay to the Administrative Agent agency fees in the
amounts set forth in a letter agreement dated March 3, 1999 between the Lead
Arranger, Administrative Agent and Borrower. These agency fees are fully earned
as of the date when due, are solely for the account of Administrative Agent and
are non-refundable.
4.4 Facility Fees. On the Closing Date, Borrower shall pay to the
-------------
Administrative Agent, for the account of each Lender, a non-refundable facility
fee in amount equal to (a) the amount of that Lender's Pro Rata Share, times (b)
-----
a percentage based on the principal amount of the Commitment which such Lender
extended a written offer to Borrower to assume (without regard to the Pro Rata
Share actually allocated to such Lender), as set forth in a letter agreement
dated March 3, 1999 among the Lead Arranger, the Administrative Agent and
Borrower.
4.5 Commitment Fees. From the Closing Date, the Borrower shall pay to the
---------------
Administrative Agent, for the account of the Lenders according to their Pro Rata
Shares, commitment fees equal to the product of (a) the Applicable Percentage
for Commitment Fees times (b) the average daily Unused Commitment for that
-----
calendar quarter. The commitment fees shall be payable quarterly in arrears on
each Quarterly Payment Date and upon any termination of the Commitment.
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<PAGE>
4.6 Letter of Credit Fees. Concurrently with the issuance of each
---------------------
Letter of Credit, Borrower shall pay letter of credit fees (a) to the Issuing
Lender, for the sole account of the Issuing Lender, in an amount set forth in a
letter agreement dated March 3, 1999 between the Issuing Lender, Lead Arranger
and Borrower, and (b) to the Administrative Agent, for the ratable account of
the Lenders in accordance with their Pro Rata Shares of the Commitment, in an
amount equal to the Applicable Percentage for LIBOR Loans times the maximum
-----
amount available for drawing under such Letter of Credit, in each case for the
tenor of such Letter of Credit. The Administrative Agent shall promptly make
available to the Lenders in immediately available funds, pro-rata according to
their Pro Rata Share, the standby letter of credit fees which are for the
account of the Lenders. Borrower shall also pay transfer, issuance, check fees
and such other fees as the Issuing Lender normally charges (not to include
origination fees) in connection with standby letters of credit and activity
pursuant thereto, which fees shall be solely for the account of the Issuing
Lender.
4.7 Increased Commitment Costs. If any Lender shall have determined
--------------------------
that the introduction after the date hereof of any applicable law, rule,
regulation or guideline regarding capital adequacy, or any change therein or any
change in the interpretation or administration thereof by any central bank or
other Governmental Agency charged with the interpretation or administration
thereof, or compliance by that Lender (or its LIBOR Lending Office) or any
corporation controlling that Lender, with any request, guidelines or directive
regarding capital adequacy (whether or not having the force of law) of any such
central bank or other authority, affects or would affect the amount of capital
required or expected to be maintained by that Lender or any corporation
controlling that Lender and (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy and such Lender's
desired return on capital) determines that the amount of such capital is
increased as a consequence of its obligations under this Agreement, then, upon
demand of such Lender, Borrower shall immediately pay to that Lender, from time
to time as specified by that Lender, additional amounts sufficient to compensate
that Lender for such increase.
4.8 LIBOR Fees and Costs.
--------------------
(a) If, after the date hereof, the existence or occurrence
of any Special Circumstance:
(i) shall subject any Lender or its LIBOR Lending
Office to any tax, duty or other charge or cost with respect to any
LIBOR Advance, any Note or its obligation to make LIBOR Advances, or
shall change the basis of taxation of payments to any Lender of the
principal of or interest on any LIBOR Advance or any other amounts due
under this Agreement in respect of any LIBOR Advance, any Note or its
obligation to make LIBOR Advances (except for changes in any tax on
------
the overall net income, gross income or gross receipts of such Lender
or its LIBOR Lending Office);
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<PAGE>
(ii) shall impose, modify or deem applicable any
reserve (including, without limitation, any reserve imposed by the
---------
Board of Governors of the Federal Reserve System), special deposit or
similar requirements against assets of, deposits with or for the
account of, or credit extended by, any Lender or its LIBOR Lending
Office; or
(iii) shall impose on any Lender or its LIBOR Lending
Office or the Designated Market any other condition affecting any
LIBOR Advance, any Note, its obligation to make LIBOR Advances or this
Agreement, or shall otherwise affect any of the same;
and the result of any of the foregoing, as determined by such Lender,
increases the cost to such Lender or its LIBOR Lending Office of making or
maintaining any LIBOR Advance or in respect of any LIBOR Advance, any Note
or its obligation to make LIBOR Advances or reduces the amount of any sum
received or receivable by such Lender or its LIBOR Lending Office with
respect to any LIBOR Advance, any Note or its obligation to make LIBOR
Advances (assuming such Lender's LIBOR Lending Office had funded 100% of
its LIBOR Advance in the Designated Market), then, upon demand by such
Lender (with a copy to the Administrative Agent), Borrower shall pay to
such Lender such additional amount or amounts as will compensate such
Lender for such increased cost or reduction (determined as though such
Lender's LIBOR Lending Office had funded 100% of its LIBOR Advance in the
Designated Market). A statement of any Lender claiming compensation under
this subsection, providing supporting calculation, and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive
in the absence of manifest error. Each Lender agrees to endeavor promptly
to notify Borrower of any event of which it has actual knowledge occurring
after the Closing Date, which will entitle such Lender to compensation
pursuant to this Section, and agrees to designate a different LIBOR Lending
Office promptly if such designation will avoid the need for or reduce the
amount of such compensation and will not, in the judgment of such Lender,
otherwise be disadvantageous to such Lender. If any Lender claims
compensation under this Section, Borrower may at any time, upon at least
four LIBOR Business Days' prior notice to the Administrative Agent and such
Lender and upon payment in full of the amounts provided for in this Section
through the date of such payment plus any prepayment fee required by
----
Section 3.8(d), pay in full the affected LIBOR Advances of such Lender or
request that such LIBOR Advances be converted to Base Rate Advances.
(b) If, after the date hereof, the existence or occurrence of
any Special Circumstance shall, in the opinion of any Lender, make it
unlawful, impossible or impracticable for such Lender or its LIBOR Lending
Office to make, maintain or fund its portion of any LIBOR Loan, or
materially restrict the ability of such Lender to purchase or sell, or to
take deposits of, dollars in the Designated Market, or to
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<PAGE>
determine or charge interest rates based upon the LIBOR, and such Lender
shall so notify the Administrative Agent, then such Lender's obligation to
make LIBOR Advances shall be suspended for the duration of such illegality,
impossibility or impracticability and the Administrative Agent forthwith
shall give notice thereof to the other Lenders and Borrower. Upon receipt
of such notice, the outstanding principal amount of such Lender's LIBOR
Advances, together with accrued interest thereon, automatically shall be
converted to Base Rate Advances on either (1) the last day of the Interest
Period(s) applicable to such LIBOR Advances if such Lender may lawfully
continue to maintain and fund such LIBOR Advances to such day(s) or (2)
immediately if such Lender may not lawfully continue to fund and maintain
such LIBOR Advances to such day(s), provided that in such event the
--------
conversion shall not be subject to payment of a prepayment fee under
Section 3.8(d). In the event that any Lender is unable, for the reasons set
forth above, to make, maintain or fund its portion of any LIBOR Loan, such
Lender shall fund such amount as a Base Rate Advance for the same period of
time, and such amount shall be treated in all respects as a Base Rate
Advance.
(c) If, with respect to any proposed LIBOR Loan:
(i) the Administrative Agent reasonably determines that, by
reason of circumstances affecting the Designated Market generally that
are beyond the reasonable control of the Lenders, deposits in dollars
(in the applicable amounts) are not being offered to each of the
Lenders in the Designated Market for the applicable Interest Period;
or
(ii) the Requisite Lenders advise the Administrative Agent
that the LIBOR as determined by the Administrative Agent (A) does not
represent the effective pricing to such Lenders for deposits in
dollars in the Designated Market in the relevant amount for the
applicable Interest Period, or (B) will not adequately and fairly
reflect the cost to such Lenders of making the applicable LIBOR
Advances;
then the Administrative Agent forthwith shall give notice thereof to
Borrower and the Lenders, whereupon until the Administrative Agent notifies
Borrower that the circumstances giving rise to such suspension no longer
exist, the obligation of the Lenders to make any future LIBOR Advances
shall be suspended. If at the time of such notice there is then pending a
Request for Loan that specifies a LIBOR Loan, such Request for Loan shall
be deemed to specify a Base Rate Loan.
(d) Upon payment or prepayment of any LIBOR Advance (other than
as the result of a conversion required under Section 3.8(b)), on a day
other than the last day in the applicable Interest Period (whether
voluntarily, involuntarily, by reason of acceleration, or otherwise), or
upon the failure of Borrower to borrow on the
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<PAGE>
date or in the amount specified for a LIBOR Loan in any Request for Loan,
Borrower shall pay to the appropriate Lender a prepayment fee or failure to
borrow fee, as the case may be, calculated as follows (and determined as
though 100% of the LIBOR Advance had been funded in the Designated Market):
(i) principal amount of the LIBOR Advance, times the
-----
number of days between the date of prepayment or failure to borrow and
the last day in the applicable Interest Period, divided by 360, times
---------- -----
the applicable Interest Differential; plus
----
(ii) all actual out-of-pocket expenses (other than those
taken into account in the calculation of the Interest Differential)
incurred by the Lender (excluding allocations of any expense internal
---------
to that Lender) and reasonably attributable to such payment,
prepayment or failure to borrow;
provided that no prepayment fee or failure to borrow fee shall be payable
--------
(and no credit or rebate shall be required) if the product of the foregoing
formula is not a positive number. Each Lender's determination of the amount
of any prepayment fee or failure to borrow fee payable under this Section
3.8(d) shall be based upon the Administrative Agent's determination of the
applicable Interest Differential but shall otherwise be conclusive in the
absence of manifest error.
4.9 Default Rate. Upon the occurrence and during the continuation of
------------
any Default, the outstanding principal amount of the Loans shall, at the option
of the Requisite Lenders, thereafter bear interest at a rate per annum which is
2% per annum in excess of the otherwise applicable rate, to the fullest extent
permitted by applicable Laws. Upon the occurrence and during the continuation of
any Default or Event of Default, accrued and unpaid interest on past due amounts
(including, without limitation, interest on past due interest) shall be payable
---------
upon demand and shall be compounded quarterly, on the last day of each calendar
quarter, to the fullest extent permitted by applicable Laws.
4.10 Computation of Interest and Fees. Computation of interest on Base
--------------------------------
Rate Loans shall be calculated on the basis of a year of 365 or 366 days, as the
case may be, and the actual number of days elapsed. Computation of interest on
LIBOR Loans and on fees payable under this Agreement shall be calculated on the
basis of a year of 360 days and the actual number of days elapsed. Borrower
acknowledges that such latter calculation method will result in a higher yield
to the Lenders than a method based on a year of 365 or 366 days. Any Loan that
is repaid on the same day on which it is made shall bear interest for one day.
4.11 Non-Business Days. If any payment to be made by Borrower or any
-----------------
other Party under any Loan Document shall come due on a day other than a
Business Day, payment shall instead be considered due on the next succeeding
Business Day and the extension of time shall be reflected in computing interest.
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4.12 Manner and Treatment of Payments.
--------------------------------
(a) Each payment hereunder (except payments pursuant to Sections
------
3.7, 3.8, 13.11 and 13.15) or on the Notes or under any other Loan Document
shall be made, without setoff, counterclaim or deduction of any kind, to
the Administrative Agent, at the Administrative Agent's Office, for the
account of each of the Lenders or the Administrative Agent, as the case may
be, in immediately available funds not later than 11:00 a.m., California
local time, on the day of payment (which must be a Business Day). All later
payments shall be deemed received on the next succeeding Business Day. The
amount of all payments received by the Administrative Agent for the account
of each Lender shall be paid by the Administrative Agent to the applicable
Lender in immediately available funds and, if such payment was received by
the Administrative Agent by 11:00 a.m., California local time, on a
Business Day and not so made available to the account of a Lender on that
Business Day, the Administrative Agent shall reimburse that Lender for the
cost to such Lender of funding the amount of such payment at the Federal
Funds Rate. All payments shall be made in lawful money of the United States
of America.
(b) Each payment or prepayment on account of any Loan shall be made
and applied pro rata according to the outstanding Advances made by each
Lender comprising such Loan.
(c) Each Lender shall use its best efforts to keep a record of
Advances made by it and payments received by it with respect to its Note
and such record shall be presumptive evidence of the amounts owing.
Notwithstanding the foregoing sentence, no Lender shall be liable to any
Party for any failure to keep such a record, and no such failure shall
affect the amount of the Obligations hereunder.
4.13 Funding Sources. Nothing in this Agreement shall be deemed to
---------------
obligate any Lender to obtain the funds for any Loan or Advance in any
particular place or manner or to constitute a representation by any Lender that
it has obtained or will obtain the funds for any Loan or Advance in any
particular place or manner.
4.14 Failure to Charge Not Subsequent Waiver. Any decision by the
---------------------------------------
Administrative Agent or any Lender not to require payment of any interest
(including interest at the Default Rate), fee, cost or other amount payable
- ----------
under any Loan Document, or to calculate any amount payable by a particular
method, on any occasion shall in no way limit or be deemed a waiver of the
Administrative Agent's or such Lender's right to require full payment of any
interest (including interest at the Default Rate), fee, cost or other amount
---------
payable under any Loan Document, or to calculate an amount payable by another
method, on any other or subsequent occasion.
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<PAGE>
4.15 Administrative Agent's Right to Assume Payments Will be Made by
---------------------------------------------------------------
Borrower. Unless the Administrative Agent shall have been notified by Borrower
- --------
prior to the date on which any payment to be made by Borrower hereunder is due
that Borrower does not intend to remit such payment, the Administrative Agent
may, in its discretion, assume that Borrower has remitted such payment when so
due and the Administrative Agent may, in its discretion and in reliance upon
such assumption, make available to each Lender on such payment date an amount
equal to such Lender's share of such assumed payment. If Borrower has not in
fact remitted such payment to the Administrative Agent, each Lender shall
forthwith on demand repay to the Administrative Agent the amount of such assumed
payment made available to such Lender, together with interest thereon in respect
of each day from and including the date such amount was made available by the
Administrative Agent to such Lender to the date such amount is repaid to the
Administrative Agent at the Federal Funds Rate.
4.16 Authority to Charge Account. Borrower hereby authorizes the
---------------------------
Administrative Agent to charge the Designated Deposit Account or any other
demand deposit account maintained by Borrower with the Administrative Agent, in
such amounts as may from time to time be necessary to cause timely payment of
principal, interest, fees and other charges payable by Borrower under the Loan
Documents, but only to the extent that any such payment is not otherwise made
when due. Nothing herein shall obligate the Administrative Agent to charge any
such account in this manner or to charge any account at a time when there are
not sufficient good funds in such account.
4.17 Fee Determination Detail. The Administrative Agent, and any
------------------------
Lender, shall provide reasonable detail to Borrower regarding the manner in
which the amount of any payment to the Lenders, or that Lender, under Article 3
has been determined.
4.18 Survivability. All of Borrower's obligations under Sections 3.7
-------------
and 3.8 shall survive for one year following the date on which all Loans
hereunder are fully paid; provided, however, that such obligations shall not,
--------
from and after the date on which all Loans hereunder are fully paid, be deemed
secured Obligations for any purpose under the Loan Documents.
4.19 Withholding Gross-Up. Each payment of any amount payable by
--------------------
Borrower or any other Party under this Agreement or any other Loan Document
shall be made free and clear of, and without reduction by reason of, any taxes,
assessments or other charges imposed by any Governmental Agency, central bank or
comparable authority, excluding (i) taxes imposed on or measured in whole or in
---------
part by overall net income, gross income or gross receipts, (ii) franchise taxes
imposed on any Lender by (A) any jurisdiction (or political subdivision thereof)
in which it is organized or maintains its principal office or LIBOR Lending
Office or (B) any jurisdiction (or political subdivision thereof) in which it is
"doing business", (iii) any withholding
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<PAGE>
taxes or other taxes based on gross income imposed by the United States of
America that are not attributable to any change in any Law or the interpretation
or administration of any Law by any Governmental Agency and (iv) any withholding
tax or other taxes based on gross income imposed by the United States of America
for any period with respect to which it has failed to provide Borrower with the
appropriate form or forms required by Section 13.23, to the extent such forms
are then available under applicable Laws (all such non-excluded taxes,
assessments or other charges being hereinafter referred to as "Taxes"). To the
extent that Borrower or any other Party is obligated by applicable Laws to make
any deduction or withholding on account of Taxes from any amount payable to any
Lender under this Agreement, they shall (i) make such deduction or withholding
and pay the same to the relevant Governmental Agency and (ii) pay such
additional amount to that Lender as is necessary to result in that Lender's
receiving a net after-Tax amount equal to the amount to which that Lender would
have been entitled under this Agreement absent such deduction or withholding. If
and when receipt of such payment results in an excess payment or credit to that
Lender on account of such Taxes, that Lender shall promptly refund such excess
to Borrower or the relevant Party.
-47-
<PAGE>
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF THE TRIBE
-------------------------------------------
In order to induce the Creditors to enter into this Agreement and the other
Loan Documents to be executed as of the Closing Date, the Tribe represents and
warrants to the Creditors that, as of the Closing Date (but not as of any date
subsequent thereto).
5.1 Existence and Qualification; Power; Compliance With Laws. The
--------------------------------------------------------
Tribe is federally recognized as a Indian Tribe pursuant to a determination of
the Assistant Secretary - Indian Affairs, dated March 7, 1994, published in the
Federal Register on March 15, 1994, as amended by a correction dated July 1,
1994, published in the Federal Register on July 20, 1994, and as an Indian
Tribal government pursuant to Sections 7701(a)(40)(A) and 7871(a) of the
Internal Revenue Code, Title 26 U.S.C. Borrower is a governmental
instrumentality of the Tribe. As of the Closing Date, each of the Tribe and
Borrower is a non-taxable entity for purposes of federal income taxation under
the Internal Revenue Code, Title 26 U.S.C., and the gaming and other revenues of
Borrower are exempt from federal income taxation. To the extent required by Law,
Borrower and the Tribe are qualified to do business and are in good standing
under the laws of each jurisdiction in which they are required to be qualified
by reason of the location or the conduct of their business. The Tribe and the
Borrower each have all requisite power and authority to execute and deliver each
Loan Document to which they are a Party and to perform their respective
Obligations. The Tribe and Borrower are in material compliance with the terms of
the Compact, the Gaming Authority Ordinance, the Gaming Ordinance and with all
Laws and other legal requirements applicable to their existence and business
(including without limitation, IGRA and all Gaming Laws), have obtained all
authorizations, consents, approvals, orders, licenses and permits from, and have
accomplished all filings, registrations and qualifications with, or obtained
exemptions from any of the foregoing from, any Governmental Agency that are
necessary for the transaction of their business, except where the failure so to
------
file, register, qualify or obtain exemptions does not constitute a Material
Adverse Effect.
5.2 Authority; Compliance With Other Agreements and Instruments and
---------------------------------------------------------------
Government Regulations. The execution, delivery and performance by the Tribe
- ----------------------
and by Borrower of the Loan Documents have been duly authorized by all necessary
Tribal Council , Management Board and other action, and do not:
(a) require any consent or approval not heretofore obtained
of any enrolled tribal member, Tribal Council member, Management Board
Member, security holder or creditor;
(b) violate or conflict with any provision of the
Constitution, charter, bylaws or other governing documents of the Tribe or
of Borrower;
-48-
<PAGE>
(c) result in or require the creation or imposition of any
Lien or Right of Others (other than pursuant to the Collateral Documents)
upon or with respect to any Authority Property now owned or leased or
hereafter acquired;
(d) violate any Law or Requirement of Law, including any
Gaming Law, applicable to the Tribe or Borrower;
(e) constitute a "transfer of an interest" or an
"obligation incurred" that is avoidable by a trustee under Section 548 of
the Bankruptcy Code of 1978, as amended, or constitute a "fraudulent
conveyance," "fraudulent obligation" or "fraudulent transfer" within the
meanings of the Uniform Fraudulent Conveyances Act or Uniform Fraudulent
Transfer Act, as enacted in any applicable jurisdiction;
(f) result in a material breach of or default under, or
would, with the giving of notice or the lapse of time or both, constitute a
material breach of or default under, or cause or permit the acceleration of
any obligation owed under, any mortgage, indenture or loan or credit
agreement or any other Contractual Obligation to which the Tribe or
Borrower is a party or by which the Tribe, Borrower or any of their
Property is bound or affected; or
(g) require any consent or approval of any Governmental
Agency, or any notice to, registration or qualification with any
Governmental Agency, not heretofore obtained or obtained concurrently with
the Closing Date;
and the Tribe and Borrower are not in violation of, or default under, any
Requirement of Law or Contractual Obligation, or any indenture, loan or credit
agreement described in Section 4.2(f), in any respect that constitutes a
Material Adverse Effect.
5.3 No Governmental Approvals Required. Except for the consent of the
---------------------------------- ------
Bureau of Indian Affairs pursuant to 25 U.S.C (S)81 (which consent is being
obtained concurrently with the execution and delivery of this Agreement), no
authorization, consent, approval, order, license or permit from, or filing,
registration or qualification with, any Governmental Agency is required to
authorize or permit under applicable Laws the execution, delivery and
performance by the Tribe and the Borrower of the Loan Documents to which they
are parties.
5.4 The Nature of Borrower. The Tribe has no Subsidiaries and no
----------------------
Affiliates which are included in or controlled by or through Borrower. All
activities of the Tribe constituting or relating to the ownership and operation
of gaming facilities (including all Class II and Class III gaming activities
within the meaning of IGRA) and all activities of the Tribe constituting or
relating to the ownership of hotel, restaurant, entertainment and resort
facilities are conducted on behalf of the Tribe by Borrower pursuant to the
authority granted to Borrower in the Gaming Authority Ordinance.
-49-
<PAGE>
5.5 No Management Contract. Neither this Agreement nor the other Loan
----------------------
Documents, taken individually or as a whole, constitute "management contracts"
or "management agreements" within the meaning of Section 12 of IGRA, or deprive
Borrower of the sole proprietary interest and responsibility of the conduct of
gaming activity at Mohegan Sun.
5.6 Title to and Location of Property. As of the Closing Date,
---------------------------------
Borrower has good and valid title to all the Property reflected in the financial
statements described in Section 5.6 other than immaterial items of Property
----- ----
subsequently sold or disposed of in the ordinary course of business, free and
clear of all Liens and Rights of Others, other than as set forth in Schedule
7.8, provided that the leasehold estate which is the subject of the Leasehold
Mortgage covers real property the title to which is held by the United States in
trust on behalf of the Tribe.
5.7 Real Property. Schedule 4.7 sets forth a summary description of
-------------
all real property owned by the Tribe which is Authority Property, including the
Real Property, and of all real property leasehold estates held by Borrower from
the Tribe, which summary is accurate and complete in all material respects.
Except as set forth in Schedule 4.7, the leases creating such real property
leasehold estates are in full force and effect and create a valid leasehold
estate on the terms of such lease, and neither Borrower nor the Tribe is in
default or breach of any thereof . The copies of such real property leases
heretofore furnished to the Administrative Agent are true copies and there are
no amendments thereto copies of which have not been furnished to the
Administrative Agent. Under 25 U.S.C. (S)177 such real property may not be
encumbered by the Tribe or Borrower without the consent of the United States of
America, however each required consent has been obtained concurrently with the
execution and delivery of this Agreement. The Authority Property includes all
real, mixed and personal property which is operationally integral to the on-
reservation gaming activities of the Tribe.
5.8 Governmental Regulation. Except for consents of the Bureau of
-----------------------
Indian Affairs being obtained concurrently with the execution of this Agreement,
Borrower is not subject to regulation under any Law limiting or regulating its
ability to incur Indebtedness for money borrowed, to grant Liens to secure its
obligations with respect to such Indebtedness or to otherwise perform the
Obligations.
5.9 Binding Obligations. The Loan Documents contemplated by Section
-------------------
10.1 and Section 10.2 have been executed and delivered by the Tribe and
Borrower, as applicable, and constitute the legal, valid and binding obligations
of the Tribe and Borrower enforceable in accordance with their terms. The
provisions of Section 13.24 are specifically enforceable against the Tribe and
Borrower.
5.10 No Default. No event has occurred and is continuing that is a
----------
Default or an Event of Default.
-50-
<PAGE>
5.11 Disclosure. No written statement made by or on behalf of the
----------
Tribe or Borrower to the Administrative Agent or any Lender in connection with
this Agreement, or in connection with any Loan or Letter of Credit, contains any
untrue statement of a material fact or omits a material fact necessary in order
to make the statement made not misleading in light of all the circumstances
existing at the date the statement was made. There is no fact known to the Tribe
or Borrower (other than matters of a general economic nature or matters
generally applicable to businesses of the types engaged in by Borrower) which
would constitute a Material Adverse Effect that has not been disclosed in
writing to the Administrative Agent and the Lenders.
5.12 Gaming Laws. Borrower and the Tribe are in material compliance
-----------
with all applicable Gaming Laws.
5.13 Security Interests. The Liens created by the Security Agreement
------------------
are perfected and of first priority to the fullest extent that the same may be
perfected by the filing of financing statements under the Connecticut Uniform
Commercial Code (as adopted by the Borrower pursuant to the UCC Ordinance). The
Leasehold Mortgage creates a valid and perfected Lien in the Collateral
described therein securing the Obligations. The Deposit Account Agreements
create a valid and perfected Lien in the Collateral described therein (including
without limitation the Operating Accounts) securing the Obligations. Each of the
Liens described in this Section are of first priority, subject only to Permitted
Encumbrances, Permitted Rights of Others and matters described in Schedule 7.8.
5.14 Arbitration. Pursuant to the Constitution, to the extent that any
-----------
dispute among the parties to the Loan Documents is initiated in or referred to
the Tribal Court, (i) such court lacks discretion to refuse to compel
arbitration among the parties to the dispute, and (ii) such court is obligated
to honor and enforce any award by the arbitrator, without review of any nature
by such court.
5.15 Recourse Obligations. Under current Law, no obligation of the
--------------------
Tribe of any type or nature may constitute a Recourse Obligation unless and to
the extent that Borrower has become an express obligor with respect thereto, and
the Tribe has no authority, independent of Borrower, to incur any obligation on
behalf of Borrower, to bind any Authority Property, or to grant Liens upon any
Authority Property.
-51-
<PAGE>
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
----------------------------------------------
In order to induce the Creditors to enter into this Agreement and the other
Loan Documents, to make Loans and to issue and participate in Letters of Credit
hereunder, Borrower represents and warrants to the Creditors that:
6.1 Existence and Qualification; Power; Compliance With Laws. The
--------------------------------------------------------
Tribe is federally recognized as a Indian Tribe pursuant to a determination of
the Assistant Secretary - Indian Affairs, dated March 7, 1994, published in the
Federal Register on March 15, 1994, as amended by a correction dated July 1,
1994, published in the Federal Register on July 20, 1994, and as an Indian
Tribal government pursuant to Sections 7701(a)(40)(A) and 7871(a) of the
Internal Revenue Code, Title 26 U.S.C. Borrower is a governmental
instrumentality of the Tribe. As of the Closing Date, each of the Tribe and
Borrower is a non-taxable entity for purposes of federal income taxation under
the Internal Revenue Code, Title 26 U.S.C., and the gaming and other revenues of
Borrower are exempt from federal income taxation. To the extent required by Law,
Borrower and the Tribe are qualified to do business and is in good standing
under the laws of each jurisdiction in which they are required to be qualified
by reason of the location or the conduct of their business. The Tribe and the
Borrower each have all requisite power and authority to conduct their respective
business, to own and lease their respective Properties, to execute and deliver
each Loan Document to which they are a Party and to perform their respective
Obligations. As of the Closing Date, the chief executive offices of Borrower are
located in Uncasville, Connecticut at the address for notices set forth on the
signature pages hereto. The Tribe and Borrower are in material compliance with
the terms of the Compact, the Gaming Ordinance, the Gaming Authority Ordinance
and with all Laws and other legal requirements applicable to their existence and
business (including without limitation, IGRA and all Gaming Laws), have obtained
all authorizations, consents, approvals, orders, licenses and permits from, and
have accomplished all filings, registrations and qualifications with, or
obtained exemptions from any of the foregoing from, any Governmental Agency that
are necessary for the transaction of their business, except where the failure so
------
to file, register, qualify or obtain exemptions does not constitute a Material
Adverse Effect.
6.2 Authority; Compliance With Other Agreements and Instruments and
---------------------------------------------------------------
Government Regulations. The execution, delivery and performance by the Tribe
- ----------------------
and by Borrower of the Loan Documents have been duly authorized by all necessary
Tribal Council, Management Board and other action, and do not:
(a) require any consent or approval not heretofore obtained
of any enrolled tribal member or Tribal Council member, Management Board
member, security holder or creditor;
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<PAGE>
(b) violate or conflict with any provision of the
Constitution, charter, bylaws or other governing documents of the Tribe or
of Borrower;
(c) result in or require the creation or imposition of any
Lien or Right of Others (other than pursuant to the Collateral Documents)
upon or with respect to any Authority Property now owned or leased or
hereafter acquired;
(d) violate any Law or Requirement of Law, including any
Gaming Law, applicable to the Tribe or Borrower;
(e) constitute a "transfer of an interest" or an
"obligation incurred" that is avoidable by a trustee under Section 548 of
the Bankruptcy Code of 1978, as amended, or constitute a "fraudulent
conveyance," "fraudulent obligation" or "fraudulent transfer" within the
meanings of the Uniform Fraudulent Conveyances Act or Uniform Fraudulent
Transfer Act, as enacted in any applicable jurisdiction;
(f) result in a material breach of or default under, or
would, with the giving of notice or the lapse of time or both, constitute a
material breach of or default under, or cause or permit the acceleration of
any obligation owed under, any mortgage, indenture or loan or credit
agreement or any other Contractual Obligation to which the Tribe or
Borrower is a party or by which the Tribe, Borrower or any of their
Property is bound or affected; or
(g) require any consent or approval of any Governmental
Agency, or any notice to, registration or qualification with any
Governmental Agency, not heretofore obtained or obtained concurrently with
the Closing Date;
and the Tribe and Borrower are not in violation of, or default under, any
Requirement of Law or Contractual Obligation, or any indenture, loan or credit
agreement described in Section 5.2(f), in any respect that constitutes a
Material Adverse Effect.
6.3 No Governmental Approvals Required. Except for the consent of the
---------------------------------- ------
Bureau of Indian Affairs pursuant to 25 U.S.C (S)81 (which consent is being
obtained concurrently with the execution and delivery of this Agreement), no
authorization, consent, approval, order, license or permit from, or filing,
registration or qualification with, any Governmental Agency is required to
authorize or permit under applicable Laws the execution, delivery and
performance by the Tribe and the Borrower of the Loan Documents to which they
are parties.
6.4 The Nature of Borrower. The Tribe has no Subsidiaries and no
----------------------
Affiliates which are included in or controlled by or through Borrower. All
activities of the Tribe constituting or relating to the ownership and operation
of gaming facilities (including all Class II and Class III gaming activities
within the meaning of IGRA) and all activities of the Tribe
-53-
<PAGE>
constituting or relating to the ownership of hotel, restaurant, entertainment
and resort facilities are conducted on behalf of the Tribe by Borrower pursuant
to the authority granted to Borrower in the Gaming Authority Ordinance.
6.5 No Management Contract. Neither this Agreement nor the other Loan
----------------------
Documents, taken individually or as a whole, constitute "management contracts"
or "management agreements" within the meaning of Section 12 of IGRA, or deprive
Borrower of the sole proprietary interest and responsibility of the conduct of
gaming activity at Mohegan Sun.
6.6 Financial Statements. Borrower has furnished to the Lenders (a)
--------------------
the audited financial statements of Borrower as at September 30, 1998 and for
the fiscal year then ended, and (b) the unaudited financial statements of
Borrower as at December 31, 1998 and for the three month fiscal period then
ended. The financial statements described above fairly present the financial
condition and the results of operations of Borrower as at such dates and for
such periods in accordance with Generally Accepted Accounting Principles
consistently applied, except in the case of the financial statements described
------
in clause (b) above, for any requirement for footnote disclosures.
6.7 Financial Statements of Borrower. The financial statements of
--------------------------------
Borrower referred to in Section 5.6 includes as liabilities of the Borrower, all
Recourse Obligations existing as of the date hereof, whether or not Borrower is
described as the borrower or obligor with respect thereto. Each financial
statement of Borrower which is hereafter delivered in accordance with Section
8.1 includes as liabilities of the Borrower, all then existing Recourse
Obligations, whether or not Borrower is described as the borrower or obligor
with respect thereto. No Non-Authority Property is described as an asset of
Borrower on any balance sheet or other financial statement of Borrower provided
to the Administrative Agent or the Lenders.
6.8 No Other Liabilities; No Material Adverse Effect. As of the
------------------------------------------------
Closing Date, Borrower does not have any material liability or material
contingent liability not reflected or disclosed in the financial statements
described in Section 5.6(b) or the notes to the financial statements described
in Section 5.6(a). No event or circumstance that constitutes a Material Adverse
Effect has occurred since September 30, 1998. As of the date of each Advance
made and each Letter of Credit issued subsequent to the Closing Date, no event
or circumstance has occurred since the Closing Date that constitutes a Material
Adverse Effect.
6.9 Title to and Location of Property. As of the Closing Date,
---------------------------------
Borrower has good and valid title to all the Property reflected in the financial
statements described in Section 5.6 other than immaterial items of Property
----- ----
subsequently sold or disposed of in the ordinary course of business, free and
clear of all Liens and Rights of Others, other than as set forth in Schedule
7.8, provided that the leasehold estate which is the subject of the Leasehold
Mortgage covers real property the title to which is held by the United States in
trust on behalf of the Tribe.
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<PAGE>
6.10 Real Property. Schedule 4.7 sets forth a summary description of
-------------
all real property owned by the Tribe which is Authority Property, including the
Real Property, and of all real property leasehold estates held by Borrower from
the Tribe, which summary is accurate and complete in all material respects.
Except as set forth in Schedule 4.7, the leases creating such real property
leasehold estates are in full force and effect and create a valid leasehold
estate on the terms of such lease, and neither Borrower nor the Tribe is in
default or breach of any thereof . The copies of such real property leases
heretofore furnished to the Administrative Agent are true copies and there are
no amendments thereto copies of which have not been furnished to the
Administrative Agent. Under 25 U.S.C. (S)177 such real property may not be
encumbered by the Tribe or Borrower without the consent of the United States of
America, however each required consent has been obtained concurrently with the
execution and delivery of this Agreement. The Authority Property includes all
real, mixed and personal property which is operationally integral to the on-
reservation gaming activities of the Tribe.
6.11 Intangible Assets. Borrower owns, or possesses the right to use
-----------------
to the extent necessary in the business of Borrower, all trademarks, trade
names, copyrights, patents, patent rights, computer software, licenses and other
Intangible Assets that are used in the conduct of the business of Borrower as
now operated and which are material to the condition (financial or otherwise),
business or operations of Borrower, and no such Intangible Asset conflicts with
the valid trademark, trade name, copyright, patent, patent right or Intangible
Asset of any other Person to the extent that such conflict constitutes a
Material Adverse Effect.
6.12 Governmental Regulation. Except for consents of the Bureau of
-----------------------
Indian Affairs being obtained concurrently with the execution of this Agreement,
Borrower is not subject to regulation under any Law limiting or regulating its
ability to incur Indebtedness for money borrowed, to grant Liens to secure its
obligations with respect to such Indebtedness or to otherwise perform the
Obligations.
6.13 Litigation. Except for (a) any matter fully covered (subject to
---------- ------
applicable deductibles and retentions) by insurance and with respect to which
the insurance carrier has not denied coverage, nor issued any denial of claim,
nor any other statement that the claim is in excess of coverage, (b) any matter,
or series of related matters, not fully covered by insurance (subject to
applicable deductibles and retentions) involving a claim against Borrower which
is, in the reasonable opinion of Borrower's independent legal counsel, in an
amount less than $1,000,000, and (c) matters set forth in Schedule 5.13, there
are no actions, suits, proceedings or investigations pending as to which
Borrower has been served or have received notice or, to the best knowledge of
Borrower, threatened against or affecting Borrower or any of its Property before
any Governmental Agency. There is no reasonable basis to believe that any of
the matters described on Schedule 5.13 may result in or constitute a Material
Adverse Effect.
-55-
<PAGE>
6.14 Binding Obligations. The Loan Documents to which the Tribe or
-------------------
Borrower is a party have been executed and delivered by the Tribe and Borrower
and constitute the legal, valid and binding obligations of the Tribe and
Borrower enforceable in accordance with their terms, and each Loan Document
hereafter executed will, when executed and delivered by the Parties thereto,
constitute the legal, valid and binding obligation of the Borrower and the Tribe
as applicable, enforceable against the Borrower and the Tribe as applicable in
accordance with its terms.
6.15 No Default. No event has occurred and is continuing that is a
----------
Default or an Event of Default.
6.16 ERISA. As of the Closing Date neither Borrower nor any ERISA
-----
Affiliate maintains, contributes to or is required to contribute to any
"employee pension benefit plan" that is subject to Title IV of ERISA.
6.17 Regulations T, U and X; Investment Company Act. No part of the
----------------------------------------------
proceeds of any Loan or other extension of credit hereunder will be used to
purchase or carry, or to extend credit to others for the purpose of purchasing
or carrying, any "margin stock" (as such term is defined in Regulations T, U and
X) in violation of Regulations T, U and X. Borrower is not engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying any such "margin stock." Borrower is not
required to be registered as an "investment company" under the Investment
Company Act of 1940.
6.18 Disclosure. No written statement made by or on behalf of the
----------
Tribe or Borrower to the Administrative Agent or any Lender in connection with
this Agreement, or in connection with any Loan or Letter of Credit, contains any
untrue statement of a material fact or omits a material fact necessary in order
to make the statement made not misleading in light of all the circumstances
existing at the date the statement was made. There is no fact known to the Tribe
or Borrower (other than matters of a general economic nature or matters
generally applicable to businesses of the types engaged in by Borrower) which
would constitute a Material Adverse Effect that has not been disclosed in
writing to the Administrative Agent and the Lenders.
6.19 Tax Liability. Borrower has filed all tax returns which are
-------------
required to be filed, and has paid, or made provision for the payment of, all
taxes with respect to the periods, Property or transactions covered by said
returns, or pursuant to any assessment received by Borrower, except such taxes,
------
if any, as are being contested in good faith by appropriate proceedings and as
to which adequate reserves have been established and maintained.
6.20 Projections. As of the Closing Date, to the best knowledge of
-----------
Borrower, the assumptions set forth in the Projections are reasonable and
consistent with each other and
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<PAGE>
with all facts known to the Tribe or Borrower and no material assumption is
omitted as a basis for the Projections, and the Projections are reasonably based
on such assumptions. Nothing in this Section shall be construed as a
representation, warranty or covenant that the Projections in fact will be
achieved.
6.21 Employee Matters. There is no strike or work stoppage in
----------------
existence or, to Borrower's knowledge, threatened involving Borrower that would
constitute a Material Adverse Effect.
6.22 Gaming Laws. Borrower is in material compliance with all
-----------
applicable Gaming Laws.
6.23 Security Interests. The Liens created by the Security Agreement
------------------
are perfected and of first priority to the fullest extent that the same may be
perfected by the filing of financing statements under the Connecticut Uniform
Commercial Code (as adopted by the Borrower pursuant to the UCC Ordinance). The
Leasehold Mortgage creates a valid and perfected Lien in the Collateral
described therein securing the Obligations. The Deposit Account Agreements
create a valid and perfected Lien in the Collateral described therein (including
without limitation the Operating Accounts) securing the Obligations. Each of the
Liens described in this Section are of first priority, subject only to Permitted
Encumbrances, Permitted Rights of Others and matters described in Schedule 7.8.
6.24 Hazardous Materials. Except as specifically described in
-------------------
Schedule 5.24, neither Borrower nor to the best knowledge of each Senior Officer
of the Borrower any predecessor in title or any third person at any time
occupying or present on the Real Property at any time, has disposed of,
discharged, released or threatened the release of any material amount of
Hazardous Materials on, from or under such real property in any manner that
violates any Hazardous Materials Law. Except as specifically described in
Schedule 5.24, no condition exists that violates any Hazardous Material Law
affecting the Real Property except for such violations that would not
individually or in the aggregate have a Material Adverse Effect. Except as
specifically described in Schedule 5.24, the Real Property and each portion
thereof is not and has not been utilized by Borrower as a site for the
manufacture of any Hazardous Materials and is in compliance in all material
respects with all Hazardous Materials Laws. To the extent that any Hazardous
Materials have been, or are, used, generated or stored by Borrower on any Real
Property, or transported to or from such Real Property by Borrower, such use,
generation, storage and transportation have been and are, in compliance in all
material respects with all Hazardous Materials Laws.
6.25 Arbitration. To the extent that any dispute among the parties to
-----------
the Loan Documents is initiated in or referred to the Tribal Court, (i) such
court lacks discretion to refuse to compel arbitration among the parties to the
dispute, and (ii) such court is obligated to honor and enforce any award by the
arbitrator, without review of any nature by such court.
-57-
<PAGE>
6.26 Deposit Accounts. Borrower does not maintain any deposit,
----------------
checking, brokerage or other similar account with any bank, savings association,
financial institution or similar financial intermediary in which Cash or Cash
Equivalents having an aggregate value in excess of $100,000 for all such
accounts are deposited which is not listed on Schedule 5.26 or the existence of
which has not been disclosed to the Administrative Agent and the Lenders in
writing.
-58-
<PAGE>
ARTICLE 7.
AFFIRMATIVE COVENANTS OF BORROWER
---------------------------------
(OTHER THAN INFORMATION AND
--------------------------
REPORTING REQUIREMENTS)
----------------------
So long as any Advance remains unpaid, or any other Obligation remains
unpaid or unperformed (other than the obligations referenced in Section 3.18),
or any portion of the Commitment remains in force, Borrower shall, unless the
Administrative Agent (with the approval of the Requisite Lenders) otherwise
consents:
7.1 Payment of Taxes and Other Potential Liens. Pay and discharge
------------------------------------------
promptly all taxes, assessments and governmental charges or levies imposed upon
Borrower or its Property or any part thereof, upon its income or profits or any
part thereof or (to the extent that the same arise after the Closing Date) any
tax assessment, governmental changes or levies imposed upon any right or
interest of the Administrative Agent or any Lender under any Loan Document,
except that Borrower shall not be required to pay or cause to be paid (a) any
- ------
income or gross receipts tax or any other tax on or measured by income generally
applicable to banks, (b) any tax, assessment, charge or levy that is not yet
delinquent, or is being contested in good faith by appropriate proceedings, so
long as Borrower has established and maintained adequate reserves for the
payment of the same and by reason of such nonpayment and contest no material
item or portion of Authority Property is in jeopardy of being seized, levied
upon or forfeited, and (c) taxes, assessments, charges and levies of amounts not
in excess of $100,000 which Borrower in good faith inadvertently fails to pay.
