SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T 3
FOR APPLICATIONS FOR QUALIFICATION OF INDENTURES
UNDER THE
TRUST INDENTURE ACT OF 1939
CASINO MAGIC OF LOUISIANA, CORP.
(Name of Applicant)
711 Casino Magic Drive
Bay St. Louis, Mississippi 39520
(Address of Principal Executive Offices)
SECURITIES TO BE ISSUED UNDER
THE INDENTURE TO BE QUALIFIED
Title of Class Amount
11 1/2% Senior Secured Notes Maximum of
Due 1999 $35,000,000
Approximate Date of Proposed Public Offering: As soon as practicable
following the effective date hereof.
Name and Address of Agent
for Service of Process:
Daniel K. Rester, Esq.
Hoffman Sutterfield Ensenat
P.O. Drawer 4407
2431 S. Acadian Thruway, Suite 600
Baton Rouge, Louisiana 70821-4407
with a copy to:
J. Patrick Ryan
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
1500 NationsBank Plaza
300 Convent
San Antonio, Texas 78205
<PAGE>
GENERAL
1. GENERAL INFORMATION. Furnish the following as to the applicant:
(a) Form of organization: Casino Magic of Louisiana, Corp. (formerly
known as Crescent City Capital Development Corporation) (the "Company") is a
corporation.
(b) State or other sovereign power under the laws of which organized:
Louisiana
2. SECURITIES ACT EXEMPTION APPLICABLE. State briefly the facts relied upon
by the applicant as a basis for the claim that registration of the indenture
securities under the Securities Act of 1933 is not required.
The indenture securities ("Indenture Securities") consist of (i)
$35,000,000 principal amount of 11 1/2% Senior Secured Notes due 1999 to be
issued by the Company, the debtor entity in the matter of Crescent City
Capital Development Corporation in the United States Bankruptcy Court for the
Eastern District Court of Louisiana (Case No. 95-12735 (TMB) (the "Bankruptcy
Proceeding")), and (ii) a guaranty (the "Guaranty") of such Notes being issued
by Jefferson Casino Corporation ("Jefferson") which will be the parent company
to the Company and together with the Company, the successor to the business of
the Company within the meaning of Section 1145(a) of Title 11 of the United
States Code (the "Bankruptcy Code"). The Indenture Securities are to be
issued under an indenture (the "Indenture") between the Company and First
Trust National Association, as Trustee (the "Trustee"). The Indenture
Securities are being issued pursuant to a Second Amended Chapter 11 Plan of
Reorganization (the "Plan of Reorganization"), pursuant to the exemption from
registration provided by Section 1145 of Title 11 of the United States Code.
The Plan of Reorganization and related Disclosure Statement (attached as
Exhibits 2.1 and 2.2, respectively) were submitted for approval by creditors
in the Bankruptcy Proceeding on April 12, 1996, were subsequently approved by
such creditors and the Plan of Reorganization was confirmed by the Court on
April 29, 1996. The Plan of Reorganization expressly provides for the
issuance of such Notes and Guaranty.
AFFILIATIONS
3. AFFILIATES. Furnish a list or diagram of all affiliates of the applicant
and indicate the respective percentages of voting securities or other bases of
control.
Pursuant to the Plan of Reorganization, Jefferson Casino Corporation
("Jefferson"), a Louisiana Corporation, is acquiring 100% of the voting
securities of the Company to be outstanding following the Plan of
Reorganization. Jefferson is a wholly-owned subsidiary of Casino Magic Corp.,
a Minnesota corporation. Under the Indenture Jefferson provides a Guaranty of
such Notes and is subject to an indirect obligation through the Company to pay
any Aggregate Excess Cash Flow (as defined) generated by the operation, if
any, of Jefferson as payments upon the Notes, until the aggregate unpaid
principal balance under the Notes is reduced to less than $17.5 million.
The following charts set forth the names of the companies controlled by
Casino Magic Corp. within the meaning of the Act (unless otherwise indicated,
the relevant beneficial ownership interest is 100%):
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<PAGE>
Names of Affiliates of Casino Magic Corp.
Mardi Gras Casino Corp.
Biloxi Casino Corp.
Casino Magic Finance Corp.
Bay St. Louis Casino Corp.
Casino Magic Mang. Serv. Corp.
Carolina Magic Corp.
Casino One Corp.
Boston Casino Corp
Crawford County Casino Corp.
Magic Resorts Corp.
St. Louis Casino Corp.
Bucks County Casino Corp.
Delta Casino Corp.
Kansas Magic Corp., which is a 50% member of two limited liability
companies, Kansas Gaming Partners, L.L.C. and Kansas Financial
Partners, L.L.C.
Coastal Land of Florida, Inc.
Casino Magic American Corp.
Gulfport Casino Corp.
Mobile Casino Corp.
Iowa Magic Corp.
Atlantic Pacific Corp.
625 Corp.
Casino Advertising, Inc.
Casino Magic Neuquen, S.A.
Casino Magic (Europe) B.V., which owns a 49% joint venture interest in
Porto Carras Casino, S.A.
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<PAGE>
MANAGEMENT AND CONTROL
4. DIRECTORS AND EXECUTIVE OFFICERS. List the names and complete mailing
addresses of all directors and executive officers of the applicant and all
persons chosen to become directors or executive officers. Indicate all
offices with the applicant held or to be held by each person named.
Present Position(s)
Name and Address with the Company
Marlin F. Torguson(1) Chairman of the Board and
Director
James E. Ernst(1) Chief Executive Officer,
President and Director
Jay S. Osman(1) Executive Vice President, Chief
Financial Officer and Treasurer
Robert A. Callaway(1) Executive Vice President,
General Counsel and Secretary
Roger H. Frommelt Assistant Secretary and
Frommelt & Eide, Ltd. Director
580 International Centre
Minneapolis, MN 55402
Allen Kokesch Director
Pelican Bay
5895 Chanteclair Drive
Condo #117
Naples, FL 33963
Wayne K. Lund Director
Lund and Associates
1612 Sheriden Lake Road
Rapid City, SD 57702-3423
E. Thomas Welch Director
The Resource Bank
900 Second Avenue South
Suite 300
Minneapolis, MN 55402
(1) Except as otherwise set forth above, the mailing address of the directors
and executive officers of the Company is 711 Casino Magic Drive, Bay St.
Louis, Mississippi 39520.
No other persons have currently been elected to become directors or
executive officers of the Company.
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<PAGE>
5. PRINCIPAL OWNERS OF VOTING SECURITIES. Furnish the following information
as to each person owning 10 percent or more of the voting securities of the
applicant.
As of the date of filing of this Form T 3, Jefferson holds 100% of the
outstanding Common Stock of the Company (100 shares) acquired pursuant to the
Plan of Reorganization.
UNDERWRITERS
6. UNDERWRITERS. Give the name and complete mailing address of (a) each
person who, within three years prior to the date of filing the application,
acted as an underwriter of any securities of the obligor which were
outstanding on the date of filing the application, and (b) each proposed
principal underwriter of the securities proposed to be offered. As to each
person specified in (a), give the title of each class of securities
underwritten.
(a) Within three years prior to the date of filing of this Form T 3,
no person has acted as an underwriter of any securities of the Company which
are outstanding on the date of filing of this Form T 3.
(b) There is no underwriter for the Notes or Guaranty.
CAPITAL SECURITIES
7. CAPITALIZATION. (a) Furnish the following information as to each
authorized class of securities of the applicant.
The securities of the Company outstanding as of the date of filing of
this Form T 3 were as follows:
Amount Amount
Title of Class Authorized Outstanding
Common Stock, $.01 par 200 shares 100 shares
value
11 1/2% Senior Secured Notes
Due 1999(1) $35,000,000 $ 0
(1) Such notes are to be guaranteed by Jefferson.
(b) Give a brief outline of the voting rights of each class of voting
securities referred to in paragraph (a) above.
Holders of shares of Common Stock are entitled to one vote for each share
owned on any matter on which a holder of shares of Common Stock is entitled to
vote, and no shares have cumulative voting rights. Holders of the Notes do
not have any voting rights by reason of ownership of those securities.
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<PAGE>
INDENTURE SECURITIES
8. ANALYSIS OF INDENTURE PROVISIONS.
The following sets forth only those provisions of the Indenture required
to be analyzed by Section 305(a)(2) of the Act and does not purport to set
forth all of the provisions of the Indenture. Reference is made to the full
provisions of the Indenture for a complete description. Capitalized terms
used herein and not otherwise defined shall have the same meaning ascribed to
them in the Indenture.
(a) EVENTS OF DEFAULT. Pursuant to Section 6.01 of the Indenture, a
Default exists under the Indenture upon the occurrence of any one of the
following events:
1. the failure by the Company to pay any installment of interest
on the Notes as and when due and payable and the continuance of any such
failure for ten (10) days;
2. the failure by the Company to pay all or any part of the
principal, or premium, if any, on the Notes when and as the same become due
and payable at maturity, redemption, by acceleration or otherwise; provided
that, in respect of a payment of Excess Cash Flow, if the amount thereof, in
respect of any period, is greater than the amount originally determined by the
Company for purposes of making such payment (but no more than five percent
(5%) of such originally determined amount), such greater amount, less the
payment already made, shall be deemed to be due and payable five (5) days
after such greater amount is finally determined;
3. except as provided in item (1) or (2) of this subsection (a),
failure of the Company or any Guarantor to comply with any provision of
Section 5.10 (limiting transactions with affiliates), 5.14 (limiting business
activities to those involving a Related Business), 5.21 (prohibiting mergers
or consolidations), 11.3 (describing allowable reallocations of Boat
Conveyance Proceeds), or 11.4 (describing allowable reallocation of Boat
Conveyance Proceeds) of the Indenture, which failure continues for thirty (30)
days;
4. failure of the Company or any Guarantor to comply with any
provision of Section 4.4 of the Indenture (limiting ability to substitute
collateral);
5. except as otherwise provided in the Indenture, the failure by
the Company or any Guarantor to observe or perform any other covenant or
agreement contained in the Notes or the Indenture and the continuance of such
failure for a period of thirty (30) days after written notice is given to the
Company by the Trustee or to the Company and Trustee by the Holders of at
least twenty-five percent (25%) in aggregate principal amount of the Notes
outstanding;
6. a decree, judgment, or order by a court of competent
jurisdiction shall have been entered adjudging the Company or any Guarantor as
bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization of the Company or such Guarantor under any bankruptcy or
similar law, and such decree or order shall have continued undischarged and
unstayed for a period of sixty (60) days; or a decree or order of a court of
competent jurisdiction over the appointment of a receiver, liquidator,
trustee, or assignee in bankruptcy or insolvency of the Company or such
Guarantor, or of the Property of any such person, or for the winding up or
liquidation of the affairs of any such person, shall have been entered, and
such decree, judgment, or order shall have remained in force undischarged and
unstayed for a period of sixty (60) days;
7. the Company or any Guarantor shall institute proceedings to
be adjudicated a voluntary bankrupt, or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a petition or answer or
consent seeking reorganization under any bankruptcy or similar law
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<PAGE>
or similar statute, or shall consent to the filing of any such petition, or
shall consent to the appointment of a Custodian, receiver, liquidator,
trustee, or assignee in bankruptcy or insolvency of it or any of its assets or
Property, or shall make a general assignment for the benefit of creditors, or
shall admit in writing its inability to pay its debts generally as they become
due, or shall, within the meaning of any Bankruptcy Law, become insolvent,
fail generally to pay their debts as they become due, or take any corporate
action in furtherance of or to facilitate, conditionally or otherwise, any of
the foregoing;
8. a default in the payment of principal, premium or interest
when due which extends beyond any stated period of grace applicable thereto or
an acceleration for any other reason of maturity of any Indebtedness of the
Company, any Guarantor or any of their respective Subsidiaries with an
aggregate principal amount in excess of $500,000;
9. final unsatisfied judgments not covered by insurance
aggregating in excess of $500,000, at any one time rendered against the
Company, any Guarantor or any of their respective Subsidiaries and not stayed,
bonded or discharged within sixty (60) days;
10. the closing after the Commencement Date (other than for
repair or maintenance) of a substantial portion of the Crescent City Queen
Casino or, if applicable, the casino on a Qualified Substitute Boat for more
than forty-five (45) consecutive days;
11. the loss of the legal right to operate the Crescent City
Queen Casino or, if applicable, the casino on a Qualified Substitute Boat and
such loss is continuing for more than ninety (90) consecutive days;
12. an event of default specified in any of the Collateral
Documents; or
13. any of the Collateral Documents fails to become or ceases to
be in full force and effect in accordance with the terms of this Indenture, or
ceases (once effective) to create in favor of the Trustee, with respect to any
material amount of Collateral, a valid and perfected first priority Lien on
the Collateral to be covered thereby (unless a prior or exclusive Lien is
specifically permitted by the Indenture).
If a Default or an Event of Default occurs and is continuing and if
it is known to the Trustee, the Trustee shall mail to each Noteholder notice
of the uncured Default or Event of Default within ninety (90) days after such
Default or Event of Default occurs. Except in the case of a Default or an
Event of Default in payment of principal (or premium, if any) of, or interest
on, any Note (including the payment of the Redemption Price on the Redemption
Date), the Trustee may withhold the notice if and so long as a Trust Officer
in good faith determines that withholding the notice is in the interest of the
Holders.
Subject to the provisions of the Indenture relating to the duties of
the Trustee in case an Event of Default shall occur and be continuing, the
Trustee will be under no obligation to exercise any of its rights or powers
under the Indenture at the request or direction of any of the Holders, unless
such Holders shall have offered the Trustee reasonable indemnity. Subject to
such provisions for the indemnification of the Trustee, the Holders of a
majority in aggregate principal amount of the Notes will have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee.
If an Event of Default (other than in respect of certain events of
bankruptcy, insolvency or reorganization of the Company or Guarantor) shall
occur and be continuing, either the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes may, by written declaration to the
Company, accelerate the maturity of all the Notes. If an Event of Default
occurs in respect of certain events of bankruptcy, insolvency or
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<PAGE>
reorganization of the Company or Guarantor, then the entire principal amount
of the Notes shall become immediately due and payable without declaration or
other notice to the Company or the Trustee. After any such acceleration, but
before a judgement or decree based on acceleration, the Holders of a majority
in aggregate principal amount of the Notes may, under certain circumstances,
rescind such acceleration if (x) all Events of Default, other than the non-
payment of accelerated principal, have been cured or waived as provided in the
Indenture or are otherwise no longer continuing and (y) the Company has paid
all amounts that have otherwise become due under the Notes.
No Holder of any Note will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given the Trustee written notice of a
continuing Event of Defualt, the Holders of at least 25% in aggregate
principal amount of the Notes shall have made written request to the Trustee
to institute such proceeding, such Holder has offered to the Trustee
reasonable indemnity, if required, the Trustee for 60 days after receipt of
such notice has failed to institute such proceeding, and no direction
inconsistent with such request shall have been given to the Trustee during
such 60-day period by the Holders of a majority in aggregate principal amount
of the Notes. However, such limitations do not apply to a suit instituted by
a Holder of the Notes for enforcement of payment of the principal of, premium,
if applicable, or interest on such Notes on or after the respective due dates
expressed in such Notes.
(b) EXECUTION AND AUTHENTICATION. Section 2.2 of the Indenture
provides that Notes in an aggregate principal amount of $35,000,000 may be
executed by the Company and delivered to the Trustee for authentication for
original issuance. The Trustee shall authenticate and deliver the Notes upon
written orders of the Company signed by two Officers specifying the amount of
Notes to be authenticated and the date on which the original issue of Notes is
to be authenticated. Two Officers of the Company shall execute the Notes for
the Company. A Note shall not be valid until the Trustee manually signs the
certificate of authentication on the Note. The signature shall be conclusive
evidence that the Note has been authenticated under the Indenture.
The Notes are being issued pursuant to the Plan of Reorganization to the
creditors of the Company in its reorganization proceeding.
(c) SUBSTITUTION AND RELEASE OF COLLATERAL.
1. Section 4.3 of the Indenture makes provision for the sale or
disposition and release of equipment and certian other types of Collateral
which have become obsolete or worn out, subject to substitution for such
Collateral or without restriction if such property is no longer necessary or
desirable for operations and maintenance of earnings and is not material.
2. Section 4.4 of the Indenture provides that, so long as no
Default or Event of Default thereunder shall have occurred and be continuing,
the Company may, without the consent of the Trustee, but otherwise subject to
the requirements of the Indenture, consummate a Qualified Sale of the Crescent
City Queen Casino vessel, free and clear of the Liens of the Mortgage and the
Security Agreement, in exchange for Cash or for a Qualified Substitute Boat
(which may be acquired either by exchange or by construction of a new vessel,
with proceeds from any sale of the Crescent City Queen Casino released for
construction purposes in the manner prescribed in the Indenture) or a
combination thereof, and that the Company may, without the consent of the
Trustee, but otherwise subject to the requirements of this Indenture, enter
into a Qualified Lessor Lease of the Crescent City Queen Casino vessel,
subject to the Liens of the Mortgage or the Other Boat Mortgage, and the other
Collateral Documents.
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<PAGE>
3. Section 4.5 of the Indenture provides that so long as no
Default or Event of Default shall have occurred and be continuing, then
provided the Trustee shall have received notice from the Company fifteen (15)
days before the Release Date (the date on which the aggregate Note principal
balance is less than $17,500,000) of the Release Date, the Trustee shall on
the Release Date release or cause to be released all Liens securing Indenture
Obligations other than those Liens on the Crescent City Queen Casino (or
arising from a permitted lease thereof) or on a Qualified Substitute Boat.
The remaining Collateral shall be released upon discharge of the Indenture.
(d) SATISFACTION AND DISCHARGE.
As provided in Article VIII of the Indenture, except for certain
surviving provisions, the Company and the Guarantors may terminate all of
their obligations under the Indenture when:
1. all Notes theretofore authenticated and delivered (other than
Notes which have been destroyed, lost or stolen and which have been replaced
or paid as provided in Section 2.7 of the Indenture) have been delivered to
the Trustee for cancellation;
2. the Company or a Guarantor has paid or caused to be paid all
sums payable by the Company under the Indenture; and
3. the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel (who may be outside counsel to the
Company, but not in-house counsel to the Company or any of its Subsidiaries),
each stating that all conditions precedent specified in the Indenture relating
to its satisfaction and discharge have been complied with and that such
satisfaction and discharge will not result in a breach or violation of, or
constitute a Default under, the Indenture or any other instrument to which the
Company, any Guarantor or any of their Subsidiaries is a party or by which it
or their Property is bound.
4. The Indenture also provides for defeasance of the Indenture
in certain cases, subject to certain conditions, including the deposit with
the Trustee of amounts sufficient to satisfy all principal, interest and
premium obligations.
(e) COMPLIANCE CERTIFICATE. Section 5.7 of the Indenture provides as
follows:
The Company shall deliver to the Trustee within ninety (90) days
after the end of its fiscal year an Officers' Certificate complying (whether
or not required) with Section 314(a)(4) of the TIA and stating that a review
of its activities during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under the
Indenture and further stating, as to each such Officer signing such
certificate, whether or not the signer knows of any failure of the Company,
any Guarantor or any Subsidiary of the Company or any Guarantor to comply with
any conditions or covenants in the Indenture and, if such signer does know of
such a failure to comply, the certificate shall describe such failure with
particularity. The Officers' Certificate shall also notify the Trustee should
the relevant fiscal year end on any date other than the current fiscal year
end date.
The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, immediately upon becoming aware of any Default or
Event of Default under the Indenture, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposing
to take with respect thereto. The Trustee shall not be deemed to have
knowledge of a Default or an Event of Default unless one of its trust officers
receives notice of the Default giving rise thereto from the Company or any of
the Holders.
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<PAGE>
I. OTHER OBLIGORS. Give the name and complete mailing address of any
person, other than the applicant, who is an obligor upon the indenture
securities.
The following entity is a guarantor of the Note and is also an indirect
obligor thereon pursuant to the Excess Cash Flow payment mechanism, which
requires that, subject to certain exceptions, all of the Aggregate Excess Cash
Flow (as defined) of the Company and Jefferson be applied to payment upon the
Notes until the aggregate principal amount of the Notes is reduced to less
than $17.5 million:
Jefferson Casino Corporation
711 Casino Magic Drive
Bay St. Louis, Mississippi 39520
There are no other obligors upon the Notes under the Indenture.
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<PAGE>
CONTENTS OF APPLICATION FOR QUALIFICATION. This application for qualification
comprises:
Exhibit 2.1 Plan of Reorganization in the Bankruptcy Proceeding, confirmed on
April 29, 1996.
Exhibit 2.2 Disclosure Statement disseminated to Company creditors in the
Bankruptcy Proceeding.
Exhibit 3.1 Certificate of Incorporation, with all amendments thereto, of the
Company.
Exhibit 3.2 Amended and Restated By laws of the Company.
Exhibit 4 Form of Indenture dated as of May 13, 1996, between the Company
and First Trust National Association, as Trustee.
A cross reference sheet showing the exact location of the
provisions of the Indenture pursuant to Section 310 through
318(A), inclusive, of the Act (included as part of Exhibit 4).
Exhibit 25 The Statement of Eligibility and Qualification of First Trust
National Association as trustee under the Indenture to be
qualified. (Form T-1, without exhibits)
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<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the applicant, Casino Magic of Louisiana Corp., a corporation
organized and existing under the laws of the State of Louisiana, has duly
caused this application to be signed on its behalf by the undersigned,
thereunto duly authorized, and its seal to be hereunto affixed and attested,
all in the City of Bay St. Louis, Mississippi on the 14th day of May, 1996.
(SEAL)
CASINO MAGIC OF LOUISIANA, CORP.
Attest: By: /s/ James E. Ernst
Name: James E. Ernst
Title: Chief Executive Officer, President
and Director
By : /s/ Jay S. Osman
Name : Jay S. Osman
Title: Executive Vice President,
Chief Financial Officer and Treasurer
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<PAGE>
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT PAGE
Exhibit 2.1 Plan of Reorganization in the Bankruptcy Proceeding,
confirmed on April 29, 1996.
Exhibit 2.2 Disclosure Statement disseminated to Company creditors
in the Bankruptcy Proceeding.
Exhibit 3.1 Certificate of Incorporation, with all amendments
thereto, of the Company
Exhibit 3.2 Amended and Restated By laws of the Company
Exhibit 4 Form of Indenture dated as of May 13, 1996, between
the Company and First Trust National Association, as
Trustee
A cross reference sheet showing the exact location of the
provisions of the Indenture therein pursuant to Section 310
through 318(A), inclusive, of the Act (included as part of
Exhibit 4)
Exhibit 25 The Statement of Eligibility and Qualification of First Trust
National Association as trustee under the Indenture to be
qualified. (Form T-1, without exhibits)
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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
In re )
)
CRESCENT CITY CAPITAL ) Case No. 95-12735 (TMB)
DEVELOPMENT CORPORATION, )
) (Chapter 11)
Debtor. )
SECOND AMENDED CHAPTER 11 PLAN OF REORGANIZATION
OF CRESCENT CITY CAPITAL DEVELOPMENT CORPORATION
BRONFIN & HELLER, LLC
Jan M. Hayden (La. Bar #6672)
Robyn J. Spalter (La. Bar #21116)
650 Poydras Street, Suite 2500
New Orleans, Louisiana 70130-6101
(504) 568-1888
Attorneys for Debtor
Dated: March __, 1996
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
In re )
)
CRESCENT CITY CAPITAL ) Case No. 95-12735 (TMB)
DEVELOPMENT CORPORATION, )
) (Chapter 11)
Debtor. )
SECOND AMENDED CHAPTER 11 PLAN OF REORGANIZATION
OF CRESCENT CITY CAPITAL DEVELOPMENT CORPORATION
The Debtor, Crescent City Capital Development Corporation ("Debtor" or
"Crescent City") proposes the following plan of reorganization pursuant to
chapter 11 of the Bankruptcy Code. This plan amends and supersedes all prior
plans proposed by the Debtor in this case.
ARTICLE I
DEFINITIONS
A. Defined Terms. As used herein, all terms shall have the meanings as
defined in the United States Bankruptcy Code except as specifically modified
herein or if such meaning shall be wholly inconsistent with the use of such
term in this plan. The following terms shall have the respective meanings
specified below (such meaning to be equally applicable to both the singular
and the plural, and masculine and feminine forms of the terms defined):
1.1. Administrative Reserve means the reserve to be established and
maintained by Liquidating Trust in a segregated interest-bearing account with
a major money center bank into which Liquidating Trust will, from time to
time, deposit Cash to, among other things, fund the operating expenses of
Liquidating Trust, as provided in Article VI(A) of the Plan.
1.2. Allowance Date means the date on which a Claim becomes an Allowed Claim.
1.3. Amended By-Laws means the by-laws of Reorganized Crescent City, as
amended and restated as of the Effective Date, which shall be a Plan Document.
1.4. Amended Certificate of Incorporation means the certificate of
incorporation of Reorganized Crescent City, as amended and restated as of the
Effective Date, which shall be a Plan Document.
1.5. Avoidance Action Recoveries means any recoveries by the Debtor or
Liquidating Trust of money, property, or other value of any kind whatsoever
(including reduction or disallowance of a claim amount), on account of rights
of recovery held by the Debtor under 11 U.S.C. Section 547 and applies to
rights of recovery of transfers made directly by any affiliates of the debtor,
including but not limited to River City Joint Venture.
1.6. Avoidance Action Rights means any rights of recovery by the Debtor or
Liquidating Trust of money, property, or other value of any kind whatsoever
(including reduction or disallowance of a claim amount), on account of rights
of recovery, held by Debtor, under 11 U.S.C. Section 547 and applies to rights
of recovery of preferential transfers made directly by the debtor and by any
affiliate of the debtor, including but not limited to River City Joint
Venture.
1.7. Bally & IGT Claims means all Claims of Bally Gaming, Inc. and
International Game Technology Corp. or their respective successors, assigns,
affiliates or agents arising in connection with the acquisition by the Debtor
of certain slot machines and other coin-operated gaming devices to be operated
on the Riverboat.
1.8. Bankruptcy Court means the United States Bankruptcy Court for the
Eastern District of Louisiana having jurisdiction over the Reorganization Case
and, to the extent of any reference made pursuant to 28 U.S.C. Sec. 157, the
unit
of such District Court pursuant to 28 U.S.C. Sec. 151.
1.9. Bankruptcy Case means that case entitled In re Crescent City Capital
Development Corporation currently pending in the Eastern District Court of
Louisiana and bearing case no. 95-12735(TMB).
1.10. Bondholder means the holder of a Secured Note or, in the alternative,
the duly authorized agent of such holder.
1.11. Bondholder Claim means the claim filed by the Indenture Trustee, on
behalf of all Bondholders, for all amounts due under the Debtor's guarantee of
amounts due under the Indenture, which Claim shall, upon the Effective Date,
be deemed an Allowed Claim for $142 million.
1.12. Business Day means any day other than Saturday, Sunday or "legal
holiday" as such term is defined in Bankruptcy Rule 9006(a).
1.13. Cash means lawful currency of the United States of America.
1.14. Cash Distribution Date means (a) the forty fifth (45th) day after the
Effective Date, and (b) the twentieth (20th) day after the end of the first
full fiscal quarter after the Effective Date and the twentieth (20th) day
after the end of each fiscal quarter thereafter, subject, however, to the
limitations set forth in Article VIII(A)(4) and any other provisions of the
Plan.
1.15. CGII means Capital Gaming International, Inc., a New Jersey corporation
and the Debtor's parent corporation.
1.16. CGII Claim means all Claims (other than DIP Financing Claims or other
Administrative Claims) against the Debtor held by CGII.
1.17. Closing means the closing of the transaction contemplated by the Magic
Agreement.
1.18. Commencement Date means July 26, 1995, the date on which an involuntary
Reorganization Case was commenced against the Debtor.
1.19. Confirmation Date means the date on which the Clerk of the Bankruptcy
Court enters the Confirmation Order on its docket.
1.20. Convenience Claim means any General Unsecured Claim against the Debtor
that is equal to or less than $5,000, or those Claims in excess of $5,000 as
to which the holder thereof elects, in writing on its ballot to accept or
reject the Plan or otherwise in writing on or before the Effective Date, to
reduce such Claim to $5,000 in accordance with Article III(E)(Class 3A)(4)
concerning treatment of General Unsecured Claims. For purposes of defining a
Convenience Claim and qualifying for the treatment afforded holders of
Convenience Claims, all General Unsecured Claims of a single holder shall be
aggregated, deemed, and treated as a single Claim; provided, however, those
holders of General Unsecured Claims who acquired such General Unsecured Claims
from different entities shall have their General Unsecured Claims aggregated
only to the extent such Claims would have been aggregated in the hands of the
original holder.
1.21. Creditors' Committee means the Statutory Committee of Unsecured
Creditors appointed in the Bankruptcy Case pursuant to Section 1102(a) of the
Bankruptcy Code, as presently or hereafter constituted.
1.22. Debtor means Crescent City Capital Development Corp., a Louisiana
corporation.
1.23. DIP Financing Claims means all Administrative Claims arising in
connection with money borrowed or credit incurred by the Debtor under Sec. 364
of
the Bankruptcy Code from CGII, Purchaser, Mirage or any other Person.
1.24. Disputed Claim means a Claim (or portion thereof) as to which: (a) a
proof of Claim has been filed, or deemed filed, under applicable law or order
of the Bankruptcy Court, with the Bankruptcy Court; (b) an objection has been
timely filed; and (c) such objection has not been: (i) withdrawn, (ii)
overruled or denied in whole by a Final Order, or (iii) granted in whole or
part by a Final Order: provided, however, the Bankruptcy Court may estimate a
Disputed Claim for purposes of allowance pursuant to Section 502(c) of the
Bankruptcy Code; provided also however, that any claim expressly allowed under
this Plan cannot be a Disputed Claim or the subject of an objection. For
purposes of the Plan, a Claim shall be considered a Disputed Claim to the
extent it is disputed if: (x) before the time that an objection has been or
may be filed, the amount of the Claim specified in the Proof of Claim exceeds
the amount of any corresponding Claim scheduled by the Debtor in the
Schedules: (y) there is a dispute as to classification of the Claim; or (z)
the Claim is unliquidated.
1.25. Disputed Claims Reserve means the reserve established pursuant to
Article VI(B) in an amount equal to the sum of (i) the aggregate of all
Disputed Designated Administrative Claims, Disputed Priority Claims, Disputed
Priority Tax Claims, and Disputed Secured Claims, (ii) the amount of Cash that
would have been distributable, from time to time, under the Plan on account of
Disputed General Unsecured Claims and Convenience Claims had such Claims been
Allowed Claims, and (iii) any net earnings in respect thereof.
1.26. Effective Date means the date that the Plan is consummated which shall
be simultaneous with the Closing.
1.27. Fee Request means any Administrative Claim for compensation or
reimbursement of expenses pursuant to Sections 327, 328, 329, 330, 331, or
503(b) of the Bankruptcy Code in connection with an application made to the
Bankruptcy Court in the Bankruptcy Case.
1.28. Final Order means an order or judgment of the Bankruptcy Court or other
court of competent jurisdiction which may hear appeals from the Bankruptcy
Court which having not been reversed, modified or amended, and not being
stayed, and the time to appeal from which or to seek review or rehearing or
petition for certiorari from which having expired without an appeal or
application for review or rehearing having been filed, has become final and is
in full force and effect.
1.29. General Unsecured Claim means any Allowed Claim against the Debtor,
other than a Bondholder Claim, Secured Claim, Administrative Claim, Priority
Claim, Priority Tax Claim, CGII Claim, Subordinated Unsecured Claim or
Convenience Claim.
1.30. Grand Palais means Grand Palais Riverboat, Inc., a Louisiana
corporation.
1.31. Indenture means the Indenture governing the Secured Notes, dated
February 17, 1994, as amended, between CGII, as issuer, the guarantors
thereunder, and the Indenture Trustee.
1.32. Indenture Trustee means First Trust National Association, as indenture
trustee under the Indenture, and any successor or assign thereof.
1.33. Institutional Note Holders' Steering Committee means that committee
consisting of Bondholders who hold a substantial principal amount of the
Secured Notes and have filed, in this case, a statement pursuant to Bankruptcy
Rule 2019(a).
1.34. Interest means, except as expressly otherwise specified in the Plan,
the interest or interest equivalent payable on any Claim calculated as
provided for in any agreement concerning such Claim which contains an
enforceable provision for the payment of interest, or, in the absence of any
such provision, at the Legal Rate.
1.35. Legal Rate means the rate of interest on outstanding judgments of the
courts of the State of Louisiana as prescribed by Louisiana Civil Code article
2924.
1.36. License means the gaming license issued by the Louisiana State Gaming
Commission on or about April 4, 1994 in favor of the Debtor.
1.37. Liquidating Trustees means the Persons selected by the Creditors'
Committee and approved by the Bankruptcy Court who shall be the co-trustees of
Liquidating Trust.
1.38. Liquidating Trust means Crescent City Liquidating Trust, a New Jersey
trust or trust of such state as the Debtor and the Unsecured Creditors
Committee shall select, which shall be established as of the Effective Date,
for the single purpose of implementing and administering the Plan in
accordance with Section 1142(a) of the Bankruptcy Code.
1.39. Magic Agreement means the Agreement by and between CGII, the Debtor,
Casino Magic Corporation, Jefferson Casino Corporation and C-M of Louisiana,
Inc., dated February 21, 1996, pursuant to which Casino Magic Corporation,
through Jefferson Casino Corporation or another of its wholly owned
subsidiaries to which the Agreement is assigned, has agreed to purchase the
New Common Stock in conjunction with the consummation of the Plan, a copy of
which is attached hereto as Exhibit "1".
1.40. Magic Cash Consideration, is estimated to be $15,000,000.00, less the
Magic Deferred Cash.
1.41. Magic Closing Cash means Magic Cash Consideration less the balance of
principal and interest due Magic at closing on the Magic DIP Financing Claim,
estimated at $1,000,000.00, and to be retained by Magic from the Magic Cash
Consideration and applied to pay its DIP Financing Claim.
1.42. Magic Consideration means the Magic Cash Consideration, the Magic Non-
cash Consideration, and the Magic Deferred Cash.
1.43. Magic Deferred Cash means the Cash, in the amount of $500,000.00, to be
held in escrow, pursuant to the Magic Agreement, for a period of one (1) year
after Closing as security for the Debtor's and CGII's indemnities under the
Magic Agreement, and which, upon the expiration of the one (1) year escrow
period, the amount in the escrow, if any, will be disbursed to CGII in
accordance with Paragraph 3 of the Magic Agreement and this Plan.
1.44. Magic DIP Financing Claim shall mean that Claim of Purchaser arising
out of money borrowed or credit incurred by Debtor under Sec.364 of the
Bankruptcy Code.
1.45. Magic Non-Cash Consideration means all non-cash consideration to be
delivered to, or for the benefit of, the Debtor pursuant to the Magic
Agreement, including without limitation, Magic's obligation to assume or
otherwise satisfy the Bally and IGT Claims (up to an aggregate total not to
exceed $6,500,000.00) and the Magic Notes.
1.46. Magic Notes means the $35,000,000.00 of notes which shall be issued by
Reorganized Crescent City and guaranteed by Jefferson Casino Corporation and
C-M of Louisiana, Inc., each a wholly owned subsidiary of Casino Magic
Corporation, under the Mirage Indenture.
1.47. Mirage shall mean Mirage Resorts, Inc. or any of its
affiliates, subsidiaries, related entities, successors and assigns, and their
respective officers, directors and/or agents.
1.48. Mirage Agreement shall mean the Agreement among CGII, the Debtor and
Mirage pursuant to which Mirage was to purchase the New Common Stock, and
which Agreement formed the basis for Debtor's First Amended Plan of
Reorganization.
1.49. Mirage Claim means any and all claims which the Debtor or debtor in
possession may have, whether arising prior to or after the filing of the
petition for relief herein against Mirage, including but not limited to any
rights of setoff or defenses to the payments of any claims asserted by Mirage
against Debtor or its property.
1.50. Magic Indenture shall mean the Indenture governing the Magic Notes,
dated as of the Effective Date, between Reorganized Crescent City, as issuer,
and the guarantors, thereunder, in substantially the same form as attached
hereto as Exhibit "2".
1.51. Mirage Recovery shall mean any and all monies recovered, paid,
credited, set off or otherwise received by the Debtor , debtor-in-possession
or the Liquidating Trust on behalf of the Mirage Claim.
1.52. Net Cash Proceeds means only those Net Proceeds received in Cash.
1.53. Net Proceeds means all Cash and other property received upon the sale,
exchange or other disposition of any property, less all direct and indirect
costs incurred in connection with such disposition, including, without
limitation, fees, commissions, legal fees and expenses.
1.54. New Common Stock means all authorized common stock of Reorganized
Crescent City to be issued on the Effective Date to the Purchaser (which shall
constitute all the outstanding equity interests in Reorganized Crescent City),
pursuant to the Restated Certificate of Incorporation and Article V(A) and XV
of the Plan.
1.55. Plan means this plan under chapter 11 of the Bankruptcy Code, as the
same may be altered, amended, or modified from time to time.
1.56. Plan Document(s) means the document(s) that aid in effecting the Plan
and that are specifically identified herein as Plan Documents or which, in the
view of the Debtor, become necessary or appropriate to effectuate the Plan,
which documents, to the extent feasible, shall be filed on or prior to the
Confirmation Hearing.
1.57. Priority Claim means any Claim to the extent entitled to priority in
payment under Sections 507(a)(2)-(7) or 507(a)(9) of the Bankruptcy Code.
1.58. Priority Tax Claim means any Claim to the extent entitled to priority
in payment under Section 507(a)(8) of the Bankruptcy Code.
1.59. Pro Rata means a number (expressed as a percentage) equal to the
proportion that an Allowed Claim in a particular Class bears to the aggregate
amount of Allowed Claims in such Class as of the date of determination.
Solely for the purpose of calculating the amount to be distributed to holders
of Allowed General Unsecured Claims and reserved for the holders of Disputed
General Unsecured Claims on a Cash Distribution Date, Liquidating Trust shall
treat each Disputed General Unsecured Claim as an Allowed Claim in the amount
of such Disputed General Unsecured Claim unless such of Disputed General
Unsecured Claims have been estimated by the Bankruptcy Court.
1.60. Purchaser means Casino Magic Corporation, through Jefferson Casino
Corporation or another of its wholly owned subsidiaries to which the Magic
Agreement is assigned.
1.61. Reallocation Date means the tenth (10) Business Day prior to any Cash
Distribution Date.
1.62. Reorganized Crescent City means the Debtor from and after the Effective
Date.
1.63. Residual Property means all of the property of the Debtor's estate
immediately prior to Closing, other than the Riverboat Assets. "Residual
Property" includes, without limitation, the Debtor's interest in the River
City JV or property previously owned or held by River City JV, all avoidance
actions specified in Article V(G) and other causes of action, claims of the
Debtor against Grand Palais and its affiliates, all contract rights of the
Debtor including its rights under the Magic Agreement, the Mirage Claim and
the Mirage Recovery, provided however, Residual Property does not include the
Magic Consideration, which shall be treated in accordance with the Plan.
1.64. Riverboat means the M/V Crescent City Queen, the riverboat owned by the
Debtor.
1.65. Riverboat Assets means, collectively, the Riverboat, the License,
certain slot machines and other coin-operated gaming devices acquired by the
Debtor from Bally Gaming, Inc. and International Game Technology Corp., and
such other items of personal property used in connection with the operation of
the Riverboat as may be agreed upon between the Debtor and the Purchaser, and
as evidenced on the inventory list attached to the Magic Agreement as Exhibit
"1", specifically excepting (i) any equipment licensing or other agreements
provided by Gaming Systems International and (ii) the Crescent City Capital
Escrow, as hereinafter defined, all monies therein and all proceeds (in
whatever form) thereof.
1.66. River City JV means the River City Joint Venture, a Louisiana general
partnership, comprised of the Debtor and Grand Palais, each as general
partner.
1.67. Schedules means the schedules of assets and liabilities filed by the
Debtor with the Bankruptcy Court in accordance with Section 521(1) of the
Bankruptcy Code, as amended from time to time.
1.68. Secured Notes means, collectively, the 111/2 Secured Notes due 2001,
issued by CGII pursuant to the Indenture.
1.69. Settlement Amount means the difference, in Cash, between the Magic
Closing Cash and $6,750,000.00 plus the difference, in Magic Notes, between
the Magic Notes and $28,000,000 of Magic Notes; the Settlement Amount is to be
paid by the Indenture Trustee from the Magic Consideration to the Liquidating
Trust.
1.70. Subordinated Unsecured Claim means: (a) an unsecured Claim against the
Debtor, proof of which is tardily filed under Section 501(a) of the Bankruptcy
Code; (b) any Claim against the Debtor whether a Secured Claim or Unsecured
Claim, for any fine, penalty or forfeiture, or for multiple exemplary or
punitive damages to the extent such fine, penalty, forfeiture, or damages are
not compensation for actual pecuniary loss suffered by the holder of such
Claim; (c) any Claim against the Debtor arising from rescission of a purchase
or sale of a security of the Debtor or of an affiliate of the Debtor, for
damages arising from the purchase or sale of such security, or for
reimbursement or contribution allowed under Section 502 of the Bankruptcy Code
on account of such a Claim; and (d) any Claim against the Debtor subordinated
under Section 510 of the Bankruptcy Code or under other applicable law to
General Unsecured Claims by order of the Bankruptcy Court.
1.71. Total [ ] Claims means, with respect to a particular Class of
Claims, the aggregate dollar amount of (a) all Allowed Claims, plus (b) the
Face Amount of all Disputed Claims, in such Class.
1.72. Voting Deadline means the date by which holders of impaired Claims
receiving distributions under the Plan must vote to accept or reject the Plan.
B. Other Terms. The words "herein," "hereof," "hereto," "hereunder," and
others of similar inference refer to the Plan as a whole and not to any
particular section, subsection, or clause contained in the Plan unless
otherwise specified herein. A term used herein or elsewhere in the Plan that
is not defined herein shall have the meaning ascribed to that term, if any, in
the Bankruptcy Code or Bankruptcy Rules. The word "including" shall mean
including, without limitation. The headings in the Plan are only for
convenience of reference and shall not limit or otherwise affect the
provisions of the Plan.
C. Exhibits. All exhibits to the Plan are incorporated into and are a part
of the Plan as if set forth in full herein.
ARTICLE II
GENERAL DESCRIPTION OF THE PLAN
A. The Plan Generally. Under the Plan, the Debtor will sell the Riverboat
Assets (by reissuing its common stock) to the Purchaser for the Magic
Consideration. The Magic Closing Cash and the Magic Notes will be paid to the
Indenture Trustee, on behalf of the Bondholders, who claims a perfected
security interest in such proceeds. Upon receipt of the Magic Closing Cash
and the Magic Notes, the Indenture Trustee shall pay the Settlement Amount to
Liquidating Trust in accordance with Article II(B)(1) below, to be distributed
as provided herein. In addition, all of the Residual Property will be
transferred to Liquidating Trust and liquidated or otherwise disposed of for
the benefit of Debtor's Class 3A Creditors in accordance with the terms of the
Plan.
B. Payment of Settlement Amount.
1. Payment of Magic Closing Cash. Upon receipt of the Magic Closing Cash,
the Indenture Trustee, on behalf of the Bondholders, shall retain the sum of
$6,750,000.00 for distribution to Bondholders pursuant to the terms of the
Indenture and shall pay the remaining balance of the Magic Closing Cash
(estimated to be $6,750,000.00 less any amount by which the total balance of
principal and interest due to pay Magic's DIP Financing Claims and/or any
other DIP Financing Claims, excluding the DIP Financing Claim of Mirage, in
full, exceeds $1,000,000.00) to Liquidating Trust to be distributed and/or
reserved for Disputed Claims in accordance with the terms of this Plan.
2. Payment of Magic Notes. Upon receipt of the Magic Notes, the Indenture
Trustee, on behalf of the Bondholders, shall retain $28,000,000.00 of the
Magic Notes, for distribution to the Bondholders in accord with the Indenture
and shall assign the remaining $7,000,000.00 of Magic Notes to the Liquidating
Trust in accordance with the terms of this Plan.
ARTICLE III
CLASSIFICATION AND TREATMENT OF CLAIMS AND EQUITY INTERESTS
A. Summary. The categories of Claims and Equity Interests listed below
classify Claims and Equity Interests for all purposes, including voting,
confirmation, and distribution pursuant to the Plan.
CLASS STATUS
Class 1: Bondholder Claim Impaired - entitled to vote
Class 2: Secured Claims Impaired - entitled to vote
Class 3A: General Unsecured Claims Impaired - entitled to vote
Class 3B: Convenience Claims Impaired - entitled to vote
Class 3C: CGII Claims Impaired - entitled to vote
Class 4: Subordinated Unsecured Claims Impaired - deemed to reject
Class 5: Common Stock Impaired - deemed to reject
Class 6: Mirage Administrative/
Secured Claim Unimpaired - not entitled to vote
B. Administrative Claims. Subject to the applicable bar date provisions
contained in Article X(B), each holder of an Allowed Administrative Claim
shall be paid on account of such Claim in full, in Cash, from the Liquidating
Trust, on the later of: (a) the Effective Date (or as soon thereafter as
practicable), or (b) the first Cash Distribution Date immediately following
the date on which such Administrative Claim becomes an Allowed Claim, except
to the extent that the holder of an Allowed Administrative Claim agrees to a
different treatment; provided, however, that Administrative Claims that are
Allowed Claims representing obligations incurred in the ordinary course of
business by the Debtor will be paid by Liquidating Trust when due in the
ordinary course of business; and, provided further, however, that
Administrative Claims for payment of compensation or reimbursement of expenses
pursuant to Sections 330, 331 and 503(b) of the Bankruptcy Code shall be paid
within (3) Business Days of the entry of an order by the Bankruptcy Court
authorizing the payment of such fees and expenses. Payments to the holders of
the Administrative Claims shall be made from the Net Cash Proceeds of one or
more of the following sources, in the following order of priority; the
Settlement Amount and the Residual Property.
C. Priority Claims. Each holder of an Allowed Priority Claim shall be paid
on account of such Claim in full, in Cash, from the Liquidating Trust, on the
later of (a) the Effective Date (or as soon thereafter as is practicable), or
(b) the first Cash Distribution Date immediately following the date on which
such Priority Claim becomes an Allowed Claim, or, alternatively, upon such
other terms as may be agreed upon by and between the holder of such Claim and
the Debtor or Liquidating Trust, as the case may be. Payments to the holders
of the Priority Claims shall be made from the Net Cash Proceeds of one or more
of the following sources, in the following order of priority; the Settlement
Amount and the Residual Property.
D. Priority Tax Claims. Each holder of an Allowed Priority Tax Claim shall
be paid on account of such Claim in full, in Cash, from the Liquidating Trust,
on the later of (a) the Effective Date (or as soon thereafter as is
practicable), or (b) the first Cash Distribution Date immediately following
the date on which such Priority Tax Claim becomes an Allowed Claim, or,
alternatively, upon such other terms as may be agreed upon by and between the
holder of such Claim and the Debtor or Liquidating Trust, as the case may be.
Payments to the holders of the Priority Tax Claims shall be made from the Net
Cash Proceeds of one or more of the following sources, in the following order
of priority, the Settlement Amount and the Residual Property.
E. Classification and Treatment. The Allowed Claims against, and Equity
Interests in, the Debtor, other than Administrative Claims, Priority Claims,
and Priority Tax Claims, shall be classified and receive the treatment
specified below.
Class 1:
1. Classification: Class 1 consists of the Bondholder Claim.
2. Allowance of Bondholder Claim: On the Effective Date, the Bondholder
Claim shall be deemed an Allowed Class 1 Claim in the amount of $142 million.
The Bondholder Claim shall not, after the Effective Date, be subject to, or
the subject of, any objection, claim, counterclaim, set off, defense, action
or proceeding by the Debtor, Reorganized Crescent City, any statutory
committee, or any other party in interest, whether in law or equity. To the
extent any such objection, action or proceeding is pending on or after the
Effective Date, such action, objection or proceeding shall be deemed withdrawn
and the Bondholders may take such steps as they deem appropriate to cause the
Bankruptcy Court's records to reflect such withdrawal (including, without
limitation, seeking ex parte relief).
3. Treatment: As provided in Article II(B) of the Plan, upon receipt of the
Magic Closing Cash and the Magic Notes, the Indenture Trustee, on behalf of
the Bondholders, shall retain (i) Cash, in the amount of $6,750,000.00 and
(ii) $28,000,000.00 of Magic Notes, all, and both, free and clear of any and
all liens, claims, privileges and encumbrances held or asserted by any person
other than the Indenture Trustee, for distribution to the Bondholders pursuant
to the terms of the Indenture, and the Indenture Trustee shall immediately (i)
pay the remaining balance of the Magic Closing Cash (estimated to be
$6,750,000.00, less any amount by which the total balance of principal and
interest due to pay Magic's DIP Financing Claims in full exceeds
$1,000,000.00) and (ii) assign the remaining Magic Notes, in the amount of
$7,000,000, to Liquidating Trust for distribution and/or application in
accordance with this Plan. The Indenture Trustee shall retain the sum of
$7,250,000.00 in Magic Closing Cash and $28,000,000.00 in Magic Notes, to be
paid to Class 1 Claimants in accordance with the terms of the Indenture.
Additionally, any amounts to be paid to CGII from the Magic Deferred Cash, as
provided in this Plan, shall be subject to the security interest of the
Indenture Trustee. Any amounts to be paid to CGII from the Magic Deferred
Cash, shall be deposited by Purchaser in a segregated interest bearing account
designated by the Indenture Trustee at First Bank National Association,
subject in all respects to all of the first priority liens and security
interests of the Indenture Trustee, without any further action, and shall not
be disbursed absent the mutual consent of CGII and the Indenture Trustee, or
by an order of a court of competent jurisdiction.
Other than as set forth herein, the Class 1 claimants (including the Indenture
Trustee, the Bondholders, and anyone deriving or claiming rights under the
Secured Notes, the Indenture, or any security therefore), shall not be
entitled to participate as a Class 2, 3A or 3B Claimant under this Plan on
account of such claim.
4. Release of Defenses: As of the Effective Date, the Debtor, Debtor in
Possession, Liquidating Trust, all Creditors and equity security holders of
the Debtor shall release and waive: (i) all defenses to allowance of the
Bondholder Claim in the Bankruptcy Case, and (ii) all claims and causes of
action, if any, against the Bondholders or the Indenture Trustee based upon or
related to the Debtor's execution of its guarantee of CGII's obligations under
the Indenture, or based upon any payments made to the Indenture Trustee by the
Debtor.
Nothing herein shall constitute a waiver of any defenses to the allowance of
the claim of the Bondholders or the Indenture Trustee against CGII in any
other bankruptcy proceeding. Except with respect to the Debtor, nothing in
this Plan shall impair or otherwise affect any rights, liens, claims, or
interests of the Indenture Trustee or any Bondholder under the Notes, the
Indenture, or any related documents, including, but not limited to, any
rights, liens, claims or interests against CGII or any guarantor of CGII's
obligations.
5. Voting: Class 1 is Impaired by the Plan and the holder of Claims in
Class 1 are entitled to vote to accept or reject the Plan.
Class 2: Secured Claims
1. Classification: Class 2 consists of secured claims.
2. Determination of Allowed Secured Claim: Prior to the Effective Date, the
Debtor may seek and obtain a determination of the Allowed Secured Claim of any
Creditor asserting a Secured Claim pursuant to the Bankruptcy Code and the
Bankruptcy Rules.
3. Treatment: Except as provided in Article V(A) of the Plan, as to each
Allowed Secured Claim and in complete satisfaction of such Claim, at the
Debtor's option, either:
(i) (A) any default, other than of the kind specified in Section 365(b)(2)
of the Bankruptcy Code, shall be cured, provided that any accrued and unpaid
interest, if any, which the Debtor may be obligated to pay with respect to
such default shall be simple interest at the contract rate and not at any
default rate of interest;
(B) the maturity of such Claim shall be reinstated as the maturity existed
before any default;
(C) the holder of such Claim shall be compensated for any damage incurred as
a result of any reasonable reliance by the holder on any provision that
entitled the holder to accelerate maturity of such Claim; and
(D) the other legal, equitable, or contractual rights to which the Claim
entitles the holder shall not otherwise be altered; provided, however, that as
to any Allowed Secured Claim which is a nonrecourse claim and exceeds the
value of the collateral securing the Claim, the collateral may be sold at a
sale at which the holder of such Claim has an opportunity to bid;
(ii) on the Effective Date or such other date as may be agreed upon by the
Debtor or Liquidating Trust, as the case may be, and the holder of such
Allowed Secured Claim, the Debtor or Liquidating Trust, as the case may be,
shall abandon the collateral securing such Claim to the holder thereof in full
satisfaction and release of such Claim. The Claim held by Jones Casino
Supplies, Inc. ("Jones") shall be partially satisfied, based upon and in
consideration of the sale free and clear of all liens and other interests
pursuant to 11 U.S.C. 363(f), to Jones Casino Supplies, Inc., of the slot
machines and other gaming equipment manufactured by Sigma Games, Inc.
("Sigma"), and Advance Cart Technology, Inc. ("ACT") for a total credit of
$204,754.67 ($156, 387.20 for Sigma equipment and $48,367.47 for ACT
equipment), to be applied in reduction of the total Secured Claim of Jones
Casino Supplies, Inc. In the alternative, a partial credit shall be granted
following the abandonment of the slot machines and other equipment and
supplies manufactured by Sigma and ACT to Jones to allow it to foreclose its
security interest, and based upon the Court's determination as to the amount
of the secured portion of the Jones Claims, and the security interest and
liens held by Jones shall be preserved and retained by Jones pending the
Court's determination and the foreclosure; or
(iii) the holder of such Claim shall be paid, on account of such Allowed
Secured Claim: (a) in full, in cash, after the later of (i) the Effective Date
or (ii) the first Cash Distribution Date after the date such Secured Claim
becomes an Allowed Claim; or, if applicable, (b) upon such other terms as may
be agreed to between the Debtor or Liquidating Trust, as the case may be, and
the holder of such Allowed Secured Claim; provided, however, that as to the
Bally & IGT claims, upon such other terms as may be agreed to between
Reorganized Crescent City or the Purchaser, as the case may be, and the
respective holders of the Bally & IGT Claims. The security interest of Bally
and IGT shall survive confirmation until such claims are paid. The security
interests of any other secured claimant, shall be preserved and retained, to
survive confirmation, in either the specific collateral itself, provided said
collateral is not part of the Riverboat Assets, or preserved and attaching to
the proceeds that constitute the Settlement Amount and/or the Residual
Property, if the collateral is sold free and clear of liens and interests,
until paid.
(iv) Any Allowed Class 2 Claim found by Final Order to be secured by a lien
against any of the Riverboat Assets to be transferred to Purchaser and to be
senior to the lien securing the Class 1 Claims affecting the Riverboat
Property shall be paid in cash on the Effective Date or at such later date as
such determination is made by Final Order. Payments to the holders of any
such Class 2 Claims shall be made from the Net Cash Proceeds of one or more of
the following sources, in the following order of priority; the Settlement
Amount and the Residual Property. Any creditor determined by final order to
have an allowed Class 2 Secured Claim shall be paid to the extent of the value
of its collateral, with the creditor retaining its security interest and lien,
either as to the specific collateral, provided said collateral is not part of
the Riverboat Assets, or preserved and attaching to the proceeds only that
constitute the Settlement Amount and the Residual Property, until the court's
determination and payment, and shall have an unsecured claim for any
deficiency which shall then be recognized, and the creditor paid its pro-rata
distribution or share of the Settlement Amount as set forth below, for the
Class 3 Allowed General Unsecured Claims; provided however, that
notwithstanding anything contained in the Plan (including specifically,
without limitation, subsection 3(iii) and subsection 3(iv) hereof), the
rights, if any, of the Board of Commissioners of the Port of New Orleans (the
"Board") under that certain escrow agreement between the Board and the Debtor
and the lien or security interest, if any, in favor of the Board, pursuant to
the Escrow Agreement and/or Bert Infrastructure Reimbursement Agreement (as
amended) between the parties, including without limitation, any valid,
perfected and unavoidable lien or security interest the Board has on or in
that certain escrow account numbered 785-1061190 at the First National Bank of
Commerce, denominated as "Crescent City Capital Escrow" and all monies therein
and all proceeds (in whatever form) thereof, shall survive confirmation.
4. Voting: Class 2 is impaired by the Plan and each holder of a Claim in
Class 2 shall be entitled to vote to accept or reject the Plan.
Class 3A: General Unsecured Claims
1. Classification: Class 3A consists of Allowed General Unsecured Claims.
2. Treatment: Each holder of an Allowed General Unsecured Claim shall
receive its Pro Rata share of the remainder of the Net Cash Proceeds of the
Settlement Amount, on account of their beneficial interests in the Liquidating
Trust, after payment or reserve for all (i) Administrative Claims, (ii)
Priority Claims, (iii) Priority Tax Claims (iv) Allowed Class 3B Claims, (v)
Allowed Class 2 Claims found to be secured by a lien on any of the Riverboat
Assets and superior to the lien of the Class 1 Claimant, and (vi)
establishment of a reserve for payment of operating expenses of Liquidating
Trust (which initial reserve is not to exceed $1,000,000.00). In addition to
distributions from the Settlement Amount, Class 3A Claimants shall receive Pro
Rata distributions from all Net Cash Proceeds generated from the Residual
Property. However, there will be no distribution of the Net Cash Proceeds
generated from the Residual Property unless and until all payments and/or
reserves required under this paragraph have been made.
3. Voting: Class 3A is impaired and the holders of Claims in Class 3A are
entitled to vote to accept or reject the Plan.
4. Election To Be Treated As Holder Of Convenience Claim: On or before the
Voting Deadline, any holder of an Allowed General Unsecured Claim may elect
(by election on the ballot to be sent to all holders of Allowed General
Unsecured Claims, or thereafter until the Effective Date, by other written
election in form and substance satisfactory to the Debtor) to voluntarily
reduce its Claim to $5,000, and receive the same treatment as holders of
Claims in Class 3B.
5. Claims With Recourse to Insurance Coverage: To the extent the holder of
any General Unsecured Claim has recourse to any liability insurance policy
covering tort claims issued to or for the benefit of the Debtor, the holder of
such Claim must first, to the satisfaction of the Liquidating Trustees, use
its best efforts to collect its Allowed Claims from the insurance carrier.
Such collection will reduce the amount of such holder's Allowed Claim by the
amount of any payment received from such insurance carrier. Any remaining
unpaid portion of such Allowed General Unsecured Claim will be treated under
the other provisions applicable to Allowed General Unsecured Claims. In the
event the Liquidating Trustees determine that the holder of any such Claim has
not used its best efforts to collect the proceeds of such insurance coverage,
such Claim shall be treated as a Disputed Claim until the Liquidating Trustees
determine that such best efforts have been made.
Class 3B: Convenience Claims
1. Classification: Class 3B consists of Convenience Claims.
2. Treatment: Each holder of an Allowed Convenience Claim shall be paid
forty (40%) percent of the Allowed amount of such Claim, in Cash, on the later
of (a) the Effective Date (or as soon thereafter as is practicable), or (b)
the first Cash Distribution Date immediately following the date on which such
Convenience Claim becomes an Allowed Convenience Claim.
3. Voting: Class 3B is impaired and the holders of Claims in Class 3B are
entitled to vote to accept or reject the Plan.
Class 3C: CGII Claim
1. Classification: Class 3C consists of the CGII Claim.
2. Treatment: On the Effective Date, the Class 3C Claim shall be allowed in
the amount of $5,000,000 and the holder of the Class 3C Claim shall receive on
account of such Claim, the Magic Deferred Cash pursuant to the Magic
Agreement. The payment of the Magic Deferred Cash shall be subject to the
security interest of the Indenture Trustee. Any amounts of the Magic Deferred
Cash to be paid to CGII, pursuant to this Plan and the Magic Agreement, shall
be deposited by Purchaser in a segregated interest bearing account at First
Bank National Association, subject in all respects to all of the first
priority liens and interests of the Indenture Trustee, without any further
action, and shall not be disbursed absent the mutual consent of CGII and the
Indenture Trustee, or by an order of a court of competent jurisdiction.
3. Voting: Class 3C is impaired and the Holder of Claims in Class 3C is
entitled to vote to accept or reject the Plan.
Class 4: Subordinated Unsecured Claims
1. Classification: Class 4 consists of Subordinated Unsecured Claims.
2. Treatment: Holders of Subordinated Unsecured Claims shall receive no
distribution under the Plan. There shall be a presumption that excusable
neglect does not exist in respect of those Claims.
3. Voting: Class 4 is impaired and is deemed to reject the Plan.
Class 5: Equity Interests
1. Classification: Class 5 consists of all Equity Interests.
2. Treatment: Holders of Equity Interests shall receive no distribution
under the Plan. All Equity Interests will be canceled and rendered void and
of no further force or effect on the Effective Date.
3. Voting: Class 5 is impaired and is deemed to reject the Plan.
Class 6: Mirage Administrative/Secured Claim
1. Classification: Class 6 consists of the Mirage Administrative/Secured
Claim.
2. Treatment: Pending resolution of Debtor's objection to Mirage's DIP
Financing Claim, the entire sum of $2,000,000.00, plus the estimated amount of
accrued and/or accruing interest for a period of one (1) year after Closing
shall be reserved by the Liquidating Trust for the benefit of Mirage. Upon
entry of a Final Order allowing the claim of Mirage, a sum equal to the
Allowed Claim shall be distributed to Mirage. The balance, if any, shall then
be available for distribution to members of other classes of creditors, other
than Class 1. Upon entry of a Final Order disallowing the claim of Mirage the
entire sum reserved shall be available for distribution to members of other
classes of creditors, other than Class 1.
3. Voting: Class 6 is unimpaired and is deemed to have accepted the Plan.
ARTICLE IV
ACCEPTANCE OR REJECTION OF THE PLAN
1. Voting Classes. Each holder of an Allowed Claim in Classes 1, 2, 3A, 3B
and 3C shall be entitled to vote to accept or reject the Plan, unless
otherwise ordered by the Court.
2. Deemed Rejection of the Plan. Classes 4 and 5 shall receive no
distribution under the Plan and, therefore, are deemed to reject the Plan.
The Debtor hereby requests that the Court confirm the Plan over such
rejections in accordance with subsection 1129(b) of the Bankruptcy Code.
3. Deemed Acceptance of Plan. Class 6 is unimpaired under the Plan, and,
therefore, is deemed to accept the Plan, and thus, will not receive a ballot
to vote on the Plan.
4. Confirmability of the Plan. The confirmation requirements of Section
1129 of the Bankruptcy Code must be satisfied with respect to the Debtor and
the Plan. If the Bankruptcy Court determines that any provisions of the Plan
are prohibited by the Bankruptcy Code, or render the Plan unconfirmable under
Section 1129 of the Bankruptcy Code, the Debtor reserves the right to sever
such provisions from the Plan, and to request that the Plan, as so modified,
be confirmed.
5. Nonconsensual Confirmation. In the event that any of Classes reject the
Plan, the Debtor reserves the right to request that the Court confirm the Plan
over such rejection in accordance with Section 1129(b) of the Bankruptcy Code.
6. Controversy Concerning Impairment. In the event of a controversy as to
whether any Class of Claims or Equity Interests is Impaired under the Plan,
the Bankruptcy Court will, after notice and a hearing prior to the
Confirmation Date, determine such controversy.
ARTICLE V
MEANS OF IMPLEMENTATION OF THE PLAN
A. Closing of the Magic Agreement. On the Effective Date, Purchaser shall
pay the Magic Closing Cash and Magic Notes to the Indenture Trustee for the
benefit of the Bondholders, and Purchaser shall receive in exchange therefor
100% of the outstanding shares of New Common Stock of Reorganized Crescent
City, as of the Effective Date. Immediately upon receipt of the Magic Closing
Cash and Magic Notes, and after deducting the sum of $7,250,000.00 from the
Magic Closing Cash and $28,000,000.00 from the Magic Notes, for distribution
to Bondholders in accordance with the terms of the Indenture, the Indenture
Trustee shall pay the Settlement Amount to the Liquidating Trust. At Closing,
Purchaser or Reorganized Crescent City shall assume or shall otherwise satisfy
the Bally & IGT Claims, without any cost or expense to the Debtor or
Liquidating Trust.
B. Cancellation of Equity Interests. On and as of the Effective Date, all
Equity Interests, including, without limitation, unexercised rights to acquire
shares of stock of the Debtor by way of option, warrant or other legal or
contractual rights, shall be automatically canceled and deemed to be void.
C. Liquidation of the Assets. On the Effective Date, (a) all of the
Residual Property shall be transferred to Liquidating Trust, (b) each holder
of an Allowed Claim, to the extent such Claim is not satisfied on the
Effective Date, shall receive from Liquidating Trust (or such other party
specifically identified) the distributions provided in Article III of the
Plan, and (c) Liquidating Trust shall be managed by the Liquidating Trustees
in good faith so as to maximize the value of Liquidating Trust's property
through the orderly liquidation of such property in a commercially reasonable
manner under the continuing supervision of the Bankruptcy Court, as provided
by this Plan.
D. Corporate Governance and Management of Reorganized Crescent City;
Vesting of Assets and Discharge; Capitalization of Reorganized Crescent City;
Action Necessary for Riverboat Gaming Commission Approvals.
1. Corporate Governance of Reorganized Crescent City: On and after the
Effective Date, the Debtor shall continue in existence as Reorganized Crescent
City, a Louisiana corporation governed by the provisions of the Amended
Certificate of Incorporation, the Amended By-laws, and Louisiana General
Corporation Law.
2. Management of Reorganized Crescent City: On and after the Effective
Date, the operation of Reorganized Crescent City shall become the
responsibility of its board of directors and management.
3. Vesting of Assets and Discharge: On and after the Effective Date,
Reorganized Crescent City may operate its businesses and may use, acquire, and
dispose of its property without supervisions or approval by the Bankruptcy
Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules,
other than as expressly provided herein. The Riverboat Assets shall vest in
Reorganized Crescent City free and clear of the claims, liens, charges,
encumbrances and interests, except as otherwise provided herein. Except as
otherwise provided herein, including the Magic Agreement on and after the
Effective Date, Reorganized Crescent City shall not be liable for and shall be
discharged from any and all Claims against the Debtor, and all Equity
Interests in the Debtor shall be canceled.
E. Establishment and Management of Liquidating Trust.
1. Upon confirmation hereof, and effective upon the Effective Date, the
three (3) persons identified by the Creditors' Committee prior to the
conclusion of the Confirmation Hearing, shall be appointed to act as Co-
Liquidating Trustees (the "Liquidating Trustees") of and to administer the
Liquidating Trust hereinafter created and to liquidate assets for the benefit
of the creditors of the Debtor's estate. The selections of the persons to
serve as Liquidating Trustees shall be subject to approval of the Bankruptcy
Court. Vacancies occurring after the original appointments shall be governed
by the Liquidating Trust documents. The Liquidating Trustees shall be deemed
to be the authorized representatives of the Estate for the purpose of and
consummation of the Plan pursuant to Sections 1103 and 1123(b)(3)(B) and other
applicable sections of the Bankruptcy Code.
2. The Liquidating Trustees shall manage and govern the Liquidating Trust
by majority rule.
3. The Debtor hereby declares and establishes a Liquidating Trust, as
defined by Treas. Reg. Sec. 301.7701-4(d), (the "Liquidating Trust") for the
benefit of the creditors of the Debtor. The Liquidating Trust is organized
for the primary purpose of receiving, liquidating, and distributing the cash,
claims, and property transferred to the Liquidating Trust (the "Liquidating
Trust Property") in accordance with the provisions of this Plan as promptly as
is reasonably possible, with no objective to carry on or conduct a for-profit
trade or business. Upon transfer of the Liquidating Trust Property to the
Liquidating Trust, the Debtor shall retain no interest in the Liquidating
Trust Property.
4. The Liquidating Trust Property will be transferred to the Liquidating
Trust for the benefit of the creditors. The transfer shall be treated as a
transfer to creditors to the extent that the creditors are beneficiaries of
the Liquidating Trust. The transfer will be treated as a deemed transfer by
the beneficiary-creditors to the Liquidating Trust. The beneficiaries-
creditors of the Liquidating Trust will be treated as the grantors and deemed
owners of the Liquidating Trust.
5. The Liquidating Trust Property must be consistently valued by the
Liquidating Trustees and the beneficiary-creditors and said valuation must be
used for all federal income tax purposes.
6. The Liquidating Trustees must file returns for the Liquidating Trust as
a grantor trust pursuant to Sec. 1.671-4(a) of the Income Tax Regulations.
7. The Liquidating Trustees' powers shall be limited to recovering,
preserving and protecting the Liquidating Trust Property, liquidating the
Liquidating Trust Property as promptly as is reasonably possible and
distributing all income and proceeds from the liquidation of Liquidating Trust
Property in accordance with the terms of the Plan as promptly as is reasonably
possible. Except as otherwise inconsistent with the provisions of this Plan,
in the exercise of such powers, the Liquidating Trustees, on behalf of the
Liquidating Trust, shall be authorized to (i) avoid or recover transfers
(including fraudulent conveyances or preferential transfers) of the Debtor's
property as may be permitted by Sections 542 through 553 of the Bankruptcy
Code or applicable state law, (ii) pursue all claims and causes of action
arising from the prepetition activities of the Debtor, whether arising by
statute or common law and whether arising under the laws of the United States
of America, Louisiana, or any other state having jurisdiction over any claim
or controversy pertaining to the Debtor, and whether maintainable against
third parties, Affiliates or Insiders of the Debtor,(iii) defend claims,
causes of action and other litigation that may adversely affect or impact the
Liquidating Trust Property,(iv) contest Claims, (v) file, litigate to final
judgment, settle, or withdraw objections to Claims, and (vi) exercise offsets
against Claims. All activities of the Liquidating Trustees shall be reasonably
necessary to, and consistent with, the accomplishment of the purpose of the
Liquidating Trust as set forth in this Plan. The Liquidating Trustees shall
make continuing efforts to liquidate and distribute proceeds from the
liquidation of Liquidating Trust Property, shall make timely distributions
pursuant to the provisions hereof, and shall not unduly prolong the duration
of the Liquidating Trust.
8. The Liquidating Trustees shall have full and complete authority to do
and perform all acts, to execute all documents and to make all payments and
disbursements of funds necessary to carry out the purpose of the Liquidating
Trust as set forth in this Plan. The Liquidating Trustees shall make
distributions of proceeds from the liquidation of Liquidating Trust Property
and income from investments in accordance with this Plan.
9. Any party dealing with the Liquidating Trustees in relation to the
Liquidating Trust Property or any part thereof, including, but not limited to,
any party to whom Liquidating Trust Property or any part thereof shall be
conveyed or contracted to be sold by the Liquidating Trustees, shall not be
obligated in any way (i) to see to the application of any purchase money, (ii)
to see that the provisions of this Plan or the terms of the Liquidating Trust
have been complied with, or (iii) to inquire into any limitation or
restriction on the power or authority of the Liquidating Trustees. The power
of the Liquidating Trustees to act or otherwise deal with the Liquidating
Trust Property shall be absolute as to any party dealing with the Liquidating
Trustees in any manner whatsoever in relation to the Liquidating Trust
Property.
10. All costs, expenses, and obligations incurred by the Liquidating
Trustees in administering this Liquidating Trust or in any manner reasonably
connected, incidental or related thereto shall be a charge against the
Liquidating Trust Property. The Liquidating Trustees may approve and direct
the payment thereof or the retention by the Liquidating Trustees of adequate
reserves for such payment prior to making distributions to creditors pursuant
to this Plan.
11. The Liquidating Trustees shall keep or cause to be kept books containing
a description of all property constituting Liquidating Trust Property and an
accounting of receipts and disbursements, which shall be open to inspection by
creditor-beneficiaries at reasonable times upon written request to the
Liquidating Trustees or their counsel. The Liquidating Trustees shall file
with the Bankruptcy Court semi-annually (or more often if deemed appropriate
by the Liquidating Trustees) a statement of receipts and disbursements for the
Liquidating Trust. The Liquidating Trustees shall establish and maintain
separate accounts (including bank accounts) for the receipt and expenditure of
funds derived from the Settlement Amount, the Administrative, Priority and
Disputed Claims Reserve and the Residual Property. The Liquidating Trustees,
in their discretion, may advance funds from the Settlement Amount Account for
the purpose of investigating, commencing litigation, or otherwise enhancing
the value of the claims and property to be deposited in the other accounts but
such advance(s) shall be considered loans and shall promptly be repaid from
the first available funds in such other accounts.
12. No recourse shall ever be had, directly or indirectly, against the
Liquidating Trustees or any Representatives of the Liquidating Trustees
(including without limitation, the employers of the Liquidating Trustees), or
against any employee of the Liquidating Trustees, whether by legal or
equitable proceedings, by virtue of any statute or otherwise, or by reason of
the creation of any indebtedness by the Liquidating Trustees under this
Liquidating Trust for any purpose authorized by this Liquidating Trust, it
being expressly understood and agreed that all liabilities, contracts and
agreements of the Liquidating Trustees, whether in writing or otherwise, under
this Liquidating Trust shall be enforceable only against and be satisfied only
out of the Liquidating Trust Property or shall be evidence only of a right of
payment out of the Liquidating Trust Property, as the case may be. Nothing
herein shall constitute a waiver of claims for intentional torts, embezzlement
or other fraudulent activity. Every undertaking, contract, covenant or
agreement entered into in writing by the Liquidating Trustees, their
Representatives, shall provide expressly against the personal liability of the
Liquidating Trustees, their Representatives and employees.
13. The Liquidating Trustees shall receive no compensation for their
services but shall be entitled to reimbursement for all expenses incurred by
them in the performance of their duties as trustees, which expenses shall be a
charge against and paid out of the Liquidating Trust Property, in accordance
with the terms of this Plan. The reimbursement of expenses to the Liquidating
Trustees and reimbursement of expenses and compensation of professionals
employed by the Liquidating Trustees shall constitute a first priority expense
of the Liquidating Trust.
14. The Liquidating Trustees shall be relieved of any and all duties,
restrictions or liabilities imposed upon Liquidating Trustees by applicable
laws of the governing state, including the provisions of the trust laws of the
governing state as in effect, in the governing state, on the Effective Date
and as it may thereafter be amended, so that the Liquidating Trustees shall be
liable only for acts of self-dealing or bad faith, or intentionally adverse
acts or reckless indifference to the interests of the creditors of the Debtor.
The fact that any act or failure to act of the Liquidating Trustees was
advised by an attorney acting as attorney for the Liquidating Trust or the
Liquidating Trustees shall be conclusive evidence of the Liquidating Trustees'
good faith in performing or failing to perform such act.
15. The Liquidating Trust shall be effective as of the Effective Date and
shall remain and continue in full force and effect until the Liquidating Trust
Property has been wholly converted to cash, all costs, expenses and
obligations incurred in administering this Liquidating Trust have been fully
paid and discharged and all remaining income, proceeds and assets of the
Liquidating Trust Property have been distributed as herein set forth.
Notwithstanding the above, the Liquidating Trust created herein shall
terminate within(3) years from the Effective Date or within such further time
as is reasonably necessary to accomplish full liquidation and disbursement;
provided, however, in no event shall this Liquidating Trust extend beyond five
(5) years from the Effective Date.
16. Subject to approval of the Bankruptcy Court, the Liquidating Trustees
may engage attorneys, accountants and agents to advise or assist the
Liquidating Trustees in the administration of the Liquidating Trust and to
represent the Liquidating Trustees in all matters relating to the Liquidating
Trust. The Liquidating Trustees shall pay the reasonable fees, charges and
expenses of such attorneys and accountants who provide services after the
Effective Date as a priority expense of the Liquidating Trust, in accordance
with the terms this Plan. Subject to the availability of sufficient funds in
the Administrative Reserve, the fees and expenses of such professionals and
agents shall be paid upon the monthly submission of bills to Liquidating
Trust. If no written objection to payment is received within five (5)
Business Days following delivery of any bill, the bill shall be paid by
Liquidating Trust. If there is a dispute as to the amount of any bill, such
dispute shall be submitted to the Bankruptcy Court for a determination of the
reasonableness of such bill. Subject to the availability of sufficient funds
in the Administrative Reserve, the uncontested portion of each bill shall be
paid within ten (10) Business Days after its delivery. As provided infra, to
the extent funds are or become available, fees and expenses of professionals
and others involved in investigating, recovering, or liquidating Residual
Property shall be paid from such recoveries. To the extent that contingent fee
litigation is desirable or necessary, the Liquidating Trustees are authorized
to hire counsel to pursue such litigation at a reasonable contingent fee. The
Liquidating Trust, which shall succeed to the Debtor's interest in the
property transferred to it pursuant to this Plan, shall constitute a successor
in interest to the Debtor. Accordingly, upon the Effective Date, the
Liquidating Trustees, on behalf of the Liquidating Trust, shall become the
owner and holder, of all privileges (including the attorney-client privilege)
owned or held by the Debtor, whether owned or held by the Debtor individually
or jointly and whether concerning pre-petition Date or post-petition Date
matters.
17. This Liquidating Trust shall be administered and governed by the laws of
the State of New Jersey or such other state (the "governing state") as the
Debtor and the Creditors' Committee shall select, which shall be established
as of the Effective Date, and any questions arising hereunder shall be
resolved and determined in accordance with the laws of the governing state,
without regard to principles of conflicts of law.
18. On the Effective Date, (a) the filing by Liquidating Trust of its Trust
Articles which shall be a Plan Document shall be deemed authorized and
approved in all respects, and (b) the appointment of the Liquidating Trustees
by the Bankruptcy Court in the Confirmation Order, and the other matters
provided under the Plan concerning the structure of Liquidating Trust or
action by Liquidating Trust, shall be deemed to have occurred and shall be in
effect without any requirement of further action or order of the Bankruptcy
Court. On the Effective Date, (a) the filing by Reorganized Crescent City of
the Amended Certificate of Incorporation and the adoption of the Amended By-
laws shall be deemed authorized and approved in all respects, and (b) to the
extent identified by the Purchaser on such date, the appointment of the
directors and officers of Reorganized Crescent City, and the other matters
provided under the Plan concerning the corporate structure of Reorganized
Crescent City, or corporate action by Reorganized Crescent City or corporate
action by Reorganized Crescent City, shall be deemed to have occurred and
shall be in effect from and after the such time without any requirement of
further action or order of the Bankruptcy Court. The Directors and officers
of the Debtors will be deemed to have resigned as of the Effective Date.
F. Commission Approvals.
1. Corporate Governance of Reorganized Crescent City: On and after the
Effective Date, the Debtor shall continue in existence as Reorganized Crescent
City, a Louisiana corporation governed by the provisions of the Amended
Certificate of Incorporation, the Amended By-laws, and Louisiana General
Corporation Law.
2. Management of Reorganized Crescent City: On and after the Effective
Date, the operation of Reorganized Crescent City shall become the
responsibility of its Board of Directors and management.
3. Vesting of Assets and Discharge: On and after the Effective Date,
Reorganized Crescent City may operate its businesses and may use, acquire, and
dispose of its property without supervisions or approval by the Bankruptcy
Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules,
other than as expressly provided herein. The Riverboat Assets shall vest in
Reorganized Crescent City free and clear of the claims, liens, charges,
encumbrances and interests, except as otherwise provided herein. Except as
otherwise provided herein, on and after the Effective Date, Reorganized
Crescent City shall not be liable for and shall be discharged from any and all
Claims against the Debtor, and all Equity Interests in the Debtor shall be
canceled.
4. Action Necessary for Riverboat Gaming Commission Approvals: On and after
the Confirmation Date, Purchaser and the Debtor shall take all reasonable
steps necessary to obtain any and all authorizations, certifications and
operating authorities and any other like permits necessary for Reorganized
Crescent City to start operations on, or on the earliest date possible after
the Effective Date.
H. Assignment of Causes of Action. On the Effective Date, except as
otherwise provided herein, all rights, claims, and causes of action pursuant
to: (a) Sections 541, 542, 544, 545, 547, 548, 549, 550 and 553 of the
Bankruptcy Code; and (b) all other claims and causes of action of the Debtor
against any Person as of the Effective Date including but not limited to the
Mirage Claim and any right to the Mirage Recovery, shall be preserved and
become property of Liquidating Trust. On the Effective Date, Liquidating
Trust shall be deemed the representative of the Estate under Section 1123(b)
of the Bankruptcy Code and will be authorized and shall have the power to
commence and prosecute any and all causes of action which could have been
asserted by the Estate. Liquidating Trust may pursue such causes of action in
the Bankruptcy Court and may retain such counsel, accountants or other Persons
as Liquidating Trust deems necessary in connection therewith or in connection
with liquidation of the Residual Property or performance of the
responsibilities of Liquidating Trust and the Liquidating Agent. All
recoveries, if any, received from or in respect of the causes of action
(whether by settlement, judgment or otherwise) shall become the property of
Liquidating Trust to be distributed pursuant to the terms of the Plan. The
costs and expenses, including legal fees and disbursements, incurred in
connection with the prosecution of such causes of action, shall be paid by
Liquidating Trust without necessity of approval by the Bankruptcy Court. From
and after the Effective Date, Liquidating Trust shall litigate any avoidance
or recovery actions and any other causes of action or rights to payments of
claims that belong to the Debtor that may be pending on the Effective Date or
instituted by Liquidating Trust after the Effective Date.
I. Waiver of Subordination. The distributions under the Plan take into
account the relative priorities of the Claims in each Class in connection with
any contractual subordination provisions relating thereto.
ARTICLE VI
ESTABLISHMENT OF RESERVES
B. Administrative Reserve.
1. Creation of Administrative Reserve: On the Effective Date, Liquidating
Trust shall establish an interest bearing account with a major money center
bank in an amount necessary to create and maintain the Administrative Reserve,
as same shall be determined by the Debtor at the Confirmation Hearing and
approved by the Bankruptcy Court. The money in the Administrative Reserve
shall be used to fund (i) the continuing administration of Liquidating Trust,
including the administration of Claims, and the filing and prosecutions of
objections thereto, (ii) the payment of taxes for which the Liquidating Trust
is liable, (iii) the maintenance of insurance policies, (iv) the enforcement
and prosecution of claims of or claims assigned to the Liquidating Trust in
conjunction with the marshaling of the Residual Property, (vi) the liquidation
by conversion to Cash or other methods of the remaining Residual Property, and
(vii) the payment of the actual fees and expenses incurred in connection with
all of the above-described activities. The Administrative Reserve shall not
be used to fund the operations or pay any expenses of Reorganized Crescent
City.
2. Maintenance of the Administrative Reserve: Liquidating Trust shall
maintain sufficient Cash in the Administrative Reserve as it in good faith
deems necessary to ensure the continued funding of the activities described in
Subsection 1 of this Article VI(E) of the Plan.
3. Investment of the Administrative Reserve: Liquidating Trust shall be
permitted, from time to time, to invest all or a portion of the Cash in the
Administrative Reserve in United States Treasury Bills, interest-bearing
certificates of deposit, tax exempt securities, or investments permitted by
Section 345 of the Bankruptcy Code, using prudent efforts to enhance the rates
of interest without inordinate credit risks or interest rate risks. All
interest earned on such Cash shall be held by Liquidating Trust and (i) kept
in the Administrative Reserve and utilized to fund the operation of
Liquidating Trust, and, to the extent of any excess, (ii) transferred to an
available cash reserve for distribution in accordance with the Plan.
4. Distribution of the Administrative Reserve: After completion by
Liquidating Trust of all tasks remaining to liquidate fully its assets and
distribute the proceeds therefrom in accordance with the Plan, including the
payment of all charges and taxes related thereto, any amounts remaining in the
Administrative Reserve will be distributed to Class 3A Claimants.
B. The Disputed Claims Reserve.
2. Creation of the Disputed Claims Reserve: On or before the first (1st)
Cash Distribution Date, Liquidating Trust shall establish a segregated
interest-bearing account with a major money center bank. On the first (1st)
Cash Distribution Date and each subsequent Cash Distribution Date, from the
Settlement Amount or the Net Cash Proceeds attributable to the Residual
Property, as applicable, Liquidating Trust shall deposit into such account, or
otherwise reserve, an amount of Cash and/or Magic Notes sufficient to pay all
Disputed Administrative Claims, Disputed Priority Claims, Disputed Priority
Tax Claims, Disputed Secured Claims, Disputed Convenience Claims and Disputed
General Unsecured Claims that would have been distributable on account of such
Claims had such Claims been Allowed Claims on the relevant date. The reserve
shall be based upon the amount ordered by the Court in accordance with the
Court's authority to estimate contingent and/or unliquidated claims under 11
U.S.C. Sec.502(c) or, if no estimate has been made, the amount of the Claims,
as
filed.
3. Claims With Recourse to Insurance Coverage: All Allowed General
Unsecured Claims with recourse to insurance coverage policies of the Debtor
covering tort claims shall be deemed Disputed Claims in their Face Amount or
as otherwise ordered by the Court, and Cash and/or Magic Notes shall be set
aside in the Disputed Claims Reserve on the first (1st) Cash Distribution Date
to account for such Claims. Upon receipt of notice that any such Claim has
been satisfied in whole, or in part, by the Debtor's insurance policies,
Liquidating Trust will reduce the amount on deposit in the Disputed Claims
Reserve by an amount equal to the amount allocable to the Claim or portion
thereof so satisfied. Upon receipt of notice that a Claim entitled to
coverage under an insurance policy of the Debtor is not satisfied, in whole,
or in part, under such policy, within sixty (60) days of the Effective Date,
and such Claim is not disputed in whole or in part by Liquidating Trust,
Liquidating Trust shall distribute to the holder of such Claim, Cash set aside
in the Disputed Claims Reserve on account of that portion of such Claim that
has not been satisfied by coverage under an insurance policy.
4. Payment of Expenses of the Disputed Claims Reserve: Liquidating Trust
shall pay, or cause to be paid, out of the funds held in the Disputed Claims
Reserve, all expenses of the Disputed Claims Reserve, including any tax
imposed by any governmental unit on the income generated by the funds held in
the Disputed Claims Reserve. Liquidating Trust shall also file or cause to be
filed any tax or information returns related to the Disputed Claims Reserve
that are required by any governmental unit.
5. Investment of Disputed Claims Reserve: Liquidating Trust shall be
permitted, from time to time, to invest all or a portion of the Cash in the
Disputed Claims Reserve in United States Treasury Bills, interest-bearing
certificates of deposit, tax exempt securities, or investments permitted by
Section 345 of the Bankruptcy Code, using prudent efforts to enhance the rates
of interest without inordinate credit risks or interest rate risks. All
interest earned on such Cash shall be held by Liquidating Trust and, after
satisfaction of any expenses incurred in connection with the maintenance of
the Disputed Claims Reserve, distributed in accordance with the Plan.
6. Excess Funds: If, on any Reallocation Date, Liquidating Trust
determines there are excess funds on deposit in the Disputed Claims Reserve,
such excess funds (including any interest earned thereon) will be released
from the Disputed Claims Reserve and deposited in the Available Cash Reserve
and distributed to Class 3A Claimants in accordance with this Plan.
ARTICLE VII
PROVISIONS FOR TREATMENT OF DISPUTED AND CONTINGENT CLAIMS
B. Objections to Claims. Unless another date is established by the
Bankruptcy Court, all objections to Claims that were filed prior to the
Effective Date shall be filed and served on the holders of such Claims by the
sixtieth (60th) after the Effective Date, or such date as extended by the
Court. If any objection has not been filed to a proof of Claim or a scheduled
Claim by the objection bar date, the Claim to which the proof of claim or
scheduled Claim relates shall be treated as an Allowed Claim if such Claim has
not been Allowed or Disallowed earlier. After the Effective Date, except as
to objections to claims filed by persons other than the Debtor, only the
Liquidating Trustees shall have the authority to prosecute, settle,
compromise, withdraw or litigate to judgment objections to Claims and
counterclaims, all of which shall be prosecuted in the Bankruptcy Court.
C. Payments and Distributions on Disputed Claims. Notwithstanding any
provision in the Plan to the contrary, no payments or distributions will be
made with respect to a Disputed Claim until the resolution of such dispute by
settlement or Final Order. On the first Cash Distribution Date that is at
least forty-five (45) days after a Disputed Claim becomes an Allowed Claim,
the holder of such Allowed Claim will receive all distributions, including its
share of the net earnings of the Disputed Claims Reserve, to which such holder
is then entitled under the Plan. Notwithstanding the foregoing, any Person
who holds both an Allowed Claim(s) and a Disputed Claim(s) will receive the
appropriate payment or distribution on the Allowed Claim(s), although no
payment or distribution will be made on the Disputed Claim(s) until such
dispute is resolved by settlement or Final Order.
D. Disputed General Unsecured Claims.
1. Estimation: For purposes of effectuating the reserve provisions of
Article VI of the Plan and the allocations and distributions to holders of
Allowed General Unsecured Claims, the Bankruptcy Court will, on or prior to
the Confirmation Date, pursuant to Section 502 of the Bankruptcy Code, fix or
liquidate the amount of any Contingent General Unsecured Claim not otherwise
treated in the Plan, in which event the amount so fixed or liquidated will be
deemed the Allowed amount of such Claim for purposes of this Plan, or, in lieu
thereof, the Bankruptcy Court will determine the maximum contingent amount for
such Claim, which amount will be the maximum amount in which such Claim
ultimately may be Allowed under this Plan, if such Claim is Allowed in whole
or in part. The right of a Creditor under Section 502(j) of the Bankruptcy
Code to obtain reconsideration of a Claim that has been estimated can only be
exercised within thirty (30) days after the Effective Date. Thereafter, no
Claims that have been estimated for the purpose of allowance may be
reconsidered.
2. Distributions Upon Allowance: To the extent a Disputed General
Unsecured Claim becomes an Allowed Claim, on the next succeeding Cash
Distribution Date that is at least forty-five (45) days after a Disputed Claim
becomes an Allowed Claim, there will be distributed to the holder of such
Allowed Claim out of the Disputed Claims Reserve, in accordance with the
applicable provisions of this Plan, the amount of Cash on deposit in the
Disputed Claims Reserve allocable to the Claim so Allowed, plus its share of
the net earnings of the Disputed Claims Reserve.
ARTICLE VIII
DISTRIBUTIONS UNDER THE PLAN
B. Distributions.
1. On the Effective Date, or as soon thereafter as is reasonably
practicable, distributions of Cash shall be made by Liquidating Trust in
accordance with the relevant provisions of Article III hereof, on account of
Allowed Administrative Claims, Allowed Priority Claims, Allowed Priority Tax
Claims, and Allowed Secured Claims that are entitled to a Cash payment under
the Plan.
2. On the first (1st) Cash Distribution Date, or as soon thereafter as is
reasonably practicable, distributions of Cash shall be made by Liquidating
Trust in accordance with the relevant provisions of Article II hereof, on
account of Allowed Convenience Claims and Allowed General Unsecured Claims;
and
3. Subsequent distributions of (a) Net Cash Proceeds of the Residual
Property, and (b) previously undistributed Cash to the holders of Allowed
General Unsecured Claims, may be made if, on any Cash Distribution Date
(excluding the first (1st) Cash Distribution Date), the Liquidating Trustees,
in their discretion, determine that Liquidating Trust has accumulated
sufficient funds to justify a distribution.
4. On each Reallocation Date, the Liquidating Trustees will determine the
amount of Cash to be distributed on account of previously Allowed Claims and
Disputed Claims that have become, in whole or in part, Allowed Claims. The
Liquidating Trustees shall, if appropriate, make distributions from the
Disputed Claims Reserve on each Cash Distribution Date.
5. Fractional cents will not be distributed and shall revert to Liquidating
Trust.
B. Method of Payment. Payments to be made by Liquidating Trust pursuant to
the Plan will be made by check drawn on a domestic bank or, if in excess of
$1,000,000, by wire transfer of next day available funds.
C. Amendment of Plan. The Plan may be amended by the Debtor before, and
the Liquidating Trustees after, the Effective Date as provided in Section 1127
of the Bankruptcy Code.
D. Implementation. The Debtor and Liquidating Trust, as the case may be,
will be authorized to take all necessary steps, and perform all necessary
acts, to consummate the terms and conditions of the Plan.
E. Method of Distributions Under the Plan. All distributions of Cash and
other property shall be made by the Liquidating Trustees pursuant to the Plan
on the Effective Date or applicable Cash Distribution Date, as the case may
be, or as soon thereafter as is practicable (a) at the addresses set forth in
the proofs of claim filed by such holders; (b) at the addresses set forth in
any written notices of address change delivered to the Debtor or Liquidating
Trust after the date on which any related proof of claim was filed; or (c) at
the address reflected in the Schedules if no proof of claim has been filed and
Liquidating Trust has not received a written notice of a change of address.
F. Undeliverable Distributions.
2. Distributions Held by Liquidating Trust: If the distribution to any
holder of an Allowed Claim is returned as undeliverable, no further
distributions shall be made to such holder unless and until the Liquidating
Trustees is notified in writing by such holder of the holder's current address
at which time all previously missed distributions shall be mailed to such
holder. Undeliverable distributions shall belong to Liquidating Trust and be
held in the account from which such distribution was made (e.g., the
Settlement Amount account, the Residual Property account, etc.).
3. After Distributions Become Deliverable: On each Cash Distribution Date,
Liquidating Trust shall make all distributions that have become deliverable
since the immediately prior Cash Distribution Date. Distributions from the
Disputed Claims Reserve shall be made in all instances as soon as practicable
after the same become deliverable.
4. Failure to Claim Undeliverable Distributions: Any holder of an Allowed
Claim that does not assert a claim pursuant to the Plan for an undeliverable
distribution within two (2) years after the Distribution Date shall have its
Claim for such undeliverable distribution discharged and shall be forever
barred from asserting any such claim for an undeliverable distribution. In
such case, any Cash held for distribution on account of such Claims for
undeliverable distributions shall be redeposited into the Administrative
Reserve for distribution to holders of Allowed Class 3A Claims on the next
Cash Distribution Date after such distributions become undeliverable pursuant
to the terms hereof. Nothing contained in the Plan shall require Liquidating
Trust to attempt to locate any holder of an Allowed Claim. Checks issued in
respect of distributions to the holders of Allowed Claims shall be null and
void if not cashed within 90 days of the date of issuance thereof. Requests
for the reissuance of any check shall be made directly to Liquidating Trust by
the holder of the Allowed Claim with respect to which such check was
originally issued. Any Claim in respect of such a check voided shall be made
on or before the sixth (6th) month anniversary of the issuance of such check.
After such date, all Claims in respect of a check voided pursuant to this
Subsection shall be discharged and forever barred.
ARTICLE IX
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
B. Rejection of Executory Contracts and Unexpired Leases. On the
Confirmation Date (but subject to the occurrence of the Effective Date), all
executory contracts or unexpired leases that exist between the Debtor and any
Person, that have not been assumed or rejected by order of the Bankruptcy
Court or which are not the subject of a motion to assume or reject pending on
the Confirmation Date, will be deemed rejected in accordance with the
provisions and requirements of Section 365 of the Bankruptcy Code. Entry of
the Confirmation Order by the Clerk of the Court shall constitute an order
approving such rejections pursuant to Section 365(a) of the Bankruptcy Code.
C. Claims Based on Rejection of Executory Contracts or Unexpired Leases. All
proofs of claim with respect to Claims arising from the rejection of executory
contracts or unexpired leases must be filed with the Bankruptcy Court no later
than twenty-five (25) days after the Confirmation Date. Any Claims not filed
within such time will be forever barred from assertion against the Debtor, the
Estate and its property, Liquidating Trust, or the Disputed Claims Reserve.
Unless otherwise ordered by the Bankruptcy Court, all such Claims arising from
the rejection of executory contracts or unexpired leases will be, and will be
treated as Class 3A, General Unsecured Claims or Class 3B Convenience Claims
or Class 4 Subordinated Claims as the case may be.
ARTICLE X
ADMINISTRATIVE PROVISIONS
A. Retention of Jurisdiction. The Bankruptcy Court will retain and have
exclusive jurisdiction on and after the Confirmation Date for the following
purposes:
1. to hear and determine objections to Administrative Claims or Proofs of
Claims whenever filed both before and after the Confirmation Date, including
any objections to the classification of any Claim and to allow or disallow any
Disputed Claim, in whole or in part;
2. to hear and determine any and all motions to estimate Claims regardless
of whether the Claim is the subject of a pending objection, a pending appeal
or otherwise;
3. to hear and determine any and all pending applications for the rejection
or assumption of executory contracts or unexpired leases to which a Debtor is
a party or with respect to which a Debtor may be liable and to hear and
determine, and, if need be, to liquidate, any and all Claims arising
therefrom;
4. to enforce the provisions of the Plan and to enforce any proposed
amendments thereto;
5. to ensure that distributions, if any, to holders of Allowed Claims are
accomplished as provided herein;
6. to determine any and all applications, adversary proceedings and
contested or litigated matters that may be pending on the Effective Date or
commenced thereafter;
7. to consider any modifications of the Plan, to cure any defect or
omission, or reconcile any inconsistency in any order of the Bankruptcy Court,
including, without limitation, the Confirmation Order;
8. to hear and determine all controversies, suits and disputes that may
arise in connection with the interpretation, implementation or enforcement of
the Plan, the Estate's obligations, releases under the Plan, or any Claim
asserted against any representative of the Estate or its agents;
9. to hear and determine all controversies concerning the Magic Agreement.
10. to hear and determine all controversies concerning the Mirage
Agreement,
the Mirage DIP Financing Claims and any other claims and/or dispute asserted
by or against Mirage;
11. to enter such orders in aid of execution of the Plan to the extent
authorized by Section 1142 of the Bankruptcy Code, including such orders
aiding or promoting the transfer of the economic or ownership interest of the
Debtor, but not to the extent that such orders are in regard to matters within
the sole jurisdiction of police or regulatory authorities;
12. to determine such other matters as may be set forth in the Confirmation
Order or as may arise in connection with the Plan (including, without
limitation, Article XIII thereof) or the Confirmation Order or their
implementation;
13. to hear and determine all controversies, suits and disputes that may
arise with respect to the Residual Property;
14. to enforce all orders, judgments, injunctions and rulings entered in
connection with the Reorganization Case;
15. to determine any and all applications for allowance of compensation and
reimbursement of expenses and any other fees and expenses authorized to be
paid or reimbursed under the Bankruptcy Code or the Plan;
16. to hear and determine all proceedings to recover all assets of the
Debtor and property of the estate, wherever located, including any causes of
action under Sections 544 through 551 and 553(b) of the Bankruptcy Code, and
any other causes of action or rights to payment of Claims, that belong to the
Debtor, that may be pending on the Confirmation Date or that may be instituted
at any time by Liquidating Trust thereafter;
17. to hear and determine any disputes between the Liquidating Trustees and
Liquidating Trust or with respect to either of them;
18. to hear and determine matters concerning state, local and federal taxes
in accordance with Sections 346, 505 and 1146 of the Bankruptcy Code;
19. to approve the retention of professionals by Liquidating Trust and to
approve all requests for payment of fees and expenses by such professionals;
20. to hear any other matter as to which jurisdiction is not inconsistent
with the Bankruptcy Code; and
21. to enter a final decree or decrees closing the Reorganization Case.
B. Bar Date For Filing Claims Pursuant to Section 503(b) of the Bankruptcy
Code.
2. Administrative Claims Generally: Subject to further order of the
Bankruptcy Court, all applications for payment of Administrative Claims (other
than Administrative Claims that constitute Fee Requests) pursuant to Section
503(b) of the Bankruptcy Code shall be filed with the Bankruptcy Court within
five (5) Business Days after the Effective Date. Any requests for payment of
such Administrative Claims not so scheduled by the Debtor or filed within such
time period shall be discharged and forever barred except as otherwise may be
ordered by the Bankruptcy Court.
3. Fee Requests:
A. All Fee Requests must be filed with the Bankruptcy Court within forty-
five (45) days after the Effective Date. Objections to such Fee Requests may
be filed by any party in interest within the later of sixty (60) days after
the Effective Date and sixty (60) days after such Fee Request is filed with
the Bankruptcy Court.
B. On or prior to the Confirmation Date, each Person that has sought or
will seek to file a Fee Request shall deliver to the Debtor an estimate of the
aggregate fees and expenses through the Effective Date which shall be
requested by such Person (including, if applicable, any amount previously
requested and subject to holdback). Any such estimate shall be binding on
such Person and such Person shall not apply for fees and expenses accruing
during the Reorganization Case in excess of such estimate; provided, however,
that such estimate shall not be binding unless the Confirmation Order is
entered within ten (10) Business Days of the scheduled Confirmation hearing.
ARTICLE XI
CONDITIONS TO CONFIRMATION
AND EFFECTIVE DATE OF THE PLAN
A. Conditions to Entry of Confirmation Order. The Plan shall not be
confirmed unless the following conditions have been satisfied or waived as
specified in Article XI(C):
1. The Magic Closing Cash is estimated to be sufficient to pay the
Liquidating Trust the Settlement Amount of no less than $6,000,000.00;
B. Conditions to Effective Date. The Effective Date of the Plan shall not
occur unless and until the following conditions shall have been satisfied:
1. Entry of Confirmation Order in a form and substance satisfactory to the
Debtor, Purchaser, the Institutional Note Holders' Steering Committee and the
Creditors' Committee;
2. At Closing, Purchaser has assumed or otherwise satisfied or arranged to
satisfy the Bally & IGT Claims as provided in V(A) of the Plan;
3. The Confirmation Order shall have been entered;
4. The Confirmation Order shall not be currently stayed; and
5 The Closing has occurred or will occur simultaneously.
C. Waiver of Conditions.
1. Article XI(A)(1) may be waived by unanimous consent of the Creditors'
Committee, without regard to abstentions.
3. Article XI(B)(2) may be waived by the Creditors' Committee.
ARTICLE XII
EFFECTS OF CONFIRMATION
A. Binding Effect/Injunction.
1. Except as otherwise expressly provided in the Plan, on and after the
Effective Date, the terms of the Plan shall bind all holders of Claims and
Equity Interests, whether or not they accept the Plan.
2. Except as otherwise expressly provided in Section 1141 of the Bankruptcy
Code or this Plan, the distributions made pursuant to the Plan will be in full
and final satisfaction, settlement, release and discharge as against the
Debtor or any of its assets or properties, of any debt that arose before the
Confirmation Date and any debt of a kind specified in Sections 502(g), 502(h)
or 502(i) of the Bankruptcy Code and all Claims and interests of any nature,
including, without limitation, any interest accrued thereon from and after the
Petition Date, whether or not (i) a proof of Claim or interest based on such
debt, obligation or interest is filed or deemed filed under Section 501 of the
Bankruptcy Code, (ii) such Claim or interest is Allowed under Section 502 of
the Bankruptcy Code, or (iii) the holder of such Claim or interest has
accepted the Plan.
3. Except as set forth herein, on and after the Effective Date, every
holder of a Claim or Equity Interest shall be precluded and permanently
enjoined from asserting against the Debtor, Liquidating Trust (in connection
with is organization, and operations), and the Liquidating Trustees (in their
capacity as such), and Reorganized Crescent City, their respective officers,
directors, professionals and agents or their respective assets or properties,
any further claim based on any document, instrument, judgment, award, order,
act, omission, transaction or other activity of any kind or nature that
occurred prior to the Confirmation Date. Said injunction shall not be
construed to enjoin any action by a Creditor or Bondholder against the Debtor,
Liquidating Trust, the Liquidating Trustees, Reorganized Crescent City, their
respective officers, directors, professionals and agents which is personal to
such person or entity, and which is not derivative of the rights of the
Debtor. Nothing contained herein shall prevent the Louisiana Department of
Revenue and Taxation ("LDRT") from pursuing any corporate officers/directors
of the Debtor, pursuant to LSA-R.S. 47:1561.1, but only with respect to claims
filed in the Bankruptcy Case.
B. Rights of Action. Any rights or causes of action accruing to the Debtor
shall become assets of Liquidating Trust. Liquidating Trust may pursue those
rights or causes of action as appropriate as set forth in Article V(G) of the
Plan, in accordance with what is in the best interests, and for the benefit
of, those Creditors that will receive distributions from the Residual
Property. It is expressly understood that the Liquidating Trustees may, in
their discretion and by majority vote, settle or resolve any avoidance action
claim by agreeing to permit the transferee to make an appropriate reduction in
its claim(s) so as to give credit for the amount otherwise recoverable from
future distributions pursuant to this Plan.
C. Committees. The Creditors' Committee shall continue in existence until
the Effective Date, to exercise those powers and perform those duties
specified in Section 1103 of the Bankruptcy Code, and shall perform such other
duties as it may have been assigned by the Bankruptcy Court. On the Effective
Date, the Creditors' Committee shall be dissolved and their members shall be
deemed released of all their duties, responsibilities and obligations in
connection with the Bankruptcy Case. Upon dissolution of the Creditors'
Committee, each member of the Creditors' Committee and its counsel shall be
deemed released from liability by the Debtor and any creditor entitled to
receive a distribution under this Plan, and shall be indemnified by
Liquidating Trust from any liability to any creditor, the debtor, purchaser,
equity security holder, the Reorganized Debtor or party in interest for any
act taken in furtherance of its duties as a member of the Creditors' Committee
or its counsel, as applicable.
D. Full and Final Satisfaction. The payments and distributions which are
required to be made by the Debtor or Liquidating Trust under this Plan shall
be in full and final satisfaction, settlement, release and discharge of all
Claims against and Interests in the Debtor. A holder of an Allowed Claim may
not receive a distribution on account of such Allowed Claim equal to an amount
greater than the full amount (including interest to the extent provided in the
Plan) of such Allowed Claim.
E. Post-Confirmation Effect of Evidences of Claims or Interests. Except as
otherwise provided in the Plan, effective upon the Effective Date, all notes,
certificates and other evidences of Claims or Interests shall represent only
the right to participate in distributions under the Plan.
F. Continuation of Injunctions and Stays. Unless otherwise provided, all
injunctions, liens or stays: (a) ordered in the Reorganization Case pursuant
to Sections 105 and 362 of the Bankruptcy Code or otherwise or in existence on
the Petition Date, and (b) extant immediately prior to the Confirmation Date
shall remain in full force and effect until the Effective Date.
ARTICLE XIII
RELEASE AND EXCULPATION
A. Release. Except for the obligations created by the Plan, for good and
valuable consideration, including, without limitation, the benefits of the
Plan, the promises and obligations of the Debtor, Reorganized Crescent City,
the Bondholders, CGII and the Purchaser and the efforts and contributions of
the officers and directors of the Debtor in bringing about the confirmation
and consummation of the Plan, and to permit the effective and expeditious
reorganization of the Debtor, on the Effective Date, the Debtor, shall be
deemed to have unconditionally waived and released any and all rights, Claims,
liabilities and causes of action with respect to those matters directly
relating to Crescent City, against Reorganized Crescent City, the Bondholders,
the Indenture Trustee, CGII, the Institutional Note Holders' Steering
Committee, the Creditors' Committee, the Purchaser, and except with respect to
CGII, their respective members, officers, directors, agents and attorneys, as
well as the Debtor's officers, directors, agents and attorneys who served in
such capacities at any time during the Bankruptcy Case (collectively the
"Releasees"); provided however, that (a) Purchaser shall not be released from
its obligations under the Magic Agreement to pay the Magic Deferred Cash, and
(b) the releases granted in favor of the Committees shall release Committee
members only in their capacity as such and not in their capacity as individual
creditors. Any claim or cause of action a Creditor or Bondholder has against
any Releasee which is personal to such Releasee, and which is not derivative
of the rights of the Debtor, shall not be affected by the releases granted
hereunder.
Except with respect to the Debtor, nothing in this Plan shall impair or
otherwise affect any rights, liens, claims, or interests of the Indenture
Trustee or any Bondholder under the Notes, the Indenture, or any related
documents, including, but not limited to, any rights, liens, claims or
interests against CGII or any guarantor of CGII's obligations.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
A. Payment Dates. Whenever any payment to be made or action to be taken
under the Plan is due to be made or taken on a day other than a Business Day,
such payment will instead be made (without Interest for such delay) or action
will instead be taken on the next Business Day.
B. [INTENTIONALLY LEFT OUT]
C. Governing Law. Unless a rule or procedure is supplied by federal law
(including the Bankruptcy Code and Bankruptcy Rules), the laws of the State of
Louisiana shall govern the construction and implementation of the Plan and any
agreements, documents and instruments executed in connection with the Plan.
D. Binding Effect. The rights, duties and obligations of any person or
entity named or referred to in the Plan shall be binding upon and shall inure
to the benefit of, such person or entity and their respective successors and
assigns.
E. Filing or Execution of Additional Documents. Except as otherwise
provided in the Plan, on or before substantial consummation of the Plan, the
Debtor will file with the Bankruptcy Court or execute, as appropriate, such
agreements and other documents as may be necessary or appropriate to
effectuate and further evidence the terms and conditions of the Plan.
F. Payment of Statutory Fees. All fees payable pursuant to Section 1930 of
title 28, United States Codes, as determined by the Bankruptcy Court at the
hearing pursuant to Section 1128 of the Bankruptcy Code, shall be paid on or
before the Effective Date.
G. Revocation and Modification of Plan and Related Documents. The Debtor
reserves the right, in accordance with the Bankruptcy Code, to amend or modify
the Plan and related Plan Documents in any manner or revoke the Plan in its
entirety prior to the entry of the Confirmation Order. After entry of the
Confirmation Order, the Debtor may: (a) amend or modify the Plan and related
Plan Documents in accordance with, and to the extent permitted by, Section
1127(b) of the Bankruptcy Code; or (b) remedy any defect or omission or
reconcile any inconsistency in the Plan in such manner as may be necessary to
carry out the purpose and intent of the Plan. In the event the Plan is
confirmed but cannot be consummated, the Confirmation Order shall be revoked
and upon such revocation, the terms of the Plan shall not be binding on or
enforceable by any Person.
H. Notices. Any notice required or permitted under the Plan shall be in
writing and served either by (i) certified mail, return receipt requested,
postage pre-paid, (ii) hand delivery, or (iii) reputable overnight delivery
service, freight prepaid, addressed to the following parties:
If to the Debtor:
Crescent City Capital Development Corp.
Bayport One, Suite 250
8025 Black Horse Pike
W. Atlantic City, New Jersey 08232
Attn: President
with a copy to:
Bronfin & Heller, LLC
650 Poydras Street, Suite 2500
New Orleans, Louisiana 70130
Attn: Jan. M. Hayden, Esq.
If to Liquidating Trust:
with a copy to:
I. Construction. The rules of construction set forth in Section 102 of the
Bankruptcy Code shall apply to the construction of the Plan.
J. Section Headings. The section headings contained in the Plan are for
convenience and reference purposes only and will not affect in any way the
meaning or interpretation of the Plan.
K. Offer of Compromise. The Compromise embodied in this Plan shall not be
deemed to be an admission of liability of the Debtor, the Debtor-in-Possession
or Liquidating Trust, and shall not be admissible in any proceeding or action,
other than one to enforce the provisions of this Plan, against the Debtor, as
a debtor and debtor-in-possession, or the Indenture Trustee or Bondholders.
ARTICLE XV
TRANSACTION WITH PURCHASER
A. Notwithstanding any provision to the contrary contained in the Plan, the
provisions of this Article shall govern the performance and effect of the
consummation of the Magic Agreement in lieu of any other provision in the Plan
which may conflict with this Article.
B. Upon the payment to the Indenture Trustee of the Magic Closing Cash and
the Magic Notes as provided in Article II(A), Purchaser shall be discharged
from any further liability to the Debtor for the payment of said sum, not
including the Magic Deferred Cash. The breach by the Indenture Trustee of any
of its obligations under the Plan including but not limited to making
specified disbursements shall not affect Purchaser in any manner, and
Purchaser shall be entitled to full performance (including specific
performance) by the Debtor under the Plan and the Magic Agreement.
C. The obligations to assume or satisfy the claims of Bally, IGT or any
other vendor as provided in Paragraph 4 of the Magic Agreement shall not
exceed an aggregate amount of $6,500,000.00.
D. All conditions to Closing as defined in Paragraph 5 of the Magic
Agreement must either be satisfied or waived in writing by Purchaser prior to
the Closing occurring.
E. All obligations of Purchaser under the Magic Agreement and the Plan
shall be governed by applicable federal law and the law of the State of
Louisiana.
F. The Liquidating Trust shall be responsible for all claims, obligations,
liabilities, liens or taxes which arise or accrue prior to the Effective Date.
Neither Purchaser nor the Reorganized Crescent City shall be liable or in any
manner responsible for those claims, obligations, liabilities, liens or taxes
which arise or accrue prior to the Effective Date. All parties pursuant to
section 1141 will be enjoined from asserting any such claims, obligations,
liabilities, liens or taxes against the Reorganized Crescent City or the
Purchaser, and the Reorganized Crescent City shall be discharged from all such
claims, obligations, liabilities, liens or taxes. Except as otherwise
provided herein, all Riverboat Assets of the Reorganized Crescent City shall
be revested in the Reorganized Crescent City free and clear of all liens
and/or encumbrances of any manner whatsoever.
G. Taxes and Section 338(h)(10) Election. All of the tax benefits and tax
obligations of Debtor arising prior to the Effective Date shall be for the
account of the Debtor and shall be satisfied, discharged or otherwise provided
for by the Liquidating Trust. The Liquidating Trust or CGII will be
responsible for filing all federal, state and local tax returns through all
relevant time periods until the Effective Date. Purchaser will co-operate
with CGII and the Liquidating Trust to file Form 8023, to effectuate the
election by the Debtor and CGII under section 338(g) and 338(h)(10) of the
Internal Revenue Code.
1. With respect to the sale of the Shares, if so requested by the Debtor
upon notice to Purchaser prior to the Closing Date, Debtor and Purchaser shall
jointly make a Section 339(h)(10) Election (as hereinafter defined) in
accordance with applicable laws and under any comparable provision of state or
local law for which a separate election is permissible and as set forth
herein. The Purchaser shall take all necessary steps to properly make a
Section 338(g) Election (as hereinafter defined) in connection with the
Section 338(h)(10) Election in accordance with applicable laws and under any
comparable provision of state or local law for which a separate election is
permissible. The Purchaser and Debtor agree to cooperate in good faith with
each other in the preparation and timely filing of any tax returns required to
be filed in connection with the making of such an election, including the
exchange of information and the joint preparation and filing of Form 8023 and
related schedules.
2. The Debtor shall be responsible for the preparation and filing of all
Section 388 Forms (as hereinafter defined) in accordance with applicable tax
laws and the terms of this Agreement and shall deliver such Section 338 Forms
to Purchaser at least 30 days prior to the date such Section 338 Forms are
required to be filed. Purchaser shall execute and deliver to the Debtor such
documents or forms (including executed Section 338 Forms) as are requested and
are required by any laws in order to properly complete the Section 338 Forms
at least 20 days prior to the date such Section 338 Forms are required to be
filed.
3. The Purchase Price, liabilities of the Companies and other relevant
items shall be allocated in accordance with Section 338(b)(5) of the Code and
the Treasury Regulations thereunder.
4. "Section 338 Forms" means all returns, documents, statements, and other
forms that are required to be submitted to any federal, state or local taxing
authority in connection with a Section 338(g) Election or a Section 338(h)(10)
Election. Section 338 Forms shall include, without limitation, any "statement
of section 338 election" and IRS Form 8023 (together with any schedules or
attachments thereto) that are required pursuant to Treas. Regs. Section 1.338-
1 or Treas. Regs. Section 1.338(h)(10)-1 or any successor provisions.
5. "Section 338(g) Election" means an election described in Section 338(g)
of the Code in connection with an election under Section 338(h)(10) of the
Code with respect to the acquisition of Shares pursuant to this Agreement.
Section 338(g) Election shall include any corresponding election under any
other relevant tax laws (e.g., state laws) for which a separate election is
permissible with respect to the Purchaser's acquisition of Shares pursuant to
this Agreement.
6. "Section 338(h)(10) Election" means an election described in Section
338(h)(10) of the Code with respect to the Purchaser's acquisition of Shares
pursuant to this Agreement. Section 338(h)(10) Election shall include any
corresponding election under any other relevant tax laws (e.g., state laws)
for which a separate election is permissible with respect to the Purchaser's
acquisition of Shares pursuant to this Agreement.
7. Purchaser acknowledges that, in the absence of an effective election
under Section 338(h)(10) of the Code, CGII will make any otherwise permitted
election under Treas. Reg. Sec. 1.1502-20(g) with respect to the Debtor.
Purchaser agrees to cooperate with CGII in meeting the requirements of such
election, including causing the Debtor to comply with Treas. Regs. Sec.
1.1502-
20(g)(5).
Dated: New Orleans, Louisiana
March ____, 1996
CRESCENT CITY CAPITAL
DEVELOPMENT CORPORATION
By: _____________________________
Name: Edward M. Tracy
Title: President and CEO
BRONFIN & HELLER, LLC
Counsel to Debtor
By:____________________________________
Jan M. Hayden (Law Bar #6672)
Robyn J. Spalter (Law Bar #21116)
650 Poydras Street, Suite 2500
New Orleans, Louisiana 70130-6101
(504) 568-1888
<PAGE>
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF LOUISIANA
IN RE: NO. 95-12735-TMB
CRESCENT CITY CAPITAL CHAPTER 11
DEVELOPMENT CORPORATION
A REORGANIZATION CASE
DEBTOR UNDER CHAPTER 11 OF THE
BANKRUPTCY CODE
FIRST IMMATERIAL MODIFICATION TO
SECOND AMENDED CHAPTER 11 PLAN OF REORGANIZATION
OF CRESCENT CITY CAPITAL DEVELOPMENT CORPORATION
NOW INTO COURT, through undersigned counsel, comes Crescent City Capital
Development Corporation ("Debtor" or "Crescent City") and respectfully files
this Second Immaterial Modification to Second Amended Chapter 11 Plan of
Reorganization of Crescent City Capital Development Corporation (hereinafter
referred to as "Immaterial Modification").
I.
Pursuant to 11 USC Sec. 1127 the proponent of a plan of reorganization may
modify such plan at any time prior to confirmation, but may not modify such
plan so that such plan as modified fails to meet the requirements of Sec.
1122 and Sec. 1123 of the Bankruptcy Code.
II.
The proponent of plan need not resolicit acceptances or rejection of the plan
of reorganization and any modifications, provided, however, said modifications
are immaterial.
III.
The Debtor asserts that the modifications proposed herein are immaterial in
that they do not adversely affect any creditor or party at interest who has
accepted the Plan of Reorganization.
The following are the Debtor's immaterial modifications:
IV.
The following modifications are to be made to reflect the agreements reached
between the Debtor and Mirage in connection with the payment of the Mirage's
DIP Financing Claim. Article 1.23 is amended to read as follows:
DIP Financing Claims means all Administrative Claims arising in connection
with money borrowed or credit incurred by the Debtor under Sec. 364 of the
Bankruptcy Code from CGII, Purchaser or any other person exclusive of the
Mirage Administrative Claim.
Article 1.48 is amended to read as follows:
Mirage Agreement shall mean that certain Stock Purchase Agreement among
Mirage, CGII and Debtor dated July 24, 1995 as amended by Amendment no. 1
Stock Purchase Agreement dated December ____, 1995.
A new definition is added as Article 1.49.1, as follows:
Mirage Administrative Claim shall mean the administrative claim and security
interest of Mirage as recognized and allowed in the Agreed Order Recognizing
and Directing Payment of Administrative Claim of Mirage dated April 29, 1996.
Article 1.49 is amended to read as follows:
Mirage Claim means any and all claims which the Debtor or debtor in possession
may have, whether arising prior to or after the filing of the petition for
relief herein against Mirage under the Mirage Agreement except for any
defenses to payment of the Mirage Administrative Claim as provided in the
Agreed Order Recognizing and Directing Payment of Administrative Claim of
Mirage dat, including but not limited to any rights of setoff or defenses to
the payments of any claims asserted by Mirage against Debtor or its property.
The portion of Article III addressing the treatment of the Class 6 claim is
amended to read as follows:
CLASS 6: MIRAGE ADMINISTRATIVE CLAIM:
1. CLASSIFICATION: Class 6 consists of the Mirage Administrative Claim.
2. TREATMENT: The Mirage Administrative Claim shall be paid in full and
in immediately available funds on or before the Effective Date in accordance
with the Agreed Order Recognizing and Directing Payment of Administrative
Claim of Mirage dated April 29, 1996. Furthermore, the claims of Debtor
against Mirage, specifically including the Mirage Claim, are preserved,
including to the extent that any such claims may constitute compulsory
counterclaims pursuant to Bankruptcy Rule 7013 and/or Federal Rules of Civil
Procedure 13,
Article X(A)(10) is amended to read as follows:
to hear and determine all controversies concerning the Mirage Agreement, the
Mirage Administrative Claim, provided however, this retained jurisdiction of
the Bankruptcy Court shall not be exclusive, and this provision shall not
expand or extend the jurisdiction of the Bankruptcy Court beyond that
jurisdiction existing on the Effective Date.
V.
Article 1.46 is amended to cure a clerical error. Article 1.46 is amended to
read as follows:
Magic Notes means the $35,000,000.00 of notes which shall be issued by
Reorganized Crescent City and guaranteed by Jefferson Casino Corporation and
C-M of Louisiana, Inc., each a wholly owned subsidiary of Casino Magic
Corporation, under the Magic Indenture.
VI.
Article II(A) is amended to correct a typographical error. The second
sentence of article II(A) is amended to read as follows:
The Magic Closing Cash and the Magic Notes will be paid to the Indenture
Trustee, on behalf of the Bondholders, who claim a perfected security interest
in such proceeds.
VII.
To cure a typographical error, and to make Article III(E), Class 1(3)
Treatment consistent within itself and with Article II(B) regarding the amount
of cash to be retained by the Indenture Trustee for the benefit of the
Bondholders, the last sentence of Article III(E), Class 1(3) Treatment is
modified to read as follows:
The Indenture Trustee shall retain the sum of $7,250,000.00 in Magic Closing
Cash and $28,000,000.00 in Magic Notes, to be paid to Class 1 Claimants in
accordance with the terms of the Indenture.
Additionally, to cure a typographical error, and to make Article V(A)
consistent with Article III(E) and with Article II(B) regarding the amount of
cash to be retained by the Indenture Trustee for the benefit of the
Bondholders, the second sentence of Article V(A) is modified to read as
follows:
Immediately upon receipt of the Magic Closing Cash and Magic Notes, and after
deducting the sum of $7,250,000.00 from the Magic Closing Cash and
$28,000,000.00 from the Magic Notes, for distribution to Bondholders in
accordance with the terms of the Indenture, the Indenture Trustee shall pay
the Settlement Amount to the Liquidating Trust.
VIII.
To clarify that the holders of Class 1 Claims shall not receive anything, in
any matter, on behalf of their claims other than the treatment specifically
set forth in Article II(E), the last paragraph of Article II(E)(3) is amended
to read as follows:
Other than as set forth herein, the Class 1 claimants (including the Indenture
Trustee, the Bondholders, and anyone deriving or claiming rights under the
Secured Notes, the Indenture, or any security therefore), shall not be
entitled to participate as a Class 2, 3A, 3B, 4, 5 or 6 Claimant under this
Plan nor to otherwise receive any distribution or payment from the Debtor or
the Liquidating Trust, on account of such claim.
IX.
Article II(E), Class 2(3) is amended to reflect that after the Effective Date,
the treatment options to be afforded to Class 2 Creditors may be made by the
Liquidating Trust. Article II(E), Class 2(3) is amended to read as follows:
TREATMENT: Except as provided in Article V(A) of the Plan, as to each Allowed
Secured Claim and in complete satisfaction of such Claim, at the Debtor's or,
subsequent to the Effective Date, Liquidating Trust's option, either:
X.
To clarify the treatment options for Secured Creditors, Article III(E), Class
2(3)(iv) is amended to read as follows and Article III(E), Class 2(3)(v) is
added as follows:
(iv) Any Allowed Class 2 Claim found by Final Order to be secured by a lien
against any of the Riverboat Assets to be transferred to Purchaser and to be
senior to the lien securing the Class 1 Claims affecting the Riverboat
Property shall be paid in cash on the Effective Date or at such later date as
such determination is made by Final Order. Payments to the holders of any
such Class 2 Claims shall be made from the Net Cash Proceeds of one or more of
the following sources, in the following order of priority; the Settlement
Amount and the Residual Property.
(v) Any creditor determined by final order to have an allowed Class 2 Secured
Claim secured by property other than the Riverboat Assets shall be paid to the
extent of the value of its collateral, with the creditor retaining its
security interest and lien, either as to the specific collateral, provided
said collateral is not part of the Riverboat Assets, or preserved and
attaching to the proceeds only that constitute the Settlement Amount and the
Residual Property, until the court's determination and payment. Such creditor
shall have an unsecured claim for any deficiency which shall then be
recognized, and the creditor paid its pro-rata distribution or share of the
Settlement Amount as set forth below for the Class 3 Allowed General Unsecured
Claims.
Article III(E), Class 2(3)(ii) is amended by adding the following sentence at
the end:
Said creditors shall have an unsecured claim for any deficiency which shall
then be recognized, and the creditor paid its pro-rata distribution or share
of the Settlement Amount as set forth below for the Class 3 Allowed General
Unsecured Claims.
XII.
Article III(E), Class 3C is amended to make it clear that the treatment
afforded holders of Class 3B and 3C Claims is limited to the treatment set
forth therein, and these holders shall not be entitled to participate as a
member of any other class. At the end of the paragraph entitled "Treatment"
with respect to Class 3B and 3C, the following sentences shall be added,
respectively:
Other than as set forth herein, the Class 3B claimants (including any assignee
of a Class 3B Claim or any other party asserting any right or interest in a
Class 3B Claim), shall not be entitled to participate as a Class 1, 2, 3A, 3C,
4, 5 or 6 Claimant under this Plan nor to otherwise receive any distribution
or payment from the Debtor or the Liquidating Trust, on account of such claim.
Other than as set forth herein, the Class 3C claimant (including any assignee
of the CGII Claim or any other party asserting any right or interest in the
CGII Claim), shall not be entitled to participate as a Class 1,2, 3A, 3B, 4, 5
or 6 Claimant under this Plan nor to otherwise receive any distribution or
payment from the Debtor or the Liquidating Trust, on account of such claim.
XIII.
Article IV(E)(7) is amended to clarify that the Liquidating Trustees will be
authorized to pursue both prepetition and postpetition activities of the
Debtor. Accordingly, the second sentence of Article IV(E)(7) is amended to
read as follows:
Except as otherwise inconsistent with the provisions of this Plan, in the
exercise of such powers, the Liquidating Trustees, on behalf of the
Liquidating Trust, shall be authorized to (I) avoid or recover transfers
(including fraudulent conveyances or preferential transfers) of the Debtor's
property as may be permitted by Sections 542 through 553 of the Bankruptcy
Code or applicable state law, (ii) pursue all claims and causes of action
arising from the prepetition or postpetition activities of the Debtor, whether
arising by statute or common law and whether arising under the laws of the
United States of America, Louisiana, or any other state having jurisdiction
over any claim or controversy pertaining to the Debtor, and whether
maintainable against third parties, Affiliates or Insiders of the Debtor,(iii)
defend claims, causes of action and other litigation that may adversely affect
or impact the Liquidating Trust Property,(iv) contest Claims, (v) file,
litigate to final judgment, settle, or withdraw objections to Claims, and (vi)
exercise offsets against Claims. All activities of the Liquidating Trustees
shall be reasonably necessary to, and consistent with, the accomplishment of
the purpose of the Liquidating Trust as set forth in this Plan.