7.2 Maintenance of Properties. Maintain, preserve and protect all of
-------------------------
the depreciable Properties of Borrower in good order and condition, subject to
wear and tear in the ordinary course of business, and not permit any waste of
such Properties, except that the failure to maintain, preserve and protect a
------
particular item of depreciable Property that is not of significant value, either
intrinsically or to the operations of Borrower shall not constitute a violation
of this covenant, and maintain its ownership of all intellectual property and
licenses thereof necessary for the operation of Mohegan Sun.
7.3 Maintenance of Insurance. Cause Borrower to maintain liability,
------------------------
casualty and other insurance with respect to itself and all Authority Property
(subject to customary deductibles and retention) with responsible insurance
companies in such amounts and against such risks as is carried by responsible
companies engaged in similar businesses and owning similar assets in the general
areas in which Borrower operates and, in any event, (a) workers' compensation
insurance, to the extent required to comply with all applicable state,
territorial and United States laws and regulations, (b) comprehensive general
liability insurance with minimum limits of $2,000,000, (c) umbrella liability
insurance providing excess liability coverages over and above the foregoing
underlying insurance policies up to a minimum limit of $100,000,000, (d)
property insurance protecting the Mohegan Sun for possible damage by fire,
lightening, wind-storm other damage, vandalism, riot, earthquake,
-59-
<PAGE>
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 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),
and (e) such insurance with respect to the Real Property as is maintained as of
the Closing Date as described in Schedule 6.4.
7.4 Compliance With Laws. Comply with all Requirements of Laws
--------------------
noncompliance with which would constitute a Material Adverse Effect, except that
------
Borrower need not comply with a Requirement of Law then being contested by it in
good faith by appropriate proceedings.
7.5 Preservation of Licenses and Permits. Preserve and maintain all
------------------------------------
authorizations, rights, franchises, privileges, consents, approvals, orders,
licenses, permits, or registrations from any Governmental Agency that are
necessary for the transaction of the business of Mohegan Sun, and qualify and
remain qualified to transact business in each jurisdiction in which such
qualification is necessary in view of its business or the ownership or leasing
of its Properties except where the failure to preserve and maintain any such
------
authorizations, rights, franchises, privileges, consents, approvals, orders,
licenses, permits or registrations or to so qualify or remain qualified would
not constitute a Material Adverse Effect.
7.6 Inspection Rights. Upon reasonable notice, at any time during
-----------------
regular business hours and as often as requested (but not so as to unreasonably
interfere with the business of Borrower), permit the Administrative Agent or any
Lender, or any authorized employee, agent or representative thereof, to examine,
audit and make copies and abstracts from the records and books of account of,
and to visit and inspect Mohegan Sun, and to discuss the affairs, finances and
accounts of Borrower with any of its officers, key employees, and accountants,
and, upon request, furnish promptly to the Administrative Agent or any Lender
true copies of all financial information made available to the senior management
of Borrower. Without limitation on the foregoing, Borrower shall:
(a) provide the Construction Consultant any and all
requested access to the Proposed Expansion site;
(b) provide any and all information which is reasonably
required for the preparation of a monthly Construction Progress Report;
(c) cooperate in the preparation of each Construction
Progress Report and, if requested by the Administrative Agent, cause the
Proposed Expansion's
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architect and general contractor to certify that the improvements
constructed as of the date of any Construction Progress Report conform to
the Plans in all material respects;
(d) maintain a full set of working drawings at the construction
office for the Proposed Expansion for review by the Construction
Consultant; and
(e) within 15 days following any request by the Administrative
Agent, deliver (i) then current construction plans for the Proposed
Expansion certified as true and correct by the architect and the project
engineer for the Proposed Expansion, (ii) a then current list of the names,
addresses and telephone numbers of each contractor, subcontractor and
material supplier with respect to the Proposed Expansion and the dollar
value and amounts paid with respect to the related contracts, and (iii)
then current versions of the construction schedule for all uncompleted work
on the Proposed Expansion and all executed contracts and subcontracts for
such work.
7.7 Keeping of Records and Books of Account. Keep adequate records
---------------------------------------
and books of account reflecting all financial transactions in conformity with
Generally Accepted Accounting Principles and in material conformity with all
applicable requirements of any Governmental Agency having regulatory
jurisdiction over Borrower.
7.8 Compliance With Agreements. Promptly and fully comply with all
--------------------------
Contractual Obligations under all material agreements, indentures, leases and
instruments to which it is a party, whether such material agreements,
indentures, leases or instruments are with a Lender or another Person, provided
--------
that the good faith failure of Borrower to comply with Contractual Obligations
involving an amount of money which is less than $1,000,000 or Property having a
value of less than $1,000,000 shall not constitute a breach of this covenant for
so long as Borrower is attempting, through the exercise of diligent efforts, to
comply therewith.
7.9 Use of Proceeds. Use the proceeds of the Loans and Letters of
---------------
Credit (a) on the Closing Date, to repay the Existing Senior Secured Notes in
their entirety (in the aggregate amount, with accrued interest and premium of
approximately $175,000,000), (b) to finance the Proposed Expansion and other
Capital Expenditures associated with Authority Property, and (c) for other
working capital, casino and general purposes of Borrower, provided that all
--------
proceeds of the Loans and all Letters of Credit shall be used exclusively by the
Borrower to finance facilities and operations constituting "Gaming" within the
meaning of Article XIII, Section 1 of the Constitution.
7.10 Hazardous Materials Laws. Keep and maintain the Real Property and
------------------------
each portion thereof in compliance in all material respects with all Hazardous
Materials Laws and promptly advise Administrative Agent in writing of (a) any
and all enforcement, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened in writing pursuant to any
applicable Hazardous Materials Laws, (b) any and all claims made or threatened
in writing, and received by Borrower, by any third party against Borrower or the
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Real Property relating to damage, contribution, cost recovery, compensation,
loss or injury resulting from any Hazardous Materials and (c) discovery by any
Senior Officer of the Borrower and the Tribe of any occurrence or condition on
any real property adjoining or in the vicinity of the Real Property that could
reasonably be expected to cause the Real Property or any part thereof to be
subject to any restrictions on the ownership, occupancy, transferability or use
of the Real Property under any Hazardous Materials Laws, provided that the good
--------
faith failure of Borrower to comply with Hazardous Materials Laws shall not
constitute a breach of this covenant if (a) Borrower is diligently attempting to
comply therewith, and (b) no Authority Property having a value in excess of
$1,000,000 is affected by such non-compliance or is in jeopardy of seizure or
closure as a result of such non-compliance.
7.11 Deposit and Brokerage Accounts. Promptly and in any event within
------------------------------
ten days enter into a Deposit Account Agreement with respect to each Operating
Account hereafter established.
7.12 Proposed Expansion. Prior to commencement of construction of the
------------------
Proposed Expansion, deliver to the Lenders the proposed Plans and Budget, the
form, substance and scope of which shall be reasonably acceptable to, and
approved in writing by, the Requisite Lenders. Upon receipt of the complete
Plans and Budget, the Administrative Agent shall submit the same to the Lenders.
The Lenders shall consider the Plans and Budget promptly (and in any event
within 30 days following their receipt of the Plans and Budget), and shall
approve or disapprove of the proposed Plans and Budget within that period.
7.13 Year 2000 Compliance. Borrower represents that it has made
--------------------
appropriate inquiry regarding the ability of its computer systems and those of
its principal customers and vendors to operate correctly in a date-sensitive
manner following January 1, 2000. Borrower has implemented a Year 2000 program
to provide an independent analysis of Borrower's Year 2000 preparedness and the
adequacy of Borrower's Year 2000 plans. It is anticipated that all remediation
and verification necessary for Borrower to become Year 2000 compliant will not
exceed $1,000,000 and will not have a Material Adverse Effect.
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ARTICLE 8.
NEGATIVE COVENANTS OF BORROWER
------------------------------
(OTHER THAN INFORMATION AND
--------------------------
REPORTING REQUIREMENTS)
----------------------
So long as any Advance remains unpaid, or any other Obligation remains
unpaid or unperformed (other than the obligations referenced in Section 3.18),
or any portion of the Commitment remains in force, Borrower shall not, unless
the Administrative Agent (with the approval of the Requisite Lenders) otherwise
consents:
8.1 Payment of Subordinated Obligations. Prepay any principal
-----------------------------------
(including sinking fund payments), interest or any other amount with respect to
---------
any Subordinated Obligations, or purchase or redeem (or offer to purchase or
redeem) any Subordinated Obligations, or deposit any monies, securities or other
Property with any trustee or other Person to provide assurance that the
principal or any portion thereof of any Subordinated Obligations will be paid
when due or otherwise provide for the defeasance of any Subordinated Obligations
except (a) scheduled payments of interest made when no Default or Event of
- ------
Default exists or would result therefrom, (b) refinancings of New Subordinated
Notes through their exchange for the Exchange Notes contemplated by the New
Subordinated Notes Indenture, and (c) repayments of the TCA Subordinated Notes
using the proceeds of the Defeasance Deposit.
8.2 Disposition of Property. Make any Disposition of Authority
-----------------------
Property, whether now owned or hereafter acquired, except for (a) Permitted
------
Dispositions made when no Default or Event of Default exists or would result
therefrom, or (b) Dispositions of Property specifically contemplated by Sections
7.5 or 7.10.
8.3 Investments and Acquisitions. Make any Acquisition using
----------------------------
Authority Property, or enter into any agreement to make any Acquisition using
Authority Property, or make or suffer to exist any Investment made using
Authority Property, except:
------
(a) Investments in Cash Equivalents;
(b) Investments in Subsidiaries to the extent in compliance
with Section 9.6;
(c) Investments consisting of Property received in
connection with any Permitted Disposition;
(d) Investments consisting of payroll advances to employees
of Borrower and its Subsidiaries for travel, entertainment and relocation
expenses in the ordinary course of business in an aggregate amount not to
exceed $250,000 at any one time outstanding;
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(e) Investments in accounts and notes receivable if created
or acquired in the ordinary course of business and which are payable or
dischargeable in accordance with customary trade terms;
(f) Investments in Persons owning Related Businesses in an
aggregate amount not to exceed, when aggregated with the Capital
Expenditures made under Section 7.15(c), $25,000,000; and
(g) Investments in Approved Swap Agreements.
8.4 Hostile Tender Offers. Use the proceeds of the Commitment or any
---------------------
funds of Borrower to directly or indirectly finance any offer to purchase or
acquire, or to consummate a purchase or acquisition of, 5% or more of the
capital stock of any corporation or other business entity if the board of
directors or management of such corporation or business entity has notified
Borrower that it opposes such offer or purchase.
8.5 Distributions. Make any Distribution, whether from capital,
-------------
income or otherwise, and whether in Cash or other Property, except:
------
(a) Priority Distributions;
(b) Distributions consisting of payments to the Tribe for
governmental services (including charges for utilities, police and fire
department services, health and emergency medical services, the pro rata
portion of Tribal Council costs and salaries attributable to the operations
of Borrower, and similar pro rata costs of other tribal departments, in
each case, to the extent that the costs of such departments are
attributable to the operations of Borrower), supplied by the Tribe in
accordance with past practices to the Borrower by the Tribe or any of its
representatives, political subunits, councils, agencies or
instrumentalities.
(c) prior to the Completion Date, other Distributions to the Tribe
in an amount not to exceed $3,000,000 made during any calendar month out of
Available Cash Flow for the immediately preceding calendar month when no
Default or Event of Default exists or would result therefrom;
(d) Distributions to the Tribe constituting payment of amounts
permitted by Section 9.9(b);
(e) following the Completion Date, other Distributions to the Tribe
made when no Default or Event of Default exists (and which do not result in
any Event of Default), made out of Available Cash Flow; and
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(f) Distributions consisting of any payment or transfer
specifically permitted by Section 7.10.
8.6 ERISA.
-----
(a) At any time, permit any Pension Plan which is maintained
by Borrower or to which Borrower is obligated to contribute on behalf of
its employees, in such case if to do so would constitute a Material Adverse
Effect, to:
(i) engage in any non-exempt "prohibited
transaction," as such term is defined in Section 4975 of the Internal
Revenue Code, Title 26, U.S.C.;
(ii) incur any material "accumulated funding
deficiency," as that term is defined in Section 302 of ERISA; or
(iii) suffer a Termination Event to occur which may
reasonably be expected to result in liability of Borrower or any ERISA
Affiliate thereof to the Pension Plan or to the PBGC or the imposition
of a Lien on the Property of Borrower or any ERISA Affiliate thereof
pursuant to Section 4068 of ERISA.
(b) At any time, permit any Pension Plan which is maintained
by Borrower or to which Borrower is obligated to contribute on behalf of
its employees to fail to comply with ERISA or other applicable Laws in any
respect that would result in a Material Adverse Effect.
8.7 Business of Borrower. Engage in any material business which is
--------------------
not fundamentally related to the operation of Mohegan Sun, use any material
Authority Property for a purpose which is unrelated to the business of Borrower,
or make any fundamental change to the nature of the business operations of
Borrower.
8.8 Liens; Negative Pledges; Sales and Leasebacks. Create, incur,
---------------------------------------------
assume or suffer to exist any Lien or Right of Others of any nature upon or with
respect to Authority Property; or suffer to exist any Negative Pledge with
respect to any Authority Property; or engage in any sale and leaseback
transaction with respect to any Authority Property; except:
------
(a) Permitted Encumbrances and Permitted Rights of Others;
(b) Liens and Negative Pledges in favor of the Administrative
Agent or the Lenders under the Loan Documents;
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(c) Existing Liens disclosed in Schedule 7.8; provided that
--------
(i) the obligations secured thereby are not increased, and (ii) the Liens
and related Negative Pledges in favor of First Fidelity Bank and Fleet
National Bank disclosed on Schedule 7.8 as file numbers 0001709240 and
0001723520 shall be terminated in accordance with Section 10.2 prior to the
making of the Initial Advances and the issuance of the initial Letters of
Credit hereunder;
(d) Existing Rights of Others and Negative Pledges disclosed
in Schedule 7.8; and
(e) Purchase money Liens and associated Negative Pledges
incurred with respect to Property acquired using the proceeds of
Indebtedness and Capital Leases permitted under Section 7.9(h).
8.9 Indebtedness and Contingent Obligations. Create, incur, assume or
---------------------------------------
suffer to exist any Indebtedness or Contingent Obligation, except:
------
(a) Indebtedness and Contingent Obligations in favor of the
Lenders or the Administrative Agent under the Loan Documents;
(b) Indebtedness and Contingent Obligations consisting of
Approved Swap Agreements;
(c) Indebtedness evidenced by the Senior Unsecured Notes in an
aggregate principal amount not to exceed $200,000,000;
(d) defeased Indebtedness under the TCA Subordinated Notes;
(e) other existing Indebtedness and Contingent Obligations
disclosed on Schedule 7.9 and the renewal or refinancing, but not the
increase, thereof;
(f) the New Subordinated Notes in an aggregate outstanding
principal amount not to exceed $300,000,000;
(g) other Subordinated Obligations the incurrence of which is
approved by the Requisite Lenders;
(h) purchase money Indebtedness and Capital Lease Obligations
in an aggregate principal amount not to exceed $25,000,000; and
(i) unsecured Recourse Obligations in an aggregate principal
amount not to exceed $25,000,000.
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8.10 Transactions with Affiliates. Enter into any transaction of any
----------------------------
kind with any Affiliate of Borrower other than (a) employment of enrolled tribal
----------
members, and the immediate family members of tribal members, on terms consistent
with the past practices of Borrower (including the payment of employment bonuses
in accordance with past practices), (b) transactions involving Property having
an aggregate value of not more than $2,000,000 for all such transactions, (c)
transactions which are on commercially reasonable terms entered into with Native
American suppliers and vendors in accordance with the affirmative action
provisions of the Tribe's Employment Rights Ordinance and the Development
Services Agreement (in the case of any such transactions or series of related
transactions involving more than $2,000,000, on terms disclosed to the Lenders),
(d) other transactions on terms at least as favorable to Borrower as would be
the case in an arm's-length transaction between unrelated parties of equal
bargaining power, the terms of which are disclosed to the Lenders in writing,
and (e) transactions pursuant to the Development Services Agreement and
Relinquishment Agreement.
8.11 Authority Expenditures. Use any Authority Property for a purpose
----------------------
which is not related to the business of Borrower or specifically contemplated
hereby, expend any Authority funds for any purpose which does not directly or
indirectly benefit Borrower, or make any Capital Expenditure using funds of
Borrower or other Authority Property except to add to, further improve,
maintain, repair, restore or refurbish Mohegan Sun and Related Businesses.
8.12 Total Leverage Ratio. Permit the Total Leverage Ratio, as of the
--------------------
last day of any Fiscal Quarter described in the matrix below, to exceed the
ratio set forth opposite that Fiscal Quarter:
Fiscal Quarters Ending Maximum Ratio
---------------------- -------------
Closing Date through
December 31, 2000 3.50:1.00
March 31, 2001 4.00:1.00
June 30, 2001 through
December 31, 2001 5.00:1.00
March 31, 2002 4.00:1.00
June 30, 2002 and thereafter 3.50:1.00.
8.13 Senior Leverage Ratio. Permit the Senior Leverage Ratio, as of
---------------------
the last day of any Fiscal Quarter described in the matrix below, to exceed the
ratio set forth opposite that Fiscal Quarter:
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Fiscal Quarters Ending Maximum Ratio
---------------------- -------------
Closing Date through
December 31, 2000 2.00:1.00
March 31, 2001 2.50:1.00
June 30, 2001 3.00:1.00
September 30, 2001 3.25:1.00
December 31, 2001 3.00:1.00
March 31, 2002 2.50:1.00
June 30, 2002 and thereafter 2.00:1.00.
8.14 Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage
---------------------------
Ratio, as of that last day of any Fiscal Quarter described in the matrix below,
to be less than the ratio set forth opposite that Fiscal Quarter:
Fiscal Quarters Ending Minimum Ratio
---------------------- -------------
March 31, 1999 1.10:1.00
June 30, 1999 through
June 30, 2001 1.20:1.00
September 30, 2001 1.15:1.00
December 31, 2001 and
thereafter 1.50:1.00.
8.15 Capital Expenditures. Make, or become legally obligated to make,
--------------------
any Capital Expenditure other than:
----- ----
(a) Capital Expenditures made in accordance with the Plans and
Budget (and only following their approval in accordance with Section 6.12)
for the construction of the Proposed Expansion in an aggregate amount not
to exceed $800,000,000;
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(b) Maintenance Capital Expenditures in an aggregate amount
not to exceed $25,000,000 in any Fiscal Year;
(c) Capital Expenditures for Related Businesses which, when
aggregated with the Investments made pursuant to Section 7.3(g), do not
exceed $25,000,000; and
(d) Following the Completion Date, other Capital Expenditures
in an aggregate amount which does not exceed $40,000,000, in any Fiscal
Year.
8.16 Deposit Accounts. Fail, within ten days following the
----------------
opening of each such account, to execute and deliver to the Administrative Agent
Deposit Account Agreements granting Liens in each deposit, checking, brokerage
or other similar account of the Borrower which is opened following the Closing
Date with any bank, savings association, financial institution or similar
financial intermediary in which Cash or Cash Equivalents will be deposited.
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ARTICLE 9.
INFORMATION AND REPORTING REQUIREMENTS
--------------------------------------
9.1 Financial and Business Information. So long as any Advance
----------------------------------
remains unpaid, or any other Obligation remains unpaid or unperformed (other
than the obligations referenced in Section 3.18), or any portion of the
Commitment remains in force, Borrower shall, unless the Administrative Agent
(with the approval of the Requisite Lenders) otherwise consents, deliver to the
Administrative Agent and the Lenders, at Borrower's sole expense:
(a) As soon as practicable, and in any event within 45 days
after the end of each Fiscal Quarter, (i) the balance sheets of Borrower as
at the end of such Fiscal Quarter, (ii) statements of income and retained
earnings and of cash flow of Borrower as at the end of such Fiscal Quarter
and for the portion of the Fiscal Year ended with such Fiscal Quarter, and
(iii) the statements of cash flow of Borrower for such Fiscal Quarter and
for the portion of the Fiscal Year ended with such Fiscal Quarter, all in
reasonable detail. Such financial statements shall be certified by a Senior
Officer of Borrower as fairly presenting the financial condition, results
of operations and changes in financial position or cash flows of Borrower
in accordance with Generally Accepted Accounting Principles (other than any
requirement for footnote disclosures) consistently applied, as at such date
and for such periods, subject only to normal year-end accruals and audit
adjustments and shall be accompanied by a management narrative description
of results of operations;
(b) As soon as practicable, and in any event within 90 days
after the end of each Fiscal Year, (i) the balance sheets of Borrower as at
the end of such Fiscal Year, (ii) statements of income and retained
earnings and of cash flows of Borrower for such Fiscal Year, and (iii)
statements of cash flow of Borrower for such Fiscal Year, all in reasonable
detail. Such financial statements shall be prepared in accordance with
Generally Accepted Accounting Principles, consistently applied, and such
balance sheet and statements shall be accompanied by a report and opinion
of independent public accountants of recognized standing selected by
Borrower and reasonably satisfactory to the Requisite Lenders, which report
shall be based on an audit conducted in accordance with generally accepted
auditing standards as at such date, and which opinion shall be an
unqualified opinion without additional explanatory or non-standard wording
which the Requisite Lenders determine is unacceptable and with no
limitation as to the scope of their audit;
(c) Concurrently with the delivery of the financial
statements referred to in Sections 8.1(a) and 8.1(b), a written discussion
and analysis of the financial condition and results of operations of
Borrower in reasonable detail, including in the case of any such report
---------
delivered in connection with the financial statements referred to in
Section 8.1(b), an explanation of any material variance from operational
results or balance sheet items contained in projections previously
delivered to the Lenders;
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(d) As soon as practicable, and in any event within 20 days
after the end of each calendar month, a monthly revenue report showing
revenues for the prior calendar month associated with each gaming category,
occupancy percentage, and average hotel room rental rates experienced by
the Mohegan Sun during such monthly period;
(e) As soon as practicable, and in any event within 90 days
after the commencement of each Fiscal Year, projected financial statements
by Fiscal Year for each of the three Fiscal Years immediately subsequent to
that Fiscal Year, including, in each case, projected balance sheets,
---------
statements of income and retained earnings and statements of cash flow of
Borrower, all in reasonable detail and in any event to include (i)
projected Distributions to be made to the Tribe by Borrower and (ii)
projected Capital Expenditures;
(f) Promptly following receipt by Borrower, copies of any
detailed audit reports or recommendations submitted to Borrower or the
Tribe by independent accountants in connection with the accounts or books
of Borrower or any audit of Borrower;
(g) Promptly following a filing, copies of any specific
report or other document filed by Borrower (or by the Tribe in respect of
its gaming operations or any Authority Property) with any Governmental
Agency, including without limitation all reports which Borrower is required
to file with the National Indian Gaming Commission under 25 C.F.R. Part
514;
(h) Promptly after the same are available, a copy of the
Form 5500 series report of each Pension Plan maintained by Borrower as
filed with the Internal Revenue Service for each Fiscal Year;
(i) Promptly upon a Senior Officer of the Borrower or the
Tribe becoming aware, and in any event within thirty Business Days after
becoming aware, of the occurrence of any (i) "reportable event" (as such
term is defined in Section 4043 of ERISA) or (ii) "prohibited transaction"
(as such term is defined in Section 406 of ERISA or Section 4975 of the
Internal Revenue Code, Title 26, U.S.C.) in connection with any Pension
Plan or any trust created thereunder, written notice specifying the nature
thereof and specifying what action Borrower is taking or proposes to take
with respect thereto, and, when known, any action taken by the Internal
Revenue Service with respect thereto;
(j) As soon as practicable, and in any event not less than
10 days (or, if acceptable to the Administrative Agent, a shorter period)
prior to the proposed effective date thereof, written notice of any
proposed amendment, modification or
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waiver of the terms and provisions of any of the Material Documents or the
Plans and Budget.
(k) As soon as practicable, and in any event within five
Business Days after a Senior Officer of the Borrower or the Tribe becomes
aware of the existence of any condition or event which constitutes a
Default or Event of Default, written notice specifying the nature and
period of existence thereof and specifying what action Borrower and the
Tribe are taking or propose to take with respect thereto;
(l) Promptly upon a Senior Officer of the Borrower or the
Tribe becoming aware that (i) any Person has commenced a legal proceeding
with respect to a claim against Borrower or the Tribe that is, in the
reasonable opinion of their independent legal counsel, $5,000,000 or more
in excess of the amount thereof that is fully covered by insurance (subject
to applicable deductibles and retentions), (ii) any creditor or lessor
under a written credit agreement with respect to Indebtedness in excess of
$5,000,000 or lease involving unpaid rent in excess of $5,000,000 has
asserted a default thereunder on the part of Borrower or the Tribe, (iii)
any Person commenced a legal proceeding with respect to a claim against
Borrower or the Tribe under a contract that is not a credit agreement or
lease in excess of $5,000,000, (iv) any labor union has notified Borrower
or the Tribe of its intent to strike Borrower or the Tribe on a date
certain, which strike could reasonably be expected to have a Material
Adverse Effect, or (v) any other event or circumstance occurs or exists
that would constitute a Material Adverse Effect, in each case a written
notice describing the pertinent facts relating thereto and what action
Borrower and the Tribe are taking or propose to take with respect thereto;
(m) Not later than the fifteenth day of each calendar
month, such information as may be required for the completion of the
monthly Construction Progress Report; and
(n) Such other data and information regarding the Borrower
and the business of Mohegan Sun as from time to time may be reasonably
requested by the Administrative Agent or the Requisite Lenders.
9.2 Compliance Certificates. So long as any Advance remains unpaid,
-----------------------
or any other Obligation remains unpaid or unperformed (other than the
obligations referenced in Section 3.18), or any portion of the Commitment
remains outstanding, Borrower shall, unless the Requisite Lenders otherwise
consent, deliver to the Administrative Agent, at Borrower's sole expense,
concurrently with the financial statements required pursuant to Sections 8.1(a),
and 8.1(b), a Compliance Certificate signed by the chief financial officer or
chief executive officer of Borrower, together with a narrative description of
the results of the operations of Borrower.
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ARTICLE 10.
COVENANTS OF THE TRIBE
----------------------
So long as any Advance remains unpaid, or any other Obligation
remains unpaid or unperformed (other than the obligations referenced in Section
3.18), or any portion of the Commitment remains in force, the Tribe shall, and
shall cause the Borrower to, unless the Administrative Agent (with the approval
of the Requisite Lenders) otherwise consents:
10.1 Continual Operation of Mohegan Sun. Cause Borrower to
----------------------------------
continuously operate the Mohegan Sun and each principal amenity now or hereafter
associated therewith in the manner operated as of the Closing Date (or as
contemplated on the Closing Date to be operated) and in any event in compliance
with the Gaming Ordinance, the Gaming Authority Ordinance all applicable Laws
and the Compact, and refrain from conducting any gaming activities (including
without limitation all Class II and Class III gaming activities (as defined in
IGRA)) through any Person, agency or instrumentality other than Borrower or at
any location other than Mohegan Sun.
10.2 Remittance of Available Cash Flow. Cause Borrower, to the
---------------------------------
extent that Available Cash Flow exists, promptly and in any event within two
Business Days following demand by the Administrative Agent (with such demand to
be made only following the date upon which any such payment is due hereunder and
has not been made by Borrower), to remit to the Administrative Agent from
Available Cash Flow all payments of principal, interest, fees and other amounts
payable to the Creditors under the Loan Documents.
10.3 Sovereign Immunity; Jurisdiction and Venue. Refrain from
------------------------------------------
asserting that the provisions of this Article and Sections 13.18, 13.24, 13.26
and 13.27 are not valid, binding and legally enforceable against the Tribe and
Borrower, and reaffirm in writing upon request the valid, binding and
enforceable nature of the provisions of this Article and Sections 13.18, 13.24,
13.26 and 13.27.
10.4 The Landlord Consent. Continuously abide by the terms of
--------------------
the Landlord Consent.
10.5 Preservation of Existence; Operation.
------------------------------------
(a) Do all things necessary to maintain the existence of
the Tribe as a federally recognized Indian Tribe under 25 C.F.R. Part 83
and as an Indian Tribal government pursuant to Sections 7701(a)(40)(A) and
7871(a) of the Internal Revenue Code, Title 26 U.S.C.; and
(b) Continuously maintain the existence of Borrower as a
governmental instrumentality of Borrower.
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10.6 Ownership of Mohegan Sun; Management. Not form or acquire
------------------------------------
any corporation or other business entity for the purpose of directly or
indirectly owning Mohegan Sun or any interest therein, or engage any manager for
Mohegan Sun, provided that Borrower shall be entitled to form one or more
--------
wholly-owned Subsidiaries for the purpose of owning or operating the assets of
the Borrower provided that concurrently with their formation such Subsidiaries
execute a guarantee of the Obligations and Collateral Documents which are in
form and substance acceptable to the Administrative Agent and any and all other
documents reasonably required by the Administrative Agent in connection with the
Loan Documents.
10.7 Prohibited Transactions. Not accept any Distribution or
-----------------------
other payment from Borrower the making of which is prohibited hereunder (the
Tribe hereby agreeing that any such payment or Distribution so made will be held
by the Tribe in trust for the benefit of, and shall be paid forthwith over and
delivered, upon the request of the Administrative Agent or the Borrower, to
Borrower), or enter into any transaction with Borrower which is prohibited by
Section 7.10.
10.8 Amendments to Certain Documents.
-------------------------------
(a) Not amend, modify or waive any term or provision of
any Material Document, or waive any rights thereunder in any respect which
is adverse to the interests of the Administrative Agent or the Lenders,
provided that:
--------
(i) The terms of the Senior Unsecured Notes and
the Senior Unsecured Note Indenture may be amended, modified or
waived in any manner permitted thereunder;
(ii) The terms of the New Subordinated Notes and
the New Subordinated Notes Indenture may be amended, modified or
waived in any manner permitted thereunder which is not materially
adverse to the interests of the Lenders and which does not
shorten their maturity or the time for the making of any payment
thereunder, increase the rate of interest or affect in any manner
the subordination provisions thereof; and
(iii) The UCC Ordinance provides and shall provide
that any amendment to the Uniform Commercial Code as enacted from
time to time by Connecticut shall be automatically incorporated
in the Tribe's Uniform Commercial Code.
(b) In any event, not consent to any amendment,
modification, or waiver of any term or provision of any Material Document
in any manner without thirty days prior written notice to the Lenders.
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10.9 Impairment of Contracts; Imposition of Governmental Charges. The
-----------------------------------------------------------
Tribe shall not:
(a) Adopt, enact, promulgate or otherwise place into effect
any tribal Law which impairs or interferes, or could impair or interfere,
in any manner, with any right or remedy of the Creditors, the Obligations
of the Tribe or Borrower under this Agreement or the other Loan Documents
(it being understood and agreed that any such tribal Law which is adopted,
enacted, promulgated or otherwise placed into effect without the consent of
all of the Lenders shall, with respect to the Loan Documents, the rights
and remedies of the Creditors thereunder, and the Obligations, be void and
of no effect); or
(b) Demand, impose or receive any tax, charge, assessment, fee
or other imposition (except as specifically contemplated by Sections 7.2,
7.5 or 7.10) or impose any regulatory or licensing requirement, except as
------
provided in the Gaming Ordinance, against Borrower, its customers or
guests, its operations or Property (including without limitation Mohegan
Sun), the Creditors, the employees, officers, directors, patrons or vendors
of Borrower, other than (i) charges upon Borrower to pay the actual and
----- ----
reasonable regulatory expenditures of the Mohegan Tribal Gaming Commission
under the Gaming Ordinance, (ii) sales, use, room occupancy and related
excise taxes, including admissions and cabaret taxes and any other taxes
(other than income taxes) imposed by the Tribe on the Borrower, its
patrons, or operations, provided that the rate and scope of such taxes
shall not be more onerous than those which may be imposed by the State of
Connecticut, (iii) fees imposed on Borrower by the Commission under IGRA,
and (iv) the actual costs to the Tribe of services provided to Borrower
under the Town Agreement.
10.10 Segregation of Authority Assets. The Tribe shall not:
-------------------------------
(a) Fail to segregate all Authority Property, including all
funds and bank accounts, from the Property of the Tribe; or
(b) Commingle any Property of Borrower (including any funds or
bank accounts) with any Non-Authority Property or with any Property of its
Affiliates.
10.11 Trust Property. The Tribe shall not convey into trust with the
--------------
federal government of the United States of America, to be held for the benefit
of the Tribe or any of its Affiliates, any Property of the Tribe other than
----- ----
interests in real property.
10.12 Liens on Authority Property. The Tribe shall not create, incur,
---------------------------
assume or suffer to exist any Lien or other encumbrance upon Authority Property
which is not permitted by Section 7.8.
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10.13 Bankruptcy Matters; Etc.
-----------------------
(a) The Tribe will not enact any bankruptcy 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 Creditors provided
for in the Loan Documents;
(b) The Tribe will not, or permit Borrower or any of the Tribe's
representatives, political subunits, agencies, instrumentalities or
councils to, exercise any power of eminent domain over the Mohegan Sun.
Except as required by state or federal Law, the Tribe will not enact any
statute, law, ordinance or rule that would have a material adverse affect
upon the rights of the Creditors under the Loan Documents; and
(c) The Tribe agrees that upon any payment or distribution of
assets upon any liquidation, dissolution, winding up, reorganization,
assignment for the benefit of creditors, marshaling of assets or any
bankruptcy, insolvency or similar proceedings of or with respect to
Borrower, the Creditors shall be entitled to receive payment in full of all
Obligations before any payment or distribution is made to the Tribe.
10.14 Impairment of Contracts. The Tribe agrees that any action taken
-----------------------
in violation of Sections 9.8, 9.9 or 9.13 shall be deemed in contravention of
Article XIV (entitled "Non-Impairment of Contracts") of the Constitution.
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ARTICLE 11.
CONDITIONS
----------
11.1 Closing. The Closing Date is subject to the following conditions
-------
precedent, each of which shall be satisfied unless the Lenders, in their sole
and absolute discretion, shall agree otherwise:
(a) The Administrative Agent shall have received all of the
following, each of which shall be originals unless otherwise specified,
each properly executed by each party thereto, each dated as of the Closing
Date and each in form and substance satisfactory to the Administrative
Agent and its legal counsel (unless otherwise specified or, in the case of
the date of any of the following, unless the Administrative Agent otherwise
agrees or directs):
(i) executed counterparts of this Agreement,
sufficient in number for distribution to the Administrative Agent, the
Lenders, the Tribe and Borrower;
(ii) Notes executed by Borrower in favor of each
Lender, each in a principal amount equal to that Lender's Pro Rata
Share;
(iii) Such documentation as the Administrative Agent
may reasonably require to establish the due organization, valid
existence and good standing of the Tribe as a federally recognized
Indian Tribe, the formation, valid existence and good standing of the
Tribe and Borrower, their authority to execute, deliver and perform
any Loan Documents, and the identity, authority and capacity of each
Senior Officer authorized to act on their behalf, including, without
---------
limitation, certified copies of the Constitution, the Tribe's and
Borrower's charter and bylaws, and amendments thereto, resolutions,
incumbency certificates, Certificates of Senior Officers, and the
like;
(iv) the Security Agreement executed by Borrower,
together with sufficient copies of financing statements on Form UCC-1
(including such fixture filings as may be appropriate) for filing in
every jurisdiction in which Borrower owns Property;
(v) Deposit Account Agreements in favor of the
Administrative Agent executed by Borrower and the holder of each
deposit, brokerage or other similar account maintained by Borrower
with respect to each Operating Account executed by each party thereto;
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(vi) The Leasehold Mortgage executed by Borrower and
the Bureau of Indian Affairs and the Landlord Consent executed by the
Tribe;
(vii) the favorable written legal opinion of internal
counsel to Borrower, substantially in the form of Exhibit E, opining to the
absence of conflicts with the Constitution, tribal Law, and the matters
described in Section 4.2, together with copies of all factual certificates
and legal opinions upon which such counsel have relied;
(viii) the favorable written legal opinions of Hogan &
Hartson L.L.P., special counsel to Borrower, and Rome, McGuigan, Sabanosh
special Connecticut counsel to Borrower, substantially in the forms of
Exhibits F-1 and F-2 together with copies of all factual certificates and
legal opinions upon which such counsel have relied;
(ix) an advice letter of Dorsey & Whitney LLP,
special Indian law counsel to the Administrative Agent;
(x) a Certificate signed by a Senior Officer of the
Borrower and the Tribe certifying that the conditions specified in Sections
10.1(b), 10.1(d) and 10.1(e) have been satisfied and setting forth the
Total Leverage Ratio as of the Closing Date;
(xi) evidence that insurance, of the types and in the
amounts specified in the Loan Documents, is maintained in force by
Borrower, together with an executed form 438 BFU with respect thereto;
(xii) a Certificate signed by a Senior Officer of the
Borrower and the Tribe attaching true, correct and complete copies of each
of the Material Documents (including, in each case, any amendments or
modifications of the terms thereof entered into as of the Closing Date).
(xiii) The Tribe and First Union National Bank, as
Escrow Agent, shall have entered into the Construction Reserve Disbursement
Agreement, and the Administrative Agent shall have received evidence
satisfactory to it that the deposits referred to therein shall have been
made with First Union National Bank.
(xiv) evidence acceptable to the Administrative Agent
that the Defeasance Deposit has been established.
(xv) such other assurances, certificates, documents,
consents or opinions as the Administrative Agent reasonably may require.
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(b) the Existing Senior Secured Notes shall have been or shall
concurrently be terminated and all such Indebtedness shall have been or
shall concurrently be repaid and retired, all Liens securing such
Indebtedness shall have been or shall concurrently be released and the
Lenders shall have received or shall concurrently receive all termination
statements, re-assignments, reconveyances and other assurances in
connection therewith as Administrative Agent shall require in its sole
discretion.
(c) The fees payable as of the Closing Date pursuant to Sections
3.2, 3.3 and 3.4 shall be paid concurrently.
(d) The representations and warranties of the Tribe and Borrower
contained in Articles 4 and 5, respectively, shall be true and correct.
(e) Borrower and any other Parties shall be in compliance with all
the terms and provisions of the Loan Documents, and no Default or Event of
Default shall have occurred and be continuing.
(f) The Bureau of Indian Affairs shall have given its written
approval of the transactions contemplated by this Agreement and the other
Loan Documents pursuant to 25 U.S.C (S)81 in a writing acceptable to the
Administrative Agent, and shall have delivered a letter acceptable to the
Administrative Agent stating that it is the finding of the Bureau of Indian
Affairs that the approval of the Loan Documents by the Bureau of Indian
Affairs is not a major federal action significantly affecting the human
environment.
11.2 Initial Advances. The obligation of each Lender to make the initial
----------------
Advance to be made by it, and the obligation of the Issuing Lender to issue the
initial Letter of Credit, is subject to the following conditions precedent, each
of which shall be satisfied prior to the making of the initial Advances (unless
the Lenders, in their sole and absolute discretion, shall agree otherwise):
(a) the Title Company shall have committed in writing to issue to the
Administrative Agent and the Lenders its ALTA policy of title insurance
with respect to the Leasehold Mortgage (contemplating an LP-10 pricing
package and based upon a completed Title Status Report issued by the Bureau
of Indian Affairs), with coverage in an amount not less than $425,000,000
and endorsements to and exceptions from coverage acceptable to the
Administrative Agent, together with reinsurance (allowing for direct
access) from reinsurers and in amounts acceptable to the Administrative
Agent.
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(b) the Leasehold Mortgage shall have been recorded with the Bureau
of Indian Affairs, with the Town of Montville, Connecticut, and with the
appropriate officials of the Tribe, and the Administrative Agent shall have
received evidence satisfactory to the Administrative Agent that all actions
necessary or, in the opinion of the Administrative Agent or the Lenders,
desirable to perfect and protect the Liens of the Collateral Documents have
been taken.
(c) the Administrative Agent shall have received a Request for Loan
or a Request for Letter of Credit, as appropriate.
(d) Borrower's letter of credit facility with Fleet National Bank
shall have been or shall concurrently be terminated and all such
Indebtedness shall have been or shall concurrently be repaid and retired,
all Liens securing such Indebtedness shall have been or shall concurrently
be released and the Lenders shall have received or shall concurrently
receive all termination statements, re-assignments, reconveyances and other
assurances in connection therewith as Administrative Agent shall require in
its sole discretion.
11.3 Any Increasing Advance. In addition to any applicable conditions
----------------------
precedent set forth elsewhere in this Article 10, and after giving effect to the
requested Advances, the obligation of each Lender to make any Advance which
would increase the principal amount outstanding under the Loan Documents, and
the obligation of the Issuing Lender to issue each Letter of Credit, is subject
to the following conditions precedent (unless the Requisite Lenders, in their
sole and absolute discretion, agree otherwise):
(a) except as disclosed by Borrower and approved in writing by the
Requisite Lenders, the representations and warranties contained in Article
5 (other than Sections 5.7 (first sentence) and 5.13) shall be true and
-----
correct on and as of the date of the Advance as though made on that date;
(b) other than matters described in Schedule 5.13 or not required as
of the Closing Date to be therein described, there shall not be then
pending or threatened any action, suit, proceeding or investigation against
or affecting Borrower or any of its Property before any Governmental Agency
that constitutes a Material Adverse Effect;
(c) no Default or Event of Default shall then exist;
(d) the Administrative Agent shall have timely received a Request for
Loan in compliance with Article 2 (or telephonic or other request for loan
referred to in the second sentence of Section 2.1(b), if applicable) in
compliance with Article 2, or the Issuing Lender and the Administrative
Agent shall have timely received a Request for Letter of Credit in
compliance with Article 2, as applicable; and
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(e) the Administrative Agent shall have received, in form and
substance reasonably satisfactory to the Administrative Agent, such other
assurances, certificates, documents or consents related to the foregoing as the
Administrative Agent reasonably may require.
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ARTICLE 12.
EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT
----------------------------------------------------
12.1 Events of Default. The existence or occurrence of any one or more of
-----------------
the following events, whatever the reason therefor and under any circumstances
whatsoever, shall constitute an Event of Default:
(a) Borrower fails to pay any principal on any of the Loans, or any
portion thereof, when due, or fails or to make full reimbursement with respect
to any Letter of Credit when due; or
(b) Borrower fails to pay any interest or any of the fees payable
under Article 3, or any portion thereof, within two Business Days after demand
therefor; or
(c) Borrower fails to pay any other fees or amounts payable to the
Lenders under any Loan Document, or any portion thereof, within three Business
Days after demand therefor; or
(d) Any failure to comply with Section 8.1(l) that is materially
adverse to the interests of the Administrative Agent or the Lenders; or
(e) The Tribe fails to perform or observe any of the covenants
contained in Article 9 or the Borrower fails to perform or observe any of the
covenants contained in Articles 7 or 8 (other than the covenant set forth in
Section 8.1(d)); or
(f) Borrower, the Tribe or any other Party fails to perform or
observe any other covenant or agreement contained in any Loan Document on its
part to be performed or observed within thirty Business Days after the giving of
notice by the Administrative Agent at the request of the Requisite Lenders of
such Default; or
(g) Any representation or warranty made in any Loan Document, or in
any certificate delivered pursuant to any Loan Document, proves to have been
incorrect when made or reaffirmed in any respect that is materially adverse to
the interests of the Administrative Agent or the Lenders; or
(h) At any time (i) Borrower fails to pay the principal, or any
principal installment, of any present or future indebtedness for borrowed money
of $10,000,000 or more, or any guaranty of present or future indebtedness for
borrowed money of $10,000,000 or more, on its part to be paid, when due (or
within any stated grace period), whether at the stated maturity, upon
acceleration, by reason of required prepayment or otherwise or (ii) Borrower
fails to perform or observe any other term, covenant or agreement on its part to
be performed or observed, or suffers any event to
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occur, in connection with any present or future indebtedness for borrowed money
of $10,000,000 or more, or of any guaranty of present or future indebtedness for
borrowed money of $10,000,000 or more, if as a result of such failure or
sufferance any holder or holders thereof (or an agent or trustee on its or their
behalf) has the right to declare such indebtedness due before the date on which
it otherwise would become due; or
(i) At any time (i) the Tribe fails to pay the principal, or any
principal installment, of any present or future indebtedness for borrowed money
of $10,000,000 or more, or any guaranty of present or future indebtedness for
borrowed money of $10,000,000 or more, on its part to be paid, when due (or
within any stated grace period), whether at the stated maturity, upon
acceleration, by reason of required prepayment or otherwise or (ii) the Tribe
fails to perform or observe any other term, covenant or agreement on its part to
be performed or observed, or suffers any event to occur, in connection with any
present or future indebtedness for borrowed money of $10,000,000 or more, or of
any guaranty of present or future indebtedness for borrowed money of $10,000,000
or more, if as a result of such failure or sufferance any holder or holders
thereof (or an agent or trustee on its or their behalf) has the right to declare
such indebtedness due before the date on which it otherwise would become due; or
(j) Any Loan Document, at any time after its execution and delivery
and for any reason other than the agreement of the Lenders or satisfaction in
full of all the Obligations, ceases to be in full force and effect or is
declared by a court of competent jurisdiction to be null and void, invalid or
unenforceable in any respect which, in any such event in the reasonable opinion
of the Requisite Lenders, is materially adverse to the interests of the Lenders;
or Borrower or the Tribe denies that it has any or further liability or
obligation under any Loan Document, or purports to revoke, terminate or rescind
the same or any provision thereof; or
(k) Any event occurs which gives the holder or holders of any
Subordinated Obligation (or an agent or trustee on its or their behalf) the
right to declare such Subordinated Obligations due before the date on which it
otherwise would become due, or the right to require the issuer thereof to redeem
or purchase, or offer to redeem or purchase, all or any portion of any
Subordinated Obligations; or the trustee for, or any holder of, Subordinated
Obligations breaches any subordination provision applicable to such Subordinated
Obligations; or
(l) A final judgment is entered by a court or other tribunal which
purports to be of competent jurisdiction that any Subordinated Obligation is not
subordinated in accordance with its terms to the Obligations; or
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(m) A judgment against the Tribe or Borrower is entered for the
payment of money in excess of $10,000,000 and, absent procurement of a stay of
execution, such judgment remains unbonded or unsatisfied for thirty calendar
days after the date of entry of judgment (unless the Tribe or Borrower has
deposited the amount of the monetary award associated with such judgment into a
court escrow pending determination of an appeal), or in any event later than
five days prior to the date of any proposed sale thereunder; or
(n) The Tribe or Borrower institutes or consents to any proceeding
under a Debtor Relief Law relating to it or to all or any part of their
respective Property, or is unable or admits in writing its inability to pay its
debts as they mature, or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any part of its Property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of the Tribe or Borrower and the appointment continues
undischarged or unstayed for sixty calendar days; or any proceeding under a
Debtor Relief Law relating to the Tribe or Borrower or to all or any part of
their Property is instituted without their consent and continues undismissed or
unstayed for sixty calendar days; or any judgment, writ, warrant of attachment
or execution or similar process is issued or levied against all or any material
part of the Authority Property and is not released, vacated or fully bonded
within sixty calendar days after its issue or levy; or
(o) The Tribe at any time ceases to be a federally recognized Indian
Tribe; or
(p) The occurrence of a Termination Event with respect to any
Pension Plan if the aggregate liability of Borrower and its ERISA Affiliates
under ERISA as a result thereof exceeds $5,000,000; or the complete or partial
withdrawal by Borrower or any of its ERISA Affiliates from any Multiemployer
Plan if the aggregate liability of Borrower and its ERISA affiliates as a result
thereof exceeds $5,000,000; or
(q) The occurrence of an Event of Default (as such term is or may
hereafter be specifically defined in any other Loan Document) under any other
Loan Document; or
(r) Borrower ceases to be a wholly-owned instrumentality of the
Tribe, managed and controlled by the Tribe; or
(s) The occurrence of any event or circumstance which results in
the failure of Borrower to have any material portion of the Mohegan Sun open to
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conduct Class II or Class III gaming activities for any reason for more than
five consecutive days to the extent that such failure results in a Material
Adverse Effect (nothing in this clause requiring the conduct of gaming
operations at the Proposed Expansion prior to the opening thereof); or
(t) The occurrence of any event or circumstance which results in
the prohibition of the Tribe to conduct Class II or Class III gaming activities
at Mohegan Sun through the Borrower for a period in excess of five consecutive
days (nothing in this clause requiring the conduct of gaming operations at the
Proposed Expansion prior to the opening thereof); or
(u) Any Change in Control occurs.
12.2 Remedies Upon Event of Default. Without limiting any other rights or
------------------------------
remedies of the Administrative Agent or the Lenders provided for elsewhere in
this Agreement, or the Loan Documents, or by applicable Law, or in equity, or
otherwise:
(a) Upon the occurrence, and during the continuance, of any Event of
Default other than an Event of Default described in Section 11.1(n):
(i) the commitment to make Advances and issue Letters of
Credit and all other obligations of the Administrative Agent, the Issuing
Lender and the Lenders and all rights of Borrower and any other Parties
under the Loan Documents shall be suspended without notice to or demand
upon the Tribe or Borrower, which are expressly waived by the Tribe and
Borrower, except that the Requisite Lenders (or, in the case of any Event
------
of Default which arises under a provision of the Loan Documents the
amendment of which requires the consent of all the Lenders under Section
13.2, all of the Lenders) may waive the Event of Default or, without
waiving, determine, upon terms and conditions satisfactory to such Lenders,
to reinstate the Commitment and make further Advances and issue further
Letters of Credit, which waiver or determination shall apply equally to,
and shall be binding upon, all of the Lenders;
(ii) the Issuing Lender may, with the approval of the
Administrative Agent on behalf of the Requisite Lenders, demand immediate
payment by Borrower of an amount equal to the aggregate amount of all
outstanding Letters of Credit; and
(iii) the Requisite Lenders may request the Administrative
Agent to, and the Administrative Agent thereupon shall, terminate the
Commitment and declare all or any part of the unpaid principal of all
Loans, all interest accrued and unpaid thereon and all other amounts
payable under the
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Loan Documents to be forthwith due and payable, whereupon the same
shall become and be forthwith due and payable, without protest,
presentment, notice of dishonor, demand or further notice of any kind,
all of which are expressly waived by Borrower.
(b) Upon the occurrence of any Event of Default described in Section
11.1(n):
(i) the commitment to make Advances and issue Letters of
Credit and all other obligations of the Administrative Agent, the Issuing
Lender and the Lenders and all rights of Borrower and any other Parties
under the Loan Documents shall terminate without notice to or demand upon
Borrower, which are expressly waived by Borrower and the Tribe;
(ii) an amount equal to the aggregate amount available for
drawing under outstanding Letters of Credit shall forthwith become due and
payable to the Issuing Lender without protest, presentment, notice of
dishonor demand or further notice of any kind, all of which are waived by
Borrower and the Tribe to be held by the Issuing Lender as cash collateral
for the Obligations to the Issuing Lender in non-interest bearing accounts
with the Issuing Lender; and;
(iii) the unpaid principal of all Loans, all interest accrued
and unpaid thereon and all other amounts payable under the Loan Documents
shall be forthwith due and payable, without protest, presentment, notice of
dishonor, demand or further notice of any kind, all of which are expressly
waived by Borrower and the Tribe.
(c) Upon the occurrence and during the continuance of any Event of
Default, the Administrative Agent, without notice or demand upon Borrower or the
Tribe, which are expressly waived by Borrower and the Tribe, may proceed in
accordance with applicable Laws (but only with the consent of the Requisite
Lenders) to protect, exercise and enforce their rights and remedies under the
Loan Documents (including the Collateral Documents) against Borrower, the Tribe
and any other Party and such other rights and remedies as are provided by Law or
equity.
(d) The order and manner in which the Lenders' rights and remedies
are to be exercised shall be determined by the Requisite Lenders in their sole
discretion, and all payments received after the occurrence of any Default or
Event of Default by the Administrative Agent and the Lenders, or any of them,
shall be applied first to the costs and expenses (including attorneys' fees and
disbursements payable pursuant to Section 13.3) of the Administrative Agent,
acting as Administrative Agent, and of the Lenders, and thereafter paid pro rata
to the Lenders in the same proportions that the aggregate Obligations owed to
each Lender under the Loan Documents bear to the aggregate Obligations owed
under the Loan Documents to all the Lenders, without priority or preference
among the Lenders. Regardless
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of how each Lender may treat payments for the purpose of its own accounting, for
the purpose of computing the Obligations hereunder and under the other Loan
Documents, payments shall be applied first, to the costs and expenses of the
-----
Administrative Agent, acting as the Administrative Agent, and the Lenders, as
set forth above, second, to the payment of accrued and unpaid interest due under
------
any Loan Documents to and including the date of such application (ratably, and
without duplication, according to the accrued and unpaid interest due under each
of the Loan Documents), and third, to the payment of all other amounts
-----
(including principal and fees) then owing to the Administrative Agent or the
Lenders under the Loan Documents. No application of payments will cure any Event
of Default, or prevent acceleration, or continued acceleration, of amounts
payable under the Loan Documents, or prevent the exercise, or continued
exercise, of rights or remedies of the Lenders hereunder or thereunder or at law
or in equity.
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ARTICLE 13.
THE ADMINISTRATIVE AGENT
------------------------
13.1 Appointment and Authorization. Each Lender hereby irrevocably
-----------------------------
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under the Loan Documents as are delegated
to the Administrative Agent by the terms thereof or are reasonably incidental,
as determined by the Administrative Agent, thereto. This appointment and
authorization is intended solely for the purpose of facilitating the servicing
of the Loans and Letters of Credit and does not constitute appointment of the
Administrative Agent as trustee for any Lender or as representative of any
Lender for any other purpose and, except as specifically set forth in the Loan
------
Documents to the contrary, the Administrative Agent shall take such action and
exercise such powers only in an administrative and ministerial capacity. The
Administrative Agent is the agent of the Lenders only and does not assume any
agency relationship with the Tribe or Borrower, express or implied.
13.2 Business Activities with the Tribe and Borrower. Bank of America
-----------------------------------------------
(and each successor Administrative Agent) has the same rights and powers under
the Loan Documents as any other Lender and may exercise the same as though it
was not the Administrative Agent, and the term "Lender" or "Lenders" includes
Bank of America in its individual capacity. Each Lender (including Bank of
America and each successor Administrative Agent) and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of banking, trust
or other business with the Tribe or Borrower or any of their Affiliates. Bank of
America may engage in these activities in the same manner as the other Lenders
as if it was not the Administrative Agent and without any duty to account
therefor to the Lenders. Bank of America (and each successor Administrative
Agent) need not account to any other Lender for any monies received by it for
reimbursement of its costs and expenses as Administrative Agent hereunder, or
for any monies received by it in its capacity as a Lender hereunder. The
Administrative Agent shall not be deemed to hold a fiduciary, trust or other
special relationship with any Lender and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.
13.3 Proportionate Interest of the Lenders in any Collateral. The
-------------------------------------------------------
Administrative Agent, on behalf of all the Lenders, shall hold in accordance
with the Loan Documents all items of any collateral or interests therein
received or held by the Administrative Agent. Subject to the Administrative
Agent's and the Lenders' rights to reimbursement for their costs and expenses
hereunder (including attorneys' fees and disbursements and other professional
---------
services), each Lender shall have an interest in any collateral or interests
therein in the same proportions that the aggregate Obligations owed such Lender
under the Loan Documents (other than an Approved Swap Agreement) bear to the
aggregate Obligations owed under the Loan Documents to all the Lenders, without
priority or preference among the Lenders. Any obligation owed to a Lender under
an Approved Swap Agreement shall rank pari passu with the Obligations under the
---- -----
Loan Documents up to an amount equal to the Swap Termination Value (as
determined by the
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Administrative Agent) of that Approved Swap Agreement, and shall be subordinate
to the Obligations under other Loan Documents to the extent of any excess over
such amount.
13.4 Lenders' Credit Decisions. Each Lender agrees that it has,
-------------------------
independently and without reliance upon the Administrative Agent, any other
Lender or the directors, officers, agents, employees or attorneys of the
Administrative Agent or of any other Lender, and instead in reliance upon
information supplied to it by or on behalf of the Tribe and Borrower and upon
such other information as it has deemed appropriate, made its own independent
credit analysis and decision to enter into this Agreement. Each Lender also
agrees that it shall, independently and without reliance upon the Administrative
Agent, any other Lender or the directors, officers, agents, employees or
attorneys of the Administrative Agent or of any other Lender, continue to make
its own independent credit analyses and decisions in acting or not acting under
the Loan Documents.
13.5 Action by Administrative Agent.
------------------------------
(a) The Administrative Agent may assume that no Default or Event
of Default has occurred and is continuing, unless the Administrative Agent
has received notice from the Tribe or Borrower stating the nature of the
Default or Event of Default or has received notice from a Lender stating
the nature of the Default or Event of Default and that such Lender
considers the Default or Event of Default to have occurred and to be
continuing.
(b) The Administrative Agent has only those obligations under
the Loan Documents as are expressly set forth therein.
(c) Except for any obligation expressly set forth in the Loan
------
Documents and as long as the Administrative Agent may assume that no Event
of Default has occurred and is continuing, the Administrative Agent may,
but shall not be required to, exercise its discretion to act or not act,
except that the Administrative Agent shall be required to act or not act
------
upon the instructions of the Requisite Lenders (or of all the Lenders, to
the extent required by Section 13.2) and those instructions shall be
binding upon the Administrative Agent and all the Lenders, provided that
--------
the Administrative Agent shall not be required to act or not act if to do
so would be contrary to any Loan Document or to applicable Law or would
result, in the reasonable judgment of the Administrative Agent, in
substantial risk of liability to the Administrative Agent .
(d) If the Administrative Agent has received a notice specified
in clause (a), the Administrative Agent shall give notice thereof to the
Lenders and shall act or not act upon the instructions of the Requisite
Lenders (or of all the Lenders, to the extent required by Section 13.2),
provided that the Administrative Agent shall not be required to act or not
--------
act if to do so would be contrary to any Loan Document or to applicable Law
or would result, in the reasonable judgment of the Administrative Agent, in
substantial risk of liability to the Administrative Agent, and except that
------
if the Requisite Lenders (or all the Lenders, if required under Section
13.2) fail, for five Business Days after the receipt of notice from the
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Administrative Agent, to instruct the Administrative Agent, then the
Administrative Agent, in its sole discretion, may act or not act as it
deems advisable for the protection of the interests of the Lenders, until
such time as it receives such a notice from the Requisite Lenders.
(e) The Administrative Agent shall have no liability to any
Lender for acting as instructed by the Requisite Lenders, or for refraining
from acting, if so instructed by the Requisite Lenders (or, in each case,
all the Lenders, if required under Section 13.2), notwithstanding any other
provision hereof.
13.6 Liability of Administrative Agent. Neither the Administrative
---------------------------------
Agent nor any of its directors, officers, agents, employees or attorneys shall
be liable for any action taken or not taken by them under or in connection with
the Loan Documents, except for their own gross negligence or willful misconduct.
------
Without limitation on the foregoing, the Administrative Agent and its directors,
officers, agents, employees and attorneys:
(a) May treat each Lender identified on Schedule 1.1 as the
owner of its Pro Rata Share until the Administrative Agent receives notice
of the assignment or transfer thereof, in form satisfactory to the
Administrative Agent, signed by the payee, and may treat each Lender as the
owner of that Lender's interest in the Obligations for all purposes of this
Agreement until the Administrative Agent receives notice of the assignment
or transfer thereof, in form satisfactory to the Administrative Agent,
signed by that Lender.
(b) May consult with legal counsel (including in-house legal
---------
counsel), accountants (including in-house accountants) and other
---------
professionals or experts selected by it, or with legal counsel, accountants
or other professionals or experts for the Tribe, Borrower or the Lenders,
and shall not be liable for any action taken or not taken by it in good
faith in accordance with any advice of such legal counsel, accountants or
other professionals or experts.
(c) Shall not be responsible to any Lender for any statement,
warranty or representation made in any of the Loan Documents or in any
notice, certificate, report, request or other statement (written or oral)
given or made in connection with any of the Loan Documents.
(d) Except to the extent expressly set forth in the Loan
------
Documents, shall have no duty to ask or inquire as to the performance or
observance by the Tribe, Borrower or any other Party of any of the terms,
conditions or covenants of any of the Loan Documents or to inspect any
collateral or the Property, books or records of the Tribe or Borrower.
(e) Will not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, effectiveness, sufficiency
or value of any Loan Document, any other instrument or writing furnished
pursuant thereto or in connection therewith, or any collateral.
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(f) Will not incur any liability by acting or not acting in reliance
upon any Loan Document, notice, consent, certificate, statement, request or
other instrument or writing believed by it to be genuine and signed or sent
by the proper party or parties.
(g) Will not incur any liability for any arithmetical error in
computing any amount paid or payable by the Borrower or any Affiliate thereof
or paid or payable to or received or receivable from any Lender under any
Loan Document, including, without limitation, principal, interest, commitment
---------
fees, Advances and other amounts; provided that, promptly upon discovery of
--------
such an error in computation, the Administrative Agent, the Lenders and (to
the extent applicable) Borrower or its Affiliates shall make such adjustments
as are necessary to correct such error and to restore the parties to the
position that they would have occupied had the error not occurred.
13.7 Indemnification. Each Lender shall, ratably in accordance with
---------------
its Pro Rata Share, indemnify and hold the Administrative Agent and its
directors, officers, agents, employees and attorneys harmless against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
(including reasonable attorneys' fees and disbursements) that may be imposed on,
---------
incurred by or asserted against it or them in any way relating to or arising out
of the Loan Documents (other than losses incurred by reason of the failure of
Borrower to pay the indebtedness represented by the Loan Documents) or any
action taken or not taken by it as Administrative Agent thereunder, except such
as result from its own gross negligence or willful misconduct. Without
limitation on the foregoing, each Lender shall reimburse the Administrative
Agent upon demand for that Lender's ratable share of any cost or expense
incurred by the Administrative Agent in connection with the negotiation,
preparation, execution, delivery, amendment, waiver, restructuring,
reorganization (including a bankruptcy reorganization), enforcement or attempted
---------
enforcement of the Loan Documents.
13.8 Successor Administrative Agent. The Administrative Agent may,
------------------------------
and at the request of the Requisite Lenders shall, resign as Administrative
Agent (i) upon 30 days' notice to the Borrower and the Lenders or (ii) if the
Administrative Agent determines that for it to continue as Administrative Agent
would result in a conflict of interest affecting the Administrative Agent, or
would create an unacceptable risk of significant liability of the Administrative
Agent to a third party, or would otherwise be inadvisable under prevailing
standards of banking prudence, at any time, and effective immediately upon
written notice to Borrower and the Lenders. If the Administrative Agent so
resigns, (a) the Requisite Lenders shall appoint a successor Administrative
Agent, who must be from among the Lenders (and reasonably acceptable to Borrower
unless an Event of Default exists), provided that any resigning Administrative
--------
Agent shall be entitled to appoint a successor Administrative Agent from among
the Lenders, subject to acceptance of appointment by that successor
Administrative Agent, if the Requisite Lenders have not appointed a successor
Administrative Agent within 30 days after the date the resigning Administrative
Agent gave notice of resignation; (b) upon a successor's acceptance of
appointment
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as Administrative Agent, the successor will thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the resigning
Administrative Agent or the removed Administrative Agent; and (c) upon the
effectiveness of any resignation, the resigning Administrative Agent thereupon
will be discharged from its duties and obligations thereafter arising under the
Loan Documents other than obligations arising as a result of any action or
inaction of the resigning Administrative Agent prior to the effectiveness of
such resignation. Upon any resignation of Bank of America (or any successor
Administrative Agent) as Administrative Agent, Bank of America (or such
successor) shall be deemed to have concurrently resigned as Issuing Lender with
respect to the issuance of any further Letters of Credit hereunder (including
without limitation the extension of the expiration of any outstanding Letter of
Credit), and the successor Administrative Agent shall (i) be deemed concurrently
appointed as Issuing Lender, and (ii) shall promptly issue Letters of Credit to
replace or support any outstanding Letters of Credit issued by Bank of America.
13.9 Performance of Conditions. For the purpose of determining
-------------------------
fulfillment by the Tribe and Borrower of conditions precedent specified in
Section 10.1 and Section 10.2 only, each Lender shall be deemed to have
consented to, and approved or accepted, or to be satisfied with each document or
other matter sent by the Administrative Agent to such Lender for consent,
approval, acceptance or satisfaction, or required under Article 10 to be
consented to, or approved by or acceptable or satisfactory to, that Lender,
unless an officer of the Administrative Agent who is responsible for the
transactions contemplated by the Loan Documents shall have received written
notice from that Lender prior to the making of the requested Loan or the
issuance of the requested Letter of Credit specifying its objection thereto and
either (i) such objection shall not have been withdrawn by written notice to the
Administrative Agent or (ii) in the case of any condition to the making of a
Loan, that Lender shall not have made available to the Administrative Agent that
Lender's Pro Rata Share of such Loan.
13.10 Collateral Matters.
------------------
(a) The Administrative Agent is authorized by each Lender, without
the necessity of any notice to or further consent from any Lender, and
without the obligation to take any such action, to take any action with
respect to any Collateral or any Collateral Document which may from time to
time be necessary to perfect and maintain perfected the Liens of the
Collateral Documents.
(b) The Lenders irrevocably authorize the Administrative Agent, at
its option and in its discretion, to release any Lien granted to or held by
the Administrative Agent upon any Collateral (i) upon termination of the
Commitment and the payment in full of all Loans and all other Obligations
payable under this Agreement (other than the obligations referenced in
Section 3.18) and under the other Loan Documents; (ii) constituting Property
of Borrower or its Affiliates which is sold, transferred or otherwise
disposed of in connection with any transaction not prohibited by this
Agreement or the Loan Documents; (iii) constituting Property leased to
Borrower under an operating lease which has expired or been
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terminated in a transaction not prohibited by this Agreement or which will
concurrently expire and which has not been and is not intended by the
Borrower to be, renewed or extended; (iv) consisting of an instrument, if
the Indebtedness evidenced thereby has been paid in full; or (v) if approved
or consented to by those of the Lenders required by Section 13.2. Upon
request by the Administrative Agent, the Lenders will confirm in writing the
Administrative Agent's authority to release particular types or items of
Collateral pursuant to this Section.
13.11 No Obligations of Borrower or the Tribe. Nothing contained in
---------------------------------------
this Article 12 shall be deemed to impose upon Borrower or the Tribe any
obligation in respect of the due and punctual performance by the Administrative
Agent of its obligations to the Lenders under any provision of this Agreement,
and the Tribe and Borrower shall have no liability to the Administrative Agent
or any of the Lenders in respect of any failure by the Administrative Agent or
any Lender to perform any of its obligations to the Administrative Agent or the
Lenders under this Agreement.
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ARTICLE 14.
MISCELLANEOUS
-------------
14.1 Cumulative Remedies; No Waiver. The rights, powers, privileges and
------------------------------
remedies of the Creditors provided herein and in the other Loan Documents are
cumulative and not exclusive of any right, power, privilege or remedy provided
by Law or equity. No failure or delay on the part of any Creditor in exercising
any right, power, privilege or remedy may be, or may be deemed to be, a waiver
thereof; nor may any single or partial exercise of any right, power, privilege
or remedy preclude any other or further exercise of the same or any other right,
power, privilege or remedy. The terms and conditions of Article 10 hereof are
inserted for the sole benefit of the Creditors and may be waived in whole or in
part, with or without terms or conditions, in respect of any Loan or Letter of
Credit without prejudicing the Creditors' right to assert them in whole or in
part in respect of any other Loan or Letter of Credit.
14.2 Amendments; Consents. No amendment, modification, supplement,
--------------------
extension, termination or waiver of any provision of this Agreement or any other
Loan Document, no approval or consent thereunder, and no consent to any
departure by Borrower or any other Party therefrom, may in any event be
effective unless in writing signed by the Administrative Agent with the approval
in writing of the Requisite Lenders, and then only in the specific instance and
for the specific purpose given; and, without the approval in writing of all the
Lenders, no amendment, modification, supplement, termination, waiver or consent
may be effective:
(a) To (i) amend or modify the principal of, or the amount of
principal, principal repayments on, any Obligation, (ii) increase the amount
of the Commitment except as contemplated by Section 2.7, or (iii) decrease
the rate of interest or any commitment fee payable to any Lender, or any
other fee or amount payable to any Lender under the Loan Documents;
(b) Except as otherwise expressly provided for herein, to postpone
any date fixed for any payment of principal of, prepayment of principal of
or any installment of interest on, any Obligation or any installment of any
commitment fee or other credit fee payable to any Lender, to extend the
Maturity Date or any Reduction Date, or to release any Collateral (except as
specifically provided for in any Loan Document);
(c) To amend, modify or waive the provisions of the definitions of
"Available Cash Flow" or "Requisite Lenders" or amend or modify Article 9,
------------------- -----------------
Sections 11.1(o), 11.1(r), 11.1(t), and 11.1(u) this Section, or Sections
13.18, 13.24, 13.26 or 13.27;
(d) To amend or modify any provision of this Agreement in a manner
which materially and adversely affects the Administrative Agent or the
Issuing Lender without their written consent;
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(e) To amend or modify any provision of this Agreement that
expressly requires the consent or approval of all the Lenders.
Any amendment, modification, supplement, termination, waiver or consent pursuant
to this Section 13.2 shall apply equally to, and shall be binding upon, all of
the Creditors.
14.3 Costs, Expenses and Taxes. Borrower shall pay on demand the
-------------------------
reasonable costs and expenses of (a) the Administrative Agent and the Lead
Arranger in connection with the negotiation, preparation, syndication, closing,
execution and delivery of the Loan Documents, including without limitation, the
reasonable attorneys' fees and disbursements of Sheppard, Mullin, Richter &
Hampton LLP and Dorsey & Whitney, LLP and the allocated cost of any internal
counsel to the Administrative Agent, (b) the Construction Consultant in
connection with the monitoring services provided by the Construction Consultant
(all as more fully set out in a letter agreement between the Administrative
Agent and the Borrower), (c) the Administrative Agent, in connection with each
amendment executed when no Default or Event of Default exists, and (d) each of
the Creditors in connection with each refinancing, restructuring, reorganization
(including a bankruptcy reorganization) and enforcement or attempted enforcement
---------
of the Loan Documents, and any matter related thereto, in each case including,
---------
filing fees, recording fees, title insurance fees, appraisal fees, search fees
and other out-of-pocket expenses and the reasonable fees and out-of-pocket
expenses of any legal counsel (including the allocated fees and all
disbursements and other expenses of any internal legal counsel), independent
public accountants and other outside experts retained by the Administrative
Agent or any Lender, and including, without limitation, any costs, expenses or
fees incurred or suffered by the Creditors in connection with or during the
course of any bankruptcy or insolvency proceedings of Borrower. Borrower shall
pay any and all documentary and other taxes (other than income or gross receipts
taxes generally applicable to banks) and all costs, expenses, fees and charges
payable or determined to be payable in connection with the filing or recording
of this Agreement, any other Loan Document or any other instrument or writing to
be delivered hereunder or thereunder, or in connection with any transaction
pursuant hereto or thereto, and shall reimburse, hold harmless and indemnify the
Administrative Agent and the Lenders from and against any and all loss,
liability or legal or other expense with respect to or resulting from any delay
in paying or failure to pay any such tax, cost, expense, fee or charge or that
any of them may suffer or incur by reason of the failure of any Party to perform
any of its Obligations. Any amount payable to the Administrative Agent or any
Lender under this Section shall bear interest at the Default Rate.
14.4 Nature of the Lenders' Obligations. The obligations of the Lenders
----------------------------------
hereunder are several and not joint or joint and several. Nothing contained in
this Agreement or any other Loan Document and no action taken by the
Administrative Agent or the Lenders or any of them pursuant hereto or thereto
may, or may be deemed to, make the Lenders a partnership, an association, a
joint venture or other entity, either among themselves or with the Borrower or
any Affiliate of the Borrower. Each Lender's obligation to make any Advance
pursuant hereto is several and not joint or joint and several. A default by any
Lender will not increase the percentage of the Commitment attributable to any
other Lender. Any Lender not in default may, if it desires,
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assume in such proportion as the nondefaulting Lenders agree the obligations of
any Lender in default, but is not obligated to do so.
14.5 Survival of Representations and Warranties. All representations
------------------------------------------
and warranties contained herein or in any other Loan Document, or in any
certificate or other writing delivered by or on behalf of any one or more of the
Parties to any Loan Document, will survive the making of the Loans and the
issuance of Letters of Credit hereunder and the execution and delivery of the
Loan Documents, and have been or will be relied upon by the Administrative Agent
and each Lender, notwithstanding any investigation made by the Administrative
Agent or any Lender or on their behalf.
14.6 Notices. Except as otherwise expressly provided in the Loan
-------
Documents (a) all notices, requests, demands, directions and other
communications provided for hereunder or under any other Loan Document must be
in writing and must be mailed, telegraphed, telecopied, delivered or sent by
recognized overnight courier service, to the appropriate party at the address
set forth on the signature pages of this Agreement or other applicable Loan
Document or, as to any party to any Loan Document, at any other address as may
be designated by it in a written notice sent to all other parties to such Loan
Document in accordance with this Section; and (b) any notice, request, demand,
direction or other communication given by telecopier, must be confirmed within
48 hours by letter mailed or delivered to the appropriate party at its
respective address. Except as otherwise expressly provided in any Loan Document,
if any notice, request, demand, direction or other communication required or
permitted by any Loan Document is given by mail it will be effective on the
earlier of receipt or the third Business Day after deposit in the United States
mail with first class or airmail postage prepaid; if given by telegraph or
cable, when delivered to the telegraph company with charges prepaid; if given by
telex or telecopier, when sent; or if given by personal delivery, when
delivered. Notices given by the Borrower under Articles 2 and 3 shall be deemed
given on actual receipt by the Administrative Agent.
14.7 Execution of Loan Documents. Unless the Administrative Agent
---------------------------
otherwise specifies with respect to any Loan Document, this Agreement and any
other Loan Document may be executed in any number of counterparts and any party
hereto or thereto may execute any counterpart, each of which when executed and
delivered will be deemed to be an original and all of which counterparts of this
Agreement or any other Loan Document, as the case may be, when taken together
will be deemed to be but one and the same instrument. The execution of this
Agreement or any other Loan Document by any party hereto or thereto will not
become effective until counterparts hereof or thereof, as the case may be, have
been executed by all the parties hereto or thereto.
14.8 Binding Effect; Assignment.
--------------------------
(a) This Agreement and the other Loan Documents shall be binding
upon and shall inure to the benefit of the parties hereto and thereto and
their respective successors and assigns, except that Borrower and its
Affiliates may not assign their rights hereunder or
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thereunder or any interest herein or therein without the prior written
consent of all the Lenders. Any assignment by the Borrower or its Affiliates
without the prior written consent of the Lenders shall be void, provided
that no Person other than the Lenders shall have any rights under this
sentence. Each Lender represents that it is not acquiring any Note with a
view to the distribution thereof within the meaning of the Securities Act of
1933, as amended (subject to any requirement that disposition of such Notes
must be within the control of such Lender). Any Lender may at any time
pledge its Note, if any, or any other instrument evidencing its rights as a
Lender under this Agreement to a Federal Reserve Bank, but no such pledge
shall release that Lender from its obligations hereunder or grant to such
Federal Reserve Bank the rights of a Lender hereunder absent foreclosure of
such pledge.
(b) From time to time following the Closing Date, each Lender may
assign to one or more Eligible Assignees all or any portion of its Pro Rata
Share; provided that (i) such Eligible Assignee, if not then a Lender or an
Affiliate of the assigning Lender, shall be approved by each of the
Administrative Agent and Borrower (neither of which approvals shall be
unreasonably withheld or delayed), (ii) such assignment shall be evidenced
by an Assignment Agreement, a copy of which shall be furnished to the
Administrative Agent, (iii) except in the case of an assignment to an
Affiliate of the assigning Lender or to another Lender of the entire
remaining Commitment of the assigning Lender, the assignment shall be of a
Pro Rata Share of not less than $10,000,000, and (iv) the effective date of
any such assignment shall be as specified in the Assignment Agreement, but
not earlier than the date which is five Business Days after the date the
Administrative Agent has received the Assignment Agreement unless the
Administrative Agent otherwise agrees. Upon the effective date of such
Assignment Agreement, the Eligible Assignee named therein shall be a Lender
for all purposes of this Agreement, with the Pro Rata Share set forth
therein and, to the extent of such Pro Rata Share, the assigning Lender
shall be released from its further obligations under this Agreement.
Borrower agrees that it shall execute and deliver (against delivery by the
assigning Lender to Borrower of any Note in its possession) to such assignee
Lender, a Note evidencing that assignee Lender's Pro Rata Share, and to the
assigning Lender, a Note evidencing the remaining balance Pro Rata Share
retained by the assigning Lender (in each case, if Notes are requested by
such Assignee under Section 2.1).
(c) By executing and delivering an Assignment Agreement, the
Eligible Assignee thereunder acknowledges and agrees that: (i) other than
the representation and warranty that it is the legal and beneficial owner of
the Pro Rata Share being assigned thereby free and clear of any adverse
claim, the assigning Lender has made no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the
execution, legality, validity, enforceability, genuineness or sufficiency of
this Agreement or any other Loan Document; (ii) the assigning Lender has
made no representation or warranty and assumes no responsibility with
respect to the financial condition of Borrower or the performance by
Borrower of the Obligations; (iii) it has received a copy of this Agreement,
together with copies of the most recent financial statements delivered
pursuant to Section 8.1 and such other
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documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment Agreement; (iv)
it will, independently and without reliance upon the Administrative Agent or
any Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or not taking action under this Agreement; (v) it appoints and authorizes
the Administrative Agent to take such action and to exercise such powers
under this Agreement as are delegated to the Administrative Agent by this
Agreement; and (vi) it will perform in accordance with their terms all of
the obligations which by the terms of this Agreement are required to be
performed by it as a Lender.
(d) The Administrative Agent shall maintain at the Administrative
Agent's Office a copy of each Assignment Agreement delivered to it. After
receipt of a completed Assignment Agreement executed by any Lender and an
Eligible Assignee, and receipt of an assignment fee of $3,500 from such
Eligible Assignee, Administrative Agent shall, promptly following the
effective date thereof, provide notice thereof to Borrower and the Lenders.
(e) Each Lender may grant participations from time to time in a
portion of its Pro Rata Share to one or more banks or other financial
institutions (including another Lender); provided, however, that (i) such
Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the participating banks or other
financial institutions shall not be a Lender hereunder for any purpose
except, if the participation agreement so provides, for the purposes of
Sections 3.7, 3.8, 13.11 and 13.15, (iv) Borrower and the other Creditors
shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement, (v) the
participation interest shall be expressed as a percentage of the granting
Lender's Pro Rata Share as it then exists and shall not restrict an increase
in the Commitment, or in the granting Lender's Pro Rata Share, so long as
the amount of the participation interest is not affected thereby, and (vi)
the consent of the holder of such participation interest shall not be
required for amendments or waivers of provisions of the Loan Documents other
-----
than those which (A) extend the Maturity Date, any Reduction Date or any
----
date upon which any payment of money is due to the Lenders, (B) reduce the
rate of interest on the Loans, any fee or any other monetary amount payable
to the Lenders, (C) reduce the amount of any installment of principal due
with respect to the Loans, or (D) release any material portion of the
Collateral.
(f) Any Lender (a "Granting Lender") may grant to a special purpose
funding vehicle (an "SPC") of such Granting Lender, identified as such in
writing from time to time by the Granting Lender to the Administrative Agent
and the Borrower, the option to provide all or any part of any Advance that
such Granting Lender would otherwise be obligated to make pursuant to
Article 2, provided that (i) nothing herein shall constitute a commitment to
make any Advance by any SPC, (ii) if an SPC elects not to exercise such
option or otherwise fails to provide all or any part of such Advance, the
Granting Lender shall be obligated to make such Advance pursuant to the
terms hereof, and (iii) the rights of any such SPC shall be derivative of
the rights of the Granting Lender. Each SPC shall be
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conclusively presumed to have made arrangements with its Granting Lender for
the exercise of voting and other rights hereunder in a manner which is
acceptable to the SPC, and the Administrative Agent, the other Creditors and
each other Party shall be entitled to rely upon and deal solely with the
Granting Lender with respect to Advances made by or through its SPC. The
making of an Advance by an SPC hereunder shall utilize the Pro Rata Share of
the Commitment of the Granting Lender to the same extent, and as if, such
Advance were made by the Granting Lender. Each party hereto hereby agrees
that no SPC shall be liable for any indemnity or similar payment obligation
under this Agreement (all liability for which shall remain with the related
Granting Lender). In furtherance of the foregoing, each party hereto hereby
agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in
full of all outstanding senior indebtedness of any SPC, it will not
institute against, or join any other person in instituting against, such SPC
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or similar proceedings under the laws of the United States or
any State thereof, provided that the Granting Lender for each SPC hereby
-------- ----
agrees to indemnify, save, and hold harmless each other party hereto for any
loss, cost, damage and expense arising out of their inability to institute
any such proceeding against its SPC. In addition, notwithstanding anything
to the contrary contained in this Section, any SPC may (i) with notice to,
but without the prior written consent of, the Borrower or the Administrative
Agent and without paying any processing fee therefor, assign all or a
portion of its interests in any Advance to its Granting Lender or to any
financial institutions providing liquidity and/or credit facilities to or
for the account of such SPC to fund the Advances made by such SPC or to
support the securities (if any) issued by such SPC to fund such Loans (but
nothing contained herein shall be construed in derogation of the obligation
of the Granting Lender to make Advances hereunder), provided that neither
-------- ----
the consent of the SPC or of any such assignee shall be required for
amendments or waivers of provisions of the Loan Documents except for those
amendments or waivers for which the consent of participants is required
under Section 13.8(e)(vi), and (ii) disclose on a confidential basis any
non-public information relating to its Loans to any rating agency,
commercial paper dealer or provider of a surety, guarantee or credit or
liquidity enhancement to such SPC.
14.9 Lien on Deposits and Property in Possession of any Lender. As
---------------------------------------------------------
security for the prompt payment and performance of all Obligations, Borrower
hereby grants to each Creditor, as the representative of all other Creditors, a
security interest in and a right of off-set with respect to, all its right,
title, and interest in and to any and all deposit accounts now or hereafter
maintained with that Creditor in and to any and all of its Property and the
proceeds thereof now or hereafter in the possession of that Creditor. If an
Event of Default has occurred and is continuing, any Lender (but only with the
consent of the Requisite Lenders) may, to the extent permitted by applicable
Laws, exercise its rights under Article 9 of the Uniform Commercial Code and
other applicable Laws (including its right of off-set) and apply any funds in
any deposit account maintained with it by Borrower and any Property of Borrower
in its possession against the Obligations.
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14.10 Sharing of Setoffs. Each Lender severally agrees that if it,
------------------
through the exercise of any right of setoff, banker's lien or counterclaim
against a Party, or otherwise, receives payment of the Obligations held by it
that is ratably more than any other Lender, through any means, receives in
payment of the Obligations held by that Lender, then: (a) The Lender exercising
the right of setoff, banker's lien or counterclaim or otherwise receiving such
payment shall notify the Administrative Agent and thereafter shall purchase, and
shall be deemed to have simultaneously purchased, from the other Lender a
participation in the Obligations held by the other Lender and shall pay to the
other Lender a purchase price in an amount so that the share of the Obligations
held by each Lender after the exercise of the right of setoff, banker's lien or
counterclaim or receipt of payment shall be in the same proportion that existed
prior to the exercise of the right of setoff, banker's lien or counterclaim or
receipt of payment; and (b) such other adjustments and purchases of
participations shall be made from time to time as shall be equitable to ensure
that all of the Lenders share any payment obtained in respect of the Obligations
ratably in accordance with each Lender's share of the Obligations immediately
prior to, and without taking into account, the payment; provided that, if all or
--------
any portion of a disproportionate payment obtained as a result of the exercise
of the right of setoff, banker's lien, counterclaim or otherwise is thereafter
recovered from the purchasing Lender by Borrower or any Person claiming through
or succeeding to the rights of Borrower, the purchase of a participation shall
be rescinded and the purchase price thereof shall be restored to the extent of
the recovery. Each Lender that purchases a participation in the Obligations
pursuant to this Section shall from and after the purchase have the right to
give all notices, requests, demands, directions and other communications under
this Agreement with respect to the portion of the Obligations purchased to the
same extent as though the purchasing Lender were the original owner of the
Obligations purchased. Each Party expressly consents to the foregoing
arrangements and agrees that any Lender holding a participation in an Obligation
so purchased may exercise any and all rights of setoff, banker's lien or
counterclaim with respect to the participation as fully as if the Lender were
the original owner of the Obligation purchased; provided, however, that each
--------
Lender agrees that it shall not exercise any right of setoff, banker's lien or
counterclaim with respect to the Obligations without first obtaining the consent
of the Requisite Lenders.