XIV.
In order to clarify that funds need not be reserved for claims with recourse
to insurance coverage, to the extent that Debtor's insurance coverage is
sufficient to cover said claims, the first sentence of Article VI(B)(2) is
amended to read as follows:
All Allowed General Unsecured Claims with recourse to insurance coverage
policies of the Debtor covering tort claims shall be deemed Disputed Claims in
their Face Amount or as otherwise ordered by the Court, and, except to the
extent that the Liquidating Trustees have verified that there is adequate
insurance coverage for such claims, Cash and/or Magic Notes shall be set aside
in the Disputed Claims Reserve on the first (1st) Cash Distribution Date to
account for such Claims.
XV.
Because this Plan will not be consummated until the Closing Date, which date
is equivalent to the Effective Date, certain provisions of the Plan
erroneously reference the Confirmation Date, and not the Effective Date, as
the date by which certain events must take place. Therefore, the following
modifications are to be made:
The first sentence of Article VII(C)(1) shall be amended to read as follows:
For purposes of effectuating the reserve provisions of Article VI of the Plan
and the allocations and distributions to holders of Allowed General Unsecured
Claims, the Bankruptcy Court will, on or prior to the Effective Date, pursuant
to Section 502 of the Bankruptcy Code, fix or liquidate the amount of any
Contingent General Unsecured Claim not otherwise treated in the Plan, in which
event the amount so fixed or liquidated will be deemed the Allowed amount of
such Claim for purposes of this Plan, or, in lieu thereof, the Bankruptcy
Court will determine the maximum contingent amount for such Claim, which
amount will be the maximum amount in which such Claim ultimately may be
Allowed under this Plan, if such Claim is Allowed in whole or in part.
The first sentence of Article X(B)(2)(B) shall be amended to read as follows:
On or prior to the Effective Date, each Person that has sought or will seek to
file a Fee Request shall deliver to the Debtor an estimate of the aggregate
fees and expenses through the Effective Date which shall be requested by such
Person (including, if applicable, any amount previously requested and subject
to holdback).
XVI.
Article XIV(B) addressing Governing Law requires amendment to ensure that this
provision is not in contrast to, nor does it negate the provisions of Article
V(E)(17) dealing with the law governing the Liquidating Trust. As such, the
following sentence is added to the end of Article XIV(B):
Notwithstanding the foregoing, Liquidating Trust shall be governed by the laws
of the state of New Jersey or such other state laws under which the
Liquidating Trust may be organized.
XVII.
Article XIV(G) shall be amended to provide that names and addresses of the
parties to receive notices on behalf of the Liquidating Trust are as follows:
If to Liquidating Trust:
Jim Hingle
Grimaldi/C.R. Pittman
P. O. Box 8370
New Orleans, Louisiana 70182
Rudy J. Cerone, Esq.
McGlinchey, Stafford
643 Magazine Street
New Orleans, Louisiana 70130
with a copy to:
William E. Steffes, Esq.
Steffes & Macmurdo, LLP
2237 S. Acadian Thruway
Suite 600
Baton Rouge, Louisiana 70808
Ms. Lisa Futrell
Jones, Walker
50th Floor, Place St. Charles
201 St. Charles Avenue
New Orleans, Louisiana 70170
XVIII.
To modify section article 1.65 to reflect the turnover of the money in the
Dock Board Escrow Account following the granting of the Dock Board's Motion
for Limited Relief from Stay. Article 1.65 is amended to read as follows:
Riverboat Assets means, collectively, the Riverboat, the License, certain slot
machines and other coin-operated gaming devices acquired by the Debtor from
Bally Gaming, Inc. and International Game Technology Corp., and such other
items of personal property used in connection with the operation of the
Riverboat as may be agreed upon between the Debtor and the Purchaser, and as
evidenced on the inventory list attached to the Magic Agreement as Exhibit
"1", specifically excepting any equipment licensing or other agreements
provided by Gaming Systems International.
New Orleans, Louisiana, this 29th day of April, 1996.
Respectfully submitted,
________________________________
JAN M. HAYDEN (La. Bar #6672)
ROBYN J. SPALTER (La. Bar #21116)
BRONFIN & HELLER, LLC
650 Poydras Street, Suite 2500
New Orleans, Louisiana 70130-6101
Telephone: (504) 568-1888
ATTORNEYS FOR CRESCENT CITY
CAPITAL DEVELOPMENT CORPORATION
<PAGE>
C E R T I F I C A T E
I certify that a copy of the foregoing pleading was served on counsel listed
below by U. S. Mail, postage prepaid and properly addressed on the _____ of
____________, 1996.
Charles L. Stern, Jr., Esq.
Steeg & O'Connor
201 St. Charles Ave., Ste. 3021
New Orleans, LA 70170
ATTORNEY FOR NEW ORLEANS 2000 PARTNERSHIP
Barry N. Seidel, Esq.
Joshua M. Levine, Esq.
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, NY 10022-4699
Allan Kanner, Esq.
A. Kanner & Associates, P.C.
636 Carondelet Street
New Orleans, LA 70130
ATTORNEY FOR NEW ORLEANS 2000 PARTNERSHIP
Stephen L. Williamson, Esq.
Montgomery Barnett et al
3200 Energy Centre
1100 Poydras Street
New Orleans, LA 70163
ATTORNEY FOR FIRST TRUST NATIONAL ASSOC.
R. Patrick Vance
Ms. Elizabeth Futrell
201 St. Charles Ave., 50th Fl.
New Orleans, LA 70170
ATTORNEYS FOR GRIMALDI/C.R. PITTMAN
U.S. Trustee's Office
400 Poydras Street
Suite 2110
New Orleans, LA 70130
William S. Papazian, Esq.
Vice President & General Counsel
Capital Gaming International, Inc.
Bayport One, Suite 250
8025 Black Horse Pike
W. Atlantic City, NJ 08232
Evan P. Howell, III
3500 N. Causeway Blvd.
Suite 715
Metairie, LA 70002
ATTORNEY FOR COMMUNICORE, INC.
Gerard G. Metzger, Esq.
144 Elk Place, Suite 1710
New Orleans, LA 70112
ATTORNEY FOR INT'L ELECTRONIC PROTECTION, LTD.
Hugh R. Ray, Esq.
Andrews & Kirth LLP
600 Travis, 4200 Texas Comm Tower
Houston, TX 77002
ATTORNEY FOR CAPITAL GAMING INT'L NOTEHOLDERS
STEERING COMMITTEE
Paul N. Silverstein, Esq.
Andrews & Kirth LLP
425 Lexington Ave.
New York 10017
ATTORNEY FOR CAPITAL GAMING INT'L NOTEHOLDERS
STEERING COMMITTEE
Alan H. Goodman
James C. Butler
LEMLE & HELLEHER, LLP
601 Poydras St., #2100
New Orleans, LA 70130
ATTORNEYS FOR SHAWMUT BANK CONNECTICUT
NATIONAL ASSOCIATION
Philip K. Jones, Jr.
Liskow & Lewis
50th Floor
One Shell Square
New Orleans, LA 70139
ATTORNEY FOR MIRAGE RESORTS, INC.
Fred S. Herman, Esq.
701 Poydras Street, Suite 4110
New Orleans, LA 70130
ATTORNEY FOR GRIMALDI/C.R. PITTMAN
GDC, Inc.
c/o T. Randolph Richardson
One Shell Square, Suite 4110
New Orleans, LA 70139
ATTORNEY FOR GDC, INC.
Thomas J. Lutkewitte
Favret Demarest Russo & Lutkewitte
1515 Poydras Street, Suite 1400
New Orleans, LA 70112
ATTORNEY FOR JONES CASINO SUPPLIES, INC.
Daniel A. Smith, Esq.
Michael W. Boleware, Esq.
Deutsch, Kerrigan & Stiles, LLP
755 Magazine St.
New Orleans, LA 70130-3672
ATTORNEYS FOR BROADMOOR CORPORATION
A. Morgan Brian, Jr., Esq.
700 Camp Street
New Orleans, LA 70130-3702
ATTORNEY FOR RAYMOND GROUP
D. Michael Dendy, Esq.
901 Derbigny Street
Gretna, LA 70053
ATTORNEY FOR TOMBA COMMUNICATIONS
Mr. David S. Rubin
Kantrow, Spaht, Weaver & Blitzer
445 N. Blvd., Ste. 300 (70802)
P.O. Box 2997
Baton Rouge, LA 70821-2997
ATTORNEY FOR STATE OF LA., RIVERBOAT GAMING ENFORCEMENT DIV., STATE POLICE
Howard Elliott, Esq.
General Counsel
P.O. Box 66614
Baton Rouge, LA 70896
ATTORNEY FOR STATE OF LA., RIVERBOAT GAMING ENFORCEMENT DIV., STATE POLICE
Joseph E. Friend, Esq.
Breazeale, Sachse & Wilson, LLP
909 Poydras St., Ste. 2400 LL&E Tower
New Orleans, LA 70112
ATTORNEY FOR NEW ORLEANS 2000 PARTNERSHIP
Phillip K. Wallace, Esq.
201 Evans Road, Suite 401
New Orleans, LA 70123
ATTORNEY FOR BAGBY ELEVATOR CO., INC.
Victor E. Stilwell, Jr., Esq.
Deutsch, Kerrigan & Stiles, LLP
755 Magazine St.
New Orleans, LA 70130
ATTORNEY FOR LYONS & HUDSON ARCHITECTS, LTD.
Mark C. Landry, Esq.
Newman, Mathis, Brady, Wakefield
& Spedale, PLC
212 Veterans Blvd.
Metairie, LA 70005
ATTORNEY FOR BALLY GAMING, INC.
Mark Wielga, Esq.
Jackquelyn Kilmer, Esq.
Ballard, Spahr, Andrews & Ingersoll
1225 17th St., Suite 2300
Denver, CO 80202-5596
ATTORNEY FOR CAPITAL ASSOCIATES INTN'L, INC.
Bruce D. Meyer, Esq.
Gibson, Dunn & Crutcher
333 South Grand Ave.
Los Angeles, CA 90071
ATTORNEYS FOR PLAYERS RIVER CITY AND
SDI SECURITIES 11, INC., A JOINT VENTURE
Charles R. Moyer, Esq.
Senior Attorney
Unisys Corporation
P.O. Box 500 M/S C1SW19
Blue Bell, PA 19424
ATTORNEYS FOR UNISYS CORPORATION
Omer F. Kubel III
Drpaer & Culpepper
909 Poydras St., Ste. 2630
New Orleans, LA 70112
ATTORNEY FOR GRAND PALAIS RIVERBOAT, INC.
Cary A. Des Roches
Fraser & Des Roches
530 Natchez St., Ste. 200
New Orleans, LA 70130
ATTORNEY FOR BOLAND MARINE & MANF. CO.
Hugh R. Ray, Esq.
Andrews & Kirth LLP
600 Travis, 4200 Texas Comm Tower
Houston, TX 77002
ATTORNEY FOR TURNBERRY CAPITAL, ELLIOTT ASSOC.
SUNAMERICA, INC., FIDELITY INVESTMENTS
William H. Patrick, III
10636 Linkwood Court
Baton Rouge, LA 70810
Hugh R. Ray, Esq.
ATTORNEY FOR OFFICIAL COMMITTEE OF
UNSECURED CREDITORS
Martha Villar-Posada
Dept. of Revenue & Taxation
P.O. Box 66658
Baton Rouge, LA 70896
ATTORNEY FOR DEPT. OF REVENUE & TAXATION
Thomas W. Papazoglakis, Gen'l Mgr.
Marrero, Couvillion & Assoc., Inc.
1035 Executive Park Ave.
Baton Rouge, LA 70806
S. Ault Hootsell III
Brent B. Barriere, Esq.
Phelps Dunbar
400 Poydras St., 28th Floor
New Orleans, LA 70130-3245
ATTORNEYS FOR FIRST NBC
& BOARD OF COMMISSIONERS OF THE PORT OF N.O.
John M. Duck, Esq.
Kenneth F. Tamplain, Jr.
Adams and Reese
4500 One Shell Square
New Orleans, LA 70139
ATTORNEYS FOR PLAYERS RIVER CITY AND
SDI SECURITIES 11, INC., A JOINT VENTURE
Ms. Jenifer Schaye, Asst. Atty Gen'l
Thomas A. Warner, III
Dept. of Justice
P.O. Box 4307
Baton Rouge, LA 70804
STATE OF LA. THROUGH THE DEPT. OF PUBLIC SAFETY
AND CORRECTIONS, RIVERBOAT GAMING COMM..
Jonathan M. Landers, Esq.
Gibson Dunn & Crutcher
One Montgomery St., Telesis Tower
San Francisco, CA 94101
ATTORNEY FOR PLAYERS RIVER CITY AND SDI
Kermit L. Roux, III
Lowe, Stein, Hoffman, Allweiss
& Hauver, LLP,
701 Poydras St., Ste. 3600
New Orleans, LA 70139-3600
ATTORNEY FOR ACCENT ANNEX ENTERPRISES, INC.
David J. Motter, Esq.
Jack M. Capella Law Firm
3445 N. Causeway Blvd., Ste. 1001
Metairie, LA 70002
ATTORNEY FOR IMPERIAL TRADING CO., AND
DELTA DIVERSIONS, INC. D/B/A DELTA GAMING CO.
Gaming Systems International
c/o Mary Catherine Cali
Shows, Cohn & Cali
P.O. Drawer 4425
Baton Rouge, LA 70821
ATTORNEYS FOR GAMING SYSTEMS INT'L
F Otway Denny, III
Porteous, Hainkel, Johnson & Sarpy
704 Carondelet St.
New Orleans, LA 70130
ATTORNEY FOR CUMMINS-ALLISON CORP.
Peter A. Feringa, Jr.
Chaffe, McCall, et al.
1100 Poydras St., Ste. 2300
New Orleans, LA 70163-2300
ATTORNEY FOR GRINNELL FIRE PROTECTION SYSTEMS
Richard J. Tomeny, Jr.
F. Joseph Drolla, Jr.
212 Veterans Blvd., Ste. 201
Metairie, LA 70005
ATTORNEYS FOR RUST SCAFFOLD RENTAL & ERECTION, INC.
Raymond J. Salassi, Jr.
Stanhope B. Denegre, Esq.
Jones, Walker, et al.
201 St. Charles Ave., 49th Floor
New Orleans, LA 70170
ATTORNEYS FOR CITY OF NEW ORLEANS-PUBLIC BELT RAILRAOD COMMISSION OF N.O.
Clayton J. Swak, III
1419 Hwy. 190, Suite 216
Covington, LA 70433
ATTORNEY FOR GRAMILDI/CR PITTMAN RE: FNBC
Mark S. Goldstein, Esq.
Alicia M. Bendana
Lowe Stein et al
701 Poydras St., Ste. 3600
New Orleans, LA 70139
ATTORNEY FOR WARN CLAIMANTS
Mark G. Rabogliatti
Oppenheimer, Wilff & Donnelly
45 So. 7th Street, Ste. 3400
Minneapolis, MN 55402
______________________________
<PAGE>
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF LOUISIANA
IN RE: NO. 95-12735-TMB
CRESCENT CITY CAPITAL CHAPTER 11
DEVELOPMENT CORPORATION
A REORGANIZATION CASE
DEBTOR UNDER CHAPTER 11 OF THE
BANKRUPTCY CODE
MOTION FOR APPROVAL OF
SECOND IMMATERIAL MODIFICATION TO
SECOND AMENDED CHAPTER 11 PLAN OF REORGANIZATION
OF CRESCENT CITY CAPITAL DEVELOPMENT CORPORATION
AND FOR ORDER IN AID OF CONSUMMATION
NOW INTO COURT, through undersigned counsel, comes Crescent City Capital
Development Corporation ("Debtor" or "Crescent City") and respectfully files
this Motion for Approval of Second Immaterial Modification to Second Amended
Chapter 11 Plan of Reorganization of Crescent City Capital Development
Corporation and for Order in Aid of Consummation (hereinafter referred to as
"Immaterial Modification").
I.
Pursuant to 11 USC Sec. 1127, the proponent of a plan of reorganization may
modify such plan at any time prior to consummation, but may not modify such
plan so that such plan as modified fails to meet the requirements of Sec.
1122 and Sec. 1123 of the Bankruptcy Code.
II.
The proponent of plan need not resolicit acceptances or rejection of the plan
of reorganization and any modifications, provided that said modifications are
immaterial.
III.
The Debtor asserts that the modifications proposed herein are immaterial in
that they do not adversely affect any creditor or party at interest who has
accepted the Plan of Reorganization.
The following are the Debtor's immaterial modifications:
IV.
Article IV, Paragraph 5 is amended to read as follows:
CLOSING OF THE MAGIC AGREEMENT. On the Effective Date, Purchaser shall pay
the Magic Closing Cash and shall become obligated to issue the Magic Notes,
which shall be dated May 13, 1996, to the Indenture Trustee for the benefit of
the Bondholders, and Purchaser shall receive in exchange therefor 100% of the
outstanding shares of New Common Stock of Reorganized Crescent City, as of the
Effective Date provided, however, the Magic Notes shall not be issued until
the Application for Qualification of the Indenture to be filed by Reorganized
Crescent City pursuant to 15 U.S.C. Sec. 77 ggg has been approved by the
Securities and Exchange Commission. To the extent that Magic Notes are not
issued on the closing date, they shall be issued no later than three (3)
business days after the approval by the Securities and Exchange Commission.
Immediately upon receipt of the Magic Closing Cash and Magic Notes, and after
deducting the sum of $6,750,000.00 from the Magic Closing Cash and
$28,000,000.00 from the Magic Notes, for distribution to Bondholders as soon
as practicable in accordance with the terms of the Indenture, the Indenture
Trustee shall pay the Settlement Amount to the Liquidating Trust. Provided
however, to the extent that Magic Notes are delivered after the Closing Date,
the portion of the Settlement Amount represented by Magic Notes shall be
delivered within three (3) business days of the Indenture Trustee's receipt of
same. At Closing, Purchaser or Reorganized Crescent City shall assume or
shall otherwise satisfy the Bally & IGT Claims, without any cost or expense to
the Debtor or Liquidating Trust.
V.
Article XV, Paragraph H is added to read as follows:
The Magic Notes issued hereunder constitute an offer of sale under a plan of a
security of the Debtor, or of a successor to the Debtor under the Plan in
exchange for a claim against, interest in or claim for administrative expense
in the case concerning the Debtor.
Article XV, Paragraph I is added to read as follows:
The obligation to issue the Magic Notes shall be incurred on the Closing Date.
VI.
Additionally, Crescent City requests that this Court issue an order in aid of
consummation ordering Casino Magic of Louisiana, Corp. (f/k/a Crescent City
Capital Development Corporation) to issue the Magic Notes within three (3)
business days of the approval by the Securities and Exchange Commission of the
Application for the Qualification of the Indenture pursuant to 15 U.S.C. Sec.
77 ggg and providing that if Purchaser should fail to do so, that the Court,
without notice and /or a hearing may direct the Clerk of Court to do so.
Crescent City further requests that the order reflect that pending issurance
of the notes, Casino Magic of Louisiana Corporation is bound by the terms of
the Casino Magic of Louisiana Corporation Inentgure executed on the Effecitve
Date as of the Effective Date.
VII.
Counsel for Casino Magic of Louisiana, Corporation hereby consents to entry of
this order and consents to the appointment of the Clerk of Court to act in its
stead should it fail to perform its duties described herein.
New Orleans, Louisiana, this _____ day of May, 1996.
Respectfully submitted,
________________________________
JAN M. HAYDEN (La. Bar #6672)
ROBYN J. SPALTER (La. Bar #21116)
BRONFIN & HELLER, LLC
650 Poydras Street, Suite 2500
New Orleans, Louisiana 70130-6101
Telephone: (504) 568-1888
ATTORNEYS FOR CRESCENT CITY
CAPITAL DEVELOPMENT CORPORATION
CONSENTED TO:
_______________________________
DANIEL K. RESTER (La. Bar # )
HOFFMAN SUTTERFIELD ENSENAT
2431 S. Acadian Thruway, Suite 600
Baton Rouge, Louisiana 70821
Telephone: (504) 928-6800
ATTORNEYS FOR CASINO MAGIC OF
LOUISIANA, CORP.
C E R T I F I C A T E
I certify that a copy of the foregoing pleading was served on counsel listed
below by U. S. Mail, postage prepaid and properly addressed on the _____ of
____________, 1996.
Charles L. Stern, Jr., Esq.
Steeg & O'Connor
201 St. Charles Ave., Ste. 3021
New Orleans, LA 70170
Attorney for New Orleans 2000 Partnership
Barry N. Seidel, Esq.
Joshua M. Levine, Esq.
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, NY 10022-4699
Allan Kanner, Esq.
A. Kanner & Associates, P.C.
636 Carondelet Street
New Orleans, LA 70130
Attorney for New Orleans 2000 Partnership
Stephen L. Williamson, Esq.
Montgomery Barnett et al
3200 Energy Centre
1100 Poydras Street
New Orleans, LA 70163
Attorney for First Trust National Assoc.
R. Patrick Vance
Ms. Elizabeth Futrell
201 St. Charles Ave., 50th Fl.
New Orleans, LA 70170
Attorneys for Grimaldi/C.R. Pittman
U.S. Trustee's Office
400 Poydras Street
Suite 2110
New Orleans, LA 70130
William S. Papazian, Esq.
Vice President & General Counsel
Capital Gaming International, Inc.
Bayport One, Suite 250
8025 Black Horse Pike
W. Atlantic City, NJ 08232
Evan P. Howell, III
3500 N. Causeway Blvd.
Suite 715
Metairie, LA 70002
Attorney for Communicore, Inc.
Gerard G. Metzger, Esq.
144 Elk Place, Suite 1710
New Orleans, LA 70112
Attorney for Int'l Electronic Protection, Ltd.
Hugh R. Ray, Esq.
Andrews & Kirth LLP
600 Travis, 4200 Texas Comm Tower
Houston, TX 77002
Attorney for Capital Gaming Int'l Noteholders
Steering Committee
Paul N. Silverstein, Esq.
Andrews & Kirth LLP
425 Lexington Ave.
New York 10017
Attorney for Capital Gaming Int'l Noteholders
Steering Committee
Alan H. Goodman
James C. Butler
LEMLE & HELLEHER, LLP
601 Poydras St., #2100
New Orleans, LA 70130
Attorneys for Shawmut Bank Connecticut
National Association
Philip K. Jones, Jr.
Liskow & Lewis
50th Floor
One Shell Square
New Orleans, LA 70139
Attorney for Mirage Resorts, Inc.
Fred S. Herman, Esq.
701 Poydras Street, Suite 4110
New Orleans, LA 70130
Attorney for Grimaldi/C.R. Pittman
GDC, Inc.
c/o T. Randolph Richardson
One Shell Square, Suite 4110
New Orleans, LA 70139
Attorney for GDC, Inc.
Thomas J. Lutkewitte
Favret Demarest Russo & Lutkewitte
1515 Poydras Street, Suite 1400
New Orleans, LA 70112
Attorney for Jones Casino Supplies, Inc.
Daniel A. Smith, Esq.
Michael W. Boleware, Esq.
Deutsch, Kerrigan & Stiles, LLP
755 Magazine St.
New Orleans, LA 70130-3672
Attorneys for Broadmoor Corporation
A. Morgan Brian, Jr., Esq.
700 Camp Street
New Orleans, LA 70130-3702
Attorney for Raymond Group
D. Michael Dendy, Esq.
901 Derbigny Street
Gretna, LA 70053
Attorney for Tomba Communications
Mr. David S. Rubin
Kantrow, Spaht, Weaver & Blitzer
445 N. Blvd., Ste. 300 (70802)
P.O. Box 2997
Baton Rouge, LA 70821-2997
Attorney for State of La., Riverboat Gaming Enforcement Div., State Police
Howard Elliott, Esq.
General Counsel
P.O. Box 66614
Baton Rouge, LA 70896
Attorney for State of La., Riverboat Gaming Enforcement Div., State Police
Joseph E. Friend, Esq.
Breazeale, Sachse & Wilson, LLP
909 Poydras St., Ste. 2400 LL&E Tower
New Orleans, LA 70112
Attorney for New Orleans 2000 Partnership
Phillip K. Wallace, Esq.
201 Evans Road, Suite 401
New Orleans, LA 70123
Attorney for Bagby Elevator Co., Inc.
Victor E. Stilwell, Jr., Esq.
Deutsch, Kerrigan & Stiles, LLP
755 Magazine St.
New Orleans, LA 70130
Attorney for Lyons & Hudson Architects, Ltd.
Mark C. Landry, Esq.
Newman, Mathis, Brady, Wakefield
& Spedale, PLC
212 Veterans Blvd.
Metairie, LA 70005
Attorney for Bally Gaming, Inc.
Mark Wielga, Esq.
Jackquelyn Kilmer, Esq.
Ballard, Spahr, Andrews & Ingersoll
1225 17th St., Suite 2300
Denver, CO 80202-5596
Attorney for Capital Associates Intn'l, Inc.
Bruce D. Meyer, Esq.
Gibson, Dunn & Crutcher
333 South Grand Ave.
Los Angeles, CA 90071
Attorneys for Players River City and
SDI Securities 11, Inc., A Joint Venture
Charles R. Moyer, Esq.
Senior Attorney
Unisys Corporation
P.O. Box 500 M/S C1SW19
Blue Bell, PA 19424
Attorneys for Unisys Corporation
Omer F. Kubel III
Drpaer & Culpepper
909 Poydras St., Ste. 2630
New Orleans, LA 70112
Attorney for Grand Palais Riverboat, Inc.
Cary A. Des Roches
Fraser & Des Roches
530 Natchez St., Ste. 200
New Orleans, LA 70130
Attorney for Boland Marine & Manf. Co.
Hugh R. Ray, Esq.
Andrews & Kirth LLP
600 Travis, 4200 Texas Comm Tower
Houston, TX 77002
Attorney for Turnberry Capital, Elliott Assoc.
SunAmerica, Inc., Fidelity Investments
William H. Patrick, III
10636 Linkwood Court
Baton Rouge, LA 70810
Hugh R. Ray, Esq.
Attorney for Official Committee of
Unsecured Creditors
Martha Villar-Posada
Dept. of Revenue & Taxation
P.O. Box 66658
Baton Rouge, LA 70896
Attorney for Dept. of Revenue & Taxation
Thomas W. Papazoglakis, Gen'l Mgr.
Marrero, Couvillion & Assoc., Inc.
1035 Executive Park Ave.
Baton Rouge, LA 70806
S. Ault Hootsell III
Brent B. Barriere, Esq.
Phelps Dunbar
400 Poydras St., 28th Floor
New Orleans, LA 70130-3245
Attorneys for First NBC
& Board of Commissioners of the Port of N.O.
John M. Duck, Esq.
Kenneth F. Tamplain, Jr.
Adams and Reese
4500 One Shell Square
New Orleans, LA 70139
Attorneys for Players River City and
SDI Securities 11, Inc., A Joint Venture
Ms. Jenifer Schaye, Asst. Atty Gen'l
Thomas A. Warner, III
Dept. of Justice
P.O. Box 4307
Baton Rouge, LA 70804
State of La. Through The Dept. of Public Safety
and Corrections, Riverboat Gaming Comm..
Jonathan M. Landers, Esq.
Gibson Dunn & Crutcher
One Montgomery St., Telesis Tower
San Francisco, CA 94101
Attorney for Players River City and SDI
Kermit L. Roux, III
Lowe, Stein, Hoffman, Allweiss
& Hauver, LLP,
701 Poydras St., Ste. 3600
New Orleans, LA 70139-3600
Attorney for Accent Annex Enterprises, Inc.
David J. Motter, Esq.
Jack M. Capella Law Firm
3445 N. Causeway Blvd., Ste. 1001
Metairie, LA 70002
Attorney for Imperial Trading Co., and
Delta Diversions, Inc. d/b/a Delta Gaming Co.
Gaming Systems International
c/o Mary Catherine Cali
Shows, Cohn & Cali
P.O. Drawer 4425
Baton Rouge, LA 70821
Attorneys for Gaming Systems Int'l
F Otway Denny, III
Porteous, Hainkel, Johnson & Sarpy
704 Carondelet St.
New Orleans, LA 70130
Attorney for Cummins-Allison Corp.
Peter A. Feringa, Jr.
Chaffe, McCall, et al.
1100 Poydras St., Ste. 2300
New Orleans, LA 70163-2300
Attorney for Grinnell Fire Protection Systems
Richard J. Tomeny, Jr.
F. Joseph Drolla, Jr.
212 Veterans Blvd., Ste. 201
Metairie, LA 70005
Attorneys for Rust Scaffold Rental & Erection, Inc.
Raymond J. Salassi, Jr.
Stanhope B. Denegre, Esq.
Jones, Walker, et al.
201 St. Charles Ave., 49th Floor
New Orleans, LA 70170
Attorneys for City of New Orleans-Public Belt Railraod Commission of N.O.
Clayton J. Swak, III
1419 Hwy. 190, Suite 216
Covington, LA 70433
Attorney for Gramildi/CR Pittman Re: FNBC
Mark S. Goldstein, Esq.
Alicia M. Bendana
Lowe Stein et al
701 Poydras St., Ste. 3600
New Orleans, LA 70139
Attorney for WARN Claimants
Mark G. Rabogliatti
Oppenheimer, Wolff & Donnelly
45 So. 7th Street, Ste. 3400
Minneapolis, MN 55402
______________________________
<PAGE>
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF LOUISIANA
IN RE: NO. 95-12735-TMB
CRESCENT CITY CAPITAL CHAPTER 11
DEVELOPMENT CORPORATION
A REORGANIZATION CASE
DEBTOR UNDER CHAPTER 11 OF THE
BANKRUPTCY CODE
ORDER AUTHORIZING SECOND IMMATERIAL MODIFICATION TO
SECOND AMENDED CHAPTER 11 PLAN OF REORGANIZATION
OF CRESCENT CITY CAPITAL DEVELOPMENT CORPORATION
AND IN AID OF CONSUMMATION
Considering the Second Immaterial Modification to the Second Amended Chapter
11 Plan of Reorganization of Crescent City Capital Development Corporation and
An Order in Aid of Consummation filed herein and it having been determined
that the Second Immaterial Modification is immaterial;
IT IS HEREBY ORDERED that Crescent City Capital Development Corporation is
hereby authorized to modify its Second Amended Chapter 11 Plan of
Reorganization by its Second Immaterial Modification to Second Amended Chapter
11 Plan of Reorganization of Crescent City Capital Development Corporation.
IT IS HEREBY FURTHER ORDERED that Casino Magic of Louisiana, Corp. (f/k/a
Crescent City Capital Development Corporation) shall issue the Magic Notes
dated May 13, 1996 as defined in the Plan within three (3) business days of
the approval by the Securities and Exchange Commission of the Application for
Qualification of the Indenture pursuant to 15 U.S.C. Sec. 77 ggg.
IT IS HEREBY FURTHER ORDERED that considering the consent of Casino Magic of
Louisiana, Corp. to the entry of this Order, if Casino Magic of Louisiana,
Corp. should fail to issue the Magic Notes within the time set forth above,
the Clerk of this Court is hereby appointed as Casion Magic of Louisiana,
Corporation's attorney in fact to take all acts and to execute all documents
on behalf of Casino Magic of Louisiana, Corp. to cause the Magic Notes to be
issued.
IT IS HEREBY FURTHER ORDERED that pending issuance of the notes, Casino Magic
of Louisiana, Corporation is bound by the terms of the Casino Magic of
Louisiana Corporation Indenture executed on the Effecitve Date as of the
Effective Date.
New Orleans, Louisiana, this _______ day of May, 1996.
_________________________________
UNITED STATES BANKRUPTCY JUDGE
CONSENTED TO:
_______________________________
DANIEL K. RESTER (La. Bar # )
HOFFMAN SUTTERFIELD ENSENAT
2431 S. Acadian Thruway, Suite 600
Baton Rouge, Louisiana 70821
Telephone: (504) 928-6800
ATTORNEYS FOR CASINO MAGIC OF
LOUISIANA, CORP.
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF LOUISIANA
IN RE: NO. 95-12735-TMB
CRESCENT CITY CAPITAL SECTION "A" CHAPTER 11
DEVELOPMENT CORPORATION
A REORGANIZATION CASE
DEBTOR UNDER CHAPTER 11 OF THE
BANKRUPTCY CODE
REVISED SECOND AMENDED DISCLOSURE STATEMENT
JAN M. HAYDEN (La. Bar #6672)
ROBYN J. SPALTER (La. Bar #21116)
BRONFIN & HELLER, LLC
650 Poydras Street, Suite 2500
New Orleans, Louisiana 70130
Telephone: (504) 568-1888
<PAGE>
TABLE OF CONTENTS
I. Introduction..........................................................1
II. History of Crescent City..............................................4
III. Significant Prefiling Events..........................................9
IV. Significant Post-Filing Events.......................................13
V. Status of River City and Grand Palais Proceedings....................16
VI. Ownership and Management.............................................16
VII. Liquidation Analysis.................................................17
VIII. Summary of Claims and Assets.........................................22
A. Claims and Assets.............................................22
B. Assumptions Regarding Claims and Assets.......................24
C. Treatment of Joint Creditors of the Joint Venture and
Grand Palais..................................................26
D. Secured Claims Against the M/V CRESCENT CITY QUEEN............26
E. Claim Variances...............................................27
IX. Summary of the Plan..................................................38
A. Sale to Purchaser.............................................38
B. Means of Implementation of the Plan...........................39
C. Classification and Treatment of Claims........................57
Class 1: Bondholder Claim.....................................58
Class 2: Secured Claims......................................61
Class 3A: General Unsecured Claims............................67
Class 3B: Convenience Claims..................................69
Class 3C: CGII Claim..........................................69
Class 4: Subordinated Unsecured Claims.......................70
Class 5: Equity Interests.....................................70
Class 6: Mirage Administrative/Secured Claim..................71
X. Retention of Jurisdiction............................................71
XI. Conclusion...........................................................74
<PAGE>
DISCLOSURE STATEMENT
This Revised Second Amended Disclosure Statement of Crescent City Capital
Development, Inc. (the "Disclosure Statement") has been prepared by the Debtor
pursuant to S1125 of Title 11 of the United States Code (the "Bankruptcy
Code"), and describes the terms and provisions of the Debtor's Second Amended
Plan of Reorganization (the "Plan") in the Bankruptcy Case of the Debtor
pending before the United States Bankruptcy Court for the Eastern District of
Louisiana (the "Bankruptcy Court") under Chapter 11 of the Bankruptcy Code.
To the extent there are any inconsistencies between this Disclosure Statement
and the Plan, the Plan controls.
A number of terms used in this Disclosure Statement are defined for use in the
Plan. Capitalized terms used, but not otherwise defined in this Disclosure
Statement, have the respective meaning ascribed to them in the Plan.
I. INTRODUCTORY STATEMENT
On July 26, 1995, an involuntary petition was filed against Crescent City
Capital Development Corporation (hereinafter "Crescent City" or "Debtor"). On
July 28, 1995, Crescent City consented to entry of an order for relief. The
order for relief was entered on August 1, 1995. On October 13, 1995, the
Debtor filed a Plan of Reorganization which was amended on December 8, 1995
and is referred to hereafter as the "First Amended Plan". The First Amended
Plan was confirmed on January 12, 1996 but pursuant to the terms of the First
Amended Plan, did not become effective until a closing with Mirage. This
closing did not occur and thus, the First Amended Plan did not become
effective. Furthermore, the First Amended Plan specifically provided that if
the plan could not be consummated, the Confirmation Order would be revoked.
It is anticipated that on or before the date set for the hearing on
confirmation of Debtor's Plan, the Confirmation Order with respect to the
First Amended Plan will be revoked. The Debtor has now filed its Second
Amended Plan of Reorganization.
Pursuant to the terms of the Bankruptcy Code, acceptance of the Plan by
holders of claims or interests may not be solicited unless, at the time of or
before such solicitation, there is transmitted to the holders, a copy or
summary of the Plan and a written disclosure statement approved by the Court
as containing adequate information. Crescent City has prepared this
disclosure statement to disclose that information which, in its opinion, is
necessary to make an informed evaluation of the Plan. This Disclosure
Statement, including the summary of the Plan contained herein, has been
presented to and approved by the Bankruptcy Court. The Court's approval does
not constitute a judgment by the Court as to the desirability of the Plan, but
only that the Disclosure Statement contains information sufficient to enable a
typical creditor to make an informed judgment about the Plan. However, if any
class or classes of creditors whose claims are impaired fails to accept the
Plan, it may still be confirmed under the provisions of S 1129(b) of the
United States Bankruptcy Code.
In order to vote on the Plan, a creditor or holder must have filed a proof of
claim prior to September 21, 1995 unless such creditor's claim is scheduled by
Crescent City and is not listed in the schedules as disputed, unliquidated or
contingent. Any creditor whose claim is scheduled as undisputed, liquidated,
and not contingent, is to the extent scheduled, deemed to have filed a claim.
In order for the Plan to be accepted by creditors, more than one-half in
number and two-thirds (2/3) in amount of claims filed, allowed (for voting
purposes) and voting in each impaired class of creditors must vote to accept
the Plan. The interest holders under the Plan are impaired. Therefore, they
will not vote and are deemed to reject the Plan. If the Debtor is unable to
obtain the requisite acceptances, it may be able to obtain confirmation of the
Plan, despite the non-acceptance of one or more classes pursuant to 11 U.S.C.
S1129.
The ballots for the Class 1 Claimants will be mailed to the Bondholders of
Record as of March 10, 1996 or to the beneficial holders, if known to the
Debtor. If a ballot is received from the beneficial holder then that ballot
will be counted. If the only ballot received is from the Record holder then
that ballot shall be counted. The vote of the Class 1 Claims will be
determined by the ballots actually returned by the Bondholders. The Indenture
Trustee will not vote on behalf of the Bondholders or the Class 1 Claims.
A creditor or interest holder may vote on the Plan by filling out and mailing
or faxing to Jan M. Hayden the enclosed ballot which the Court has provided.
The ballots must be received by April 29, 1996 at 5:00 P.M. CST. Unless the
court orders otherwise, no vote received after such time will be counted nor
included in the tally in any manner. Whether a creditor or interest holder
votes on the Plan or not, such claim holder will be bound by the terms of the
Plan if the Plan is accepted. You are therefore, urged to complete, date,
sign, and promptly mail the ballot to Jan M. Hayden, Bronfin & Heller, L.L.C.,
650 Poydras Street, Suite 2500, New Orleans, Louisiana, Louisiana 70130 in the
envelope provided or fax it to Jan M. Hayden at (504) 522-0949.
NO REPRESENTATION OR STATEMENTS OTHER THAN THESE SET FORTH IN THIS DISCLOSURE
STATEMENT CONCERNING CRESCENT CITY OR THE PLAN HAVE BEEN AUTHORIZED BY
CRESCENT CITY OR THE BANKRUPTCY COURT. ANY REPRESENTATIONS OR INDUCEMENTS
MADE TO SECURE YOUR ACCEPTANCE WHICH ARE OTHER THAN AS CONTAINED IN THIS
DISCLOSURE STATEMENT SHOULD NOT BE RELIED UPON BY YOU IN ARRIVING AT YOUR
DECISION, AND SUCH ADDITIONAL REPRESENTATIONS AND INDUCEMENTS SHOULD BE
REPORTED TO COUNSEL FOR CRESCENT CITY WHO IN TURN SHALL DELIVER SUCH
INFORMATION TO THE BANKRUPTCY COURT FOR SUCH ACTION AS MAY BE DEEMED
APPROPRIATE.
THE INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT AND THE ATTACHED
SCHEDULES HAS NOT BEEN SUBJECT TO A CERTIFIED AUDIT. DUE TO THE COMPLEXITY OF
THE DEBTOR'S FINANCIAL MATTERS, THE DEBTOR IS UNABLE TO WARRANT THAT THE
INFORMATION CONTAINED HEREIN IS WITHOUT INACCURACY OR OMISSIONS, ALTHOUGH
GREAT EFFORT HAS BEEN MADE TO BE ACCURATE.
II. HISTORY OF CRESCENT CITY
The State of Louisiana legalized riverboat gaming in 1991, adopting
legislation permitting the issuance of a maximum of 15 gaming licenses.
Crescent City was originally incorporated on June 11, 1993. On February 10,
1995, the Louisiana Riverboat Gaming Commission granted to Crescent City, a
certificate of preliminary approval to construct, manage, own and operate the
M/V CRESCENT CITY QUEEN. On February 11, 1994, the Riverboat Gaming
Enforcement Division (the "State Police") issued Crescent City a conditional
operators license. Crescent City received a certificate of final approval on
April 4, 1995.
In developing its Louisiana operations, the Debtor's parent company, Capital
Gaming International, Inc. ("CGII") had originally reached an agreement in
principal with Republic Corporate Services, Inc. ("Republic") pursuant to
which the parties formed a joint venture for the purposes of developing,
licensing and operating a riverboat gaming vessel in Louisiana. Republic was
to receive 20% of the pre-tax profits and an additional 8% of pre-tax profits
(limited to $1.6 million annually) of Crescent City, in return for which CGII
was to receive the right to 40% of Republic's pre-tax profits as well as
certain consulting, public relations, marketing and marketing support
services. In August, 1993, Republic granted CGII an option to purchase
Republic's interest in Crescent City for $26 million. This option was
exercised on April 19, 1994.
As a result of this transaction, Crescent City is a wholly owned subsidiary of
CGII. Crescent City owns a state of the art riverboat, the M/V CRESCENT CITY
QUEEN. The construction of the vessel was commenced in January, 1994, and was
completed in March, 1995. The vessel cost approximately $29.9 million to
construct and is a replica of a turn of the century paddle wheel riverboat.
The vessel is approved for a capacity of 2500 persons including staff. The
Las Vegas style casino features 30,000 sq. ft. of casino space with
approximately 1,150 slot machines and 50 table games. Subsequent to the
bankruptcy filing, Crescent City voluntarily surrendered its certificate of
inspection because of the cost associated with such renewal. Upon sale of the
vessel, the vessel will need to be reinspected.
Crescent City entered into a joint venture agreement with Grand Palais
Riverboat, Inc. ("Grand Palais") a wholly owned subsidiary of Hemmeter
Enterprises, Inc. ("Hemmeter"), dated June 29, 1994, amended on July 7, 1994,
to form the River City Joint Venture ("Joint Venture"). The purpose of the
Joint Venture was to construct, develop, own and operate a two vessel terminal
and docking support facility for the M/V CRESCENT CITY QUEEN as well as the
M/V GRAND PALAIS. The facility owned by the Joint Venture is presently
composed of approximately 51 acres of land at the Robin Street wharf near
downtown New Orleans. Crescent City and Grand Palais are separate licensees
who each own and operated their respective riverboats from the common berth
and terminal.
Pursuant to the Joint Venture Agreement, Crescent City and Grand Palais were
50/50 participants in a joint venture named River City Joint Venture. Although
the original cost projections for the River City Casino were approximately
$196 million, the cost of construction of the project exceeded $223 million.
Pursuant to the Joint Venture Agreement, all costs in excess of $196 million,
required the specific consent of both joint venturers.
On March 29, 1995, the Joint Venture opened for business with the sailing of
the M/V GRAND PALAIS. The M/V CRESCENT CITY QUEEN opened for business on
April 4, 1995. Soon after opening of the River City Casino complex, it became
apparent that operating revenues would not be sufficient to meet operating
costs. In addition to the construction overruns associated with the project,
Crescent City's difficulties were attributable to the New Orleans market
conditions in connection with the gaming industry. Crescent City's operating
difficulties were not unique in the New Orleans area. As is well known, both
the temporary land based casino and another downtown riverboat casino
experienced disappointing gaming revenues far below projections in 1995.
Both Crescent City and Grand Palais began funding the operating shortfalls of
the Joint Venture. In an effort to respond to cash shortage needs credited by
the poor performance, the Joint Venture, Crescent City and Grand Palais
entered into a forbearance agreement with the general contractor of the land
based improvements for the Joint Venture. Additionally, Crescent City's
management sought to obtain the additional funding needed to satisfy the cost
increases and operating shortfalls through a combination of capital
contributions and loans from third party sources. The Joint Venture also
attempted to work with vendors to obtain deferrals of payments.
Following an intensive review of the initial two months of operations,
Crescent City determined that as a result of (i) the occurrence of substantial
operating losses amounting to approximately $10.1 million, (ii) the fact that
the project was 67% below projected revenues, (iii) the lack of additional
available capital for investment, (iv) substantial construction overruns of
approximately $31.8 million, (v) the delayed completion of certain I-10 access
ramps to River City, (vi) a historic flood in the first two weeks of May,
1995, and (vii) the significantly lower than expected patronage from tourists,
prudent and responsible business judgment mandated that operating losses be
immediately curtailed and that the riverboat gaming operations be temporarily
suspended. At approximately the same time, Grand Palais ceased gaming
operations on its vessel.
On July 21, 1995, Crescent City notified Hemmeter and Grand Palais that the
actions of Grand Palais and/or Hemmeter in connection with entering into a
transaction to sell Grand Palais and its assets to Players International, Inc.
and an affiliate of Hyatt Corporation frustrated the purpose of the Joint
Venture and constituted a breach of the Joint Venture Agreement and a breach
of the fiduciary duties owing to Crescent City and accordingly, Crescent City
deemed such actions to constitute a termination of the Joint Venture
Agreement. Hemmeter and Grand Palais objected to the company's
characterization of the events leading up to the agreement between Players
International, Inc. and Hyatt Corporation.
On June 13, 1995, Bagby Elevator Company, Inc. ("Bagby") and Island Oasis
Frozen Cocktail Company, Inc. ("Island Oasis") filed an action under admiralty
law against the M/V CRESCENT CITY QUEEN, her engines, tackle, apparel,
furniture, etc., in rem, under Docket No. 95-1887 of the United States
District Court for the Eastern District of Louisiana (the "Complaint"). This
Complaint embodied an admiralty and maritime claim within the jurisdiction of
the United States District Court for the Eastern District of Louisiana
pursuant to Rules C and D of the supplemental rules for certain admiralty and
maritime claims and within the meaning of Rule 9(h) of the Federal Rules of
Civil Procedure. Both Bagby and Island Oasis have asserted maritime liens for
providing necessaries to the M/V CRESCENT CITY QUEEN.
The M/V CRESCENT CITY QUEEN was seized by the U.S. Marshal for the Eastern
District of Louisiana in accordance with an Order issued by the Honorable G.
Thomas Porteous, Jr., United States District Judge, in Civil Action No. 95-
1887.
As a result of the seizure, the U.S. Marshal boarded and maintained possession
and provided security for the vessel including its contents, all at the
expense of Bagby and Island Oasis. As a result, Bagby and Island Oasis
incurred the expense of the custodial legis for the security of the vessel in
the amounts which they assert are $24,612.91 and $26,092.91 respectively.
The U.S. Marshal maintained its arrest and seizure of the vessel after the
bankruptcy filing and while the Chapter 11 proceeding was ongoing. The
seizure of the M/V CRESCENT CITY QUEEN was terminated on August 21, 1995 at
4:10 p.m. through a consent order of the U.S. District Court for the Eastern
District of Louisiana. Bagby and Island Oasis have appealed this order. It
should be noted, that Bagby and Island Oasis assert, that there presently
exists a dispute as to whether jurisdiction lodges with the Bankruptcy Court
as a result of the Standing Order for Reference issued by the United States
District Court for the Eastern District of Louisiana or whether the U.S.
District Court maintains jurisdiction over the admiralty matter.
Crescent City aggressively pursued various alternatives aimed at either
attracting new equity investors to participate in and revitalize the gaming
operation or to sell all or part of Crescent City's gaming operations. During
this period, Crescent City and CGII were assisted by Donaldson, Lufkin &
Jenrette in locating potential investors and purchasers. These efforts
combined with the fact that the closing of the vessels was one of the more
noteworthy events in the nationwide gaming community, allowed the Debtor to
fully explore the opportunities available for both sales and investments.
Crescent City has had contact with no less than ten (10) potential investors
and/or purchasers and in four of these instances it reached the point of
drafting documents. Through the negotiating/drafting process and the Debtor's
own due diligence, the Debtor has been able to ascertain the market value of
its assets and the ability and interest of any purchaser to close a deal. The
results of those initial efforts was the Mirage Agreement which formed the
basis of the First Amended Plan. After Mirage refused to close, the Debtor
again contacted various potential purchasers. These subsequent efforts
resulted in the Magic Agreement which forms the basis of this Second Amended
Plan of Reorganization.
III. SIGNIFICANT PREFILING EVENTS
Originally, Crescent City had intended to locate the New Orleans casino at the
Julia Street wharf in downtown New Orleans and had commenced negotiations with
the Dock Board to enter into a berth and terminal lease permitting Crescent
City to conduct riverboat gaming operations at the Julia Street wharf.
Subsequently, Crescent City and Grand Palais reexamined the location of the
riverboat casino and decided upon the current site. The Joint Venture
acquired title to this property the ("New Orleans 2000 Property") on July 14,
1994 for a purchase price of $37.5 million. At the closing, the Joint Venture
paid $15 million in cash and New Orleans 2000 Property retained an in rem
mortgage in the amount of $22.5 million. The New Orleans 2000 Property is
also encumbered by a second mortgage in favor of First National Bank of
Commerce as collateral agent for the Indenture Trustee and the indenture
trustee, Shawmut Bank of Connecticut, of Hemmeter.
Additionally, on June 30, 1994, the Joint Venture purchased approximately 2
acres of riverfront land on the Orange Street wharf from the Alabama Great
Southern Railroad Company for a total cash purchase price of $2 million. This
property is adjacent to the New Orleans 2000 Property. The Joint Venture has
also acquired three additional parcels of land located adjacent to the New
Orleans 2000 Property. The total purchase price of these parcels of land was
approximately $1.8 million. First National Bank of Commerce holds a first
mortgage on these properties in the amount of $2.5 million. The second
mortgage on these properties is held by First National Bank of Commerce as
collateral agent for the Indenture Trustee and Shawmut Bank of Connecticut,
indenture trustee of Hemmeter.
During the period when the Joint Venture contemplated locating the New Orleans
River City Casino at Julia Street wharf, Crescent City entered into a berth
infrastructure reimbursement agreement with the Board of Commissioners of the
Port of New Orleans (the "Dock Board") pursuant to which Crescent City agreed
to pay $7,551,500.00 (plus additional costs as defined in the agreement),
constituting one-third (1/3) of the total cost of certain inter-related
infrastructure improvements. In order to fund its reimbursement obligations
to the Dock Board, Crescent City initially provided a letter of credit, and
thereafter, in substitution thereof deposited $6,371,987.23 in escrow with
FNBC for the benefit of the Dock Board (the "Dock Board Escrow Account"). As
of March 26, 1996, there was a remaining balance of $2,269,566.96 in the Dock
Board Escrow Account.
On January 31, 1995, the Dock Board approved the terms of the berthing and
terminal lease agreements with Crescent City, Grand Palais and the River City
Joint Venture. Pursuant to the berthing agreement, Crescent City was to be
provided berthing space for its riverboat by the Dock Board. The berthing
agreement provided for payment to the Dock Board in a combination of
percentage of revenues as well as certain fixed payments and contributions
towards certain costs incurred by the Dock Board.
The funds for construction of the M/V CRESCENT CITY QUEEN and Crescent City's
contributions to the land-based improvements were provided pursuant to the
private placement sale on February 17, 1994 of CGII's 11-1/2% Notes due 2001
(the "Notes") and common stock and warrants which resulted in total gross
proceeds of $159,711,455 (the "Proceeds"). The Note offering was structured
as an "A-B" exchange wherein the Company covenanted to make an exchange offer
pursuant to which the private Series A Notes could be exchanged for publicly
traded Series B Notes in the same amount and tenor pursuant to an effective
registration statement filed with the Securities and Exchange Commission
("SEC") under the Securities Act of 1933. That registration statement was
declared effective on August 12, 1994. Each of the holders of the Series A
Notes then tendered their Series A Notes to the Trustee, who issued the Series
B Notes in exchange therefor on or about September 12, 1994.
Pursuant to the terms of the Indenture and Cash Collateral and Disbursement
Agreement governing the Notes, on February 17, 1994, $70,300,000 of the
Proceeds were deposited by the Trustee into an account in the name of CGII
referenced as the CCCD Construction Account (which consisted of sub-accounts
for the ship and the land-based improvements) (the "Account") in which the
Trustee for the Noteholders had a security interest. These funds were
disbursed, during the progress of construction, upon submission of a draw
request from Crescent City to CGII for submission to the Trustee for the note
holders, once compliance with the requirements of the Cash Collateral and
Disbursement Agreement was verified. In addition to the $70 million,
additional funds were expended out of proceeds allocated for working capital
and general corporate purposes and other unrestricted corporate funds. In
order to construct the vessel and land based improvements CGII was required to
infuse $2.7 million of these general funds.
The Notes were guaranteed by Crescent City on February 17, 1994. On that same
date, in order to secure its guaranty, Crescent City also granted the Trustee
a security interest in substantially all of its assets pursuant to two
Security Agreements, one covering the M/V CRESCENT CITY QUEEN and all
component parts, which was under construction (the "Riverboat Security
Agreement") and the other covering substantially all of its other assets (the
"General Security Agreement"). Upon completion of the construction of the M/V
CRESCENT CITY QUEEN in March of 1995 and the documentation of the vessel, the
Trustee was granted a First Preferred Ship Mortgage dated March 23, 1995 as
required pursuant to the Indenture. The First Preferred Ship Mortgage was
recorded on March 24, 1995.
On September 22, 1994 a collateral mortgage in favor of First National Bank of
Commerce, as collateral agent for the Indenture Trustee and Shawmut Bank of
Connecticut, the indenture trustee of Hemmeter, on most of the real estate
then owned by the Joint Venture was recorded. Pursuant to a Pledge and
Security Agreement executed by the Joint Venture on October 28, 1994 and by
the Trustee on November 18, 1994, Joint Venture pledged the collateral
mortgage note as security for the Notes (and certain obligations of Hemmeter
Enterprises, Incorporated). In March of 1995, the Joint Venture executed an
Act of Supplement to Collateral Mortgage adding the remainder of the property
then owned by the Joint Venture to the collateral mortgage, which was recorded
on March 27, 1995.
On April 28, 1995, subsequent to the execution of the Berthing Agreement by
Crescent City, and the Terminal and Use Agreement by River City Joint Venture
in February of 1995, Crescent City executed a collateral mortgage (and related
documents) on the Berthing Agreement in favor of the Indenture Trustee as
further security for the Notes. The Joint Venture also executed a collateral
mortgage (and related documents) on the Terminal and Use Agreement in favor of
the Trustee as further security for the Notes (and as security for certain
obligations of Hemmeter Enterprises, Inc.). These collateral mortgages were
recorded on April 28, 1995.
IV. SIGNIFICANT POST-FILING EVENTS
As noted above, an involuntary petition seeking relief under Chapter 11 was
filed against Crescent City on July 26, 1995. Similar petitions were filed
against Grand Palais, the former joint venturer of Crescent City, and the
Joint Venture on the same date. Grand Palais consented to entry of an order
for relief on July 27, 1995 and that order for relief was entered on the same
date. No order for relief has been entered in the Joint Venture's proceeding.
Immediately after the filing of the petition for relief herein, Crescent City
and Grand Palais filed complaints against the State of Louisiana through the
Department of Public Safety and Corrections, Riverboat Gaming Enforcement
Division of the Office of State Police ("State Police") seeking to enjoin the
State Police as to several activities. In particular, the debtors sought to
prohibit the State Police from conducting a hearing to revoke Crescent City's
and Grand Palais' gaming licenses. The Court entered temporary restraining
orders in each proceeding. Thereafter, the State Police filed answers to the
complaints and also motions seeking orders from the Court either declaring
that the automatic stay did not apply to their actions or in the alternative
requesting that the automatic stay be modified. Subsequently, on October 2,
1995, the Bankruptcy Court entered orders declaring that the automatic stay
applied and prevented the State Police from taking any action to revoke or
terminate either gaming license. Additionally, the court refused to lift the
automatic stay or to provide adequate protection to the State Police. The
State Police filed a motion for rehearing, which was denied. The State Police
have now appealed that ruling which appeal is pending before the District
Court.
Prior to the Commencement Date, Debtor entered into the Mirage Agreement
whereby Mirage was to acquire 100% of the stock of the Debtor and thus,
substantially all of its assets, for $55 million in cash and the assumption of
$6.5 million in debt. The First Amended Plan, which encompassed this
transaction was confirmed. However, Mirage, through a series of events,
failed to perform under the Mirage Agreement and the confirmed First Amended
Plan, and on January 25, 1996, Mirage gave notice to the Debtor of its intent
to terminate the Mirage Agreement. The Debtor has asserted that Mirage has
breached its agreement and for reasons discussed in more detail below believes
it has a valid cause of action against Mirage for breach of the Mirage
Agreement.
Shortly after the Commencement Date, Crescent City sought and obtained an
interim court order authorizing Crescent City to borrow operating funds from
CGII in order to fund its operations. Thereafter, another interim order was
entered authorizing Crescent City to borrow additional operating funds from
CGII. The total approved by the court was $1.3 million. Subsequently, the
Court approved replacement Debtor-in-Possession financing by Mirage in the
amount of $2 million. This replacement postpetition financing is secured by
a first lien against all of the assets of Crescent City, except for liens held
by equipment vendors, the Dock Board or any other claim amount that is senior
to the lien of the Indenture Trustee, up to an aggregate amount of
$3,000,000.00. This lien is superior to any lien held by the Indenture
Trustee. As a result of Mirage's attempt to terminate the agreement, it has
also taken the position that the Debtor is in default under the Agreement and
that the $2 million is now due. The Debtor, however, asserts that it is not
in default and, in fact, asserts that none of the $2 million is due Mirage due
to its breach of the Mirage Agreement. At this time the Debtor has operated
on limited Debtor-In-Possession ("DIP") financing provided by CGII, in the
approximate amount of $180,000.00. Shortly, the Debtor expects to seek
authority to borrow $1 million from Magic. The DIP financing will contain
essentially the same terms and conditions as the Mirage DIP, but will be
junior to the Mirage DIP.
On February 9, 1996, the Dock Board filed a Motion for Limited Relief from the
Automatic Stay seeking the release of the funds in the Dock Board Escrow
Account in which the Dock Board asserted a security interest. On March 11,
1996, the Dock Board's Motion for Limited Relief from the Automatic Stay was
granted. Pursuant to the Bankruptcy Court's Order, the funds in the Dock
Board Escrow Account, in the amount of $2,269,566.96, were tuned over by First
National Bank of Commerce to the Dock Board on March 26, 1996.
An Official Unsecured Creditors Committee was formed in this proceeding and it
has actively participated in negotiating the terms of this plan. The
Committee in that connection has attempted to obtain detailed listings of the
names and addresses of all persons who purchased and owned the bonds and stock
interests of the debtor at different points the last year. This information
is not available.
V. STATUS OF RIVER CITY AND GRAND PALAIS PROCEEDINGS
Although an involuntary petition was filed against River City, no answer was
filed and an order for relief has been entered. However, the automatic stay
has been lifted as to all real estate owned by River City. It should be
noted that a number of claims including preference claims may exist at the
River City level. The Grand Palais proceedings have been active, and a plan
has been confirmed which provides for the company to be sold to Casino
America. The Debtor cannot estimate the recovery, if any, that creditors may
receive in either of these proceedings.
VI. OWNERSHIP AND MANAGEMENT
A. CRESCENT CITY MANAGEMENT
The Board of Directors is composed as follows:
I. G. Davis, Jr. Chairman of The Board
Edward M. Tracy Vice Chairman of The Board
Col. Clinton L. Pagano Director
The officers of Crescent City are as follows:
Edward M. Tracy President and CEO
Col. Clinton L. Pagano Executive Vice President of Compliance
Robert J. Specht Assistant Secretary
No officers or directors receive any compensation from Debtor and the only
compensation they do receive for services rendered to Debtor is from CGII.
B. CRESCENT CITY OWNERSHIP
The stock of Crescent City is owned 100% by CGII.
C. CGII LIABILITY TO THE BONDHOLDERS
As of this date, there have been no meaningful negotiations between CGII and
the Bondholders regarding a settlement of CGII's liability to the Bondholders
following consummation of Crescent City's Plan. However, whatever settlement
is reached will not affect the Bondholders' payments under this Plan in that
the payments under the Plan represent a settlement in full of all claims by
and between the Bondholders and Crescent City.
VII. LIQUIDATION ANALYSIS
First Trust, the Indenture Trustee for the Bondholders asserts a first
security interest in essentially all of the Debtor's assets except as may be
primed by the CGII Debtor-in-Possession financing or any other priming liens.
Set forth below is a more detailed analysis of the Debtor's assets and how
they are encumbered. The only assets in which Indenture Trustee may not have
a security interest are the License, certain claims of the Debtor against
third parties and the goodwill of the Debtor. The following is a listing of
the major assets of the Debtor and the Debtor's estimate of their value upon
liquidation in a Chapter 7 proceeding:
Undeposited Patron Markers & Miscellaneous Receivables $6,000(1)
Overpayment of State Gaming Tax 20,000(2)
Vessel & Gaming Equipment 20,000,000
License & Goodwill --0--
Claims and/or Causes of Actions against Third Parties unknown
______________________
(1) The book value of these assets is $30,000.00 but the Debtor believes that
this sum represents the appropriate liquidation value when one considers the
collectibility of the claims and cost of collection.
(2) This amount may be subject to set off or recoupment and not available for
distribution to creditors.
As the majority of the assets, if not all, are encumbered beyond their value
by virtue of the Indenture Trustee's security interest, these assets would
produce no benefit to the creditors other than the Indenture Trustee and the
Bondholders in Chapter 7. Additionally, certain vendors, including IGT and
Bally's, as assignee of Gulf Gaming, assert security interests in certain
equipment and supplies. Finally, although the Debtor disputes the validity of
its claim, Mirage has asserted a secured administrative claim in excess of $2
million which, if valid, is against all of the assets of the estate.
The Indenture Trustee also asserts a security interest in the Debtor's
License. It is unclear, at this juncture, whether the Indenture Trustee has a
valid security interest in the License as neither the Debtor nor the
Creditors' Committee have conceded that such a License can be subject to a
security interest. For purposes of this liquidation analysis, it is assumed
that the Bondholders do not have a security interest in the License. Even if
the Bondholders do not have a security interest in the License, there would be
no value upon liquidation in a Chapter 7 flowing from the License to the
creditors. This is because under Louisiana gaming regulations, the License,
as a separate asset, cannot be transferred. The only way to transfer the
economic interest in a license is to transfer an interest in an entity that
owns a license. Thus, as provided for under this Chapter 11 plan, the stock
in the Debtor must be sold to another entity. A Chapter 7 trustee, however,
would not have the ability to sell the stock as the stock is not an asset of
the Debtor corporation. Thus, if the Chapter 7 trustee cannot transfer the
stock interest in the entity owning the gaming license, the Debtor asserts
that no value for the License can be recovered in a Chapter 7.
The Debtor also holds certain claims against third parties. One of the
largest of these claims is the claim in the amount of $19.6 Million asserted
by Debtor against Grand Palais Riverboat, Inc. in Grand Palais' bankruptcy
proceeding. At this point in time creditors should not rely on any recovery
of this claim. Any recovery is not only dependent on prosecuting complex
litigation, but at this point in time it may be unlikely that any unsecured
creditors will be able to receive a substantial distribution in the Grand
Palais matter without successfully seeking recovery from other Hemmeter
related entities. Although it is anticipated that First Trust, as Indenture
Trustee for the Bondholders, will assert that its security interest is broad
enough to encompass the Grand Palais claim, there is the potential that this
claim could be recovered in a Chapter 7 to benefit the unsecured creditors.