14.11 Indemnity by Borrower. Borrower agrees to indemnify, save and
---------------------
hold harmless each Creditor and their respective Affiliates, directors,
officers, agents, attorneys and employees (collectively the "Indemnitees") from
-----------
and against: (a) any and all claims, demands, actions or causes of action that
are asserted against any Indemnitee by any third party, if the claim, demand,
action or cause of action directly or indirectly relates to a claim, demand,
action or cause of action that such Person asserts or may assert against
Borrower (or, to the extent related to the Loan Documents or the transactions
contemplated thereby, any Affiliate of Borrower or any officer of Borrower); (b)
any and all claims, demands, actions or causes of action by a third party if the
claim, demand, action or cause of action arises out of or relates to the
Commitment, the use or contemplated use of proceeds of any Loan or Letter of
Credit, the relationship of Borrower and the Lenders under this Agreement or any
transaction contemplated by the Loan Documents; (c) any administrative or
investigative proceeding by any Governmental Agency arising out of or related to
a claim, demand, action or cause of action described in clauses (a) or (b)
above; and (d) any and
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all liabilities, losses, costs or expenses (including reasonable attorneys' fees
---------
and disbursements and other professional services) that any Indemnitee suffers
or incurs as a result of the assertion of any foregoing claim, demand, action or
cause of action; provided that no Indemnitee shall be entitled to
--------
indemnification for any loss caused by its own gross negligence or willful
misconduct. If any claim, demand, action or cause of action is asserted against
any Indemnitee, such Indemnitee shall promptly notify Borrower, but the failure
to so promptly notify Borrower shall not affect Borrower's obligations under
this Section unless Borrower is materially prejudiced thereby (and then only to
the extent prejudiced). Each Indemnitee may contest the validity, applicability
and amount of such claim, demand, action or cause of action with counsel
selected by such Indemnitee. Each Indemnitee is authorized to employ counsel in
enforcing its rights hereunder and in defending any claim, demand, action or
cause of action covered by this Section; provided that each Indemnitee shall
endeavor in connection with any matter covered by this Section which also
involves other Indemnitees, to use reasonable efforts to avoid unnecessary
duplication of effort by counsel for all Indemnitees. Any obligation or
liability of Borrower to any Indemnitee under this Section shall survive the
expiration or termination of this Agreement and the repayment of all Loans and
the payment and performance of all other Obligations (other than the Obligations
referenced in Section 3.18) owed to the Lenders; provided, however, that such
--------
obligations or liabilities shall not, from and after the date on which the
Obligations are fully paid and the Commitment terminated, be deemed Obligations
for any purpose under the Loan Documents.
14.12 Nonliability of the Lenders. Each of the Tribe and Borrower
---------------------------
acknowledges and agrees that:
(a) Any inspections of any Property of Borrower made by or through
the Creditors are for purposes of administration of the Loan Documents only
and neither the Tribe nor Borrower is entitled to rely upon the same;
(b) By accepting or approving anything required to be observed,
performed, fulfilled or given to the Creditors pursuant to the Loan
Documents, none of the Creditors shall be deemed to have warranted or
represented the sufficiency, legality, effectiveness or legal effect of the
same, or of any term, provision or condition thereof, and such acceptance or
approval thereof shall not constitute a warranty or representation to anyone
with respect thereto by any Creditor;
(c) The relationship between the Borrower and the Creditors is, and
shall at all times remain, solely that of a borrowers and lenders; no
Creditor shall under any circumstance be deemed to be in a relationship of
confidence or trust or a fiduciary relationship with the Tribe or with
Borrower or their Affiliates, or to owe any fiduciary duty to the Tribe,
Borrower, or their Affiliates; no Creditor undertakes or assumes any
responsibility or duty to the Tribe, Borrower or their Affiliates to select,
review, inspect, supervise, pass judgment upon or inform the Tribe, Borrower
or their Affiliates of any matter in connection with their Property or the
operations of the Tribe, Borrower or its Affiliates; the Tribe, Borrower and
its Affiliates shall rely entirely upon their own judgment with respect to
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such matters; and any review, inspection, supervision, exercise of judgment
or supply of information undertaken or assumed by the Creditors in
connection with such matters is solely for the protection of the Creditors
and neither the Tribe, Borrower nor any other Person is entitled to rely
thereon; and
(d) The Creditors shall not be responsible or liable to any Person
for any loss, damage, liability or claim of any kind relating to injury or
death to Persons or damage to Property or other loss, damage, liability or
claim caused by the actions, inaction or negligence of the Tribe, Borrower
and its Affiliates and Borrower hereby indemnifies and holds the Creditors
harmless from any such loss, damage, liability or claim.
14.13 No Third Parties Benefited. This Agreement is made for the
--------------------------
purpose of defining and setting forth certain obligations, rights and duties of
Borrower, the Tribe and the Creditors in connection with the Loans and Letters
of Credit, and is made for the sole benefit of the Tribe, Borrower, the
Creditors, and the Creditors' successors and assigns. Except as provided in
------
Sections 3.7, 3.8, 13.8, 13.11, 13.15 and 13.28 no other Person shall have any
rights of any nature hereunder or by reason hereof.
14.14 Confidentiality. Each Creditor agrees to hold any confidential
---------------
information that it may receive from the Tribe or Borrower pursuant to this
Agreement in confidence, except for disclosure (a) to other Lenders, their
------
officers, directors, employees and agents (but, in the case of agents, only
subject to an appropriate confidentiality agreement); (b) to legal counsel,
accountants and other professional advisors to the Tribe or Borrower or any
Lender; (c) to regulatory officials having jurisdiction over that Lender; (d) as
required by Law or legal process or in connection with any legal proceeding to
which that Creditor, the Tribe or Borrower are adverse parties; (e) to another
financial institution in connection with a disposition or proposed disposition
to that financial institution of all or part of that Lender's interests
hereunder or a participation interest in its Pro Rata Share (or to any SPC of
that Lender in accordance with the last sentence of Section 13.8); (f) to
prospective purchasers of any Collateral in connection with any disposition
thereof (but then only subject to an appropriate confidentiality agreement); or
(g) if an Event of Default has occurred and is continuing, to the extent that
any Creditor determines such disclosure to be necessary or appropriate in the
enforcement or for the protection of the rights and remedies under the Loan
Documents. For purposes of the foregoing, "confidential information" shall mean
all information respecting the Tribe or Borrower delivered to the Lenders marked
"Confidential" or in another conspicuous manner which denotes its
confidentiality, other than (i) information previously filed with any
----------
Governmental Agency and available to the public, (ii) information previously
published in any public medium from a source other than, directly or indirectly,
that Lender, and (iii) information previously disclosed by the Tribe or Borrower
to any Person not associated with the Tribe or Borrower without a written
confidentiality agreement. Nothing in this Section shall be construed to create
or give rise to any fiduciary duty on the part of any Creditor to the Tribe or
to Borrower.
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14.15 Hazardous Materials Indemnity. Borrower hereby agrees to
-----------------------------
indemnify, hold harmless and defend (by counsel reasonably satisfactory to the
Administrative Agent) each of the Creditors and their respective directors,
officers, employees, agents, successors and assigns from and against any and all
claims, losses, damages, liabilities, fines, penalties, charges, administrative
and judicial proceedings and orders, judgments, remedial action requirements,
enforcement actions of any kind, and all costs and expenses incurred in
connection therewith (including but not limited to reasonable attorneys' fees
and expenses), arising directly or indirectly, in whole or in part, out of (i)
the presence on or under the Real Property of any Hazardous Materials, or any
releases or discharges of any Hazardous Materials on, under or from the Real
Property and (ii) any activity carried on or undertaken on or off the Real
Property by Borrower or any of its predecessors in title (including the Tribe),
whether prior to or during the term of this Agreement, and whether by Borrower
or any predecessor in title or any employees, agents, contractors or
subcontractors of Borrower or any predecessor in title, or any third persons at
any time occupying or present on the Real Property, in connection with the
handling, treatment, removal, storage, decontamination, clean-up, transport or
disposal of any Hazardous Materials at any time located or present on or under
the Real Property. The foregoing indemnity shall further apply to any residual
contamination on or under the Real Property, or affecting any natural resources,
and to any contamination of any property or natural resources arising in
connection with the generation, use, handling, storage, transport or disposal of
any such Hazardous Materials, and irrespective of whether any of such activities
were or will be undertaken in accordance with applicable Laws, but the foregoing
indemnity shall not apply to (i) Hazardous Materials on the Real Property, the
presence of which is caused by that Creditor or (ii) activities carried on or
undertaken by the Creditors, in each case subsequent to its or their entry into
the Real Property pursuant to the Leasehold Mortgage (but only to the extent
that the same are not attributable to the Tribe or the Borrower).
14.16 Further Assurances. The Tribe or Borrower shall, at their sole
------------------
expense and without expense to the Creditors do, execute and deliver such
further acts and documents as any Lender or the Administrative Agent from time
to time reasonably requires for the assuring and confirming unto the Creditors
of the rights hereby created or intended now or hereafter so to be, or for
carrying out the intention or facilitating the performance of the terms of any
Loan Document.
14.17 Integration. This Agreement, together with the other Loan
-----------
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and supersedes all prior agreements, written or oral, on
the subject matter hereof. In the event of any conflict between the provisions
of this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control and govern; provided that the inclusion of supplemental
--------
rights or remedies in favor of the Creditors in any other Loan Document shall
not be deemed a conflict with this Agreement. Each Loan Document was drafted
with the joint participation of the respective parties thereto and shall be
construed neither against nor in favor of any party, but rather in accordance
with the fair meaning thereof.
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14.18 Governing Law. Except to the extent otherwise expressly provided
------------- ------
therein, each Loan Document shall be governed by, and construed and enforced in
accordance with, the Laws of Connecticut, without regard to the conflicts of law
provisions of the Laws of Connecticut, provided however, that if and only to the
-------- -------
extent that any security interest granted to the Administrative Agent for the
benefit of the Lenders pursuant to this Agreement or any other Loan Document
shall be deemed exempt from the provisions of Article 9 of the Uniform
Commercial Code of the State of Connecticut, C.G.S. (S)42a-9-101, et seq., by
-------
virtue of C.G.S. (S)42a-9-104(e), then such security interest shall be governed
by the corresponding provisions of Article 9 of Tribe's Uniform Commercial Code,
as adopted by the UCC Ordinance. Borrower and each other party hereto each
hereby consents to the application of Connecticut civil law to the construction,
interpretation and enforcement of this Agreement and the other Loan Documents,
and to the application of Connecticut civil law to the procedural aspects of any
suit, action or proceeding relating thereto, including but not limited to legal
process, execution of judgments and other legal remedies, except for any
procedural matters governed by or relating to the conduct of arbitration under
Section 13.24.
14.19 Severability of Provisions. Any provision in any Loan Document
--------------------------
that is held to be inoperative, unenforceable or invalid as to any party or in
any jurisdiction shall, as to that party or jurisdiction, be inoperative,
unenforceable or invalid without affecting the remaining provisions or the
operation, enforceability or validity of that provision as to any other party or
in any other jurisdiction, and to this end the provisions of all Loan Documents
are declared to be severable.
14.20 Independent Covenants. Each covenant in Articles 6, 7, 8 and 9 is
---------------------
independent of the other covenants in those Articles; the breach of any such
covenant shall not be excused by the fact that the circumstances underlying such
breach would be permitted by another such covenant.
14.21 Headings. Article and Section headings in this Agreement and the
--------
other Loan Documents are included for convenience of reference only and are not
part of this Agreement or the other Loan Documents for any other purpose.
14.22 Time of the Essence. Time is of the essence of the Loan
-------------------
Documents.
14.23 Tax Withholding Exemption Certificates. On or before the Closing
--------------------------------------
Date, each Lender which is organized outside the United States of America shall
deliver to Borrower a properly completed and duly executed Internal Revenue
Service Form 4224 or Form 1001 and any other certificate or statement required
by applicable Laws to establish that payments due to such Lender under the Loan
Documents are (a) not subject to withholding under the Code because such
payments are effectively connected with the conduct of a trade or business in
the United States of America or (b) totally exempt from United States tax under
the provisions of an applicable tax treaty.
14.24 Arbitration Reference.
---------------------
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(a) Mandatory Arbitration. At the option of the Administrative
---------------------
Agent (exercised in accordance with consent of the Requisite Lenders),
Borrower or (to the extent it is a party to any such controversy or claim),
the Tribe, any controversy or claim between or among the parties arising out
of or relating to this Agreement or any agreements or instruments relating
hereto or delivered in connection herewith and any claim based on or arising
from an alleged tort, shall be determined by arbitration. The arbitration
shall be conducted in accordance with the United States Arbitration Act
(Title 9, U.S. Code), notwithstanding any choice of law provision in this
Agreement, and under the Commercial Rules of the American Arbitration
Association ("AAA"). The arbitrators shall give effect to statutes of
limitation in determining any claim. Any controversy concerning whether an
issue is arbitrable shall be determined by the arbitrators. Judgment upon
the arbitration award may be entered in any court having jurisdiction. The
institution and maintenance of an action for judicial relief or pursuit of a
provisional or ancillary remedy shall not constitute a waiver of the right
of any party, including the plaintiff, to submit the controversy or claim to
arbitration if any other party contests such action for judicial relief.
(b) Provisional Remedies, Self-Help and Foreclosure. No provision
-----------------------------------------------
of this section shall limit the right of any party to this Agreement to
exercise self-help remedies such as setoff, to foreclose against or sell any
real or personal property collateral or security or to obtain provisional or
ancillary remedies from a court of competent jurisdiction before, after, or
during the pendency of any arbitration or other proceeding. The exercise of
a remedy does not waive the right of either party to resort to arbitration
or reference. At the Requisite Lenders' option, foreclosure under a deed of
trust or mortgage may be accomplished either by exercise of power of sale
under the deed of trust or mortgage or by judicial foreclosure.
(c) Limitation. This Section shall not be construed to require
----------
arbitration by the Creditors of any disputes which now exist or hereafter
arise amongst themselves which do not involve the Tribe or Borrower and are
not related to this Agreement and the Loan Documents.
(d) Specific Enforcement Representation. Each party to this
-----------------------------------
Agreement severally represents and warrants to the other parties that this
Section 13.24 is specifically enforceable against such party by the other
parties.
14.25 PURPORTED ORAL AMENDMENTS. THE TRIBE, THE BORROWER AND THE
-------------------------
CREDITORS EXPRESSLY ACKNOWLEDGE THAT THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
MAY ONLY BE AMENDED OR MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR
SUPPLEMENTED, BY AN INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION 13.2. EACH
OF THE TRIBE AND BORROWER AGREES THAT IT WILL NOT RELY ON ANY COURSE OF DEALING,
COURSE OF PERFORMANCE, OR ORAL OR WRITTEN STATEMENTS BY ANY REPRESENTATIVE OF
ANY CREDITOR THAT DOES NOT COMPLY WITH SECTION 13.2 TO
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EFFECT AN AMENDMENT, MODIFICATION, WAIVER OR SUPPLEMENT TO THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS.
14.26 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT
--------------------------------
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTY HERETO OR ANY OF THEM WITH
RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
14.27 WAIVER OF SOVEREIGN IMMUNITY; CONSENT TO JURISDICTION.
-----------------------------------------------------
(A) THE TRIBE AND THE BORROWER EACH HEREBY EXPRESSLY AND IRREVOCABLY
WAIVE THE SOVEREIGN IMMUNITY OF THE MOHEGAN TRIBAL GAMING AUTHORITY (AND ANY
DEFENSE BASED THEREON) FROM ANY SUIT, ACTION OR PROCEEDING OR FROM ANY LEGAL
PROCESS (WHETHER THROUGH SERVICE OF NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION, EXECUTION, EXERCISE OF CONTEMPT POWERS, OR
OTHERWISE) IN ANY FORUM, WITH RESPECT TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, PROVIDED
--------
THAT (1) THE WAIVER CONTAINED IN THIS CLAUSE (A) IS EXPRESSLY LIMITED TO
----
ACTIONS AGAINST THE BORROWER AND (2) ANY RECOVERY UPON ANY JUDGMENT RESULTING
THEREFROM SHALL BE LIMITED TO RECOVERY AGAINST THE ASSETS AND REVENUES OF THE
BORROWER.
(B) THE TRIBE HEREBY EXPRESSLY AND IRREVOCABLY WAIVES ITS OWN SOVEREIGN
IMMUNITY (APPLICABLE TO ITSELF AS AN INDIAN TRIBAL NATION) (AND ANY DEFENSE
BASED THEREON) FROM ANY SUIT, ACTION OR PROCEEDING OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OF NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT
IN AID OF EXECUTION, EXECUTION, EXERCISE OF CONTEMPT POWERS, OR OTHERWISE)
WITH RESPECT TO THE REPRESENTATIONS AND WARRANTIES OF THE TRIBE SET FORTH IN
ARTICLE 4, THE COVENANTS OF THE TRIBE SET FORTH IN ARTICLE 9, AND EACH
PROVISION OF SECTION 11.1 WHICH RELATES TO AN EVENT OF DEFAULT CAUSED BY THE
TRIBE'S BREACH OF ANY SUCH
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REPRESENTATION, WARRANTY OR COVENANT, IT BEING EXPRESSLY UNDERSTOOD THAT (1)
THE WAIVERS AND CONSENTS CONTAINED IN THIS CLAUSE (B) ARE NOT LIMITED TO
ACTIONS AGAINST THE BORROWER, (2) ANY ACTION DESCRIBED IN THIS CLAUSE (B) MAY
BE BROUGHT AGAINST THE TRIBE, AND (3) ANY RECOVERY UPON ANY JUDGMENT
RESULTING FROM ANY SUCH ACTION MAY BE HAD AGAINST THE ASSETS AND REVENUES OF
THE TRIBE IN A MANNER CONSISTENT WITH SECTION 13.28.
(C) EACH OF THE TRIBE AND BORROWER HEREBY CONSENTS TO THE JURISDICTION
OF THE COURTS OF THE STATE OF CONNECTICUT, THE COURTS OF THE UNITED STATES,
AND THE COURTS OF ANY OTHER STATE WHICH MAY HAVE JURISDICTION OVER THE
SUBJECT MATTER, OVER ANY SUCH ACTION AND OVER BORROWER AND THE TRIBE.
(D) THE WAIVERS AND CONSENTS DESCRIBED IN THIS SECTION SHALL INURE TO
THE BENEFIT OF THE CREDITORS AND EACH OTHER PERSON WHO IS ENTITLED TO THE
BENEFITS OF THE LOAN DOCUMENTS (INCLUDING WITHOUT LIMITATION THE INDEMNIFIED
PERSONS REFERRED TO IN SECTION 13.11). SUBJECT TO SECTION 13.28 THE CREDITORS
AND SUCH OTHER PERSONS SHALL HAVE AND BE ENTITLED TO ALL AVAILABLE LEGAL AND
EQUITABLE REMEDIES, INCLUDING THE RIGHT TO SPECIFIC PERFORMANCE, MONEY
DAMAGES AND INJUNCTIVE OR DECLARATORY RELIEF. THE WAIVERS OF SOVEREIGN
IMMUNITY AND CONSENTS TO JURISDICTION CONTAINED IN THIS SECTION ARE
IRREVOCABLE.
14.28 Lender Covenant. In any action or proceeding against the Borrower
---------------
to enforce the Loan Documents which is not also an action or proceeding against
the Tribe, the Creditors agree that they shall have no recourse to the Tribe or
to Non-Authority Property. In any action or proceeding to enforce the Loan
Documents which includes the Tribe, the Creditors agree that they shall, to the
extent then permitted by applicable Law, take commercially practicable steps to
enforce any claim for damages awarded to the Creditors by any court, tribunal,
arbitrator or other decision maker against the Borrower or the Authority
Property prior to taking general recourse to the Tribe or Non-Authority
Property. The provisions of this Section shall not be construed (a) to create
any recourse on the part of the Creditors against the Tribe, its Properties or
revenues except for any breach of the Tribe's own representations, warranties
and covenants set forth in Articles 4 and 9, or (b) to require exhaustion by the
Creditors of any remedies against Borrower or the Authority Property prior to
having recourse, in the proper case, against the Tribe and Non-Authority
Property.
14.29 PREJUDGMENT REMEDY WAIVER. Each of the Tribe and Borrower
-------------------------
represents, warrants and acknowledges that the transaction of which this
Agreement is a part is a commercial transaction and not a consumer transaction.
Monies now or in the future to be
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advanced to or on behalf of Borrower are not and will not be used for personal,
family or household purposes.
EACH OF THE TRIBE AND BORROWER ACKNOWLEDGES THAT IT HAS THE RIGHT
UNDER SECTION 52-278a, ET SEQ., OF THE CONNECTICUT GENERAL STATUTES, SUBJECT TO
------
CERTAIN LIMITATIONS, TO NOTICE OF AND HEARING ON THE RIGHT OF THE CREDITORS TO
OBTAIN A PREJUDGMENT REMEDY, SUCH AS ATTACHMENT, GARNISHMENT OR REPLEVIN, UPON
COMMENCING ANY LITIGATION AGAINST EITHER THE TRIBE OR BORROWER. NOTWITHSTANDING
SUCH RIGHT, EACH OF THE TRIBE AND BORROWER HEREBY WAIVES ALL RIGHTS TO NOTICE,
JUDICIAL HEARING OR PRIOR COURT ORDER TO WHICH IT MIGHT OTHERWISE HAVE THE RIGHT
UNDER SAID STATUTE OR UNDER ANY OTHER STATE OR FEDERAL STATUTE OR CONSTITUTION
IN CONNECTION WITH THE OBTAINING BY THE CREDITORS OF ANY PREJUDGMENT REMEDY IN
CONNECTION WITH THIS AGREEMENT. EACH OF THE TRIBE AND BORROWER FURTHER CONSENTS
TO THE ISSUANCE OF ANY PREJUDGMENT REMEDIES WITHOUT A BOND AND AGREES NOT TO
REQUEST OR FILE MOTIONS SEEKING TO REQUIRE THE POSTING OF A BOND UNDER PUBLIC
ACT 93-431 IN CONNECTION WITH THE CREDITORS' EXERCISE OF ANY PREJUDGMENT REMEDY.
EACH OF THE TRIBE AND BORROWER ALSO WAIVES ANY AND ALL OBJECTION WHICH IT MIGHT
OTHERWISE ASSERT, NOW OR IN THE FUTURE, TO THE EXERCISE OR USE BY THE CREDITORS
OF ANY RIGHT OF SETOFF, REPOSSESSION OR SELF HELP AS MAY PRESENTLY EXIST UNDER
STATUTE OR COMMON LAW. THIS SECTION SHALL NOT BE CONSTRUED IN DEROGATION OF THE
RIGHTS OF THE TRIBE UNDER SECTION 13.28.
14.30 Designated Senior Secured Indebtedness. Borrower hereby
--------------------------------------
irrevocably designates the Obligations as "Designated Senior Indebtedness" and
"Designated Senior Secured Indebtedness" as such terms are defined in the
Relinquishment Agreement and irrevocably designates the Obligations as
"Designated Senior Indebtedness" as such term is defined in the New Subordinated
Notes Indenture.
14.31 Compliance with 25 U.S.C. (S)81
----------------------------------
(a) In compliance with Section 81 of Title 25 of the United States
Code, the residence and occupation of the parties to this Agreement are as
follows:
Party in interest: Bank of America National Trust and Savings
Association, as Administrative Agent, and the Lenders
named herein
Residence: Bank of America National Trust and Savings
Association, as Administrative Agent
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555 South Flower Street
Los Angeles, California 90071
Attn: Janice Hammond, Vice President
Telephone: (213) 228-9861
Telecopier: (213) 228-2299
Occupation Commercial Lenders
Party in interest: The Mohegan Tribal Gaming Authority
Residence Uncasville, Connecticut
Occupation Tribal Gaming Instrumentality
Party in interest: The Mohegan Tribe of Indians of Connecticut
Residence Uncasville, Connecticut
Occupation A federally recognized Indian Tribe
(b) The Chairman of the Management Board of The Mohegan Tribal
Gaming Authority is authorized to execute this Agreement and the other Loan
Documents by Resolution of the Management Board adopted on February 18, 1999,
which finds this Agreement to be in the long range economic objectives of
Borrower and the Tribe. The members of the Management Board including the
Chairman exercise their authority in this instance because they believe that
this Agreement and the other Loan Documents and the consummation of the
transactions contemplated hereby and thereby are in the best interests of
Borrower and the Tribe.
(c) The Chairman of the Tribal Council of The Mohegan Tribe of
Indians of Connecticut is authorized to execute this Agreement and the other
Loan Documents by Resolution of the Tribal Council adopted on February 18,
1999, which finds this Agreement to be in the long range economic objectives
of Tribe. The members of the Tribal Council including the Chairman exercise
their authority in this instance because they believe that this Agreement and
the other Loan Documents and the consummation of the transactions
contemplated hereby and thereby are in the best interests of Tribe.
(d) This Agreement and the other Loan Documents were executed in
counterpart on or about 12:01 p.m. on the 3rd day of March, 1999 at
Uncasville, Connecticut, for the particular purposes set forth above.
-109-
<PAGE>
(e) This Agreement relates to the Obligations having an initial
maturity date of March 3, 2004.
(f) Borrower agrees that this Agreement and the other Loan
Documents are in compliance with 25 U.S.C. (S)81.
-110-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
"Borrower":
THE MOHEGAN TRIBAL GAMING AUTHORITY
By: /s/ Roland J. Harris
--------------------
Title: Chairman, Managment Board
Address for Notices:
1 Mohegan Sun Boulevard
Uncasville, Connecticut 06382
Attn: Jeffrey Hartmann, Chief Financial Officer
Telephone: (860) 204-7171
Telecopier: (860) 204-7167
"Tribe":
THE MOHEGAN TRIBE OF INDIANS OF CONNECTICUT
By: /s/Roland J. Harris
-------------------
Tribal Council Chairman
Address for Notices:
P.O. Box 488
67 Sandy Desert Road
Uncasville, Connecticut 06382
Attn: Leo Chupaska, Chief Financial Officer
Telephone: (860) 204-6106
Telecopier: (860) 204-7167
Approved pursuant to 25 U.S.C. (S) 81:
United States Department of the Interior
Bureau of Indian Affairs:
By: /s/ Franklin Keel
-----------------
Area Director of the Eastern Office of the Bureau of Indian Affairs for the
Secretary of the Interior and the Commissioner of Indian Affairs, acting under
delegated authority.
-111-
<PAGE>
Approval Dated: March 3, 1999
-112-
<PAGE>
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Administrative Agent
By: /s/ Janice Hammond
------------------
Janice Hammond, Vice President
Address:
Bank of America National Trust and Savings Association
555 South Flower Street
Los Angeles, California 90017
Attn: Janice Hammond, Vice President
Telephone: (213) 228-9861
Telecopier: (213) 228-2299
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as a Lender and as the
Issuing Lender
By: /s/ Jon M. Varnell
------------------
Jon M. Varnell, Managing Director
Address for Notices:
Bank of America National Trust and Savings Association
Credit Products-LA 3283
Entertainment and Media Group
555 South Flower Street, 10th Floor
Los Angeles, California 90071
Attn: Jon M. Varnell, Managing Director
Telephone: (213) 228 6181
Telecopier: (213) 228 2641
with a copy to:
Bank of America National Trust and Savings Association
Credit Products-LA 3283
Entertainment and Media Group
555 South Flower Street, 10th Floor
Los Angeles, California 90071
Attn: William S. Newby, Managing Director
Telephone: (213) 228-2438
Telecopier: (213) 228-3145
-113-
<PAGE>
SALOMON BROTHERS HOLDING COMPANY INC.
By: /s/ Mavis B. Taintor
--------------------
Title: Managing Director
Address for notices:
Citibank, N.A.
399 Park Ave., 11th Floor, Zone 20
New York, New York 10043
Attn: Townsend Weekes, Vice President
Facsimile: (212) 793-3963
Tel: (212) 559-4846
-114-
<PAGE>
SOCIETE GENERALE
By: /s/ Donald L. Schubert
----------------------
Title: Managing Director
Address for notices:
Societe Generale
2029 Century Park East, Suite 2900
Los Angeles, California 90067
Attn: Donald L. Schubert, Vice President
Facsimile: (310) 551-1537
Telephone: (310) 788-7104
-115-
<PAGE>
BANKBOSTON, N.A.
By: /s/ Daniel M. Kortick
---------------------
Title: Director
Address for notices:
BankBoston Corporation (Boston HQ)
Mail Code 01-08-08
100 Federal Street
Boston, Massachusetts 02110-1802
Attn: Daniel M. Kortick
Facsimile: (617) 434-3401
Tel: (617)434-6757
-116-
<PAGE>
FLEET NATIONAL BANK
By: /s/ William E. Lofgren
----------------------
Title: Senior Vice President
Address for notices:
Fleet National Bank
250 State Street
New London, Connecticut 06320
Attn: William Lofgren, Senior Vice President
Facsimile: (860) 437-4269
Tel: (860) 437-4212
-117-
<PAGE>
COMMERZBANK AG, LOS ANGELES BRANCH
By: /s/ Werner Schmidbauer
-----------------------
Title: Vice President
By: /s/ Karla Wirth
---------------
Title: Assistant Treasurer
Address for notices:
Commerzbank AG, Los Angeles Branch
633 West 5th Street, Suite 6600
Los Angeles, California 90071
Attn: Werner Schmidbauer, Vice President
Facsimile: (213) 623-0039
Tel: (213) 683-5413
-118-
<PAGE>
KEYBANK NATIONAL ASSOCIATION
By: /s/ Mary K. Young
-----------------
Title: Assistant Vice President
Address for notices:
KeyBank National Association
Mail Stop WA 31-10-4612
700 5th Avenue, 46th Floor
Seattle, Washington 98104
Attn: Mary Young
Facsimile: (206) 684-6035
Tel: (206) 684-6085
-119-
<PAGE>
PEOPLE'S BANK
By: /s/ Arthur C. Barton
--------------------
Title: Vice President
Address for notices:
People's Bank
4 Broadway
Norwich, Connecticut 06360
Attn: Arthur C. Barton
Facsimile: 860-886-6588
Tel: 860-892-6226
-120-
<PAGE>
CITIZENS BANK OF CONNECTICUT
By: /s/ Glenna Scaramozza
---------------------
Title: Vice President
Address for notices:
Citizens Bank
63 Eugene O'Neill Drive
New London, Connecticut 06320
Attn: Glenna Scaramozza
Facsimile: (860) 444-3496
Tel: (860) 444-3476
-121-
<PAGE>
FIRST SECURITY BANK, N.A.
By: /s/ David P. Williams
---------------------
Title: Vice President
Address for notices:
First Security Bank, Utah
Second Floor
15 East 100 South
Salt Lake City, Utah 84111
Attn: David P. Williams
Facsimile: (801) 246-5532
Tel: 801-246-5540
-122-
<PAGE>
Approved pursuant to 25 U.S.C. (S) 81:
United States Department of the Interior
Bureau of Indian Affairs:
By: /s/ Franklin Keel
-----------------
Area Director of the Eastern Office of the
Bureau of Indian Affairs for the Secretary
of the Interior and the Commissioner of
Indian Affairs, acting under delegated
authority.
Approval Dated: March 3, 1999
-123-
<PAGE>
MOHEGAN TRIBAL GAMING AUTHORITY
$425,000,000 REDUCING REVOLVING CREDIT FACILITY
FINAL ALLOCATIONS
<TABLE>
<CAPTION>
============================================================================================
LENDER COMMITMENT FINAL PERCENT OF
AMOUNT ALLOCATION TOTAL
<S> <C> <C> <C>
ADMINISTRATIVE AGENT
- --------------------
Bank of America $ 75,000,000.00 $ 75,000,000.00 17.647058824%
National Trust and
Savings Association
SYNDICATION AGENT
- --------------------
Salomon Smith Barney $ 75,000,000.00 $ 75,000,000.00 17.647058824%
DOCUMENTATION AGENT
- --------------------
Societe Generale $ 75,000,000.00 $ 75,000,000.00 17.647058824%
SENIOR MANAGING
AGENTS
- --------------------
Bank Boston, N.A. $ 50,000,000.00 $ 50,000,000.00 11.764705882%
Fleet Bank $ 50,000,000.00 $ 50,000,000.00 11.764705882%
CO-AGENTS
- --------------------
Commerzbank AG $ 25,000,000.00 $ 25,000,000.00 5.882352941%
KeyBank $ 25,000,000.00 $ 25,000,000.00 5.882352941%
People's Bank $ 25,000,000.00 $ 25,000,000.00 5.882352941%
PARTICIPANTS
- --------------------
Citizens Bank of $ 15,000,000.00 $ 15,000,000.00 3.529411765%
Connecticut
First Security Bank $ 10,000,000.00 $ 10,000,000.00 2.352941176%
- ----------------------------------------------------------------------------------------
TOTAL $425,000,000.00 $425,000,000.00 100.00%
========================================================================================
</TABLE>
-124-
<PAGE>
EXHIBIT A
---------
ASSIGNMENT AGREEMENT
--------------------
THIS ASSIGNMENT AGREEMENT (this "Assignment") is entered into as of
_____________, ____ between _______________________________________ ("Assignor")
and _____________________________________________________ ("Assignee") with
reference to that certain Loan Agreement dated as of March 3, 1999 among The
Mohegan Tribe of Indians of Connecticut, a federally recognized Indian Tribe and
native American sovereign nation (the "Tribe"), The Mohegan Tribal Gaming
Authority, an instrumentality of the Tribe ("Borrower"), the Lenders,
Documentation Agent and Syndication Agent referred to therein and Bank of
America National Trust and Savings Association ("Bank of America"), as
Administrative Agent (as amended from time to time, the "Loan Agreement").
Capitalized terms used but not defined herein are used with the meanings set
forth for those terms in the Loan Agreement.
RECITALS
--------
A. Assignor holds a Pro Rata Share of the Commitment to make Loans (the
"Commitment") under the Loan Agreement.
B. As of the date hereof, the outstanding principal balance of the
Advances made by Assignor (the "Assignor Advances") is set forth on Annex I
hereto.
C. Assignor desires to assign its rights under the Loan Agreement and the
other Loan Documents with respect to a portion of the Commitment and a portion
of any Assignor Advances to Assignee and Assignee has agreed to assume the
obligations of Assignor under the Loan Documents to the extent of the rights so
assigned.
NOW, THEREFORE, in consideration of the matters recited above, and the
mutual covenants and agreements contained herein, the parties hereto hereby
agree as follows:
SECTION 1. Assignment and Assumption.
-------------------------
-1-
<PAGE>
(a) Assignor hereby assigns to Assignee, without recourse,
representation or warranty, an undivided fractional interest in Assignor's
rights arising under the Loan Documents relating to the Commitment, and any
Assignor Advances to the extent of the Assigned Pro Rata Share reflected on
Annex I hereto (the "Assigned Pro Rata Share") including, without limitation,
(i) all amounts advanced and to be advanced or participated in by Assignor
pursuant to the Commitment; (ii) all of Assignor's rights and powers contained
in the Loan Documents; (iii) all claims of Assignor against persons who may in
the future become or are now liable for repayment of any Assignor Advances or
reimbursement of expenses incurred by Assignor on account of any Assignor
Advances; and (iv) all amounts received by Assignor on account of any Assignor
Advances, whether from the Borrower or from others who are now or may in the
future become obligated with respect to some or all of the amounts owing on any
Assignor Advances or from any other source, including, without limitation,
recovery from litigation.
(b) Assignee hereby assumes from Assignor, and Assignor is hereby
expressly and absolutely released from, the Assigned Pro Rata Share of all of
Assignor's obligations arising under the Loan Documents relating to the
Commitment including, without limitation, all obligations with respect to any
Assignor Advances. Assignee agrees that it shall fully perform all of the
obligations of Assignor with respect to the interests assigned by this
Assignment.
(c) Assignor and Assignee hereby agree that Annex I attached hereto
sets forth (i) the amount of all Assignor Advances giving effect to the
assignment and assumption described herein, (ii) the amount of the Commitment
and the Pro Rata Share of Assignee after giving effect to the assignment and
assumption described herein, and (iii) accrued but unpaid interest thereon.
(d) Assignor and Assignee hereby agree that, upon giving effect to
the assignment and assumption described herein, Assignee shall have all of the
obligations under the Loan Documents of, and shall be deemed to have made all of
the covenants and agreements contained in the Loan Documents made by, a Lender
having a Pro Rata Share of the Commitment as reflected on Annex I attached
hereto. Assignee hereby acknowledges and agrees that the agreement set forth in
this subsection 1(d) is expressly made for the benefit of the Borrower, the
Administrative Agent, Assignor and the other Lenders and their respective
successors and permitted assigns. From and after the date of this Assignment,
(i) Assignee shall be a party to the Loan Agreement and, to the extent provided
in this Assignment, shall have the rights and obligations of a Lender under the
Loan Agreement and the other Loan Documents and (ii) Assignor shall, to the
extent provided in this Assignment, relinquish its rights and be released from
its obligations under the Loan Agreement and the other Loan Documents.
-2-
<PAGE>
(e) Assignor and Assignee hereby acknowledge and confirm their
understanding and intent (i) that this Assignment shall effect the assignment by
Assignor and the assumption by Assignee of the Assigned Pro Rata Share of
Assignor's rights and obligations under the Loan Documents and (ii) that any
other assignments by Assignor of a portion of its rights and obligations under
the Loan Documents shall have no effect on the Commitment and Pro Rata Share of
Assignee set forth on Annex I attached hereto.
(f) Assignee agrees to pay to Assignor, on ________, an amount equal
to $____________, in immediately available funds, representing the purchase
price of the Assigned Pro Rata Share. Assignor and Assignee shall make all
appropriate adjustments for periods prior to the date of this Assignment or with
respect to the making of this Assignment directly between themselves.
(g) Nothing contained in this Assignment shall be construed to amend
or modify the terms of the Loan Documents other than to effectuate the
assignment contemplated herein.
SECTION 2. Representations and Warranties.
------------------------------
(a) Assignee represents and warrants that it is an Eligible Assignee.
(b) Assignee represents and warrants that it has become a party
hereto solely in reliance upon its own independent investigation of the
financial and other circumstances surrounding Borrower, any Assignor Advances
and all aspects of the transactions evidenced by or referenced in the Loan
Documents, or has otherwise satisfied itself thereto, and that it is not relying
upon any representation, warranty or statement (except any such representation,
warranty or statement expressly set forth in this Assignment) of Assignor in
connection with the assignment made hereby. Assignee further acknowledges that
Assignee will, independently and without reliance upon Assignor and based upon
Assignee's review of such documents and information as Assignee deems
appropriate at the time, continue to make its own credit decisions in connection
with the assignment made hereby. Assignor shall have no duty or responsibility
either initially or on a continuing basis to make any such investigation or any
such appraisal on behalf of Assignee or to provide Assignee with any credit or
other information with respect thereto, whether coming into its possession
before the making of the initial extension of credit under the Loan Agreement or
at any time thereafter.
(c) Assignee represents and warrants to Assignor that it has
experience and expertise in the making of loans such as the Advances assigned
hereby and with respect to the other types of credit which may be extended under
the Loan Agreement; that it has acquired its Assigned Pro Rata Share for its own
account and not with any present
-3-
<PAGE>
intention of selling all or any portion of such interest; and that it has
received, reviewed and approved copies of all Loan Documents.
(d) Assignor and Assignee represent to one another and to the
Administrative Agent that they have duly authorized, executed and delivered this
Assignment, that they are legally entitled to enter into the assignment and
assumption transactions contemplated herein and that, in the case of Assignor,
that it is the legal and beneficial owner of the Assigned Pro Rata Share, free
of any Liens or adverse claims.
(e) Assignor shall not be responsible to Assignee for the execution,
effectiveness, accuracy, completeness, legal effect, genuineness, validity,
enforceability, collectibility or sufficiency of any of the Loan Documents
(other than its own due execution of the Loan Documents) or for any
representations, warranties, recitals or statements made therein or in any
written or oral statement or in any financial or other statements, instruments,
reports, certificates or any other documents made or furnished or made available
by Assignor to Assignee (other than written representations, warranties,
recitals or statements made by Assignor therein) or by or on behalf of the
Borrower or the Tribe to Assignor or Assignee in connection with the Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of the Borrower or any other Person liable for the
payment of any Advance or payment of amounts owed in connection with other
extensions of credit under the Loan Agreement or any other matter. Assignor
shall not be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained in any of the Loan Documents or as to the use of the proceeds of the
Advances or other extensions of credit under the Loan Agreement or as to the
existence or possible existence of any Default or Event of Default.
(f) Each party to this Assignment represents and warrants to the
other party to this Assignment that it has full power and authority to enter
into this Assignment and to perform its obligations under this Assignment in
accordance with the provisions of this Assignment, that this Assignment has been
duly authorized, executed and delivered by such party and that this Assignment
constitutes a legal, valid and binding obligation of such party, enforceable in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, moratorium or other similar laws affecting creditors' rights
generally and by general equitable principles.
SECTION 3. Notices.
-------
Any notice or other communication required or permitted to be given
hereunder shall be in writing addressed to the parties at their addresses set
forth below and shall be delivered in the manner set forth for notices in the
Loan Agreement:
-4-
<PAGE>
(a) Notices to Assignor:
_________________________________
_________________________________
_________________________________
(b) Notices to Assignee:
_________________________________
_________________________________
_________________________________
SECTION 4. Miscellaneous Provisions.
------------------------
(a) Neither this Assignment nor any term hereof may be changed,
waived, discharged or terminated, except by an instrument in writing signed by
the party against whom enforcement of such change, waiver, discharge or
termination is sought.
(b) Title and headings of sections in this Assignment are for
convenience of reference only and shall not be used to define or limit the
provisions hereof.
(c) This Assignment and the transactions contemplated hereunder shall
be governed by and construed and enforced in accordance with the laws of the
State of Connecticut.
(d) This Assignment embodies the entire agreement between Assignor
and Assignee with respect to the Loan Documents and supersedes all prior
agreements between Assignor and Assignee with respect to the Loan Documents.
(e) This Assignment may be executed in one or more counterparts, each
of which shall constitute an original, but all of which together shall
constitute but one Assignment. The signature pages of all counterparts of this
Assignment may be detached and attached to a single counterpart of this
Assignment so that all signature pages are physically attached to the same
document.
(f) All of the terms, covenants and conditions herein contained shall
inure to the benefit of and be binding upon the parties hereto, and their
respective successors and assigns.
-5-
<PAGE>
(g) Every provision of this Assignment is intended to be severable.
If any term or provision thereof is declared by a court of competent
jurisdiction to be illegal, invalid or unenforceable for any reason whatsoever,
such illegality, invalidity or unenforceability shall not affect the balance of
the terms and provisions hereof, which terms and provisions shall remain binding
and enforceable, and to the extent possible all of the other provisions shall
nonetheless remain in full force and effect.
SECTION 5. The Administrative Agent.