Any of the parties mentioned herein should be put on notice that the Debtor or
the Liquidating Trust may pursue claims against them. This includes, but is
not limited to, those creditors mentioned in the Claims Variance section
herein. The Debtor also has a claim against Mirage arising out of Mirage's
alleged breach of the Mirage Agreement. The Debtor believes that the
potential for recovery is significant. It should be noted that the Debtor's
claim, absent its ability to mitigate its damages by entering into another
sale, would be at least equal to the purchase price of $55 million and the
costs incurred by the Debtor in connection with its negotiation of and
performance under the Magic Agreement and the Mirage Agreement.
Furthermore, the Debtor may have preference actions which may produce value
for the unsecured creditors in a Chapter 7 liquidation or in a Chapter 11
proceeding. At this time, the Debtor has not conducted a detailed analysis of
these potential claims and thus cannot accurately estimate their value. The
analysis the Debtor has done indicates that only $1.3 Million was paid by
Crescent City out of the Crescent City bank accounts during the 90 day
preference period. Attached hereto as Exhibit "A" are the registers for the
Crescent City bank accounts for the ninety (90) days before the filing of the
petition. These registers identify possible preference defendants. Of these
payments, the vast portion appears to be for current taxes, in the approximate
amount of $760,000.00, or for contemporaneous services. For this reason the
Debtor is doubtful that there will be any substantial recoveries of preference
claims. However, the value of these claims remain the same in both a Chapter
11 and Chapter 7. Because in both a Chapter 11 and a Chapter 7, the claims are
preserved for the benefit of the creditors, the Debtor does not believe the
value of the claims are relevant to the analysis of whether creditors will
receive more or less under this plan than they would receive in a Chapter 7.
The Debtor does not at this point in time believe that it has viable claims
against CGII. First, although ordinarily a guarantor has right of subrogation
against the principal obligor, the debtor does not believe it has any
subrogation claims against CGII for the Debtor's guarantee of CGII's
Bondholder Debt as such rights are waived in the Indenture, at page 110,
unless the Bondholders have been paid in full. Certainly, the Bondholders are
not being paid in full in these proceedings and for the reasons noted below it
is unlikely that they will be paid by CGII.
The Debtor also does not believe at this time that it has any claims against
CGII that arise out of theories of alter-ego or veil piercing. However, no
thorough investigation has been done into this issue. Most importantly the
Debtor does not believe any claims against CGII are worth pursuing due to
CGII's financial condition. As evidence of the condition of CGII, attached
hereto as Exhibit "B" is an excerpt from the Capital Gaming International,
Inc. Annual Report pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934. The entirety of this document is available for review
in the offices of Bronfin & Heller.
The Debtor also does not believe at this time, that it has any claims against
its officers and directors. However, no investigation has been conducted on
this issue. More importantly, the Debtor does not believe that pursuing such
claims is worthwhile, as there is no directors and officers liability
insurance.
Based on this analysis of assets, each class of creditors is receiving at
least, under this Chapter 11 plan of reorganization, what they would receive
upon liquidation in a Chapter 7. In particular, the Debtor notes that in a
Chapter 7, no funds would be available to pay unsecured claims unless the
Chapter 7 Trustee was successful in accomplishing one or more of the following
(1) subordinating the claim of the Indenture Trustee or avoiding its lien; (2)
defeating the claim asserted by Mirage or (3) collecting on claims against
Grand Palais.
VIII. SUMMARY OF CLAIMS AND ASSETS
A. CLAIMS AND ASSETS
Below is the Debtor's summary of its estimate of outstanding claims against
its estate as of May 31, 1996, the estimated Effective Date.
Administrative Claims $3,600,000.00(3)
Priority and Tax Priority $1,925,000.00(4)
Class 1 - Bondholders Claims $142,000,000.00
Class 2 - Other Secured Claims $6,047,596.00(5)
Class 3A - Unsecured Claims, excluding convenience claims $29,195,000.00(6)
Class 3B - All convenience claims 217,481.00(7)
Class 3C - CGII and other Affiliates $5,000,000.00
Class 4 - All subordinated claims - 0 -(8)
Class 5 - Equity
________________________________________
(3) This amount includes the Mirage DIP Financing Claim which as addressed
elsewhere herein, Debtor disputes.
(4) A portion of this figure is attributable to sales/use tax due to the
State of Louisiana and the City of New Orleans. The portion attributable to
these taxes totals $1,200,000.00. This sum also includes a sum allegedly due
the City of New Orleans for real estate taxes of approximately $600,000.00.
All or a portion of these taxes are disputed.
The breakdown of the amount due between Crescent City and the Joint Venture,
for Sales/Use Tax is as follows:
City of New Orleans Sales/Use Tax:
River City Joint Venture (full value) $275,000
Crescent City $400,000
State of Louisiana Sales/Use Tax:
River City Joint Venture (full value) $250,000
Crescent City $350,000
City of New Orleans Real Estate Tax (all
River City Joint Venture) $600,000
The basis of the sales/use taxes is unpaid sales tax for goods and services
purchased from vendors who remain unpaid. Debtor's calculations of amounts
owed to its unsecured vendor creditors, in many instances, includes unpaid
sales tax. Thus, this amount is included in Debtor's estimate of claims
twice, once in priority taxes and once in the unsecured claims. The Debtor
will use the claims objection process to reduce vendor claims by those
portions which represent sales tax. The real estate taxes are taxes due by
River City and may not be claims entitled to priority. It should be noted
that there are hundreds of other claimants who have asserted priority claims
with respect to compensation and WARN claims, and these are discussed in more
detail below. The alleged WARN claims are not included in this figure.
(5) The amount noted here is the amount of the claims asserted by Bally
Gaming and IGT. There are hundreds of other claimants who have asserted
secured claims on the vessels and these claims are discussed in more detail
below.
(6) This figure includes the Joint Venture liabilities of $23,420,030. This
may not be the percentage for which Debtor is liable, as more fully discussed
herein at page ____.
(7) This figure assumes that those creditors holding claims between $5000 and
$8,000 will elect to reduce their claims to $5000 and be treated in the
convenience class.
(8) At this time the Debtor has not identified any members of this class
other than possibly the WARN Act claimants. The WARN Act claimants assert
that their claims, at least in part, are entitled to priority, however, Debtor
disputes this and will contend that if these claimants are entitled to
compensation under the WARN Act, such compensation constitutes a penalty, and
thus, is a subordinated claim.
__________________________________________
The following is the Debtor's estimate of the value of the property of the
estate upon confirmation:
Vessel with Gaming Equipment $30,000,000
License & Goodwill 20,800,000
Undeposited Patron Markers & Miscellaneous Receivables $6,000
Overpayment of State Gaming Tax $20,000
Causes of Action unknown
B. ASSUMPTIONS REGARDING CLAIMS AND ASSETS
For purposes of the analysis of the claims asserted against the estate, the
Debtor has been forced to estimate the sums it believes will be the amount of
allowed claims in each class. This process has been complicated because
approximately 425 proof of claims were filed in this case on or before the bar
date of September 21, 1995(9). Debtor has begun an analysis of the claims as
filed compared to the Debtor's schedules. Although it is anticipated that
further and substantial analysis of the claims is still to be done the Debtor
is able to make certain statements about the claims at this time.
______________________________________
(9) Three of these claims were filed as "Group Claims" and assert claims of
approximately 800-900 employees.
______________________________________
Of the approximately 425 claims which have been filed, approximately 213
claims are from claimants listed on the Debtor's schedules, however, all of
these claims do not match the amount as scheduled. Of the approximately 425
claims filed, approximately 69 of those claims are filed in an amount equal to
the amount listed in the Debtor's schedules. The total amount of these claims
is approximately $1,326,000.00.
It should be noted that in its schedules, the Debtor listed as undisputed its
virile share, or fifty percent (50%) of the Joint Venture liabilities of
$23,420,030. A substantial variance between the Debtor's schedules and the
amount of a significant number of claims is that many Joint Venture creditors
filed their claim for the full amount rather than for the Debtor's 50% virile
share. The Debtor submits that it has always been the intent of the former
joint venturers that they share pro rata as to all debts and liabilities and
that a reading of the entire Section 10.06 of the Amended and Restated
Partnership Agreement governing the sharing of liability supports such a
conclusion. The Debtor will attempt to resolve this issue through the claims
objection process, however, the Debtor does anticipate that some creditors
will assert that the liability of the former joint venturers is in solido due
to the use of the term joint and several in the Amended and Restated
Partnership Agreement of River City Joint Venture.
Additionally, the claims register includes some "duplicate" claims. By
"duplicate" claims, Debtor does not mean just those claims where a creditor
has filed the same claim twice, but this category also includes, for instance,
Grimaldi subcontractors who have filed their own claims while those amounts
are also included in Grimaldi's claim, certain individual bondholders or
companies who have filed claims while these amounts are also included in the
Indenture Trustee's proof of claim. These "duplicate" claims total
approximately $22,000,000.00. Finally, the claims register includes
approximately 131 claims under the WARN Act and other theories, filed by
employees, including three claims filed by the firm of Butler & Stern that are
characterized as "group claims" that include the claims of approximately 792
employees. In addition, two proofs of claim purporting to be class action
claims have been filed. These claims total in excess of $21 million.(10)
_______________________________________
(10) It should be noted that there is an error on the Court's claim register.
On the claims register, claim no. 377 is shown as filed in the amount of
$2,000,000.00. This, however, is a clerical error. Claim no. 377 is actually
only for $20,000.00. The claim total for employee related claims is
calculated using the correct amount of the claim, not the error amount.
_______________________________________
C. TREATMENT OF JOINT CREDITORS OF THE JOINT VENTURE AND GRAND PALAIS
A number of creditors are also creditors of River City and/or Grand Palais.
Due to the fact that most of the assets of the River City Joint Venture are
encumbered beyond their value and because to do so would unnecessarily delay
the distributions in this case, the Debtor does not intend to plead
discussion. The Debtor does intend to assert in the claims objection process,
credits for any recovery from these other proceedings. However, under the
Plan all claims, including any rights to plead discussion, shall flow to the
Liquidating Trust and the Debtor cannot predict with any measure of certainty
what the Liquidating Trustees will do, but certainly the same consideration
will govern their position.
D. SECURED CLAIMS AGAINST THE M/V CRESCENT CITY QUEEN
As noted above, hundreds of creditors have filed and/or asserted maritime
liens against the vessel. A complaint has been filed to determine the
validity and rank of these liens. The only liens which should prime the first
preferred ship mortgage held by the Indenture Trustee in this case are the
following:
1) Claims for seaman's wages;
2) Certain tort claims;
3) Those maritime liens which accrued prior to the recordation of the first
preferred ship mortgage.
The priming maritime liens which are in category 3 would be claims accrued
sometime between the vessel becoming a "vessel" and March 24, 1995 (the date
of recordation of the mortgage). A dispute exists amongst the parties as to
whether the vessel became a vessel on October 11, 1994 when the boat was
launched, on October 17, 1994 when the engines were placed on the vessel, on
March 20, 1995 when the first sea trials were conducted or on March 30, 1995
when the vessel was documented. The WARN claimants who served aboard the M/V
CRESCENT CITY QUEEN assert that their WARN claims and their contractual
severance pay claims (both of which are described in detail at page ___ of
this Disclosure Statement) are secured by maritime liens within the highest
category - "Claims for seamen's wages."
E. CLAIM VARIANCES
In analyzing the filed claims compared to the schedules, Debtor has identified
those claims which vary significantly from the amount at which they were
scheduled. As a general rule of thumb, for this initial analysis, Debtor
considered a major variance to be approximately $100,000. Set forth below is
Debtor's brief description of the claims which exhibit major variances. As of
this date, Debtor has not been able to fully evaluate the backup for many of
these proof of claims, in large part because the creditors provided little, or
no, backup attached to the proof of claims. Therefore, Debtor can only
discuss in broad general terms the suspected reasons for some of the major
variances. Furthermore, Debtor specifically reserves its right to assert
additional and/or different bases for objections when it actually files its
claims objections.
1. BALAR ASSOCIATES AND MORPHY MAKOSKY
Debtor's schedules reflect claims by Balar and Morphy Makosky in the amounts
of $57,066 and $8,348, respectively. Balar and Morphy Makosky have filed
proofs of claims nos. 96 and 90 in the amounts of $241,078 and $181,347,
respectively. The reason for this variance is that these two creditors
included amounts in their claims which are owed to them by another contractor,
not the Debtor.
2. BTG UNIFORMS
Debtor's schedules reflect a claim for BTG Uniforms in the amount of $134,552.
BTG has filed proof of claim no. 132 in the amount of $332,764. At this time,
Debtor has not been able to make an absolute determination of the reason for
this variance. However, Debtor suspects the variance is either attributable
to (i) the claim including both the Crescent City and Grand Palais components
or (ii) a rejection claim.
3. CUSTOM BUS, LIMOUSINE LIVERY AND TAXI ADS
Custom Bus filed proof of claim no. 404 in the amount of $3,601,673. The
Debtor scheduled Custom Bus' claim at $71,220. Limousine Livery filed proof
of claim no. 38 in the amount of $1,135,708. The Debtor scheduled Limousine
Livery's claim at $4,170. Taxi Ads filed a proof of claim no. 380 in the
amount of $500,000. The Debtor scheduled Taxi Ads' claim at $36,300. The
variance in these three claims is assumedly due to the fact that each of these
entities filed their claims based on a rejection claim. They each calculated
their rejection claim by simply adding up all remaining payments due under
their respective long term contracts. None of these claimants factored in
mitigation of damages into their claims.
4. GRIMALDI
Grimaldi filed proof of claim no. 101 in the amount of $15,426,082. The
Debtor scheduled Grimaldi's claim at $11,439,083. The variance in these
amounts consists of the following, (i) Grimaldi included approximately
$400,000 of interest, and (ii) a claim for damages.
5. GULF GAMING AND IGT-NORTH AMERICA
Gulf Gaming filed proof of claim no. 396 in the amount of $2,312,358. The
Debtor scheduled Gulf Gaming's claim at $1,869,482. IGT-North America filed
proof of claim no. 225 in the amount of $4,219,112. The Debtor scheduled IGT-
North America's claim at $3,998,266. The variance in Gulf Gaming's claim is
attributable to the fact that Gulf Gaming did not give the Debtor credit for
certain equipment which was returned to Gulf Gaming and for which credit was
to be given. Debtor suspects that IGT-North America's variance may be
attributable to interest.
6. RIVER MARINE
River Marine filed proof of claim no. 26 in the amount of $451,912. The
Debtor scheduled River Marine's claim at $206,318. The variance is
attributable to the fact that River Maine filed a claim for rejection of its
contract, including a substantial termination fee.
7. WILLIAM BROADHURST
William Broadhurst filed proof of claim no. 155 in the amount of $500,000.
The Debtor scheduled William Broadhurst's claim at $75,000. Broadhurst had a
consulting agreement with the Joint Venture. His claim is based on the
termination of that agreement.
8. WARN ACT CLAIMS AND OTHER EMPLOYEE CLAIMS
Crescent City was named as the defendant in certain lawsuits filed in the
United States District Court for the Eastern District of Louisiana asserting
liability under the Worker Adjustment and Retraining Act. 29 USC S2101 et
seq. (the "WARN Act") entitled Jodie Roberts, et al v. Crescent City Capital
Development Corporation and CGII International, Inc., Civil Action Number 95-
1856, Section "E" (3) and Diane L. Speiler, et al v. River City Joint Venture,
et al, Civil Action Number 95-1865, Section "E" (3). Both of these matters
are pending in the United States District Court for the Eastern District of
Louisiana. Proof of Claims have been filed on behalf of the employees in
connection with these cases as noted above.
These eight hundred sixty two (862) claimants have filed back pay claims under
the WARN Act with these claims totaling $5,141,805.31 including attorney fees
and $3,856,353.98 net of attorneys fees. Many of the claimants (those who
worked on the M/V CRESCENT CITY QUEEN) assert that their claims are secured
and enjoy a first lien superior to all other lien holders in the full amount
of their claims. These claims total $2,368,955.10 with attorney fees, and
$1,776,746.32 net of attorney fees. Additionally, all claimants contend that
each claim is entitled to priority status, superior to the unsecured
creditors, in the amount of up to $4,000.00 per claim. The maximum total of
these priority WARN claims amounts to $3,317,991.21 with attorney fees, and
$3,079,845.78 net of attorney fees.
The Debtor contends that the WARN claims are without merit because the Debtor
did not have enough full time employees as defined by the Statute to trigger
the WARN Act notice provisions. The claimants contend that the numerosity
requirement to trigger the WARN Act is fulfilled because of their position
that the applicable "business enterprise" as defined by the WARN Act would be
River City as a single site of employment, and not the Debtor. Additionally,
the Debtor alleges that it is entitled to the defenses set forth by the WARN
Act which would relieve the Debtor of its prenotification requirement.
In any event, the Debtor denies that the WARN claimants are entitled to
secured status, even if their WARN Act claims are allowed because those claims
would not constitute seamen's wages. Furthermore, Debtor denies that these
claims, if allowed, would be entitled to priority status under Section 507 (a)
(3) of the Bankruptcy Code.
In addition, these employees have filed claims for five days contractual back
pay. These claims total $326,568.17. The Debtor denies that these claims are
applicable. Similar to the WARN claims, many of the claimants assert that
their claims are secured by a preferred maritime wage lien on the M/V CRESCENT
CITY QUEEN and enjoy a first lien superior to all other lien holders in the
full amount of their claim, totaling $148,153.39. Additionally, all of the
claimants contend that each claim is entitled to priority status up to
$4,000.00 under 11 U.S.C. S507(a)(4) of the Bankruptcy Code. The Debtor
denies the merits of these claims and the security interests or priority
status claimed.
In addition, some of the employees have claimed their right to collect "toke"
payments that were allegedly collected by upper management and not correctly
disbursed. Both the claimant and the Debtor are looking into this situation,
and an estimate of these claims and an analysis of their validity is not
available. There would also be issues with respect to these claimants being
entitled to a preferred maritime lien, as well as priority status.
Several of the employees have personal injury claims for physical injuries
allegedly sustained on the M/V CRESCENT CITY QUEEN. These claimants would
have secured preferred maritime liens on the CRESCENT CITY QUEEN to the extent
that their claims are valid. These claims are thought to be insured and will
be handled by the applicable insurance company assuming coverage is verified.
Finally, each employee has submitted a claim for $20,000.00 representing
damages for the alleged intentional infliction of emotional distress. These
claims if valid, may constitute maritime liens. The Debtor strenuously denies
the validity of these claims.
On March 26, 1996, a Plan of Reorganization was confirmed by the Bankruptcy
Court in the Grand Palais Riverboat, Inc. bankruptcy, Case No. 95-12736-A.
According to that Plan, the WARN claimants are to be paid $1,000,000.00 out of
the proceeds of the sale of the M/V Grand Palais to Casino America or an
affiliate thereof, $250,000.00 of this amount is to be paid in cash on or
shortly after the date of the sale, and the remaining $750,000.00 is to be
paid pursuant to a promissory note amortized over six years and payable in
full over three years. In addition, the WARN claimants are to receive one-
half of the difference between $1,000,000.00 and the total allowed tax claims
receiving priority under 11 U.S.C. S507(a)(8). Debtor, Crescent City contends
that it only has a one-half virile share liability with respect to the WARN
claimants' claims, but in the event that it is determined that the WARN
claimants' claims are a solidary liability of the Debtor, the Debtor claims
that it must be given credit for those payments made to the WARN claimants
pursuant to the Grand Palais Plan of Reorganization and sale to Casino
America.
9. DOCK BOARD
The Dock Board has filed a proof of claim in these proceedings claiming
$1,643,199.97 as unsecured and $31,482,272.50 as secured. The total amount of
the secured claim consists of $31,475,949.56 of principal and accrued interest
through July 28, 1995 of $6,322.94. The Dock Board asserts that it is a
secured creditor by virtue of a perfected lien on the Dock Board Escrow
Account and a maritime lien on the vessel M/V CRESCENT CITY QUEEN. The Debtor
disputes this claim both as to amount and as to the purported security for
several reasons. These objections, include but are not limited to the
following: First, the Debtor submits it is liable only for its virile share
of the Joint Venture debts. Second, the claim does not account for the
limitations placed on the allowance of the claim under 11 U.S.C. S502(b)(6).
Finally, the claim also appears to assert a maritime lien for wharfage and
berthing which has not been provided to the M/V CRESCENT CITY QUEEN.
10. GRAND PALAIS
Grand Palais filed a proof of claim in these proceedings for an undisclosed
amount asserting various causes of actions. Crescent City asserts that the
claim is false, malicious and wholly without merit.
11. MIRAGE RESORTS, INC.
Mirage Resorts, Inc. has filed a proof of claim in the amount of $2 million.
Said claim arises out of the purchase agreement whereby Crescent City and its
parent, CGII, agreed to permit Mirage an overbid fee of $2 million. This
claim should be disallowed as the event upon which it was contingent, i.e., an
overbid, did not occur. In addition, Mirage asserts an administrative/secured
claim in connection with its DIP financing claim. Debtor disputes this claim,
as more fully discussed under Significant Post-Filing Events.
12. LOUISIANA DEPARTMENT OF REVENUE & CITY OF NEW ORLEANS
The Louisiana Department of Revenue (the "Dept. of Revenue") has filed two
claims totaling in the aggregate approximately $3.6 million. The City of New
Orleans has filed a proof of claim in the amount of $1,125,797.00. The Debtor
and the Department of Revenue have been working together to audit the Debtor's
books and records to ascertain the actual amount owed to the Dept. of Revenue
for sales and use tax. Although Debtor cannot yet validate the number
asserted in the Dept. of Revenue's claim, it should be noted that an amount
for sales tax is incorporated in Debtor's schedules. When scheduling the
Dept. of Revenue as a priority claim, Debtor listed the amount as unknown.
However, the amount is included in the schedules by way of its allocation
amongst the vendor claims. This amount asserted by the Dept. of Revenue
reflects sales tax that was to be paid to vendors for goods and services
purchased by Debtors. As such, vendors or unsecured creditors had included
this amount in their invoices. Once a determination of the proper amount due
and owing is reached, there will have to be some adjustment made to the
unsecured claims. This same analysis is also true with respect to the City of
New Orleans' claim.
13. INTERNATIONAL ELECTRONIC PRODUCTS
International Electronic Products ("IEP") filed proof of claim no. 111 in the
amount of $430,517.76. Debtor has scheduled IEP's claim at $326,774.64.
IEP's proof of claim seems to segregate the claim into two portions, a
Crescent City portion and a River City Joint Venture portion. The amount
scheduled by Debtor reflects the Crescent City portion of IEP's claim without
the inclusion of interest. The difference in the amount scheduled versus
IEP's proof of claim is therefore attributable to interest on the Crescent
City claim and a claim allegedly against River City Joint Venture equal to
approximately $98,000.00 plus interest. At this point in time, Debtor has not
been able to ascertain the propriety of IEP's alleged claim against River City
Joint Venture.
14. CATHERINE MONACO
Catherine Monaco filed proof of claim no. 151 in the amount of $300,000.00.
There is absolutely no back up documentation attached to the proof of claim
nor has Catherine Monaco been identified as a creditor of the Debtor by the
Debtor in its books and records. The only indication of the basis for this
claim is that checked off on the proof of claim is personal injury/wrongful
death as the basis. Furthermore, the proof of claim indicates that the debt
was incurred on May 16, 1995. Debtor has no further information regarding
this claim and does not anticipate that there is a valid $300,000.00 claim for
personal injuries by Catherine Monaco against this estate. In any event, it
is anticipated that this claim will be satisfied by insurance coverage.
15. TOMBA COMMUNICATIONS
Tomba Communications ("Tomba") has filed two proofs of claim, nos. 160 and
161. Proof of claim no. 160 is for $115,511.52. This proof of claim wholly
represents an anticipated rejection claim in connection with a lease between
Tomba and River City Joint Venture. Tomba's claim does not provide any credit
for the return of the leased property or taken into account any mitigation of
damages by release of the leased property. Tomba's second claim, no. 161, is
filed in the amount of $88,267.00. This claim states on it face that it is
representative of equipment that was purchased by either the Debtor or the
Joint Venture and was subject of a dation in favor of Tomba that was executed
on or about June 9, 1995, thus, transferring title to the property back to
Tomba. However, according to the proof of claim, actual redelivery of the
equipment was never made to Tomba. Thus, upon redelivery of the equipment
subject to the dation, or, if, in fact, the equipment has been returned
already. Tomba will not have a proper claim as asserted on proof of claim no.
161. Furthermore, Debtor believes that the equipment has actually been
returned to Tomba.
16. INTERIOR SYSTEMS ENTERPRISES
Interior Systems Enterprises ("ISE") filed proof of claim no. 167 asserting a
secured claim in the amount of $150,000.00 and an unsecured claim in the
amount of $18,466.05. Debtor has scheduled the claim of ISE in the amount of
$54,688.62. Although it is not entirely clear, it appears that the variance
in the amount scheduled and the amount of the proof of claim may be
attributable to double counting the proper claim held by ISE as both against
Crescent City, Grand Palais and the Joint Venture. In reviewing the back up
to the proof of claim, it appears that the claim is made up of a claim of
approximately $56,000.00 against Grand Palais, a $56,000.00 claim against
Crescent City and a $111,000.00 against River City Joint Venture.
17. INTERNAL REVENUE SERVICE
The Internal Revenue Service ("IRS") has filed a proof of claim in the amount
of $632,649.25, $550,129.78 priority and $82,519.47 unsecured. The Debtor
disputes this claim. The claim on its face asserts that it is for FICA, FUTA
and income taxes for the periods ending September 30, 1995 and December 31,
1995. Considering that as of the filing of this proof of claim the period had
not concluded, there is no basis for this claim. Further, the claim states
that "no returns" have been filed and therefore, estimates these taxes as if
the Debtor was fully operational and fully staffed during this quarter. This
has not been the case since the temporary closing of the M/V CRESCENT CITY
QUEEN. For these reasons, Debtor contends that it has no liability to the IRS
for these payroll and/or income taxes. Furthermore, as the returns and the
taxes for these periods were not yet due as of the date of the filing, it is
improbable that penalties could have already accrued.
IX. SUMMARY OF THE PLAN
A. SALE TO PURCHASER
The cornerstone of this Plan of Reorganization is the sale to Casino Magic
Corporation, through Jefferson Casino Corporation or another of its wholly
owned subsidiaries to which the Magic Agreement is assigned ("Purchaser") of
100% of New Common Stock of the Reorganized Crescent City. The Magic
Agreement governing the terms of this transaction is attached as Exhibit "1"
to the Plan. The purchase price will be $50.0 million, payable in Cash and
notes, plus the assumption of those liabilities due Bally Gaming, Inc. and
International Game Technology in an aggregate amount not to exceed $6.5
million. The $50.0 million is payable at closing as follows: (i) payment of
$14.5 million, in Cash, (ii) issuance of $35 million of notes having the terms
set forth on Exhibit "2" to the Magic Agreement, and as more fully described
herein, and (iii) establishment of an escrow in the amount of $500,000. The
escrow will be held for a one (1) year period partially to secure the
obligation due by CGII to the Purchaser. When, and if, the escrow is paid to
CGII, said sum will be subject to the security interest of the Indenture
Trustee. In acquiring the stock, it is contemplated that Purchaser will
acquire all essential elements of the Debtor's gaming operations including the
M/V CRESCENT CITY QUEEN, the physical assets necessary to conduct such
operations(11) and the gaming license. The Purchaser will not acquire any
causes of action which are presently owned by Crescent City, including, but
not limited to, any claims Crescent City may have against Grand Palais or any
other third party including preference claims and/or fraudulent conveyance
claims. In order to implement the sale, the plan provides as follows:
_______________________________________
(11) Purchaser, in the Magic Agreement, has acknowledged that 33 slot
machines and other coin operated gaming devices which were purchased by
Crescent City and manufactured and sold by Sigma Game, Inc. and two of which
were manufactured and sold by Universal Distributing are subject to
liabilities collateralized by security interests in favor of such vendors and
that such machines and devices may be disposed of separately by Crescent City
prior to the sale.
_______________________________________
B. MEANS OF IMPLEMENTATION OF THE PLAN
(1) CLOSING OF MAGIC AGREEMENT. On the Effective Date, Purchaser shall pay
the Magic Closing Cash and Magic Notes to the Indenture Trustee for the
benefit of the Bondholders, and Purchaser shall receive in exchange therefor
100% of the outstanding shares of New Common Stock of Reorganized Crescent
City, as of the Effective Date. Immediately upon receipt of the Magic Closing
Cash and Magic Notes, and after deducting the sum of $7,250,000.00 from the
Magic Closing Cash and $28,000,000.00 from the Magic Notes, for distribution
to Bondholders in accordance with the terms of the Indenture, the Indenture
Trustee shall pay the Settlement Amount to the Liquidating Trust. From the
Settlement Amount, the following amounts will be paid:
1. Plan Payments to the Administrative Claimants.
2. Plan Payments to the Priority and Priority Tax claimants.
3. Plan Payments to secured claimants other than those of Bally's, as
assignee of Gulf Gaming, Inc., IGT and the Bondholders.
4. Plan Payments to Class 3B Convenience claimants.
5. The initial funding of an amount not to exceed $1,000,000, for the
expenses of administering the Liquidating Trust and any additional funding for
such purposes as are necessary.
6. Establishment of reserves.
7. Plan payments to Class 3A claimants.
At Closing, Purchaser shall assume or shall otherwise cause the Reorganized
Crescent City to satisfy the Bally's & IGT Claims, without any cost or expense
to the Debtor or Liquidating Trust. In addition, all of the Residual Property
will be transferred to Liquidating Trust and liquidated or otherwise disposed
of for the benefit of the Debtor's Class 3A Creditors in accordance with the
terms of the Plan.
(2) PAYMENT OF SETTLEMENT AMOUNT.
a. PAYMENT OF MAGIC CLOSING CASH. Upon receipt of the Magic Closing Cash,
the Indenture Trustee, on behalf of the Bondholders, shall retain the sum of
$6,750,000.00 for distribution to Bondholders pursuant to the terms of the
Indenture and shall pay the remaining balance of the Magic Closing Cash
(estimated to be $6,750,000.00 less any amount by which the total balance of
principal and interest due to pay Magic's DIP Financing Claims and/or any
other DIP Financing Claims, excluding the DIP Financing Claim of Mirage, in
full, exceeds $1,000,000.00) to Liquidating Trust to be distributed and/or
reserved for Disputed Claims in accordance with the terms of this Plan.
b. PAYMENT OF MAGIC NOTES. Upon receipt of the Magic Notes, the Indenture
Trustee, on behalf of the Bondholders, shall retain $28,000,000.00 of the
Magic Notes, for distribution to the Bondholders in accord with the Indenture
and shall assign the remaining $7,000,000.00 of Magic Notes to the Liquidating
Trust in accordance with the terms of this Plan.
(3) DESCRIPTION OF MAGIC NOTES. Pursuant to the Magic Agreement, as part of
the Magic Consideration, Reorganized Crescent City will issue $35,000,000.00
of notes (the "Magic Notes"). The Magic Notes will be guaranteed by Jefferson
Casino Corporation and C-M of Louisiana, Inc. ("CMLI"), each a wholly owned
subsidiary of Casino Magic Corporation ("Magic"). Set forth below is a chart
setting forth the principal terms of the Magic Notes(12). For more detailed
information on the Magic Notes, reference should be made to the Magic
Indenture, a copy of which, in substantially the same form as the final
document, is attached as Exhibit "2" to the Plan.
_______________________________________
(12) The terms used in the chart are defined under the Magic Agreement, which
is attached to the Plan as Exhibit "1", and may differ from the defined terms
in the Plan.
_______________________________________
TERM: Subject to acceleration as provided in Paragraph 13, three (3)
years from the earlier of: (a) the date on which Magic opens the Crescent City
Queen (the "Boat") or the Substitute Boat (as hereinafter defined) for public
gaming play in Bossier City, Louisiana, and (b) the day which is 180 days
after the Closing (the "Commencement Date").
INTEREST: 11 1/2% per annum, payable quarterly. (Each day on which
interest is payable is hereinafter referred to as a "Payment Date").
COLLATERAL OF ISSUER: All current and after acquired assets of Issuer,
except for furniture, fixtures and equipment, including, but not limited to,
gaming equipment, and all proceeds from the sale or transfer of the foregoing.
COLLATERAL OF GUARANTORS: All current and after acquired assets of
Guarantors, including, but not limited to, approximately 20 acres of
unencumbered real estate in Bossier Parish and all improvements thereon owned
by CMLI, and all proceeds from the sale or transfer of the foregoing.
MANDATORY REDEMPTION: Until the Payment Date immediately following the
Release Date, Excess Cash Flow (as hereinafter defined) shall be computed
quarterly and paid quarterly in arrears and applied to principal to redeem the
Notes in accordance with the redemption schedule set forth herein. Excess
Cash Flow means the cash flow from the operation of a casino on the Boat or
Substitute Boat in Bossier City and all ancillary facilities, after interest
and income tax expense that exceeds: (a) permitted capital expenditures, and
(b) a $5 million cash reserve.
OPTIONAL REDEMPTION: The Notes may be redeemed at any time, in whole or in
part, according to the redemption schedule set forth below:
(a) Until the one (1) year anniversary following the Commencement Date, at
100% of the principal face amount of the Notes to be redeemed on such
redemption date; or
(b) Following the first anniversary of the Commencement Date and until the
second anniversary of the Commencement Date, at a rate that increases on a
ratable basis daily from 100% to 110% of the principal face amount of the
Notes to be redeemed on such redemption date; or
(c) Following the second anniversary of the Commencement Date and until the
third anniversary of the Commencement Date, at a rate that increases on a
ratable basis daily from 110% to 120% of the principal face amount of the
Notes to be redeemed on such redemption date.
SUBSTITUTION OF COLLATERAL: At its option, and without incurring additional
payments or expenses relative to the Notes, CCCDC shall have the unilateral
right (so long as CCCDC is not in default under the indenture relating to the
Notes) to transfer the Boat to a third party, free and clear of all liens
related to the Notes, for cash and/or a substitute casino riverboat
("Substitute Boat"); PROVIDED, HOWEVER, that the Substitute Boat must qualify
under the Louisiana Riverboat Economic and Control Act as a riverboat and must
be substantially similar in quality and size to any riverboat casino used and
competitive in Bossier City or Shreveport, Louisiana; and PROVIDED, FURTHER,
that the liens related to the Notes are transferred to the cash proceeds and
the Substitute Boat, if any, and constitute the sole lien and encumbrance
thereon. To the extent cash proceeds are received form a sale or other
disposition of the Boat, such cash proceeds shall be held in escrow (subject
to the first and only lien of the indenture trustee). Such cash proceeds
shall be released as follows:
(a) During the initial ninety (90) day period after the closing of the
transfer of the Boat (the "Waiting Period"), cash proceeds will be released
from escrow to CCCDC solely to purchase a qualifying Substitute Boat and
thereafter, for permitted capital expenditures;
(b) If a Substitute Boat is not purchased by CCCDC during the Waiting
Period AND if CCCDC has not contracted with a third-party by the end of the
Waiting Period to build a qualifying Substitute Boat, the escrowed cash shall
be distributed immediately upon the expiration of the Waiting Period to the
indenture trustee for redemption of the Notes pursuant to the Paragraph 8
hereof;
(c) If Purchasers contract to build a qualifying Substitute Boat during the
Waiting Period, cash may be released from escrow to CCCDC to fund construction
of said Substitute Boat; provided, however, that the indenture trustee shall
maintain at all relevant times a first priority perfected lien on the
Substitute Boat under applicable law subject only to those liens which may be
permitted, from time to time, under the indenture relating to the Notes (more
particularly described in clause (d) of Paragraph 12; and
(d) Notwithstanding any provision of subparagraphs (a), (b) or (c) to the
contrary, to the extent any cash remains in escrow fifteen (15) months after
expiration of the Waiting Period, said cash shall be released to the indenture
trustee at the expiration of said fifteen (15) month period.
Notwithstanding any provision of this Agreement to the contrary, in the event
CCCDC is in default under the indenture relating to the Notes, all funds in
escrow shall be paid over immediately to the indenture trustee.
RELEASE OF COLLATERAL: The indenture relating to the Notes shall provide that
at such time as the aggregate outstanding principal amount of the Notes is
reduced to $17.5 million (the "Release Balance") AND CCCDC is not in default
under said indenture, all collateral for the Notes and the guarantee thereof
shall be released, except for the liens on the Boat or Substitute Boat, which
liens will continue to secure CCCDC's obligations with respect to the Notes.
CCCDC's mandatory redemption payment obligations shall terminate as to any
quarterly period commencing after the date on which the Release Balance is
attained (the "Release Date"). Notwithstanding the foregoing, CCCDC's
obligations with respect to mandatory redemption payments relating to Excess
Cash Flow for any quarterly period commencing prior to the Release Date shall
be paid when due. The balance, if any, owed on the Notes as of the Release
Date shall be amortized in equal quarterly payments of principal due on the
then remaining Payment Dates (together with accrued interest and the
applicable redemption premium as provided in the redemption schedule) over the
remaining term of the Notes.
COVENANTS: The indenture relating to the Notes shall (a) permit capital
expenditures to be made consistent with the Site improvements identified in
the pending application of CCCDC to modify berth, as amended by Purchasers,
(b) prohibit dividends and other payments to Magic and its affiliates, (c)
contain a negative pledge of the operating cash flow of the Issuer and the
Guarantors, (d) prohibit liens or other encumbrances on any property of the
Issuer or either of the Guarantors, exclusive of (i) any liens on furniture or
equipment incurred in connection with the acquisition thereof, and (ii) any
statutory liens of laborers or materialmen or maritime liens, provided that
any such liens are satisfied, bonded or otherwise removed within sixty (60)
after Issuer receives notice of the existence of such liens, and (e) contain
other customary covenants and conditions.
ALTERNATIVE AMORTIZATION SCHEDULE: If action is taken in the State of
Louisiana which prohibits or substantially restricts gaming by CCCDC on the
Boat or Substitute Boat ("Adverse State Action"), the balance, if any, then
owed on the Notes then outstanding, shall be amortized and paid in equal
quarterly payments of principal (without premium) together with accrued
interest over the period of time commencing on the Payment Date immediately
following the Adverse State Action and ending on the Payment Date immediately
following the day on which the Adverse State Action takes effect. CCCDC's
mandatory redemption obligations shall continue after an Adverse State Action.
MARKETABILITY OF NOTES: The Notes shall be issued by CCCDC under the
securities law exemption provided by S1145 of the Bankruptcy Code. CCCDC, at
its sole cost and expense, shall take such steps as may be necessary to comply
with the Trust Indenture Act of 1939.
RECORDING COSTS: All costs of recording a ship mortgage on the Boat and
Substitute Boat, if any, and otherwise perfecting the security interests and
liens securing the Notes, shall be borne by Guarantors or Reorganized CCCDC.
(4) APPLICABILITY OF SECTION 1145 OF THE BANKRUPTCY CODE TO THE MAGIC NOTES.
The Debtor believes that the issuance of the Magic Notes under the Plan will
be exempt from the registration requirements of section 5 of the Securities
Act of 1933 (15 U.S.C. S77e)(the "Securities Act") and any state or local law
requiring registration for the offer or sale of a security pursuant to the
provisions of section 1145 of the Bankruptcy Code. Section 1145 of the
Bankruptcy Code exempts the original issuance of securities under a plan of
reorganization from registration under section 5 of the Securities Act or
under applicable state law. For the original issuance to be exempt, three
principal requirements must be satisfied: (i) the securities must be issued by
the debtor, its successor, or an affiliate participating in a joint plan with
the debtor under a plan of reorganization under Chapter 11 of the Bankruptcy
Code; (ii) the recipients of the securities must hold a claim against the
debtor or such affiliate, an interest in the debtor or such affiliate, or a
claim for an administrative expense against the debtor or such affiliate; and
(iii) the securities must be issued entirely in exchange for the recipient's
claim against or interest in the debtor or such affiliate, or principal in
such exchange and partly for cash or property.
Section 1145(c) of the Bankruptcy Code provides that the distribution of the
Magic Notes pursuant to the Plan in accordance with the provisions of Section
1145(a) will be deemed to be a "public offering." Accordingly, the Magic
Notes issued under the Plan will not be subject to restrictions on resale of
the type imposed on securities issued in a nonpublic offering and will not be
required to bear legends. Therefore, the Magic Notes may be resold by any
holder thereof without registration under the Securities Act pursuant to the
exemption provided by section 4(1) of the Securities Act, unless the older is
a "dealer" under section 2(12) of the Securities Act, or an "underwriter," as
defined in section 1145(b) of the Bankruptcy Code.
GIVEN THE COMPLEX, SUBJECTIVE NATURE OF THE QUESTION OF WHETHER A PARTICULAR
HOLDER MAY BE AN UNDERWRITER OR DEALER, THE DEBTOR MAKES NO REPRESENTATIONS
CONCERNING THE RIGHT OF ANY PERSON TO TRADE THE MAGIC NOTES. THE DEBTOR
RECOMMENDS THAT RECIPIENTS OF THE MAGIC NOTES ISSUED UNDER THE PLAN CONSULT
THEIR OWN COUNSEL CONCERNING WHETHER THEY WOULD BE CONSIDERED AN "UNDERWRITER"
OR "DEALER" AND WHETHER THEY MAY TRADE FREELY SUCH SECURITIES RECEIVED.
(5) RELEASES. As of the Effective Date the Debtor, Debtor in Possession,
Liquidating Trust, all Creditors and equity security holders of the Debtor
shall release and waive: (i) all defenses to the Bondholder Class Claim in
regard to the allowance of such claim in the Bankruptcy Case; and (ii) all
claims and causes of action against the Bondholders based upon or related to
the Debtor's execution of its guarantee of CGII's obligations under the
Indenture, or based upon any payments made to or for the benefit of the
Bondholders by the Debtor.
Additionally, except for the obligations created by the Plan, for good and
valuable consideration, including, without limitation, the benefits of the
Plan, the promises and obligations of the Debtor, Reorganized Crescent City,
the Bondholders, CGII and the Purchaser and the efforts and contributions of
the officers and directors of the Debtor in bringing about the confirmation
and consummation of the Plan, and to permit the effective and expeditious
reorganization of the Debtor, on the Effective Date, the Debtor, shall be
deemed to have unconditionally waived and released any and all rights, Claims,
liabilities and causes of action with respect to those matters directly
relating to Crescent City, against Reorganized Crescent City, the Bondholders,
the Indenture Trustee, CGII, the Institutional Note Holders' Steering
Committee, the Creditors' Committee, the Purchaser, and except with respect to
CGII, their respective members, officers, directors, agents and attorneys, as
well as the Debtor's officers, directors, agents and attorneys who served in
such capacities at any time during the Bankruptcy Case (collectively the
"Releasees"); provided however, the releases granted in favor of the
Committees shall release Committee members only in their capacity as such and
not in their capacity as individual creditors. Any claim or cause of action a
Creditor or Bondholder has against any Releasee which is personal to such
Releasee, and which is not derivative of the rights of the Debtor, shall not
be affected by the releases granted hereunder. Except with respect to the
Debtor, nothing in this Plan shall impair or otherwise affect any rights,
liens, claims, or interests of the Indenture Trustee or any Bondholder under
the Notes, the Indenture, or any related documents, including, but not limited
to, any rights, liens, claims or interests against CGII or any guarantor of
CGII's obligations.
(6) ESTABLISHMENT AND MANAGEMENT OF LIQUIDATING TRUST.
a. Upon confirmation hereof, and effective upon the Effective Date, the
three (3) persons identified by the Creditors' Committee prior to the
conclusion of the Confirmation Hearing, shall be appointed to act as Co-
Liquidating Trustees (the "Liquidating Trustees") of and to administer the
Liquidating Trust hereinafter created and to liquidate assets for the benefit
of the creditors of the Debtor's estate. The selections of the persons to
serve as Liquidating Trustees shall be subject to approval of the Bankruptcy
Court. Vacancies occurring after the original appointments shall be governed
by the Liquidating Trust documents. The Liquidating Trustees shall be deemed
to be the authorized representatives of the Estate for the purpose of and
consummation of the Plan pursuant to Sections 1103 and 1123(b)(3)(B) and other
applicable sections of the Bankruptcy Code.
b. The Liquidating Trustees shall manage and govern the Liquidating Trust
by majority rule.
c. The Debtor will establish a Liquidating Trust, as defined by Treas. Reg.
S 301.7701-4(d), (the "Liquidating Trust") for the benefit of the creditors of
the Debtor. The Liquidating Trust is organized for the primary purpose of
receiving, liquidating, and distributing the cash, claims, and property
transferred to the Liquidating Trust (the "Liquidating Trust Property") in
accordance with the provisions of this Plan as promptly as is reasonably
possible, with no objective to carry on or conduct a for-profit trade or
business. Upon transfer of the Liquidating Trust Property to the Liquidating
Trust, the Debtor shall retain no interest in the Liquidating Trust Property.
d. The Liquidating Trust Property will be transferred to the Liquidating
Trust for the benefit of the creditors. The transfer shall be treated as a
transfer to creditors to the extent that the creditors are beneficiaries of
the Liquidating Trust. The transfer will be treated as a deemed transfer by
the beneficiary-creditors to the Liquidating Trust. The beneficiaries-
creditors of the Liquidating Trust will be treated as the grantors and deemed
owners of the Liquidating Trust.
e. The Liquidating Trust Property must be consistently valued by the
Liquidating Trustees and the beneficiary-creditors and said valuation must be
used for all federal income tax purposes.
f. The Liquidating Trustees must file returns for the Liquidating Trust as
a grantor trust pursuant to S 1.671-4(a) of the Income Tax Regulations.
g. The Liquidating Trustees' powers shall be limited to recovering,
preserving and protecting the Liquidating Trust Property, liquidating the
Liquidating Trust Property as promptly as is reasonably possible and
distributing all income and proceeds from the liquidation of Liquidating Trust
Property in accordance with the terms of the Plan as promptly as is reasonably
possible. Except as otherwise inconsistent with the provisions of this Plan,
in the exercise of such powers, the Liquidating Trustees, on behalf of the
Liquidating Trust, shall be authorized to (i) avoid or recover transfers
(including fraudulent conveyances or preferential transfers) of the Debtor's
property as may be permitted by Sections 542 through 553 of the Bankruptcy
Code or applicable state law, (ii) pursue all claims and causes of action
arising from the prepetition activities of the Debtor, whether arising by
statute or common law and whether arising under the laws of the United States
of America, Louisiana, or any other state having jurisdiction over any claim
or controversy pertaining to the Debtor, and whether maintainable against
third parties, Affiliates or Insiders of the Debtor,(iii) defend claims,
causes of action and other litigation that may adversely affect or impact the
Liquidating Trust Property,(iv) contest Claims, (v) file, litigate to final
judgment, settle, or withdraw objections to Claims, and (vi) exercise offsets
against Claims. All activities of the Liquidating Trustees shall be reasonably
necessary to, and consistent with, the accomplishment of the purpose of the
Liquidating Trust as set forth in the Plan. The Liquidating Trustees shall
make continuing efforts to liquidate and distribute proceeds from the
liquidation of Liquidating Trust Property, shall make timely distributions
pursuant to the provisions hereof, and shall not unduly prolong the duration
of the Liquidating Trust.
h. The Liquidating Trustees shall have full and complete authority to do
and perform all acts, to execute all documents and to make all payments and
disbursements of funds necessary to carry out the purpose of the Liquidating
Trust as set forth in the Plan. The Liquidating Trustees shall make
distributions of proceeds from the liquidation of Liquidating Trust Property
and income from investments in accordance with the Plan.
i. Any party dealing with the Liquidating Trustees in relation to the
Liquidating Trust Property or any part thereof, including, but not limited to,
any party to whom Liquidating Trust Property or any part thereof shall be
conveyed or contracted to be sold by the Liquidating Trustees, shall not be
obligated in any way (i) to see to the application of any purchase money, (ii)
to see that the provisions of the Plan or the terms of the Liquidating Trust
have been complied with, or (iii) to inquire into any limitation or
restriction on the power or authority of the Liquidating Trustees. The power
of the Liquidating Trustees to act or otherwise deal with the Liquidating
Trust Property shall be absolute as to any party dealing with the Liquidating
Trustees in any manner whatsoever in relation to the Liquidating Trust
Property.
j. All costs, expenses, and obligations incurred by the Liquidating
Trustees in administering this Liquidating Trust or in any manner reasonably
connected, incidental or related thereto shall be a charge against the
Liquidating Trust Property. The Liquidating Trustees may approve and direct
the payment thereof or the retention by the Liquidating Trustees of adequate
reserves for such payment prior to making distributions to creditors pursuant
to the Plan.
k. The Liquidating Trustees shall keep or cause to be kept books containing
a description of all property constituting Liquidating Trust Property and an
accounting of receipts and disbursements, which shall be open to inspection by
creditor-beneficiaries at reasonable times upon written request to the
Liquidating Trustees or their counsel. The Liquidating Trustees shall file
with the Bankruptcy Court semi-annually (or more often if deemed appropriate
by the Liquidating Trustees) a statement of receipts and disbursements for the
Liquidating Trust. The Liquidating Trustees shall establish and maintain
separate accounts (including bank accounts) for the receipt and expenditure of
funds derived from the Settlement Amount, the Administrative, Priority and
Disputed Claims Reserve and the Residual Property. The Liquidating Trustees,
in their discretion, may advance funds from the Settlement Amount Account for
the purpose of investigating, commencing litigation, or otherwise enhancing
the value of the claims and property to be deposited in the other accounts but
such advance(s) shall be considered loans and shall promptly be repaid from
the first available funds in such other accounts.
l. No recourse shall ever be had, directly or indirectly, against the
Liquidating Trustees or any Representatives of the Liquidating Trustees
(including without limitation, the employers of the Liquidating Trustees), or
against any employee of the Liquidating Trustees, whether by legal or
equitable proceedings, by virtue of any statute or otherwise, or by reason of
the creation of any indebtedness by the Liquidating Trustees under this
Liquidating Trust for any purpose authorized by this Liquidating Trust, it
being expressly understood and agreed that all liabilities, contracts and
agreements of the Liquidating Trustees, whether in writing or otherwise, under
this Liquidating Trust shall be enforceable only against and be satisfied only
out of the Liquidating Trust Property or shall be evidence only of a right of
payment out of the Liquidating Trust Property, as the case may be. Nothing
herein shall constitute a waiver of claims for intentional torts, embezzlement
or other fraudulent activity. Every undertaking, contract, covenant or
agreement entered into in writing by the Liquidating Trustees, their
Representatives, shall provide expressly against the personal liability of the
Liquidating Trustees, their Representatives and employees.
m. The Liquidating Trustees shall receive no compensation for their
services but shall be entitled to reimbursement for all expenses incurred by
them in the performance of their duties as trustees, which expenses shall be a
charge against and paid out of the Liquidating Trust Property, in accordance
with the terms of the Plan. The reimbursement of expenses to the Liquidating
Trustees and reimbursement of expenses and compensation of professionals
employed by the Liquidating Trustees shall constitute a first priority expense
of the Liquidating Trust.
n. The Liquidating Trustees shall be relieved of any and all duties,
restrictions or liabilities imposed upon Liquidating Trustees by applicable
laws of the governing state, including the provisions of the trust laws of the
governing state as in effect, in the governing state, on the Effective Date
and as it may thereafter be amended, so that the Liquidating Trustees shall be
liable only for acts of self-dealing or bad faith, or intentionally adverse
acts or reckless indifference to the interests of the creditors of the Debtor.
The fact that any act or failure to act of the Liquidating Trustees was
advised by an attorney acting as attorney for the Liquidating Trust or the
Liquidating Trustees shall be conclusive evidence of the Liquidating Trustees'
good faith in performing or failing to perform such act.
o. The Liquidating Trust shall be effective as of the Effective Date and
shall remain and continue in full force and effect until the Liquidating Trust
Property has been wholly converted to cash, all costs, expenses and
obligations incurred in administering this Liquidating Trust have been fully
paid and discharged and all remaining income, proceeds and assets of the
Liquidating Trust Property have been distributed as herein set forth.
Notwithstanding the above, the Liquidating Trust created herein shall
terminate within(3) years from the Effective Date or within such further time
as is reasonably necessary to accomplish full liquidation and disbursement;
provided, however, in no event shall this Liquidating Trust extend beyond five
(5) years from the Effective Date.
p. Subject to approval of the Bankruptcy Court, the Liquidating Trustees
may engage attorneys, accountants and agents to advise or assist the
Liquidating Trustees in the administration of the Liquidating Trust and to
represent the Liquidating Trustees in all matters relating to the Liquidating
Trust. The Liquidating Trustees shall pay the reasonable fees, charges and
expenses of such attorneys and accountants who provide services after the
Effective Date as a priority expense of the Liquidating Trust, in accordance
with the terms this Plan. Subject to the availability of sufficient funds in
the Administrative Reserve, the fees and expenses of such professionals and
agents shall be paid upon the monthly submission of bills to Liquidating
Trust. If no written objection to payment is received within five (5)
Business Days following delivery of any bill, the bill shall be paid by
Liquidating Trust. If there is a dispute as to the amount of any bill, such
dispute shall be submitted to the Bankruptcy Court for a determination of the
reasonableness of such bill. Subject to the availability of sufficient funds
in the Administrative Reserve, the uncontested portion of each bill shall be
paid within ten (10) Business Days after its delivery. As provided infra, to
the extent funds are or become available, fees and expenses of professionals
and others involved in investigating, recovering, or liquidating Residual
Property shall be paid from such recoveries. To the extent that contingent fee
litigation is desirable or necessary, the Liquidating Trustees are authorized
to hire counsel to pursue such litigation at a reasonable contingent fee. The
Liquidating Trust, which shall succeed to the Debtor's interest in the
property transferred to it pursuant to this Plan, shall constitute a successor
in interest to the Debtor. Accordingly, upon the Effective Date, the
Liquidating Trustees, on behalf of the Liquidating Trust, shall become the
owner and holder, of all privileges (including the attorney-client privilege)
owned or held by the Debtor, whether owned or held by the Debtor individually
or jointly and whether concerning pre-petition Date or post-petition Date
matters.
q. This Liquidating Trust shall be administered and governed by the laws of
the State of New Jersey or such other state (the "governing state") as the
Debtor and the Creditors' Committee shall select, which shall be established
as of the Effective Date, and any questions arising hereunder shall be
resolved and determined in accordance with the laws of the governing state,
without regard to principles of conflicts of law.
r. On the Effective Date, (a) the filing by Liquidating Trust of its Trust
Articles which shall be a Plan Document shall be deemed authorized and
approved in all respects, and (b) the appointment of the Liquidating Trustees
by the Bankruptcy Court in the Confirmation Order, and the other matters
provided under the Plan concerning the structure of Liquidating Trust or
action by Liquidating Trust, shall be deemed to have occurred and shall be in
effect without any requirement of further action or order of the Bankruptcy
Court. On the Effective Date, (a) the filing by Reorganized Crescent City of
the Amended Certificate of Incorporation and the adoption of the Amended By-
laws shall be deemed authorized and approved in all respects, and (b) to the
extent identified by the Purchaser on such date, the appointment of the
directors and officers of Reorganized Crescent City, and the other matters
provided under the Plan concerning the corporate structure of Reorganized
Crescent City, or corporate action by Reorganized Crescent City or corporate
action by Reorganized Crescent City, shall be deemed to have occurred and
shall be in effect from and after the such time without any requirement of
further action or order of the Bankruptcy Court. The Directors and officers
of the Debtors will be deemed to have resigned as of the Effective Date.
(7) TAX RAMIFICATIONS OF LIQUIDATING TRUST
It is anticipated that certain assets of the Debtor (the "Trust Assets") will
be contributed to a liquidating trust (the "Liquidating Trust"). The Class
3A and 3B Creditors will be the beneficiaries of the Liquidating Trust. As
with a liquidating corporation, the formation of the Liquidating Trust and the
contribution of the Trust Assets will be a taxable transaction. The Debtor
will recognize gain or loss equal to the difference between its basis in each
of the Trust Assets and the fair market value of each such Trust Asset at the
time of contribution. Similarly, creditors will generally recognize gain or
loss equal to the difference between such creditor's basis in its claim and
the fair market value of its share of the Trust Assets at the time of
contribution. Creditors should consult their own tax advisors to determine if
all or a portion of any gain recognized should be treated as ordinary income
either as accrued but unpaid interest or accrued market discount.
It is anticipated that the Liquidating Trust will be treated as a "grantor"
trust for federal income tax purposes, and the creditors will be treated as if
the Liquidating Trust did not exist. Each creditor will have its own cost
basis in the underlying Trust Assets as if the Liquidating Trust did not
exist.
C. CLASSIFICATION AND TREATMENT OF CLAIMS
The Plan of Reorganization establishes various categories and classes of
creditors and provides for the treatment of each of those creditor bodies.
As to Administrative Claims, the Plan provides that these creditors shall
receive on account of such claim, in full, in Cash, from the Liquidating
Trust, on the later of: (a) the Effective Date (or as soon thereafter as
practicable), or (b) the first Cash Distribution Date immediately following
the date on which such Administrative Claim becomes an Allowed Claim, except
to the extent that the holder of an Allowed Administrative Claim agrees to a
different treatment; provided, however, that Administrative Claims that are
Allowed Claims representing obligations incurred in the ordinary course of
business by the Debtor will be paid by Liquidating Trust when due in the
ordinary course of business. The Plan further provides that Administrative
Claims for the payment of compensation and reimbursement of expenses pursuant
to S330, 331 and 503(b) of the Bankruptcy Code, will be paid within three (3)
business days of the entry of an order of the Bankruptcy Court authorizing the
payment. The Debtor has estimated Administrative Claims to be $3,500,000.00,
which includes the estimated sums due on any DIP Financing Claims, including
the disputed Mirage DIP Financing Claim, all professional fees and ordinary
operating expenses estimated to be due on the Confirmation Date.
As to Priority Claims and Priority Tax Claims, the Plan provides that such
creditors will be paid in full on the Effective Date or on the First Cash
Distribution Date immediately following the date on which the claim has become
an allowed claim. The Debtor estimates the Priority Claims and Priority Tax
Claims, might be as high as $1,925,000.00 on the Effective Date, which amount
is subject to substantial disputes. The disputes are more fully addressed
herein at Section VIII.
Eight hundred sixty two (862) former employees have filed WARN claims and
other claims for compensation, as set forth in more detail on page ???__ of
this Disclosure Statement. These claimants contend that their claims are
entitled to priority under 11 U.S.C. S507(a)(3), and they contend that these
claims must be paid in full up to $4,000.00 per claimant under the Plan of
Reorganization. The Debtor denies that these claims are entitled to priority
status. Prior to or concurrent with confirmation, the Bankruptcy Judge will
be asked to estimate the maximum amount of these contingent and/or
unliquidated claims, and sufficient amounts will be set aside to pay these
claims upon final adjudication, not to exceed the maximum amount estimated by
the Bankruptcy Judge prior to confirmation. Should the Bankruptcy Judge
estimate these claims to be in a maximum amount inconsistent with the
Conditions to Confirmation and Effectiveness of the Plan, as set forth in
Article XI of the Plan of Reorganization, the Plan shall not be confirmed.
As to the remaining creditors, they have been classified as follows under the
Plan and have been given the treatment outlined below:
Class 1: Bondholder Class Claim
1. Classification: Class 1 consists of the Bondholder Class Claim. The
Bondholder Class Claim is represented by the proof of claim filed by First
Trust National Association as the Indenture Trustee. The claim as filed is
for the amount of $142,676,250. The Indenture Trustee, on behalf of the
Bondholders, has asserted a security interest in any interest the Debtor may
have in its license and goodwill. The Debtor has disputed, in part, the
extent of the security interest asserted by the Indenture Trustee. In large
part, the Plan of Reorganization constitutes a settlement of this dispute.
The Plan provides that the Bondholders claims will be allowed. Additionally,
the Bondholder's Claim will not be subject to, after the Effective Date, any
objection, claim, counter claim, set off defense, action or proceeding by the
Debtor, Reorganized Crescent City, any statutory committee or any other
parties in interest.
2. Allowance of Bondholder Claim: On the Effective Date, the Bondholder
Claim shall be deemed an Allowed Class 1 Claim in the amount of $142 million.
The Bondholder Claim shall not, after the Effective Date, be subject to, or
the subject of, any objection, claim, counterclaim, set off, defense, action
or proceeding by the Debtor, Reorganized Crescent City, any statutory
committee, or any other party in interest, whether in law or equity. To the
extent any such objection, action or proceeding is pending on or after the
Effective Date, such action, objection or proceeding shall be deemed withdrawn
and the Bondholders may take such steps as they deem appropriate to cause the
Bankruptcy Court's records to reflect such withdrawal (including, without
limitation, seeking EX PARTE relief).
3. Treatment: As provided in Article II(B) of the Plan, upon receipt of the
Magic Closing Cash and the Magic Notes, the Indenture Trustee, on behalf of
the Bondholders, shall retain (i) Cash, in the amount of $6,750,000.00 and
(ii) $28,000,000.00 of Magic Notes, all, and both, free and clear of any and
all liens, claims, privileges and encumbrances held or asserted by any person
other than the Indenture Trustee, for distribution to the Bondholders pursuant
to the terms of the Indenture, and the Indenture Trustee shall immediately (i)
pay the remaining balance of the Magic Closing Cash (estimated to be
$6,750,000.00, less any amount by which the total balance of principal and
interest due to pay Magic's DIP Financing Claims in full exceeds
$1,000,000.00) and (ii) assign the remaining Magic Notes, in the amount of
$7,000,000 to Liquidating Trust for distribution and/or application in
accordance with this Plan. The Indenture Trustee shall retain the sum of
$6,750,000.00 in Magic Closing Cash and $28,000,000.00 in Magic Notes, to be
paid to Class 1 Claimants, in accordance with the terms of the Indenture.
Additionally, any amounts to be paid to CGII from the Magic Deferred Cash, as
provided in this Plan, shall be subject to the security interest of the
Indenture Trustee. Any amounts to be paid to CGII from the Magic Deferred
Cash, shall be deposited by Purchaser in a segregated interest bearing account
designated by the Indenture Trustee at First Bank National Association,
subject in all respects to all of the first priority liens and security
interests of the Indenture Trustee, without any further action, and shall not
be disbursed absent the mutual consent of CGII and the Indenture Trustee, or
by an order of a court of competent jurisdiction.
Other than as set forth herein, the Class 1 claimants (including the Indenture
Trustee, the Bondholders, and anyone deriving or claiming rights under the
Secured Notes, the Indenture, or any security therefore), shall not be
entitled to participate as a Class 2, 3A or 3B Claimant under this Plan on
account of such claim.
4. Release of Defenses: As of the Effective Date the Debtor, Debtor in
Possession, Liquidating Trust, all Creditors and equity security holders of
the Debtor shall release and waive: (i) all defenses to allowance of the
Bondholder Claim in the Bankruptcy Case, and (ii) all claims and causes of
action, if any, against the Bondholders or the Indenture Trustee based upon or
related to the Debtor's execution of its guarantee of CGII's obligations under
the Indenture, or based upon any payments made to the Indenture Trustee by the
Debtor.
Nothing herein shall constitute a waiver of any defenses to the allowance of
the claim of the Bondholders or the Indenture Trustee against CGII in any
other bankruptcy proceeding. Except with respect to the Debtor, nothing in
this Plan shall impair or otherwise affect any rights, liens, claims, or
interests of the Indenture Trustee or any Bondholder under the Notes, the
Indenture, or any related documents, including, but not limited to, any
rights, liens, claims or interests against CGII or any guarantor of CGII's
obligations.
5. Voting: Class 1 is Impaired by the Plan and the holder of Claims in Class
1 are entitled to vote to accept or reject the Plan.