------------------------
Assignor and Assignee have examined this Assignment and have exercised
independent credit judgment in determining to enter into this Assignment. Each
of Assignor and Assignee have obtained the advice of their counsel with respect
to this document or waive the opportunity to do so. The Administrative Agent
bears no responsibility for the form, legality or sufficiency of this
Assignment.
-6-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of
the date first above written.
"ASSIGNOR"
________________________________
By: _____________________________
Name: ______________________
Title: ______________________
"ASSIGNEE"
________________________________
By: _____________________________
Name: ______________________
Title: ______________________
-7-
<PAGE>
ANNEX I
I ASSIGNOR'S PRO RATA SHARE OF THE COMMITMENT BEFORE ASSIGNMENT
Commitment $_____________________
Pro Rata Share _____________%
Outstanding Principal $_____________________
Accrued and unpaid Interest $_____________________
II ASSIGNOR'S REMAINING PRO RATA SHARE OF THE COMMITMENT AFTER ASSIGNMENT
Commitment $_____________________
Pro Rata Share _____________%
III ASSIGNEE'S PRO RATA SHARE OF THE COMMITMENT AFTER ASSIGNMENT
Commitment $_____________________
Pro Rata Share ______________%
-8-
<PAGE>
ACKNOWLEDGMENT AND CONSENT
OF THE AGENT
Bank of America National Trust and Savings Association, as Administrative
Agent, hereby (i) acknowledges and consents to the assignment to and assumption
by Assignee of Assignor's rights and obligations with respect to a portion of
the Commitment effected pursuant to the foregoing Assignment and (ii) agrees
that, for all purposes of the Loan Documents, Assignee shall be deemed to be a
Lender having a Pro Rata Share of the Commitment as reflected on Annex I
attached to the Assignment.
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent
By ___________________________
Name: _________________________
Title: ________________________
ACKNOWLEDGMENT AND CONSENT
OF THE BORROWER
Borrower hereby (i) acknowledges and consents to the assignment to and
assumption by Assignee of Assignor's rights and obligations with respect to a
portion of the Commitment effected pursuant to the foregoing Assignment and (ii)
agrees that, for all purposes of the Loan Documents, Assignee shall be deemed to
be a Lender having a Pro Rata Share of the Commitment as reflected on Annex I
attached to the Assignment.
"Borrower":
THE MOHEGAN TRIBAL GAMING
AUTHORITY
By:__________________________
Title:_______________________
-9-
<PAGE>
EXHIBIT D
---------
NOTE
----
$_______________ March 3, 1999
Uncasville, Connecticut
FOR VALUE RECEIVED, the undersigned promises to pay to the order of
______________________________________________________ (the "Lender"), the
principal amount of ___________________ ($________) or such lesser aggregate
amounts as may be made as Advances under the Commitment pursuant to the Loan
Agreement referred to below, payable as hereinafter set forth. The undersigned
promises to pay interest on the principal amount hereof remaining unpaid from
time to time from the date hereon until the date of payment in full, payable as
hereinafter set forth.
Reference is made to the Loan Agreement of even date herewith, by and
among the undersigned, as Borrower, The Mohegan Tribe of Indians of Connecticut,
a federally recognized Indian Tribe and native American sovereign nation (the
"Tribe"), the Lenders, Syndication Agent and Documentation Agent named therein,
and Bank of America National Trust and Savings Association, as Administrative
Agent (as the same may be further amended, renewed, extended or otherwise
modified from time to time, the "Loan Agreement"). Terms defined in the Loan
Agreement and not otherwise defined herein are used herein with the meanings
given those terms in the Loan Agreement. This is one of the Notes referred to
in the Loan Agreement, and the Lender and any subsequent rightful holder hereof
(collectively "Holder") is entitled to all of the rights, remedies, benefits and
privileges provided for in the Loan Agreement as originally executed or as it
may from time to time be supplemented, modified or amended. The Loan Agreement,
among other things, contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events upon the terms and conditions
therein specified.
The principal indebtedness evidenced by this Note shall be payable as
provided in the Loan Agreement and in any event on the Maturity Date.
Interest shall be payable on the outstanding daily unpaid principal
amount of each Advance hereunder from the date thereof until payment in full and
shall accrue and be payable at the rates and on the dates set forth in the Loan
Agreement, both before and after default and before and after maturity and
judgment, with interest on overdue principal and interest to bear interest at
the rate set forth in Section 3.9 of the Loan Agreement, to the fullest extent
permitted by applicable Law.
-1-
<PAGE>
The amount of each payment hereunder shall be made to the
Administrative Agent at the Administrative Agent's Office for the account of the
Lender in immediately available funds not later than 11:00 a.m. (California
time) on the day of payment (which must be a Business Day). All payments
received after 11:00 a.m. (California time) on any particular Business Day shall
be deemed received on the next succeeding Business Day. All payments shall be
made in lawful money of the United States of America.
The Lender shall use its best efforts to keep a record (which may be
in electronic or other intangible form) of Advances made by it and payments of
principal received by it with respect to this Note, and such record shall be
presumptive evidence of the amounts owing under this Note.
The undersigned hereby promises to pay all costs and expenses of any
rightful Holder hereof incurred in collecting the undersigned's obligations
hereunder or in enforcing or attempting to enforce any of such Holder's rights
hereunder, including reasonable attorneys' fees and disbursements (including
allocated costs of legal counsel employed by the Administrative Agent or the
Holder), whether or not an action is filed in connection therewith.
The undersigned hereby waives presentment, demand for payment,
dishonor, notice of dishonor, protest, notice of protest and any other notice or
formality, to the fullest extent permitted by applicable Laws.
THE UNDERSIGNED HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF
ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS NOTE OR ANY
OTHER LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTY HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT,
OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
THE UNDERSIGNED HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT
LENDER OR ANY HOLDER OF THIS NOTE MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE UNDERSIGNED TO THE WAIVER
OF ITS RIGHT TO TRIAL BY JURY.
THE UNDERSIGNED HEREBY EXPRESSLY AND IRREVOCABLY WAIVES ITS SOVEREIGN
IMMUNITY (AND ANY DEFENSE BASED THEREON) FROM ANY SUIT, ACTION OR PROCEEDING OR
FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OF NOTICE, ATTACHMENT PRIOR TO
JUDGMENT, ATTACHMENT IN AID OF EXECUTION, EXECUTION, EXERCISE OF CONTEMPT
POWERS, OR OTHERWISE) IN ANY FORUM, WITH RESPECT TO THIS NOTE AND THE OTHER LOAN
DOCUMENTS
-2-
<PAGE>
AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, PROVIDED THAT (1) THE
-------- ----
WAIVER CONTAINED IN THIS PARAGRAPH IS EXPRESSLY LIMITED TO ACTIONS AGAINST THE
UNDERSIGNED (AND NOT AGAINST THE MOHEGAN TRIBE OF INDIANS OF CONNECTICUT) AND
(2) ANY RECOVERY UPON ANY JUDGMENT RESULTING THEREFROM SHALL BE LIMITED TO
RECOVERY AGAINST THE ASSETS AND REVENUES OF THE UNDERSIGNED.
THE UNDERSIGNED HEREBY CONSENTS TO THE JURISDICTION OF THE COURTS OF
THE STATE OF CONNECTICUT, THE COURTS OF THE UNITED STATES, AND THE COURTS OF ANY
OTHER STATE WHICH MAY HAVE JURISDICTION OVER THE SUBJECT MATTER, OVER ANY SUCH
ACTION AND OVER THE UNDERSIGNED.
THE WAIVERS AND CONSENTS DESCRIBED IN THIS NOTE SHALL INURE TO THE
BENEFIT OF EACH HOLDER OF THIS NOTE. THE HOLDER SHALL HAVE AND BE ENTITLED TO
ALL AVAILABLE LEGAL AND EQUITABLE REMEDIES, INCLUDING THE RIGHT TO SPECIFIC
PERFORMANCE, MONEY DAMAGES AND INJUNCTIVE OR DECLARATORY RELIEF. THE WAIVERS
OF SOVEREIGN IMMUNITY AND CONSENTS TO JURISDICTION CONTAINED HEREIN ARE
IRREVOCABLE.
The undersigned represents, warrants and acknowledges that the
transaction of which this Note is a part is a commercial transaction and not a
consumer transaction. Monies now or in the future to be advanced to or on
behalf of the undersigned are not and will not be used for personal, family or
household purposes.
THE UNDERSIGNED ACKNOWLEDGES THAT IT HAS THE RIGHT UNDER SECTION 52-
278a, ET SEQ., OF THE CONNECTICUT GENERAL STATUTES, SUBJECT TO CERTAIN
------
LIMITATIONS, TO NOTICE OF AND HEARING ON THE RIGHT OF THE LENDER TO OBTAIN A
PREJUDGMENT REMEDY, SUCH AS ATTACHMENT, GARNISHMENT OR REPLEVIN, UPON COMMENCING
ANY LITIGATION AGAINST THE UNDERSIGNED. NOTWITHSTANDING SUCH RIGHT, THE
UNDERSIGNED HEREBY WAIVES ALL RIGHTS TO NOTICE, JUDICIAL HEARING OR PRIOR COURT
ORDER TO WHICH IT MIGHT OTHERWISE HAVE THE RIGHT UNDER SAID STATUTE OR UNDER ANY
OTHER STATE OR FEDERAL STATUTE OR CONSTITUTION IN CONNECTION WITH THE OBTAINING
BY THE LENDER OF ANY PREJUDGMENT REMEDY IN CONNECTION WITH THIS NOTE. THE
UNDERSIGNED FURTHER CONSENTS TO THE ISSUANCE OF ANY PREJUDGMENT REMEDIES WITHOUT
A BOND AND AGREES NOT TO REQUEST OR FILE MOTIONS SEEKING TO REQUIRE THE POSTING
OF A BOND UNDER PUBLIC ACT 93-431 IN CONNECTION WITH THE LENDER'S EXERCISE OF
ANY PREJUDGMENT REMEDY. THE UNDERSIGNED ALSO WAIVES ANY AND ALL OBJECTION WHICH
IT MIGHT OTHERWISE ASSERT, NOW OR IN THE FUTURE, TO THE EXERCISE OR USE BY THE
LENDER OF ANY RIGHT OF SETOFF, REPOSSESSION OR SELF HELP AS MAY PRESENTLY EXIST
UNDER STATUTE OR COMMON LAW.
-3-
<PAGE>
This Note was executed on or about ____ p.m. on the_____ day of
___________, 1999 at Uncasville, Connecticut, for the particular purposes set
forth above.
THIS NOTE SHALL BE DELIVERED TO AND ACCEPTED BY THE LENDER, OR BY
ADMINISTRATIVE AGENT ON ITS BEHALF, IN CONNECTICUT AND SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LOCAL LAWS THEREOF.
THE MOHEGAN TRIBAL GAMING AUTHORITY
By: _______________________________
Title:_____________________________
-4-
<PAGE>
SCHEDULE OF ADVANCES AND
PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
Date Amount Interest Amount of Unpaid Notation
of Advance Period Principal Principal Made by
Paid Balance
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
-5-
<PAGE>
EXHIBIT G
---------
REQUEST FOR LETTER OF CREDIT
----------------------------
1. This REQUEST FOR LETTER OF CREDIT is executed and delivered by a Senior
Officer of The Mohegan Tribal Gaming Authority ("Borrower") to Bank of America
National Trust and Savings Association, as the Issuing Lender, pursuant to
Sections 2.4 of the Loan Agreement ( the "Loan Agreement") dated as of March 3,
1999, among Borrower, The Mohegan Tribe of Indians of Connecticut, a federally
recognized Indian Tribe and native American sovereign nation (the "Tribe"), the
Lenders, Documentation Agent and Syndication Agent referred to therein and Bank
of America National Trust and Savings Association, as Administrative Agent.
Terms defined in the Loan Agreement and not otherwise defined herein are used
herein as defined in the Loan Agreement.
2. Subject to paragraph 4 below, Borrower hereby requests that the Issuing
-
Lender issue a Letter of Credit as follows:
(a) Amount of Letter of Credit: $____________.
(b) Date of Issuance: ________________, ____.
(c) Beneficiary under Letter of Credit:
Name: _______________________________
Address: ____________________________
____________________________
____________________________
(d) Expiry Date: __________________, ____.
(e) Purpose of Letter of Credit: ______________
____________________________________________.
(f) Additional Information/Terms: _______________
_____________________________________________.
-2-
<PAGE>
3. The requested Letter of Credit is (check one box only):
[_] a new Letter of Credit in addition to Letters of Credit already
outstanding.
[_] a supplement, modification, amendment, renewal, or extension to
or of the following outstanding Letter(s) of Credit: [identify]
--------
4. In connection with the issuance of the Letter of Credit requested
herein, Borrower represents, warrants and certifies to the Lenders that:
(a) Now and as of the date of the issuance of the requested Letter of
Credit, except (i) for representations and warranties which expressly speak
------
as of a particular date or which are no longer true and correct as a result
of a change permitted by the Loan Agreement or (ii) as disclosed by
Borrower and approved in writing by the Requisite Lenders, each
representation and warranty made by Borrower in Article 5 of the Loan
Agreement (other than Sections 5.7 (first sentence) and 5.13) will be true
----------
and correct, both immediately before such Letter of Credit is issued and
after giving effect to such Letter of Credit, as though such
representations and warranties were made on and as of the date of such
Letter of Credit;
(b) other than matters described in Schedule 5.13 of the Loan
----------
Agreement or not required as of the Closing Date to be therein described,
there is not any action, suit, proceeding or investigation pending or
threatened against or affecting Borrower or any of the Restricted
Subsidiaries or any Property of any of them before any Governmental Agency
that constitutes a Material Adverse Effect;
(c) now and as of the date of the requested Letter of Credit, no
Default or Event of Default presently exists or will have occurred and be
continuing as a result of the issuance of the Letter of Credit; and
(d) following the issuance of the Letter of Credit requested herein,
(i) the aggregate effective amount under all outstanding Letters of Credit
will not exceed $25,000,000, and (ii) the sum of (A) the aggregate
---
principal amount of the outstanding Loans, plus (B) the aggregate amount
----
available for drawing under the outstanding Letters of Credit, plus (C) the
----
aggregate amount of all unreimbursed draws with respect to all Letters of
Credit, shall not exceed the then applicable Commitment..
5. Attached hereto is an Application for Letter of Credit on the form
provided to Borrower by the Issuing Lender.
-3-
<PAGE>
6. This Request for Letter of Credit is executed on _____________, _____,
by a Senior Officer of Borrower. The undersigned, in such capacity, hereby
certifies each and every matter contained herein to be true and correct.
THE MOHEGAN TRIBAL GAMING AUTHORITY
By:___________________________
______________________________
[Name & Title]
-4-
<PAGE>
EXHIBIT H
---------
REQUEST FOR LOAN
----------------
2. This Request for Loan is executed and delivered by a Senior
Officer of The Mohegan Tribal Gaming Authority ("Borrower") to Administrative
Agent (as hereinafter defined), pursuant to the Loan Agreement (the "Loan
Agreement") dated as of March 3, 1999, entered into by and among Borrower, The
Mohegan Tribe of Indians of Connecticut, a federally recognized Indian Tribe and
native American sovereign nation, (the "Tribe"), the Lenders, Documentation
Agent and Syndication Agent referred to therein and Bank of America National
Trust and Savings Association, as Administrative Agent ("Administrative Agent").
Terms defined in the Loan Agreement and not otherwise defined herein are used
herein as defined in the Loan Agreement.
3. Subject to paragraph 3 below, Borrower hereby requests that Lender
-
make a Loan pursuant to the Loan Agreement as follows:
3..1 Amount of Loan: $_________________.
3..2 Date of Loan: __________________, _____.
3..3 Proceeds to be deposited as follows:
___________________________________
(d) Type of Loan:
[_] Base Rate Loan
[_] LIBOR Loan with a ___ month Interest Period.
4. In connection with the Loan requested herein, Borrower hereby
represents, warrants, and certifies to the Administrative Agent that as of the
date of the Loan requested herein:
4.1 except as disclosed by Borrower and approved in writing by
the Administrative Agent and except for representations and warranties
which expressly relate solely to a specified date, the representations and
warranties contained in Article 5 of the
-1-
<PAGE>
Loan Agreement (other than Sections 5.7 (first sentence) and 5.13) are true
----- ----
and correct on and as of the date of the Loan as though made on that date;
4.2 other than matters described in Schedule 5.13 of the Loan
----- ----
Agreement, or matters not required as of the Closing Date to be therein
described, or matters disclosed by Borrower and approved in writing by the
Administrative Agent, no action, suit, proceeding or investigation is
pending or threatened against or affecting Borrower or any property of
Borrower before any Governmental Agency that constitutes a Material Adverse
Effect; and
4.3 no Default or Event of Default exists.
5. This Request for Loan is executed on _________, ____, by a Senior
Officer of Borrower. The undersigned, in such capacity, hereby certifies each
and every matter contained herein to be true and correct.
THE MOHEGAN TRIBAL GAMING AUTHORITY
By:___________________________
______________________________
[Name & Title]
-2-
<PAGE>
EXHIBIT 10.11
ESCROW DEPOSIT AGREEMENT
THIS AGREEMENT, dated as of the 3rd day of March, 1999 (the "Agreement"),
is by and among the Mohegan Tribal Gaming Authority (the "Issuer") and First
Union National Bank, as Defeasance Agent (the "Defeasance Agent").
A. WHEREAS, the Issuer issued $90,000,000 in principal amount of its
Subordinated Notes (the "Notes") pursuant to a Note Purchase Agreement by
and between the Issuer and Sun International Hotels Limited ("Sun
International") dated as of September 29, 1995 (the "Note Purchase
Agreement"). All capitalized terms used herein and not otherwise defined
shall have the meanings ascribed thereto in the Note Purchase Agreement.
B. WHEREAS, $90,000,000 in principal amount of the Notes remains outstanding,
all of which are currently held by Sun International and Waterford Gaming,
LLC ("Waterford Gaming", and together with Sun International the "Note
Holders") in the amounts set forth opposite their names on the signature
pages hereto.
C. WHEREAS, the Issuer has elected to provide for a Covenant Defeasance of the
Notes pursuant to Section 12.03 of the Note Purchase Agreement and has
delivered or will deliver to First Union National Bank as Trustee for the
Senior Secured Notes, a certificate calling for the redemption of the Notes
on January 1, 2000.
D. WHEREAS, Section 12.04(a) of the Note Purchase Agreement provides that
Issuer must irrevocably deposit with an agent, which may be the Defeasance
Agent, in trust, for the benefit of the Note Holders, cash in United States
dollars, non-callable Government Securities, or a combination thereof, in
such amounts as will be sufficient, in the opinion of a nationally
recognized firm of independent public accountants as evidenced by a
certificate delivered to the Defeasance Agent, to pay the principal of,
premium, if any, and interest on the outstanding Notes on the stated
maturity date or on the applicable redemption date, as the case may be and
the Issuer must specify whether the Notes are being defeased to maturity or
to a particular redemption date.
E. WHEREAS, the Issuer and the Note Holders have agreed that the obligations of
Section 12.04(a) of the Note Purchase Agreement are satisfied by the deposit
of sums pursuant to two (2) side letters dated February 22, 1999 attached
hereto ("Side Letters").
F. WHEREAS, Defeasance Agent has agreed to accept, hold, and disburse the funds
deposited with it and the earnings thereon in accordance with the terms of
this Agreement and the Side Letters.
G. WHEREAS, in order to establish the escrow of funds for the covenant
defeasance of the Notes and to effect the provisions of the Note Purchase
Agreement and the Side Letters, the parties hereto have entered into this
Agreement.
<PAGE>
STATEMENT OF AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, for
themselves, their successors and assigns, hereby agree as follows:
1. Definitions. The following terms shall have the following
-----------
meanings when used herein:
"Defeasance Funds" shall mean the funds deposited with Defeasance
Agent pursuant to this Agreement, together with any interest and other income
thereon, which funds shall include, without limitation, the initial sum of One
Hundred Forty Million Three Hundred Thousand Dollars ($140,300,000).
"Redemption Date" shall mean January 1, 2000.
"Joint Written Direction" shall mean a written direction executed by
the Representatives and directing Defeasance Agent to disburse all or a portion
of the Defeasance Funds or to take or refrain from taking an action pursuant to
this Agreement.
"Representatives" shall mean authorized representatives of the Issuer
and the Note Holders.
2. Appointment of and Acceptance by Defeasance Agent. The Issuer
-------------------------------------------------
hereby appoints Defeasance Agent to serve as defeasance agent hereunder.
Defeasance Agent hereby accepts such appointment and, upon receipt by wire
transfer of the Defeasance Funds in accordance with Section 3 below, agrees to
---------
hold, invest and disburse the Defeasance Funds in accordance with this
Agreement.
3. Creation of Defeasance Funds. On March 3, 1999, Issuer will
----------------------------
transfer the sum of One Hundred Forty Million Three Hundred Thousand Dollars
($140,300,000) to Defeasance Agent, by wire transfer of immediately available
funds, to the following account:
First Union National Bank
Charlotte, North Carolina
ABA # [053000219]
Credit: D/5000000016439 Trust Ops
FFC: A/C #9572832469 Mohegan/Sun ESC
ATTN: CT-9750 Hartford
-2-
<PAGE>
4. Disbursements of Defeasance Funds.
---------------------------------
a. Joint Written Direction. Defeasance Agent shall disburse
-----------------------
Defeasance Funds, at any time and from time to time, in
accordance with a Joint Written Direction of the Issuer and
the Note Holders.
b. Redemption Date. On the Redemption Date, Defeasance Agent
---------------
shall apply the Defeasance Funds to the redemption of the
Notes in accordance with and at the price set forth in the
Side Letters without any further instruction or direction,
by payment to the holders of the Notes as set forth on the
registration books of the Issuer on the 15th day
immediately preceding the Redemption Date. Any payment due
on a date other than a banking day shall be made on the
next banking day. Any balance of the Defeasance Funds
remaining after redemption of the Notes as aforesaid shall
be remitted by the Defeasance Agent to the Issuer.
5. Disbursement Into Court. If, at any time, there shall exist any
-----------------------
dispute between Issuer or Note Holders with respect to the holding or
disposition of any portion of the Defeasance Funds or any other obligations of
Defeasance Agent hereunder, or if at any time Defeasance Agent is unable to
determine, to Defeasance Agent's sole satisfaction, the proper disposition of
any portion of the Defeasance Funds or Defeasance Agent's proper actions with
respect to its obligations hereunder, or if the Representatives have not within
30 days of the furnishing by Defeasance Agent of a notice of resignation
pursuant to Section 7 hereof, appointed a successor Defeasance Agent to act
---------
hereunder, then Defeasance Agent may, in its sole discretion, take either or
both of the following actions:
a. suspend the performance of any of its obligations (including
without limitation any disbursement obligations) under this Agreement until
such dispute or uncertainty shall be resolved to the sole satisfaction of
Defeasance Agent or until a successor Defeasance Agent shall have been
appointed (as the case may be); provided however, that Defeasance Agent
-------- -------
shall continue to invest the Defeasance Funds in accordance with Section 6
---------
hereof; and/or
b. petition (by means of an interpleader action or any other
appropriate method) any court of competent jurisdiction in any venue
convenient to Defeasance Agent, for instructions with respect to such
dispute or uncertainty, and to the extent required by law, pay into such
court, for holding and disposition in accordance with the instructions of
such court, all funds held by it in the Defeasance Funds, after deduction
and payment to Defeasance Agent of all fees and expenses (including court
costs and attorneys' fees) payable to, incurred by, or expected to be
incurred by Defeasance Agent in connection with the performance of its
duties and the exercise of its rights hereunder.
-3-
<PAGE>
Defeasance Agent shall have no liability to Issuer, Note Holders, their
respective shareholders or any other person with respect to any such suspension
of performance or disbursement into court, specifically including any liability
or claimed liability that may arise, or be alleged to have arisen, out of or as
a result of any delay in the disbursement of funds held in the Defeasance Funds
or any delay in or with respect to any other action required or requested of
Defeasance Agent.
6. Investment of Funds. Defeasance Agent shall invest the
-------------------
Defeasancee Funds in the manner set forth in Schedule 1 attached hereto.
Each of the Issuer and the Note Holders agree that said investments will
provide sufficient funds to redeem the Notes in full on the Redemption
Date. In the event, for any reason that it becomes necessary to reinvest
any Defeasance Funds, Defeasance Agent shall do so as the Representatives
jointly shall direct; provided, however, that no investment or reinvestment
may be made except in Government Securities, in accordance with the terms
of the Note Purchase Agreement.
If Defeasance Agent has not received a Joint Written Direction at any time
that an investment decision must be made, Defeasance Agent shall invest the
Defeasance Funds, or such portion thereof as to which no Joint Written Direction
has been received, in overnight Government Securities. Each of the foregoing
investments shall be made in the name of Defeasance Agent. Notwithstanding
anything to the contrary contained herein, Defeasance Agent may, without notice
to the Representatives, sell or liquidate any of the foregoing investments at
any time if the proceeds thereof are required for any release of funds permitted
or required hereunder, and Defeasance Agent shall not be liable or responsible
for any loss, cost or penalty, resulting from any such sale or liquidation.
With respect to any funds received by Defeasance Agent for deposit into the
Defeasance Funds or any Joint Written Direction received by Defeasance Agent
with respect to investment of any funds in the Defeasance Funds after ten
o'clock, a.m., Hartford, Connecticut, time, Defeasance Agent shall not be
required to invest such funds or to effect such investment instruction until the
next day upon which banks in Hartford, Connecticut are open for business.
7. Resignation and Removal of Defeasance Agent. Defeasance Agent may
-------------------------------------------
resign from the performance of its duties hereunder at any time by giving ten
(10) days' prior written notice to the Representatives or may be removed, with
or without cause, by the Representatives, acting jointly by furnishing a Joint
Written Direction to Defeasance Agent, at any time by the giving of ten (10)
days' prior written notice to Defeasance Agent. Such resignation or removal
shall take effect upon the appointment of a successor Defeasance Agent as
provided herein below. Upon any such notice of resignation or removal, the
Representatives jointly shall appoint a successor Defeasance Agent hereunder,
which shall be a commercial bank, trust company or other financial institution
with a combined capital and surplus in excess of $10,000,000. Upon the
acceptance in writing of any appointment as Defeasance Agent hereunder by a
successor Defeasance Agent, such successor Defeasance Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Defeasance Agent, and the retiring Defeasance Agent, shall be
discharged from its duties and obligations under this Agreement, but shall not
be discharged from any liability for actions taken
-4-
<PAGE>
as Defeasance Agent hereunder prior to such succession. After any retiring
Defeasance Agent's resignation or removal, the provisions of this Agreement
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Defeasance Agent under this Agreement. The retiring Defeasance
Agent shall transmit all records pertaining to the Defeasance Funds and shall
pay all funds held by it in the Defeasance Funds to the successor Defeasance
Agent, after making copies of such records as the retiring Defeasance Agent
deems advisable and after deduction and payment to the retiring Defeasance Agent
of all fees and expenses (including court costs and attorneys' fees) payable to,
incurred by, or expected to be incurred by the retiring Defeasance Agent in
connection with the performance of its duties and the exercise of its rights
hereunder.
8. Liability of Defeasance Agent.
-----------------------------
a. Defeasance Agent shall have no liability or obligation with
respect to the Defeasance Funds except for Defeasance Agent's willful misconduct
or gross negligence. Defeasance Agent's sole responsibility shall be for the
safekeeping, investment, and disbursement of the Defeasance Funds in accordance
with the terms of this Agreement. Defeasance Agent shall have no implied duties
or obligations and shall not be charged with knowledge or notice of any fact or
circumstance not specifically set forth herein. Defeasance Agent may rely upon
any instrument, not only as to its due execution, validity and effectiveness,
but also as to the truth and accuracy of any information contained therein,
which Defeasance Agent shall in good faith believe to be genuine, to have been
signed or presented by the person or parties purporting to sign the same and to
conform to the provisions of this Agreement. In no event shall Defeasance Agent
be liable for incidental, indirect, special, consequential or punitive damages.
Defeasance Agent shall not be obligated to take any legal action or commence any
proceeding in connection with the Defeasance Funds, any account in which
Defeasance Funds are deposited, this Agreement or the Note Purchase Agreement,
or to appear in, prosecute or defend any such legal action or proceeding.
Defeasance Agent may consult legal counsel selected by it in the event of any
dispute or question as to the construction of any of the provisions hereof or of
any other agreement or of its duties hereunder, or relating to any dispute
involving any party hereto, and shall incur no liability and shall be fully
indemnified from any liability whatsoever in acting in accordance with the
opinion or instruction of such counsel. Issuer and Note Holders, jointly and
severally, shall promptly pay, upon demand, the reasonable fees and expenses of
any such counsel.
(b) The Defeasance Agent is authorized, in its sole discretion, to
comply with orders issued or process entered by any court with respect to the
Defeasance Funds, without determination by the Defeasance Agent of such court's
jurisdiction in the matter. If any portion of the Defeasance Funds is at any
time attached, garnished or levied upon under any court order, or in case the
payment, assignment, transfer, conveyance or delivery of any such property shall
be stayed or enjoined by any court order, or in case any order, judgment or
decree shall be made or entered by any court affecting such property or any part
thereof, then and in any such event, the Defeasance Agent is authorized, in its
sole discretion, to rely upon and comply with any such order, writ, judgment or
decree which it is advised by legal counsel selected by it is binding upon it
without the need for appeal or other action; and if the Defeasance Agent
complies with any
-5-
<PAGE>
such order, writ, judgment or decree, it shall not be liable to any of the
parties hereto or to any other person or entity by reason of such compliance
even though such order, writ, judgment or decree may be subsequently reversed,
modified, annulled, set aside or vacated.
9. Indemnification of Defeasance Agent. From and at all times after
-----------------------------------
the date of this Agreement, Issuer, shall, to the fullest extent permitted by
law and to the extent provided herein, indemnify and hold harmless Defeasance
Agent and each director, officer, employee, attorney, agent and affiliate of
Defeasance Agent (collectively, the "Indemnified Parties") against any and all
actions, claims (whether or not valid), losses, damages, liabilities, costs and
expenses of any kind or nature whatsoever (including without limitation
reasonable attorneys' fees, costs and expenses) incurred by or asserted against
any of the Indemnified Parties from and after the date hereof, whether direct,
indirect or consequential, as a result of or arising from or in any way to any
demand, suit, action or proceeding (including any inquiry or investigation) by
any person, including without limitation Issuer or Note Holders, whether
threatened or initiated, asserting a claim for any legal or equitable against
any person under any statute or regulation, including, but not limited to, any
federal or state securities laws, or under any common law or equitable cause or
otherwise, arising from or in connection with the negotiation, preparation,
execution, performance or failure of performance of this Agreement or any
transactions contemplated herein, whether or not any such Indemnified Party is a
party to any such action, proceeding, suit or the target of any such inquiry or
investigation; provided, however, that no Indemnified Party shall have the right
to be indemnified hereunder for any liability finally determined by a court of
competent jurisdiction, subject to no further appeal, to have resulted solely
from the gross negligence or willful misconduct of such Indemnified Party. If
any such action or claim shall be brought or asserted against any Indemnified
Party, such Indemnified Party shall promptly notify Issuer and Note Holders in
writing, and Issuer and Note Holders shall assume the defense thereof, including
the employment of counsel and the payment of all expenses. Such Indemnified
Party shall, in its sole discretion, have the right to employ separate counsel
(who may be selected by such Indemnified Party in its sole discretion) in any
such action and to participate in the defense thereof, and the fees and expenses
of such counsel shall be paid by such Indemnified Party, except that Issuer
shall be required to pay such fees and expenses if (a) Issuer agrees to pay such
fees and expenses, or (b) Issuer shall fail to assume the defense of such action
or proceeding or shall fail, in the sole discretion of such Indemnified Party,
to employ counsel satisfactory to the Indemnified Party in any such action or
proceeding, (c) Issuer or Note Holders is the plaintiff in any such action or
proceeding or (d) the named parties to any such action or proceeding (including
any potential parties) include both Indemnified Party and Issuer, and
Indemnified Party shall have been advised by counsel that there may be one or
more legal defenses available to it which are different from or additional to
those available to Issuer. Issuer shall be jointly and severally liable to pay
fees and expenses of counsel pursuant to the preceding sentence, except that any
obligation to pay under clause (a) shall apply only to the party so agreeing.
All such fees and expenses payable by Issuer pursuant to the foregoing sentence
shall be paid from time to time as incurred, both in advance of and after the
final disposition of such action or claim. All of the foregoing losses, damages,
costs and expenses of the Indemnified Parties shall be payable by Issuer upon
demand by such Indemnified Party. The obligations of Issuer under this Section
-------
9 shall survive any termination of this Agreement, and the resignation or
- -
removal of Defeasance Agent shall be independent of any obligation of the
Defeasance Agent.
-6-
<PAGE>
10. Fees and Expenses of Defeasance Agent. Issuer shall compensate
-------------------------------------
Defeasance Agent for its services hereunder in accordance with Schedule A
----------
attached hereto and, in addition, shall reimburse Defeasance Agent for all of
its reasonable out-of-pocket expenses, including attorneys' fees, travel
expenses, telephone and facsimile transmission costs, postage (including express
mail and overnight delivery charges), copying charges and the like. All of the
compensation and reimbursement obligations set forth in this Section 10 shall be
----------
payable by Issuer upon demand by Defeasance Agent. The obligations of Issuer
under this Section 10 shall survive any termination of this Agreement and the
----------
resignation or removal of Defeasance Agent.
11. Representations and Warranties.
------------------------------
a. Issuer makes the following representations and warranties to
Defeasance Agent:
(i) Issuer is duly established and validly existing as an
instrumentality of the Mohegan Tribe of Indians of Connecticut,
and has full power and authority to execute and deliver this
Agreement and to perform its obligations hereunder,
(ii) This Agreement has been duly and validly authorized,
executed and delivered by the Issuer, and constitutes a valid and
binding agreement of Issuer, enforceable in accordance with its
terms.
(iii) The execution, delivery, and performance by Issuer of this
Agreement is in accordance with the Note Purchase Agreement and
will not violate, conflict with, or cause a default under the
governing instruments of Issuer, any applicable law or
regulation, any court order or administrative ruling or decree to
which Issuer is a party or any of its property is subject, or any
agreement, contract, indenture, or other binding arrangement,
including without limitation the Note Purchase Agreement, to
which Issuer is a party or any of its property is subject.
(iv) Roland Harris and each of the other officers of the
Management Board of the Issuer has been duly appointed to act as
the representative of Issuer hereunder and has full power and
authority to execute, deliver, and perform this Agreement, to
execute and deliver any Joint Written Direction, to amend, modify
or waive any provision of this Agreement and to take any and all
other actions under this Agreement, all without further consent
or direction from, or notice to, Issuer or any other party.
(v) No party other than the parties hereto have, or shall have,
any lien, claim or security interest in the Defeasance Funds or
any part thereof. No financing statement under the Uniform
Commercial Code is on file in any
-7-
<PAGE>
jurisdiction claiming a security interest in or describing
(whether specifically or generally) the Defeasance Funds or any
part thereof.
(vi) All of the representations and warranties of Issuer
contained herein are true and complete as of the date hereof and
will be true and complete at the time of any disbursement from
the Defeasance Funds.
(vii) The Note Holders are the holders of Notes, in the amounts
set forth on the signature pages hereto, and the registration
books maintained by the Issuer pursuant to Section 10.04 of the
Note Purchase Agreement reflect that fact.
12. Consent to Jurisdiction and Venue. In the event that any party
---------------------------------
hereto commences a lawsuit or other proceeding relating to or arising from this
Agreement, the parties hereto agree that the state courts of the State of
Connecticut shall have jurisdiction over any such proceeding. The parties
hereto waive any objection to such venue. The parties hereto consent to and
agree to submit to the jurisdiction of any of the courts specified herein and
agree to accept service or process to vest personal jurisdiction over them in
any of these courts.
13. Notice. All notices and other communications hereunder she be in
------
writing and shall be deemed to have been validly served, given or delivered five
(5) days after deposit in the United States mails, by certified mail with return
receipt requested and postage prepaid, when delivered personally, one (1) day
after delivery to any overnight courier, or when transmitted by facsimile
transmission facilities, and addressed to the party to be notified as follows:
If to Issuer at: Mohegan Tribal Gaming Authority
One Mohegan Sun Boulevard
Uncasville, Connecticut 06382
ATTENTION: Roland Harris, Chairman
Facsimile Number (860) 204-6153
With a copy to: ATTENTION: Jeffrey Hartmann,
Chief Financial Officer
Facsimile Number: (860) 204-7167
If to Note Holders at: a) Sun International Hotels Limited
Executive Offices, Coral Towers
PO Box N-4777, Paradise Island
Nassau, The Bahamas
ATTENTION: Charles Adamo, Esq.
Facsimile Number: (242) 363-3703
b) Waterford Gaming, L.L.C.
914 Hartford Turnpike
PO Box 715
Waterford, Connecticut 06385
-8-
<PAGE>
ATTENTION: Len Wolman
Facsimile Number. (860) 437-7752
If to Defeasance Agent: First Union National Bank,
as Defeasance Agent
Corporate Trust Operations
10 State House Square
2nd Floor
Hartford, Connecticut 06103
ATTENTION: W. Jeffrey Kramer
Facsimile Number: (860) 247-1356
or to such other address as each party may designate for itself by like notice.
14. Amendment or Waiver. This Agreement may be changed, waived,
-------------------
discharged or terminated only by a writing signed by the Representatives and
Defeasance Agent. No delay or omission by any party in exercising any right
with respect hereto shall operate as a waiver. A waiver on any one occasion
shall not be construed as a bar to, or waiver of, any right or remedy on any
future occasion.
15. Severability. To the extent any provision of this Agreement is
------------
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
16. Governing Law. This Agreement shall be construed and
-------------
interpreted in accordance with the internal laws of the State of Connecticut
without giving effect to the conflict of laws principles thereof.
17. Entire Agreement. This Agreement constitutes the entire
----------------
agreement between the parties relating to the holding, investment and
disbursement of the Defeasance Funds and sets forth in their entirety the
obligations and duties of Defeasance Agent with respect to the Defeasance
Funds.
18. Binding Effect. All of the terms of this Agreement, as amended
--------------
from time to time, shall be binding upon, inure to the benefit of and be
enforceable by the respective heirs, successors and assigns of Issuer, Note
Holders, the Representatives and Defeasance Agent.
19. Execution in Counterparts. This Agreement and any Joint Written
-------------------------
Direction may be executed in two or more counterparts, which when so executed
shall constitute one and the same agreement or direction.
-9-
<PAGE>
20. Termination. Upon the first to occur of the disbursement of all
-----------
amounts in the Defeasance Funds pursuant to Joint Written Directions or the
disbursement of all amounts in the Defeasance Funds into court pursuant to
Section 5 hereof, this Agreement shall terminate and Defeasance Agent shall
---------
have no further obligation or liability whatsoever with respect to this
Agreement or the Defeasance Funds.
21. Dealings. The Defeasance Agent and any stockholder, director,
--------
officer or employee of the Defeasance Agent may buy, sell, and deal in any of
the securities of the Issuer or Note Holders and become pecuniary interested in
any transaction in which the Issuer or Note Holders may be interested, and
contract and lend money to the Issuer or Note Holders and otherwise act as
fully and freely as though it were not Defeasance Agent under this Agreement.
Nothing herein shall preclude the Defeasance Agent from acting in any other
capacity for the Issuer or Note Holders or for any other entity.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal as of the date first above written.
Defeasance Agent: Issuer:
FIRST UNION NATIONAL BANK Mohegan Tribal Gaming Authority,
An instrumentality of the Nation
By:/s/ W. Jeffrey Kramer By:/s/ Jayne Fawcett
______________________ _____________________________
The undersigned acknowledge that the Authority
has entered into the foregoing and confirms
the principal amounts of the Notes held by
each.
Amount: 15% Notes CG Notes Sun International Hotels Limited,
---------- -------- a Bahamian Corporation
$ 850,000 $ 7,000,000 By: /s/ Charles Adamo
19,150,000 15,000,000 ---------------------------
----------- 10,000,000 Name:
$20,000,000 5,000,000 Title:
8,000,000
----------
$45,000,000
-10-
<PAGE>
Amount:15% Notes CG Notes
--------- --------
WATERFORD GAMING LLC
850,000 2,500,000 A Delaware limited liability company
19,150,000 2,500,000
---------- ---------- By:_________________________________
$20,000,000 $5,000,000 Name:
Title:
-11-
<PAGE>
SCHEDULE 1
INVESTMENT OF DEFEASANCE FUNDS
-12-
<PAGE>
EXHIBIT 10.12
EXECUTION COPY
- --------------------------------------------------------------------------------
THE MOHEGAN TRIBE OF INDIANS OF CONNECTICUT
AND
FLEET NATIONAL BANK,
AS ESCROW AGENT
FOR THE BENEFIT OF
THE MOHEGAN TRIBAL GAMING AUTHORITY
AND
THE ADMINISTRATIVE AGENT ON BEHALF OF THE LENDERS
AND
THE TRUSTEES ON BEHALF OF THE HOLDERS
----------------------------------------------
CONSTRUCTION RESERVE DISBURSEMENT AGREEMENT
DATED AS OF MARCH 3 , 1999
----------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INDEX
<TABLE>
<S> <C>
ARTICLE I. DEFINITIONS AND OTHER GENERAL PROVISIONS......................................... 1
Section 1.1. Definitions................................................................. 1
Section 1.2. Rules of Construction....................................................... 5
ARTICLE II. ESTABLISHMENT OF ESCROW......................................................... 5
Section 2.1. Appointment of Escrow Agent................................................. 5
Section 2.2. Establishment of Escrow Account............................................. 5
ARTICLE III. DISBURSEMENTS FROM ESCROW...................................................... 6
Section 3.1. Condition to Disbursement................................................... 6
Section 3.2. Method of Disbursement...................................................... 6
Section 3.3. Timing; Amount.............................................................. 6
Section 3.4. Disbursement of Compensation................................................ 6
ARTICLE IV. CONDITIONS PRECEDENT TO DISBURSEMENT............................................ 7
Section 4.1. Conditions to Disbursements Requested by the Authority...................... 7
Section 4.2. Requests for Disbursements by the Tribe..................................... 7
Section 4.3. Final Disbursement of Funds Following Operating Date........................ 7
ARTICLE V. LIMITATION OF LIABILITY.......................................................... 8
Section 5.1. Limitation of Escrow Agent's Liability...................................... 8
Section 5.2. Liability of Administrative Agent and Trustees.............................. 8
ARTICLE VI. INDEMNITY AND INSURANCE......................................................... 9
Section 6.1. Indemnity of Escrow Agent................................................... 9
ARTICLE VII. TERMINATION.................................................................... 9
ARTICLE VIII. SUBSTITUTION OR RESIGNATION................................................... 10
Section 8.1. Substitution of Escrow Agent or Resignation................................. 10
ARTICLE IX. ESCROW ACCOUNT STATEMENT........................................................ 10
ARTICLE X. NOTICE........................................................................... 11
ARTICLE XI. MISCELLANEOUS................................................................... 11
Section 11.1. Waiver..................................................................... 11
Section 11.2. Invalidity................................................................. 11
</TABLE>
i
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<TABLE>
<S> <C>
Section 11.3. No Authority............................................................... 11
Section 11.4. Assignment................................................................. 11
Section 11.5. Benefit.................................................................... 12
Section 11.6. Time....................................................................... 12
Section 11.7. Choice of Law.............................................................. 12
Section 11.8. Entire Agreement; Amendments............................................... 12
Section 11.9. Notices.................................................................... 12
Section 11.10. Counterparts.............................................................. 13
Section 11.11. Captions.................................................................. 14
Section 11.12. Right to Consult Counsel.................................................. 14
Section 11.13. Disbursement and Escrow Fee............................................... 14
ARTICLE XII. CONSENT TO SUIT................................................................ 14
</TABLE>
ii
<PAGE>
CONSTRUCTION RESERVE DISBURSEMENT AGREEMENT
THIS AGREEMENT (this "Agreement" or "Disbursement Agreement") is made as of this
3rd day of March, 1999 by and among the Mohegan Tribe of Indians of Connecticut
(the "Tribe"), Fleet National Bank, as escrow agent ("Escrow Agent") and the
Mohegan Tribal Gaming Authority (the "Authority") for the benefit of the
Administrative Agent on behalf of the Lenders and the Trustees, on behalf of the
Holders.
A. WHEREAS the Authority has arranged for financing from the Lenders
and Holders, among others, (the "Financing") in connection with its plans to
expand the Mohegan Sun Casino (as defined below);
B. WHEREAS the plans for the Expansion are in the preliminary stages
and final construction budgets are yet to be completed;
C. WHEREAS the Tribal Council has issued a formal resolution capping
the scope of the Expansion at $800 million;
D. WHEREAS, the Tribe desires to ensure sufficient funds are
available to the Authority and in connection with the Lenders and the Holders
providing the Financing, the Tribe has agreed to deposit $40 million in the
Reserve Account to pay Vendors for Project Costs incurred in excess of the
Construction Budget;
NOW, THEREFORE, in consideration of the foregoing, and other good and
valuable consideration the receipt and sufficiency of which are acknowledged,
the parties agree as follows:
ARTICLE I.
DEFINITIONS AND OTHER GENERAL PROVISIONS
Section 1.1 Definitions.
-----------
The following terms, as used herein, have the following meanings:
"Administrative Agent" means Bank of America National Trust and
Savings Association, until a successor Administrative Agent is named pursuant to
the terms of the Loan Agreement or any successor Administrative Agent under a
successor loan agreement.
"Affiliate" means, as applied to any Person, any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), when used with respect to any specified
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
"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 (provided that the full
faith and credit of the United States is pledged in support thereof)
1
<PAGE>
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 lender party to the Loan Agreement or with any domestic commercial bank
having capital and surplus in excess of $500 million and a Thompson Bank Watch
Rating of "B" or better; (iv) repurchase obligations with a term of not more
than seven days for underlying securities of the types described in clauses (ii)
and (iii) above entered into with any financial institution meeting the
qualifications specified in clause (iii) above; (v) commercial paper having one
of the two highest ratings obtainable from Moody's Investor Service, Inc. or
Standard & Poor's Rating Group and in each case maturing within six months after
the date of acquisition; and (vi) money market funds at least 95% of the assets
of which constitute Cash Equivalents of the kinds described in clauses (i) - (v)
of this definition.
"Completed" means, with respect to the Expansion, the first time that:
(i) all liens (other than Permitted Liens or liens which relate to Disputed
Amounts) relating to the construction of the Expansion have been paid; (ii) the
general contractor and the project architect for the Expansion, or an
independent construction expert appointed by the Authority, certify that the
Expansion is completed 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 (as defined in the
Indentures) 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 Expansion; and (iii)
the Expansion is in a condition (including installation of furnishings, fixtures
and equipment sufficient for the Expanded Resort and provision of adequate
expansion operating capital) and 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 Expanded Resort is fit to receive guests in the ordinary course of
business.
"Construction Budget" means the construction budget established by the
Authority as such may be amended from time to time for the construction of the
Expansion.
"Credit Facilities" means, with respect to the Authority, one or more
debt facilities (including, without limitation, the Loan Agreement) or
commercial paper facilities with banks or other institutional lenders providing
for revolving credit loans, term loans, receivables financing (including through
the sale of receivables to such lenders or to special purpose entities formed to
borrow from such lenders against such receivables) or letters of credit, in each
case, as amended, restated, modified, renewed, refunded, replaced or refinanced
in whole or in part from time to time.
"Disputed Amounts" means amounts disputed in good faith between the
Authority and any Vendor providing goods, materials or services in connection
with the Expansion construction.
"Escrow Agent" means Fleet National Bank or such substitute Escrow
Agent as may be designated in accordance with Section 8 hereof.
2
<PAGE>
"Escrow Agent's Office" means 250 State Street, New London,
Connecticut or such other office as to which Escrow Agent provides all parties
to this Agreement notice as provided in Section 11.9 hereof.
"Escrow Agent Statement" means a statement in form and substance
satisfactory to the Authority prepared by the Escrow Agent setting forth in
reasonable particularity the balance of funds in the Reserve Account and the
manner in which such funds are invested.
"Exchange Act" means the United States Securities Exchange Act of
1934, as amended.
"Expanded Resort" means the Mohegan Sun casino after the Expansion is
completed.
"Expansion" means the project to expand the existing Mohegan Sun
Casino as described in the Authority's Offering Memorandum, dated February 24,
1999.
"Final Plans" means, with respect to any particular work or
improvement, Plans which (i) have received final approval from all governmental
authorities required to approve such Plans prior to completion of the work or
improvements; and (ii) contain sufficient specificity to permit the completion
of the work or improvement.
"Financing Documents" means all documentation relating to the
Authority's Credit Facilities (including the Loan Agreement) and the Indentures.
"Financing Obligations" means all obligations relating to or arising
from the Financing Documents.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of the Indentures.
"Gaming Regulatory Authority" means any agency, authority, board,
bureau, commission, department, office or instrumentality of any nature
whatsoever of the United States or a 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.
"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, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof), of all or any part of any Indebtedness.
"Holders" means the Holders of the Authority's 8 1/8% Senior Notes due
2006 and the Authority's 8 3/4% Senior Subordinated Notes due 2009 both as
issued, authenticated and
3
<PAGE>
delivered under the respective Indentures. The Holders shall include all Holders
of any or all of the Initial Notes, Definitive Registered Notes or Exchange
Notes (as defined in the Indentures).
"Indentures" means the Indentures, dated the date thereof relating to
the Authority's 8 1/8% Senior Notes due 2006 and the Authority's 8 3/4% Senior
Subordinated Notes due 2009 as amended or supplemented from time to time.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"Lenders" means all lenders under the Loan Agreement.
"Loan Agreement" means that certain Agreement, dated as of March 3,
1999, by and among the Tribe, the Authority and Bank of America National Trust
and Savings Association and certain Lenders as parties thereto, including any
related notes, guarantees, instruments and agreements executed in connection
therewith, and in each case as amended, modified, renewed, refunded, replaced or
refinanced from time to time.
"Management Board" means the Management Board of the Authority or any
authorized committee of the Management Board of the Authority, as applicable.
"NIGC" means the National Indian Gaming Commission.
"Notes" means the Authority's 8 1/8% Senior Notes due 2006 and the
Authority's 8 3/4% Senior Subordinated Notes due 2009.
"Permitted Liens" has the meaning set forth in the Indentures.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or agency or political subdivision thereof (including any subdivision
or ongoing business of any such entity or substantially all of the assets of any
such entity, subdivision or business).
"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 Expansion and the labor and
materials necessary for the construction thereof.
"Project Costs" means all costs of developing, designing,
constructing, equipping and furnishing the Expansion, including all costs
related to land acquisition, professional services, pre-opening costs and
expansion operating capital, provided that all Project Costs shall be allocated
in accordance with GAAP, consistently applied, but excluding any debt service
costs (such as principal, premium or interest on Credit Facilities or the
Notes).
4
<PAGE>
"Reserve Account" means the reserve account established pursuant to
this Agreement.
"Tribal Council" means the nine-member duly elected governing council
of the Tribe.
"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. (S) 83.
"Trustees" means the Persons acting as Trustees under the Indentures
until any successor Trustee shall have become such pursuant to the applicable
provisions of either such Indenture, and thereafter "Trustees" shall mean each
such successor Trustee.
"Vendor" means any third party who is not an Affiliate of the
Authority and who has provided materials or services used in connection with the
completion of the Expanded Resort.
Section 1.2. Rules of Construction.
---------------------
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) "or" is not exclusive;
(3) "including" means including without limitation;
(4) words in the singular include the plural and words in the plural
include the singular; and
(5) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.
ARTICLE II.
ESTABLISHMENT OF ESCROW
Section 2.1. Appointment of Escrow Agent.
---------------------------
The Tribe and the Authority hereby appoint Escrow Agent, and Escrow
Agent hereby accepts appointment, as escrow agent under the terms and conditions
of this Agreement. By execution and delivery of this Agreement, Escrow Agent
hereby acknowledges its receipt of $40.0 million (as such amounts may be reduced
from time to time, the "Escrow Principal") from the Tribe.
Section 2.2. Establishment of Escrow Account. Concurrently with the
-------------------------------
execution and delivery hereof, Escrow Agent shall establish an account (the
"Reserve Account") in the name of the Escrow Agent at Escrow Agent's office with
the funds to be held in trust and not commingled with any ordinary deposit or
commercial bank account. All funds accepted by the Escrow Agent pursuant to this
Agreement shall be held in the Reserve Account for the benefit of the Authority,
the Administrative Agent and the Trustees subject to the terms and conditions of
this Agreement and
5
<PAGE>
shall also be under the sole dominion and control of such Escrow Agent as agent
for the Authority. Accordingly, all such funds and assets shall not be within
the bankruptcy "estate" (as such term is used in 11 U.S.C. (S) 541) of the
Escrow Agent. All such funds and all earnings accruing from time to time thereon
shall be held in the Reserve Account until disbursed in accordance with the
terms hereof. All interest, dividends or other earnings resulting from the
investment of the Escrow Principal shall not become part of the Escrow Principal
and shall be disbursed to the Tribe pursuant to Section 3.4(b). All funds
contained in such Reserve Account shall be invested in cash or Cash Equivalents
as are specified, from time to time, by the Authority in writing pending
disbursement of such funds pursuant to this Agreement. If no such instructions
are received by the Escrow Agent after request, such funds shall be invested in
Cash Equivalents.
ARTICLE III.
DISBURSEMENTS FROM ESCROW
Section 3.1. Condition to Disbursement. Except as provided in
-------------------------
Sections 3.4, 4.2 and 4.3 hereof, the Escrow Agent shall disburse the Escrow
Principal from the Reserve Account only to the extent and in the manner directed
by the Authority in a written authorization (each, a "Disbursement
Authorization") delivered by the Authority to the Escrow Agent (in the form of
Exhibit A attached hereto). In no event may the Authority deliver a Disbursement
Authorization authorizing and directing the Escrow Agent to disburse an amount
greater than the then remaining Escrow Principal.
Section 3.2. Method of Disbursement. Upon receipt of a Disbursement
----------------------
Authorization as set forth in Section 3.1 above, the Escrow Agent shall disburse
the Escrow Principal from the Reserve Account to the appropriate Vendor as
specified in the Disbursement Authorization. The Escrow Agent shall rely
entirely upon the accuracy of the certifications of the Authority set forth in a
Disbursement Authorization. The Escrow Agent shall be under no duty to inquire
as to the satisfaction of the conditions set forth in Section 4.1 with regard to
any Disbursement Authorization. Such disbursement shall be effected within five
business days of the Escrow Agent's receipt of a Disbursement Authorization.
Section 3.3. Timing; Amount. The Authority shall not request
--------------
disbursement from the Reserve Account more frequently than twice a month.
Section 3.4. Disbursement of Compensation.
----------------------------
(a) Escrow Agent's Compensation. Escrow Agent shall disburse from
---------------------------
the Reserve Account the fees as set forth on Exhibit B attached hereto and made
a part hereof to Escrow Agent as compensation for services to be performed by
Escrow Agent under this Agreement. The Escrow Agent shall be entitled to
disburse and receive such fees without the requirement of obtaining any further
consent or action on the part of the Authority or with respect to the payment.
(b) Earnings on Escrow Principal. Escrow Agent shall disburse to the
-----------------------------
Tribe from the Reserve Account on the last business day of each calendar
quarter, all interest, dividends or other earnings resulting from the investment
of the Escrow Principal. The Tribe shall receive such disbursements without the
requirement of obtaining any further consent or action on the part of the
Authority or any other party.
6
<PAGE>
ARTICLE IV.
CONDITIONS PRECEDENT TO DISBURSEMENT
Section 4.1. Conditions to Disbursements Requested by the Authority.
------------------------------------------------------
The Authority's right to request any disbursements from the Reserve Account
shall be subject to the following conditions:
(a) The Authority has expended at least $500 million towards
Completion of the Expansion in accordance with the Construction Budget
(including at least $300 million pursuant to the terms of the Loan Agreement
unless the Commitment (as defined therein) has then been terminated);
(b) The Authority has certified that it does not have funds available
to cause the Expansion to be Completed in accordance with the Plans;
(c) The Authority has provided the Tribe and the Escrow Agent with
invoices from Vendors and has certified that such invoices are for Project Costs
incurred in accordance with the Construction Budget; and
(d) The Disbursement Request on its face has been completed as to the
information required therein and attachments, if any, are attached.
Section 4.2. Requests for Disbursements by the Tribe. The Tribe may,
---------------------------------------
at any time in its sole discretion by delivering a Disbursement Request in the
form of Exhibit C to the Escrow Agent, request that the Escrow Agent make
disbursements from the Reserve Account consistent with the terms of Sections
3.4(b) and 4.1(c) and (d). In conjunction with such Disbursement Request, the
Tribe shall provide the Escrow Agent with invoices from Vendors and shall
certify that such invoices are for Project Costs incurred in accordance with the
Construction Budget.
Section 4.3. Final Disbursement of Funds Following Operating Date.
----------------------------------------------------
If the Authority provides written certification to the Escrow Agent that (a) the
Expanded Resort is Completed, has commenced operations and the Expanded Resort
continues to be operating as of the date of the certification and (b) funds
remain in the Reserve Account as of the date of the certification then, the
Escrow Agent shall disburse all remaining funds in the Reserve Account to the
Tribe within five business days.
ARTICLE V.
LIMITATION OF LIABILITY
Section 5.1. Limitation of Escrow Agent's Liability. The Escrow
--------------------------------------
Agent's responsibility and liability under this Agreement shall be limited as
follows:
(a) the Escrow Agent does not represent, warrant or guarantee to the
Tribe the performance of the Authority, any contractor, subcontractor or
provider of materials or services in connection with construction of the
Expansion;
(b) the Escrow Agent shall have no responsibility to the Authority,
the Tribe, the Administrative Agent, the Trustees or any other party as a
consequence of performance by the
7
<PAGE>
Escrow Agent of its duties hereunder except for any gross negligence or willful
misconduct of the Escrow Agent or failure to account for funds held on deposit;
(c) the Authority shall remain solely responsible for all aspects of
its business and conduct in connection with the Expansion, including, but not
limited to, the quality and suitability of the Plans, the supervision of the
construction work, the qualifications, financial condition and performance of
all architects, engineers, contractors, subcontractors, suppliers, consultants
and property managers, the accuracy of all applications for payment, and the
proper application of all disbursements;
(d) the Escrow Agent is not obligated to supervise, inspect or
inform, the Authority, the Tribe, the Administrative Agent, the Trustees or any
other party or any third party of any aspect of the construction of the
Expansion or any other party to protect against, or to inform the Authority of,
any negligent, faulty, inadequate or defective design or construction of the
Expansion. The Escrow Agent 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.
Section 5.2. Liability of Administrative Agent and Trustees.
----------------------------------------------
(a) The Administrative Agent and the Trustees shall not be liable to
the Authority or the Tribe for any damages caused by the performance or exercise
of their rights hereunder.
(b) The Administrative Agent and the Trustees shall have no
responsibility to the Authority, the Tribe or Escrow Agent hereunder except for
any gross negligence or willful misconduct of the Administrative Agent or the
Trustees, as the case may be.
ARTICLE VI.
INDEMNITY AND INSURANCE
Section 6.1. Indemnity of Escrow Agent. The Authority and the Tribe
-------------------------
shall indemnify and hold harmless and defend the Escrow Agent 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 Escrow
Agent'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 Escrow Agent.
8
<PAGE>
ARTICLE VII.
TERMINATION
(a) This Agreement shall terminate automatically and immediately upon
disbursement of all funds remaining in the Reserve Account; provided, however,
that (i) the agreements and obligations of the Authority and the Tribe under
Section 6.1 and Article XII of this Agreement shall survive termination of this
Agreement or the resignation of the Escrow Agent.
(b) Notwithstanding any foreclosure of any lien of any deed of trust
or security agreement relating to any or all of the real or personal property
secured by such lien, whether by the exercise of the power of sale contained
therein, by an action for judicial foreclosure or by an acceptance of a deed in
lieu of foreclosure, the Tribe and the Authority shall remain bound under this
Agreement.
(c) The Tribe and the Authority shall continue to be liable under
this Agreement and the provisions of this Agreement shall remain in full force
and effect notwithstanding:
(i) Any modification, agreement, or stipulation between the
Authority, the Administrative Agent on behalf of the Lenders, and either of the
Trustees on behalf of the Holders or their respective successors and assigns,
concerning the Financing Documents or the obligations encompassed by them;
(ii) Any modification of or amendments or addenda to the Plans;
(iii) Any Administrative Agent's or Trustees' waiver of or
failure to enforce any of the terms, covenants or conditions
contained in the Financing Documents or in any modification thereof;
(iv) Any discharge or release of the Authority (or any of its
subsidiaries) from any liability with respect to the Financing
Obligations;
(v) Any discharge, release, exchange or subordination of any
real or personal property then held by any Lender as security for the
performance of the Financing Obligations;
(vi) Any additional security taken for the Financing
Obligations, whether real or personal property;
(vii) Any foreclosure or other realization on any security for
the Financing Obligations;
(viii) Any additional loans or financial accommodations to the
Authority; and
(ix) Any claims whatsoever that the Authority or the Tribe
may have against any Vendor.
9
<PAGE>
ARTICLE VIII.
SUBSTITUTION OR RESIGNATION
Section 8.1. Substitution of Escrow Agent or Resignation.
-------------------------------------------
(a) The Tribe or the Authority shall each have the right, upon the
expiration of 30 days following delivery of written notice of substitution to
Escrow Agent, and to the other parties, to cause Escrow Agent to be relieved of
its duties hereunder and to select a substitute escrow agent to serve hereunder.
The Escrow Agent may resign at any time upon 30 days written notice to all
parties hereto. Such resignation shall take effect upon receipt by the Escrow
Agent of an instrument of acceptance executed by a successor escrow agent and
consented to by the Tribe and the Authority. Upon selection of such substitute
escrow agent, the Authority, the Tribe and the substitute escrow agent shall
enter into an agreement substantially identical to this Agreement and,
thereafter, the Escrow Agent shall be relieved of its duties and obligation to
perform hereunder, except that the Escrow Agent shall transfer to the substitute
escrow agent upon request therefor all funds and Cash Equivalents maintained by
the Escrow Agent hereunder and originals of all books, records, plans and other
documents in the Escrow Agent's possession relating to such funds or Cash
Equivalents or this Agreement. If no successor escrow agent is appointed and
executes and delivers to the Escrow Agent an instrument of acceptance within 30
days of the notice of resignation, the Escrow Agent shall deliver all funds and
Cash Equivalents maintained by the Escrow Agent hereunder and originals of all
books, records, plans and other documents in the Escrow Agent's possession
relating to such funds or Cash Equivalents or this Agreement into a court of
competent jurisdiction.
ARTICLE IX.
ESCROW ACCOUNT STATEMENT
Upon the request of the Authority or the Tribe from time to time, the
Escrow Agent shall deliver to the Authority and the Tribe a statement prepared
by the Escrow Agent in a form reasonably satisfactory to the Tribe and the
Authority setting forth with reasonable particularity the balance of funds then
in the Reserve Account and the manner in which such funds are invested;
provided, however, that the Escrow Agent shall not be required to provide such
statements more often than monthly.
ARTICLE X.
NOTICE
The parties hereto irrevocably instruct the Escrow Agent that on the
first date upon which the balance in the Reserve Account is reduced to zero, the
Escrow Agent shall deliver to the Tribe, the Administrative Agent, the Trustees,
and the Authority a notice that the balance in the Reserve Account has been
reduced to zero.
ARTICLE XI.
MISCELLANEOUS
Section 11.1. 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
10
<PAGE>
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.
Section 11.2. 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.
Section 11.3. No Authority. The Escrow Agent shall not have any
------------
authority to, and the Escrow Agent shall not make any warranty or representation
or incur any obligation on behalf of, or in the name of, the Tribe.
Section 11.4. Assignment. This Agreement shall not be assignable by
----------
any of the parties except with the prior written consent of the other parties,
provided that the rights of the Administrative Agent on behalf of the Lenders
and the Trustees on behalf of the Holders are assignable to their successors. In
any event, this Agreement shall inure to and be binding upon the parties and
their successors and permitted assigns. Notwithstanding the foregoing, the
parties hereto understand that the Lenders, pursuant to the terms of the Loan
Agreement, have a security interest in all the assets of the Authority,
including the Authority's rights hereunder and each party hereto consents to
that security interest. It is expressly understood by the parties hereto that in
no circumstances whatsoever shall the Escrow Principal be used to pay charges or
expenses relating to Financing Obligations including, without limitation, any
debt service.
Section 11.5. Benefit. The parties hereto, the Administrative Agent,
-------
the Trustees, and their respective successors and assigns, but no others, shall
be express third party beneficiaries and entitled to the benefits hereof.
Notwithstanding the foregoing, the rights of the Administrative Agent and the
Trustees as express third party beneficiaries hereunder are limited to the right
to enforce this agreement, pursuant to its terms and the right to consent to any
amendment to this Agreement, as provided in Section 11.8 hereof.
Section 11.6. Time. Time is of the essence of each provision of this
----
Agreement.
Section 11.7. Choice of Law. The existence, validity, construction,
-------------
operation and effect of any and all terms and provisions of this Agreement shall
be determined in accordance with and governed by the substantive laws of the
state of Connecticut, without giving effect to its conflicts of law principles.
Section 11.8. Entire Agreement; Amendments. This Agreement contains
----------------------------
the entire agreement among the parties with respect to the subject matter hereof
and supersedes any and all prior agreements, understandings and commitments,
whether oral or written. This Agreement may be amended only by a writing signed
by duly authorized representatives of all parties who are signatories hereto and
the express written consent of the Administrative Agent, on behalf of the
Lenders and the Trustees on behalf of the Holders.
11
<PAGE>
Section 11.9. Notices. All notices and other communications required
-------
or permitted to be given or made under this Agreement shall be in writing 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; or (b) on the day
sent, when sent by United States certified mail, postage and certification fee
prepaid, return receipt requested, addressed as follows:
To the Escrow Agent:
Fleet National Bank
250 State Street
New London, CT 06320
Attention: William E. Lofgren
Senior Vice President
To the Trustees on behalf of the Holders:
First Union National Bank
10 State House Square
Hartford, CT 06103-3698
Attention: W. Jeffrey Kramer
Vice President
Corporate Trust
and: Edwards & Angell
90 State House Square - 9th Floor
Hartford, CT 06103
Attention: Justin M. Sullivan, Esq.
To the Authority:
Roland J. Harris
Mohegan Tribal Gaming Authority
1 Mohegan Sun Boulevard
Uncasville, CT 06382
Telephone: (203) 848-0545
To the Tribe:
Roland J. Harris
Mohegan Tribal of Indians of Connecticut
1 Mohegan Sun Boulevard
Uncasville, CT 06382
Telephone: (203) 848-0545
To the Administrative Agent on behalf of the Lenders:
Jon Varnell
Bank of America National Trust and Savings Association
12
<PAGE>
555 South Flower Street
11th Floor
Los Angeles, CA 90071
Telephone: (213) 228-6181
or at such other address as the specified entity most recently may have
designated in writing in accordance with this paragraph and others.
Section 11.10. 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.
Section 11.11. 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.
Section 11.12. Right to Consult Counsel. The Escrow Agent, may, if
------------------------
it deems necessary or appropriate, consult with and be advised by counsel in
respect of its duties hereunder. The Escrow Agent shall be entitled to rely upon
the advice of its counsel in any action taken in its capacity as the Escrow
Agent hereunder and shall be protected from any liability of any kind for
actions taken in reasonable reliance upon such opinion of counsel. The Authority
agrees to pay all such reasonable counsel fees.
Section 11.13. Disbursement and Escrow Fee. The Escrow Agent shall
---------------------------
receive its respective compensation as set forth in Section 3.4 hereof during
the term of this Agreement, as provided in said Section.
ARTICLE XII.
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. 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 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
13
<PAGE>
of this Agreement, 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 and the Authority to take any action, including a judgment compelling the
Tribe and the Authority to submit to binding arbitration; and (iv) adjudicate
any claim under the Indian Civil Rights Act of 1968, 25 U.S.C (S) 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 and the Authority, to (i) enforce and interpret the terms of
this Agreement, 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
and 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 and the Authority to take any action, including a judgment
compelling the Tribe and the Authority to submit to binding arbitration.
14
<PAGE>
MOHEGAN TRIBE OF INDIANS OF CONNECTICUT
By:/s/ Roland J. Harris
--------------------
Roland J. Harris
Chairman
MOHEGAN TRIBAL GAMING AUTHORITY
By:/s/ Roland J. Harris
--------------------
Roland J. Harris
Chairman
FLEET NATIONAL BANK, as
Escrow Agent
By: /s/ William E. Lofgren
----------------------
Title: Senior Vice President
15
<PAGE>
EXHIBIT A TO CONSTRUCTION RESERVE DISBURSEMENT AGREEMENT
Form of Authority Request for Disbursement
------------------------------------------
____________, ____
Fleet National Bank
250 State Street
New London, Connecticut 06320
Attention: William E. Lofgren
Senior Vice President
Re: The Mohegan Tribal Gaming Authority
of the Mohegan Tribe of Indians of Connecticut
Construction Reserve Disbursement Agreement
Ladies and Gentlemen:
This request is delivered to you pursuant to that certain Construction
Reserve Disbursement Agreement dated March 3, 1999 between and among Fleet
National Bank as Escrow Agent, 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"). Capitalized terms used herein shall
have the meanings assigned to such terms in the Construction Reserve
Disbursement Agreement (the "Agreement").
We hereby certify to each of you as follows as contemplated by Article IV
of the above-referenced Agreement:
(1) The Authority has expended at least $500 million towards
Completion of the Expansion in accordance with the Construction Budget
(including at least $300 million pursuant to the terms of the Loan Agreement or
the Commitment (as defined therein) has been terminated);
(2) We do not have funds available to cause the Expansion to be
Completed in accordance with the Plans.
(3) We have provided the Tribe with invoices from Vendors and
certify that such invoices are for Project Costs incurred in accordance with the
Construction Budget.
A-1
<PAGE>
The foregoing representations, warranties and certifications are true and
correct and you are entitled to rely on the foregoing in connection with the
requested disbursement.
In accordance with the terms of the Agreement, the Escrow Agent is hereby
authorized and directed to disburse funds from the Escrow Principal in the
amounts and to the Vendors identified by name and address on Schedule A attached
----------
hereto and made a part hereof.
THE MOHEGAN TRIBAL GAMING AUTHORITY
By:
Name:_______________________
Title:
A-2
<PAGE>
EXHIBIT B TO CONSTRUCTION RESERVE DISBURSEMENT AGREEMENT
For performance of all duties and responsibilities as Escrow Agent described in
the Construction Reserve Disbursement Agreement dated March 3, 1999 between the
Mohegan Tribe of Indians of Connecticut, the Mohegan Tribal Gaming Authority and
Fleet National Bank, compensation shall be as follows:
Escrow Agent shall distribute to Escrow Agent quarterly, in arrears, from the
Reserve Account, an amount equal to 0.03% of the average principal balance
maintained in the Reserve Account.
B-1
<PAGE>
EXHIBIT C TO CONSTRUCTION RESERVE DISBURSEMENT AGREEMENT
Form of Tribe Request for Disbursement
--------------------------------------
____________, ____
Fleet National Bank
250 State Street
New London, Connecticut 06320
Attention: William E. Lofgren
Senior Vice President
Re: The Mohegan Tribal Gaming Authority
of the Mohegan Tribe of Indians of Connecticut
Construction Reserve Disbursement Agreement
Ladies and Gentlemen:
This request is delivered to you pursuant to Sections 4.1 and 4.2 of that
certain Construction Reserve Disbursement Agreement dated March 3, 1999 between
and among Fleet National Bank as Escrow Agent, 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"). Capitalized terms
used herein shall have the meanings assigned to such terms in the Construction
Reserve Disbursement Agreement (the "Agreement").
We certify that the attached invoices from Vendors are for Project Costs
incurred in accordance with the Construction Budget.
The foregoing certification is true and correct and you are entitled to
rely on the foregoing in connection with the requested disbursement.
In accordance with the terms of the Agreement, the Escrow Agent is hereby
authorized and directed to disburse funds from the Escrow Principal in the
amounts and to the Vendors identified by name and address on Schedule A attached
----------
hereto and made a part hereof.
THE MOHEGAN TRIBE OF INDIANS OF CONNECTICUT
By:________________________
Name:
Title:
C-1
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
To the
Mohegan Tribal Gaming Authority:
As independent public accountants, we hereby consent to the use of our reports
(and to all references to our Firm) included in or made a part of this
registration statement.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
April 20, 1999
<PAGE>
Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION UNDER THE TRUST INDENTURE
ACT OF 1939, AS AMENDED, OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
______________________
FIRST UNION NATIONAL BANK
(Exact name of Trustee as specified in its charter)
United States National Bank 56-0900030
(Jurisdiction of incorporation (IRS employer
if not a national bank) identification no.)
FIRST UNION NATIONAL BANK
First Union National Bank
230 South Tryon Street, 9th Floor
Charlotte, NC 28202
(704) 590-7600
Attn: General Counsel
(Address of principal executive offices)
______________________
Same as above
-------------
(Name, address and telephone number, including area code, of
Trustee's agent for service)
______________________
<TABLE>
<CAPTION>
IRS Employer
Exact Name of Obligor as State or other Jurisdiction of Primary Standard Industrial Identification
Specified in its Charter Incorporation or Organization Classification Code Number Number
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Mohegan Tribal Gaming Not Applicable 7999 06-1436334
Authority
</TABLE>
1 Mohegan Sun Boulevard
Uncasville, Connecticut 06382
(860) 204-8000
(Address, including zip code, and telephone number, including
area code, of Obligor's principal executive offices)
______________________
$200,000,000 8/1//8% Senior Notes Due 2006
(Title of the indenture securities)
______________________
<PAGE>
1. General Information. Furnish the following information as to the Trustee:
-------------------
(a) Name and address of each examining or supervising authority to which it
is subject.
___________________________________________________________________________
Name Address
___________________________________________________________________________
Federal Reserve Bank of Richmond, VA Richmond, VA
Comptroller of the Currency Washington, D.C.
Securities and Exchange Commission Division
of Market Regulation Washington, D.C.
Federal Deposit Insurance Corporation Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The Trustee is authorized to exercise corporate trust powers.
2. Affiliations with obligor and underwriters. If the obligor or any
------------------------------------------
underwriter for the obligor is an affiliate of the Trustee, describe each
such affiliation.
None.
(See Note 1 on Page 4)
Because the obligor is not in default on any securities issued under indentures
under which the applicant is Trustee, Items 3 through 15 are not required
herein.
16. List of Exhibits.
----------------
All exhibits identified below are filed as a part of this statement of
eligibility.
1. A copy of the Articles of Association of First Union National Bank as
now in effect, which contain the authority to commence business and a
grant of powers to exercise corporate trust powers, is filed as an
Exhibit to Form T-1 in connection with Registration Statement Number
333-24773 is filed with the Securities and Exchange Commission on March
20, 1998, and incorporated by reference herein.
2. A copy of the certificate of authority of the Trustee to commence
business, if not contained in the Articles of Association is filed as an
Exhibit to Form T-1 in connection with Registration Statement Number
333-24773 filed with the Securities and Exchange Commission on March 20,
1998, and is incorporated by reference herein.
-2-
<PAGE>
3. A copy of the authorization of the Trustee to exercise corporate trust
powers, if such authorization is not contained in the documents
specified in Exhibits (1) or (2) above, is filed as an Exhibit to Form
T-1 in connection with Registration Statement Number 333-24773 filed
with the Securities and Exchange Commission on March 20, 1998, and is
incorporated by reference herein.
4. A copy of the existing By-laws of the Trustee, or instruments
corresponding thereto filed as an Exhibit to Form T-1 in connection with
Registration Statement Number 333-24773 filed with the Securities and
Exchange Commission on March 20, 1998, and is incorporated by reference
herein.
5. Inapplicable.
6. The consent of the Trustee required by Section 321(b) of the Trust
Indenture Act of 1939 is included at Page 4 of this Form T-1 Statement.
7. A copy of the latest report of condition of the Trustee, is filed as
an Exhibit to Form T-1 in connection with Registration Statement Number
333-72899 on February 24, 1999, and is incorporated by reference.
8. Inapplicable.
9. Inapplicable.
-3-
<PAGE>
NOTE
Note 1: Inasmuch as this Form T-1 is filed prior to the ascertainment
by the Trustee of all facts on which to base a responsible answer to Item 2, the
answer to said Item is based on incomplete information. Item 2 may, however, be
considered correct unless amended by an amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the Trustee, First Union National Bank, a national association
organized and existing under the laws of the United States of America, has duly
caused this statement of eligibility and qualification to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Hartford, and State of Connecticut, on the 21 day of April, 1999.
FIRST UNION NATIONAL BANK,
(Trustee)
By: /s/ W. Jeffrey Kramer
---------------------
W. Jeffrey Kramer
Vice President
CONSENT OF TRUSTEE
Under Section 321(b) of the Trust Indenture Act of 1939, as amended,
and in connection with the proposed issuance by the Obligors of the 8/1//8%
Senior Notes Due 2006, First Union National Bank as the Trustee herein named,
hereby consents that reports of examinations of said Trustee by Federal, State,
Territorial or District authorities may be furnished by such authorities to the
Securities and Exchange Commission upon requests therefor.
FIRST UNION NATIONAL BANK
By: /s/ W. Jeffrey Kramer
---------------------
W. Jeffrey Kramer
Vice President
Dated: April 21, 1999
-4-
<PAGE>
Exhibit 25.2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
---------
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)
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Maureen Scannell Bateman, Esq. Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
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.)
1 Mohegan Sun Boulevard, Uncasville, CT 06382
(Address of principal executive offices) (Zip Code)
8 3/4% Senior Subordinated Notes Due January 1, 2009
(Title of indenture securities)
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to
which it is subject.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
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.
Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor.
If the Obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee or of its
parent, State Street Corporation.
(See note on page 2.)
Item 3. through Item 15. Not applicable.
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of eligibility.
1. A copy of the articles of association of the trustee as now in
effect.
A copy of the Articles of Association of the trustee, as now
in effect, is on file with the Securities and Exchange Commission as Exhibit 1
to Amendment No. 1 to the Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse Shoe, Inc. (File No.
22-17940) and is incorporated herein by reference thereto.
2. A copy of the certificate of authority of the trustee to commence
business, if not contained in the articles of association.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the trustee to commence
business was necessary or issued is on file with the Securities and Exchange
Commission as Exhibit 2 to Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the Registration Statement of
Morse Shoe, Inc. (File No. 22-17940) and is incorporated herein by reference
thereto.
3. A copy of the authorization of the trustee to exercise corporate
trust powers, if such authorization is not contained in the documents specified
in paragraph (1) or (2), above.
A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities and Exchange Commission as
Exhibit 3 to Amendment No. 1 to the Statement of Eligibility and Qualification
of Trustee (Form T-1) filed with the Registration Statement of Morse Shoe, Inc.
(File No. 22-17940) and is incorporated herein by reference thereto.
4. A copy of the existing by-laws of the trustee, or instruments
corresponding thereto.
A copy of the by-laws of the trustee, as now in effect, is on
file with the Securities and Exchange Commission as Exhibit 4 to the Statement
of Eligibility and Qualification of Trustee (Form T-1) filed with the
Registration Statement of Eastern Edison Company (File No. 33-37823) and is
incorporated herein by reference thereto.
5. A copy of each indenture referred to in Item 4. if the obligor is in
default.
Not applicable.
-2-
<PAGE>
6. The consents of United States institutional trustees required by
Section 321(b) of the Act.
The consent of the trustee required by Section 321(b) of the
Act is annexed hereto as Exhibit 6 and made a part hereof.
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.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its supervising or
examining authority is annexed hereto as Exhibit 7 and made a part
hereof.
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter for
the obligor, the trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the April 19, 1999.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Susan T. Keller
---------------------------------
Name: Susan T. Keller
Title: Vice President
-3-
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by Mohegan
Tribal Gaming Authority, of its Senior Subordinated Notes we hereby consent that
reports of examination by Federal, State, Territorial or District authorities
may be furnished by such authorities to the Securities and Exchange Commission
upon request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Susan T. Keller
------------------------------------
Name: Susan T. Keller
Title: Vice President
Dated: April 19, 1999
-4-
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company,
Massachusetts and foreign and domestic subsidiaries, a state banking institution
organized and operating under the banking laws of this commonwealth and a member
of the Federal Reserve System, at the close of business December 31, 1998,
-----------------
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act and in accordance
with a call made by the Commissioner of Banks under General Laws, Chapter 172,
Section 22(a).
<TABLE>
<CAPTION>
Thousands of
ASSETS Dollars
------------
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin......................... 1,209,293
Interest-bearing balances.................................................. 12,007,895
Securities.......................................................................... 9,705,731
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary............................................ 9,734,476
Loans and lease financing receivables:
Loans and leases, net of unearned income..................... 6,973,125
Allowance for loan and lease losses.......................... 84,308
Allocated transfer risk reserve.............................. 0
Loans and leases, net of unearned income and allowances............................. 6,888,817
Assets held in trading accounts..................................................... 1,574,999
Premises and fixed assets........................................................... 523,514
Other real estate owned............................................................. 0
Investments in unconsolidated subsidiaries.......................................... 612
Customers' liability to this bank on acceptances outstanding........................ 47,334
Intangible assets................................................................... 212,743
Other assets........................................................................ 1,279,224
---------
Total assets........................................................................ 43,184,638
==========
LIABILITIES
Deposits:
In domestic offices............................................................ 10,852,862
Noninterest-bearing...................................... 8,331,830
Interest-bearing......................................... 2,521,032
In foreign offices and Edge subsidiary......................................... 16,761,573
Noninterest-bearing...................................... 83,010
Interest-bearing......................................... 16,678,563
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary............................................ 10,041,324
Demand notes issued to the U.S. Treasury............................................ 108,420
Trading liabilities................................................................. 1,240,938
Other borrowed money................................................................ 322,331
Subordinated notes and debentures................................................... 0
Bank's liability on acceptances executed and outstanding............................ 47,334
Other liabilities................................................................... 1,126,058
Total liabilities................................................................... 40,500,840
----------
EQUITY CAPITAL
Perpetual preferred stock and related surplus....................................... 0
Common stock........................................................................ 29,931
Surplus............................................................................. 468,511
Undivided profits and capital reserves/Net unrealized holding gains (losses)........ 2,164,055
Net unrealized holding gains (losses) on available-for-sale securities......... 21,638
Cumulative foreign currency translation adjustments................................. (337)
Total equity capital................................................................ 2,683,798
----------
Total liabilities and equity capital................................................ 43,184,638
==========
</TABLE>
-5-
<PAGE>
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition 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 Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Truman S. Casner
-6-
<PAGE>
Exhibit 99.1
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 5:00 P.M., NEW YORK CITY TIME, ON JUNE 2, 1999,
UNLESS EXTENDED (THE "EXPIRATION DATE").
- --------------------------------------------------------------------------------
Mohegan Tribal Gaming Authority
LETTER OF TRANSMITTAL
Offer To Exchange Its 8 1/8% Senior Notes Due January 1, 2006
Which Have Been Registered Under The Securities Act of 1933
For Any And All Of Its Outstanding
8 1/8% Senior Notes Due January 1, 2006
Pursuant To The Prospectus Dated April , 1999
The Exchange Agent
for the Exchange Offer is:
First Union National Bank
By Facsimile: By Mail:
(704) 590-7626 First Union National Bank
Attention: Customer Service 1525 W.T. Harris Boulevard
Confirm by Telephone: (704) 590-7408 Charlotte, North Carolina 28288-1153
Attention: Corporate Trust Department
By Hand or Overnight Courier:
First Union National Bank
1525 W.T. Harris Boulevard
Charlotte, North Carolina 28288-1153
Attention: Corporate Trust Department
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A NUMBER
OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. THE
INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF
TRANSMITTAL IS COMPLETED.
<PAGE>
Capitalized terms used but not defined herein shall have the same meaning
given them in the Prospectus (as defined below).
This Letter of Transmittal is to be completed by holders of Outstanding
Notes (as defined below) either if Outstanding Notes are to be forwarded
herewith or if tenders of Outstanding Notes are to be made by book-entry
transfer to an account maintained by First Union National Bank (the "Exchange
Agent") at The Depository Trust Company ("DTC") pursuant to the procedures set
forth in "The Exchange Offer--Procedures for Tendering Outstanding Notes" in
the Prospectus.
Holders of Outstanding Notes whose certificates (the "Certificates") for
such Outstanding Notes are not immediately available or who cannot deliver
their Certificates, this Letter of Transmittal and all other required
documents to the Exchange Agent on or prior to the Expiration Date or who
cannot complete the procedures for book-entry transfer on a timely basis, may
tender their Outstanding Notes according to the guaranteed delivery procedures
set forth in "The Exchange Offer--Procedures for Tendering Outstanding Notes"
in the Prospectus.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE
AGENT.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
List below the Outstanding Notes of which you are a holder. If the space
provided below is inadequate, list the certificate numbers and principal
amount on a separate signed schedule and attach that schedule to this Letter
of Transmittal. See Instruction 3.