Class 2: Secured Claims
1. Classification: Class 2 consists of secured claims.
A substantial number of the creditors of this estate have filed proofs of
claims indicating a secured status. The Debtor has compiled a list of those
claims, the date incurred, the amount and a brief description of the security
interest asserted, a copy of which can be obtained by contacting counsel for
the Debtor. The Debtor believes that a vast portion of these claims are, in
fact, unsecured for the reason that pursuant to 11 U.S.C. S506 a creditor has
a secured claim only to the extent he has an interest in collateral sufficient
to pay that claim. The vast portion of all claims asserted against the
vessel, the Debtor believes, are inferior to the First Preferred Ship Mortgage
held by the Indenture Trustee. The Debtor has filed a complaint with the
United States Bankruptcy Court seeking to rank and determine the extent of any
maritime liens against the vessel. Additionally, it should be noted that a
number of creditors have filed secured claims based on liens asserted against
the terminal facility. As discussed above, the terminal facility is property
owned by River City, a joint venture of Crescent City and Grand Palais.
Therefore, these creditors do not hold a secured claim as to this estate.
Finally, a number of creditors, including Bally and IGT, have asserted a
security interest in certain equipment. The Debtor believes that these liens
are in fact valid and will be treated in accordance with the terms and
conditions set forth in the Plan.
Many of the employees earlier described as having WARN Act claims and other
claims contend that their WARN claims, their alleged contractual five (5) day
back pay claims, their toke claims, and their personal injury claims, enjoy
maritime liens. Those employees assert that their liens would be superior to
all other liens, including those held by the Indenture Trustee, under Federal
Maritime Law. For those employees who provided necessaries to vessels, they
would enjoy maritime liens, but those liens would be inferior to the lien of
the Indenture Trustee, and thus valueless.
The WARN claims for those employees who were assigned to the Crescent City
Queen are alleged to amount to $2,368,995.10 including attorney fees and
$1,776,746.32 net of attorney fees. The five (5) day back pay claims for
those working on the Crescent City Queen total $148,153.39. The toke claims
for those working on the Crescent City Queen are not known at this time.
Their personal injury claims for bodily injuries sustained by employees
working on the Crescent City Queen are estimated at $150,000.00, and are
thought to be insured.
The $20,000.00 per person claim for damages resulting from the alleged
intentional infliction of emotional distress, if valid, would constitute a
preferred maritime tort lien for those who were assigned to vessels.
As noted above the Debtor strenuously denies the validity of all of the claims
asserted by the employees as well as the assertions that such claims are
entitled to priority or secured status.
2. Determination of Allowed Secured Claim: Prior to the Effective Date, the
Debtor may seek and obtain a determination of the Allowed Secured Claim of any
Creditor asserting a Secured Claim pursuant to the Bankruptcy Code and the
Bankruptcy Rules.
3. Treatment: Except as provided in Article V(A) of the Plan, as to each
Allowed Secured Claim and in complete satisfaction of such Claim, at the
Debtor's option, either:
(i) (A) any default, other than of the kind specified in Section 365(b)(2)
of the Bankruptcy Code, shall be cured, provided that any accrued and unpaid
interest, if any, which the Debtor may be obligated to pay with respect to
such default shall be simple interest at the contract rate and not at any
default rate of interest;
(B) the maturity of such Claim shall be reinstated as the maturity existed
before any default;
(C) the holder of such Claim shall be compensated for any damage incurred as
a result of any reasonable reliance by the holder on any provision that
entitled the holder to accelerate maturity of such Claim; and
(D) the other legal, equitable, or contractual rights to which the Claim
entitles the holder shall not otherwise be altered; PROVIDED, HOWEVER, that as
to any Allowed Secured Claim which is a nonrecourse claim and exceeds the
value of the collateral securing the Claim, the collateral may be sold at a
sale at which the holder of such Claim has an opportunity to bid;
(ii) on the Effective Date or such other date as may be agreed upon by
the Debtor or Liquidating Trust, as the case may be, and the holder of such
Allowed Secured Claim, the Debtor or Liquidating Trust, as the case may be,
shall abandon the collateral securing such Claim to the holder thereof in full
satisfaction and release of such Claim. The Claim held by Jones Casino
Supplies, Inc. ("Jones") shall be partially satisfied, based upon and in
consideration of the sale free and clear of all liens and other interests
pursuant to 11 U.S.C. 363(f), to Jones Casino Supplies, Inc., of the slot
machines and other gaming equipment manufactured by Sigma Games, Inc.
("Sigma"), and Advance Cart Technology, Inc. ("ACT") for a total credit of
$204,754.67 ($156, 387.20 for Sigma equipment and $48,367.47 for ACT
equipment), to be applied in reduction of the total Secured Claim of Jones
Casino Supplies, Inc. In the alternative, a partial credit shall be granted
following the abandonment of the slot machines and other equipment and
supplies manufactured by Sigma and ACT to Jones to allow it to foreclose its
security interest, and based upon the Court's determination as to the amount
of the secured portion of the Jones Claims, and the security interest and
liens held by Jones shall be preserved and retained by Jones pending the
Court's determination and the foreclosure; or
(iii) the holder of such Claim shall be paid, on account of such Allowed
Secured Claim: (a) in full, in cash, after the later of (i) the Effective Date
or (ii) the first Cash Distribution Date after the date such Secured Claim
becomes an Allowed Claim; or, if applicable, (b) upon such other terms as may
be agreed to between the Debtor or Liquidating Trust, as the case may be, and
the holder of such Allowed Secured Claim; PROVIDED, HOWEVER, that as to the
Bally & IGT claims, upon such other terms as may be agreed to between
Reorganized Crescent City or the Purchaser, as the case may be, and the
respective holders of the Bally & IGT Claims. The security interest of Bally
and IGT shall survive confirmation until such claims are paid. The security
interests of any other secured claimant, shall be preserved and retained, to
survive confirmation, in either the specific collateral itself, provided said
collateral is not part of the Riverboat Assets, or preserved and attaching to
the proceeds that constitute the Settlement Amount and/or the Residual
Property, if the collateral is sold free and clear of liens and interests,
until paid.
(iv) Any Allowed Class 2 Claim found by Final Order to be secured by a
lien against any of the Riverboat Assets to be transferred to Purchaser and to
be senior to the lien securing the Class 1 Claims affecting the Riverboat
Property shall be paid in cash on the Effective Date or at such later date as
such determination is made by Final Order. Payments to the holders of any
such Class 2 Claims shall be made from the Net Cash Proceeds of one or more of
the following sources, in the following order of priority; the Settlement
Amount and the Residual Property. Any creditor determined by final order to
have an allowed Class 2 Secured Claim shall be paid to the extent of the value
of its collateral, with the creditor retaining its security interest and lien,
either as to the specific collateral, provided said collateral is not part of
the Riverboat Assets, or preserved and attaching to the proceeds only that
constitute the Settlement Amount and the Residual Property, until the court's
determination and payment, and shall have an unsecured claim for any
deficiency which shall then be recognized, and the creditor paid its pro-rata
distribution or share of the Settlement Amount as set forth below, for the
Class 3 Allowed General Unsecured Claims.
It is anticipated that most of the claims which fall in this class will be
paid in cash out of the Settlement Amount. To the extent a Claimant having
filed a Claim designated as secured, is determined to have a partially secured
and partially unsecured claim, based on the fact that the claim exceeds the
value of the collateral securing such Claim, the remaining deficiency Claim,
or unsecured claim, shall be treated as a General Unsecured Claim in Class 3A.
4. Voting: Class 2 is impaired by the Plan and each holder of a Claim in
Class 2 shall be entitled to vote to accept or reject the Plan.
Class 3A: General Unsecured Claims
1. Classification: Class 3A consists of Allowed General Unsecured Claims.
As noted above, in the summary of claims against the estate, there are
substantial variances between the Debtor's records and the proof of claims
filed in these proceedings.
2. Treatment: Each holder of an Allowed General Unsecured Claim shall
receive its Pro Rata share of the remainder of the Net Cash Proceeds
Settlement Amount, on account of their beneficial interests in the Liquidating
Trust, after payment or reserve for all (i) Administrative Claims, (ii)
Priority Claims, (iii) Priority Tax Claims (iv) Allowed Class 3B Claims, (v)
Allowed Class 2 Claims found to be secured by a lien on any of the Riverboat
Assets and superior to the lien of the Class 1 Claimant, and (vi)
establishment of a reserve for payment of operating expenses of Liquidating
Trust (which initial reserve is not to exceed $1,000,000.00). In addition to
distributions from the Settlement Amount, Class 3A Claimants shall receive Pro
Rata distributions from all Net Cash Proceeds generated from the Residual
Property. However, there will be no distribution of the Net Cash Proceeds
generated from the Residual Property unless and until all payments and/or
reserves required under this paragraph have been made.
3. Voting: Class 3A is impaired and the holders of Claims in Class 3A are
entitled to vote to accept or reject the Plan.
4. Election To Be Treated As Holder Of Convenience Claim: On or before the
Voting Deadline, any holder of an Allowed General Unsecured Claim may elect
(by election on the ballot to be sent to all holders of Allowed General
Unsecured Claims, or thereafter until the Effective Date, by other written
election in form and substance satisfactory to the Debtor) to voluntarily
reduce its Claim to $5,000, and receive the same treatment as holders of
Claims in Class 3B.
5. Claims With Recourse to Insurance Coverage: To the extent the holder of
any General Unsecured Claim has recourse to any liability insurance policy
covering tort claims issued to or for the benefit of the Debtor, the holder of
such Claim must first, to the satisfaction of the Liquidating Trustees, use
its best efforts to collect its Allowed Claims from the insurance carrier.
Such collection will reduce the amount of such holder's Allowed Claim by the
amount of any payment received from such insurance carrier. Any remaining
unpaid portion of such Allowed General Unsecured Claim will be treated under
the other provisions applicable to Allowed General Unsecured Claims. In the
event the Liquidating Trustees determine that the holder of any such Claim has
not used its best efforts to collect the proceeds of such insurance coverage,
such Claim shall be treated as a Disputed Claim until the Liquidating Trustees
determine that such best efforts have been made.
6. Estimation of Distribution to Holders of Class 3A Claims: The
Distribution to Class 3A claimants will be affected by (i) the total amount of
Administrative Expenses, Priority Tax Claims, Priority Claims, Class 2 Claims
and Class 3B claims, and (ii) the amount of allowed claims in Class 3A. In an
attempt to give Class 3A creditors some estimate of what their distribution
might be, Debtor has prepared a chart showing estimated distribution under
various scenarios. This chart is attached as Exhibit "C".
Class 3B: Convenience Claims
1. Classification: Class 3B consists of Convenience Claims.
2. Treatment: Each holder of an Allowed Convenience Claim shall be paid
forty (40%) percent of the Allowed amount of such Claim, in Cash, on the later
of (a) the Effective Date (or as soon thereafter as is practicable), or (b)
the first Cash Distribution Date immediately following the date on which such
Convenience Claim becomes an Allowed Convenience Claim. This distribution
will be funded out of the Settlement Amount. It should be noted that if
these claims have been acquired by a third party purchaser, then the third
party purchaser shall retain the right to receive treatment as a convenience
claimant.
3. Voting: Class 3B is impaired and the holders of Claims in Class 3B are
entitled to vote to accept or reject the Plan.
Class 3C: CGII
1. Classification: Class 3C consists of the CGII Claim.
2. Treatment: On the Effective Date, the Class 3C Claim shall be allowed in
the amount of $5,000,000 and the holder of the Class 3C Claim shall receive on
account of such Claim, the Magic Deferred Cash pursuant to the Magic
Agreement. The payment of the Magic Deferred Cash shall be subject to the
security interest of the Indenture Trustee. Any amounts of the Magic Deferred
Cash to be paid to CGII, pursuant to this Plan and the Magic Agreement, shall
be deposited by Purchaser in a segregated interest bearing account at First
Bank National Association, subject in all respects to all of the first
priority liens and interests of the Indenture Trustee, without any further
action, and shall not be disbursed absent the mutual consent of CGII and the
Indenture Trustee, or by an order of a court of competent jurisdiction.
3. Voting: Class 3C is impaired and the Holder of Claims in Class 3C is
entitled to vote to accept or reject the Plan.
Class 4: Subordinated Unsecured Claims
1. Classification: Class 4 consists of Subordinated Unsecured Claims.
2. Treatment: Holders of Subordinated Unsecured Claims shall receive no
distribution under the Plan. There shall be a presumption that excusable
neglect does not exist in respect of those Claims.
3. Voting: Class 4 is impaired and is deemed to reject the Plan.
Class 5: Equity Interests
1. Classification: Class 5 consists of all Equity Interests.
2. Treatment: Holders of Equity Interests shall receive no distribution
under the Plan. All Equity Interests will be canceled and rendered void and
of no further force or effect on the Effective Date.
3. Voting: Class 5 is impaired and is deemed to reject the Plan.
Class 6: Mirage Administrative/Secured Claim
1. Classification: Class 6 consists of the Mirage Administrative/Secured
Claim.
2. Treatment: Pending resolution of Debtor's objection to the Mirage's DIP
Financing Claim, the entire sum of $2,000,000.00, plus the estimated amount of
accrued and/or accruing interest for a period of one (1) year after Closing
shall be reserved by the Liquidating Trust for the benefit of Mirage. Upon
entry of a Final Order allowing the claim of Mirage, a sum equal to the
Allowed Claim shall be distributed to Mirage. The balance, if any, shall then
be available for distribution to members of other classes of creditors, other
than Class 1. Upon entry of a Final Order disallowing the claim of Mirage the
entire sum reserved shall be available for distribution to member of other
classes of creditors, other than Class 1.
3. Voting: Class 6 is unimpaired and is deemed to have accept the Plan.
X. RETENTION OF JURISDICTION
Until all payments required to be made under this Plan have been made, the
Bankruptcy Court shall retain jurisdiction of these proceedings for the
following purposes:
1. To hear and determine objections to Administrative Claims or Proofs of
Claims whenever filed both before and after the Confirmation Date, including
any objections to the classification of any Claim and to allow or disallow any
Disputed Claim, in whole or in part;
2. To hear and determine any and all motions to estimate Claims regardless
of whether the Claim is the subject of a pending objection, a pending appeal
or otherwise;
3. To hear and determine any and all pending applications for the rejection
or assumption of executory contracts or unexpired leases to which a Debtor is
a party or with respect to which a Debtor may be liable and to hear and
determine, and, if need be, to liquidate, any and all Claims arising
therefrom;
4. To enforce the provisions of the Plan and to enforce any proposed
amendments thereto;
5. To ensure that distributions, if any, to holders of Allowed Claims are
accomplished as provided herein;
6. To determine any and all applications, adversary proceedings and
contested or litigated matters that may be pending on the Effective Date or
commenced thereafter;
7. To consider any modifications of the Plan, to cure any defect or
omission, or reconcile any inconsistency in any order of the Bankruptcy Court,
including, without limitation, the Confirmation Order;
8. To hear and determine all controversies, suits and disputes that may
arise in connection with the interpretation, implementation or enforcement of
the Plan, the Estate's obligations, releases under the Plan, or any Claim
asserted against any representative of the Estate or its agents;
9. To hear and determine all controversies concerning the Magic Agreement;
10. To hear and determine all controversies concerning the Mirage Agreement,
the Mirage DIP Financing Claims and any other claims and/or dispute asserted
by or against Mirage;
11. To enter such orders in aid of execution of the Plan to the extent
authorized by Section 1142 of the Bankruptcy Code, including such orders
aiding or promoting the transfer of the economic or ownership interest of the
Debtor, but not to the extent that such orders are in regard to matters within
the sole jurisdiction of police or regulatory authorities;
12. To determine such other matters as may be set forth in the Confirmation
Order or as may arise in connection with the Plan (including, without
limitation, Article XIII thereof) or the Confirmation Order or their
implementation;
13. To hear and determine all controversies, suits and disputes that may
arise with respect to the Residual Property;
14. To enforce all orders, judgments, injunctions and rulings entered in
connection with the Reorganization Case;
15. To determine any and all applications for allowance of compensation and
reimbursement of expenses and any other fees and expenses authorized to be
paid or reimbursed under the Bankruptcy Code or the Plan;
16. To hear and determine all proceedings to recover all assets of the
Debtor and property of the estate, wherever located, including any causes of
action under Sections 544 through 551 and 553(b) of the Bankruptcy Code, and
any other causes of action or rights to payment of Claims, that belong to the
Debtor, that may be pending on the Confirmation Date or that may be instituted
at any time by Liquidating Trust thereafter;
17. To hear and determine any disputes between the Liquidating Trustees and
Liquidating Trust or with respect to either of them;
18. To hear and determine matters concerning state, local and federal taxes
in accordance with Sections 346, 505 and 1146 of the Bankruptcy Code;
19. To approve the retention of professionals by Liquidating Trust and to
approve all requests for payment of fees and expenses by such professionals;
20. To hear any other matter as to which jurisdiction is not inconsistent
with the Bankruptcy Code; and
21. To enter a final decree or decrees closing the Reorganization Case.
XI. CONCLUSION
This Disclosure Statement is intended to assist each creditor in making an
informed decision regarding the acceptance of Debtor's Plan. If the Plan is
accepted, all creditors will be bound by its terms. You are, therefore, urged
to carefully review the statement and the enclosed copy of the Plan. If
questions remain after such review, you are urged to make further inquiries as
you may deem appropriate to counsel or other creditors.
<PAGE>
Dated: New Orleans, Louisiana
April ___, 1996
CRESCENT CITY CAPITAL
DEVELOPMENT CORPORATION
By: __________________________
Edward M. Tracy
President and CEO
BRONFIN & HELLER, L.L.C.
Counsel for Debtor
By: __________________________
Jan M. Hayden (La. Bar #6672)
Robyn J. Spalter (La. Bar #21116)
650 Poydras Street, Suite 2500
New Orleans, Louisiana 70130-6101
Tele: (504) 568-1888
ARTICLES OF INCORPORATION
OF
CRESCENT CITY CAPITAL DEVELOPMENT CORPORATION
We, the undersigned, each capable of contracting, for the purpose of
forming a corporation pursuant to Chapter 1 of Title 12 of the Louisiana
Revised Statutes, do hereby certify:
FIRST: The name of the corporation is Crescent City Capital
Development Corporation.
SECOND: The address (and zip code) of this corporation's
initial registered office is
8550 United Plaza Boulevard
Baton Rouge, Louisiana 70809
and the name of this corporation' s initial registered agent at such
address is
CT Corporation System
THIRD: The purposes for which this corporation is organized
are:
(a) To engage in any activity within the purposes for which corporations
may be organized under the Louisiana Business Corporation Law, including
without limitation, to license, construct, develop, own and operate a
riverboat casino in Orleans Parish, Louisiana.
(b) The foregoing and following clauses shall be construed as objects
and powers in furtherance and not in limitation of general powers conferred by
the laws of the State of Louisiana, and it is hereby expressly provided that
the foregoing and following enumeration of specific powers shall not be held
to limit or restrict in any manner the powers of this corporation and that
this corporation may do all and everything necessary,, suitable or proper for
the accomplishment of any of the purposes or objects hereinabove enumerated,
either alone or in association with other corporations, firms or individuals
to the same extent and as fully as individuals might or could do as
principals, agents, contractors or otherwise.
FOURTH: The duration of the corporation is perpetual.
FIFTH: The aggregate number of shares which the corporation
shall have authority to issue is Two Hundred (200) Shares, $.01 par
value.
SIXTH: The first Board of Directors of the corporation shall consist of
three (3) Directors and the name and post office address of each person who is
to serve as such a Director is as follows:
NAME ADDRESS
I.G. Davis, Jr. c/o Capital Gaming International, Inc.
Bayport One, Suite 250
8025 Black Horse Pike
West Atlantic City, NJ 08232
Edward M. Tracy c/o Capital Gaming International, Inc.
Bayport One, Suite 250
8025 Black Horse Pike
West Atlantic City, NJ 08232
Col. Clinton Pagano c/o Capital Gaming International, Inc.
Bayport One, Suite 250
8025 Black Horse Pike
West Atlantic City, NJ 08232
SEVENTH: The name and address of each incorporator is as
follows:
NAME ADDRESS
I.G. Davis, Jr. c/o Capital Gaming International, Inc.
Bayport One, Suite 250 8025 Black Horse Pike West
Atlantic City, NJ 08232
EIGHTH: Pursuant to the provisions of Section 24 of the Louisiana
Business Corporation Law, any director or officer of this corporation shall
not be personally liable to the corporation or its shareholders for damages
for breach of any duty owed to the corporation or its shareholders, except
that this provision shall not relieve a director or officer of liability for
any breach of duty based upon an act or omission (a) in breach of such
person's duty of loyalty to the corporation or its shareholders; (b) for any
action not taken in good faith, involving intentional misconduct or in knowing
violation of law; (c) amounting to an unlawful distribution or other violation
of R.S. 12:92(D); or (d) resulting in receipt by such person of an improper
personal benefit.
NINTH:
(a) Right to Indemnification. Each person who was or is made a party or
is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a
person of whom he or she is the legal representative, is or was a director or
officer of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation
or of a partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, whether the basis of such
proceeding is alleged action in an official capacity as a director, officer,
employee or agent or in any other capacity while serving as a director,
officer, employee or agent, shall be indemnified and held harmless by the
corporation to the fullest extent authorized by the Louisiana Business
Corporation Law, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification rights than said law permitted
the corporation to provide prior to such amendment) , against all expense,
liability and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of his or her heirs,
executors and administrators: provided, however, that, except as provided in
paragraph (b) hereof, the corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person only if such proceeding (or part thereof) was authorized by the
Board of Directors of the corporation. The right to indemnification conferred
in this Section shall be a contract right and shall include the right to be
paid by the corporation the expenses incurred in defending any such proceeding
in advance of its final disposition; provided, however, that, if the Louisiana
Business Corporation Law, the payment of such expenses incurred by a director
or officer in his or her capacity as a director or officer (and not in any
other capacity in which services were or are rendered by such person while a
director or officer, including, without limitation, service to any employee
benefit plan) in advance of the final disposition of a proceeding, shall be
made only upon delivery to the corporation of an undertaking, by or on behalf
of such director or officer, to repay all amounts so advanced if it shall
ultimately be determined that such director or officer is not entitled to be
indemnified under this Section or otherwise. The corporation may, by action
of its Board of Directors, provide indemnification to employees and agents of
the corporation with the same scope and effect as the foregoing
indemnification of directors and officers.
(b) Right of Claimant to Bring Suit. If a claim under paragraph (a) of
this Section is not paid in full by the corporation within thirty (30) days
after a written claim has been received by the corporation, the claimant may
at any time thereafter bring suit against the corporation to recover the
unpaid amount of the claim ' and, if successful, in whole or in part, the
claimant
shall be entitled to be paid also the expense of prosecuting such claim. It
shall be a defense to any such action (other than an action brought to enforce
a claim for expenses incurred in defending any proceeding in advance of its
final disposition where the required undertaking, if any is required, has been
tendered to the corporation) that the claimant has not met the standards of
conduct which make it permissible under the Louisiana Business Corporation Law
for the corporation to indemnify the claimant for the amount claimed, but the
burden of proving such defense shall be on the corporation. Neither the
failure of the corporation (including its Board of Directors, independent
legal counsel, or its shareholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he or she had met the applicable standard of conduct
set forth in the Louisiana Business Corporation Law, nor an actual
determination by the corporation (including the Board of Directors,
independent legal counsel, or its shareholders) that the claimant has not met
such applicable standard of conduct, shall be a defense to an action or create
a presumption that the claimant has not met the applicable standard of
conduct.
(c) Non-Exclusivity of Rights. The right to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Section shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
provision of the Articles of Incorporation, by-law, agreement, vote of
shareholders or disinterested directors or
otherwise.
(d) Insurance. The corporation may maintain insurance, at its expense,
to protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such
expense, liability or loss under the New Jersey Business Corporation Act.
TENTH: This corporation reserves the right to amend, alter, change or
repeal any provision contained in these articles in the manner now or
hereafter prescribed by statute, and all rights conferred upon shareholders
herein are granted subject to this reservation.
IN WITNESS WHEREOF, I the undersigned, capable of cont. Vacting, have
hereunto affixed my signature on this the 4th day of June 1993.
/s/ I.G. Davis, Jr.
I.G. Davis, Jr., Chairman and CEO
<PAGE>
STATE OF NEW JERSEY)
)
COUNTY OF MERCER )
BE IT KNOWN, That on this 4th day of the month of June, in the year of
our Lord, 1993, before me, the undersigned, a Notary Public in and for the
County and State aforesaid duly commissioned and qualified, there came and
appeared I.G. Davis, Jr., known to me, Notary, and known by me to be the
person whose name appears upon the foregoing instrument and said appearer
declared and acknowledged unto me, Notary, that he executed the said
instrument for the uses and purposes therein set forth and apparent.
IN WITNESS WHEREOF, said appearer has signed these presents, and I have
hereunto set my official hand and seal on the day and date first hereinabove
written.
(Notarial Seal)
/s/ L. Maria Vazquez
Notary Public
L. Maria Vazquez
A Notary Public of New Jersey
My Commission Expires Oct. 22, 1997
B Y - L A W S
of
CRESCENT CITY CAPITAL DEVELOPMENT CORPORATION
ARTICLE I - OFFICES
The registered office of the Corporation shall be located in such city as
the Board of Directors shall designate. The principal office of the
Corporation is in the City of West Atlantic City, County of Ocean, State of
New Jersey. The Board of Directors has full power and authority to change the
principal place of business at any time to another location within or outside
of the State of New Jersey. The Corporation may also have offices at such
other places within or without the State of New Jersey as the Board may from
time to time determine or the business of the Corporation may require.
ARTICLE II - SHAREHOLDERS
1. PLACE OF MEETINGS.
Meetings of shareholders shall be held at the principal office of the
Corporation or at such place within or without the State of New Jersey as the
Board shall authorize.
2. ANNUAL MEETING.
The annual meeting of the shareholders shall be held on the first Tuesday
of the fifth month following the close of the Corporation's fiscal year at
10:00 a.m. in each year if not a legal holiday; and if a legal holiday then on
the next business day following at the same hour, or at such other date and
time as may be fixed by the Board of Directors, when the shareholders shall
elect a Board and transact such other business as may properly come before the
meeting.
3. SPECIAL MEETINGS.
Special meetings of the shareholders may be called by the Board or by the
President and shall be called by the President or the Secretary at the request
in writing of a majority of the Board or at the request in writing by
shareholders owning a majority in amount of the shares issued and outstanding.
Such request shall state the purpose of purposes of the proposed meeting.
Business transacted at a special meeting shall be confined to the purposes
stated in the notice.
4. FIXING RECORD DATE.
For the purpose of determining the shareholders entitled to notice of or
to vote at any meeting of shareholders or any adjournment thereof, or to
express consent to or dissent from any proposal without a meeting, or for the
purpose of determining shareholders entitled to receive payment of any
dividend or the allotment of any rights, or for the purpose of any other
action the Board shall fix, in advance, a date as the record date for any such
determination of shareholders. Such date shall not be more than sixty (60)
nor less than ten (10) days before the date of such meeting, nor more than
sixty (60) days prior to any other action. If no record date is fixed, it
shall be determined in accordance with the provisions of law.
5. NOTICE OF MEETINGS OF SHAREHOLDERS.
Written notice of each meeting of shareholders shall
state the purpose or purposes for which the meeting is called, the place,
date, and hour of the meeting and, unless it is the annual meeting, shall
indicate that it is being issued by or at the direction of the person or
persons calling the meeting. Notice shall be given either personally or by
mail to each shareholder entitled to vote at such meeting, not less than ten
(10) nor more than sixty (60) days before the date of the meeting. If action
is proposed to be taken that might entitle the shareholders to payment for
their shares, the notice shall include a statement of that purpose and to that
effect. If mailed, the notice is given when deposited in the United States
mail, with postage thereon prepaid, directed to the shareholder at his address
as it appears on the record of shareholders, or, if he shall have filed with
the Secretary a written request that notices to him be mailed to some other
address, then directed to him at such other address.
6. WAIVERS.
Notice of meeting need not be given to any shareholder who signs a waiver
of notice, in person or by proxy, whether before or after the meeting. The
attendance of any shareholder at a meeting, in person or by proxy, without
protesting prior to the conclusion of the meeting the lack of notice of such
meeting, shall constitute a waiver of notice by him.
7. QUORUM OF SHAREHOLDERS.
Unless the Certificate of Incorporation provides otherwise, the holders of a
majority of the shares entitled to vote thereat shall constitute a quorum at a
meeting of shareholders for the transaction of any business, provided that
when a specified item of business is required to be voted on by a class or
classes, the holders of a majority of the shares of such class or classes
shall constitute a quorum for the transaction of such specified item of
business.
When a quorum is once present to organize a meeting, it is not broken by
the subsequent withdrawal of any shareholder.
The shareholders present may adjourn the meeting despite the absence of a
quorum.
8. PROXIES.
Every shareholder entitled to vote at a meeting of shareholders or to
express consent or dissent without a meeting may authorize another person or
persons to act for him by proxy.
Every proxy must be signed by the shareholder or his attorney-in-fact.
No proxy shall be valid after expiration of eleven months from the date
thereof unless otherwise provided in the proxy. Every proxy shall be
revocable at the pleasure of the shareholder executing it, except as otherwise
provided by law.
9. QUALIFICATION OF VOTERS.
Every shareholder of record shall be entitled at every meeting of
shareholders to one vote for every share standing in his name on the record of
shareholders, unless otherwise provided in the Certificate of Incorporation.
10. VOTE OF SHAREHOLDERS.
Except as otherwise required by statute or by the Certificate of
Incorporation:
(a) directors shall be elected by a plurality of the votes cast at a
meeting of shareholders by the holders of shares entitled to vote in the
election;
(b) all other corporate action shall be authorized by a majority of the
votes cast.
11. WRITTEN CONSENT OF SHAREHOLDERS.
Any action required or permitted to be taken at a meeting of shareholders
by statute, the certificate of incorporation, or by-laws other than the annual
election of directors may be taken without a meeting upon the written consent
of shareholders who would have been entitled to cast the minimum number of
votes which would be necessary to authorize such action at a meeting at which
all shareholders entitled to vote thereon were present and voting. The
written consents of the shareholders consenting thereto shall be filed with
the minutes of proceedings of shareholders.
ARTICLE III - DIRECTORS
1. BOARD OF DIRECTORS.
Subject to any provision in the Certificate of Incorporation the business
of the Corporation shall be managed by its Board of Directors, each of whom
shall be at least eighteen years of age and need not be shareholders.
2. NUMBER OF DIRECTORS.
The number of directors shall be not less than one (1) nor more than nine
(9). The number of directors shall be fixed by the Board from time to time.
3. ELECTION AND TERM OF DIRECTORS.
At each annual meeting of shareholders, the shareholders shall elect
directors to hold office until the next annual meeting. each director shall
hold office until the expiration of the term for which he is elected and until
his successor has been elected and qualified, or until his prior resignation
or removal.
4. NEWLY CREATED DIRECTORSHIPS AND VACANCIES.
Newly created directorships resulting from an increase in the number of
directors and vacancies occurring in the Board for any reason, except the
removal of directors without cause, may be filled by a vote of a majority of
the directors then in office, although less than a quorum exists. Vacancies
occurring by reason of the removal of directors without cause shall be filled
by vote of the shareholders. A director elected to fill a vacancy caused by
resignation, death, or removal shall be elected to hold office for the
unexpired term of his predecessor.
5. REMOVAL OF DIRECTORS.
Any or all of the directors may be removed for cause by vote of the
shareholders or by action of the Board. Directors may be removed without
cause only by vote of the shareholders.
6. RESIGNATION.
A director may resign at any time by giving written notice to the Board,
the President, or the Secretary of the Corporation. Unless otherwise
specified by the notice, the resignation shall take effect upon receipt
thereof by the Board or such officer, and the acceptance of the resignation
shall not be necessary to make it effective.
7. QUORUM OF DIRECTORS.
Unless otherwise provided in the Certificate of Incorporation, a majority
of the entire board shall constitute a quorum for the transaction of business
or of any specified item of business.
8. ACTION OF THE BOARD.
(a) Unless otherwise required by law, the vote of a majority of the
directors present at the time of the vote, if a quorum is present at such
time, shall be the act of the Board. Each director present shall have one
vote regardless of the number of shares, if any, which he may hold.
(b) Whenever any action is required or permitted to be taken by the
Board or any committee thereof, such action may be taken without a meeting if
all members of the Board or the committee consent in writing to the adoption
of a resolution authorizing the action. The resolution and the written
consent thereto by members of the Board or committee shall be filed with the
minutes of the proceedings of the Board or committee. Meetings may also be
held by conference telephone.
9. PLACE AND TIME OF BOARD MEETINGS; NOTICE; ADJOURNMENT.
(a) The Board may hold its meetings at the office of the corporation or
at such other places, either within or without the State of New Jersey, as it
may, from time to time, determine.
(b) A regular annual meeting of the Board shall be held immediately
following the annual meeting of shareholders at the place of such annual
meeting of shareholders.
(c) Regular meetings of the Board may be held without notice at such
time and place as it from time to time shall determine.
(d) Special meetings of the Board shall be held upon notice to the
directors and may be called by the President upon three days' notice to each
director either personally or by mail or by wire; special meetings shall be
called by the President or by the Secretary in a like manner on written
request of two directors. Notice of a meeting need not be given to any
director who submits a waiver of notice whether before or after the meeting or
who attends the meeting without protesting prior thereto or at its
commencement, the lack of notice to him.
(e) A majority of the directors present, whether or not a quorum is
present, may adjourn any meeting to another time and place. Notice of the
adjournment shall be given all directors who were absent at the time of the
adjournment and, unless such time and place are announced at the meeting, to
the other directors.
10. CHAIRMAN.
At all meetings of the Board the Chairman or, in his absence, the
President or, in his absence, Vice President or, in his absence, a chairman
chosen by the Board shall preside.
11. EXECUTIVE AND OTHER COMMITTEES.
The Board, by resolution adopted by a majority of the entire Board, may
designate from among its members an executive committee and other committees,
each consisting of three or more directors. Each such committee shall serve
at the pleasure of the Board.
12. COMPENSATION.
Directors shall be compensated for their services and reimbursed for
their expenses as employees, officers, directors, and members of Board or of
committees. The Board shall periodically determine a reasonable basis for
compensation, and a majority of the Board must adopt any resolution
determining compensation. The Board may, if it deems it appropriate, provide
for reduced or no additional compensation for Board members who are
compensated employees of the Corporation. In addition, directors by
resolution of the Board may authorize a fixed sum and expenses for actual
attendance at each regular and special meeting of the Board. Nothing herein
contained shall be construed to preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor.
ARTICLE IV - OFFICERS
1. OFFICES, ELECTION, TERM.
(a) The Board may elect or appoint a Chairman of the Board, a President,
one or more Vice-Presidents, a Secretary, and a Treasurer, and such other
officers as it may determine, who shall have such duties, powers, and
functions as hereinafter provided.
(b) All officers shall be elected or appointed to hold office until the
meeting of the Board following the annual meeting of shareholders.
(c) Each officer shall hold office for the term for which he is elected
or appointed and until his successor has been elected or appointed and
qualified.
2. REMOVAL, RESIGNATION, SALARY.
(a) Any officer elected or appointed by the Board may be removed by the
Board with or without cause.
(b) In the event of the death, resignation, or removal of an officer,
the Board in its discretion may elect or appoint a successor to fill the
unexpired term.
(c) Any two or more offices may be held by the same person, except the
offices of President and Secretary.
(d) The salaries of all officers shall be fixed by the Board.
(e) The directors may require any officer to give security for the
faithful performance of his duties.
3. CHAIRMAN OF THE BOARD.
The Chairman of the Board shall preside at all meetings of the
shareholders and of the Board and shall see that all orders and resolutions of
the Board are carried into effect. The Board may designate the Chairman chief
executive officer of the Corporation.
4. PRESIDENT.
The President shall be the chief operating officer of the Corporation and
shall have the management of the operations of the Corporation. If there be
no Chairman of the Board, the President shall perform the duties of the
Chairman of the Board.
5. VICE-PRESIDENTS.
During the absence or disability of the President, the Vice President or,
if there are more than one, the Executive Vice President, shall have all the
powers and functions of the President. Each Vice President shall perform such
other duties as the Board shall prescribe.
6. SECRETARY.
The Secretary shall:
(a) attend all meetings of the Board and of the shareholders;
(b) record all votes and minutes of all proceedings in a book to be kept
for that purpose;
(c) give or cause to be given notice of all meetings of shareholders and
of special meetings of the Board;
(d) keep in safe custody the seal of the Corporation and affix it to any
instrument when authorized by the Board;
(e) when required, prepare or cause to be prepared and available at each
meeting of shareholders a certified list in alphabetical order of the names of
the shareholders entitled to vote thereat, indicating the number of shares of
each respective class held by each;
(f) keep all the documents and records of the Corporation as required by
law or otherwise in a proper and safe manner;
(g) perform such other duties as may be prescribed by the Board.
7. ASSISTANT SECRETARIES.
During the absence or disability of the Secretary, the Assistant
Secretary or, if there are more than one, the one so designated by the
Secretary or the Board, shall have all the powers and functions of the
Secretary.
8. TREASURER.
The Treasurer shall:
(a) have the custody of the corporate funds and securities;
(b) keep full and accurate accounts of receipts and disbursements in the
corporate books;
(c) deposit all money and other valuables in the name and to the credit
of the Corporation in such depositories as may be designated by the Board;
(d) disburse the funds of the Corporation as may be ordered or
authorized by the Board and preserve proper vouchers for such disbursements;
(e) render to the President and Board at the regular meetings of the
Board, or whenever they require it, an account of all his transactions as
Treasurer and of the financial condition of the Corporation;
(f) render a full financial report at the annual meeting of the
shareholders if so requested;
(g) be furnished by all corporate officers and agents, at his request,
with such reports and statements as he may require as to all financial
transactions of the Corporation;
(h) perform such other duties as are given to him by these by-laws or as
from time to time are assigned to him by the Board or the President.
9. ASSISTANT TREASURER.
During the absence or disability of the Treasurer, the Assistant
Treasurer or, if there are more than one, the one so designated by the
Treasurer or by the Board, shall have all the powers and functions of the
Treasurer.
10. SURETIES AND BONDS.
In case the Board shall so require, any officer or agent of the
Corporation shall execute to the Corporation a bond in such sum and with such
surety or sureties as the Board may direct, conditioned upon the faithful
performance of his duties to the Corporation and including responsibility for
negligence and for the accounting for all property, funds, or securities of
the Corporation which may come into his hands.
ARTICLE V - CERTIFICATES FOR SHARES
1. CERTIFICATES.
The shares of the Corporation shall be represented by certificates. They
shall be numbered and entered in the books of the Corporation as they are
issued. They shall exhibit the holder's name and the number of shares and
shall be signed by the President or a Vice President and the Treasurer or the
Secretary, and shall bear the corporate seal.
2. LOST OR DESTROYED CERTIFICATES.
The Board may direct a new certificate or certificates to be issued in
place of any certificate or certificates theretofore issued by the
Corporation, alleged to have been lost or destroyed, upon the making of an
affidavit of that fact by the person claiming the certificate to be lost or
destroyed. When authorizing such issue of a new certificate or certificates,
the Board may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost or destroyed certificate or
certificates, or his legal representative, to advertise the same in such
manner as it shall require and/or give the Corporation a bond in such sum and
with such surety or sureties as it may direct as indemnity against any claim
that may be made against the Corporation with respect to the certificate
alleged to have been lost or destroyed.
3. TRANSFERS OF SHARES.
(a) Upon surrender to the Corporation or the transfer agent of the
Corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment, or authority to transfer, it shall be the
duty of the Corporation to issue a new certificate to the person entitled
thereto, and cancel the old certificate; every such transfer shall be entered
on the transfer book of the Corporation which shall be kept at its principal
office. No transfer shall be made within ten days next preceding the annual
meeting of shareholders.
(b) The Corporation shall be entitled to treat the holder of record of
any share as the holder in fact thereof and, accordingly, shall not be bound
to recognize any equitable or other claim to or interest in such share on the
part of any other person, whether or not it shall have express or other notice
thereof, except as expressly provided by the laws of the State of New Jersey.
4. CLOSING TRANSFER BOOKS.
The Board shall have the power to close the share transfer books of the
Corporation for a period of not more than ten days during the thirty day
period immediately preceding (i) any shareholders' meeting, or (ii) any date
upon which shareholders shall be called upon to or have a right to take action
without a meeting, or (iii) any date fixed for the payment of a dividend or
any other form of distribution, and only those shareholders of record at the
time the transfer books are closed shall be recognized as such for the purpose
of (A) receiving notice of or voting at such meeting, or (B) allowing them to
take appropriate action, or (C) entitling them to receive any dividend or
other form of distribution.
ARTICLE VI - DIVIDENDS
Subject to the provisions of the Certificate of Incorporation and to
applicable law, dividends on the outstanding shares of the Corporation may be
declared in such amounts and at such time or times as the Board may determine.
Before payment of any dividend, there may be set aside out of the net profits
of the Corporation available for dividends such sum or sums as the Board, from
time to time, in its absolute discretion deems proper as a reserve fund to
meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation, or for such other purpose as the
Board shall think conducive to the interests of the Corporation, and the Board
may modify or abolish any such reserve.
ARTICLE VII - CORPORATE SEAL
The seal of the Corporation shall be circular in form and bear the name
of the Corporation, the year of its organization, and the words "Corporate
Seal, Louisiana." The seal may be used by causing it to be impressed directly
on the instrument or writing to be sealed, or upon adhesive substance affixed
thereto. The seal on the certificate for shares or upon any corporate
obligation for the payment of money may be a facsimile, engraved or printed.
ARTICLE VIII - EXECUTION OF INSTRUMENTS
All corporate instruments and documents shall be signed or countersigned,
executed, verified, or acknowledged by such officer or officers or other
person or persons as the Board may from time to time designate.
ARTICLE IX - FISCAL YEAR
The fiscal year shall begin on the first day of January in each year or
at such other time as may be designated by the Board of Directors.
ARTICLE X - REFERENCES TO CERTIFICATE OF INCORPORATION
Reference to the Certificate of Incorporation in these by-laws shall
include all amendments thereto or changes thereof unless specifically
excepted.
ARTICLE XI - BY-LAW CHANGES
AMENDMENT, REPEAL, ADOPTION, ELECTION OF DIRECTORS.
(a) Except as otherwise provided in the Certificate of Incorporation,
the by-laws may be amended, repealed, or adopted by vote of the holders of the
shares at the time entitled to vote in the election of any directors. By-laws
may also by amended, repealed, or adopted by the Board; but any by-law adopted
by the Board may be amended by the shareholders entitled to vote thereon as
hereinabove provided.
(b) If any by-law regulating an impending election of directors is
adopted, amended, or repealed by the Board, there shall be set forth in the
notice of the next meeting of shareholders for the election of directors the
by-law so adopted, amended, or repealed, together with a concise statement of
the changes made.
ARTICLE XII - INDEMNIFICATION
The directors, officers, employees and agents of the Corporation shall be
indemnified to the fullest extent permitted by the Business Corporation Law of
the State of Louisiana.
_________________________________________________________________
CASINO MAGIC OF LOUISIANA, CORP.
Issuer
and
THE GUARANTORS NAMED HEREIN
and
FIRST TRUST NATIONAL ASSOCIATION
Trustee
________________________
INDENTURE
Dated as of May 13, 1996
________________________
$35,000,000
11 1/2% Senior Secured Notes due 1999
_________________________________________________________________
<PAGE>
Reconciliation and Tie between Trust Indenture
Act of 1939 and Indenture dated as of May 13, 1996
TRUST INDENTURE ACT SECTION INDENTURE SECTION
S 310(a)(1)..............................................................7.10
(a)(2)..............................................................7.10
(a)(3)..............................................................N.A.
(a)(4)..............................................................N.A.
(a)(5)..............................................................7.10
(b)......................................................7.8; 7.10; 13.2
(c).................................................................N.A.
S 311(a).................................................................7.11
(b).................................................................7.11
(c).................................................................N.A.
S 312(a)..................................................................2.5
(b).................................................................13.3
(c).................................................................13.3
S 313(a)..................................................................7.6
(b)(1)..............................................................N.A.
(b)(2)...............................................................7.6
(c)............................................................7.6; 13.2
(d)..................................................................7.6
S 314(a)............................................................5.8; 13.1
(b)..................................................................4.2
(c)(1)....................................................2.2; 7.2; 13.4
(c)(2).........................................................7.2; 13.4
(c)(3)...............................................................4.2
(d)..................................................................4.2
(e).................................................................13.5
(f).................................................................N.A.
S 315(a)..................................................................7.1
(b).......................................................7.5; 7.6; 13.2
(c)...............................................................7.1(a)
(d).......................................................2.8; 6.12; 7.1
(e).................................................................6.14
S 316(a)(last sentence)...................................................2.9
(a)(1)(A)...........................................................6.12
(a)(1)(B)...........................................................6.13
(a)(2)..............................................................N.A.
(b)............................................................6.13; 6.8
(c).................................................................Note
S 317(a)(1)...............................................................6.3
(a)(2)...............................................................6.4
(b)..................................................................2.4
S 318(a).................................................................13.1
_______________
This Reconciliation and Tie shall not, for any purpose, be deemed to be a part
of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
Article I. DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions...................................................1
Section 1.2. Incorporation by Reference of TIA............................24
Section 1.3. Rules of Construction........................................24
Article II. THE NOTES
Section 2.1. Form and Dating..............................................25
Section 2.2. Execution and Authentication.................................25
Section 2.3. Registrar and Paying Agent...................................26
Section 2.4. Paying Agent to Hold Assets in Trust.........................27
Section 2.5. Noteholder Lists.............................................27
Section 2.6. Transfer and Exchange........................................28
Section 2.7. Replacement Notes............................................28
Section 2.8. Outstanding Notes............................................29
Section 2.9. Treasury Notes...............................................29
Section 2.10. Temporary Notes.............................................29
Section 2.11. Cancellation................................................30
Section 2.12. Defaulted Interest..........................................30
Article III. MANDATORY REDUCTION; REDEMPTION
Section 3.1. Mandatory Principal Reduction with Excess Cash Flow..........31
Section 3.2. Optional Redemption..........................................32
Section 3.3. Election to Redeem; Notices to Trustee.......................32
Section 3.4. Selection by Trustee of Notes to be Redeemed.................32
Section 3.5. Notice of Redemption.........................................33
Section 3.6. Effect of Notice of Redemption...............................34
Section 3.7. Deposit of Redemption Price..................................34
Section 3.8. Notes Redeemed in Part.......................................35
Section 3.9. Redemption Pursuant to Gaming Laws...........................35
Article IV. SECURITY
Section 4.1. Security Interest............................................35
Section 4.2. Recording; Opinions of Counsel...............................36
Section 4.3. Disposition of Certain Collateral............................37
Section 4.4. Substitution of Collateral...................................39
Section 4.5. Release Date; Releases of Collateral.........................41
Section 4.6. Certain Other Releases of Collateral.........................42
Section 4.7. Payment of Expenses..........................................42
Section 4.8. Suits to Protect the Collateral..............................42
Section 4.9. Trustee's Duties.............................................43
Article V. COVENANTS
Section 5.1. Payment of Notes.............................................44
Section 5.2. Maintenance of Office or Agency..............................44
Section 5.3. Limitation on Restricted Payments............................45
Section 5.4. Corporate Existence..........................................45
Section 5.5. Payment of Taxes and Other Claims............................45
Section 5.6. Maintenance of Insurance.....................................46
Section 5.7. Compliance Certificate: Notice of Default....................46
Section 5.8. Reports......................................................47
Section 5.9. Waiver of Stay, Extension or Usury Laws......................47
Section 5.10. Limitation on Transactions with Affiliates..................48
Section 5.11. Limitation on Incurrence of Additional Indebtedness and
Disqualified Capital Stock..................................49
Section 5.12. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries......................................50
Section 5.13. Limitation on Liens.........................................51
Section 5.14. Limitation on Lines of Business.............................52
Section 5.15. Limitation on Status as Investment Company..................52
Section 5.16. Restrictions on Sale and Issuance of Stock. Prior to the
Release Date:...............................................52
Section 5.17. Restrictions on Subsidiaries................................52
Section 5.18. Restrictions on Investments.................................52
Section 5.19. Restrictions on Capital Expenditures........................52
Section 5.20. Limitation on Sales of Assets and Subsidiary Stock..........53
Section 5.21. Limitation on Merger, Sale or Consolidation.................54
Section 5.22. Maintenance of Business.....................................54
Article VI. EVENTS OF DEFAULT AND REMEDIES
Section 6.1. Events of Default............................................55
Section 6.2. Rescission and Annulment.....................................59
Section 6.3. Collection of Indebtedness and Suits for Enforcement by
Trustee......................................................60
Section 6.4. Trustee May File Proofs of Claim.............................60
Section 6.5. Trustee May Enforce Claims Without Possession of Notes.......61
Section 6.6. Priorities...................................................62
Section 6.7. Limitation on Suits..........................................62
Section 6.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest.........................................63
Section 6.9. Rights and Remedies Cumulative...............................64
Section 6.10. Delay or Omission Not Waiver................................64
Section 6.11. Control by Holders..........................................64
Section 6.12. Waiver of Past Default......................................65
Section 6.13. Undertaking for Costs.......................................65
Section 6.14. Restoration of Rights and Remedies..........................66
Section 6.15. Cash Proceeds from Collateral...............................66
Article VII. TRUSTEE
Section 7.1. Duties of Trustee........................................... 66
Section 7.2. Rights of Trustee............................................68
Section 7.3. Individual Rights of Trustee.................................69
Section 7.4. Trustee's Disclaimer.........................................69
Section 7.5. Notice of Default............................................70
Section 7.6. Reports by Trustee to Holders................................70
Section 7.7. Compensation and Indemnity...................................70
Section 7.8. Replacement of Trustee.......................................71
Section 7.9. Successor Trustee by Merger, Etc.............................73
Section 7.10. Eligibility; Disqualification...............................73
Section 7.11. Preferential Collection of Claims Against Company...........73
Article VIII. TERMINATION AND DISCHARGE
Section 8.1. Termination of Obligations Upon Cancellation of the Notes....73
Section 8.2. Survival of Certain Obligations..............................74
Section 8.3. Acknowledgment of Discharge by Trustee.......................74
Section 8.4. Reinstatement................................................75
Article IX. AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1. Supplemental Indentures Without Consent of Holders...........75
Section 9.2. Amendments, Supplemental Indentures and Waivers with
Consent of Holders...........................................76
Section 9.3. Compliance with TIA..........................................78
Section 9.4. Revocation and Effect of Consents............................78
Section 9.5. Notation on or Exchange of Notes.............................79
Section 9.6. Trustee to Sign Amendments, Etc..............................79
Article X. MEETINGS OF NOTEHOLDERS
Section 10.1. Purposes for Which Meetings May Be Called...................80
Section 10.2. Manner of Calling Meetings..................................80
Section 10.3. Call of Meetings by Company or Holders......................81
Section 10.4. Who May Attend and Vote at Meetings.........................81
Section 10.5. Regulations May Be Made by Trustee; Conduct of the
Meeting; Voting Rights; Adjournment.........................82
Section 10.6. Voting at the Meeting and Record to Be Kept.................83
Section 10.7. Exercise of Rights of Trustee or Noteholders May Not Be
Hindered or Delayed by Call of Meeting......................83
Article XI. APPLICATION OF TRUST MONEYS
Section 11.1. "Trust Moneys" Defined......................................84
Section 11.2. Withdrawals of Net Awards...................................86
Section 11.3. Withdrawal of Boat Conveyance Proceeds For Purchase or
Qualified Lessee Lease of Substitute Boat...................90
Section 11.4. Withdrawal of Boat Conveyance Proceeds For Construction of
Qualified Substitute Boat or for Capital Expenditures on
such Qualified Substitute Boat..............................94
Section 11.5. Investment of Trust Moneys.................................101
Article XII. GUARANTY
Section 12.1. Guaranty...................................................101
Section 12.2. Certain Bankruptcy Events..................................103
Article XIII. MISCELLANEOUS
Section 13.1. TIA Controls...............................................104
Section 13.2. Notices....................................................104
Section 13.3. Communications by Holders with Other Holders...............105
Section 13.4. Certificate and Opinion as to Conditions Precedent.........105
Section 13.5. Statements Required in Certificate or Opinion..............106
Section 13.6. Rules by Trustee, Paying Agent, Registrar..................106
Section 13.7. Legal Holidays.............................................106
Section 13.8. Governing Law..............................................107
Section 13.9. No Adverse Interpretation of Other Agreements..............107
Section 13.10. No Recourse against Others................................107
Section 13.11. Successors................................................108
Section 13.12. Duplicate Originals.......................................108
Section 13.13. Severability..............................................108
Section 13.14. Table of Contents, Headings, Etc..........................108
EXHIBITS
Exhibit A -- Form of Note
Exhibit B -- Form of Guaranty
Exhibit C -- Tax Sharing Treaty
Exhibit D -- JCC Real Property Description
Exhibit E -- JCC Indebtedness
INDENTURE, dated as of May 13, 1996, between Casino Magic of Louisiana,
Corp., a Louisiana corporation (the "Company"), the Guarantors referred to
below and First Trust National Association, as Trustee.
Each party hereto agrees as follows for the benefit of each other party
and for the equal and ratable benefit of the Holders of the Company's 11 1/2%
Senior Secured Notes due 1999:
Article I.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. DEFINITIONS.
"ACCELERATION NOTICE" shall have the meaning specified in Section 6.1.
"ADJUSTED RENT OBLIGATIONS" means the obligations of the Company to the lessor
under a Qualified Lessee Lease which would be in the nature of "basic rent" or
"fixed rent" under a "triple net" lease of Property, which obligations in any
event shall not include any amount attributable to the operating expenses of
or payment of taxes or insurance on such Substitute Boat subject to such
lease.
"ADVERSE STATE ACTION" means any administrative, regulatory or judicial act or
action of a Governmental Authority of the State of Louisiana the effect of
which is to prohibit, or to upon effectiveness prohibit, or to restrict, or to
upon effectiveness restrict, the ability of the Company to conduct the
business of operating a riverboat casino in Bossier City, Louisiana.
"AFFILIATE" means (i) any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, any
of the Guarantors or any of their respective Subsidiaries, (ii) any spouse,
immediate family member, or other relative who has the same principal
residence of any person described in clause (i) above, and (iii) any trust in
which any person described in clause (i) or (ii) above has a beneficial
interest. For purposes of this definition, the term "control" means (a) the
power to direct the management and policies of a person, directly or through
one or more intermediaries, whether through the ownership of voting
securities, by contract, or otherwise, or (b) the beneficial ownership of 10%
or more of any class of voting Capital Stock of a person (on a fully diluted
basis) or of warrants or other rights to acquire such class of Capital Stock
(whether or not presently exercisable).
"AFFILIATE CONVEYANCE" shall have the meaning specified in Section 5.10.
"AFFILIATE TRANSACTION" shall have the meaning specified in Section 5.10.
"AGENT" means any Registrar, Paying Agent or co-Registrar.
"AGGREGATE EXCESS CASH FLOW" has the meaning set forth in Section 3.1 hereof.
"ARCHITECT'S CERTIFICATE" means a certificate of an independent, reputable
architect or engineer, licensed in the state in which the applicable Property
is located and experienced in the design, construction and operation of the
type of the applicable Property.
"ASSET SALE" shall have the meaning specified in Section 5.20.
"AVERAGE LIFE" means, as of the date of determination, with respect to any
security or instrument, the quotient obtained by dividing (i) the sum of the
products of the number of years from the date of determination to the dates of
each successive scheduled principal (or redemption) payment of such security
or instrument multiplied by the amount of such principal (or redemption)
payment by (ii) the sum of all such principal (or redemption) payments.
"BASIC SUB-ACCOUNT" shall have the meaning provided in Section 11.1.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar Federal, state or
foreign law for the relief of debtors.
"BOARD OF DIRECTORS" means, with respect to any person, the Board of Directors
of such person or any committee of the Board of Directors of such person
authorized, with respect to any particular matter, to exercise the power of
the Board of Directors of such person.
"BOAT CONVEYANCE PROCEEDS" means Cash received by the Company (i) as
consideration for the sale by the Company of the Crescent City Queen Casino,
or (ii) as rents, profits, or any other proceeds of a Qualified Lessor Lease.
"BOAT CONVEYANCE PROCEEDS SUB-ACCOUNT" shall have the meaning provided in
Section 11.1.
"BOARD RESOLUTION" means, with respect to any person, a duly adopted
resolution of the Board of Directors of such person.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
"CAPITAL EXPENDITURES" means all expenditures, except interest capitalized
during construction, which, in accordance with GAAP, are required to be
included in Property, plant and equipment or similar fixed asset account.
"CAPITAL STOCK" means, with respect to any corporation, any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests (however designated) in stock issued by that
corporation.
"CAPITALIZED LEASE OBLIGATION" means obligations under a lease, entered into
on or after the Issue Date, that are required to be capitalized for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented as such obligations shall be the capitalized amount of such
obligations, as determined in accordance with GAAP.
"CASH" means U.S. Legal Tender or U.S. Government Obligations.
"CASH EQUIVALENT" means (i) securities issued or directly and fully guaranteed
or insured by the United States of America or any agency or instrumentality
thereof (provided that good full faith and credit of the United States of
America is pledged in support thereof), (ii) time deposits and certificates of
deposit of banks doing business in the States of Louisiana and Minnesota which
are not Affiliated with the Company, (iii) time deposits and certificates of
deposit of banks, and commercial paper issued by the parent corporation of any
domestic commercial bank, of recognized standing having capital and surplus in
excess of $500,000,000, and commercial paper issued by others rated at least
A-2 or the equivalent thereof by Standard & Poor's Corporation or at least P-2
or the equivalent thereof by Moody's Investors Service, Inc. and in each case
maturing within one year after the date of acquisition, (iv) investments in
money market funds substantially all of whose assets comprise securities of
the types described in clauses (i) and (iii) above, and (v) bank accounts
maintained by the Grantor or a Guarantor in the ordinary course of its
business.
"CMLI MORTGAGE" means the Mortgage, Assignment of Leases and Rents, and
Security Agreement Securing Future Advances dated as of May 13, 1996 by C-M of
Louisiana, Inc., a Louisiana corporation (n/k/a JCC) to the Trustee, as the
same may be amended from time to time.
"CMLI REAL PROPERTY" means the real Property owned by CMLI in Bossier Parish,
Louisiana, described in EXHIBIT D hereto, and all improvements to such real
Property existing on or after May 13, 1996.
"COLLATERAL" means, subject to Section 4.5 hereof, the Property and assets of
the Company and the Property and assets of the Guarantors which are subject to
the Liens created by the Collateral Documents, including, but not limited to,
the Crescent City Queen Casino, any Qualified Substitute Boat or Substitute
Boat, in each case owned by the Company, each Qualified Lessor Lease and
Qualified Lessee Lease, the Boat Conveyance Proceeds, all other Property of
the Company owned as of the Issue Date or thereafter acquired (other than (i)
certain Cash of the Company arising from the gaming operations (or operations
incidental or ancillary thereto) of the Company conducted in the ordinary
course of business, including, without limitation, the sale of inventory and
provision of services in the ordinary course of the Company's gaming business,
(ii) Cash of JCC received from Parent Equity Contributions or as proceeds of
Indebtedness which JCC may incur under clause (g) of Section 5.11 hereof, and
(iii) furniture, fixtures and equipment of the Company (except furniture,
fixtures and equipment which the Company acquires after May 13, 1996 (other
than that acquired pursuant to Permitted FF&E Financing)), the CMLI Real
Property, all the issued Capital Stock of the Company and all other real and
personal Property of the Guarantors owned as of May 13, 1996 or thereafter
acquired.
"COLLATERAL ACCOUNT" shall have the meaning provided in Section 11.1.
"COLLATERAL DOCUMENTS" means, collectively, the Security Agreement, the
Mortgage, any Other Boat Mortgage, the JCC Mortgage, all agreements relating
to the Collateral Account, and all other security agreements, mortgages, deeds
of trust, assignments of leases and rents, pledges, collateral assignments or
any other instruments evidencing or creating any security interest in favor of
the Trustee for the benefit of the Holders in all or any portion of the
Property of the Company or any Guarantor, as the same may be modified, amended
or supplemented from time to time.
"COMMENCEMENT DATE" means the earlier of (i) the date that is 180 days after
May 13, 1996 and (ii) the date on which the Company opens a riverboat casino
for public gaming play in Bossier City, Louisiana.
"COMPANY" means the party named as such in this Indenture until a successor
replaces it pursuant to the Indenture and thereafter means such successor.
"COMPANY CASH FLOW" means, for any period, the Net Income of the Company for
such period adjusted to add thereto, without duplication, the sum of (i)
Depreciation and Amortization of the Company for such period, (ii) Fixed
Charges, which reduced Net Income, of the Company for such period, and (iii)
all cash Income Tax Credit of the Company for such period, and adjusted to
subtract therefrom, all cash Income Tax Expense of the Company for such
period.
"COMPANY COLLATERAL SUB-ACCOUNT" shall have the meaning provided in Section
11.1.
"COMPANY ORDER" means a written order or request signed in the name of the
Company by its President or a Vice President, and by its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to
the Trustee.
"COMPANY PAYMENT SUB-ACCOUNT" shall have the meaning provided in Section 11.1.
"CONSULTING PROFESSIONAL" means a construction manager or consultant
experienced in the gaming business, engaged by the Trustee unless otherwise
instructed by Holders holding a majority in principal amount of the Notes
outstanding at the time of selection.
"CRESCENT CITY QUEEN CASINO" means the New Orleans Riverboat Casino known as
the M/V Crescent City Queen with respect to which the Company has a Louisiana
Gaming Operator's License.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator, sequestrator or
similar official under any Bankruptcy.
"DEFAULT" means any event which is, or after notice or passage of time or both
would be, an Event of Default.
"DEFINITIVE GAMING OPERATOR'S LICENSE" means a Louisiana Gaming Operator's
License issued to the Company and with respect to which no condition or other
requirement of any Gaming Law or Gaming Authority to the validity or
effectiveness of such license or to the ability of the Company to conduct
gaming operations on and operate the New Orleans Riverboat, remains
unfulfilled.
"DEPRECIATION AND AMORTIZATION" for any person means the total depreciation
and amortization for such person and its Subsidiaries, as determined in
accordance with GAAP.
"DISQUALIFIED CAPITAL STOCK" means, with respect to any person, any Capital
Stock other than any common stock with no special rights and no preference,
privilege or redemption or repayment provisions.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor statute.
"ESTIMATE" has the meaning assigned to such term in the Collateral Documents.
"EVENT OF DEFAULT" shall have the meaning specified in Section 7.1.
"EVENT OF LOSS" means, with respect to any Property or asset, any (i) loss,
destruction or damage of such Property or asset, or (ii) any actual
condemnation, seizure or taking, by exercise of the power of eminent domain or
otherwise, of such Property or asset, or confiscation or requisition of the
use of such Property or asset.
"EXCESS CASH FLOW" means for any fiscal quarter or portion thereof, the amount
of the sum of (x) Company Cash Flow (if greater than zero) for such period
plus (but not reduced by) (y) Guarantor Cash Flow for such period less the sum
of (i) the Cash Fixed Charges, which reduced Net Income, of the Company for
such period (but only to the extent such Fixed Charges were not funded by
Collateral), (ii) regularly scheduled principal payments on the Notes (but not
payments of Excess Cash Flow) during such period, (iii) scheduled principal
payments on assumed Existing FF&E Indebtedness and (iv) the cash interest
expense of the Guarantors in respect of Indebtedness, all of the proceeds of
which have been used to make Permitted Capital Expenditures in respect of the
CMLI Real Property (but only to the extent such expense was not funded by
Collateral), for such period, that exceeds the sum of (a) Permitted Capital
Expenditures other than Capital Expenditures funded with Collateral or with a
Parent Equity Contribution (but only to the extent of such Collateral or
Parent Equity Contribution), and (b) an amount which for any fiscal quarter
shall be in the sole discretion of the Company but which may not for all
fiscal quarters of the Company exceed $5 million (less the aggregate amount of
any indemnity or other liabilities arising out of a Qualified Sale or
Qualified Lessor Lease which have been claimed during or prior to such period
under such Qualified Sale or Qualified Lessor Lease, but only to the extent
such indemnity or liability has reduced Net Income) in the aggregate.
"EXCESS CASH REDEMPTION AMOUNT" for any Interest Payment Date means the amount
of the Aggregate Excess Cash Flow to be paid to the Holders on such Interest
Payment Date in reduction of the outstanding principal amount of the Notes
pursuant to Section 3.1 hereof TIMES a fraction, the numerator of which is 100
and the denominator of which is the sum of (i) 100 plus (ii) the Excess Cash
Redemption Premium for such Interest Payment Date.
"EXCESS CASH REDEMPTION PREMIUM" means (i) on any Interest Payment Date
occurring on or before the first anniversary of the Commencement Date, zero,
(ii) on any Interest Payment Date occurring on or after the first anniversary
of the Commencement Date but on or before the second anniversary of the
Commencement Date, ten percent (10%) TIMES a fraction, the numerator of which
is the amount of calendar days having elapsed from and including the day after
the first anniversary of the Commencement Date to and including such Interest
Payment Date, and the denominator of which is three hundred and sixty-five
(365), and (iii) on any Interest Payment Date occurring after the second
anniversary of the Commencement Date but before the third anniversary of the
Commencement Date, twenty percent (20%) TIMES a fraction, the numerator of
which is the amount of calendar days having elapsed from and including the day
after the second anniversary of the Commencement Date to and including such
Interest Payment Date, and the denominator of which is three hundred and
sixty-four (364).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated by the SEC thereunder.
"EXISTING FF&E FINANCING" means all Indebtedness arising out of the assumption
of all claims of Bally Gaming, Inc. and International Game Technology Corp. or
their respective successors, assigns, affiliates or agents pursuant to the
Stock Purchase Agreement.
"FIXED CHARGES" of any person means, for any period, the aggregate amount
(without duplication) of (a) interest expensed or capitalized, paid, accrued,
or scheduled to be paid or accrued in accordance with GAAP (including, in
accordance with the following sentence, interest attributable to Capitalized
Lease Obligations) during such period in respect of all Indebtedness of such
person and its Subsidiaries, including (i) original issue discount and non-
cash interest payments or accruals on any Indebtedness other than with respect
to the Notes, (ii) the interest portion of all deferred payment obligations,
calculated in accordance with GAAP, (iii) all commissions, discounts and other
fees and charges owed with respect to bankers' acceptance financings and
currency and Interest Swap Obligations, in each case to the extent
attributable to such period and determined on a consolidated basis in
accordance with GAAP, and (b) the rental expense for such period attributable
to operating leases of such person and its Subsidiaries. For purposes of this
definition, (x) interest on a Capitalized Lease Obligation shall be deemed to
accrue at an interest rate reasonably determined by the Company to be the rate
of interest implicit in such Capitalized Lease Obligation in accordance with
GAAP and (y) interest expense attributable to any Indebtedness represented by
the guaranty by such person or a Subsidiary of such person of an obligation of
another person shall be deemed to be the interest expense attributable to the
Indebtedness guaranteed.
"GAAP" means United States generally accepted accounting principles as in
effect on the Issue Date.
"GAMING AUTHORITY" means any Governmental Authority with the power to regulate
gaming in any Gaming Jurisdiction, and the corresponding Governmental
Authorities with responsibility to interpret and enforce the laws and
regulations application to gaming in any Gaming Jurisdiction.
"GAMING JURISDICTION" means any Federal, state, tribal or local jurisdiction
or sovereign nation in which any entity in which the Company has a direct or
indirect beneficial, legal or voting interest conducts or intends to conduct
casino gaming (including the rendering of management services in respect
thereof pursuant to a Native American Casino Management Contract or
otherwise).
"GAMING LAW" means any law, rule, regulation or ordinance governing gaming
activities, including the Louisiana Economic Development and Riverboat Gaming
Control Act and the Indian Gaming Regulatory Act, 25 U.S.C. Sec. 2701 et seq.,
any administrative rules or regulations promulgated thereunder, and any of the
corresponding statutes, rules and regulations in each Gaming Jurisdiction.
"GAMING LICENSES" means every material license, material franchise or other
material authorization on the date of the Indenture or thereafter required to
own, lease, operate or otherwise conduct or manage riverboat, dockside or
land-based gaming in any Gaming Jurisdiction, and applicable liquor licenses.
"GOVERNMENTAL AUTHORITY" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States or a tribal or foreign government, any sovereign nation
where the Company or any Guarantor conducts business (including the rendering
of management services in respect thereof pursuant to a Native American Casino
Management Contract or otherwise), any state, province or any city or other
political subdivision or otherwise and whether now or hereafter in existence,
or any officer or official thereof, and any maritime authority.
"GUARANTORS" means JCC and any other person who executes and delivers a
Guaranty on or after the date hereof.
"GUARANTOR CASH FLOW" means, for any period, sixty percent (60%) of the amount
of the Net Income for such period, or forty percent (40%) of the amount of the
Net Loss for such period, of the Guarantors from the JCC Real Property
adjusted to add to such Net Income, without duplication, the sum of (i)
Depreciation and Amortization expense of the Guarantors and (ii) Fixed Charges
of the Guarantors.
"GUARANTOR COLLATERAL SUB-ACCOUNT" shall have the meaning provided in Section
11.1.
"GUARANTY" shall have the meaning provided in Section 12.1(a).
"HOLDER" or "NOTEHOLDER" means the person in whose name a Note is registered
on the Registrar's books.
"INCOME TAX CREDIT" of the Company means the total net income tax credits of
the Company as determined under the Tax Sharing Treaty.
"INCOME TAX EXPENSE" of the Company means the total net income tax expenses of
the Company as determined under the Tax Sharing Treaty.
"INCUR" shall have the meaning specified in Section 5.11.
"INDEBTEDNESS" of any person means, without duplication, (a) all liabilities
and obligations, contingent or otherwise, of such person, (i) in respect of
borrowed money (whether or not the recourse of the lender is to the whole of
the assets of such person or only to a portion thereof), (ii) evidenced by
bonds, notes, debentures or similar instruments, (iii) representing the
balance deferred and unpaid of the purchase price of any Property or services,
except such as would constitute trade payables to trade creditors in the
ordinary course of business; provided that such trade payables that are more
than thirty (30) days past their original due date shall constitute
Indebtedness if the aggregate amount thereof at any time exceeds $100,000,
(iv) evidenced by bankers' acceptances or similar instruments issued or
accepted by banks, (v) for the payment of money relating to a Capitalized
Lease Obligation, or (vi) evidenced by a letter of credit or a reimbursement
obligation of such person with respect to any letter of credit; (b) all net
obligations of such person under Interest Swap Obligations and foreign
currency hedges; (c) all liabilities of others of the kind described in the
preceding clause (a) or (b) that such person has guaranteed or that is
otherwise its legal liability and all obligations to purchase, redeem or
acquire any Capital Stock; (d) all obligations secured by a Lien to which the
Property or assets (including, without limitation, leasehold interests and any
other tangible or intangible Property rights) of such person are subject,
whether or not the obligation secured thereby shall have been assumed by or
shall otherwise be such person's legal liability, PROVIDED, that the amount of
such obligation shall be limited to the lesser of the fair market value of the
assets or Property to which such Lien attaches and the amount of the
obligation so secured; and (e) any and all deferrals, renewals, extensions,
refinancings and refundings (whether direct or indirect) of, or amendments,
modifications or supplements to, any liability of the kind described in any of
the preceding clauses (a), (b), (c), or (d) or this clause (e), whether or not
between or among the same parties.
"INDENTURE" means this Indenture, as amended or supplemented from time to time
in accordance with the terms hereof.
"INDENTURE OBLIGATIONS" means the obligations of the Company and the
Guarantors pursuant to this Indenture and the Notes (and any other obligor
hereunder or under the Notes) now or hereafter existing, to pay principal of
and premium, if any, and interest on the Notes when due and payable, whether
on the Maturity Date or an Interest Payment Date, by acceleration, call for
redemption, or otherwise, and interest on the overdue principal and premium,
if any, of, and (to the extent lawful) interest, if any, on, the Notes and all
other amounts due or to become due in connection with this Indenture, the
Notes and the Security Agreement and the Mortgage, including any and all
extensions, renewals or other modifications thereof, in whole or in part, and
the performance of all other obligations of the Company (and any other obligor
hereunder or under the Notes) and the Guarantors, including all costs and
expenses incurred by the Trustee or the Holders in the collection or
enforcement of any such obligations or realization upon the Collateral or the
security of any Mortgage.
"INSURANCE PROCEEDS" means the Company's and the Guarantors' interest in and
to (a) all proceeds which now or hereafter may be paid under any insurance
policies now or hereafter obtained by or on behalf of the Company or any of
the Guarantors in connection with the conversion of the Property subject to
the Mortgage, the CMLI Mortgage or the Security Agreement into Cash or
liquidated claims, together with the interest payable thereon and the right to
collect and receive the same, including, but without limiting the generality
of the foregoing, proceeds of casualty insurance, title insurance, business
interruption insurance and any other insurance now or hereafter maintained
with respect to such Property and (b) all amounts attributable to Events of
Loss.
"INTEREST PAYMENT DATE" means any of the following dates: August 15, 1996,
November 15, 1996, February 15, 1997, May 15, 1997, August 15, 1997, November
15, 1997, February 15, 1998, May 15, 1998, August 15, 1998, November 15, 1998,
February 15, 1999, May 15, 1999, August 15, 1999 (but only if such date is on
or before the third anniversary of the Commencement Date), and November 13,
1999 (but only if such date is on or before the third anniversary of the
Commencement Date).
"INTEREST SWAP OBLIGATION" means, when used with reference to any person, the
obligations of such person pursuant to any arrangement with any other person
whereby, directly or indirectly, such person is entitled to receive from time
to time periodic payments calculated by applying either a floating or a fixed
rate of interest on a stated notional amount in exchange for periodic payments
made by such person calculated by applying a fixed or a floating rate of
interest on the same notional amount.
"INVESTMENT" by any person in any other person means (without duplication) (a)
the acquisition by such person (whether for cash, Property, services,
securities or otherwise) of capital stock, bonds, notes, debentures,
partnership or other ownership interests or other securities, including any
options or warrants, of such other person or any agreement to make any such
acquisition; (b) the making by such person of any deposit with, or advance,
loan or other extension of credit to, such other person (including the
purchase of Property from another person subject to an understanding or
agreement, contingent or otherwise, to resell such Property to such other
person) or any commitment to make any such advance, loan or extension (but
excluding accounts receivable arising in the ordinary course of business;
provided that such receivables that are more than thirty (30) days past their
original due date shall constitute Investments if the aggregate amount thereof
at any time exceeds $100,000), other than prepaid expenses and deposits with
governmental authorities in the ordinary course of business of such person;
(c) other than the Guaranties of the Notes, the entering into by such person
of any guarantee of, or other credit support or contingent obligation with
respect to, Indebtedness or other liability of such other person; or (d) the
making of any capital contribution by such person to such other person.
"ISSUE DATE" means the date of first issuance of the Notes under the the
Second Amended Plan of Reoerganization of Crescent City Casin Development
Corporation, dated March 15, 1996.
"JCC" means Jefferson Casino Corporation, a Louisiana corporation.
"JCC INDEBTEDNESS" means the Indebtedness of JCC identified on Exhibit E
hereto.
"LEGAL HOLIDAY" shall have the meaning provided in Section 12.7.
"LICENSES" means the Certificate of Preliminary Approval, Certificate of Final
Approval and Conditional or, as applicable, Definitive Gaming Operator's
License.
"LIEN" means any mortgage, lien, pledge, charge, security interest, or other
encumbrance of any kind, whether or not filed, recorded or otherwise perfected
under applicable law (including any conditional sale or other title retention
agreement and any lease deemed to constitute a security interest, and any
option or other agreement to give any security interest).
"LOUISIANA GAMING OPERATOR'S LICENSE" means one of the Gaming Licenses to
conduct riverboat gaming activities (limited in number to fifteen as of the
Issue Date) permitted to be issued pursuant to the provisions of the Louisiana
Riverboat Economic Development and Gaming Control Act and Title 42, Part XIII,
Chapters 17 and 21 of the Louisiana Administrative Code, and any amendment
thereto.
"MATURITY DATE," when used with respect to any Note, means the date on which
the principal of such Note becomes due and payable as therein or herein
provided, whether at Stated Maturity, a Redemption Date or by declaration of
acceleration, call for redemption or otherwise.
"MORTGAGE" means the First Preferred Ship Mortgage dated as of May 13, 1996
from the Company to the Trustee, as the same may be amended from time to time.
"NET AWARD" has the meaning assigned to such term in the Collateral Documents.
"NET AWARD SUB-ACCOUNT" has the meaning set forth in Section 11.1 hereof.
"NET INCOME" of any person or in respect of any asset, for any period, means
the total of all gain and loss for such person or in respect of such asset, as
determined in accordance with GAAP, excluding from the computation thereof (a)
all gain and loss arising from the sale, damage, destruction, condemnation,
exchange, or distribution of any or all assets (other than current assets),
(b) all revenue and expense from (i) all changes in accounting principles,
(ii) all discontinued operations or dispositions thereof, (iii) extraordinary
transactions, or (iv) all Qualified Lessor Leases and Qualified Lessee
Leases, and (c) expenses to the extent funded from Cash that is Collateral
(other than expenses funded by the disposition of Collateral in accordance
with Section 4.3(a)(i) hereof).
"NET LOSS" shall mean, for any period, Net Income to the extent Net Income as
computed for such period is less than zero.
"NON-RECOURSE INDEBTEDNESS" means Indebtedness of a person to the extent that
under the terms thereof or pursuant to applicable law (i) no personal recourse
shall be had against such person for the payment of the principal of or
interest or premium on such Indebtedness, and (ii) enforcement of obligations
on such Indebtedness is limited only to recourse against interests in Property
and assets purchased with the proceeds of the incurrence of such Indebtedness
and as to which neither the Company nor any Guarantor provides any credit
support or is liable.
"NOTEHOLDER" See "HOLDER."
"NOTES" means the 11 1/2% Senior Secured Notes due 1999, as amended and
supplemented from time to time in accordance with the terms hereof, that are
issued pursuant to this Indenture.
"OFFICER" means, with respect to the Company or any Guarantor, the Chairman of
the Board, the President, any Vice President, the Chief Financial Officer, the
Treasurer, the Controller, or the Secretary or Assistant Secretary of the
Company or such Guarantor.
"OFFICERS' CERTIFICATE" means, with respect to the Company or any Guarantor, a
certificate signed by two Officers of the Company or such Guarantor and
otherwise complying with the requirements of Sections 13.4 and 13.5.
"OPINION OF COUNSEL" means a written opinion from legal counsel to the Company
complying with the requirements of Sections 13.4 and 13.5. Unless otherwise
required by this Indenture, the counsel may be in-house counsel to the
Company.
"OTHER BOAT MORTGAGE" means collectively the mortgages, instruments and
agreements delivered by the Company pursuant to Section 4.4(a) and 11.3
sufficient to grant to the Trustee for the benefit of the Holders a valid
first priority Lien on any Substitute Boat.
"PARENT EQUITY CONTRIBUTION" means Cash payments from JCC to the Company, or
from Casino Magic Corp. to either Guarantor, for Capital Stock (other than
Disqualified Capital Stock).
"PAYING AGENT" shall have the meaning specified in Section 2.3.
"PERMITTED CAPITAL EXPENDITURES" means any of the following:
(i) Capital Expenditures of the Company or the Guarantor to the extent funded
with the proceeds of a Parent Equity Contribution (a) in an amount of up to
25% of the purchase price of furniture, fixtures and equipment the remainder
of the purchase price of which is financed with Permitted FF&E Financing
pursuant to Section 5.11(b) hereof, or (b) in all other cases, only so long as
the Liens of the Trustee under the Collateral Documents attach to the Property
acquired or constructed with such Capital Expenditures with the same validity,
priority and perfection as the Liens of the Trustee in the Collateral;
(ii) Capital Expenditures to the extent funded with Cash which is not
Collateral (a) in an amount of up to 25% of the purchase price of furniture,
fixtures and equipment the remainder of the purchase price of which is
financed with Permitted FF&E Financing incurred pursuant to Section 5.11(b)
hereof, or (b) in all other cases, only so long as the Liens of the Trustee
under the Collateral Documents attach to the Property acquired or constructed
with such Capital Expenditures with the same validity, priority and perfection
as the Liens of the Trustee in the Collateral;
(iii) Capital Expenditures (other than to purchase furniture, fixtures and
equipment the purchase price of which is financed in part with Permitted FF&E
Financing incurred pursuant to Section 5.11(b) hereof) to the extent funded
with Cash from the Company Collateral Sub-Account, but only in an aggregate
amount from the Issue Date which, when added to the aggregate amount from the
Issue Date of Capital Expenditures permitted under clause (iv) below, does not
exceed $1,000,000; PROVIDED, HOWEVER, that the Liens of the Trustee attach to
the Property acquired or constructed with such Capital Expenditures with the
same validity, priority and perfection as the Liens of the Trustee in the
Collateral used to fund such Capital Expenditures;
(iv) Capital Expenditures to the extent funded with Cash from the Company
Collateral Sub-Account, in each case in an amount of up to 25% of the purchase
price of furniture, fixtures and equipment the remainder of the purchase price
of which is financed with Permitted FF&E Financing incurred pursuant to
Section 5.11(b) hereof, but only in an aggregate amount from the Issue Date
which, when added to the aggregate amount from the Issue Date of Capital
Expenditures permitted under clause (iii) above, does not exceed $1,000,000;
(v) Capital Expenditures to the extent funded with Boat Conveyance Proceeds;
PROVIDED, HOWEVER, that the Liens of the Trustee attach to such Capital
Expenditures with the same validity, priority and perfection as the Liens of
the Trustee in the Collateral used to fund such Capital Expenditures;
PROVIDED, FURTHER, the Company complies in all respects with the provisions of
Section 11.4 hereof in making any Capital Expenditures funded with Boat
Conveyance Proceeds; and
(vi) Capital Expenditures to the extent funded with Net Awards; PROVIDED,
HOWEVER, that the Liens of the Trustee attach to such Capital Expenditures
with the same validity, priority and perfection as the Liens of the Trustee in
the Collateral used to fund such Capital Expenditures; PROVIDED, FURTHER, the
Company complies in all respects with the provisions of Section 11.2 hereof in
making any Capital Expenditures funded with Net Awards; and
(vii) after the Release Date, Capital Expenditures to the extent funded with
Cash which is not Collateral.
"PERMITTED FF&E FINANCING" means Indebtedness which is Non-recourse
Indebtedness to the Company or any of its properties (other than as provided
in this definition) that is incurred to finance the acquisition or lease after
May 13, 1996 of newly acquired or leased furniture, fixtures or equipment
("FF&E") used directly in the operation of casinos and secured by a first
priority Lien on such FF&E which Lien, subject to (i) Liens permitted under
Section 5.13 hereof, and (ii) a Lien in favor of the Notes, but only to the
extent permitted by the secured lender with respect to such FF&E financing,
shall be the only Lien with respect to such FF&E and may be an exclusive Lien
or senior, PARI PASSU or junior to the rights of the Trustee under the
Collateral Documents.
"PERMITTED LIENS" means any of the following:
(a) Liens for taxes, assessments or other governmental charges not yet
due or which are being contested in good faith and by appropriate proceedings
by the Company or a Guarantor if adequate reserves with respect thereto are
maintained on the books of the Company or such Guarantor, as the case may be,
in accordance with GAAP;
(b) statutory Liens of carriers, laborors, warehousemen, mechanics,
landlords, materialmen, repairmen or other like Liens (including maritime
liens) arising by operation of the law in the ordinary course of business and
consistent with industry practices and Liens on deposits made to obtain the
release of such Liens if (i)the underlying obligations are not overdue for a
period of more than sixty (60) days or (ii) such Liens are being contested in
good faith and by appropriate proceedings by the Company or a Guarantor and
adequate reserves with respect thereto are maintained on the books of the
Company or such Guarantor, as the case may be, in accordance with GAAP; and
(c) easements, rights-of-way, zoning and similar restrictions and other
similar encumbrances or title defects incurred or imposed, as applicable, in
the ordinary course of business and consistent with industry practices which,
in the aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto (as such
property is used by the Company or such Guarantor) or interfere with the
ordinary conduct of the business of the Company or such Guarantor or any of
their Subsidiaries; PROVIDED, that any such Liens are not incurred in
connection with any borrowing of money or any commitment to loan any money or
to extend any credit.
"PERSON" means any individual, limited liability company, corporation,
partnership, joint venture, association, joint-venture company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
"PLANS AND SPECIFICATIONS" means all drawings, plans and specifications
prepared by or on behalf of the Company or any of its Subsidiaries, as the
same may be amended or supplemented from time to time in good faith by the
Board of Directors of the Company or such Guarantor, and, if required by
applicable law, submitted to and approved by the building or other relevant
department, which describe and show the Crescent City Queen Casino, or, if
applicable, another casino and the labor and materials necessary for
construction thereof.
"PRINCIPAL" of any Indebtedness (including the Notes) means the principal of
such Indebtedness plus any applicable premium, if any, on such Indebtedness.
"PROPERTY" or "property" means any right or interest in or to property or
assets of any kind whatsoever, whether real, personal or mixed and whether
tangible, intangible, contingent, indirect or direct.
"QUALIFIED LESSEE LEASE" means a lease agreement (which in all respects shall
be subject to the provisions of Section 11.3 hereof) pursuant to which the
Company is the Lessee of a Substitute Boat or a Qualified Substitute Boat;
PROVIDED, HOWEVER, that such lease stipulates that the Company's use and quiet
enjoyment of such Substitute Boat or Qualified Substitute Boat during the term
of such lease shall not be disturbed so long as the Company does not default
under its payment obligations to or for the benefit of the lessor and its
successors and assigns under such lease.
"QUALIFIED LESSOR LEASE" means a lease by the Company of the Crescent City
Queen Casino or a Qualified Substitute Boat owned by the Company pursuant to
the terms of which the contract rights, agreements and instruments evidencing
the Company's rights and interests with respect to the lease transaction are
not subject to any negative pledge or other impairment as to assignability.
"QUALIFIED SALE" means a sale, transfer or other conveyance of all of the
Company's right, title and interest in the Crescent City Casino Queen pursuant
to the terms of which (i) there is no post-closing escrow, retainage or other
hold-back of the consideration to be paid to the Company, (ii) the contract
rights, agreements and instruments evidencing the Company's rights and
interests with respect to the sale are not subject to any negative pledge or
other impairment as to assignability, and (iii) the Company shall have no
post-closing indemnification or other liabilities to or for the benefit of the
purchaser other than liabilities that are not recourse to the Collateral.
"QUALIFIED SUBSTITUTE BOAT" means a vessel qualifying under the Louisiana
Riverboat Economic and Control Act as a riverboat substantially similar in
quality and size to any riverboat casinos used and competitive in Bossier City
or Shreveport, Louisiana.
"RECORD DATE" means a Record Date specified in the Notes whether or not such
Record Date is a Business Day.
"REDEMPTION DATE" when used with respect to any Note to be redeemed means the
date fixed for such redemption by or pursuant to this Indenture.
"REDEMPTION PREMIUM" means (i) on any Redemption Date occurring on or before
the first anniversary of the Commencement Date, zero, (ii) on any Redemption
Date occurring on or after the first anniversary of the Commencement Date but
on or before the second anniversary of the Commencement Date, ten percent
(10%) TIMES a fraction, the numerator of which is the amount of calendar days
having elapsed from and including the day after the first anniversary of the
Commencement Date to and including such Redemption Date, and the denominator
of which is three hundred and sixty-five (365), and (iii) on any Redemption
Date occurring after the second anniversary of the Commencement Date but
before the third anniversary of the Commencement Date, twenty percent (20%)
TIMES a fraction, the numerator of which is the amount of calendar days having
elapsed from and including the day after the second anniversary of the
Commencement Date to and including such Redemption Date, and the denominator
of which is three hundred and sixty-four (364).
"REDEMPTION PRICE" when used with respect to any Note to be redeemed, means
the principal face amount of such Note TIMES the sum of one plus the
Redemption Premium as of the Redemption Date for such Note.
"REFINANCING INDEBTEDNESS" means Indebtedness (a) issued in exchange for, or
the proceeds from the issuance and sale of which are used substantially
concurrently to repay, redeem, defease, refund, refinance, discharge or
otherwise retire for value, in whole or in part, or (b) constituting an
amendment, modification or supplement to, or a deferral or renewal of ((a) and
(b) above are, collectively, a "Refinancing"), any Indebtedness in a principal
amount not to exceed (after deduction of reasonable and customary fees and
expenses incurred in connection with the Refinancing) the lesser of (i) the
principal amount of the Indebtedness so Refinanced and (ii) if such
Indebtedness being Refinanced was issued with an original issue discount, the
accreted value thereof (as determined in accordance with GAAP) at the time of
such Refinancing; PROVIDED, that (A) Refinancing Indebtedness of any Guarantor
of the Company shall only be used to refinance outstanding Indebtedness of
such Guarantor, (b) Refinancing Indebtedness shall (x) not have an Average
Life shorter than the Indebtedness to be so Refinanced at the time of such
refinancing and (y) in all respects, be no less subordinated, if applicable,
to the rights of holders pursuant to the Notes than was the Indebtedness to be
refinanced and (C) such Refinancing Indebtedness shall have no installment of
principal (or redemption) scheduled to come due earlier than the scheduled
maturity of any installment of principal of the Indebtedness to be so
refinanced which was scheduled to come due prior to the Stated Maturity.
"REGISTRAR" shall have the meaning specified in Section 2.3.
"RELATED BUSINESS" means the gaming business conducted (or proposed to be
conducted) by the Company and its Subsidiaries as of the Issue Date and any
and all materially related businesses in support of and ancillary to the
gaming business.
"RELEASE DATE" means the first date on which the aggregate principal amount of
Notes outstanding is equal to or less than $17,500,000.00.
"REQUIRED REGULATORY REDEMPTION" means a redemption by the Company of any of a
Note or Notes pursuant to, and in accordance with, any order of any
Governmental Authority with appropriate jurisdiction and authority relating to
a Gaming License, or to the extent necessary in the reasonable, good faith
judgment of the Board of Directors of the Company to prevent the loss, failure
to obtain or material impairment or to secure the reinstatement of, any
material Gaming License, wherein any such case such redemption or acquisition
is required because the Holder or beneficial owner of such Note is required to
be found suitable or to otherwise qualify under any Gaming Laws and is not
found suitable or so qualified within a reasonable period of time.
"RESTRICTED INVESTMENT" means, in one or a series of related transactions, any
Investment other than in Cash Equivalents; PROVIDED, that the extension of
credit to customers of Company-owned or operated casinos or the settlement of
gambling debts consistent with industry practice and in the ordinary course of
business shall not be a Restricted Investment.
"RESTRICTED PAYMENT" means, with respect to any person, (a) the declaration or
payment of any dividend or other distribution in respect of Capital Stock of
such person, or (b) any payment on account of the purchase, redemption or
other acquisition or retirement for value of Capital Stock of such person or
any Affiliate of such person; PROVIDED, HOWEVER, that the term "Restricted
Payment" does not include any dividend, distribution or other payment (i) to
any of the Guarantors by any other Guarantor, (ii) under the Tax Sharing
Treaty, or (iii) in repayment of the amount of an escrow or holdback funded
solely by a Parent Equity Contribution in connection with a Qualified Sale;
PROVIDED, FURTHER that any payment from a Subsidiary of the Guarantor (other
than the Company) shall not be a Restricted Payment for purposes of clause (a)
or (b) above.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the rules
and regulations of the SEC promulgated thereunder.
"SECURITY AGREEMENT" means the Pledge and Security Agreement, dated the date
hereof, by and among the Company, the Guarantors, and the Trustee for the
benefit of the Holders, as the same may be amended from time to time in
accordance with the terms thereof.
"STATED MATURITY," when used with respect to any Note, means the third
anniversary of the Commencement Date.
"STOCK PURCHASE AGREEMENT" means that certain Stock Purchase Agreement, dated
February 21, 1996, among the Company, JCC, C-M of Louisiana, Inc., a Louisiana
corporation (n/k/a JCC), Casino Magic Corp., and Capital Gaming International,
Inc.
"SUBSIDIARY," with respect to any person, means (i) a corporation a majority
of whose Capital Stock with voting power, under ordinary circumstances, to
elect directors is at the time, directly or indirectly, owned by such person,
by such person and one or more Subsidiaries of such person or by one or more
Subsidiaries of such person or (ii) any other person (other than a
corporation) in which such person, one or more Subsidiaries of such person, or
such person and one or more Subsidiaries of such person, directly or
indirectly, at the date of determination thereof has at least majority
ownership interest.
"SUBSTITUTE BOAT" means a vessel qualifying under the Louisiana Riverboat
Economic and Control Act as a riverboat.
"TAX SHARING TREATY" means the Tax Allocation Agreement substantially in the
form of Exhibit C hereto.
"THIRD PARTY" means a person which is not an Affiliate of the Company or any
Guarantor.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sec 77aaa-7bbbb) as
in effect on the date of the execution of this Indenture.
"TRUST MONEYS" shall have the meaning specified in Section 11.1.
"TRUSTEE" means the party named as such in this Indenture until a successor
replaces it in accordance with the provisions of this Indenture and thereafter
means such successor.
"TRUST OFFICER" means any officer within the corporate trust department (or
any successor group) of the Trustee including any vice president, assistant
vice president, secretary, assistant secretary or any other officer or
assistant officer of the Trustee customarily performing functions similar to
those performed by the persons who at that time shall be such officers, and
also means, with respect to a particular corporate trust officer any other
officer of the corporate trust department (or any successor group) of the
Trustee to whom such trust matter is referred because of his knowledge of and
familiarity with the particular subject.
"U.S. GOVERNMENT OBLIGATIONS" means direct non-callable obligations of, or
non-callable obligations guaranteed by, the United States of America for the
payment of which obligations or guarantee the full faith and credit of the
United States of America is pledged.
"U.S. LEGAL TENDER" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
"WAITING PERIOD" means the initial 90 day period from and after the
consummation of the transactions contemplated by the transfer of the Crescent
City Queen Casino pursuant to Section 4.4 hereof.
"WHOLLY OWNED" with respect to a Subsidiary of any person means (i) with
respect to a Subsidiary that is a limited liability company or similar entity,
a Subsidiary whose capital stock is 99% or greater beneficially owned by such
person and (ii) with respect to a Subsidiary that is other than a limited
liability company or similar entity, a Subsidiary whose capital stock or other
equity interest is 100% beneficially owned by such person.
Section 1.2. INCORPORATION BY REFERENCE OF TIA.
Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"COMMISSION" means the SEC.
"INDENTURE SECURITYHOLDER" means a Holder or a Noteholder.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee.
"OBLIGOR" on the indenture securities means the Company and any other obligor
on the Notes.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them thereby.
Section 1.3. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words in the plural include
the singular;
(v) provisions apply to successive events and transactions;
(vi) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision; and
(vii) references to Sections or Articles means reference to such Section or
Article in this Indenture, unless stated otherwise.
<PAGE>
Article II.
THE NOTES
Section 2.1. FORM AND DATING.
The Notes and the Trustee's certificate of authentication, in respect thereof,
shall be substantially in the form of EXHIBIT A hereto, which is part of this
Indenture. The Notes may have notations, legends or endorsements required by
law, stock exchange rule or usage. The Company shall approve the form of the
Notes and any notation, legend or endorsement on them. Any such notations,
legends or endorsements not contained in the form of Note attached as EXHIBIT
A hereto shall be delivered in writing to the Trustee. Each Note shall be
dated the date of its authentication.
The terms and provisions contained in the form of Notes shall constitute, and
are hereby expressly made, a part of this Indenture and, to the extent
applicable, the Company and the Trustee, by their execution and delivery of
this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
Section 2.2. EXECUTION AND AUTHENTICATION.
Two Officers shall sign, or one Officer shall sign and one Officer shall
attest to, the Notes for the Company by manual or facsimile signature. The
Company's seal shall be impressed, affixed, imprinted, or reproduced on the
Notes and may be in facsimile form.
If an Officer whose signature is on a Note was an Officer at the time of such
execution but no longer holds that office at the time the Trustee
authenticates the Note, the Note shall be valid nevertheless and the Company
shall nevertheless be bound by the terms of the Notes and this Indenture.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note, but such
signature shall be conclusive evidence that the Note has been authenticated
pursuant to the term of this Indenture.
The Trustee shall authenticate Notes for original issue in the aggregate
principal amount of up to $35,000,000 upon a written order of the Company in
the form of an Officers' Certificate. The Officers' Certificate shall specify
the amount of Notes to be authenticated and the date on which the Notes are to
be authenticated. The aggregate principal amount of Notes outstanding at any
time may not exceed $35,000,000, except as provided in Section 2.7. Upon the
written order of the Company in the form of an Officers' Certificate, the
Trustee shall authenticate Notes in substitution of Notes originally issued to
reflect any name change of the Company.
The Trustee may appoint an authenticating agent acceptable to the Company to
authenticate Notes. Unless otherwise provided in the appointment, an
authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as
an Agent to deal with the Company, any Affiliate of the Company or any of
their respective Subsidiaries.
Notes shall be issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof.
Section 2.3. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency in the borough of Manhattan,
The City of New York, where Notes may be presented for registration of
transfer or for exchange ("Registrar") and an office or agency in the Borough
of Manhattan, The City of New York where Notes may be presented for payment
("Paying Agent") and an office or agency where notices and demands to or upon
the Company in respect of the Notes may be served. The Company may act as its
own Registrar or Paying Agent, except that, for the purposes of Articles III
and VII, neither the Company nor any Affiliate of the Company shall act as
Paying Agent. The Registrar shall keep a register of the Notes, their
respective outstanding principal amounts, and their transfer and exchange.
The Company may have one or more co-Registrars and one or more additional
Paying Agents. The term "Paying Agent" includes any additional Paying Agent.
The Company hereby initially appoints the Trustee as Registrar and Paying
Agent, and the Trustee hereby initially agrees so to act.
The Company shall enter into an appropriate written agency agreement with any
Agent not a party to this Indenture, which agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
promptly notify the Trustee in writing of the name and address of any such
Agent. If the Company fails to maintain a Registrar or Paying Agent, the
Trustee shall act as such.
Section 2.4. PAYING AGENT TO HOLD ASSETS IN TRUST.
The Company shall require each Paying Agent other than the Trustee to agree in
writing that each Paying Agent shall hold in trust for the benefit of Holders
or the Trustee all assets held by the Paying Agent for the payment of
principal of, or interest on, the Notes (whether such assets have been
distributed to it by the Company or any other obligor on the Notes), and shall
notify the Trustee in writing of any Default by the Company (or any other
obligor on the Notes) in making any such payment. If the Company or a
Subsidiary of the Company acts as Paying Agent, it shall segregate such assets
and hold them as a separate trust fund for the benefit of the Holders or the
Trustee. The Company at any time may require a Paying Agent to distribute all
assets held by it to the Trustee and account for any assets disbursed and the
Trustee may at any time during the continuance of any payment Default, upon
written request to a Paying Agent, require such Paying Agent to distribute all
assets held by it to the Trustee and to account for any assets that shall have
been delivered by the Company to the Paying Agent, and upon compliance by the
Paying Agent with such directions, the Paying Agent (if other than the
Company) shall have no further liability for such assets.
Section 2.5. NOTEHOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably practicable
the most recent list available to it of the names and addresses of Holders.
If the Trustee is not the Registrar, the Company shall furnish to the Trustee
on or before the third Business Day preceding each Interest Payment Date and
at such other times as the Trustee may request in writing a list in such form
and as of such date as the Trustee reasonably may require of the names and
addresses of Holders. The Trustee, the Registrar and the Company shall
provide a current securityholder list to any Gaming Authority upon demand.
Section 2.6. TRANSFER AND EXCHANGE.
When Notes are presented to the Registrar or a co-Registrar with a request to
register the transfer of such Notes or to exchange such Notes for an equal
principal amount of Notes of other authorized denominations, the Registrar or
co-Registrar shall register the transfer or make the exchange as met;
PROVIDED, HOWEVER, that the Notes surrendered for transfer or exchange shall
be duly endorsed or accompanied by a written instrument of transfer in form
reasonably satisfactory to the Company and the Registrar or Co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing. To
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Notes at the Registrar's or co-Registrar's
request. No service charge shall be made for any registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
transfer tax, assessments, or similar governmental charge payable in
connection therewith (other than any such transfer taxes, assessments, or
similar governmental charge payable upon exchanges or transfers pursuant to
Sections 2.2, 2.10, 3.6, or 9.5). Except for a Required Regulatory Redemption
pursuant to Section 3.2 of this Indenture or an order of any Gaming Authority,
the Registrar or co-Registrar shall not be required to register the transfer
of or exchange of (a) any Note selected for redemption in whole or in part
pursuant to being redeemed in part, or (b) any Note for a period of 15
Business Days before the mailing of a notice of an offer to redeem Notes
pursuant to Article III hereof and ending on the close of business of the day
of such mailing.
Section 2.7. REPLACEMENT NOTES.
If a mutilated Note is surrendered to the Trustee or if the Holder of a Note
claims and submits an affidavit or other evidence, satisfactory to the
Trustee, to the Trustee to the effect that the Note has been lost, destroyed
or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Note if the Trustee's requirements are met. If
required by the Trustee or the Company, such Holder must provide an indemnity
bond or other indemnity, sufficient in the judgment of both the Company and
the Trustee, to protect the Company, the Trustee or any Agent from any loss
which any of them may suffer if a Note is replaced. The Company may charge
such Holder for its reasonable, out-of-pocket expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company.
Section 2.8. OUTSTANDING NOTES.
Notes outstanding at any time are all the Notes that have been authenticated
by the Trustee except those canceled by it, those delivered to it for
cancellation and those described in this Section 2.8 as not outstanding. A
Note does not cease to be outstanding because the Company or an Affiliate of
the Company holds the Note, except as provided in Section 2.9.
If a Note is replaced pursuant to Section 2.7 (other than a mutilated Note
surrendered for replacement), it ceases to be outstanding unless the Trustee
receives proof satisfactory to it that the replaced Note is held by a BONA
FIDE purchaser. A mutilated Note ceases to be outstanding upon surrender of
such Note and replacement thereof pursuant to Section 2.7.
If on a Redemption Date or the Maturity Date the Paying Agent (other than the
Company or an Affiliate of the Company) holds U.S. Legal Tender or U.S.
Government Obligations sufficient to pay all of the principal and interest due
on the Notes payable on that date and payment of the securities called for
redemption is not otherwise prohibited, then on and after that date such Notes
cease to be outstanding and interest on them ceases to accrue.
Section 2.9. TREASURY NOTES.
In determining whether the Holders of the required principal amount of Notes
have concurred in any direction, amendment, supplement, waiver or consent,
Notes owned by the Company, any Guarantor and Affiliates of the Company or of
any Guarantor shall be disregarded, except that, for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, amendment, supplement, waiver or consent, only Notes that the
Trustee knows or has reason to know are so owned shall be disregarded.
Section 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may prepare, the
Guarantor shall endorse and the Trustee shall authenticate temporary Notes.
Temporary Notes shall be substantially in the form of definitive Notes but may
have variations that the Company reasonably and in good faith considers
appropriate for temporary Notes. Without unreasonable delay, the Company
shall prepare, the Guarantor shall endorse and the Trustee shall authenticate
definitive Notes in exchange for temporary Notes. Until so exchanged, the
temporary Notes shall in all respects be entitled to the same benefits under
this Indenture as permanent Notes authenticated and delivered hereunder.
Section 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and the Paying Agent shall forward to the Trustee any Notes
surrendered to them for transfer, exchange or payment. The Trustee, or at the
direction of the Trustee, the Registrar or the Paying Agent (other than the
Company or an Affiliate of the Company), and no one else, shall cancel and, at
the written direction of the Company, shall dispose of all Notes surrendered
for transfer, exchange, payment or cancellation. Subject to Section 2.7, the
Company may not issue new Notes to replace Notes it has paid or delivered to
the Trustee for cancellation. No Notes shall be authenticated in lieu of or
in exchange for any Notes canceled as provided in this Section 2.11, except as
expressly permitted in the form of Notes and as permitted in this Indenture.
Section 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it shall pay
the defaulted interest, plus (to the extent lawful) interest on the defaulted
interest, to the persons who are Holders on a Record Date (or at its option a
subsequent special record date) which date shall be the fifteenth day next
preceding the date fixed by the Company for the payment of defaulted interest,
whether or not such day is a Business Day, unless the Trustee fixes another
record date. At least 15 days before the subsequent special record date, the
Company shall mail to each Holder with a copy to the Trustee a notice that
states the subsequent special record date, the payment date and the amount of
defaulted interest, and interest payable on such defaulted interest, if any,
to be paid.
<PAGE>
Article III.
MANDATORY REDUCTION; REDEMPTION
Section 3.1. MANDATORY PRINCIPAL REDUCTION WITH EXCESS CASH FLOW.
On each Interest Payment Date commencing November 15, 1996, and ending with
the second Interest Payment Date after the occurrence of the Release Date, the
Company will unconditionally pay to the Trustee for the benefit of the Holders
the Excess Cash Flow for the fiscal quarter of the Company and the Guarantors
ending on the Interest Payment Date immediately preceding such Interest
Payment Date; PROVIDED, HOWEVER, that the Company will pay to the Trustee for
the benefit of the Holders the Excess Cash Flow for the last fiscal quarter of
a fiscal year of the Company and the Guarantors on the SECOND Interest Payment
Date following the last date of such last fiscal quarter of the fiscal year.
The Company will certify no later than 10 days prior to the applicable
Interest Payment Date the amount of Excess Cash Flow to be paid by the Company
and will deliver such Excess Cash Flow in accordance with Section 5.1 hereof.
If on any Interest Payment Date the Excess Cash Flow otherwise payable shall
be $100,000 or less, no Excess Cash Flow payment shall be made to Holders, but
as to such Excess Cash Flow (the "Aggregate Excess Cash Flow"), the Trustee
shall hold all such Aggregate Excess Cash Flow in the Company Payment Sub-
Account in anticipation of distribution in accordance with this Section 3.1;
PROVIDED, HOWEVER, that interest earned on Aggregate Excess Cash Flow while in
the Company Payment Sub-Account during any fiscal quarter shall be remitted to
the Company on the last day of such fiscal quarter.
On each Interest Payment Date commencing November 15, 1996, and ending with
the second Interest Payment Date after the occurrence of the Release Date on
which the Aggregate Excess Cash Flow then held by the Trustee exceeds
$100,000, the Trustee will distribute to each Holder upon presentment to the
Trustee of such Holder's Note such Holder's PRO RATA share of the Aggregate
Excess Cash Flow in reduction of the then outstanding principal amount of the
Note by an amount equal to such Holder's PRO RATA share of the Excess Cash
Redemption Amount, in addition to any regularly scheduled principal payment
due on such Interest Payment Date (if any).
After the Release Date or the date of an Adverse State Action, as the case may
be, Aggregate Excess Cash Flow distributions made on an Interest Payment Date
pursuant to this Section 3.1 will be applied to installments of principal on
the Notes in inverse order of maturity.
The obligations of the Company under this Section 3.1 shall continue
notwithstanding an Adverse State Action.
Section 3.2. OPTIONAL REDEMPTION.
The Notes may be redeemed at any time, in whole or in part, at the election of
the Company at the Redemption Price then applicable for the Redemption Date
for such redemption and subject to the conditions set forth herein and in the
form of Note set forth in EXHIBIT A hereto.
Any redemption pursuant to this Section 3.2 shall be made, to the extent
applicable, pursuant to the provisions of Section 3.3 through 3.8 hereof.
Section 3.3. ELECTION TO REDEEM; NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to Section 3.2 hereof, at least
30 days but not more than 60 days prior to the date of the notice of
redemption described in Section 3.5, the Company shall notify the Trustee in
writing of the Redemption Date and deliver to the Trustee an Officers'
Certificate stating that such redemption will comply with the conditions
contained in Sections 3.3 through 3.8 hereof, as appropriate.
If the Company elects, and is permitted by the terms hereof, to credit against
any such redemption Notes not previously delivered to the Trustee for
cancellation, it shall deliver such Notes with the notice.
Section 3.4. SELECTION BY TRUSTEE OF NOTES TO BE REDEEMED.
In the event that less than all of the Notes are to be redeemed, the Trustee
shall select the Notes to be redeemed, if the Notes are listed on a national
securities exchange, in accordance with the rules of such exchange or, if the
Notes are not so listed, on either a pro rata basis or by lot, or such other
method as it shall deem fair and equitable. The Trustee shall promptly notify
the Company of the Notes selected for redemption and, in the case of any Notes
selected for partial redemption, the principal amount thereof to be redeemed.
The Trustee may select for redemption portions of the principal of the Notes
that have denominations larger than $1,000. Notes and portions of them the
Trustee selects shall be in amounts of $1,000 or whole multiples of $1,000.
For all purposes of this Indenture unless the context otherwise requires,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.5. NOTICE OF REDEMPTION.
At least 30 days, and no more than 45 days, before the Redemption Date fixed
by the Company, the Company shall mail, or cause to be mailed, a notice of
redemption by first-class mail to each Holder of Notes to be redeemed at his
or her last address as the same appears on the registry books maintained by
the Registrar pursuant to Section 2.3 hereof.
The notice shall identify the notes to be redeemed (including the CUSIP
numbers thereof) and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the Redemption Date and
upon surrender of such Note, a new Note or Notes in principal amount equal to
the unredeemed portion will be issued;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the Paying Agent
to collect the Reduction Price;
(6) that unless the Company defaults in making the redemption payment,
interest on Notes called for redemption ceases to accrue on and after the
Redemption Date;
(7) the paragraph of the Notes and/or Section of this Indenture pursuant to
which the Notes called for redemption are being redeemed; and
(8) the aggregate principal amount of Notes that are being redeemed.
At the Company's request, the Trustee shall give the notice of redemption in
the Company's name and at the Company's sole expense.
Section 3.6. EFFECT OF NOTICE OF REDEMPTION.
Once the notice of redemption described in Section 3.5 is mailed, Notes called
for redemption become due and payable on the Redemption Date and at the
Redemption Price, including any Redemption Premium, plus interest accrued to
the Redemption Date. Upon surrender to the Paying Agent, such Notes shall be
paid at the Redemption Price, including any Redemption Premium, plus interest
accrued to the Redemption Date, PROVIDED, HOWEVER, that if the Redemption Date
is after a regular interest payment record date and on or prior to the
interest payment date, the accrued interest shall be payable to the Holder of
the redeemed Notes registered on the relevant record date, and PROVIDED,
FURTHER, that if a Redemption Date is a Legal Holiday, payment shall be made
on the next succeeding Business Day and no interest shall accrue for the
period from such Redemption Date to such succeeding Business Day.
Section 3.7. DEPOSIT OF REDEMPTION PRICE.
On or prior to 10:00 A.M., New York City time, on each Redemption Date, the
Company shall deposit with the Paying Agent in immediately available funds
moneys sufficient to pay the Redemption Price of and accrued interest on all
Notes to be redeemed on that date other than Notes or portions thereof called
for redemption on that date which have been delivered by the Company to the
Trustee for cancellation.
On and after any Redemption Date, if money sufficient to pay the Redemption
Price of and accrued interest on Notes called for redemption shall have been
made available in accordance with the preceding paragraph, the Notes called
for redemption will cease to bear interest and the only right of the Holders
of such Notes will be to receive payment of the Redemption Price of and,
subject to the proviso in Section 3.6, accrued and unpaid interest on such
Notes. If any Note called for redemption shall not be so paid, interest will
be paid, from the Redemption Date until such redemption payment is made, on
the unpaid principal of the Note and any interest not paid on such unpaid
principal, in each case, at the rate and in the manner provided in the Notes.
Section 3.8. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Trustee shall
authenticate for a Holder a new Note equal in principal amount to the
unredeemed portion of the Note surrendered.
Section 3.9. REDEMPTION PURSUANT TO GAMING LAWS.
Notwithstanding any other provision of this Indenture, the Notes shall also be
redeemable at any time pursuant to, and in accordance with, a Required
Regulatory Redemption. If the Company requires the redemption of any Note
pursuant to this Section 3.9, then the redemption price shall be the principal
amount thereof, plus accrued interest to the date of redemption. The Company
shall tender the redemption price (together with any accrued and unpaid
interest) to the Trustee no later than 30 and no more than 60 days after the
Company gives the Holder or owner of a beneficial or voting interest written
notice of redemption or such earlier date as may be ordered by any Gaming
Authority. The Company shall notify the Trustee of any disposition or
redemption required under this Section 3.9, and upon receipt of such notice,
the Trustee shall not accord any rights or privileges under this Indenture or
any Note to any Holder or owner of a beneficial or voting interest who is
required to dispose of any Note or tender it for redemption, except to pay the
redemption price (together with any accrued but unpaid interest) upon tender
of such Note.
Article IV.
SECURITY
Section 4.1. SECURITY INTEREST.
(a) In order to secure the prompt and complete payment and performance in full
of Indenture Obligations, the Company, the Guarantors and the Trustee have
entered into this Indenture, the Security Agreement and the Mortgage. Each
Holder, by accepting a Note, agrees to all of the terms and provisions of this
Indenture and the Collateral Documents, and the Trustee agrees to all of the
terms and provisions of the Indenture and the Collateral Documents as this
Indenture or any of the Collateral Documents may be amended from time to time
pursuant to the provisions thereof and hereof.
(b) The Collateral as now or hereafter constituted shall be held for the equal
and ratable benefit of the Holders without preference, priority or distinction
of any thereof over any other by reason of difference in time of issuance,
sale or otherwise, as security for the Indenture Obligations.
(c) The provisions of TIA Section 314(d), and the provisions of TIA Section
314(c)(3) to the extent applicable by specific reference in this Article IV,
are hereby incorporated by reference herein as if set forth in their entirety
and to the same extent as if the Indenture were qualified under the TIA.
Section 4.2. RECORDING; OPINIONS OF COUNSEL.
(a) Each of the Company and the Guarantors represents that it has caused to be
executed and delivered, filed and recorded and covenants that it will promptly
cause to be executed and delivered, filed and recorded, all instruments and
documents, and have done and will do or will cause to be done all such acts
and other things, at the Company's expense, as are necessary to effect and
maintain valid and perfected security interests in the Collateral. Each of
the Company and the Guarantors shall, as promptly as practicable, cause to be
executed and delivered, filed and recorded all instruments and do all acts and
other things as may be required by law to perfect, maintain and protect the
security interests under the Collateral Documents and herein. The Company and
the Guarantors shall promptly obtain title insurance insuring the Trustee as
an insured for the benefit of the Holders in the aggregate amount equal to the
estimated fair market value of the Property that is subject to the CMLI
Mortgage, with such endorsements as are reasonably requested by the Trustee,
subject only to those exceptions which are reasonably acceptable to the
Trustee.
(b) The Company shall furnish to the Trustee, promptly after the execution and
delivery of this Indenture, the Security Agreement and the Mortgage and
promptly after the execution and delivery of any amendment thereto or any
other instrument of further assurance and Opinion(s) of Counsel stating that,
in the opinion of such counsel, subject to customary exclusions and exceptions
reasonably acceptable to the Trustee, either (i) this Indenture, the Security
Agreement, the Mortgage, the CMLI Mortgage, any such amendment and all other
instruments of further assurance have been properly recorded, registered and
filed has been taken to the extent necessary to make effective valid security
interests and to perfect the security interests intended to be created by the
Indenture, the Security Agreement and the Mortgage, and reciting the details
of such action, or (ii) no such action is necessary to maintain the validity
and perfection of the security interests under the Security Agreement, the
Mortgage and hereunder.
(c) The Company shall furnish to the Trustee, within 60 days after May 15 in
each year commencing 1997, an Opinion(s) of Counsel, dated as of such date,
stating that, in the opinion of such counsel, subject to customary exclusions
and exceptions, either (A) all such action has been taken with respect to the
recording, registering, filing, rerecording and refiling of the Indenture, all
supplemental indentures, the Security Agreement, the Mortgage, financing
statements, continuation statements and all other instruments of further
assurance or other Collateral Documents as is necessary to maintain the
security interests under the Collateral Documents and hereunder in full force
and effect and reciting the details of such action, and stating that all
financing statements and continuation statements have been executed and filed
that are necessary fully to preserve and protect the rights of the Holders and
the Trustee hereunder and under the Collateral Documents or (B) no such action
is necessary to maintain the security interests in full force and effect.
Section 4.3. DISPOSITION OF CERTAIN COLLATERAL.
(a) The Company and the Guarantors may, without consent of the Trustee, but
otherwise subject to the requirements of this Indenture:
(i) sell, assign, transfer, license or otherwise dispose of, free from
the security interests under the Collateral Documents and hereunder, any
machinery, equipment, or other personal Property constituting Collateral that
has become worn out, obsolete, or unserviceable or is being upgraded, upon
replacing the same with or substituting for the same, machinery, equipment or
other Property constituting Collateral not necessarily of the same character
but being of at least equal fair value and at least equal utility to the
Company as the Property so disposed of, which Property shall without further
action become Collateral subject to the security interests under the
Collateral Documents and hereunder;
(ii) (A) sell, assign, transfer, license or otherwise dispose of, free
from the security interests under the Collateral Documents and hereunder,
inventory held for resale that is at any time part of the Collateral in the
ordinary course of the Company's business, consistent with industry practices,
(B) collect, liquidate, sell, factor or otherwise dispose of, free from the
security interests under the Collateral Documents and hereunder, accounts
receivable or notes receivable that are part of the Collateral in the ordinary
course of the Company's business, consistent with industry practices, or (C)
make Cash payments out of the Guarantor Collateral Sub-Account to fund
operating expenses of the CMLI Real Property or Capital Expenditures in
respect of the CMLI Real Property, PROVIDED, HOWEVER, that the Liens of the
Trustee under the Collateral Documents attach to the Property acquired or
constructed with such Capital Expenditures with the same validity, priority
and perfection as the Liens of the Trustee in the CMLI Real Property;
(iii) so long as no Default or Event of Default hereunder shall have
occurred and be continuing, sell, assign, transfer, license or otherwise
dispose of Collateral of the Company for the purpose of making Capital
Expenditures permitted to the Company under clauses (iii), (iv), (v), (vi) and
(vii) of the definition of Permitted Capital Expenditures; and
(iv) abandon, sell, assign, transfer, license or otherwise dispose of
any personal Property the use of which is no longer necessary or desirable in
the proper conduct of the business of the Company and the maintenance of its
earnings and is not material to the conduct of the business of the Company.
(b) In the event that the Company or any Guarantor has sold, exchanged, or
otherwise disposed of or proposes to sell, exchange or otherwise dispose of
any portion of the Collateral which under the provisions of this Section 4.3
may be sold, exchanged or otherwise disposed of by the Company and the
Guarantors without consent of the Trustee, and the Company and the Guarantors
request the Trustee to furnish a written disclaimer, release or quitclaim of
any interest in such Property under the Collateral Documents, the Trustee
shall execute such an instrument upon delivery to the Trustee of an Officers'
Certificate by the Company and the Guarantors reciting the sale, exchange or
other disposition made or proposed to be made and describing in reasonable
detail the Property affected thereby, and stating and demonstrating that such
Property is Property which by the provisions of this Section 4.3 may be sold,
exchanged or otherwise disposed of or dealt with by the Company and the
Guarantors without any release or consent of the Trustee.
(c) Any disposition of Collateral made in compliance with the provisions of
this Section 4.3 shall be deemed not to impair the security interests under
the Collateral Documents and hereunder in contravention of the provisions of
this Indenture.
Section 4.4. SUBSTITUTION OF COLLATERAL.
(a)(i) So long as no Default or Event of Default hereunder shall have
occurred and be continuing, the Company may, without the consent of the
Trustee, but otherwise subject to the requirements of this Indenture,
consummate a Qualified Sale to a Third Party, free and clear of the Liens of
the Mortgage and the Security Agreement, in exchange for Cash or for a
Qualified Substitute Boat or a combination thereof; PROVIDED, HOWEVER, that
any Qualified Sale constituting an Affiliate Conveyance shall meet the
requirements of Section 5.10 hereof in all respects. In such event, the
Company immediately shall file and record all instruments and documents, and
immediately will do or will cause to be done all such acts and other things,
at the Company's expense, as are necessary to effect and maintain exclusive,
valid and perfected security interests in the Boat Conveyance Proceeds and the
Qualified Substitute Boat, as the case may be, and all agreements and contract
rights arising under or evidencing such Qualified Sale, in favor of the
Trustee for the benefit of the Holders, including, but not limited to, the
deposit of Boat Conveyance Proceeds in the Boat Conveyance Proceeds Sub-
Account.
(ii) So long as no Default or Event of Default hereunder shall have
occurred and be continuing, the Company may, without the consent of the
Trustee, but otherwise subject to the requirements of this Indenture, enter
into a Qualified Lessor Lease, subject to the Liens of the Mortgage or the
Other Boat Mortgage, as the case may be, and the other Collateral Documents;
PROVIDED, HOWEVER, that any such Qualified Lessor Lease constituting an
Affiliate Conveyance shall meet the requirements of Section 5.10 hereof in all
respects. In such event, the Company immediately shall file and record all
instruments and documents, and immediately will do or will cause to be done
all such acts and other things, at the Company's expense, as are necessary to
effect and maintain exclusive, valid and perfected security interests in the
Boat Conveyance Proceeds arising under such Qualified Lessor Lease, and in all
of the Company's right, title and interest in such Qualified Lessor Lease and
all rents, profits and proceeds therefrom and contract rights arising
thereunder, in favor of the Trustee for the benefit of the Holders, including,
but not limited to, the deposit of Boat Conveyance Proceeds in the Boat
Conveyance Proceeds Sub-Account.
(b) Boat Conveyance Proceeds shall remain in the Boat Conveyance Proceeds
Sub-Account with the Trustee subject to the Liens of the Trustee and, so long
as no Default or Event of Default shall have occurred and be continuing, shall
be released from the Boat Conveyance Proceeds Sub-Account by the Trustee only
as follows:
(i) During the Waiting Period, Boat Conveyance Proceeds will be released
by the Trustee to the Company, first, (A) for the consummation by the Company
of the purchase of a Qualified Substitute Boat pursuant to the provisions of
Section 11.3 hereof or for the financing or the servicing of the financing of
such purchase from time to time, or (B) for the payment of the Adjusted Rent
Obligations of the Company under a Qualified Lessee Lease under the provisions
of Section 11.3 hereof, and thereafter until the end of the Waiting Period for
Capital Expenditures permitted pursuant to the provisions of Section 5.19
hereof;
(ii) If during the Waiting Period the Company has entered into a binding
contract with a Third Party for the construction of a Qualified Substitute
Boat, then after delivery of all certificates, documents, instruments,
contracts and agreements precedent to the first release of Boat Conveyance
Proceeds under the provisions of Section 11.4 hereof, and until the date that
is fifteen (15) months after the last day of the Waiting Period, the Trustee
shall release Boat Conveyance Proceeds to the Company solely (A) to fund
obligations under such contract for the construction of the Qualified
Substitute Boat, PROVIDED, HOWEVER, that the Trustee shall maintain at all
times a valid and perfected first priority Lien on and security interest in
the Qualified Substitute Boat, whether under the Other Boat Mortgage or
otherwise, subject only to Liens permitted pursuant to Section 5.13 hereof;
(B) for the financing or the servicing of the financing from time to time by
the Company of the purchase of a Qualified Substitute Boat pursuant to the
provisions of Section 11.3 hereof; or (C) for the payment of the Adjusted Rent
Obligations of the Company under a Qualified Lessee Lease under the provisions
of Section 11.3 hereof;
(iii) If on or before the last day of the Waiting Period the Company has
neither consummated the purchase of a Qualified Substitute Boat, entered into
a Qualified Lessee Lease of a Substitute Boat, nor delivered all certificates,
documents, instruments, contracts and agreements precedent to the first
release of Boat Conveyance Proceeds under the provisions of Section 11.4
hereof for the construction of a Qualified Substitute Boat, then all Boat
Conveyance Proceeds remaining in the Boat Conveyance Proceeds Sub-Account with
the Trustee on the last day of the Waiting Period shall be deemed to
constitute Excess Cash Flow of the Company for the fiscal quarter in which the
Waiting Period expires and shall be used to redeem Notes on the Interest
Payment Date that is the last day of the fiscal quarter of the Company
immediately following the fiscal quarter in which the Waiting Period expires
pursuant to the provisions of Article III hereof; and
(iv) Notwithstanding any other provisions of this clause (b), all Boat
Conveyance Proceeds in the Boat Conveyance Proceeds Sub-Account on the last
date of the fifteenth month after the date of the last day of the Waiting
Period or at any time thereafter shall be deemed to solely constitute
Collateral securing the Indenture Obligations, and the Company shall have no
right to request or demand, and the Trustee shall have no obligation to
release, Boat Conveyance Proceeds prior to the payment in full of the
Indenture Obligations.
The Trustee shall release Liens on Boat Conveyance Proceeds pursuant to this
Section 4.4 in accordance with the provisions of Article XI, the Collateral
Documents and the TIA.
Section 4.5. RELEASE DATE; RELEASES OF COLLATERAL.
So long as no Default or Event of Default shall have occurred and be
continuing, then provided the Trustee shall have received notice from the
Company fifteen (15) days before the Release Date of the Release Date, the
Trustee shall on the Release Date (or, in the case of failure of the Company
to timely notify the Trustee in accordance with this Section 4.5, fifteen (15)
days from the date of actual receipt by the Trustee of such notice of the
Release Date) release or cause to be released all Liens securing Indenture
Obligations other than (i) those Liens granted to the Trustee under the
Mortgage or the Other Boat Mortgage, as the case may be, (ii) those Liens
granted to the Trustee in respect of a lease by the Company of the Crescent
City Queen Casino pursuant to Section 4.4(b) hereof, and (iii) those Liens
securing proceeds from the foregoing. The Trustee shall release such Liens
pursuant to this Section 4.5 in accordance with the provisions of Article XI,
the Collateral Documents and the TIA.
Section 4.6 CERTAIN OTHER RELEASES OF COLLATERAL.
Subject to applicable law, the release of any Collateral from Liens created by
the Security Agreement or the Mortgage or the release of, in whole or in part,
the Liens created by the Security Agreement or the Mortgage, will not be
deemed to impair the Security Agreement or the Mortgage, as the case may be,
in contravention of the provisions of this Indenture if and to the extent the
Collateral or Liens are released pursuant to, and in accordance with, the
terms hereof. To the extent applicable, without limitation, the Company and
each obligor on the Notes shall cause TIA Section 314(d) relating to the
release of Property or securities from the Liens of the Security Agreement or
the Mortgage to be complied with. Any certificate or opinion required by TIA
Section 314(d) may be made by one Officer prior to the qualification of the
Indenture under the TIA and by two Officers after such qualification, except
in cases which TIA Section 314(d) requires that such certificate or opinion be
made by an independent person.
Section 4.7 PAYMENT OF EXPENSES.
On demand of the Trustee, the Company forthwith shall pay or satisfactorily
provide for all reasonable expenditures incurred by the Trustee under this
Article IV, including the reasonable fees and expenses of counsel and all such
sums shall be a Lien upon the Collateral and shall be secured thereby.
Section 4.8 SUITS TO PROTECT THE COLLATERAL.