ALL TENDERING HOLDERS COMPLETE THIS BOX:
Description of Outstanding Notes Tendered
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Name(s) and Address(es) of Registered Holder(s)
(Fill in, if blank) Outstanding Notes Tendered
- --------------------------------------------------------------------------------------------------------
Certificate
Number(s)*
(Attach additional Principal Amount Principal Amount
list (Attach additional Tendered (if less
if necessary) list if necessary) than all)**
--------------------------------------------------------------------
<S> <C> <C> <C>
$
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
Total Amount Tendered: $ $
</TABLE>
- -------------------------------------------------------------------------------
* Need not be completed by book-entry holders. Such holders should check
the appropriate box below and provide the requested information.
** Need not be completed if tendering for exchange all Outstanding Notes
held. Outstanding Notes may be tendered in whole or in part in integral
multiples of $1,000 principal amount. All Outstanding Notes held shall
be deemed tendered unless a lesser number is specified in this column.
See Instruction 4.
2
<PAGE>
(Boxes Below To Be Checked By Eligible Institutions Only. See Instruction 1)
[_] CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT AT DTC AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution: _____________________________________________
DTC Account Number: ________________________________________________________
Transaction Code Number: ___________________________________________________
[_] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED OUTSTANDING NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s): ___________________________________________
Window Ticket Number (if any): _____________________________________________
Date of Notice of Guaranteed Delivery: _____________________________________
Institution Which Guaranteed Delivery: _____________________________________
If Guaranteed Delivery is to be made by book-entry transfer:
Name of Tendering Institution: _____________________________________________
DTC Account Number: ________________________________________________________
Transaction Code Number: ___________________________________________________
[_] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED OUTSTANDING NOTES FOR
YOUR OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING
ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name: ______________________________________________________________________
Address: ___________________________________________________________________
_____________________________________________________________________
Telephone Number and Contact Person: _______________________________________
3
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Mohegan Tribal Gaming Authority (the
"Authority"), the above described principal amount of the Company's 8 1/8%
Senior Notes due January 1, 2006 (the "Outstanding Notes") in exchange for a
like principal amount of the Authority's 8 1/8% Senior Notes due January 1,
2006 (the "Exchange Notes"), which have been registered under the Securities
Act of 1933 (the "Securities Act"), upon the terms and subject to the
conditions set forth in the Prospectus dated January 29,1999 (as the same may
be amended or supplemented from time to time, the "Prospectus"), receipt of
which is hereby acknowledged, and in this Letter of Transmittal (which,
together with the Prospectus, constitute the "Exchange Offer").
Subject to and effective upon the acceptance for exchange of the Outstanding
Notes tendered herewith, the undersigned hereby sells, assigns and transfers
to or upon the order of the Authority all right, title and interest in and to
such Outstanding Notes as are being tendered herewith. The undersigned hereby
irrevocably constitutes and appoints the Exchange Agent as its agent and
attorney-in-fact (with full knowledge that the Exchange Agent is also acting
as agent of the Authority in connection with the Exchange Offer and as Trustee
under the Senior Notes Indenture for the Outstanding Notes and the Exchange
Notes) with respect to the tendered Outstanding Notes, with full power of
substitution (such power of attorney being an irrevocable power coupled with
an interest), subject only to the right of withdrawal described in the
Prospectus, to: (i) deliver such Outstanding Notes to the Authority together
with all accompanying evidences of transfer and authenticity to, or upon the
order of, the Authority upon receipt by the Exchange Agent, as the
undersigned's agent, of the Exchange Notes to be issued in exchange for such
Outstanding Notes; (ii) present Certificates for such Outstanding Notes for
transfer, and to transfer such Outstanding Notes on the account books
maintained by DTC; and (iii) receive for the account of the Company all
benefits and otherwise exercise all rights of beneficial ownership of such
Outstanding Notes, all in accordance with the terms and conditions of the
Exchange Offer.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED HAS FULL
POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE
OUTSTANDING NOTES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR
EXCHANGE, THE AUTHORITY WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE
THERETO, FREE AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES,
AND THAT THE OUTSTANDING NOTES TENDERED HEREBY ARE NOT SUBJECT TO ANY ADVERSE
CLAIMS OR PROXIES. THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND DELIVER ANY
ADDITIONAL DOCUMENTS DEEMED BY THE COMPANY OR THE EXCHANGE AGENT TO BE
NECESSARY OR DESIRABLE TO COMPLETE THE EXCHANGE, SALE, ASSIGNMENT AND TRANSFER
OF THE OUTSTANDING NOTES TENDERED HEREBY. THE UNDERSIGNED HAS READ AND AGREES
TO ALL OF THE TERMS OF THE EXCHANGE OFFER.
The name(s) and address(es) of the registered holder(s) of the Outstanding
Notes tendered hereby should be printed above, if they are not already set
forth above, as they appear on the Certificates representing such Outstanding
Notes. The Certificate number(s) and the Outstanding Notes that the
undersigned wishes to tender should be indicated in the appropriate boxes
above.
If any tendered Outstanding Notes are not exchanged pursuant to the Exchange
Offer for any reason, or if Certificates are submitted for more Outstanding
Notes than are tendered or accepted for exchange, Certificates for such
nonexchanged or nontendered Outstanding Notes will be returned (or, in the
case of Outstanding Notes tendered by book-entry transfer, such Outstanding
Notes will be credited to an account maintained at DTC), without expense to
the tendering holder promptly following the expiration or termination of the
Exchange Offer.
4
<PAGE>
The undersigned understands that tenders of Outstanding Notes pursuant to
any one of the procedures described in "The Exchange Offer--Procedures for
Tendering Outstanding Notes" in the Prospectus and in the instructions herein
will, upon the Company's acceptance for exchange of such tendered Outstanding
Notes, constitute a binding agreement between the undersigned and the Company
upon the terms and subject to the conditions of the Exchange Offer. The
undersigned recognizes that, under certain circumstances set forth in the
Prospectus, the Company may not be required to accept for exchange any of the
Outstanding Notes tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby directs that the Exchange Notes be
issued in the name(s) of the undersigned or, in the case of a book-entry
transfer of Outstanding Notes, that such Exchange Notes be credited to the
account indicated above maintained at DTC. If applicable, substitute
Certificates representing Outstanding Notes not exchanged or not accepted for
exchange will be issued to the undersigned or, in the case of a book-entry
transfer of Outstanding Notes, will be credited to the account indicated above
maintained at DTC. Similarly, unless otherwise indicated under "Special
Delivery Instructions," please deliver Exchange Notes to the undersigned at
the address shown below the undersigned's signature.
BY TENDERING OUTSTANDING NOTES AND EXECUTING THIS LETTER OF TRANSMITTAL, THE
UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT: (i) THE UNDERSIGNED IS NOT AN
"AFFILIATE" OF THE AUTHORITY (WITHIN THE MEANING OF RULE 405 UNDER THE
SECURITIES ACT), OR IF THE UNDERSIGNED IS AN AFFILIATE, THE UNDERSIGNED WILL
COMPLY WITH THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE
SECURITIES ACT TO THE EXTENT APPLICABLE; (ii) ANY EXCHANGE NOTES TO BE
RECEIVED BY THE UNDERSIGNED ARE BEING ACQUIRED IN THE ORDINARY COURSE OF ITS
BUSINESS; AND (iii) THE UNDERSIGNED HAS NO ARRANGEMENT OR UNDERSTANDING WITH
ANY PERSON TO PARTICIPATE IN A DISTRIBUTION (WITHIN THE MEANING OF THE
SECURITIES ACT) OF EXCHANGE NOTES TO BE RECEIVED IN THE EXCHANGE OFFER. IF THE
UNDERSIGNED IS NOT A BROKER-DEALER, BY TENDERING OUTSTANDING NOTES AND
EXECUTING THIS LETTER OF TRANSMITTAL, THE UNDERSIGNED REPRESENTS AND AGREES
THAT IT IS NOT ENGAGED IN, AND DOES NOT INTEND TO ENGAGE IN, A DISTRIBUTION OF
EXCHANGE NOTES. IF THE UNDERSIGNED IS A BROKER-DEALER THAT WILL RECEIVE
EXCHANGE NOTES FOR ITS OWN ACCOUNT IN EXCHANGE FOR OUTSTANDING NOTES PURSUANT
TO THE EXCHANGE OFFER, BY TENDERING OUTSTANDING NOTES AND EXECUTING THIS
LETTER OF TRANSMITTAL, THE UNDERSIGNED REPRESENTS AND AGREES THAT SUCH
OUTSTANDING NOTES WERE ACQUIRED BY SUCH BROKER-DEALER FOR ITS OWN ACCOUNT AS A
RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES AND IT WILL
DELIVER A PROSPECTUS MEETING THE REQUIREMENTS OF THE SECURITIES ACT IN
CONNECTION WITH ANY RESALE OF EXCHANGE NOTES (PROVIDED THAT, BY SO
ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, SUCH BROKER-DEALER WILL NOT BE
DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER" WITHIN THE MEANING OF THE
SECURITIES ACT). THE COMPANY HAS AGREED THAT STARTING ON THE EXPIRATION DATE
AND ENDING ON THE CLOSE OF BUSINESS ON THE FIRST ANNIVERSARY OF THE EXPIRATION
DATE, IT WILL MAKE THE PROSPECTUS AVAILABLE TO ANY PARTICIPATING BROKER-DEALER
IN CONNECTION WITH ANY SUCH RESALE.
All authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned. Except as
stated in the Prospectus and in the Instructions contained in this Letter of
Transmittal, this tender is irrevocable.
5
<PAGE>
PLEASE SIGN HERE
PLEASE SIGN HERE
_____________________________________ _______________________________________
Authorized Signature Authorized Signature
Name:________________________________ Name:__________________________________
Title:_______________________________ Title:_________________________________
Address:_____________________________ Address:_______________________________
_____________________________________ _______________________________________
Telephone Number:____________________ Telephone Number:______________________
Dated:_______________________________ Dated:_________________________________
_____________________________________ _______________________________________
Taxpayer Identification or Social Taxpayer Identification or Social
Security Number Security Number
(NOTE: Signature(s) must be guaranteed if required by Instructions 2 and 5.
This Letter of Transmittal must be signed by the registered holder(s) exactly
as the name(s) appear(s) on Certificate(s) for the Outstanding Notes hereby
tendered or on a security position listing, or by any person(s) authorized to
become the registered holder(s) by endorsements and documents transmitted
herewith, including such opinions of counsel, certifications and other
information as may be required by the Authority or the Trustee for the
Outstanding Notes to comply with the restrictions on transfer applicable to
the Outstanding Notes. If signature is by an attorney-in-fact, executor,
administrator, trustee, guardian, officer of a corporation or another acting
in a fiduciary capacity or representative capacity, please set forth the
signer's full title. See Instructions 2 and 5. Please complete substitute Form
W-9 below.)
6
<PAGE>
Guarantee of Signature(s)
(If required--see Instructions 2 and 5)
Signature(s) Guaranteed by an
Eligible Institution:_____________________________ Date:______________________
Authorized Signature
Name of Eligible Institution
Guaranteeing Signature:______________________________________________________
Address:______________________________
Capacity (full title):____________ ______________________________________
Telephone Number:_________________ ______________________________________
SPECIAL ISSUANCE INSTRUCTIONS(See
Instructions 2, 5 and 6) SPECIAL DELIVERY INSTRUCTIONS (See
Instructions 2, 5 and 6)
To be completed ONLY if the Ex-
change Notes or any Outstanding To be completed ONLY if Exchange
Notes that are not tendered are to Notes or any Outstanding Notes
be issued in the name of someone that are not tendered are to be
other than the registered hold- sent to someone other than the
er(s) of the Outstanding Notes registered holder(s) of the
whose name(s) appear(s) above. Outstanding Notes whose name(s)
appear(s) above, or to such
registered holder(s) at an address
other than that shown above.
Issue:
Mail:
[_] Outstanding Notes not ten-
dered, to: [_] Outstanding Notes not ten-
dered, to:
[_] Exchange Notes, to:
[_] Exchange Notes, to:
Name(s) ___________________________
Address ___________________________
Address ___________________________
Name(s)____________________________
___________________________________
___________________________________
Telephone Number:__________________
Telephone Number:__________________
___________________________________
(Tax Identification or Social ___________________________________
Security Number) (Tax Identification or Social
Security Number)
7
<PAGE>
INSTRUCTIONS
(Forming part of the terms and conditions of the Exchange Offer)
1. Delivery of Letter of Transmittal and Certificates; Guaranteed Delivery
Procedures. This Letter of Transmittal is to be completed either if (a)
Certificates are to be forwarded herewith or (b) tenders are to be made
pursuant to the procedures for tender by book-entry transfer set forth in "The
Exchange Offer--Procedures for Tendering Outstanding Notes" in the Prospectus.
Certificates, or timely confirmation of a book-entry transfer of such
Outstanding Notes into the Exchange Agent's account at DTC, as well as this
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
at its address set forth herein on or prior to the Expiration Date. The term
"book-entry confirmation" means a timely confirmation of book-entry transfer
of Outstanding Notes into the Exchange Agent's account at DTC. Outstanding
Notes may be tendered in whole or in part in integral multiples of $1,000
principal amount.
Holders who wish to tender their Outstanding Notes and: (i) whose
Certificates for such Outstanding Notes are not immediately available; (ii)
who cannot deliver their Certificates, this Letter of Transmittal and all
other required documents to the Exchange Agent prior to the Expiration Date;
or (iii) who cannot complete the procedures for delivery by book-entry
transfer on a timely basis, may tender their Outstanding Notes by properly
completing and duly executing a Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedures set forth in "The Exchange Offer--Procedures
for Tendering Outstanding Notes" in the Prospectus. Pursuant to such
procedures: (i) such tender must be made by or through an Eligible Institution
(as defined below); (ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form accompanying this Letter of
Transmittal, must be received by the Exchange Agent prior to the Expiration
Date; and (iii) the Certificates (or a book-entry confirmation) representing
all tendered Outstanding Notes, in proper form for transfer, together with a
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
within three New York Stock Exchange trading days after the date of execution
of such Notice of Guaranteed Delivery, all as provided in "The Exchange
Offer--Procedures for Tendering Outstanding Notes" in the Prospectus.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile or mail to the Exchange Agent and must include a guarantee by an
Eligible Institution in the form set forth in the Notice of Guaranteed
Delivery. For Outstanding Notes to be properly tendered pursuant to the
guaranteed delivery procedure, the Exchange Agent must receive a Notice of
Guaranteed Delivery prior to the Expiration Date. As used herein and in the
Prospectus, "Eligible Institution" means a firm or other entity identified in
Rule 17Ad-15 under the Exchange Act as "an eligible guarantor institution,"
including (as such terms are defined therein): (i) a bank; (ii) a broker,
dealer, municipal securities broker or dealer or government securities broker
or dealer; (iii) a credit union; (iv) a national securities exchange,
registered securities association or clearing agency; or (v) a savings
association that is a participant in a Securities Transfer Association.
THE METHOD OF DELIVERY OF OUTSTANDING NOTES, THIS LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. 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 TIMELY DELIVERY AND PROPER INSURANCE SHOULD BE
OBTAINED. NO LETTER OF TRANSMITTAL OR OUTSTANDING NOTES SHOULD BE SENT TO THE
AUTHORITY. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL
BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THESE TRANSACTIONS FOR SUCH
HOLDERS.
8
<PAGE>
The Authority will not accept any alternative, conditional or contingent
tenders. Each tendering holder, by execution of a Letter of Transmittal (or
facsimile thereof), waives any right to receive any notice of the acceptance
of such tender.
2. Guarantee of Signatures. No signature guarantee on this Letter of
Transmittal is required if: (i) this Letter of Transmittal is signed by the
registered holder (which shall include any participant in DTC whose name
appears on a security position listing as the owner of the Outstanding Notes)
of Outstanding Notes tendered herewith, unless such holder has completed
either the box entitled "Special Issuance Instructions" or the box entitled
"Special Delivery Instructions" above; or (ii) such Outstanding Notes are
tendered for the account of a firm that is an Eligible Institution. In all
other cases, an Eligible Institution must guarantee the signature(s) on this
Letter of Transmittal. See Instruction 5.
3. Inadequate Space. If the space provided in the box captioned "Description
of Outstanding Notes Tendered" is inadequate, the Certificate number(s) and/or
the principal amount of Outstanding Notes and any other required information
should be listed on a separate signed schedule and attached to this Letter of
Transmittal.
4. Partial Tenders and Withdrawal Rights. Tenders of Outstanding Notes will
be accepted only in integral multiples of $1,000 principal amount. If less
than all the Outstanding Notes evidenced by any Certificate submitted are to
be tendered, fill in the principal amount of Outstanding Notes which are to be
tendered in the box entitled "Principal Amount Tendered (if less than all)."
In such case, new Certificate(s) for the remainder of the Outstanding Notes
that were evidenced by the old Certificate(s) will be sent to the tendering
holder, unless the appropriate boxes on this Letter of Transmittal are
completed, promptly after the Expiration Date. All Outstanding Notes
represented by Certificates delivered to the Exchange Agent will be deemed to
have been tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of Outstanding Notes may be
withdrawn at any time prior to the Expiration Date. In order for a withdrawal
to be effective, a written, telegraphic or facsimile transmission of such
notice of withdrawal must be timely received by the Exchange Agent at its
address set forth above prior to the Expiration Date. Any such notice of
withdrawal must specify the name of the person who tendered the Outstanding
Notes to be withdrawn, the aggregate principal amount of Outstanding Notes to
be withdrawn, and (if Certificates for such Outstanding Notes have been
tendered) the name of the registered holder of the Outstanding Notes as set
forth on the Certificate(s), if different from that of the person who tendered
such Outstanding Notes. If Certificates for Outstanding Notes have been
delivered or otherwise identified to the Exchange Agent, the notice of
withdrawal must specify the serial numbers on the particular Certificates for
the Outstanding Notes to be withdrawn and the signature on the notice of
withdrawal must be guaranteed by an Eligible Institution, except in the case
of Outstanding Notes tendered for the account of an Eligible Institution. If
Outstanding Notes have been tendered pursuant to the procedures for book-entry
transfer set forth in "The Exchange Offer--Procedures for Tendering
Outstanding Notes," the notice of withdrawal must specify the name and number
of the account at DTC to be credited with the withdrawal of Outstanding Notes
and must otherwise comply with the procedures of DTC. Withdrawals of tenders
of Outstanding Notes may not be rescinded. Outstanding Notes properly
withdrawn will not be deemed validly tendered for purposes of the Exchange
Offer, but may be retendered at any subsequent time prior to the Expiration
Date by following any of the procedures described in the Prospectus under "The
Exchange Offer--Procedures for Tendering Outstanding Notes."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Authority, in
its sole discretion, which determination shall be final and binding on all
parties. Neither the Authority, any affiliates of the Authority, the Exchange
Agent or any other person shall be under any duty to give any notification of
any defects or irregularities in any notice
9
<PAGE>
of withdrawal or incur any liability for failure to give any such
notification. Any Outstanding Notes which have been tendered but which are
withdrawn will be returned to the holder thereof promptly after withdrawal.
5. Signatures on Letter of Transmittal, Assignments and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the
Outstanding Notes tendered hereby, the signature(s) must correspond exactly
with the name(s) as written on the face of the Certificate(s) or on a security
position listing, without alteration, enlargement or any change whatsoever.
If any of the Outstanding Notes tendered hereby are owned of record by two
or more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Outstanding Notes are registered in different names on
several Certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal (or facsimiles thereof) as there are
names in which Certificates are registered.
If this Letter of Transmittal or any Certificates 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 must submit proper evidence
satisfactory to the Company, in its sole discretion, of such persons'
authority to so act.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Outstanding Notes listed and transmitted hereby,
the Certificate(s) must be endorsed or accompanied by appropriate bond
power(s), signed exactly as the name(s) of the registered owner appear(s) on
the Certificate(s), and also must be accompanied by such opinions of counsel,
certifications and other information as the Company or the Trustee for the
Outstanding Notes may require in accordance with the restrictions on transfer
applicable to the Outstanding Notes. Signature(s) on such Certificate(s) or
bond power(s) must be guaranteed by an Eligible Institution.
6. Special Issuance and Delivery Instructions. If Exchange Notes or
Certificates for Outstanding Notes not exchanged are to be issued in the name
of a person other than the signer of this Letter of Transmittal, or are to be
sent to someone other than the signer of this Letter of Transmittal or to an
address other than that shown above, the appropriate boxes on this Letter of
Transmittal should be completed. In the case of issuance in a different name,
the taxpayer identification number of the person named must also be indicated.
Holders tendering Outstanding Notes by book-entry transfer may request that
Outstanding Notes not exchanged be credited to such account maintained at DTC
as such holder may designate. If no such instructions are given, Outstanding
Notes not exchanged will be returned by mail or, if tendered by book-entry
transfer, by crediting the account indicated above maintained at DTC.
7. Irregularities. The Authority will determine, in its sole discretion, all
questions as to the form of documents, validity, eligibility (including time
of receipt) and acceptance for exchange of any tender of Outstanding Notes,
which determination shall be final and binding on all parties. The Authority
reserves the absolute right, in its sole and absolute discretion, to reject
any and all tenders determined by it not to be in proper form or the
acceptance for exchange of which may, in the view of counsel to the Authority,
be unlawful. The Authority also reserves the absolute right, subject to
applicable law, to waive any of the conditions of the Exchange Offer set forth
in the Prospectus under "The Exchange Offer--Conditions to the Exchange Offer"
or any defect or irregularity in any tender of Outstanding Notes of any
particular holder whether or not similar defects or irregularities are waived
in the case of other holders. The Authority's interpretation of the terms and
conditions of the Exchange Offer (including this Letter of Transmittal and the
instructions hereto) will be final and binding. No tender of Outstanding Notes
will be deemed to have been validly made until all defects or irregularities
with respect to such tender have been cured or waived. Neither the Authority,
any affiliates of the Authority, the Exchange Agent, or any other person shall
be under any duty to give any notification of any defects or irregularities in
tenders or incur any liability for failure to give any such notification.
10
<PAGE>
8. Questions, Requests for Assistance and Additional Copies. Questions and
requests for assistance may be directed to the Exchange Agent at its address
and telephone number set forth above. Additional copies of the Prospectus, the
Notice of Guaranteed Delivery and the Letter of Transmittal may be obtained
from the Exchange Agent or from your broker, dealer, commercial bank, trust
company or other nominee.
9. Backup Withholding; Substitute Form W-9. Under U.S. Federal income tax
law, a holder whose tendered Outstanding Notes are accepted for exchange is
required to provide the Exchange Agent with such holder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 below. If the Exchange
Agent is not provided with the correct TIN, the Internal Revenue Service (the
"IRS") may subject the holder or other payee to a $50 penalty. In addition,
payments to such holders or other payees with respect to Outstanding Notes
exchanged pursuant to the Exchange Offer may be subject to 31% backup
withholding.
The box in Part 3 of the Substitute Form W-9 may be checked if the tendering
holder has not been issued a TIN and has applied for a TIN or intends to apply
for a TIN in the near future. If the box in Part 3 is checked, the holder or
other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% of all payments made prior to the time a properly certified TIN
is provided to the Exchange Agent. The Exchange Agent will retain such amounts
withheld during the 60 day period following the date of the Substitute Form W-
9. If the holder furnishes the Exchange Agent with its TIN within 60 days
after the date of the Substitute Form W-9, the amounts retained during the 60
day period will be remitted to the holder and no further amounts shall be
retained or withheld from payments made to the holder thereafter. If, however,
the holder has not provided the Exchange Agent with its TIN within such 60 day
period, amounts withheld will be remitted to the IRS as backup withholding. In
addition, 31% of all payments made thereafter will be withheld and remitted to
the IRS until a correct TIN is provided.
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered owner of
the Outstanding Notes or of the last transferee appearing on the transfers
attached to, or endorsed on, the Outstanding Notes. If the Outstanding Notes
are registered in more than one name or are not in the name of the actual
owner, consult the Instructions to Form W-9 (Request for Identification Number
and Certification) for additional guidance on which number to report.
Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" on the
face thereof, to avoid possible erroneous backup withholding. A foreign person
may qualify as an exempt recipient by submitting a properly completed IRS Form
W-8, signed under penalties of perjury, attesting to that holder's exempt
status. Please consult the Instructions to Form W-9 (Request for
Identification Number and Certification) for additional guidance on which
holders are exempt from backup withholding.
Backup withholding is not an additional U.S. federal income tax. Rather, the
U.S. federal income tax liability of a person subject to backup withholding
will be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained.
10. Mutilated, Lost, Destroyed or Stolen Certificates. If any Certificate
representing Outstanding Notes has been mutilated, lost, destroyed or stolen,
the holder should promptly notify the Exchange Agent. The holder will then be
instructed as to the steps that must be taken in order to replace the
Certificate. This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing mutilated, lost, destroyed or
stolen Certificates have been followed.
11
<PAGE>
11. Security Transfer Taxes. Holders who tender their Outstanding Notes for
exchange will not be obligated to pay any transfer taxes in connection
therewith, except that if Exchange Notes are to be delivered to, or are to be
issued in the name of, any person other than the registered holder of the
Outstanding Notes tendered, or if a transfer tax is imposed for any reason
other than the exchange of Outstanding Notes in connection with the Exchange
Offer, then the amount of any such transfer tax (whether imposed on the
registered holder or any other persons) will be payable by the tendering
holder. If satisfactory evidence of payment of such transfer tax or exemption
therefrom is not submitted with the Letter of Transmittal, the amount of such
transfer tax will be billed directly to such tendering holder.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF), TOGETHER
WITH CERTIFICATES REPRESENTING TENDERED OUTSTANDING NOTES OR A BOOK ENTRY
CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
12
<PAGE>
TO BE COMPLETED BY ALL TENDERING SECURITY HOLDERS:
(See Instruction 9)
PAYER'S NAME: FIRST UNION NATIONAL BANK
Part 1--PLEASE PROVIDE YOUR Social security number or
SUBSTITUTE TIN ON THE LINE AT RIGHT AND Employer identification
CERTIFY BY SIGNING AND number
Form W-9 DATING BELOW -----------------------
----------------------------------------------------------
Department of Part 2--CERTIFICATION--Under penalties of perjury, I
the Treasury certify that:
Internal (1) The number shown on this form is my correct
Revenue Service taxpayer identification number (or I am waiting for
a number to be issued to me);
Payer's (2) I am not subject to backup withholding either
Request for because: (a) I am exempt from backup withholding;
Taxpayer's (b) I have not been notified by the Internal
Identification Revenue Service ("IRS") that I am subject to backup
Number (TIN) withholding as a result of a failure to report all
interest or dividends; or (c) the IRS has notified
me that I am no longer subject to backup
withholding; and
(3) Any other information provided on this form is true
and correct.
Certification Instructions--You must cross out item (2)
above if you have been notified by the IRS that you are
subject to backup withholding because of underreporting
interest or dividends on your tax return and you have
not been notified by the IRS that you are no longer
subject to backup withholding.
----------------------------------------------------------
SIGNATURE ____________________________ Part 3--
Awaiting
TIN [_]
DATE _________________________________
----------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN
CERTAIN CIRCUMSTANCES RESULT IN BACKUP WITHHOLDING OF
31% OF ANY AMOUNTS PAID TO YOU PURSUANT TO THE EXCHANGE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
----------------------------------------------------------
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECKED THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer
identification number has not been issued to me, and
either (1) I have mailed or delivered an application to
receive a taxpayer identification number to the
appropriate Internal Revenue Service Center or Social
Security Administration Office or (2) I intend to mail
or deliver an application in the near future. I
understand that if I do not provide a taxpayer
identification number by the time of payment, 31% of
all payments made to me on account of the Exchange
Notes shall be retained until I provide a taxpayer
identification number to the Exchange Agent and that,
if I do not provide my taxpayer identification number
within 60 days, such retained amounts shall be remitted
to the Internal Revenue Service as backup withholding
and 31% of all reportable payments made to me
thereafter will be withheld and remitted to the
Internal Revenue Service until I provide a taxpayer
identification number.
SIGNATURE: _________________ DATE: __________________
13
<PAGE>
Exhibit 99.2
NOTICE OF GUARANTEED DELIVERY
for Tender of
8 1/8% Senior Notes Due January 1, 2006
(the "Outstanding Notes")
of
Mohegan Tribal Gaming Authority
This Notice of Guaranteed Delivery, or one substantially equivalent to this
form, must be used to tender Outstanding Notes pursuant to the Exchange Offer
described in the Prospectus dated April , 1999 (as the same may be amended
or supplemented from time to time, the "Prospectus") of Mohegan Tribal Gaming
Authority (the "Authority"), if certificates for the Outstanding Notes are not
immediately available, or time will not permit the Outstanding Notes, the
Letter of Transmittal and all other required documents to be delivered to
First Union National Bank (the "Exchange Agent") prior to 5:00 p.m., New York
City time, on [June 2,] 1999 or such later date and time to which the Exchange
Offer may be extended (the "Expiration Date"), or the procedures for delivery
by book-entry transfer cannot be completed on a timely basis. This Notice of
Guaranteed Delivery, or one substantially equivalent to this form, must be
delivered by hand or sent by facsimile transmission or mail to the Exchange
Agent, and must be received by the Exchange Agent prior to the Expiration
Date. See "The Exchange Offer--Procedures for Tendering Outstanding Notes" in
the Prospectus. Capitalized terms used but not defined herein shall have the
same meaning given them in the Prospectus.
The Exchange Agent for the Exchange Offer is:
First Union National Bank
By Mail: By Facsimile: By Hand or Overnight
Courier:
First Union National Bank (704) 590-7626
First Union National
1525 W.T. Harris Boulevard Attention: Customer Bank
Charlotte, North Carolina Service Confirm by
28288-1153 Telephone: (704) 590-7408 1525 W.T. Harris
Attention: Corporate Trust Boulevard
Department Charlotte, North
Carolina 28288-1153
Attention: Corporate
Trust Department
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA
FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to the Authority, upon the terms and subject
to the conditions set forth in the Prospectus and the related Letter of
Transmittal, the Outstanding Notes indicated below pursuant to the guaranteed
delivery procedures set forth in the Prospectus under the caption "The
Exchange Offer--Procedures for Tendering Outstanding Notes."
Name(s) of Registered Holder(s): ______________________________________________
(Please Print or Type)
Signature(s): _________________________________________________________________
Address(es): __________________________________________________________________
_______________________________________________________________________________
Area Code(s) and Telephone Number(s): _________________________________________
Account Number: _______________________________________________________________
Date: _________________________________________________________________________
Certificate No(s). Principal Amount of Outstanding
(if available) Notes Tendered*
_________________________________ _____________________________________
_________________________________ _____________________________________
_________________________________ _____________________________________
_________________________________ _____________________________________
_________________________________ _____________________________________
_________________________________ _____________________________________
* Must be in integral multiples of $1,000 principal amount.
GUARANTEE OF DELIVERY
(Not to be used for signature guarantee)
The undersigned, 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 a correspondent in the United States or
an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under
the Securities Exchange Act of 1934, as amended, hereby guarantees that the
undersigned will deliver to the Exchange Agent the certificates representing
the Outstanding Notes being tendered hereby in proper form for transfer (or a
confirmation of book-entry transfer of such Outstanding Notes, into the
Exchange Agent's account at the book-entry transfer facility of The Depository
Trust Company ("DTC")) with delivery of a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), with any required signature
guarantees and any other required documents, all within three New York Stock
Exchange trading days after the date of execution of the Notice of Guaranteed
Delivery.
Name of Firm: ___________________ _____________________________________
Authorized Signature
Address: ________________________ Name: _______________________________
_________________________________ Please Print or Type
Zip Code Title: ______________________________
Telephone No.: __________________ Dated: ______________________________
The institution that completes this form must communicate the guarantee to
the Exchange Agent and must deliver the certificates representing any
Outstanding Notes (or a confirmation of book-entry transfer of such
Outstanding Notes into the Exchange Agent's account at DTC) and the Letter of
Transmittal to the Exchange Agent within the time period shown herein. Failure
to do so could result in a financial loss to such institution.
2
<PAGE>
Exhibit 99.3
Mohegan Tribal Gaming Authority
Offer to Exchange its
8 1/8% Senior Notes Due January 1, 2006
Which Have Been Registered Under
the Securities Act of 1933
For Any and All of its Outstanding
8 1/8% Senior Notes Due January 1, 2006
Pursuant to the Prospectus Dated April , 1999
TO: BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES AND OTHER NOMINEES:
Mohegan Tribal Gaming Authority (the "Authority") is offering to exchange
(the "Exchange Offer"), upon and subject to the terms and conditions set forth
in the enclosed Prospectus, dated April , 1999 (the "Prospectus"), and the
enclosed Letter of Transmittal (the "Letter of Transmittal"), its 8 1/8%
Senior Notes due January 1, 2006 which have been registered under the
Securities Act of 1933 (the "Exchange Notes") for any and all of its
outstanding 8 1/8% Senior Notes due January 1, 2006 (the "Outstanding Notes").
The Exchange Offer is being made in order to satisfy certain obligations of
the Authority contained in the Registration Agreement dated as of March 3,
1999, among the Authority, Salomon Smith Barney, NationsBanc Montgomery
Securities, LLC, Bear, Stearns & Co. Inc., SG Cowen, BancBoston Robertson
Stephens Inc, and Fleet Securities, Inc.
In connection with the Exchange Offer, we are requesting that you contact
your clients for whom you hold Outstanding Notes registered in your name or in
the name of your nominee, or who hold Outstanding Notes registered in their
own names. The Authority will not pay any fees or commissions to any broker,
dealer or other person in connection with the solicitation of tenders pursuant
to the Exchange Offer. However, you will, upon request, be reimbursed for
reasonable out-of-pocket expenses incurred in connection with soliciting
acceptances of the Exchange Offer. The Authority will pay or cause to be paid
all transfer taxes applicable to the exchange of Outstanding Notes pursuant to
the Exchange Offer, except as set forth in the Prospectus and the Letter of
Transmittal.
For your information and for forwarding to your clients, we are enclosing
the following documents:
1. Prospectus dated April , 1999;
2. A Letter of Transmittal for your use and for the information of your
clients;
3. A form of Notice of Guaranteed Delivery; and
4. A form of letter which may be sent to your clients for whose account you
hold Outstanding Notes registered in your name or the name of your
nominee, with space provided for obtaining such clients' instructions
with regard to the Exchange Offer.
YOUR PROMPT ACTION IS REQUESTED. THE EXCHANGE OFFER WILL EXPIRE AT 5:00
P.M., NEW YORK CITY TIME, ON [JUNE 2,] 1999 (THE "EXPIRATION DATE"), UNLESS
EXTENDED BY THE COMPANY (IN WHICH CASE THE TERM "EXPIRATION DATE" SHALL MEAN
THE LATEST DATE AND TIME TO WHICH THE EXCHANGE OFFER IS EXTENDED). THE
OUTSTANDING NOTES TENDERED PURSUANT TO THE EXCHANGE OFFER MAY BE WITHDRAWN,
SUBJECT TO THE PROCEDURES DESCRIBED IN THE PROSPECTUS AND THE LETTER OF
TRANSMITTAL, AT ANY TIME PRIOR TO THE EXPIRATION DATE.
To participate in the Exchange Offer, a duly executed and properly completed
Letter of Transmittal (or facsimile thereof), with any required signature
guarantees and any other required documents, should be sent to the Exchange
Agent and certificates representing the Outstanding Notes should be delivered
to the Exchange Agent, all in accordance with the instructions set forth in
the Prospectus and the Letter of Transmittal.
<PAGE>
If holders of Outstanding Notes wish to tender, but it is impracticable for
them to forward their certificates for Outstanding Notes prior to the
expiration of the Exchange Offer or to comply with the book-entry transfer
procedures on a timely basis, a tender may be effected by following the
guaranteed delivery procedures described in the Prospectus and the Letter of
Transmittal.
Any inquiries you may have with respect to the Exchange Offer, or requests
for additional copies of the enclosed materials, should be directed to the
Exchange Agent for the Outstanding Notes, at its address and telephone number
set forth on the front of the Letter of Transmittal.
Very truly yours,
Mohegan Tribal Gaming Authority
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
OTHER PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE
YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF
OF EITHER OF THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS
EXPRESSLY MADE IN THE PROSPECTUS OR THE LETTER OF TRANSMITTAL.
2
<PAGE>
Exhibit 99.4
Mohegan Tribal Gaming Authority
Offer to Exchange its
8 1/8% Senior Notes Due January 1, 2006
Which Have Been Registered Under the Securities Act of 1933
For Any and All of its Outstanding
8 1/8% Senior Notes Due January 1, 2006
TO OUR CLIENTS:
Enclosed for your consideration is a Prospectus, dated April , 1999 (the
"Prospectus"), and a form of Letter of Transmittal (the "Letter of
Transmittal"), relating to the offer (the "Exchange Offer") of Mohegan Tribal
Gaming Authority (the "Authority") to exchange its 8 1/8% Senior Notes due
January 1, 2006, which have been registered under the Securities Act of 1933
(the "Exchange Notes"), for any and all of its outstanding 8 1/8% Senior Notes
due January 1, 2006 (the "Outstanding Notes"), upon the terms and subject to
the conditions described in the Prospectus and the Letter of Transmittal. The
Exchange Offer is being made in order to satisfy certain obligations of the
Authority contained in the Registration Agreement dated as of March 3, 1999,
among the Authority, Salomon Smith Barney, NationsBanc Montgomery Securities
LLC, SG Cowen, Bear, Stearns & Co. Inc., BancBoston Robertson Stephens Inc.
and Fleet Securities Inc.
This material is being forwarded to you as the beneficial owner of the
Outstanding Notes carried by us in your account but not registered in your
name. A TENDER OF SUCH OUTSTANDING NOTES MAY ONLY BE MADE BY US AS THE HOLDER
OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS.
Accordingly, we request instructions as to whether you wish us to tender on
your behalf the Outstanding Notes held by us for your account, pursuant to the
terms and conditions set forth in the enclosed Prospectus and Letter of
Transmittal.
Your instructions should be forwarded to us as promptly as possible in order
to permit us to tender the Outstanding Notes on your behalf in accordance with
the provisions of the Exchange Offer. The Exchange Offer will expire at 5:00
p.m., New York City time, on [June 2,] 1999, unless extended by the Authority
(the "Expiration Date"). Any Outstanding Notes tendered pursuant to the
Exchange Offer may be withdrawn, subject to the procedures described in the
Prospectus and the Letter of Transmittal, at any time prior to the Expiration
Date.
If you wish to have us tender your Outstanding Notes, please so instruct us
by completing, executing and returning to us the instruction form included
with this letter. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR
INFORMATION ONLY AND MAY NOT BE USED DIRECTLY BY YOU TO TENDER OUTSTANDING
NOTES.
<PAGE>
INSTRUCTIONS WITH RESPECT TO
THE EXCHANGE OFFER
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein, including the Prospectus and the accompanying
form of Letter of Transmittal, relating to the Exchange Offer made by Mohegan
Tribal Gaming Authority with respect to its Outstanding Notes.
This will instruct you as to the action to be taken by you relating to the
Exchange Offer with respect to the Outstanding Notes held by you for the
account of the undersigned, upon and subject to the terms and conditions set
forth in the Prospectus and the Letter of Transmittal.
The aggregate principal amount of the Outstanding Notes held by you for the
account of the undersigned is (fill in amount):
$ ___________________________________
of the 8 1/8% Senior
Notes due January 1, 2006
With respect to the Exchange Offer, the undersigned hereby instructs you
(check appropriate box):
[_] To TENDER the following Outstanding Notes held by you for the account of
the undersigned (insert aggregate principal amount at maturity of
Outstanding Notes to be tendered, in integral multiples of $1,000):
$ ___________________________________
of the 8 1/8% Senior
Notes due January 1, 2006
[_] NOT to tender any Outstanding Notes held by you for the account of the
undersigned.
2
<PAGE>
If the undersigned instructs you to tender the Outstanding Notes held by you
for the account of the undersigned, it is understood that you are authorized
to make, on behalf of the undersigned (and the undersigned, by its signature
below, hereby makes to you), the representations, warranties and agreements
contained in the Letter of Transmittal that are to be made with respect to the
undersigned as beneficial owner.
SIGN HERE
Name of beneficial owner(s): __________________________________________________
Signature(s): _________________________________________________________________
Name(s) (please print): _______________________________________________________
Address: ______________________________________________________________________
Telephone Number: _____________________________________________________________
Taxpayer Identification or Social Security Number(s): _________________________
Date: _________________________________________________________________________
None of the Outstanding Notes held by us for your account will be tendered
unless we receive written instructions from you to do so. Unless a specific
contrary instruction is given in the space provided, your signature(s) hereon
shall constitute an instruction to us to tender all the Outstanding Notes held
by us for your account.
3
<PAGE>
Exhibit 99.5
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 5:00 P.M., NEW YORK CITY TIME, ON [JUNE 2,] 1999,
UNLESS EXTENDED (THE "EXPIRATION DATE").
Mohegan Tribal Gaming Authority
LETTER OF TRANSMITTAL
Offer To Exchange Its 8 3/4% Senior Subordinated Notes Due January 1, 2009
Which Have Been Registered Under The Securities Act of 1933
For Any And All Of Its Outstanding
8 3/4% Senior Subordinated Notes Due January 1, 2009
Pursuant To The Prospectus Dated April , 1999
The Exchange Agent
for the Exchange Offer is:
State Street Bank and Trust Company
By Facsimile: By Mail:
(617) 664-5290 State Street Bank and Trust Company
Attention: Customer Service Corporate Trust Department
Confirm by Telephone to: (617) 664-5249 P.O. Box 778
Boston, MA 02102
Attention: Ralph Jones
By Hand before 4:30 p.m.: By Overnight Courier and
State Street Bank and Trust Company By Hand after 4:30 p.m.:
Corporate Trust Department State Street Bank and Trust Company
Two International Place - 4th Floor Corporate Trust Department
Boston, MA 02110 Two International Place - 4th Floor
Attention: Ralph Jones Boston, MA 02110
Attn: Ralph Jones
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A NUMBER
OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. THE
INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF
TRANSMITTAL IS COMPLETED.
<PAGE>
Capitalized terms used but not defined herein shall have the same meaning
given them in the Prospectus (as defined below).
This Letter of Transmittal is to be completed by holders of Outstanding
Notes (as defined below) if the physical Outstanding Notes are to be forwarded
herewith.
If tenders of Outstanding Notes are to be made by book-entry transfer to an
account maintained by State Street Bank & Trust Company (the "Exchange Agent")
at The Depository Trust Company ("DTC"), instructions must be transmitted
through the DTC Automated Tender Offer Program (ATOP) pursuant to the
procedures set forth in "The Exchange Offer--Procedures for Tendering
Outstanding Notes" in the Prospectus. Holders of Original Notes that are
tendering by book-entry transfer to the Exchange Agent's account at DTC should
execute the tender through ATOP, for which the transaction will be eligible.