Subject to Section 4.1 of this Indenture and to the provisions of the Security
Agreement and the Mortgage, the Trustee shall have power to institute and to
maintain such suits and proceedings as it may deem expedient to prevent any
impairment of the Collateral by any acts which may be unlawful or in violation
of the Security Agreement, the Mortgage or this Indenture, including the power
to institute and maintain suits or proceedings to restrain the enforcement of
or compliance with any legislative or other governmental enactment, rule or
order that may be unconstitutional or otherwise invalid or if the enforcement
of, or compliance with, such enactment, rule or order would impair the
security interests in contravention of this Indenture or be prejudicial to the
interests of the Holders or of the Trustee. The Trustee shall give notice to
the Company promptly following the institution of any such suit or proceeding.
Section 4.9 TRUSTEE'S DUTIES.
The powers and duties conferred upon the Trustee by this Article IV are solely
to protect the security interests created hereby and shall not impose any duty
upon the Trustee to exercise any such powers and duties, except as expressly
provided in this Indenture. The Trustee shall be under no duty to the Company
or any Guarantor whatsoever to make or give any presentment, demand for
performance, notice of nonperformance, protest, notice of protest, notice of
dishonor, or other notice or demand in connection with any Collateral, or to
take any steps necessary to preserve any rights against prior parties except
as expressly provided in this Indenture. The Trustee shall not be liable to
the Company or the Guarantors for failure to collect or realize upon any or
all of the Collateral, or for any delay in so doing, nor shall the Trustee be
under any duty to the Company or the Guarantors to take any action whatsoever
with regard thereto. The Trustee shall have no duty to the Company or the
Guarantors to comply with any recording, filing, or other legal requirements
necessary to establish or maintain the validity, priority or enforceability of
the security interests in, or the Trustee's rights in or to, any of the
Collateral.
Article V
COVENANTS
Section 5.1. PAYMENT OF NOTES
The Company shall pay the principal of (including Excess Cash Flow to be paid
by the Company on an Interest Payment Date pursuant to the provisions of
Section 3.1 hereof) and interest on the Notes on the dates and in the manner
provided in the Notes and this Indenture. An installment of principal of
(including Excess Cash Flow to be paid by the Company on an Interest Payment
Date pursuant to the provisions of Section 3.1 hereof) or interest on the
Notes shall be considered paid on the date it is due if the Trustee or Paying
Agent (other than the Company or an Affiliate of the Company) holds for the
benefit of the Holders, on or before 10:00 a.m. New York City time on that
date, U.S. Legal Tender deposited and designated for and sufficient to pay the
installment. Together with any installments of principal the Company will
deliver to the Trustee a sufficient number of stickers, in form satisfactory
to the Trustee, setting forth the outstanding principal amount of each Note
after having given effect to such current principal payments, for delivery by
the Trustee to the Holders for the purpose of affixing such stickers to their
respective Notes.
The Company shall pay interest on overdue principal and on overdue
installments of interest at the rate specified in the Notes compounded semi-
annually, to the extent lawful.
Section 5.2. MAINTENANCE OF OFFICE OR AGENCY.
The Company and the Guarantors shall maintain in the Borough of Manhattan, The
City of New York, an office or agency where Notes may be presented or
surrendered for payment, where Notes may be surrendered for registration of
transfer and exchange and where notices and demands to or upon the Company and
the Guarantors in respect of the Notes and this Indenture may be served. The
Company and the Guarantors shall give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency. If at
any time the Company and the Guarantors shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be
made or served at the address of the Trustee set forth in Section 13.2
The Company and the Guarantors may also from time to time designate one or
more other offices or agencies where the Notes may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; PROVIDED, HOWEVER, that no such designation or rescission shall
in any manner relieve the Company and the Guarantors of their obligation to
maintain an office or agency in the Borough of Manhattan, The City of New
York, for such purposes. The Company and the Guarantors shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency. The Company and
the Guarantors hereby initially designate the corporate trust office of the
Trustee as such office.
Section 5.3. LIMITATION ON RESTRICTED PAYMENTS.
The Company and the Guarantors will not, and none will permit any of its
Subsidiaries to, directly or indirectly, make any Restricted Payment.
Section 5.4. CORPORATE EXISTENCE.
The Company and the Guarantors shall do or cause to be done all things
necessary to preserve and keep in full force and effect their corporate
existence and the corporate or other existence of each of their Subsidiaries
in accordance with the respective organizational documents of each of them and
the rights (charter and statutory) and corporate franchises of the Company and
the Guarantors and each of their Subsidiaries; PROVIDED, HOWEVER, that neither
the Company nor any of the Guarantors shall be required to preserve, with
respect to itself, any right or franchise if (a) the Board of Directors of the
Company shall determine reasonably and in good faith that the preservation
thereof is no longer desirable in the conduct of the business of the Company
and (b) the loss thereof is not disadvantageous in any material respect to the
Holders.
Section 5.5. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company and the Guarantors shall, and shall cause each of their
Subsidiaries to, pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, (i) all taxes, assessments and governmental
charges (including withholding taxes and any penalties, interest and additions
to taxes) levied or imposed upon the Company, any Guarantor or any of their
Subsidiaries or properties and assets of the Company, any Guarantor, or any of
their Subsidiaries and (ii) all lawful claims, whether for labor, materials,
supplies, services or anything else, which have become due and payable and
which by law have or may become a Lien upon the Property and assets of the
Company, any Guarantor or any of their Subsidiaries; PROVIDED HOWEVER, that
neither the Company nor any Guarantor shall be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim the
amount, applicability or validity of which is being contested in good faith by
appropriate proceedings and for which disputed amounts adequate reserves have
been established in accordance with GAAP.
Section 5.6. MAINTENANCE OF INSURANCE.
From and at all times after May 13, 1996, the Company and each of the
Guarantors and each of their respective Subsidiaries shall have in effect
customary comprehensive general liability insurance and (as applicable)
brownwater coverage, shall use their best efforts to have completion,
performance or similar bonds in place for any Substitute Boat not yet
completed, and shall cause the builder of any Substitute Boat to maintain
builder's risk coverage insurance, in each case on terms and in an amount
reasonably sufficient (taking into account, among other factors, the
creditworthiness of the insurer) to avoid a material adverse change in the
financial condition or results of operation of the Company and the Guarantors
taken as a whole.
Section 5.7. COMPLIANCE CERTIFICATE: NOTICE OF DEFAULT.
The Company shall deliver to the Trustee within 90 days after the end of its
fiscal year an Officers' Certificate complying (whether or not required) with
Section 314(a)(4) of the TIA and stating that a review of its activities
during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture and
further stating, as to each such Officer signing such certificate, whether or
not the signer knows of any failure of the Company, any Guarantor or any
Subsidiary of the Company or any Guarantor to comply with any conditions or
covenants in this Indenture and, if such signer does know of such a failure to
comply, the certificate shall describe such failure with particularity. The
Officers' Certificate shall also notify the Trustee should the relevant fiscal
year end on any date other than the current fiscal year end date.
The Company shall, so long as any of the Notes are outstanding, deliver to the
Trustee, immediately upon becoming aware of any Default or Event of Default
under this Indenture, an Officers' Certificate specifying such Default or
Event of Default and what action the Company is taking or proposing to take
with respect thereto. The Trustee shall not be deemed to have knowledge of a
Default or an Event of Default unless one of its trust officers receives
notice of the Default giving rise thereto from the Company or any of the
Holders.
Section 5.8. REPORTS.
Whether or not the Company or any Guarantor is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company and each
Guarantor shall deliver to the Trustee and to each Holder, within 15 days
after it is or would have been required to file such with the SEC, annual and
quarterly consolidating financial statements substantially equivalent to
financial statements that would have been included in reports filed with the
SEC if the Company were subject to the requirements of Section 13 or 15(d) of
the Exchange Act including, with respect to annual information only, a report
thereon by the Company's independent public accountants as such would be so
required, together with a management's discussion and analysis of financial
condition and results of operations which would be so required.
Section 5.9. WAIVER OF STAY, EXTENSION OR USURY LAWS.
The Company and each Guarantor covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension
law or any usury law or other law wherever enacted which would prohibit or
forgive the Company or any Guarantor from paying all or any portion of the
principal of or interest on the Notes as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that they
may lawfully do so) the Company and each Guarantor hereby expressly waives all
benefit or advantage of any such law insofar as such law applies to the Notes,
and covenants that it shall 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.
Section 5.10. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
None of the Company, any Guarantor, or any of their Subsidiaries shall enter
into any transaction, including any contract, agreement, understanding, loan,
advance or guarantee and including any series of related transactions, with or
for the benefit of any Affiliate (an "Affiliate Transaction") except for (i)
employment arrangements in the ordinary course with officers and employees of
the Company who are not also officers, directors, or employees of any
Affiliate of the Company, (ii) the Tax Sharing Treaty, (iii) Parent Equity
Contributions, (iv) Indebtedness of JCC which JCC may incur under clause (g)
of Section 5.11 hereof, and (v) the conveyance, sale, lease, transfer,
assignment or other disposition of the Crescent City Queen Casino or a
Qualified Substitute Boat by the Company to an Affiliate (an "Affiliate
Conveyance"); PROVIDED, HOWEVER, that with respect to any such Affiliate
Conveyance described in clause (v) of this Section 5.10, the Company shall
obtain, prior to the consummation of such Affiliate Transaction, a written
opinion addressed to the Trustee from an independent investment banking firm
of national reputation with experience in the gaming business conducted by the
Company that such Affiliate Conveyance is as favorable to the Company from a
financial point of view as if made on an arm's length basis with a Third
Party. Such investment banking firm shall be promptly selected by the Company
and agreed to by the Holders of a majority in aggregate principal amount of
then outstanding Notes; PROVIDED, HOWEVER, that if the Holders of a majority
in aggregate principal amount of then outstanding Notes do not agree to such
investment banking firm, each of the Company and the Holders of a majority in
aggregate principal amount of then outstanding Notes shall then promptly
select one such investment banking firm, and the two firms so chosen shall
select a third investment banking firm to provide such opinion.
Section 5.11. LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS AND
DISQUALIFIED CAPITAL STOCK.
Except as set forth below, from and after May 13, 1996 the Company and the
Guarantors will not, and none will permit any of its Subsidiaries to, directly
or indirectly, issue, assume, guaranty, incur, become directly or indirectly
liable with respect to (including as a result of an acquisition, merger or
consolidation), extend the maturity of, or otherwise become responsible for,
contingently or otherwise (individually and collectively, to "incur," or, as
appropriate, an "incurrence"), any Indebtedness or any Disqualified Capital
Stock. Notwithstanding the foregoing:
(a) the Company and the Guarantors may incur Indebtedness evidenced by the
Notes and other obligations pursuant to the Indenture up to the amounts
specified herein as of the Issue Date;
(b) so long as no Default or Event of Default shall have occurred and be
continuing at the time, the Company or any Guarantor may incur Permitted FF&E
Financing; provided, that (I) prior to the Release Date, the aggregate amount
of Indebtedness incurred pursuant to this paragraph (b) (including any
Indebtedness issued to refinance, replace or refund such Indebtedness) shall
not constitute more than 100% of the cost (reportable on the balance sheet
(including all appropriate notes thereto) of such entity in accordance with
GAAP) to the Company and the Guarantors of the FF&E so purchased or leased and
(ii) prior to the Release Date, the aggregate principal amount of such
Permitted FF&E Financing in respect of FF&E funded with all or any portion of
Cash of the Company (other than Cash from a Parent Equity Contribution) does
not exceed the sum of (x) the excess (the "FF&E Basket") of $6.5 million over
the principal amount of all Existing FF&E Indebtedness on the Issue Date, less
all payments of principal after the Issue Date in respect of such Existing
FF&E Indebtedness and (y) $1 million, at any time, and (iii) in all other
cases prior to the Release Date, Permitted FF&E Financing does not at any time
exceed $10 million plus the FF&E Basket, less the amount of any such financing
described in clause (ii) above then outstanding, at any time;
(c) the Company and any of the Guarantors may incur Indebtedness constituting
a bond or surety obligation (or an indemnity or similar obligation) (i) in
order to prevent the impairment or loss of or to obtain a Gaming License, or
(ii) as required under any insurance required under Section 5.6 hereof, but
only to the extent required by applicable law and consistent in character and
amount with customary industry practice;
(d) the Company may incur Indebtedness the proceeds of which are used to pay
all or a part of the purchase price of a Qualified Substitute Boat; provided,
however, that such Indebtedness and the Liens securing such Indebtedness shall
be subordinate and junior, in all respects, to the Indenture Obligations and
the Liens of the Trustee securing the Indenture Obligations;
(e) the Company may suffer to exist Existing FF&E Financing;
(f) the Company and any of the Guarantors may incur Refinancing Indebtedness
with respect to any Indebtedness described in clauses (a),(b), (c) and (d) of
this covenant so long as, in the case of Indebtedness used to refinance,
refund, or replace Indebtedness in clauses (b) and (d), such Refinancing
Indebtedness satisfies the applicable requirements of such clauses;
(g) JCC may incur (i) the JCC Indebtedness, and (ii) any Indebtedness to an
Affiliate other than the Company as to which Indebtedness the Company provides
no credit support nor is liable and the proceeds of which Indebtedness are
used solely to pay the JCC Indebtedness; and
(h) after the Release Date, the Company may incur any Indebtedness, so long as
no Default or Event of Default shall have occurred and be continuing at the
time.
Section 5.12. LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES.
None of the Guarantors will, and none will permit any of its Subsidiaries
other than the Company to, directly or indirectly, create, assume or suffer to
exist any consensual encumbrance or restriction on the ability of any such
Subsidiary to pay dividends or make other distributions to, or to pay any
obligation to, or to otherwise transfer assets or make or pay loans or
advances to, any of the Guarantors, except (a) restrictions imposed by the
Notes or the Indenture and (b) restrictions imposed by applicable law.
Section 5.13. LIMITATION ON LIENS.
Neither the Company nor any of the Guarantors will, and none will permit any
of its Subsidiaries to, directly or indirectly, create, incur, assume or
suffer to exist any Lien in or on any right, title or interest to any of their
respective Cash other than the Liens of the Trustee for the benefit of the
Holders. Neither the Company nor any of the Guarantors will, and none will
permit any of its Subsidiaries to, directly or indirectly, create, incur,
assume or suffer to exist any Lien in or on any right, title or interest to
any of their respective properties or assets, other than Cash, owned by the
Company or the Guarantors, as the case may be, on May 13, 1996 except (a) the
Liens of the Trustee for the benefit of the Holders, and (b) Liens existing on
the Issue Date and identified on a Schedule to be delivered to the Trustee no
later than ten (10) days prior to the Issue Date. Neither the Company nor any
of the Guarantors will, and none will permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or suffer to exist any Lien in
or on any right, title or interest to any of their respective properties or
assets, other than Cash, acquired after except (u) Permitted Liens, (v) the
Liens of the Trustee for the benefit of the Holders, (w) Liens incurred
pursuant to Permitted FF&E Financing incurred in accordance with the
provisions of paragraph (b) of Section 5.11, which Liens may be exclusive
Liens on such Permitted FF&E, (x) Liens in respect of Existing FF&E Financing,
(y) Liens incurred in connection with the incurrence of Refinancing
Indebtedness in accordance with the provisions of paragraph (f) of Section
5.11, PROVIDED, HOWEVER, that such Liens are not more adverse to the interests
of the Holders of the Notes than the Liens replaced or extended thereby,
PROVIDED, FURTHER, that such Liens replaced or extended are permitted hereby,
and (z) only with respect to real Property acquired by the Guarantors after
May 13, 1996, minor title defects and survey exceptions which do not
materially detract from the value of the real Property subject thereto (as
such Property is used by such Guarantor). Anything in this Section 5.13 to
the contrary notwithstanding, after the Release Date, the Company and the
Guarantors may incur Liens on any and all their respective Property or assets
other than the Collateral, so long as no Default or Event of Default shall
have occurred and be continuing at the time.
Section 5.14. LIMITATION ON LINES OF BUSINESS.
None of the Company, any Guarantor and any of their respective Subsidiaries
will directly or indirectly engage in any line or lines of business activity
other than in a Related Business.
Section 5.15. LIMITATION ON STATUS AS INVESTMENT COMPANY.
None of the Company, any Guarantor, or any of their respective Subsidiaries
shall become "investment companies" (as that term is defined in the Investment
Company Act of 1940, as amended), or otherwise become subject to regulation
under the Investment Company Act.
Section 5.16. RESTRICTIONS ON SALE AND ISSUANCE OF STOCK. Prior to the
Release Date:
(a) The Company and each Guarantor shall not issue or sell, and shall not
permit any of their respective Subsidiaries to issue or sell, any Capital
Stock of any Subsidiary to any person other than the Company or a Guarantor of
the Company.
(b) The Company shall not sell or issue Capital Stock (other than
Disqualified Capital Stock) unless the same becomes subject to the Lien of
this Indenture.
Section 5.17. RESTRICTIONS ON SUBSIDIARIES.
Prior to the Release Date, neither the Company nor any Guarantor shall create,
acquire or suffer to exist any Subsidiary which was not a direct or indirect
subsidiary of the Company or such Guarantor, as the case may be, on May 13,
1996.
Section 5.18. RESTRICTIONS ON INVESTMENTS.
The Company and each Guarantor shall not make any Restricted Investments
except, in the case of JCC, its equity interests in the Company.
Section 5.19. RESTRICTIONS ON CAPITAL EXPENDITURES.
The Company and each Guarantor shall not incur any Capital Expenditures except
for Permitted Capital Expenditures.
Section 5.20. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK.
Neither the Company nor any of the Guarantors will, and none will permit any
of its Subsidiaries to, in one or a series of related transactions, convey,
sell, lease, transfer, assign or otherwise dispose of, directly or indirectly,
any of its Property, business or assets, including without limitation upon any
sale or other transfer or issuance of any Capital Stock of any Subsidiary or
through the issuance, sale or transfer of Capital Stock of a Subsidiary (an
"Asset Sale"). Notwithstanding the foregoing:
(a) so long as no Default or Event of Default shall have occurred and be
continuing at the time of, or would occur after giving effect, on a PRO FORMA
basis, to, such Asset Sale, the Company may sell, lease, transfer, assign or
otherwise dispose of the Crescent City Queen Casino or any Qualified
Substitute Boat or other Substitute Boat in accordance with the provisions of
Section 4.4 or Section 5.10 hereof, and further subject to the applicable
provisions of Article XI hereof;
(b) the Company and the Guarantors may sell, lease, transfer, assign or
otherwise dispose of any machinery, equipment, or other personal Property that
has become worn out, obsolete, or unserviceable or is being upgraded upon
replacing the same with or substituting for the same, machinery, equipment or
other personal Property not necessarily of the same character but being of at
least equal fair value and at least equal utility to the Company as the
Property so disposed of;
(c) the Company and the Guarantors may (A) sell, assign, transfer, license or
otherwise dispose of inventory held for resale in the ordinary course of the
Company's business, consistent with industry practices and (B) collect,
liquidate, sell, factor or otherwise dispose of accounts receivable or notes
receivable in the ordinary course of the Company's business, consistent with
industry practices; and
(d) the Company and the Guarantors may abandon, sell, assign, transfer,
license or otherwise dispose of any personal Property the use of which is no
longer necessary or desirable in the proper conduct of the business of the
Company and the maintenance of its earnings and is not material to the conduct
of the business of the Company; and
(e) so long as no Default or Event of Default shall have occurred and be
continuing, the Company and the Guarantors may convey, sell, lease, transfer,
assign or otherwise dispose of their respective Property or assets other than
Collateral.
Section 5.21. LIMITATION ON MERGER, SALE OR CONSOLIDATION.
Neither the Company nor any of the Guarantors will consolidate with or merge
with or into another person.
Section 5.22. MAINTENANCE OF BUSINESS.
At all times from and after the Commencement Date, the Company will operate a
riverboat casino in Bossier City, Louisiana.
Section 5.23. COMMENCEMENT DATE; RELEASE DATE; ADVERSE STATE ACTION.
(a) The Company shall give the Trustee notice, at the addresses and in the
manner set forth in Section 13.2 hereof, of:
(i) the Commencement Date, as soon as the occurrence of such date is
ascertained by the Company but in no event later than five (5) days after the
occurrence thereof;
(ii) the Release Date, as soon as the occurrence of such date is
ascertained by the Company but in no event later than five (5) days after the
occurrence thereof;
(iii) the occurrence of an Adverse State Action, in no event later than
one (1) day after the Company receives actual notice of the occurrence
thereof; and
(iv) the date an Adverse State Action is to take effect, immediately
upon receipt by the Company of notice of such date.
(b) No later than ten (10) days after the Release Date, the Company will
deliver to the Trustee an amortization schedule setting forth the amortization
of the remaining outstanding principal amount of the Notes in eight (8) equal
installments payable on each of the eight (8) Interest Payment Dates
immediately following the Release Date (or, if there shall be fewer than eight
Interest Payment Dates remaining after the Release Date but before or
including the third anniversary of the Commencement Date, in equal
installments numbering the amount of remaining Interest Payment Date).
(c) No later than ten (10) days after the date of the occurrence of an Adverse
State Action, the Company will deliver to the Trustee an amortization schedule
setting forth the amortization of the remaining outstanding principal amount
of the Notes in equal installments payable on each of the Interest Payment
Dates immediately following the date of the occurrence of the Adverse State
Action to and including the date on which the Adverse State Action is to take
effect against the Company.
Article VI.
EVENTS OF DEFAULT AND REMEDIES
Section 6.1. EVENTS OF DEFAULT.
"Event of Default," wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
caused voluntarily or involuntarily or effected, without limitation, by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) the failure by the Company to pay any installment of interest on the
Notes as and when due and payable and the continuance of any such failure for
10 days;
(2) the failure by the Company to pay all or any part of the principal, or
premium, if any, on the Notes when and as the same become due and payable at
maturity, redemption, by acceleration or otherwise; PROVIDED that, in respect
of a payment of Excess Cash Flow, if the amount thereof, in respect of any
period, is greater than the amount originally determined by the Company for
purposes of making such payment (but by no more than 5% of such originally
determined amount), such greater amount, less the payment already made, shall
be deemed to be due and payable to the Trustee 5 days after such greater
amount is finally determined;
(3) except as provided in clauses (1) or (2) of this Section 6.1, failure of
the Company or any Guarantor to comply with any provision of Section 5.10,
5.14, 5.21, 5.22, 11.3 or 11.4 which failure continues for 30 days;
(4) failure of the Company or any Guarantor to comply with any provision of
Section 4.4 hereof;
(5) except as otherwise provided herein, the failure by the Company or any
Guarantor to observe or perform any other covenant or agreement contained in
the Notes or the Indenture and the continuance of such failure for a period of
30 days after written notice is given to the Company by the Trustee or to the
Company and Trustee by the Holders of at least 25% in aggregate principal
amount of the Notes outstanding;
(6) a decree, judgment, or order by a court of competent jurisdiction shall
have been entered adjudging the Company or any Guarantor as bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization of
the Company or such Guarantor under any bankruptcy or similar law, and such
decree or order shall have continued undischarged and unstayed for a period of
60 days; or a decree or order of a court of competent jurisdiction over the
appointment of a receiver, liquidator, trustee, or assignee in bankruptcy or
insolvency of the Company or such Guarantor, or of the Property of any such
person, or for the winding up or liquidation of the affairs of any such
person, shall have been entered, and such decree, judgment, or order shall
have remained in force undischarged and unstayed for a period of 60 days;
(7) the Company or any Guarantor shall institute proceedings to be
adjudicated a voluntary bankrupt, or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a petition or answer or
consent seeking reorganization under any bankruptcy or similar law or similar
statute, or shall consent to the filing of any such petition, or shall consent
to the appointment of a Custodian, receiver, liquidator, trustee, or assignee
in bankruptcy or insolvency of it or any of its assets or Property, or shall
make a general assignment for the benefit of creditors, or shall admit in
writing its inability to pay its debts generally as they become due, or shall,
within the meaning of any Bankruptcy Law, become insolvent, fail generally to
pay their debts as they become due, or take any corporate action in
furtherance of or to facilitate, conditionally or otherwise, any of the
foregoing;
(8) a default in the payment of principal, premium or interest when due which
extends beyond any stated period of grace applicable thereto or an
acceleration for any other reason of maturity of any Indebtedness of the
Company, any Guarantor or any of their respective Subsidiaries with an
aggregate principal amount in excess of $500,000;
(9) final unsatisfied judgments not covered by insurance aggregating in
excess of $500,000, at any one time rendered against the Company, any
Guarantor or any of their respective Subsidiaries and not stayed, bonded or
discharged within 60 days;
(10) the closing after the Commencement Date (other than for repair or
maintenance) of a substantial portion of the Crescent City Queen Casino or, if
applicable, the casino on a Qualified Substitute Boat for more than 45
consecutive days;
(11) the loss of the legal right to operate the Crescent City Queen Casino
or, if applicable, the casino on a Qualified Substitute Boat and such loss is
continuing for more than 90 consecutive days;
(12) an event of default specified in any of the Collateral Documents; or
(13) any of the Collateral Documents fails to become or ceases to be in full
force and effect in accordance with the terms of this Indenture, or ceases
(once effective) to create in favor of the Trustee, with respect to any
material amount of Collateral, a valid and perfected first priority Lien on
the Collateral to be covered thereby (unless a prior or exclusive Lien is
specifically permitted by this Indenture).
If a Default occurs and is continuing, the Trustee must, within 90 days after
the occurrence of such default, give to the Holders notice of such default in
accordance with Section 7.5 hereof; PROVIDED, HOWEVER, that, except in the
case of a Default or an Event of Default in payment of principal (or premium,
if any) of, or interest on, any Note (including the payment of the Redemption
Price on the Redemption Date), the Trustee may withhold the notice if and so
long as a Trust Officer in good faith determines that withholding the notice
is in the interest of the Holders.
If an Event of Default occurs and is continuing (other than an Event of
Default specified in clauses (6) or (7), above, relating to the Company or any
Guarantor), then in every such case, unless the principal of all of the Notes
shall have already become due and payable, either the Trustee or the Holders
of 25% in aggregate principal amount of the Notes then outstanding, by notice
in writing to the Company, and to the Trustee if given by Holders (an
"Acceleration Notice"), may declare all principal and accrued interest thereon
to be due and payable immediately. If an Event of Default specified in
clauses (6) or (7), above, relating to the Company or any Guarantor occurs,
all principal and accrued interest thereon and any then applicable Redemption
Premium will be immediately due and payable on all outstanding Notes without
any declaration or other act on the part of Trustee or the Holders. The
Holders of no less than a majority in aggregate principal amount of Notes
generally are authorized to rescind such acceleration if all existing Events
of Default, other than the non-payment of the principal of, premium, if any,
and interest on the Notes which have become due solely by such acceleration,
have been cured or waived.
Prior to the declaration of acceleration of the maturity of the Notes, the
Holders of a majority in aggregate principal amount of the Notes at the time
outstanding may waive on behalf of all the Holders any default, except a
default in the payment of principal of or interest on any Note not yet cured,
or a default with respect to any covenant or provision which cannot be
modified or amended without the consent of the Holder of each outstanding Note
affected. Subject to the provisions of the Indenture relating to the duties
of the Trustee, the Trustee will be under no obligation to exercise any of its
rights or powers under the Indenture at the request, order or direction of any
of the Holders, unless such Holders have offered to the Trustee reasonable
security or indemnity. Subject to all provisions of the Indenture and
applicable law, the Holders of a majority in aggregate principal amount of the
Notes at the time outstanding will have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee.
Section 6.2. RESCISSION AND ANNULMENT.
Prior to any judgment or decree for payment of any money due being obtained by
the Trustee as hereinafter provided in this Article VI, the Holders of a
majority in aggregate principal amount of then outstanding Notes, by written
notice to the Company and the Trustee, may waive, on behalf of all Holders, an
Event of Default or Default if:
(1) the Company has paid or deposited with the Trustee a sum sufficient to
pay
(A) all overdue interest on all Notes,
(B) the principal of (and premium, if any, applicable to) any Notes which
would become due otherwise than by such declaration of acceleration, and
interest thereon at the rate borne by the Notes,
(C) to the extent that payment of such interest is lawful, interest upon
overdue interest at the rate borne by the Notes,
(D) all sums paid or advanced by the Trustee hereunder and the compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and
(2) all Events of Default, other than the non-payment of amounts which have
become due solely by such declaration of acceleration, have been cured or
waived as provided in Section 6.13.
Notwithstanding the previous sentence of this Section 6.2, no waiver shall be
effective for any Event of Default or Default with respect to any covenant or
provision which cannot be modified or amended without the consent of the
Holder of each outstanding Note, unless all such affected Holders agree, in
writing, to waive such Event of Default or Default. No such waiver shall cure
or waive any subsequent default or impair any right consequent thereon.
Section 6.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
The Company covenants that if an Event of Default in payment of principal,
premium, or interest specified in Section 6.1(1) and (2) occurs and is
continuing, the Company shall, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Notes, the whole amount then due and payable on
such Notes for principal, premium (if any) and interest, and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal (and premium, if any) and on any overdue interest, at the
rate borne by the Notes, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
compensation to, and expenses, disbursements and advances of the Trustee, its
agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust in favor of the
Holders, may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final decree and
may enforce the same against the Company or any other obligor upon the Notes
and collect the moneys adjudged or decreed to be payable in the manner
provided by law out of the Property of the Company or any other obligor upon
the Notes, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem
most effective to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid
of the exercise of any power granted herein, or to enforce any other proper
remedy.
Section 6.4. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Notes or the Property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Notes
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand
on the Company for the payment of overdue principal or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise to
take any and all actions under the TIA, including
(i) to file and prove a claim for the whole amount of principal (and premium,
if any) and interest owing and unpaid in respect of the Notes and to file such
other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent
and counsel) and of the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other Property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due the Trustee under Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment, or composition affecting the Notes or
the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 6.5. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES.
All rights of action and claims under this Indenture or the Notes may be
prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust in favor of the Holders, and any recovery of
judgment shall, after provision for the payment of compensation to, and
expenses, disbursements and advances of the Trustee, its agents and counsel,
be for the ratable benefit of the Holders of the Notes in respect of which
such judgment has been recovered.
Section 6.6. PRIORITIES.
Any money collected by the Trustee pursuant to this Article VI shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal, premium (if
any) or interest, upon presentation of the Notes and the notation thereon of
the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant to Section 7.7;
SECOND: To the Holders in payment of the amounts then due and unpaid for
principal of, premium (if any) and interest on, the Notes in respect of which
or for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and payable
on such Notes for principal, premium (if any) and interest, respectively; and
THIRD: To whomsoever may be lawfully entitled thereto, the remainder, if any.
Section 6.7 LIMITATION ON SUITS.
No Holder of any Note shall have any right to order or direct the Trustee to
institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(A) such Holder has previously given written notice to the Trustee of a
continuing Event of Default;
(B) the Holders of not less than 25% in principal amount of then outstanding
Notes shall have made written request to the Trustee to institute proceedings
in respect of such Event of Default in its own name as Trustee hereunder;
(C) such Holder or Holders have offered to the Trustee reasonable security
or indemnity against the costs, expenses and liabilities to be incurred or
reasonably probable to be incurred in compliance with such request;
(D) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(E) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in
principal amount of the outstanding Notes;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other
Holders, or to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all the
Holders.
Section 6.8. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND
INTEREST.
Notwithstanding any other provision of this Indenture, the Holder of any Note
shall have the right, which is absolute and unconditional, to receive payment
of the principal of, and premium (if any) and interest on, such Note on the
Maturity Dates of such payments as expressed in such Note (in the case of
redemption, the Redemption Price on the applicable Redemption Date, and in the
case of Section 3.1, Excess Cash Flow on the applicable date specified in
Section 3.1) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
Section 6.9. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the placement or payment of
mutilated, destroyed, lost or stolen Notes in Section 2.7, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy
shall, to the extent permitted by law, be cumulative and in addition to every
other right and remedy given hereunder or now or hereafter existing at law or
in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 6.10. DELAY OR OMISSION NOT WAIVER.
No delay or omission by the Trustee or by any Holder of any Note to exercise
any right or remedy arising upon any Event of Default shall impair the
exercise of any such right or remedy or constitute a waiver of any such Event
of Default. Every right and remedy given by this Article VI or by law to the
Trustee or to the Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Holders, as the case may be.
Section 6.11. CONTROL BY HOLDERS.
The Holder or Holders of a majority in aggregate principal amount of then
outstanding Notes shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred upon the Trustee, PROVIDED, that
(1) such direction shall not be in conflict with any rule of law or with
this Indenture,
(2) the Trustee shall not determine that the action so directed would be
unjustly prejudicial to the Holders not taking part in such direction, and
(3) the Trustee may take any other action deemed proper by the Trustee which
is not inconsistent with such direction.
Section 6.12. WAIVER OF PAST DEFAULT.
Subject to Section 6.8, the Holder or Holders of not less than a majority in
aggregate principal amount of the outstanding Notes may, by written notice to
the Trustee on behalf of all Holders, prior to the declaration of the maturity
of the Notes, waive any past default hereunder and its consequences, except a
default
(A) in the payment of the principal of, premium, if any, or interest on, any
Note as specified in clauses (1) and (2) of Section 6.1, or
(B) in respect of a covenant or provision hereof which, under Article IX,
cannot be modified or amended without the consent of the Holder of each
outstanding Note affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent
or other default or impair the exercise of any right arising therefrom.
Section 6.13. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Note by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted to be taken by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section 6.13 shall not apply to any
suit instituted by the Company, to any suit instituted by the Trustee, to any
suit instituted by any Holder, or group of Holders, holding in the aggregate
more than 10% in aggregate principal amount of the outstanding Notes, or to
any suit instituted by any Holder for enforcement of the payment of principal
of, or premium (if any) or interest on, any Note on or after the Maturity Date
of such Note.
Section 6.14. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee
or to such Holder, then and in every case, subject to any determination in
such proceeding, the Company, the 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 Trustee and the Holders shall
continue as though no such proceeding had been instituted.
Section 6.15. CASH PROCEEDS FROM COLLATERAL.
The Cash proceeds of any Collateral obtained and/or disposed of pursuant to
the terms of the Collateral Documents shall be held by the Trustee in the
manner provided in Article XI hereof for the equal and ratable benefit of the
Holders without preference, priority or distinction of any thereof by reason
of difference in time of issuance, sale or otherwise.
Article VII.
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture and
covenants and agrees to perform the same, as herein expressed.
Section 7.1. DUTIES OF TRUSTEE.
(a) If a Default or an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Except during the continuance of a Default or an Event of Default:
(1) The Trustee need perform only those duties as are specifically set
forth in this Indenture and no others, and no covenants or obligations shall
be implied in or read into this Indenture which are adverse to the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture, including
certificates or opinions of the Consulting Professional and the Construction
Manager. 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 liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section 7.1.
(2) The Trustee shall comply with any order or directive of a Gaming
Authority that the Trustee submit an application for any license, finding of
suitability or other approval pursuant to any Gaming Law and will cooperate
fully and completely in any proceeding related to such application.
(3) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(4) The Trustee shall not be liable with respect to any action it takes
or omits to take in good faith (i) in accordance with a direction received by
it pursuant to Section 6.12, or (ii) in reliance upon actions, statements,
judgments or representations taken or made by the Consulting Professional or
the Construction Manager in accordance with Section 11.4 hereof.
(d) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any
action under this indenture or at the request, order or direction of the
Holders or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to the Trustee
is subject to paragraphs (a), (b), (c) and (d) of this Section 7.1.
(f) The Trustee shall not be liable for interest on any assets received by
it except as the Trustee may agree in writing with the Company. Assets held
in trust by the Trustee need not be segregated from other assets except to the
extent required by law.
Section 7.2. RIGHTS OF TRUSTEE.
Subject to Section 7.1:
(a) The Trustee may rely on any document believed by it to be genuine and to
have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult with
counsel and may require an Officers' Certificate or an Opinion of Counsel,
which shall conform to Sections 13.4 and 13.5. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such certificate or opinion.
(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent (including the
Consulting Professional) appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to take
in good faith which it believes to be authorized or within its rights or
powers.
(e) The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, notice, request, direction, consent, order, bond, debenture, or other
paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or direction of
any of the Holders, pursuant to the provisions of this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred therein or
thereby.
(g) Except with respect to Section 5.1, the Trustee shall have no duty to
inquire as to the performance of the Company's covenants in Article V hereof.
In addition, the Trustee shall not be deemed to have knowledge of any Default
or Event of Default except (i) any Event of Default occurring pursuant to
Sections 6.1(1), 6.1(2) and 5.1, or (ii) any Default or Event of Default of
which the Trustee shall have received written notification or obtained actual
knowledge.
(h) The Trustee may rely on the accuracy of any amortization schedule
delivered to it by the Company pursuant to Section 5.23 hereof.
Section 7.3. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Company, any Guarantor, any
of their respective Subsidiaries, or their respective Affiliates with the same
rights it would have if it were not Trustee. Any agent may do the same with
like rights. However, the Trustee must comply with Sections 7.10 and 7.11.
Section 7.4. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Notes, and it shall not be responsible for any statement in
the Notes, other than the Trustee's certificate of authentication, or the use
or application of any funds received by a Paying Agent other than the Trustee.
Section 7.5. NOTICE OF DEFAULT.
If a Default or an Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to each Noteholder notice of the
uncured Default or Event of Default within 90 days after such Default or Event
of Default occurs. Except in the case of a Default or an Event of Default in
payment of principal (or premium, if any) of, or interest on, any Note
(including the payment of the Redemption Price on the Redemption Date), the
Trustee may withhold the notice if and so long as a Trust Officer in good
faith determines that withholding the notice is in the interest of the
Holders.
Section 7.6. REPORTS BY TRUSTEE TO HOLDERS.
If required by law, within 60 days after each May 15 beginning with May 15,
1997, the Trustee shall mail to each Noteholder a brief report dated as of
such May 15 that complies with TIA Section 313(a). If required by law, the
Trustee also shall comply with TIA Section 313(b) and 313(c).
The Company shall promptly notify the Trustee in writing if the Notes become
listed on any stock exchange or automatic quotation system.
A copy of each report at the time of its mailing to Noteholders shall be
mailed to the Company and filed with the SEC and each stock exchange, if any,
on which the Notes are listed.
Section 7.7. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable compensation
for its services. The Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Company shall reimburse
the Trustee upon request for all reasonable disbursements, expenses and
advances incurred or made by it. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents, accountants,
experts and counsel.
The Company shall indemnify the Trustee (in its capacity as Trustee) and each
of its officers, directors, attorneys-in-fact and agents for, and hold it
harmless against, any claim, demand, expense (including but not limited to
reasonable compensation, disbursements and expenses of the Trustee's agents
and counsel), loss or liability incurred by them without negligence or bad
faith on its part, arising out of or in connection with the administration of
this trust and their rights or duties hereunder including the reasonable costs
and expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The Trustee shall notify the Company promptly of any claim
asserted against the Trustee for which it may seek indemnity. The Company
shall defend the claim and the Trustee shall provide reasonable cooperation at
the Company's expense in the defense. The Trustee may have separate counsel
and the Company shall pay the reasonable fees and expenses of such counsel;
PROVIDED, that the Company will not be required to pay such fees and expenses
if it assumes the Trustee's defense and there is no conflict of interest
between the Company and the Trustee in connection with such defense. The
Company need not pay for any settlement made without its written consent. The
Company need not reimburse any expense or indemnify against any loss or
liability to the extent incurred by the Trustee through its negligence, bad
faith or willful misconduct.
To secure the Company's payment obligations in this Section 7.7, the Trustee
shall have a lien prior to the Notes on all assets held or collected by the
Trustee, in its capacity as Trustee, except assets held in trust to pay
principal and premium, if any, of or interest on particular Notes.
When the Trustee incurs expenses or renders services after an Event of Default
specified in Section 6.1(5) or (6) occurs, the expenses and the compensation
for the services are intended to constitute expenses of administration under
any Bankruptcy Law.
The Company's obligations under this Section 7.7 and any lien arising
hereunder shall survive the resignation or removal of the Trustee, the
discharge of the Company's obligations pursuant to Article VIII of this
Indenture and any rejection or termination of this Indenture under any
Bankruptcy Law.
Section 7.8. REPLACEMENT OF TRUSTEE.
The Trustee may resign by notifying the Company in writing. The Holder or
Holders of a majority in principal amount of the outstanding Notes may remove
the Trustee by so notifying the Company and the Trustee in writing and may
appoint a successor trustee with the Company's consent. The Company may
remove the Trustee if:
(1) the Trustee fails to comply with Section 7.1(d) or 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver, Custodian, or other public officer takes charge of the
Trustee or its Property; or
(4) the Trustee become incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office of
Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holder
or Holders of a majority in principal amount of the Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its appointment to
the retiring Trustee and to the Company. Immediately after that and provided
that all sums owing to the Trustee provided for in Section 7.7 have been paid,
the retiring Trustee shall transfer all Property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.7, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. A successor Trustee shall mail notice of its succession
to each Holder.
If a successor Trustee does not take office within 60 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company or the Holder
or Holders of at least 10% in principal amount of the outstanding Notes may
petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.10, any Noteholder may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the
Company's obligations under Section 7.7 shall continue for the benefit of the
retiring Trustee.
Section 7.9. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
resulting, surviving or transferee corporation without any further act shall,
if such resulting, surviving or transferee corporation is otherwise eligible
hereunder, be the successor Trustee.
Section 7.10. ELIGIBILITY; DISQUALIFICATION.
The Trustee shall at all times satisfy the requirements of TIA Section
310(a)(1) and TIA Section 310(a)(5). The Trustee shall have a combined
capital and surplus of at least $25,000,000 as set forth in its most recent
published annual report of condition. The Trustee shall comply with TIA
Section 310(b).
Section 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
Article VIII.
TERMINATION AND DISCHARGE
Section 8.1. TERMINATION OF OBLIGATIONS UPON CANCELLATION OF THE NOTES.
The Company and the Guarantors may terminate all of their obligations under
this Indenture (subject to Section 8.2) when:
(1) all Notes theretofore authenticated and delivered (other than Notes
which have been destroyed, lost or stolen and which have been replaced or paid
as provided in Section 2.7) have been delivered to the Trustee for
cancellation;
(2) the Company or a Guarantor has paid or caused to be paid all sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officer's Certificate and
an Opinion of Counsel (who may be outside counsel to the Company, but not in-
house counsel to the Company or any of its Subsidiaries), each stating that
all conditions precedent specified herein relating to the satisfaction and
discharge of this Indenture have been complied with and that such satisfaction
and discharge will not result in a breach or violation of, or constitute a
Default under, this Indenture or any other instrument to which the Company,
any Guarantor or any of their Subsidiaries is a party or by which it or their
Property is bound.
Section 8.2. SURVIVAL OF CERTAIN OBLIGATIONS.
Notwithstanding the termination of this Indenture and of the Notes referred to
in Section 8.1 , the respective obligations of the Company, the Guarantors and
the Trustee under Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.11, 2.12, Article
III, Article IV, 5.1, 5.2, 5.4, 5.6, 5.15, 6.7, 6.8, 7.7, 7.8, 8.4, 13.1,
13.2, 13.4, 13.5, 13.7, 13.8, 13.11 and this Section 8.2 shall survive until
the Notes are no longer outstanding, and thereafter the obligations of the
Company and the Trustee under Sections 6.8, 7.7, 7.8, 8.4, 13.11 and this
Section 8.2 shall survive. Nothing contained in this Article VIII shall
abrogate any of the obligations or duties of the Trustee under this Indenture.
Section 8.3. ACKNOWLEDGMENT OF DISCHARGE BY TRUSTEE.
After (i) the conditions of Section 8.1 have been satisfied, (ii) the Company
or a Guarantor has paid or caused to be paid all other sums payable hereunder
by the Company and (iii) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent referred to in clause (i), above, relating to the satisfaction and
discharge of this Indenture have been complied with, the Trustee upon request
shall acknowledge in writing the discharge of the Company's and the
Guarantors' obligations under this Indenture except for those surviving
obligations specified in Section 8.2.
Section 8.4. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender or
U.S. Government Obligations in accordance with Section 8.1 by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.1 until such time as the Trustee or Paying Agent is permitted to
apply all such U.S. Legal Tender or U.S. Government Obligations in accordance
with Section 8.1 ; PROVIDED, HOWEVER, that if the Company or a Guarantor has
made any payment of principal of, premium, if any, or interest on any Notes
because of the reinstatement of its obligations, the Company or such Guarantor
shall be subrogated to the rights of the Holders of such Notes to receive such
payment from the U.S. Legal Tender or U.S. Government Obligations held by the
Trustee or Paying Agent.
Article IX.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holder, the Company or any Guarantor, when
authorized by Board Resolutions, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, or may amend,
modify or supplement the Collateral Documents, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to cure any ambiguity, defect, or inconsistency, or to make any other
provisions with respect to matters or questions arising under this Indenture
which shall not be inconsistent with the provisions of this Indenture,
provided such action pursuant to this clause (1) shall not adversely affect
the interests of any Holder in any respect;
(2) to add to the covenants of the Company for the benefit of the Holders,
or to surrender any right or power herein conferred upon the Company or to
make any other change that does not adversely affect the rights of any Holder;
provided, that the Company has delivered to the Trustee an Opinion of Counsel
stating that such change does not adversely affect the rights of any Holder;
(3) to provide for additional Collateral for or additional Guarantors of
the Notes;
(4) to provide for uncertificated Notes in addition to or in place of
certificated Notes in compliance with this Indenture; or
(5) to comply with the TIA.
Section 9.2. AMENDMENTS, SUPPLEMENTAL INDENTURES AND WAIVERS WITH CONSENT OF
HOLDERS.
Subject to Section 6.8 and the last sentence of this paragraph, with the
consent of the Holders of a majority in aggregate principal amount of then
outstanding Notes by written act of said Holders delivered to the Company and
the Trustee, the Company and any Guarantor, when authorized by Board
Resolutions, and the Trustee may amend or supplement the Mortgage, this
Indenture or the Notes or enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of the Mortgage, this Indenture or the
Notes or of modifying in any manner the rights of the Holders under the
Collateral Documents, this Indenture or the Notes. Subject to Section 6.8 and
the last sentence of this paragraph, the Holder or Holders of a majority in
aggregate principal amount of then outstanding Notes not held by Affiliates of
the Issuer may waive compliance by the Company or any Guarantor with any
provision of the Collateral Documents, this Indenture or the Notes.
Notwithstanding the foregoing provisions of this Section 9.2, no such
amendment, supplemental indenture or waiver shall, without the consent of the
Holders of at least 66 2/3% of the aggregate principal amount of outstanding
Notes not held by Affiliates of the Issuer, change any provision of Article
IV, Article XII or (except for the Stated Maturity, which is governed by
clause (4) (below) extend any Maturity Date of any Note, and no such
amendment, supplemental indenture or waiver shall, without the consent of the
Holder of each outstanding Note affected thereby:
(1) change the percentage of principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver of any provision of this
indenture or the securities;
(2) reduce the rate or extend the time for payment of interest on any Note;
(3) reduce the principal amount of any Note;
(4) change the Stated Maturity of any Note;
(5) alter the redemption provisions of Article III in a manner adverse to
any Holder;
(6) make any changes in the provisions concerning waivers of Defaults or
Events of Default by Holders of the Notes or the rights of Holders to recover
the principal or premium of, interest on, or redemption payment with respect
to, any Note;
(7) make any changes in Section 6.4, 6.7 or this third sentence of this
Section 9.2;
(8) make the principal of, or the interest on, any Note payable with
anything or in any manner other than as provided for in this Indenture and the
Notes as in effect on the date hereof; or
(9) make the Notes subordinated in right of payment except as provided
herein to any extent or under any circumstances to any other indebtedness.
It shall not be necessary for the consent of the Holders under this Section to
approve the particular form of any proposed amendment, supplement or waiver,
but it shall be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section becomes effective,
the Company shall mail to the Holders affected thereby a notice briefly
describing the amendment, supplement or waiver. Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture.
After an amendment, supplement or waiver under this Section 9.2 or 9.4 becomes
effective, it shall bind each Holder.
In connection with any amendment, supplement or waiver under this Article IX,
the Company may, but shall not be obligated to, offer to any Holder who
consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or
waiver.
Section 9.3. COMPLIANCE WITH TIA.
Every amendment, waiver or supplement of this Indenture or the Notes shall
comply with the TIA as then in effect.
Section 9.4. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, waiver or supplement becomes effective, a consent to it by
a Holder is a continuing consent by the Holder and every subsequent Holder of
a Note or portion of a Note that evidences the same debt as the consenting
Holder's Note, even if notation of the consent is not made on any Note.
However, any such Holder or subsequent Holder may revoke the consent as to his
Note or portion of his Note by written notice to the Company or the person
designated by the Company as the person to whom consents should be sent if
such revocation is received by the Company or such person before the date on
which the Trustee receives an Officers' Certificate Certifying that the
Holders of the requisite principal amount of Notes have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Company notwithstanding the provisions of the TIA. If a record date is fixed,
then notwithstanding the last sentence of the immediately preceding paragraph,
those persons who were Holders at such record date, and only those persons (or
their duly designated proxies), shall be entitled to revoke any consent
previously given, whether or not such persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than
90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall bind
every Noteholder, unless it makes a change described in any of clauses (1)
through (8) of Section 9.2, in which case, the amendment, supplement or waiver
shall bind only each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same debt
as the consenting Holder's Note; PROVIDED, HOWEVER, that any such waiver shall
not impair or affect the right of any Holder to receive payment of principal
and premium and interest on a Note, on or after the respective dates set for
such amounts to become due and payable expressed in such Note, or to bring
suit for the enforcement of any such payment on or after such respective
dates.
Section 9.5. NOTATION ON OR EXCHANGE OF NOTES.
If an amendment, supplement or waiver changes the terms of a Note, the Trustee
may require the Holder of the Note to deliver it to the Trustee or require the
Holder to put an appropriate notation on the Note. The Trustee may place an
appropriate notation on the Note about the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Note shall issue, the Guarantors shall endorse and
the Trustee shall authenticate a new Note that reflects the changed terms.
Any failure to make the appropriate notation or to issue a new Note shall not
affect the validity of such amendment, supplement or waiver.
Section 9.6. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall execute any amendment, supplement or waiver authorized
pursuant to this Article IX, provided, that the Trustee may, but shall not be
obligated to, execute any such amendment, supplement or waiver which affects
the Trustee's own rights, duties or immunities under this Indenture. The
Trustee shall be entitled to receive, and shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of any amendment,
supplement or waiver authorized pursuant to this Article IX is authorized or
permitted by this Indenture.
Article X.
MEETINGS OF NOTEHOLDERS
Section 10.1 PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Noteholders may be called at any time and from time to time
pursuant to the provisions of this Article X for any of the following
purposes:
(a) to give any notice to the Company, any Guarantor or to the Trustee, or
to give any directions to the Trustee, or to waive or to consent to the
waiving of any Default or Event of Default hereunder and its consequences, or
to take any other action authorized to be taken by Noteholders pursuant to any
of the provisions of Article VI;
(b) to remove the Trustee or appoint a successor Trustee pursuant to the
provisions of Article VI;
(c) to consent to a waiver pursuant to the provisions of Section 9.2; or
(d) to take any other action (i) authorized to be taken by or on behalf of
the Holder or Holders of any specified aggregate principal amount of the Notes
under any other provision of this Indenture (including the selection of the
Consulting Professional), or authorized or permitted by law or (ii) which the
Trustee deems necessary or appropriate in connection with the administration
of this Indenture.
Section 10.2. MANNER OF CALLING MEETINGS.
The Trustee may at any time call a meeting of Noteholders to take any action
specified in Section 10.1, to be held at such time and at such place in The
City of New York, State of New York or elsewhere as the Trustee shall
determine. Notice of every meeting of Noteholders, setting forth the time and
place of such meeting and in general terms the action proposed to be taken at
such meeting, shall be mailed by the Trustee, first-class postage prepaid, to
the Company, the Guarantors and to the Holders at their last addresses as they
shall appear on the registration books of the Registrar, not less than 10 nor
more than 60 days prior to the date fixed for a meeting. The Company shall
pay the costs and expenses of preparing and mailing such notice.
Any meeting of Noteholders shall be valid without notice if the Holders of all
Notes then outstanding are present in person or by proxy, or if notice is
waived before or after the meeting by the Holders of all Notes outstanding,
and if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.
Section 10.3. CALL OF MEETINGS BY COMPANY OR HOLDERS.
In case at any time the Company, pursuant to a Board Resolution, or the
Holders of not less than 10% in aggregate principal amount of the securities
then outstanding, shall have requested the Trustee to call a meeting of
Noteholders to take any action specified in Section 10.1, by written request
setting forth in reasonable detail the action proposed to be taken at the
meeting, and the Trustee shall not have mailed the notice of such meeting
within 20 days after receipt of such request, then the Company or the Holders
of Notes in the amount above specified may determine the time and place in The
City of New York, State of New York or elsewhere for such meeting and may call
such meeting for the purpose of taking such action, by mailing or causing to
be mailed notice thereof as provided in Section 10.2, or by causing notice
thereof to be published at least once in each of two successive calendar weeks
(on any Business Day during such week) in a newspaper or newspapers printed in
the English language, customarily published at least five days a week of a
general circulation in The City of New York, State of New York, the first such
publication to be not less than 10 nor more than 60 days prior to the date
fixed for the meeting.
Section 10.4. WHO MAY ATTEND AND VOTE AT MEETINGS.
To be entitled to vote at any meeting of Noteholders, a person shall (a) be a
registered Holder of one or more Notes, or (b) be a person appointed by an
instrument in writing as proxy for the registered Holder or Holders of Notes.
The only persons who shall be entitled to be present or to speak at any
meeting of Noteholders shall be the persons entitled to vote at such meeting
and their counsel and any representatives of the Trustee and its counsel and
any representatives of the Company, the Guarantors and their counsel.
Section 10.5. REGULATIONS MAY BE MADE BY TRUSTEE; CONDUCT OF THE MEETING;
VOTING RIGHTS; ADJOURNMENT.
Notwithstanding any other provisions of this Indenture, the Trustee may make
such reasonable regulations as it may deem advisable for any action by or any
meeting of Noteholders, in regard to proof of the holding of Notes and of the
appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, and submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think appropriate. Such regulations may
fix a record date and time for determining the Holders of record of Notes
entitled to vote at such meeting, in which case those and only those persons
who are Holders of securities at the record date and time so fixed, or their
proxies, shall be entitled to vote at such meeting whether or not they shall
be such Holders at the time of the meeting.
The Trustee shall, by an instrument in writing, appoint a temporary chairman
of the meeting, unless the meeting shall have been called by the Company or by
Noteholders as provided in Section 10.3, in which case the Company or the
Noteholders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary
of the meeting shall be elected by vote of the holders of a majority in
principal amount of the Notes represented at the meeting and entitled to vote.
At any meeting each Noteholder or proxy shall be entitled to one vote for each
$1,000 principal amount of Notes held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in respect of
any Notes challenged as not outstanding and ruled by the chairman of the
meeting to be not then outstanding. The chairman of the meeting shall have no
right to vote other than by virtue of Notes held by him or instruments in
writing as aforesaid duly designating him as the proxy to vote on behalf of
other Noteholders. Any meeting of Noteholders duly called pursuant to the
provisions of Section 10.2 or Section 10.3 may be adjourned from time to time
by vote of the Holder or Holders of a majority in aggregate principal amount
of the Notes represented at the meeting and entitled to vote, and the meeting
may be held as so adjourned without further notice.
Section 10.6. VOTING AT THE MEETING AND RECORD TO BE KEPT.
The vote upon any resolution submitted to any meeting of Noteholders shall be
by written ballots on which shall be subscribed the signatures of the Holders
of Notes or of their representatives by proxy and the principal amount of the
Notes voted by the ballot. The permanent chairman of the meeting shall
appoint two inspectors of votes, who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with the secretary
of the meeting their verified written reports in duplicate of all votes cast
at the meeting. A record in duplicate of the proceedings of each meeting of
Noteholders shall be prepared by the secretary of the meeting and there shall
be attached to such record the original reports of the inspectors of votes on
any vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts, setting forth a copy of the notice of the meeting and
showing that such notice was mailed as provided in Section 10.2 or published
as provided in Section 10.3. The record shall be signed and verified by the
affidavits of the permanent chairman and the secretary of the meeting and one
of the duplicates shall be delivered to the Company and the other to the
Trustee to be preserved by the Trustee, the latter to have attached thereto
the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the matters
therein stated.
Section 10.7. EXERCISE OF RIGHTS OF TRUSTEE OR NOTEHOLDERS MAY NOT BE
HINDERED OR DELAYED BY CALL OF MEETING.
Nothing contained in this Article X shall be deemed or construed to authorize
or permit, by reason of any call of a meeting of Noteholders or any rights
expressly or impliedly conferred hereunder to make such call, any hindrance or
delay in the exercise of any right or rights conferred upon or reserved to the
Trustee or to the Noteholders under any of the provisions of this Indenture or
of the Notes.
Article XI.
APPLICATION OF TRUST MONEYS
Section 11.1. "TRUST MONEYS" DEFINED.
All Cash or Cash Equivalents received by the Trustee:
(a) as Boat Conveyance Proceeds; or
(b) upon the release (other than in accordance with Section 4.3 hereof) of
Collateral from the Lien of any Collateral Document, subject to satisfaction
of any Permitted Liens on such Collateral or as otherwise permitted herein; or
(c) as Insurance Proceeds (other than (i) any liability insurance proceeds
payable to the Trustee for any loss, liability or expense incurred by it, and
(ii) proceeds from any single casualty to Collateral (other than the Crescent
City Queen Casino, any Qualified Substitute Boat or Substitute Boat, and the
JCC Real Property) where such proceeds do not exceed $50,000 from such
casualty; PROVIDED, HOWEVER, that such proceeds described in the foregoing
clause (ii) shall constitute Collateral for all other purposes under this
Indenture and the Collateral Documents) including proceeds of any insurance
received pursuant to Article I, Section 15 of the Mortgage or pursuant to the
corresponding provisions of the Other Boat Mortgage or pursuant to Section IV
of the JCC Mortgage; or
(d) as proceeds of any other sale or other disposition of all or any part of
the Collateral by or on behalf of the Trustee (including any proceeds received
pursuant to Article II, Section 2 of the Mortgage or the corresponding
provisions of the Other Boat Mortgage or pursuant to Section VI of the CMLI
Mortgage) or any collection, recovery, receipt, appropriation or other
realization of or from all or any part of the Collateral pursuant to the
Collateral Documents or otherwise; or
(e) for application under this Article XI as elsewhere provided in this
Indenture or the Collateral Documents, or whose disposition is not elsewhere
otherwise specifically provided for herein or in the Collateral Documents;
(all such moneys being herein sometimes called "Trust Moneys"; PROVIDED,
HOWEVER, that Trust Moneys shall not include any Property deposited with the
Trustee pursuant to Section 3.7 or Article VIII or delivered to or received by
the Trustee for application in accordance with Section 6.6 hereof) shall be
subject to a Lien and security interest in favor of the Trustee and shall be
held by the Trustee for the benefit of the Holders as a part of the Collateral
and, upon any entry upon or sale or other disposition of the Collateral or any
part thereof pursuant to the Collateral Documents, said Trust Moneys shall be
applied in accordance with Section 6.6; but, prior to any such entry, sale or
other disposition, all or any part of the Trust Moneys may be withdrawn, and
shall be released, paid or applied by the Trustee, from time to time as
provided in this Article XI or Article IV.
On May 13, 1996 there shall be established and, at all times hereafter until
this Indenture shall have terminated, there shall be maintained by the Trustee
, an account which shall be entitled the "Collateral Account" which shall be
established and maintained by the Trustee at its offices in the Borough of
Manhattan, The City of New York. The Collateral Account shall initially
contain the following "Basic Sub-Accounts" established by and with the
Trustee:
(i) the Boat Conveyance Proceeds Sub-Account;
(ii) the Net Awards Collateral Sub-Account;
(iii) the Guarantor Collateral Sub-Account;
(iv) the Company Collateral Sub-Account; and
(v) the Company Payment Sub-Account.
All Trust Moneys which are received by the Trustee shall be deposited in the
Collateral Account as follows:
(A) all Boat Conveyance Proceeds shall be deposited into the Boat
Conveyance Proceeds Sub-Account;
(B) all Insurance Proceeds and Net Awards shall be deposited into the Net
Awards Sub-Account;
(C) all Cash proceeds of Collateral owned by the Guarantors shall be
deposited into the Guarantor Collateral Sub-Account;
(D) all Trust Moneys paid to the Trustee for the purpose and in
anticipation of the distribution of same to the Holders pursuant to any
redemption or principal amortization shall be deposited in the Company Payment
Sub-Account; and
(E) all other Trust Moneys shall be deposited in the Company Collateral
Sub-Account.
Trust Moneys thereafter shall be held, applied and/or disbursed by the Trustee
in accordance with the terms of this Indenture. The Trustee shall have a Lien
on and security interest in the Collateral Account and the Basic Sub-Accounts
and all Cash and Cash Equivalents therein from time to time for the benefit of
the Holders as part of the Collateral.
Section 11.2. WITHDRAWALS OF INSURANCE PROCEEDS AND NET AWARDS.
To the extent that any Trust Moneys consist of Insurance Proceeds or a Net
Award received by the Trustee pursuant to the provisions of Article I, Section
15 of the Mortgage or the corresponding provisions of the Other Boat Mortgage
(which Net Award is required to be applied, or may be applied by the
applicable mortgagor or pledgor, to effect a restoration to the affected
Collateral) or Section IV of the JCC Mortgage, such Trust Moneys may be
withdrawn by the Company and shall be paid by the Trustee upon a request by a
Company Order to reimburse the Company to repair, rebuild or replace the
Property destroyed, damaged or taken, upon receipt by the Trustee of the
following:
(a) an Officers' Certificate of the Company dated not more than 30 days
prior to the date of the application for the withdrawal and payment of such
Trust Moneys:
(i) that expenditures have been made, or costs incurred, by the Company
in a specified amount for the purpose of making certain repairs, rebuildings
and replacements of the Collateral, which shall be briefly described, and
stating the fair value thereof to the Company at the date of the expenditure
or incurrence thereof by the Company;
(ii) that no part of such expenditures or costs has been or is being made
the basis for the withdrawal of any Trust Moneys in any previous or then
pending application pursuant to this Section 11.2;
(iii) that there is no outstanding Indebtedness except as permitted
herein, other than costs for which payment is being requested and customary
retainage not to exceed ten per cent (10%);
(iv) that the Property to be repaired, rebuilt or replaced is necessary
or desirable in the conduct of the business of the Company;
(v) whether any part of such repairs, rebuildings or replacements within
six months before the date of acquisition thereof by the Company has been used
or operated by others than the Company in a business similar to that in which
such Property has been or is to be used or operated by the Company and whether
the fair value to the Company at the date of such acquisition, of such part of
such repairs, rebuildings or replacements is at least the greater of $25,000
and 1% of the aggregate principal amount of the outstanding Notes;
(vi) that no Default or Event of Default shall have occurred and be
continuing; and
(vii) that all conditions precedent herein provided for relating to such
withdrawal and payment have been complied with;
(b) all documentation required under Section 314(d) of the TIA;
(c) an Architect's Certificate stating:
(i) that all restoration work to which such request relates has been done
in compliance with the approved plans and specifications and in accordance
with all provisions of law;
(ii) the sums requested are required to reimburse the Company for
payments by the Company to, or are due to, the contractors, subcontractors,
materialmen, laborers, engineers, architects or other persons rendering
services or materials for the restoration, and that, when added to the sums,
if any, previously paid out by Trustee, such sums do not exceed the cost of
the restoration to the date of such Architect's Certificate;
(iii) whether or not the Estimate continues to be accurate, and if not,
what the entire cost of such restoration is then estimated to be; and
(iv) that the amount of the Insurance Proceeds or Net Award plus any
amount received by the Trustee under a surety, guaranty, letter of credit or
commitment remaining after giving effect to such payment will be sufficient on
completion of the restoration to pay for the same in full (including, in
detail, an estimate by trade of the remaining costs of completion);
(d) an Opinion of Counsel (who shall be outside counsel to the Company)
substantially stating:
(i) that the instruments that have been or are therewith delivered to the
Trustee conform to the requirements of this Indenture and the Collateral
Documents, and that, upon the basis of such requests of the Company and the
accompanying documents specified in this Section 11.2, all conditions
precedent herein provided for relating to such withdrawal and payment have
been complied with, and the Trust Moneys whose withdrawal is then requested
may be lawfully paid over under this Section 11.2;
(ii) that the Collateral Documents create a valid and perfected Lien on
such repairs, rebuildings and replacements, that the same and every part
thereof are subject to no Liens prior to the Lien of the Collateral Documents,
except Liens of the type permitted under the Collateral Documents to which the
Property so destroyed or damaged shall have been subject at the time of such
destruction or damage; and
(iii) that all of the right, title and interest in and to said repairs,
rebuildings or replacements, or combination thereof, of the Company are then
subject to the Lien of the Collateral Documents;
(e) each such request shall be accompanied by:
(i) an Opinion of Counsel or a title insurance policy, binder or
endorsement satisfactory to the Trustee confirming that there has not been
filed with respect to all or any part of the mortgaged Property any Lien which
could have priority over the Lien of the Mortgage or the Other Boat Mortgage,
as the case may be other than those Liens which will be satisfied with the
proceeds being advanced; and
(ii) an Officer's Certificate stating that all certificates, permits,
licenses, waivers, other documents, or any combination of the foregoing
required by law in connection with or as a result of such restoration to the
extent then completed have been obtained.