DTC participants that are accepting the exchange offer as set forth in the
Prospectus and this Letter of Transmittal (together, the "Exchange Offer")
must transmit their acceptance to DTC which will edit and verify the
acceptance and execute a book-entry delivery to the Exchange Agent's account
at DTC, DTC will then send an Agent's Message to the Exchange Agent for its
acceptance. Delivery of the Agent's Message by DTC will satisfy the terms of
the Offer as the execution and delivery of a Letter of Transmittal by the
participant identified in the Agent's Message. DTC participants may also
accept the Exchange Offer by submitting a notice of guaranteed delivery
through ATOP.
Holders of Outstanding Notes whose certificates (the "Certificates") for
such Outstanding Notes are not immediately available or who cannot deliver
their Certificates, this Letter of Transmittal and all other required
documents to the Exchange Agent on or prior to the Expiration Date or who
cannot complete the procedures for book-entry transfer on a timely basis, may
tender their Outstanding Notes according to the guaranteed delivery procedures
set forth in "The Exchange Offer--Procedures for Tendering Outstanding Notes"
in the Prospectus.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE
AGENT.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
List below the Outstanding Notes of which you are a holder. If the space
provided below is inadequate, list the certificate numbers and principal
amount on a separate signed schedule and attach that schedule to this Letter
of Transmittal. See Instruction 3.
ALL TENDERING HOLDERS COMPLETE THIS BOX:
Description of Outstanding Notes Tendered
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Name(s) and Address(es) of Registered Holder(s)
(Fill in, if blank) Outstanding Notes Tendered
- --------------------------------------------------------------------------------------------------------
Certificate
Number(s)*
(Attach additional Principal Amount Principal Amount
list (Attach additional Tendered (if less
if necessary) list if necessary) than all)**
--------------------------------------------------------------------
<S> <C> <C> <C>
$
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
Total Amount Tendered: $ $
</TABLE>
- -------------------------------------------------------------------------------
* Need not be completed by book-entry holders. Such holders should check
the appropriate box below and provide the requested information.
** Need not be completed if tendering for exchange all Outstanding Notes
held. Outstanding Notes may be tendered in whole or in part in integral
multiples of $1,000 principal amount. All Outstanding Notes held shall
be deemed tendered unless a lesser number is specified in this column.
See Instruction 4.
2
<PAGE>
(Boxes Below To Be Checked By Eligible Institutions Only. See Instruction 1)
[_] CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT AT DTC AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution: _____________________________________________
DTC Account Number: ________________________________________________________
Transaction Code Number: ___________________________________________________
[_] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED OUTSTANDING NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s): ___________________________________________
Window Ticket Number (if any): _____________________________________________
Date of Notice of Guaranteed Delivery: _____________________________________
Institution Which Guaranteed Delivery: _____________________________________
If Guaranteed Delivery is to be made by book-entry transfer:
Name of Tendering Institution: _____________________________________________
DTC Account Number: ________________________________________________________
Transaction Code Number: ___________________________________________________
[_] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED OUTSTANDING NOTES FOR
YOUR OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING
ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name: ______________________________________________________________________
Address: ___________________________________________________________________
___________________________________________________________________
Telephone Number and Contact Person: _______________________________________
3
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Mohegan Tribal Gaming Authority (the
"Authority"), the above described principal amount of the Authority's 8 3/4%
Senior Subordinated Notes due January 1, 2009 (the "Outstanding Notes") in
exchange for a like principal amount of the Authority's 8 3/4% Senior
Subordinated Notes due January 1, 2009 (the "Exchange Notes"), which have been
registered under the Securities Act of 1933 (the "Securities Act"), upon the
terms and subject to the conditions set forth in the Prospectus dated January
29,1999 (as the same may be amended or supplemented from time to time, the
"Prospectus"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which, together with the Prospectus, constitute the "Exchange
Offer").
Subject to and effective upon the acceptance for exchange of the Outstanding
Notes tendered herewith, the undersigned hereby sells, assigns and transfers
to or upon the order of the Authority all right, title and interest in and to
such Outstanding Notes as are being tendered herewith. The undersigned hereby
irrevocably constitutes and appoints the Exchange Agent as its agent and
attorney-in-fact (with full knowledge that the Exchange Agent is also acting
as agent of the Authority in connection with the Exchange Offer and as Trustee
under the Senior Subordinated Notes Indenture for the Outstanding Notes and
the Exchange Notes) with respect to the tendered Outstanding Notes, with full
power of substitution (such power of attorney being an irrevocable power
coupled with an interest), subject only to the right of withdrawal described
in the Prospectus, to: (i) deliver such Outstanding Notes to the Authority
together with all accompanying evidences of transfer and authenticity to, or
upon the order of, the Authority upon receipt by the Exchange Agent, as the
undersigned's agent, of the Exchange Notes to be issued in exchange for such
Outstanding Notes; (ii) present Certificates for such Outstanding Notes for
transfer, and to transfer such Outstanding Notes on the account books
maintained by DTC; and (iii) receive for the account of the Company all
benefits and otherwise exercise all rights of beneficial ownership of such
Outstanding Notes, all in accordance with the terms and conditions of the
Exchange Offer.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED HAS FULL
POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE
OUTSTANDING NOTES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR
EXCHANGE, THE AUTHORITY WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE
THERETO, FREE AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES,
AND THAT THE OUTSTANDING NOTES TENDERED HEREBY ARE NOT SUBJECT TO ANY ADVERSE
CLAIMS OR PROXIES. THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND DELIVER ANY
ADDITIONAL DOCUMENTS DEEMED BY THE COMPANY OR THE EXCHANGE AGENT TO BE
NECESSARY OR DESIRABLE TO COMPLETE THE EXCHANGE, SALE, ASSIGNMENT AND TRANSFER
OF THE OUTSTANDING NOTES TENDERED HEREBY. THE UNDERSIGNED HAS READ AND AGREES
TO ALL OF THE TERMS OF THE EXCHANGE OFFER.
The name(s) and address(es) of the registered holder(s) of the Outstanding
Notes tendered hereby should be printed above, if they are not already set
forth above, as they appear on the Certificates representing such Outstanding
Notes. The Certificate number(s) and the Outstanding Notes that the
undersigned wishes to tender should be indicated in the appropriate boxes
above.
If any tendered Outstanding Notes are not exchanged pursuant to the Exchange
Offer for any reason, or if Certificates are submitted for more Outstanding
Notes than are tendered or accepted for exchange, Certificates for such
nonexchanged or nontendered Outstanding Notes will be returned (or, in the
case of Outstanding Notes tendered by book-entry transfer, such Outstanding
Notes will be credited to an account maintained at DTC), without expense to
the tendering holder promptly following the expiration or termination of the
Exchange Offer.
4
<PAGE>
The undersigned understands that tenders of Outstanding Notes pursuant to
any one of the procedures described in "The Exchange Offer--Procedures for
Tendering Outstanding Notes" in the Prospectus and in the instructions herein
will, upon the Company's acceptance for exchange of such tendered Outstanding
Notes, constitute a binding agreement between the undersigned and the Company
upon the terms and subject to the conditions of the Exchange Offer. The
undersigned recognizes that, under certain circumstances set forth in the
Prospectus, the Company may not be required to accept for exchange any of the
Outstanding Notes tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby directs that the Exchange Notes be
issued in the name(s) of the undersigned or, in the case of a book-entry
transfer of Outstanding Notes, that such Exchange Notes be credited to the
account indicated above maintained at DTC. If applicable, substitute
Certificates representing Outstanding Notes not exchanged or not accepted for
exchange will be issued to the undersigned or, in the case of a book-entry
transfer of Outstanding Notes, will be credited to the account indicated above
maintained at DTC. Similarly, unless otherwise indicated under "Special
Delivery Instructions," please deliver Exchange Notes to the undersigned at
the address shown below the undersigned's signature.
BY TENDERING OUTSTANDING NOTES AND EXECUTING THIS LETTER OF TRANSMITTAL, THE
UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT: (i) THE UNDERSIGNED IS NOT AN
"AFFILIATE" OF THE AUTHORITY (WITHIN THE MEANING OF RULE 405 UNDER THE
SECURITIES ACT), OR IF THE UNDERSIGNED IS AN AFFILIATE, THE UNDERSIGNED WILL
COMPLY WITH THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE
SECURITIES ACT TO THE EXTENT APPLICABLE; (ii) ANY EXCHANGE NOTES TO BE
RECEIVED BY THE UNDERSIGNED ARE BEING ACQUIRED IN THE ORDINARY COURSE OF ITS
BUSINESS; AND (iii) THE UNDERSIGNED HAS NO ARRANGEMENT OR UNDERSTANDING WITH
ANY PERSON TO PARTICIPATE IN A DISTRIBUTION (WITHIN THE MEANING OF THE
SECURITIES ACT) OF EXCHANGE NOTES TO BE RECEIVED IN THE EXCHANGE OFFER. IF THE
UNDERSIGNED IS NOT A BROKER-DEALER, BY TENDERING OUTSTANDING NOTES AND
EXECUTING THIS LETTER OF TRANSMITTAL, THE UNDERSIGNED REPRESENTS AND AGREES
THAT IT IS NOT ENGAGED IN, AND DOES NOT INTEND TO ENGAGE IN, A DISTRIBUTION OF
EXCHANGE NOTES. IF THE UNDERSIGNED IS A BROKER-DEALER THAT WILL RECEIVE
EXCHANGE NOTES FOR ITS OWN ACCOUNT IN EXCHANGE FOR OUTSTANDING NOTES PURSUANT
TO THE EXCHANGE OFFER, BY TENDERING OUTSTANDING NOTES AND EXECUTING THIS
LETTER OF TRANSMITTAL, THE UNDERSIGNED REPRESENTS AND AGREES THAT SUCH
OUTSTANDING NOTES WERE ACQUIRED BY SUCH BROKER-DEALER FOR ITS OWN ACCOUNT AS A
RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES AND IT WILL
DELIVER A PROSPECTUS MEETING THE REQUIREMENTS OF THE SECURITIES ACT IN
CONNECTION WITH ANY RESALE OF EXCHANGE NOTES (PROVIDED THAT, BY SO
ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, SUCH BROKER-DEALER WILL NOT BE
DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER" WITHIN THE MEANING OF THE
SECURITIES ACT). THE COMPANY HAS AGREED THAT STARTING ON THE EXPIRATION DATE
AND ENDING ON THE CLOSE OF BUSINESS ON THE FIRST ANNIVERSARY OF THE EXPIRATION
DATE, IT WILL MAKE THE PROSPECTUS AVAILABLE TO ANY PARTICIPATING BROKER-DEALER
IN CONNECTION WITH ANY SUCH RESALE.
All authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned. Except as
stated in the Prospectus and in the Instructions contained in this Letter of
Transmittal, this tender is irrevocable.
5
<PAGE>
PLEASE SIGN HERE PLEASE SIGN HERE
_____________________________________ _______________________________________
Authorized Signature Authorized Signature
Name:________________________________ Name:__________________________________
Title:_______________________________ Title:_________________________________
Address:_____________________________ Address:_______________________________
_____________________________________ _______________________________________
Telephone Number:____________________ Telephone Number:______________________
Dated:_______________________________ Dated:_________________________________
_____________________________________ _______________________________________
Taxpayer Identification or Social Taxpayer Identification or Social
Security Number Security Number
(NOTE: Signature(s) must be guaranteed if required by Instructions 2 and 5.
This Letter of Transmittal must be signed by the registered holder(s) exactly
as the name(s) appear(s) on Certificate(s) for the Outstanding Notes hereby
tendered or on a security position listing, or by any person(s) authorized to
become the registered holder(s) by endorsements and documents transmitted
herewith, including such opinions of counsel, certifications and other
information as may be required by the Authority or the Trustee for the
Outstanding Notes to comply with the restrictions on transfer applicable to
the Outstanding Notes. If signature is by an attorney-in-fact, executor,
administrator, trustee, guardian, officer of a corporation or another acting
in a fiduciary capacity or representative capacity, please set forth the
signer's full title. See Instructions 2 and 5. Please complete substitute Form
W-9 below.)
6
<PAGE>
Guarantee of Signature(s)
(If required--see Instructions 2 and 5)
Signature(s) Guaranteed by an
Eligible Institution:_____________________________ Date:______________________
Authorized Signature
Name of Eligible Institution
Guaranteeing Signature:_______________________________________________________
Address:_______________________________
_______________________________________
Capacity (full title):_______________ ______________________________________
Telephone Number:____________________
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 2, 5 and 6) (See Instructions 2, 5 and 6)
To be completed ONLY if the Ex- To be completed ONLY if Exchange
change Notes or any Outstanding Notes or any Outstanding Notes
Notes that are not tendered are to that are not tendered are to be
be issued in the name of someone sent to someone other than the
other than the registered hold- registered holder(s) of the
er(s) of the Outstanding Notes Outstanding Notes whose name(s)
whose name(s) appear(s) above. appear(s) above, or to such
registered holder(s) at an address
other than that shown above.
Issue: Mail:
[_] Outstanding Notes not tendered, [_] Outstanding Notes not tendered,
to: to:
[_] Exchange Notes, to: [_] Exchange Notes, to:
Name(s) ___________________________ Name(s)____________________________
Address ___________________________ Address ___________________________
___________________________________ ___________________________________
Telephone Number:__________________ Telephone Number:__________________
___________________________________ ___________________________________
(Tax Identification or Social (Tax Identification or Social
Security Number) Security Number)
7
<PAGE>
INSTRUCTIONS
(Forming part of the terms and conditions of the Exchange Offer)
1. Delivery of Letter of Transmittal and Certificates; Guaranteed Delivery
Procedures. This Letter of Transmittal is to be completed if physical
Outstanding Notes ("Certificates") are to be forwarded herewith. If tenders
are to be made pursuant to the procedures for tender by book-entry transfer
set forth in "The Exchange Offer--Procedures for Tendering Outstanding Notes"
in the Prospectus instructions must be transmitted through the DTC Automated
Tender Offer Program (ATOP). Certificates, or timely confirmation of a book-
entry transfer of such Outstanding Notes into the Exchange Agent's account at
DTC, as well as this Letter of Transmittal (or execution thereof on ATOP),
properly completed and duly executed, with any required signature guarantees
and any other documents required by this Letter of Transmittal, must be
received by the Exchange Agent at its address set forth herein on or prior to
the Expiration Date. The term "book-entry confirmation" means a timely
confirmation of book-entry transfer of Outstanding Notes into the Exchange
Agent's account at DTC. Outstanding Notes may be tendered in whole or in part
in integral multiples of $1,000 principal amount.
Holders who wish to tender their Outstanding Notes and: (i) whose
Certificates for such Outstanding Notes are not immediately available; (ii)
who cannot deliver their Certificates, this Letter of Transmittal and all
other required documents to the Exchange Agent prior to the Expiration Date;
or (iii) who cannot complete the procedures for delivery by book-entry
transfer on a timely basis, may tender their Outstanding Notes by properly
completing and duly executing a Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedures set forth in "The Exchange Offer--Procedures
for Tendering Outstanding Notes" in the Prospectus. Pursuant to such
procedures: (i) such tender must be made by or through an Eligible Institution
(as defined below); (ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form accompanying this Letter of
Transmittal, or an Agent's message with respect to guaranteed delivery that is
accepted by the Company must be received by the Exchange Agent prior to the
Expiration Date; and (iii) the Certificates (or a book-entry confirmation)
representing all tendered Outstanding Notes, in proper form for transfer,
together with a Letter of Transmittal (or facsimile thereof), or in the case
of a book-entry transfer, a properly transmitted Agent's message and duly
executed, with any required signature guarantees and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
within three New York Stock Exchange trading days after the date of execution
of such Notice of Guaranteed Delivery, all as provided in "The Exchange
Offer--Procedures for Tendering Outstanding Notes" in the Prospectus.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile or mail to the Exchange Agent and must include a guarantee by an
Eligible Institution in the form set forth in the Notice of Guaranteed
Delivery. For Outstanding Notes to be properly tendered pursuant to the
guaranteed delivery procedure, the Exchange Agent must receive a Notice of
Guaranteed Delivery prior to the Expiration Date. As used herein and in the
Prospectus, "Eligible Institution" means a firm or other entity identified in
Rule 17Ad-15 under the Exchange Act as "an eligible guarantor institution,"
which is a member of one of the following recognized signature guarantee
programs: 1. the Securities Transfer Agents Medallion Program (STAMP) 2. the
New York Stock Exchange Medallion Signature Program (MSP) 3. the Stock
Exchanges Medallion Program (SEMP).
THE METHOD OF DELIVERY OF OUTSTANDING NOTES, THIS LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. 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 TIMELY DELIVERY AND PROPER INSURANCE SHOULD BE
OBTAINED. NO
8
<PAGE>
LETTER OF TRANSMITTAL OR OUTSTANDING NOTES SHOULD BE SENT TO THE AUTHORITY.
HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST
COMPANIES OR NOMINEES TO EFFECT THESE TRANSACTIONS FOR SUCH HOLDERS.
The Authority will not accept any alternative, conditional or contingent
tenders. Each tendering holder, by execution of a Letter of Transmittal (or
execution thereof on ATOP), waives any right to receive any notice of the
acceptance of such tender.
2. Guarantee of Signatures. No signature guarantee on this Letter of
Transmittal is required if: (i) this Letter of Transmittal is signed by the
registered holder (which shall include any participant in DTC whose name
appears on a security position listing as the owner of the Outstanding Notes)
of Outstanding Notes tendered herewith, unless such holder has completed
either the box entitled "Special Issuance Instructions" or the box entitled
"Special Delivery Instructions" above; or (ii) such Outstanding Notes are
tendered for the account of a firm that is an Eligible Institution. In all
other cases, an Eligible Institution must guarantee the signature(s) on this
Letter of Transmittal. See Instruction 5.
3. Inadequate Space. If the space provided in the box captioned "Description
of Outstanding Notes Tendered" is inadequate, the Certificate number(s) and/or
the principal amount of Outstanding Notes and any other required information
should be listed on a separate signed schedule and attached to this Letter of
Transmittal.
4. Partial Tenders and Withdrawal Rights. (Not applicable to Holders who
tender by book-entry transfer). Tenders of Outstanding Notes will be accepted
only in integral multiples of $1,000 principal amount. If less than all the
Outstanding Notes evidenced by any Certificate submitted are to be tendered,
fill in the principal amount of Outstanding Notes which are to be tendered in
the box entitled "Principal Amount Tendered (if less than all)." In such case,
new Certificate(s) for the remainder of the Outstanding Notes that were
evidenced by the old Certificate(s) will be sent to the tendering holder,
unless the appropriate boxes on this Letter of Transmittal are completed,
promptly after the Expiration Date. All Outstanding Notes represented by
Certificates delivered to the Exchange Agent will be deemed to have been
tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of Outstanding Notes may be
withdrawn at any time prior to the Expiration Date. In order for a withdrawal
to be effective, a written, telegraphic or facsimile transmission of such
notice of withdrawal must be timely received by the Exchange Agent at its
address set forth above prior to the Expiration Date. Any such notice of
withdrawal must specify the name of the person who tendered the Outstanding
Notes to be withdrawn, the aggregate principal amount of Outstanding Notes to
be withdrawn, and (if Certificates for such Outstanding Notes have been
tendered) the name of the registered holder of the Outstanding Notes as set
forth on the Certificate(s), if different from that of the person who tendered
such Outstanding Notes. If Certificates for Outstanding Notes have been
delivered or otherwise identified to the Exchange Agent, the notice of
withdrawal must specify the serial numbers on the particular Certificates for
the Outstanding Notes to be withdrawn and the signature on the notice of
withdrawal must be guaranteed by an Eligible Institution, except in the case
of Outstanding Notes tendered for the account of an Eligible Institution. If
Outstanding Notes have been tendered pursuant to the procedures for book-entry
transfer set forth in "The Exchange Offer--Procedures for Tendering
Outstanding Notes," the notice of withdrawal must specify the name and number
of the account at DTC to be credited with the withdrawal of Outstanding Notes
and must otherwise comply with the procedures of DTC. Withdrawals of tenders
of Outstanding Notes may not be rescinded. Outstanding Notes properly
withdrawn will not be deemed validly tendered for purposes of the Exchange
Offer, but may be retendered at any subsequent time prior to the Expiration
Date by following any of the procedures described in the Prospectus under "The
Exchange Offer--Procedures for Tendering Outstanding Notes."
9
<PAGE>
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Authority, in
its sole discretion, which determination shall be final and binding on all
parties. Neither the Authority, any affiliates of the Authority, the Exchange
Agent or any other person shall be under any duty to give any notification of
any defects or irregularities in any notice of withdrawal or incur any
liability for failure to give any such notification. Any Outstanding Notes
which have been tendered but which are withdrawn will be returned to the
holder thereof promptly after withdrawal.
5. Signatures on Letter of Transmittal, Assignments and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the
Outstanding Notes tendered hereby, the signature(s) must correspond exactly
with the name(s) as written on the face of the Certificate(s) or on a security
position listing, without alteration, enlargement or any change whatsoever.
If any of the Outstanding Notes tendered hereby are owned of record by two
or more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Outstanding Notes are registered in different names on
several Certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal (or facsimiles thereof) as there are
names in which Certificates are registered.
If this Letter of Transmittal or any Certificates 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 must submit proper evidence
satisfactory to the Company, in its sole discretion, of such persons'
authority to so act.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Outstanding Notes listed and transmitted hereby,
the Certificate(s) must be endorsed or accompanied by appropriate bond
power(s), signed exactly as the name(s) of the registered owner appear(s) on
the Certificate(s), and also must be accompanied by such opinions of counsel,
certifications and other information as the Company or the Trustee for the
Outstanding Notes may require in accordance with the restrictions on transfer
applicable to the Outstanding Notes. Signature(s) on such Certificate(s) or
bond power(s) must be guaranteed by an Eligible Institution.
6. Special Issuance and Delivery Instructions. If Exchange Notes or
Certificates for Outstanding Notes not exchanged are to be issued in the name
of a person other than the signer of this Letter of Transmittal, or are to be
sent to someone other than the signer of this Letter of Transmittal or to an
address other than that shown above, the appropriate boxes on this Letter of
Transmittal should be completed. In the case of issuance in a different name,
the taxpayer identification number of the person named must also be indicated.
Holders tendering Outstanding Notes by book-entry transfer may request that
Outstanding Notes not exchanged be credited to such account maintained at DTC
as such holder may designate. If no such instructions are given, Outstanding
Notes not exchanged will be returned by mail or, if tendered by book-entry
transfer, by crediting the account indicated above maintained at DTC.
7. Irregularities. The Authority will determine, in its sole discretion, all
questions as to the form of documents, validity, eligibility (including time
of receipt) and acceptance for exchange of any tender of Outstanding Notes,
which determination shall be final and binding on all parties. The Authority
reserves the absolute right, in its sole and absolute discretion, to reject
any and all tenders determined by it not to be in proper form or the
acceptance for exchange of which may, in the view of counsel to the Authority,
be unlawful. The Authority also reserves the absolute right, subject to
applicable law, to waive any of the conditions of the Exchange Offer set forth
in the Prospectus under "The Exchange Offer--Conditions to the Exchange Offer"
or any defect or irregularity in any tender of Outstanding Notes of any
particular holder whether or not similar defects or irregularities are waived
in the case of other holders. The Authority's interpretation of the terms and
conditions of the
10
<PAGE>
Exchange Offer (including this Letter of Transmittal and the instructions
hereto) will be final and binding. No tender of Outstanding Notes will be
deemed to have been validly made until all defects or irregularities with
respect to such tender have been cured or waived. Neither the Authority, any
affiliates of the Authority, the Exchange Agent, or any other person shall be
under any duty to give any notification of any defects or irregularities in
tenders or incur any liability for failure to give any such notification.
8. Questions, Requests for Assistance and Additional Copies. Questions and
requests for assistance may be directed to the Exchange Agent at its address
and telephone number set forth above. Additional copies of the Prospectus, the
Notice of Guaranteed Delivery and the Letter of Transmittal may be obtained
from the Exchange Agent or from your broker, dealer, commercial bank, trust
company or other nominee.
9. Backup Withholding; Substitute Form W-9. Under U.S. Federal income tax
law, a holder whose tendered Outstanding Notes are accepted for exchange is
required to provide the Exchange Agent with such holder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 below. If the Exchange
Agent is not provided with the correct TIN, the Internal Revenue Service (the
"IRS") may subject the holder or other payee to a $50 penalty. In addition,
payments to such holders or other payees with respect to Outstanding Notes
exchanged pursuant to the Exchange Offer may be subject to 31% backup
withholding.
The box in Part 3 of the Substitute Form W-9 may be checked if the tendering
holder has not been issued a TIN and has applied for a TIN or intends to apply
for a TIN in the near future. If the box in Part 3 is checked, the holder or
other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% of all payments made prior to the time a properly certified TIN
is provided to the Exchange Agent. The Exchange Agent will retain such amounts
withheld during the 60 day period following the date of the Substitute Form W-
9. If the holder furnishes the Exchange Agent with its TIN within 60 days
after the date of the Substitute Form W-9, the amounts retained during the 60
day period will be remitted to the holder and no further amounts shall be
retained or withheld from payments made to the holder thereafter. If, however,
the holder has not provided the Exchange Agent with its TIN within such 60 day
period, amounts withheld will be remitted to the IRS as backup withholding. In
addition, 31% of all payments made thereafter will be withheld and remitted to
the IRS until a correct TIN is provided.
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered owner of
the Outstanding Notes or of the last transferee appearing on the transfers
attached to, or endorsed on, the Outstanding Notes. If the Outstanding Notes
are registered in more than one name or are not in the name of the actual
owner, consult the Instructions to Form W-9 (Request for Identification Number
and Certification) for additional guidance on which number to report.
Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" on the
face thereof, to avoid possible erroneous backup withholding. A foreign person
may qualify as an exempt recipient by submitting a properly completed IRS Form
W-8, signed under penalties of perjury, attesting to that holder's exempt
status. Please consult the Instructions to Form W-9 (Request for
Identification Number and Certification) for additional guidance on which
holders are exempt from backup withholding.
11
<PAGE>
Backup withholding is not an additional U.S. federal income tax. Rather, the
U.S. federal income tax liability of a person subject to backup withholding
will be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained.
10. Mutilated, Lost, Destroyed or Stolen Certificates. If any Certificate
representing Outstanding Notes has been mutilated, lost, destroyed or stolen,
the holder should promptly notify the Exchange Agent. The holder will then be
instructed as to the steps that must be taken in order to replace the
Certificate. This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing mutilated, lost, destroyed or
stolen Certificates have been followed.
11. Security Transfer Taxes. Holders who tender their Outstanding Notes for
exchange will not be obligated to pay any transfer taxes in connection
therewith, except that if Exchange Notes are to be delivered to, or are to be
issued in the name of, any person other than the registered holder of the
Outstanding Notes tendered, or if a transfer tax is imposed for any reason
other than the exchange of Outstanding Notes in connection with the Exchange
Offer, then the amount of any such transfer tax (whether imposed on the
registered holder or any other persons) will be payable by the tendering
holder. If satisfactory evidence of payment of such transfer tax or exemption
therefrom is not submitted with the Letter of Transmittal, the amount of such
transfer tax will be billed directly to such tendering holder.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF), TOGETHER
WITH CERTIFICATES REPRESENTING TENDERED OUTSTANDING NOTES OR A BOOK ENTRY
CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
12
<PAGE>
TO BE COMPLETED BY ALL TENDERING SECURITY HOLDERS:
(See Instruction 9)
PAYER'S NAME: STATE STREET BANK AND TRUST COMPANY
Part 1--PLEASE PROVIDE YOUR
TIN ON THE LINE AT RIGHT AND
CERTIFY BY SIGNING AND
DATING BELOW
Social security number or
SUBSTITUTE Employer identification
number
Form W-9 -----------------------
----------------------------------------------------------
Department of Part 2--CERTIFICATION--Under penalties of perjury, I
the Treasury certify that:
Internal (1) The number shown on this form is my correct
Revenue Service taxpayer identification number (or I am waiting for
a number to be issued to me);
Payer's (2) I am not subject to backup withholding either
Request for because: (a) I am exempt from backup withholding;
Taxpayer's (b) I have not been notified by the Internal
Identification Revenue Service ("IRS") that I am subject to backup
Number (TIN) withholding as a result of a failure to report all
interest or dividends; or (c) the IRS has notified
me that I am no longer subject to backup
withholding; and
(3) Any other information provided on this form is true
and correct.
Certification Instructions--You must cross out item (2)
above if you have been notified by the IRS that you are
subject to backup withholding because of underreporting
interest or dividends on your tax return and you have
not been notified by the IRS that you are no longer
subject to backup withholding.
----------------------------------------------------------
SIGNATURE ____________________________ Part 3--
Awaiting
TIN [_]
DATE _________________________________
----------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN
CERTAIN CIRCUMSTANCES RESULT IN BACKUP WITHHOLDING OF
31% OF ANY AMOUNTS PAID TO YOU PURSUANT TO THE EXCHANGE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
----------------------------------------------------------
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECKED THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer
identification number has not been issued to me, and
either (1) I have mailed or delivered an application to
receive a taxpayer identification number to the
appropriate Internal Revenue Service Center or Social
Security Administration Office or (2) I intend to mail
or deliver an application in the near future. I
understand that if I do not provide a taxpayer
identification number by the time of payment, 31% of
all payments made to me on account of the Exchange
Notes shall be retained until I provide a taxpayer
identification number to the Exchange Agent and that,
if I do not provide my taxpayer identification number
within 60 days, such retained amounts shall be remitted
to the Internal Revenue Service as backup withholding
and 31% of all reportable payments made to me
thereafter will be withheld and remitted to the
Internal Revenue Service until I provide a taxpayer
identification number.
SIGNATURE: _________________ DATE: __________________
13
<PAGE>
Exhibit 99.6
NOTICE OF GUARANTEED DELIVERY
for Tender of
8 3/4% Senior Subordinated Notes Due January 1, 2009
(the "Outstanding Notes")
of
Mohegan Tribal Gaming Authority
This Notice of Guaranteed Delivery, or one substantially equivalent to this
form, must be used to tender Outstanding Notes pursuant to the Exchange Offer
described in the Prospectus dated April , 1999 (as the same may be amended or
supplemented from time to time, the "Prospectus") of Mohegan Tribal Gaming
Authority (the "Authority"), if certificates for the Outstanding Notes are not
immediately available, or time will not permit the Outstanding Notes, the
Letter of Transmittal and all other required documents to be delivered to
State Street Bank and Trust Company (the "Exchange Agent") prior to 5:00 p.m.,
New York City time, on [June 2,] 1999 or such later date and time to which the
Exchange Offer may be extended (the "Expiration Date"), or the procedures for
delivery by book-entry transfer cannot be completed on a timely basis. This
Notice of Guaranteed Delivery, or one substantially equivalent to this form,
must be delivered by hand or sent by facsimile transmission or mail to the
Exchange Agent, and must be received by the Exchange Agent prior to the
Expiration Date. See "The Exchange Offer--Procedures for Tendering Outstanding
Notes" in the Prospectus. Capitalized terms used but not defined herein shall
have the same meaning given them in the Prospectus.
The Exchange Agent for the Exchange Offer is:
STATE STREET BANK AND TRUST COMPANY
By Facsimile: By Mail: By Hand before 4:30 p.m.:
(617) 664-5290 State Street Bank and State Street Bank and
Attention: Customer Trust Company Trust Company
Service Confirm by Corporate Trust Corporate Trust
Telephone to: (617) 664-5249 Department Department
P.O. Box 778 Two International Place
Boston, MA 02102 --4th Floor
Attention: Ralph Jones Boston, MA 02110
Attention: Ralph Jones
By Overnight Courier and By Hand after 4:30 p.m.:
State Street Bank and Trust Company
Corporate Trust Department
Two International Place--4th Floor
Boston, MA 02110
Attention: Ralph Jones
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA FACSIMILE
OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to the Authority, upon the terms and subject
to the conditions set forth in the Prospectus and the related Letter of
Transmittal, the Outstanding Notes indicated below pursuant to the guaranteed
delivery procedures set forth in the Prospectus under the caption "The
Exchange Offer--Procedures for Tendering Outstanding Notes."
Name(s) of Registered Holder(s): ______________________________________________
(Please Print or Type)
Signature(s): _________________________________________________________________
Address(es): __________________________________________________________________
_______________________________________________________________________________
Area Code(s) and Telephone Number(s): _________________________________________
Account Number: _______________________________________________________________
Date: _________________________________________________________________________
Certificate No(s). Principal Amount of Outstanding
(if available) Notes Tendered*
_________________________________ _____________________________________
_________________________________ _____________________________________
_________________________________ _____________________________________
_________________________________ _____________________________________
_________________________________ _____________________________________
_________________________________ _____________________________________
* Must be in integral multiples of $1,000 principal amount.
GUARANTEE OF DELIVERY
(Not to be used for signature guarantee)
The undersigned, 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 a correspondent in the United States or
an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under
the Securities Exchange Act of 1934, as amended, hereby guarantees that the
undersigned will deliver to the Exchange Agent the certificates representing
the Outstanding Notes being tendered hereby in proper form for transfer (or a
confirmation of book-entry transfer of such Outstanding Notes, into the
Exchange Agent's account at the book-entry transfer facility of The Depository
Trust Company ("DTC")) with delivery of a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), with any required signature
guarantees and any other required documents, all within three New York Stock
Exchange trading days after the date of execution of the Notice of Guaranteed
Delivery.
Name of Firm: ___________________ _____________________________________
Address: ________________________ Authorized Signature
_________________________________ Name: _______________________________
Zip Code Please Print or Type
Telephone No.: __________________ Title: ______________________________
Dated: ______________________________
The institution that completes this form must communicate the guarantee to
the Exchange Agent and must deliver the certificates representing any
Outstanding Notes (or a confirmation of book-entry transfer of such
Outstanding Notes into the Exchange Agent's account at DTC) and the Letter of
Transmittal to the Exchange Agent within the time period shown herein. Failure
to do so could result in a financial loss to such institution.
2
<PAGE>
Exhibit 99.7
Mohegan Tribal Gaming Authority
Offer to Exchange its
8 3/4% Senior Subordinated Notes Due January 1, 2009
Which Have Been Registered Under
the Securities Act of 1933
For Any and All of its Outstanding
8 3/4% Senior Subordinated Notes Due January 1, 2009
Pursuant to the Prospectus Dated April , 1999
TO: BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES:
Mohegan Tribal Gaming Authority (the "Authority") is offering to exchange
(the "Exchange Offer"), upon and subject to the terms and conditions set forth
in the enclosed Prospectus, dated April , 1999 (the "Prospectus"), and the
enclosed Letter of Transmittal (the "Letter of Transmittal"), its 8 3/4%
Senior Subordinated Notes due January 1, 2009 which have been registered under
the Securities Act of 1933 (the "Exchange Notes") for any and all of its
outstanding 8 3/4% Senior Subordinated Notes due January 1, 2009 (the
"Outstanding Notes"). The Exchange Offer is being made in order to satisfy
certain obligations of the Authority contained in the Registration Rights
Agreement dated as of March 3, 1999, among the Authority, Salomon Smith
Barney, NationsBanc Montgomery Securities LLC, SG Cowen, Bear, Stearns & Co.
Inc., BancBoston Robertson Stephens, Inc. and Fleet Securities Inc.
In connection with the Exchange Offer, we are requesting that you contact
your clients for whom you hold Outstanding Notes registered in your name or in
the name of your nominee, or who hold Outstanding Notes registered in their
own names. The Authority will not pay any fees or commissions to any broker,
dealer or other person in connection with the solicitation of tenders pursuant
to the Exchange Offer. However, you will, upon request, be reimbursed for
reasonable out-of-pocket expenses incurred in connection with soliciting
acceptances of the Exchange Offer. The Authority will pay or cause to be paid
all transfer taxes applicable to the exchange of Outstanding Notes pursuant to
the Exchange Offer, except as set forth in the Prospectus and the Letter of
Transmittal.
For your information and for forwarding to your clients, we are enclosing
the following documents:
1. Prospectus dated April , 1999;
2. A Letter of Transmittal for your use and for the information of your
clients;
3. A form of Notice of Guaranteed Delivery; and
4. A form of letter which may be sent to your clients for whose account you
hold Outstanding Notes registered in your name or the name of your
nominee, with space provided for obtaining such clients' instructions
with regard to the Exchange Offer.
YOUR PROMPT ACTION IS REQUESTED. THE EXCHANGE OFFER WILL EXPIRE AT 5:00
P.M., NEW YORK CITY TIME, ON [JUNE 2,] 1999 (THE "EXPIRATION DATE"), UNLESS
EXTENDED BY THE COMPANY (IN WHICH CASE THE TERM "EXPIRATION DATE" SHALL MEAN
THE LATEST DATE AND TIME TO WHICH THE EXCHANGE OFFER IS EXTENDED). THE
OUTSTANDING NOTES TENDERED PURSUANT TO THE EXCHANGE OFFER MAY BE WITHDRAWN,
SUBJECT TO THE PROCEDURES DESCRIBED IN THE PROSPECTUS AND THE LETTER OF
TRANSMITTAL, AT ANY TIME PRIOR TO THE EXPIRATION DATE.
To participate in the Exchange Offer, a duly executed and properly completed
Letter of Transmittal (or execution on ATOP), with any required signature
guarantees and any other required documents, should be sent to the Exchange
Agent and certificates representing the Outstanding Notes should be delivered
to the Exchange Agent, all in accordance with the instructions set forth in
the Prospectus and the Letter of Transmittal.
<PAGE>
If holders of Outstanding Notes wish to tender, but it is impracticable for
them to forward their certificates for Outstanding Notes prior to the
expiration of the Exchange Offer or to comply with the book-entry transfer
procedures on a timely basis, a tender may be effected by following the
guaranteed delivery procedures described in the Prospectus and the Letter of
Transmittal.
Any inquiries you may have with respect to the Exchange Offer, or requests
for additional copies of the enclosed materials, should be directed to the
Exchange Agent for the Outstanding Notes, at its address and telephone number
set forth on the front of the Letter of Transmittal.
Very truly yours,
Mohegan Tribal Gaming Authority
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
OTHER PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE
YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF
OF EITHER OF THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS
EXPRESSLY MADE IN THE PROSPECTUS OR THE LETTER OF TRANSMITTAL.
2
<PAGE>
Exhibit 99.8
Mohegan Tribal Gaming Authority
Offer to Exchange its
8 3/4% Senior Subordinated Notes Due January 1, 2009
Which Have Been Registered Under the Securities Act of 1933
For Any and All of its Outstanding
8 3/4% Senior Subordinated Notes Due January 1, 2009
TO OUR CLIENTS:
Enclosed for your consideration is a Prospectus, dated April , 1999 (the
"Prospectus"), and a form of Letter of Transmittal (the "Letter of
Transmittal"), relating to the offer (the "Exchange Offer") of Mohegan Tribal
Gaming Authority (the "Authority") to exchange its 8 3/4% Senior Subordinated
Notes due January 1, 2009, which have been registered under the Securities Act
of 1933 (the "Exchange Notes"), for any and all of its outstanding 8 3/4%
Senior Subordinated Notes due January 1, 2009 (the "Outstanding Notes"), upon
the terms and subject to the conditions described in the Prospectus and the
Letter of Transmittal. The Exchange Offer is being made in order to satisfy
certain obligations of the Authority contained in the Registration Agreement
dated as of March 3, 1999, among the Authority, Salomon Smith Barney,
NationsBanc Montgomery Securities LLC, SG Cowen, Bear, Stearns & Co. Inc.,
BancBoston Robertson Stephens Inc. and Fleet Securities Inc.
This material is being forwarded to you as the beneficial owner of the
Outstanding Notes carried by us in your account but not registered in your
name. A TENDER OF SUCH OUTSTANDING NOTES MAY ONLY BE MADE BY US AS THE HOLDER
OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS.
Accordingly, we request instructions as to whether you wish us to tender on
your behalf the Outstanding Notes held by us for your account, pursuant to the
terms and conditions set forth in the enclosed Prospectus and Letter of
Transmittal.
Your instructions should be forwarded to us as promptly as possible in order
to permit us to tender the Outstanding Notes on your behalf in accordance with
the provisions of the Exchange Offer. The Exchange Offer will expire at 5:00
p.m., New York City time, on [June 2,] 1999, unless extended by the Authority
(the "Expiration Date"). Any Outstanding Notes tendered pursuant to the
Exchange Offer may be withdrawn, subject to the procedures described in the
Prospectus and the Letter of Transmittal, at any time prior to the Expiration
Date.
If you wish to have us tender your Outstanding Notes, please so instruct us
by completing, executing and returning to us the instruction form included
with this letter. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR
INFORMATION ONLY AND MAY NOT BE USED DIRECTLY BY YOU TO TENDER OUTSTANDING
NOTES.
<PAGE>
INSTRUCTIONS WITH RESPECT TO
THE EXCHANGE OFFER
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein, including the Prospectus and the accompanying
form of Letter of Transmittal, relating to the Exchange Offer made by Mohegan
Tribal Gaming Authority with respect to its Outstanding Notes.
This will instruct you as to the action to be taken by you relating to the
Exchange Offer with respect to the Outstanding Notes held by you for the
account of the undersigned, upon and subject to the terms and conditions set
forth in the Prospectus and the Letter of Transmittal.
The aggregate principal amount of the Outstanding Notes held by you for the
account of the undersigned is (fill in amount):
$ ___________________________________
of the 8 3/4% Senior Subordinated
Notes due January 1, 2009
With respect to the Exchange Offer, the undersigned hereby instructs you
(check appropriate box):
[_]To TENDER the following Outstanding Notes held by you for the account of
the undersigned (insert aggregate principal amount at maturity of
Outstanding Notes to be tendered, in integral multiples of $1,000):
$ ___________________________________
of the 8 3/4% Senior Subordinated
Notes due January 1, 2009
[_]NOT to tender any Outstanding Notes held by you for the account of the
undersigned.
2
<PAGE>
If the undersigned instructs you to tender the Outstanding Notes held by you
for the account of the undersigned, it is understood that you are authorized
to make, on behalf of the undersigned (and the undersigned, by its signature
below, hereby makes to you), the representations, warranties and agreements
contained in the Letter of Transmittal that are to be made with respect to the
undersigned as beneficial owner.
SIGN HERE
Name of beneficial owner(s): __________________________________________________
Signature(s): _________________________________________________________________
Name(s) (please print): _______________________________________________________
Address: ______________________________________________________________________
Telephone Number: _____________________________________________________________
Taxpayer Identification or Social Security Number(s): _________________________
Date: _________________________________________________________________________
None of the Outstanding Notes held by us for your account will be tendered
unless we receive written instructions from you to do so. Unless a specific
contrary instruction is given in the space provided, your signature(s) hereon
shall constitute an instruction to us to tender all the Outstanding Notes held
by us for your account.
3