Upon compliance with the foregoing provisions of this Section 11.2 and the
provisions of the applicable Collateral Document, the Trustee shall pay on the
written request of the Company an amount of Trust Moneys of the character
aforesaid equal to the amount of the expenditures or costs stated in the
Officers' Certificate required by clause (i) of subsection (a) of this Section
11.2, or the fair value to the Company of such repairs, rebuildings and
replacements stated in such Officers' Certificate (or in such independent
appraiser's or independent financial advisor's certificate, if required by the
TIA), whichever is less; PROVIDED, HOWEVER, that notwithstanding the above, so
long as no Default or Event of Default shall have occurred and be continuing,
in the case that any insurance proceeds or award for such Property or proceeds
of such sale does not exceed the lesser of $25,000 or 1% of the principal
amount of the then outstanding Notes, and, in the good faith estimate of the
Company, such destruction or damage resulting in such insurance proceeds does
not detrimentally affect the value or use of the applicable Collateral in any
material respect, upon delivery to the Trustee of an Officers' Certificate of
the Company to such effect, the Trustee shall release to the Company such
insurance proceeds or condemnation award for such Property or proceeds of such
sale, free of the Lien hereof and of the Collateral Documents, and such
proceeds shall be deemed to have beenreleased pursuant to Section 4.6 hereof.
Section 11.3. WITHDRAWAL OF BOAT CONVEYANCE PROCEEDS FOR PURCHASE OR QUALIFIED
LESSEE LEASE OF SUBSTITUTE BOAT.
To the extent that any Trust Moneys consist of Boat Conveyance Proceeds
received by the Trustee pursuant to the provisions of Section 4.4, and the
Company intends to use such Boat Conveyance Proceeds pursuant to the
provisions of Section 4.4(b), such Boat Conveyance Proceeds may be withdrawn
by the Company and shall be paid by the Trustee to the Company (or as
otherwise directed by the Company) upon a Company Order to the Trustee and
upon receipt by the Trustee of the following:
(a) A notice (each, a "Boat Conveyance Proceeds Release Notice"), which
shall (i) refer to this Section 11.3, (ii) describe with particularity the use
to be made by the Company (including, without limitation, (A) the amount of
the purchase price of such Qualified Substitute Boat and, if such withdrawal
is for the payment of interest on or a principal installment of the financing
of such purchase price, the amount of such current payment and the outstanding
principal amount of such financing, (B) the amount and nature of any Capital
Expenditures, and (C) the calculation of Adjusted Rent Obligations for which
such Company Order is made) with respect to the released Boat Conveyance
Proceeds in accordance with Section 4.4(b) and (iii) be accompanied by a
counterpart of the instruments proposed to give effect to the release fully
executed and acknowledged (if applicable) by all parties thereto other than
the Trustee;
(b) An Officers' Certificate certifying that (i) the release of the Boat
Conveyance Proceeds complies with the terms and conditions of Section 4.4 of
this Indenture, (ii) there is no Default or Event of Default in effect or
continuing on the date thereof (both before and after giving effect to the
proposed use of the Boat Conveyance Proceeds), (iii) the release of the Boat
Conveyance Proceeds will not result in a Default or Event of Default hereunder
and (iv) all conditions precedent to such release have been complied with;
(c) All documentation required under Section 314(d) of the TIA;
(d) If the Boat Conveyance Proceeds are to be used for in whole or in part
for the purchase price of a Qualified Substitute Boat or the financing thereof
or the servicing and amortization of such financing from time to time, the
Company shall also deliver to the Trustee:
(i) an Other Boat Mortgage and other agreements or instruments in
recordable form sufficient to grant to the Trustee, for the benefit of the
Holders, a valid perfected first priority Lien on (i) such Qualified
Substitute Boat, and (ii) all contracts, agreements and other purchase
documentation, and all other indemnification and other contract rights, of the
Company arising out of or related to its purchase of such Qualified Substitute
Boat, subject only to Liens permitted pursuant to Section 5.13 hereof;
(ii) a policy of title insurance issued by a nationally recognized title
insurance company and approved by the Trustee, which approval shall not be
unreasonably withheld (or an endorsement to the title insurance policy issued
to the trustee on the Issue Date or a commitment to issue a policy of title
insurance or an endorsement), insuring that the Lien of this Indenture and the
Collateral Documents constitutes a valid and perfected first priority Lien on
such Qualified Substitute Boat in an aggregate amount equal to the fair value
of the Qualified Substitute Boat, together with an Officers' Certificate (or,
at the request of the Trustee in its sole discretion, an Opinion of Counsel)
stating that any specific exceptions to such title insurance are Liens
permitted pursuant to Section 5.13 hereof and containing such endorsements and
other assurances of the type included in the title insurance policy delivered
to the Trustee on the Issue Date with respect to the Mortgage; and
(iii) evidence of payment or a closing statement indicating payment of
all title premiums, recording charges, transfer taxes and other costs and
expenses, including reasonable legal fees and disbursements of counsel for
each of the Trustee (and any local counsel), that may be incurred to validly
and effectively subject the Qualified Substitute Boat to the Lien of any
applicable Collateral Document and to perfect such Lien;
PROVIDED, HOWEVER, that if the deliveries required under clauses (d)(i), (ii),
and (iii) above have been previously made to the Trustee under the provisions
of this clause (d), the Company shall be required only to deliver an Officer's
Certificate certifying that the documents, agreements and instruments
delivered under clauses (d)(i), (ii) and (iii) above are in full force and
effect;
(e) If the Boat Conveyance Proceeds are to be used in whole or in part for
the payment of the Adjusted Rent Obligations of the Company pursuant to a
Qualified Lessee Lease, the Company shall also deliver to the Trustee:
(i) a leasehold boat mortgage or other instruments in recordable form
sufficient to grant to the Trustee, for the benefit of the Holders, a valid
first priority Lien on all right, title and interest of the Company in the
Qualified Lessee Lease; PROVIDED, HOWEVER, that if the deliveries required
under this clause (i) have been previously made to the Trustee under the
provisions of this clause (e), the Company shall be required only to deliver
an Officer's Certificate certifying that the documents, agreements and
instruments delivered under this clause(i) are in full force and effect;
(ii) an Opinion of Counsel and a title insurance policy, binder or
endorsement satisfactory to the Trustee, in each case confirming that there
has not been filed with respect to all or any part of the Substitute Boat
which is the subject of the Qualified Lessee Lease any Lien which could have
priority over the Lien of the leasehold boat mortgage of the Trustee; and
(iii) an Officer's Certificate certifying that (A) such Qualified Lessee
Lease permits the interest of the Company to be encumbered by such leasehold
boat mortgage or other instruments evidencing the Liens of the Trustee, (B)
the Company's interest in such Qualified Lessee Lease is assignable to the
Trustee or its designee upon notice to, but without the consent of, the lessor
thereunder, and, in the event that it is so assigned, is further assignable by
the Trustee or its designee and their successors and assigns upon notice to,
but without a need to obtain the consent of, such lessor, and upon such
assignment the assignee shall be fully released from all liability thereunder;
(C) such Qualified Lessee Lease is in full force and effect and no default has
occurred under such lease, nor is there any existing condition which, but for
the passage of time or the giving of notice, would result in a default under
the terms of such lease; (D) such Qualified Lessee Lease requires the lessor
thereunder to give notice of any default by the Lessee to the Trustee, and
such Qualified Lessee Lease further provides that no notice of termination
given under such lease shall be effective against the Trustee unless a copy
has been delivered to the Trustee in the manner described in such lease; (E) a
mortgagee is permitted a reasonable opportunity (including, where necessary,
sufficient time to gain possession of the interest of the Lessee under such
lease) to cure any default under such Qualified Lessee Lease, which is curable
after the receipt of notice of any such default before the lessor thereunder
may terminate such lease, and if such Qualified Lessee Lease is terminated,
the lessor thereunder shall at the option of the Trustee enter into a new
lease on exactly the terms of the Qualified Lessee Lease; (F) such Qualified
Lessee Lease does not impose any restrictions on subletting which would be
viewed as commercially unreasonable by prudent ship lending institutions, and
such Qualified Lessee Lease contains a covenant that the lessor thereunder is
not permitted, in the absence of any uncured default, to disturb the
possession, interest or quiet enjoyment of any Lessee in the relevant portion
of the Property subject to such lease for any reason, or in any manner, which
would adversely affect the security provided by the related leasehold boat
mortgage; (G) all amounts requested under the Company Order are to pay
Adjusted Rent Obligations of the Company; and (H) the Lessee's interest in the
Substitute Boat which is subject to such Qualified Lessee Lease is not subject
to any Lien other than the Qualified Lessee Lease and any Lien for taxes not
due and payable.
(f) An Opinion of Counsel stating that the documents that have been or are
therewith delivered to the Trustee conform to the requirements of this
Indenture and that all conditions precedent herein provided for (including,
without limitation, the conditions specified in clauses (d) and (e) of this
Section 11.3) relating to such application of Boat Conveyance Proceeds have
been complied with.
Upon compliance with the foregoing provisions of this Indenture, the Trustee
shall apply the Boat Conveyance Proceeds as directed and specified by the
Company
Section 11.4. WITHDRAWAL OF BOAT CONVEYANCE PROCEEDS FOR CONSTRUCTION OF
QUALIFIED SUBSTITUTE BOAT OR FOR CAPITAL EXPENDITURES ON SUCH QUALIFIED
SUBSTITUTE BOAT.
To the extent that any Trust Moneys consist of Boat Conveyance Proceeds
received by the Trustee pursuant to the provisions of Section 4.4, and the
Company intends to use such Boat Conveyance Proceeds for the construction of a
Qualified Substitute Boat pursuant to the provisions of Section 4.4(b), or for
Permitted Capital Expenditures, such Boat Conveyance Proceeds may be withdrawn
by the Company and shall be paid by the Trustee to the Company (or as
otherwise directed by the Company) upon a Company Order to the Trustee and
upon the following terms and conditions:
(a) The Qualified Substitute Boat shall be constructed and equipped, and the
Permitted Capital Expenditures shall be made, pursuant to plans and
specifications prepared by independent, licensed architects and engineers
(collectively, the "Plans"), a construction agreement and construction
schedule (collectively the "Construction Agreement") and a budget (the
"Budget") which shall have been approved in writing by the Consulting
Professional, in its best professional opinion, and a certificate of the
Consulting Professional to that effect shall have been delivered to the
Trustee.
(b) Disbursements for costs of constructing and equipping the Qualified
Substitute Boat or the Permitted Capital Expenditures included in the Budget,
shall be made as such costs are incurred, but not more often than monthly; the
amount of the costs which have been incurred shall be as is set forth and
approved, from time to time, in a certificate of the Consulting Professional
and such other evidence as may be reasonably required by the Trustee, less a
retention of 10% of such costs until the Qualified Substitute Boat or the
Permitted Capital Expenditures have been fully completed and equipped.
(c) If at any time the Consulting Professional determines that the unfunded
cost of completing the construction and equipping of the Qualified Substitute
Boat or the Permitted Capital Expenditures exceeds the amount of the Boat
Conveyance Proceeds remaining in the Boat Conveyance Proceeds Sub-Account, the
Company shall deposit with the Trustee in the Boat Conveyance Proceeds Sub-
Account additional funds from some other source in an amount equal to such
excess, and such funds shall be used first to complete the construction and
the equipping of the Qualified Substitute Boat or the Permitted Capital
Expenditures.
(d) Amounts shall be disbursed from the Boat Conveyance Proceeds Sub-Account
only for payment of costs specified in the Budget.
(e) The Qualified Substitute Boat, if constructed in accordance with the
Plans, will comply with all legal requirements, as evidenced by an opinion of
outside counsel for the Company satisfactory to the Consulting Professional.
(f) Upon demand of the Consulting Professional, the Company, at its sole cost
and expense, shall correct promptly any defect in the Qualified Substitute
Boat, any material departure from the Plans and any failure to comply with
applicable legal requirements, all to the satisfaction of the Consulting
Professional.
(g) The Company, without the prior written consent of the Consulting
Professional, shall not make (a) any single change to the Plans that would
require the Company to incur greater than $25,000 in additional costs or (b)
any changes to the Plans that would in the aggregate, require the Company to
incur greater than $100,000 in additional costs. Furthermore, the Company
shall provide copies of all change orders, change bulletins and other
revisions of the Plans and the Construction Agreement to the Consulting
Professional prior to the commencement of any work reflecting such changes or
revisions, regardless of whether the Consulting Professional's prior approval
is required.
(h) The Company shall pay or reimburse the Trustee and the Consulting
Professional for all expenses incurred by the Trustee and the Consulting
Professional with respect to any and all transactions and matters contemplated
hereby including, without limitation, the fees of the Consulting Professional.
(i) The Trustee shall have received a certificate from the Consulting
Professional certifying that:
(i) it is satisfied that all past and current (if then due and payable)
taxes and assessments applicable to the Qualified Substitute Boat, the
Permitted Capital Expenditure, or the Property on which the Permitted Capital
Expenditure is to be constructed (the "Improved Property"), or payable by the
Company have been paid;
(ii) if the Qualified Substitute Boat or the Permitted Capital
Expenditure is constructed as planned, the Qualified Substitute Boat or the
Permitted Capital Expenditure, as the case may be, shall be suitable for its
intended purpose and will be capable of being put into service without the
need for additional expenditures except as set forth in the approved Budget;
(iii) it is satisfied that, and it has received an opinion of counsel
addressed to the Trustee for the benefit of the Holders, that the Trustee has
a valid perfected security interest in the Qualified Substitute Boat, the
Permitted Capital Expenditure and the Improved Property and all furniture,
fixtures, equipment thereon or forming a part thereof or for which advances
hereunder have been made free and clear of all other Liens, claims and
encumbrances other than Liens permitted pursuant to Section 5.13 hereof;
(iv) the Contractor shall have entered into an agreement with the
Consulting Professional on behalf of the Trustee in form and substance
satisfactory to the Trustee pursuant to which the Contractor shall agree that
it shall not make any changes to the Plans or execute any change orders except
as expressly permitted hereby and that in the event of a default of the
Company under the Construction Contract or the bankruptcy of the Company the
Contractor shall, at the election of the Trustee and the Consulting
Professional continue to perform the Construction Contract on its then
executory terms for the benefit of the Trustee;
(v) the Contractor has delivered to the Consulting Professional a list of
its subcontractors which is current as of the date of the certificate;
(vi) it has received certified copies of duly executed counterparts of
the Construction Agreement and the requisite permits, licenses and
authorizations;
(vii) it has received a copy of the Plans, satisfactory in form and
content to the Trustee and the Consulting Professional.
(viii) it has received the Budget, together with a cost breakdown and
schedule for construction of the Qualified Substitute Boat or the Permitted
Capital Expenditures setting forth all items of costs and expenses and
estimating the construction trade schedules required to complete the
construction and equipping of the Qualified Substitute Boat or the Permitted
Capital Expenditures.
(ix) it has received a critical path method schedule for completion of
the construction and equipping of the Qualified Substitute Boat or the
Permitted Capital Expenditures, which schedule shall be in form and substance
satisfactory to the Consulting Professional; and
(x) it has received an Officers' Certificate from the Company certifying
that (A) the release of the Boat Conveyance Proceeds for the construction of
the Qualified Substitute Boat or the Permitted Capital Expenditures complies
with the terms and conditions of Section 4.4 of this Indenture, (B) there is
no Default or Event of Default in effect or continuing on the date thereof
(both before and after giving effect to the proposed use of the Boat
Conveyance Proceeds), (C) the release of the Boat Conveyance Proceeds pursuant
to the Company Order will not result in a Default or Event of Default
hereunder, (D) the representations and warranties which are contained in the
Indenture or any certificate, document or financial or other statement
furnished under or in connection with the Indenture are correct on and as of
the date of the advance as if made on and as of such date, (E) all utility
services and facilities necessary for the construction of Permitted Capital
Improvements without impediment or delay will be available at or within the
boundaries of the Improved Property, and all utility services and facilities
necessary for the operation of Permitted Capital Improvements for its intended
purposes will be available at or within the boundaries of the Improved
Property when needed, (F) all required permits, authorizations, licenses and
certificates for the construction of the Qualified Substitute Boat or the
Permitted Capital Improvements have been obtained and are in full force and
effect on and as of such date, (G) expenditures have been made, or costs
incurred, by the Company in a specified amount for the construction of the
Qualified Substitute Boat or the Permitted Capital Expenditures, which shall
be briefly described, and stating the fair value thereof to the Company at the
date of the expenditure or incurrence thereof by the Company; (H) no part of
such expenditures or costs has been or is being made the basis for the
withdrawal of any Boat Conveyance Proceeds in any previous or then pending
application pursuant to this Section 11.4; (I) there is no outstanding
Indebtedness, other than costs for which payment is being requested and
customary retainage not to exceed ten per cent (10%); (J) the Qualified
Substitute Boat or Permitted Capital Expenditures is necessary or desirable in
the conduct of the business of the Company; (K) the Qualified Substitute Boat,
if constructed in accordance with the Plans, will comply with all legal
requirements; and (L) all conditions precedent to such release have been
complied with.
(j) All of the foregoing items and all other documents and legal matters in
connection with the transactions contemplated by this Indenture shall be
satisfactory in form and substance to the Trustee.
(k) The Collateral Documents shall constitute a valid lien on the Collateral
(including the Improved Property, unincorporated work and materials) for the
full amount of the Boat Conveyance Proceeds advanced to and including such
date. The Company shall deliver to the Trustee a title insurance policy,
binder or endorsement on the date of each Company Order confirming that there
has not been filed with respect to all or any part of the Improved Property
any Lien which has not been discharged of record, other than as disclosed by
surveys resulting from the prosecution of work pursuant to the approved Plans.
(l) All materials and fixtures incorporated in the construction of the
Qualified Substitute Boat or the Permitted Capital Expenditures shall have
been purchased so that their absolute ownership shall have vested in the
Company prior to the Trustee making advances of the Boat Conveyance Proceeds,
the proceeds of which are used to purchase such materials and fixtures, and
the Company shall have produced and furnished, if required by the Trustee, the
contracts, bills of sale or other agreements under which title to such
materials and fixtures is claimed.
(m) The Consulting Professional and the Trustee shall have received a
statement of the Company, in form and substance satisfactory to the Trustee,
setting forth the names, addresses and amounts due or to become due as well as
the amounts previously paid to every contractor, subcontractor, and supplier
furnishing materials for or performing labor on the construction of any part
of the Qualified Substitute Boat.
(n) The Trustee shall have received and approved (i) an inspection report of
the Consulting Professional covering the progress of construction, conformity
of the work with the Plans, quality of work completed and percentage of work
completed prepared in a professional manner in accordance with industry norms
and (ii) an Officer's Certificate requesting such disbursement, satisfactory
in form and substance to the Consulting Professional, with appropriate
insertions, accompanied by true copies of unpaid invoices, receipted bills and
lien waivers, and such other supporting information as the Consulting
Professional may reasonably request.
(o) All instruments relating to each advance and all actions taken on or
prior to each advance shall be reasonably satisfactory to the Trustee, and the
Trustee shall have been furnished with such documents, reports, certificates,
affidavits and other information, in form and substance reasonably
satisfactory to the Trustee, as the Trustee may require to evidence compliance
with all of the provisions of the Indenture
(p) The Company shall have furnished to the Trustee lien waivers and
subordination agreements in form and substance reasonably satisfactory to the
Consulting Professional from such contractors, subcontractors, suppliers and
materialmen as the Consulting Professional may require, evidencing that they
have been paid in full (less retainage) for all work performed or materials
supplied to the date of the Company's request for such advance.
(q) The Qualified Substitute Boat or the Permitted Capital Expenditures
shall not have been materially damaged by fire or other casualty unless there
shall have been received, by the Trustee or a person approved by the Trustee,
insurance proceeds sufficient in the reasonable judgment of the Trustee after
consultation with the Consulting Professional, to effect satisfactory
restoration and completion of the Qualified Substitute Boat on or before the
date that is fifteen months from the last day of the Waiting Period.
(r) The Qualified Substitute Boat or the Permitted Capital Expenditures
shall not be deemed completed for purposes of this Indenture until all of the
conditions set forth in this subsection shall have been satisfied.
(i) The Qualified Substitute Boat shall have been completed substantially
in accordance with the Plans and accepted by the Company subject to completion
of any minor "punch list" items having an aggregate cost to complete or repair
not to exceed $100,000; and
(ii) The Trustee shall have received the following, in each case in form
and substance satisfactory to the Trustee:
(A) evidence of the approval by all appropriate Governmental Authorities
of the Qualified Substitute Boat as being complete as to construction
including, without limitation, a copy of a certificate of occupancy, if
applicable, or other permits, certificates or authorizations as the Consulting
Professional deems appropriate
(B) the certification of (1) the Architect and (2) the Contractor that to
the best of their knowledge the Qualified Substitute Boat has been completed
substantially in accordance with the Plans, that connection has been made to
all appropriate utility facilities and that the Qualified Substitute Boat is
ready for occupancy.
(s) All other documentation required under Section 314(d) of the TIA and not
described above shall be delivered to the Trustee with any Company Order
delivered pursuant to the terms of this Section 11.4.
Section 11.5. INVESTMENT OF TRUST MONEYS.
All or any part of any Trust Moneys held by the Trustee shall from time to
time be invested or reinvested by the Trustee in any Cash Equivalents pursuant
to the written direction of the Company, which shall specify the Cash
Equivalents in which Trust Moneys shall be invested. Unless an Event of
Default occurs and is continuing, any interest on such Cash Equivalents (in
excess of any accrued interest paid at the time of purchase) that may be
received by the Trustee shall be forthwith paid to the Company. Such Cash
Equivalents shall be held by the Trustee as a part of the Collateral, subject
to the same provisions hereof as the cash used by it to purchase such Cash
Equivalents.
The Trustee shall not be liable or responsible for any loss resulting from
such investments or sales except only for its own negligent action, its own
negligent failure to act or its own willful misconduct in complying with this
Section 11.5.
Article XII.
GUARANTY
Section 12.1. GUARANTY.
(a) In consideration of good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, each of the Guarantors hereby
irrevocably and unconditionally guarantees (the "Guaranty") to each Holder of
a Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of
this Indenture, the Notes or the obligations of the Company under this
Indenture or the Notes, that: (w) the principal and premium (if any) of and
interest on the Notes will be paid in full when due, whether at the maturity
or interest payment date, by acceleration, call for redemption, or otherwise;
(x) all other obligations of the Company to the Holders or the Trustee under
this Indenture or the Notes will be promptly paid in full or performed, all in
accordance with the terms of this Indenture and the Notes; and (y) in case of
any extension of time of payment or renewal of any Notes or any of such other
obligations, they will be paid in full when due or performed in accordance
with the terms of the extension or renewal, whether at maturity, by
acceleration, call for redemption or otherwise. Failing payment when due of
any amount so guaranteed for whatever reason, each Guarantor shall be
obligated to pay the same before failure so to pay becomes an Event of
Default.
(b) Each Guarantor hereby agrees that its obligations with regard to this
Guaranty shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any delays in obtaining or realizing upon or failures to
obtain or realize upon collateral, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstances that might
otherwise constitute a legal or equitable discharge or defense of a guarantor.
Each Guarantor hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy of the
Company, any right to require a proceeding first against the Company or right
to require the prior disposition of the assets of the Company to meet its
obligations, protest, notice and all demands whatsoever and covenants that
this Guaranty will not be discharged except by complete performance of the
obligations contained in the Notes and this Indenture.
(c) If any Holder or the Trustee is required by any court or otherwise to
return to either the Company or any Guarantor, or any Custodian, Trustee, or
similar official acting in relation to either the Company or such Guarantor,
any amount paid by either the Company or such Guarantor to the Trustee or such
Holder, this Guaranty, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Guarantor agrees that it will not
be entitled to any right of subrogation in relation to the Holders in respect
of any obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. Each Guarantor further agrees that, as between such
Guarantor, on the one hand, and the Holders and the Trustee, on the other
hand, (i) the maturity of the obligations guaranteed hereby may be accelerated
as provided in Section 6.1 for the purposes of this Guaranty, notwithstanding
any stay, injunction or other prohibition preventing such acceleration as to
the Company of the obligations guaranteed hereby, and (ii) in the event of any
declaration of acceleration of those obligations as provided in Section 6.1,
those obligations (whether or not due and payable) will forthwith become due
and payable by each of the Guarantors for the purpose of this Guaranty.
(d) It is the intention of each Guarantor and the Company that the
obligations of each Guarantor hereunder shall be in, but not in excess of, the
maximum amount permitted by applicable law. Accordingly, if the obligations
in respect of the Guaranty would be annulled, avoided or subordinated to the
creditors of any Guarantor by a court of competent jurisdiction in a
proceeding actually pending before such court as a result of a determination
both that such Guaranty was made without fair consideration and, immediately
after giving effect thereto, such Guarantor was insolvent or unable to pay its
debts as they mature or left with an unreasonably small capital, then the
obligations of such Guarantor under such Guaranty shall be reduced by such
court if such reduction would result in the avoidance of such annulment,
avoidance or subordination; PROVIDED, HOWEVER, that any reduction pursuant to
this paragraph shall be made in the smallest amount as is strictly necessary
to reach such result. For purposes of this paragraph, "fair consideration",
"insolvency", "unable to pay its debts as they mature", "unreasonably small
capital" and the effective times of reduction, if any, required by this
paragraph shall be determined in accordance with applicable law.
Section 12.2. CERTAIN BANKRUPTCY EVENTS.
Each Guarantor hereby covenants and agrees that in the event of the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Company, such Guarantor shall not file (or join in any filing of), or
otherwise seek to participate in the filing of, any motion or request seeking
to stay or to prohibit (even temporarily) execution on the Guaranty and hereby
waives and agrees not to take the benefit of any such stay of execution,
whether under Section 362 or 105 of the United States Bankruptcy Code or
otherwise.
Article XIII.
MISCELLANEOUS
Section 13.1. TIA CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts with the
duties imposed by operation of the TIA, the imposed duties, upon qualification
of this Indenture under the TIA, shall control.
Section 13.2. NOTICES.
Any notices or other communications to the Company, the Guarantors or the
Trustee required or permitted hereunder shall be in writing, and shall be
sufficiently given if made by hand delivery, by telex, by telecopier or
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
if to the Company or any Guarantor:
Casino Magic of Louisiana Corp.
c/o Casino Magic Corp.
711 Casino Magic Drive
Bay St. Louis. MS 39520
Attention: Chief Financial Officer
with a copy to:
Casino Magic Corp.
711 Casino Magic Drive
Bay St. Louis. MS 39520
if to the Trustee:
First Trust National Association
180 East Fifth Street
Saint Paul, Minnesota 55101
Attention: Scott Strodthoff
The Company, the Guarantors or the Trustee by notice to each other party may
designate additional or different addresses as shall be furnished in writing
by such party. Any notice or communication to the Company, the Guarantors or
the Trustee shall be deemed to have been given or made as of the date so
delivered, if personally delivered; when answered back, if telexed, when
receipt if acknowledged, if telecopied; and 5 Business Days after mailing if
sent by registered or certified mail, postage prepaid (except that a notice of
change of address shall not be deemed to have been given until actually
received by the addressee).
Any notice or communication mailed to a Noteholder shall be mailed to him by
first class mail or other equivalent means at his address as it appears on the
registration books of the Registrar and shall be sufficiently given to him if
so mailed within the time prescribed.
Failure to mail a notice or communication to a Noteholder or any defect in it
shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
Section 13.3. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes.
The Company, the Guarantors, the Trustee, the Registrar and any other person
shall have the protection of TIA Section 312(c).
Section 13.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with; and
(2) an Opinion of Counsel (in form and substance reasonably satisfactory
to the Trustee) stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
Section 13.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of each such
person, such condition or covenant has been complied with; PROVIDED, HOWEVER,
that with respect to matters of fact an Opinion of Counsel may rely on an
Officers' Certificate or certificates of public officials.
Section 13.6. RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
The Trustee may make reasonable rules for action by or at a meeting of
Noteholders. The Paying Agent or Registrar may make reasonable rules for its
functions.
Section 13.7. LEGAL HOLIDAYS.
A "Legal Holiday" used with respect to a particular place of payment is a
Saturday, a Sunday or a day on which banking institutions in New York, New
York are not required to be open. If a payment date is a Legal Holiday in New
York, New York, payment may be made at such place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue for the intervening
period.
Section 13.8. GOVERNING LAW.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND
PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. THE COMPANY AND EACH GUARANTOR HEREBY IRREVOCABLY SUBMIT TO
THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF
MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH
OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE AND THE NOTES, AND
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OR THE AFORESAID COURTS. THE COMPANY AND EACH
GUARANTOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO
UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION WHICH THEY MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE OR ANY
SECURITYHOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY
OTHER JURISDICTION.
Section 13.9. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of any of the Company, the Guarantors or any of their respective
Subsidiaries. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
Section 13.10. NO RECOURSE AGAINST OTHERS.
A director, officer, employee, stockholder or incorporator, as such, of the
Company or the Guarantors shall not have any liability for any obligations of
the Company or the Guarantors under the Notes or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
reactions. Each Noteholder by accepting a Note waives and releases all such
liability. Such waiver and release are part of the consideration for the
issuance of the Notes.
Section 13.11. SUCCESSORS.
All agreements of the Company and the Guarantors in this Indenture and the
Notes shall bind their successors. All agreements of the Trustee in this
Indenture shall bind its successor.
Section 13.12. DUPLICATE ORIGINALS.
All parties may sign any number of copies or counterparts of this Indenture.
Each signed copy or counterpart shall be an original, but all of them together
shall represent the same agreement.
Section 13.13. SEVERABILITY.
In case any one or more of the provisions in this Indenture or in the Notes
shall be held invalid, illegal or unenforceable, in any respect for any
reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
Section 13.14. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Reconciliation and Tie Table and headings of the
Articles and the Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
<PAGE>
SIGNATURE
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed as of the date first written above.
CASINO MAGIC OF LOUISIANA, CORP.
By: ____________________________
Name:
Title:
Attest: ________________
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By: ____________________________
Name:
Title:
Attest: ________________
GUARANTORS:
JEFFERSON CASINO CORPORATION
By: ____________________________
Name:
Title:
Attest: ________________
<PAGE>
Exhibit A
[FORM OF NOTE]
CASINO MAGIC OF LOUISIANA, CORP.
11 1/2 SENIOR SECURED NOTES
DUE 1999
No. $
Casino Magic of Louisiana Corp. a Louisiana corporation (hereinafter
called the "Company," which term includes any successor under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
______, or registered assigns, the principal sum of ________ Dollars, on
November 13, 1999 or such earlier date as is provided for in the Indenture.
Interest Payment Dates: February 15, May 15, August 15, and November 15.
Reference is made to the further provisions of this Security on the
reverse side, which will, for all purposes, have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to be duly
executed under its corporate seal.
Dated: May 13, 1996
CASINO MAGIC OF LOUISIANA, CORP.
By: _____________________________
Attest:
__________________________
Secretary
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within mentioned Indenture.
_________________________________
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By: ____________________________
Authorized Signatory
Dated:
<PAGE>
CASINO MAGIC OF LOUISIANA, CORP.
11 1/2% Senior Secured Notes
due 1999
1. PRINCIPAL
Casino Magic of Louisiana, Corp., a Louisiana corporation (the
"Company"), promises to pay the principal amount of this Note to the Holder
hereof on the date that is the third anniversary of the earlier of the
following dates: (i) 180 days after May 13, 1996, and (ii) the first date that
a riverboat casino is opened by the Company for public gaming play in Bossier
City, Louisiana (the "Commencement Date").
Notwithstanding the foregoing, from and after the first date on which the
aggregate principal amount of Notes issued and outstanding under the Indenture
is equal to or less than $17,500,000 (the "Release Date"), the principal
amount of the Note, together with interest accrued thereon at a rate of 11
1/2% per annum, shall be paid by the Company to the Holder hereof quarterly in
equal installments commencing on the first Interest Payment Date (as defined
below) after the Release Date and ending on the Maturity Date.
Notwithstanding all of the foregoing, from and after the date of the
occurrence of an Adverse State Action (as such term is defined in the
Indenture (the "Adverse State Action Date"), the principal amount of the Note,
together with interest accrued thereon at a rate of 11 1/2% per annum, shall
be paid by the Company to the Holder hereof quarterly in equal installments
commencing on the first Interest Payment Date (as defined below) after the
Adverse State Action Date and ending on the first Interest Payment Date
immediately subsequent to the date that the Adverse State Action takes effect.
In addition to the foregoing, subject to the terms of Section 3.1 of the
Indenture, on each Interest Payment Date commencing November 15, 1996, and
ending with the second Interest Payment Date after the Release Date occurs,
the Company will unconditionally pay to each Holder such Holder's PRO RATA
share of the Excess Cash Flow (as defined in the Indenture) for the fiscal
quarter of the Company and the Guarantors ending on the Interest Payment Date
immediately preceding such Interest Payment Date in reduction of the then
outstanding principal amount of the Note by an amount equal to such Holder's
PRO RATA share of the Excess Cash Redemption Amount (as defined below), in
addition to any regularly scheduled principal payment due on such Interest
Payment Date (if any); PROVIDED, HOWEVER, that the Company will pay to each
Holder such Holder's PRO RATA share of the Excess Cash Flow for the last
fiscal quarter of a fiscal year of the Company and the Guarantors on the
SECOND Interest Payment Date following the last date of such last fiscal
quarter of the fiscal year. The obligations of the Company under this
paragraph shall continue notwithstanding an Adverse State Action.
"EXCESS CASH REDEMPTION AMOUNT" for any Interest Payment Date means the
amount of the Aggregate Excess Cash Flow to be paid to the Holders on such
Interest Payment Date in reduction of the outstanding principal amount of the
Notes TIMES a fraction, the numerator of which is 100 and the denominator of
which is (100 plus the Excess Cash Redemption Premium for such Interest
Payment Date).
"EXCESS CASH REDEMPTION PREMIUM" means (i) on any Interest Payment Date
occurring on or before the first anniversary of the Commencement Date, zero,
(ii) on any Interest Payment Date occurring on or after the first anniversary
of the Commencement Date but on or before the second anniversary of the
Commencement Date, ten percent (10%) TIMES a fraction, the numerator of which
is the amount of calendar days having elapsed from and including the day after
the first anniversary of the Commencement Date to and including such Interest
Payment Date, and the denominator of which is three hundred and sixty-five
(365), and (iii) on any Interest Payment Date occurring after the second
anniversary of the Commencement Date but before the third anniversary of the
Commencement Date, twenty percent (20%) TIMES a fraction, the numerator of
which is the amount of calendar days having elapsed from and including the day
after the second anniversary of the Commencement Date to and including such
Interest Payment Date, and the denominator of which is three hundred and
sixty-four (364).
2. INTEREST
Casino Magic of Louisiana, Corp., a Louisiana corporation (the
"Company"), promises to pay interest from May 13, 1996 on the principal amount
of this Note at a rate of 11 1/2% per annum. To the extent it is lawful, the
Company promises to pay interest on any interest payment due but unpaid on
such principal amount at a rate of 11 1/2% per annum compounded semi-annually.
The Company will pay interest quarterly on February 15, May 15, August 15, and
November 15 of each year (each, an "Interest Payment Date"), commencing August
15, 1996. Interest on the Notes will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from May 13,
1996. Interest will be computed on the basis of a 360-day year consisting of
twelve 30 day months.
3. METHOD OF PAYMENT.
The Company shall pay principal of and interest on the Notes (except
defaulted interest) to the persons who are the registered Holders at the close
of business on the Record Date immediately preceding the Interest Payment
Date. Except as provided below, the Company shall pay principal and interest
in such coin or currency of the United States of America as at the time of
payment shall be legal tender for payment of public and private debts ("U.S.
Legal Tender"). However, the Company may pay principal and interest by wire
transfer of Federal funds, or interest by its check payable in such U.S. Legal
Tender. The Company may deliver any such interest payment to a Holder at the
Holder's registered address.
Together with any installments of principal the Company will deliver to the
Paying Agent or the Trustee a sufficient number of stickers, in form
satisfactory to the Trustee, setting forth the outstanding principal amount of
each Note after having given effect to such current principal payments, for
delivery by the Trustee to the Holders for the purpose of affixing such
stickers to their respective Notes. Upon delivery to the Paying Agent or the
Trustee of this Note, the registered Holder hereof should receive a sticker
together with such principal payment, which sticker will be affixed by the
Paying Agent or the Trustee to the top of the front page of this Note atop all
such previous stickers and which sticker will set forth the outstanding
principal amount of this Note after having given effect to the current
principal payment. Notwithstanding the foregoing, the Registrar will maintain
a record of the outstanding principal amount of all outstanding Notes.
Failure by the Trustee to affix such stickers shall in no way affect the
legality, validity, or transferability of this Note; PROVIDED, HOWEVER, that
in the event of any discrepancy between the principal amount of this Note on
its face and on the records of the Registrar, the records of the Registrar
will govern absent manifest error.
4. PAYING AGENT AND REGISTRAR.
Initially, First Trust National Association (the "Trustee") will act as
Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or Co-registrar without notice to the Holders. The Company or any
of its Subsidiaries may, subject to certain exceptions, act as Paying Agent,
Registrar or Co-registrar.
5. INDENTURE
The Company issued the Notes under an Indenture, dated as of May 13, 1996
(the "Indenture"), between the Company, the Guarantors named therein and the
Trustee. Capitalized terms herein are used as defined in the Indenture unless
otherwise defined herein. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act, as in effect on the date of the Indenture. The Notes are
subject to all such terms, and Holders of Notes are referred to the Indenture
and said Act for a statement of them. The Notes are senior, secured
obligations of the Company limited in aggregate principal amount to
$35,000,000.
6. REDEMPTION.
The Notes may be redeemed at any time, in whole or in part, at the
election of the Company at the Redemption Price applicable for such Redemption
Date. The Redemption Price of this Note if so optionally redeemed is the
amount equal to the principal face amount of this Note TIMES the sum of one
PLUS the Redemption Premium as of the Redemption Date of this Note.
"REDEMPTION PREMIUM" when used with respect to this Note when redeemed or
prepaid, in whole or in part, means (i) on any Redemption Date occurring on or
before the first anniversary of the Commencement Date, zero, (ii) on any
Redemption Date occurring on or after the first anniversary of the
Commencement Date but on or before the second anniversary of the Commencement
Date, ten percent (10%) TIMES a fraction the numerator of which is the amount
of calendar days having elapsed from and including the day after the first
anniversary of the Commencement Date to and including such Redemption Date and
the denominator of which is three hundred and sixty-five (365), and (iii) on
any Redemption Date occurring after the second anniversary of the Commencement
Date and before the third anniversary of the Commencement Date, twenty percent
(20%) TIMES a fraction the numerator of which is the amount of calendar days
having elapsed from and including the day after the second anniversary of the
Commencement Date to and including such Redemption Date and the denominator of
which is three hundred and sixty-four (364).
This Note may also be redeemed at any time pursuant to, and in accordance
with, any order of any Gaming Authority with appropriate jurisdiction and
authority relating to a Gaming License, or to the extent necessary in the
reasonable, good faith judgment of the Board of Directors of the Company to
prevent the loss, failure to obtain or material impairment or to secure the
reinstatement, of any material Gaming License, where in any such case such
redemption or acquisition is required to be found suitable or so qualified
within a reasonable period of time.
Any redemption of the Notes shall comply with Article III of the
Indenture.
7. NOTICE OF REDEMPTION.
Notice of redemption will be mailed by first class mail at least 30 days
but not more than 45 days before the Redemption Date to each Holder of Notes
to be redeemed at his registered address. Notes in denominations larger than
$1,000 may be redeemed in part.
Except as set forth in the Indenture, from and after any Redemption Date,
if monies for the redemption of the Notes called for redemption shall have
been deposited with the Paying Agent on such Redemption Date, the Notes called
for redemption will cease to bear interest and the only right of the Holders
of such Notes will be to receive payment of the Redemption Price, including
any accrued and unpaid interest to the Redemption Date.
8. DENOMINATIONS; TRANSFER; EXCHANGE.
The Notes are in registered form, without coupons, in denominations of
$1,000 and integral multiples of $1,000. A Holder may register the transfer
of, or exchange Notes in accordance with, the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted
by the Indenture. The Registrar need not register the transfer of or exchange
any Notes selected for redemption.
9. PERSONS DEEMED OWNERS.
The Registered Holder of a Note may be treated as the owner of it for all
purposes.
10. UNCLAIMED MONEY.
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee and the Paying Agent(s) will pay the money back to the
Company at its written request. After that, all liability of the Trustee and
such Paying Agent(s) with respect to such money shall cease.
11. DISCHARGE PRIOR TO REDEMPTION OR MATURITY.
If the Company at any time deposits into an irrevocable trust with the
Trustee U.S. Legal Tender or U.S. Government Obligations sufficient to pay the
principal of and interest on the Notes to redemption or maturity and complies
with the other provisions of the Indenture relating thereto, the Company will
be discharged from certain provisions of the Indenture and the Notes
(including the financial covenants, but excluding its obligation to pay the
principal of and interest on the Notes).
12. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture or the Notes may be amended
or supplemented with the written consent of the Holders of a majority, and in
certain cases at least two-thirds, in aggregate principal amount of the Notes
then outstanding, and any existing Default or Event of Default or compliance
with any provision may be waived with the consent of the Holders of a majority
in aggregate principal amount of the Notes then outstanding. Without notice
to or consent of any Holder, the parties thereto may amend or supplement the
Indenture or the Notes to, among other things, cure any ambiguity, defect or
inconsistency, or make any other change that does not adversely affect the
rights of any Holder of a Note.
13. RESTRICTIVE COVENANTS.
The Indenture imposes certain limitations on the ability of the Company
and its Subsidiaries to, among other things, incur additional Indebtedness and
Disqualified Capital Stock, make payments in respect of its Capital Stock,
enter into transactions with Affiliates, incur Liens, sell assets, merge or
consolidate with any other person and sell, lease, transfer or otherwise
dispose of substantially all of its properties or assets. The limitations are
subject to a number of important qualifications and exceptions. The Company
must annually report to the Trustee on compliance with such limitations.
14. SECURITY.
In order to secure the obligations under the Indenture, the Company, the
Guarantors and the Trustee have entered into certain security agreements in
order to create security interests in and liens upon certain assets and
properties of the Company and the Guarantors.
15. GAMING LAWS.
The rights of the Holder of this Note and any owner of any beneficial
interest in this Note are subject to the Gaming Laws and the jurisdiction and
requirements of the Gaming Authorities and the further limitations and
requirements set forth in the Indenture.
16. SUCCESSORS.
When a successor assumes all the obligations of its predecessor under the
Notes and the Indenture, the predecessor will be released from those
obligations.
17. DEFAULTS AND REMEDIES.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Notes then
outstanding may declare all the Notes to be due and payable immediately in the
manner and with the effect provided in the Indenture. Holders of Notes may
not enforce the Indenture or the Notes except as provided in the Indenture.
The Trustee may require indemnity satisfactory to it before it enforces the
Indenture of the Notes. Subject to certain limitations, Holders of a majority
in aggregate principal amount of the Notes then outstanding may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Notes notice of any continuing Default or Event of Default (except
a Default in payment of principal or interest), if it determines that
withholding notice is in their interest.
18. TRUSTEE DEALINGS WITH COMPANY.
The Trustee under the Indenture, in its individual or any other capacity,
may make loans to, accept deposits from, and perform services for the Company
or its Affiliates, and may otherwise deal with the Company or its Affiliates
as if it were not the Trustee.
19. NO RECOURSE AGAINST OTHERS.
No stockholder, director, officer, employee or incorporator, as such,
past, present or future, of the Company or any successor corporation shall
have any liability for any obligation of the Company under the Notes or the
Indenture. Each Holder of a Note by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for the
issuance of the Notes.
20. AUTHENTICATION.
This Note shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Note.
21. ABBREVIATIONS AND DEFINED TERMS.
Customary abbreviations may be used in the name of a Holder of a Note 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).
22. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform Security
Identification Procedures, the Company will cause CUSIP numbers to be printed
on the Notes as a convenience to the Holders of the Notes. No representation
is made as to the accuracy of such numbers as printed on the Notes and
reliance may be placed only on the other identification numbers printed
hereon.
<PAGE>
[FORM OF ASSIGNMENT]
I or we assign this Note to
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(Print or type name, address and zip code of assignee)
Please insert Social Security or other identifying number of assignee
_________ and irrevocably appoint ________ agent to transfer this Note on the
books of the Company. The agent may substitute another to act for him.
Date: __________ Signed: ______________________________________
_____________________________________________________________________________
(Sign exactly as your name appears on the other side of this Note)
<PAGE>
EXHIBIT B
FORM OF GUARANTY
For value received, ________________, a _______________ corporation,
hereby unconditionally guarantees to the Holder of the Note upon which this
Guaranty is endorsed the due and punctual payment, as set forth in the
Indenture pursuant to which such Note and this Guaranty were issued, of the
principal of, premium (if any) and interest on such Note when and as the same
shall become due and payable for any reason according to the terms of such
Note and which this Guaranty is endorsed will not become effective until the
Trustee signs the certificate of authentication on such Note.
__________________________________
By: _____________________________
Attest: __________________________
<PAGE>
EXHIBIT C
TAX ALLOCATION AGREEMENT
Agreement effective as of May 31, 1992, by and among Casino Magic Corp.
"(Parent)" and each of its undersigned subsidiaries.
WITNESSETH
WHEREAS, the parties hereto are members of an affiliated group
"(Affiliated Group)" as defined in Section 1504(a) of the Internal Revenue
Code of 1986, as amended; and
WHEREAS, such Affiliated Group will file a U.S. consolidated income tax
return for its tax year 1992 and is required to file consolidated tax returns
for subsequent years; and
WHEREAS, it is the intent and desire of the parties hereto that a method
be established for allocating the consolidated tax liability of the Affiliated
Group among its members, for reimbursing the Parent for payment of such tax
liability, for compensating any party for use of its losses or tax credits,
and to provide for the allocation and payment of any refund arising from a
carryback of losses or tax credits from subsequent tax years.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties hereto agree as follows:
1. A U.S. consolidated income tax return shall be filed by the Parent
for the tax year ended December 31, 1992, and for each subsequent taxable
period in respect of which this agreement is in effect and for which the
Affiliated Group is required or permitted to file a consolidated tax return.
Each subsidiary shall execute and file such consents, elections, and other
documents that may be required or appropriate for the proper filing of such
returns.
2. a. For each tax period, each member of the Affiliated Group
shall compute its separate tax liability as if it had filed a separate tax
return and shall pay such amount to the Parent. For purposes of this
agreement, any liability for alternative minimum tax shall be treated as part
of the member's separate tax liability.
b. The separate return tax liability of each member shall be
computed in a manner consistent with the provisions of Regulation Sec. 1.1552-
1(a)(2)(ii), provided that the carryover of any tax attribute from a prior tax
year that is not available in determining the consolidated tax liability of
the group for such taxable period shall be disregarded.
c. Parent shall file on behalf of the Affiliated Group a
consolidated federal income tax return and shall make all payments required to
be paid to the Internal Revenue Service in satisfaction of the Federal income
tax liability (including estimated taxes and additions to tax, penalties and
interest) of the Affiliated Group. Payments made pursuant to Sections 2, 3,
and 6 hereof shall be the only payments required to be made by any member of
the Affiliated Group in respect of the consolidated Federal income tax
liability of the Affiliated Group for any taxable year.
3. Payment of the consolidated tax liability for a taxable period
shall include the payment of estimated tax installments due for such taxable
period, and each subsidiary shall pay to the Parent its share of each payment
within ten days of receiving notice of such payment from the Parent, but in no
event later than the due date for each such payment. Any amounts paid by a
subsidiary on account of a separate return or separate estimated payments that
are credited against the consolidated tax liability of the Affiliated Group
shall be included in determining the payments due from such subsidiary. Any
overpayment of estimated tax should be refunded to the subsidiary.
4. If for any taxable period the separate return liability of any
member of the Affiliated Group, including the Parent, exceeds the consolidated
tax liability for such period as a result of any excess losses or tax credits
of one or more members (a "loss member"), then the Parent shall pay to each
such loss member its allocable portion of such excess amount within ten days
after the date of filing on the consolidated return for such period.
5. If part or all of an unused loss or tax credit is allocated to a
member of the Affiliated Group pursuant to Regulation Sec. 1.1502-79, and is
carried back or forward to a year in which such member filed a separate return
or a consolidated return with another affiliated group, any refund or
reduction in tax liability arising from the carryback or carryover shall be
retained by such member. Notwithstanding the above, the Parent shall
determine in its sole discretion whether an election shall be made not to
carry back part or all of a consolidated net operating loss for any tax year
in accordance with Section 172(b)(3).
6. If the consolidated tax liability is adjusted for any taxable
period, whether by means of an amended return, claim for refund, or after a
tax audit by the Internal Revenue Service, the liability of each member shall
be recomputed to give effect to such adjustments, and in the case of a refund,
the Parent shall make payment to each member for its share of the refund
received by Parent, determined in the same manner as in paragraph 2 above,
within ten days after the refund is received by the Parent, and in the case of
an increase in tax liability, each member shall pay to the Parent its
allocable share of such increased tax liability within ten days after
receiving notice of such liability from the Parent.
7. If during a consolidated return period the Parent or any
subsidiary acquires or organizes another corporation that is required to be
included in the consolidated return, then such corporation shall join in and
be bound by this agreement.
8. Each subsidiary hereby agrees to join in any state, city, or local
combined or similar income or franchise tax return to be filed by any group of
corporations of which Parent is or shall become a member for all taxable
periods for which it is so requested from time to time by Parent, and to take
no action inconsistent therewith. In the event a subsidiary is included in a
combined, joint, consolidated, or unitary state income or franchise tax return
with any member of the Affiliated Group, the parties shall allocate and pay
such taxes and compensate for the use of tax losses or tax credits in a manner
consistent with the approach provided in this agreement for federal income
taxes. Payments made pursuant to the preceding sentence will be deemed
deductible pursuant to Section 164 for purposes of computing the separate
return tax liability of a subsidiary pursuant to Section 2(b) hereof.
9. This agreement shall apply to the tax year ending December 31,
1992, and all subsequent taxable periods unless the Parent and the
subsidiaries agree to terminate the agreement. Notwithstanding such
termination, this agreement shall continue in effect with respect to any
payment or refunds due for all taxable periods prior to termination.
10. This agreement shall be binding upon and inure to the benefit of
any successor, whether by statutory merger, acquisition of assets, or
otherwise, to any of the parties hereto, to the same extent as if the
successor had been an original party to the agreement.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed by their duly authorized representatives on May 9, 1996.
Casino Magic Corp.
by: ______________________________
its: ______________________________
Mardi Gras Casino Corp.
by: ______________________________
its: ______________________________
Biloxi Casino Corp.
by: ______________________________
its: ______________________________
Casino Magic Finance Corp.
by: ______________________________
its: ______________________________
Bay St. Louis Casino Corp.
by: ______________________________
its: ______________________________
Casino Magic Mang. Serv. Corp.
by: ______________________________
its: ______________________________
Jefferson Casino Corp.
by: ______________________________
its: ______________________________
Carolina Magic Corp.
by: ______________________________
its: ______________________________
Casino One Corp.
by: ______________________________
its: ______________________________
Boston Casino Corp.
by: ______________________________
its: ______________________________
Crawford County Casino Corp.
by: ______________________________
its: ______________________________
Magic Resorts Corp.
by: ______________________________
its: ______________________________
St. Louis Casino Corp.
by: ______________________________
its: ______________________________
Gateway Casino Co. of St. Louis
by: ______________________________
its: ______________________________
C-M of Louisiana, Inc.
by: ______________________________
its: ______________________________
Bucks County Casino Corp.
by: ______________________________
its: ______________________________
Delta Casino Corp.
by: ______________________________
its: ______________________________
Maverick Casino Corp.
by: ______________________________
its: ______________________________
Kansas Magic Corp.
by: ______________________________
its: ______________________________
Coastal Land of Florida, Inc.
by: ______________________________
its: ______________________________
Casino Magic American Corp.
by: ______________________________
its: ______________________________
Gulfport Casino Corp.
by: ______________________________
its: ______________________________
Mobile Casino Corp.
by: ______________________________
its: ______________________________
Iowa Magic Corp.
by: ______________________________
its: ______________________________
Atlantic Pacific Corp.
by: ______________________________
its: ______________________________
625 Corp.
by: ______________________________
its: ______________________________
Casino Advertising, Inc.
by: ______________________________
its: ______________________________
<PAGE>
EXHIBIT D
JCC Real Property Description
(1) TRACT "A". A TRACT OF LAND LOCATED IN SECTION 32, T18N-R13W, BOSSIER
CITY, BOSSIER PARISH, AND/OR SECTIONS 31, 32 OR 33, T18N-R13W, CADDO PARISH,
LOUISIANA. SAID TRACT BEING MORE FULLY DESCRIBED AS FOLLOWS:
BEGINNING AT A FOUND 1/2" DIAMETER IRON ROD BEING THE SOUTHWEST CORNER OF LOT
35, COOK SUBDIVISION, AS RECORDED IN BOOK 141, PAGE 11 OF THE CONVEYANCE
RECORDS OF BOSSIER PARISH, RUN THENCE SOUTH 65_05'05" EAST ALONG THE SOUTH
LINE OF SAID COOK SUBDIVISION A DISTANCE OF 384.69 FEET TO A FOUND 1/2"
DIAMETER IRON ROD,
THENCE RUN SOUTH 12_56'40" WEST A DISTANCE OF 150.37 FEET TO A FOUND 1/2"
DIAMETER CRIMP TOP IRON PIPE,
THENCE RUN SOUTH 60_12'49" EAST A DISTANCE OF 168.20 FEET TO A FOUND 5/8"
DIAMETER IRON ROD,
THENCE RUN SOUTH 26_06'32" WEST A DISTANCE OF 251.31 FEET TO A FOUND 1/2"
DIAMETER IRON ROD BEING ON THE NORTHERLY RIGHT-OF-WAY LINE OF WOODLAWN STREET,
THENCE RUN NORTH 70_42'00" WEST ALONG THE NORTHERLY RIGHT-OF-WAY LINE OF
WOODLAWN STREET A DISTANCE OF 575.91 FEET TO A FOUND 1/2" DIAMETER IRON PIPE
BEING AT THE INTERSECTION OF THE NORTHERLY RIGHT-OF-WAY LINE OF WOODLAWN
STREET WITH THE EASTERLY RIGHT-OF-WAY LINE OF KAYWOOD COURTS,
THENCE RUN NORTH 23_05'00" EAST ALONG THE EASTERLY RIGHT-OF-WAY LINE OF
KAYWOOD COURTS A DISTANCE OF 140.56 FEET TO A FOUND 1/2" DIAMETER IRON PIPE,
THENCE RUN NORTH 24_48'39" EAST ALONG THE EASTERLY RIGHT-OF-WAY LINE OF
KAYWOOD COURTS A DISTANCE OF 328.51 FEET TO THE POINT OF BEGINNING.
SAID TRACT CONTAINING 5.2319 ACRES.
(2) TRACT "B".A TRACT OF LAND LOCATED IN SECTION 32, T18N-R13W, BOSSIER CITY,
BOSSIER PARISH, AND/OR SECTIONS 31, 32 OR 33, T18N-R13W, CADDO PARISH,
LOUISIANA. SAID TRACT BEING MORE FULLY DESCRIBED AS FOLLOWS:
BEGINNING AT A FOUND 3/4" DIAMETER CRIMP TOP IRON PIPE BEING THE SOUTHEAST
CORNER OF LOT 8, KAYWOOD SUBDIVISION, AS RECORDED IN BOOK 339, PAGE 229 OF THE
CONVEYANCE RECORDS OF BOSSIER PARISH, RUN THENCE SOUTH 28_05'04" WEST A
DISTANCE OF 335.76 FEET TO A SET 1/2" DIAMETER IRON ROD BEING ON THE FORMER
NORTHERLY HIGH BANK OF THE RED RIVER,
THENCE RUN NORTHWESTERLY ALONG THE FORMER HIGH BANK OF THE RED RIVER A
DISTANCE OF 614.30 FEET, NORTH 55_22'23" WEST TO A FOUND 1" DIAMETER IRON
PIPE,
THENCE RUN NORTH 24_48'49" EAST A DISTANCE OF 897.25 FEET TO A FOUND 1/2"
DIAMETER IRON ROD BEING ON THE SOUTH LINE OF LOT 34, COOK SUBDIVISION, AS
RECORDED IN BOOK 141, PAGE 11 OF THE CONVEYANCE RECORDS OF BOSSIER PARISH,
THENCE RUN SOUTH 65_02'25" EAST ALONG THE SOUTH LINE OF LOT 34, A DISTANCE OF
9.58 FEET TO A FOUND 1/2" DIAMETER IRON ROD BEING ON THE WESTERLY RIGHT-OF-WAY
LINE OF KAYWOOD COURTS,
THENCE RUN SOUTH 24_47'37" WEST ALONG THE WESTERLY RIGHT-OF-WAY LINE OF
KAYWOOD COURTS A DISTANCE OF 329.85 FEET TO A FOUND 1/2" DIAMETER IRON PIPE,
THENCE RUN SOUTH 22_34'14" WEST ALONG THE WESTERLY RIGHT-OF-WAY LINE OF
KAYWOOD COURTS A DISTANCE OF 194.43 FEET TO A FOUND 5/8" DIAMETER IRON ROD
BEING AT THE INTERSECTION OF THE WESTERLY RIGHT-OF-WAY LINE OF KAYWOOD COURTS
WITH THE SOUTHERLY RIGHT-OF-WAY LINE OF WOODLAWN STREET,
THENCE RUN SOUTH 70_42'00" EAST ALONG THE SOUTHERLY RIGHT-OF-WAY LINE OF
WOODLAWN STREET A DISTANCE OF 5.17 FEET TO A FOUND 5/8" DIAMETER IRON ROD,
THENCE RUN SOUTH 19_18'00" WEST ALONG THE WEST LINE OF LOT 1, KAYWOOD
SUBDIVISION, UNIT 2, AS RECORDED IN BOOK 450, PAGE 113 OF THE CONVEYANCE
RECORDS OF BOSSIER PARISH, A DISTANCE OF 200.26 FEET TO A SET 1/2" DIAMETER
IRON ROD BEING THE SOUTHWEST CORNER OF LOT 1,
THENCE RUN SOUTH 70_42'00" EAST ALONG THE SOUTH LINE OF KAYWOOD SUBDIVISION
UNIT 2 AND KAYWOOD SUBDIVISION A DISTANCE OF 585.48 FEET TO THE POINT-OF-
BEGINNING,
AND ALL THAT LAND LYING BETWEEN THE SOUTHERLY MOST LINE OF SAID DESCRIBED
TRACT AND THE EXISTING HIGH BANK OF THE RED RIVER, AND LYING BETWEEN THE
PROJECTED LINES OF THE EASTERLY AND WESTERLY BOUNDARIES OF SAID DESCRIBED
TRACT,
SAID TOTAL TRACT CONTAINING 4.914 ACRES.
(3) TRACT "C".A TRACT OF LAND LOCATED IN SECTION 32, T18N-R13W, BOSSIER CITY,
BOSSIER PARISH, AND/OR SECTIONS 31, 32 OR 33, T18N-R13W, CADDO PARISH,
LOUISIANA, AND BEING A PORTION OF LOT 34, COOK SUBDIVISION, AS RECORDED IN
BOOK 141, PAGE 11, OF THE CONVEYANCE RECORDS OF BOSSIER PARISH. SAID TRACT
MORE FULLY DESCRIBED AS FOLLOWS:
BEGINNING AT A FOUND 1/2" DIAMETER IRON ROD BEING THE SOUTHWEST CORNER OF LOT
34, RUN THENCE NORTH 29_35'39" EAST ALONG THE WEST LINE OF LOT 34 A DISTANCE
OF 165.24 FEET TO A FOUND 1/2" DIAMETER IRON PIPE BEING ON THE SOUTH RIGHT-OF-
WAY LINE OF INTERSTATE 20,
THENCE RUN SOUTH 82_32'09" EAST ALONG THE SOUTH RIGHT-OF-WAY LINE OF
INTERSTATE 20 A DISTANCE OF 58.03 FEET TO A FOUND 1/2" DIAMETER IRON PIPE
BEING ON THE WESTERLY RIGHT-OF-WAY LINE OF KAYWOOD COURTS,
THENCE RUN SOUTH 29_33'17" WEST ALONG THE WESTERLY RIGHT-OF-WAY LINE OF
KAYWOOD COURTS A DISTANCE OF 190.07 FEET TO A FOUND 1/2" DIAMETER IRON ROD
BEING ON THE SOUTH LINE OF LOT 34,
THENCE RUN NORTH 65_02'25" WEST ALONG THE SOUTH LINE OF LOT 34 A DISTANCE OF
9.58 FEET TO A FOUND 1/2" DIAMETER IRON ROD,
THENCE RUN NORTH 55_34'42" WEST ALONG THE SOUTH LINE OF LOT 34 A DISTANCE OF
44.49 FEET TO THE POINT OF BEGINNING,
SAID TRACT CONTAINING 0.22 ACRES.
(4) TRACT "D".A TRACT OF LAND LOCATED IN SECTION 32, T18N-R13W, BOSSIER CITY,
BOSSIER PARISH, AND/OR SECTIONS 31, 32 OR 33, T18N-R13W, CADDO PARISH,
LOUISIANA. SAID TRACT BEING MORE FULLY DESCRIBED AS FOLLOWS:
BEGINNING AT A FOUND 1/2" DIAMETER CRIMP TOP IRON PIPE BEING THE SOUTHWEST
CORNER OF LOT 114, RIVERSIDE SUBDIVISION AS RECORDED IN BOOK 60, PAGE 157 OF
THE CONVEYANCE RECORDS OF BOSSIER PARISH, LOUISIANA, RUN THENCE SOUTH
70_23'37" EAST ALONG THE REAR LINE OF RIVERSIDE SUBDIVISION A DISTANCE OF
248.66 FEET TO A FOUND 1" DIAMETER IRON PIPE,
THENCE RUN SOUTH 29_01'37" WEST AND PARALLEL WITH THE EASTERLY LINE OF LOT 110
OF RIVERSIDE SUBDIVISION A DISTANCE OF 1021.25 FEET TO A FOUND 1" DIAMETER
IRON PIPE, BEING ON THE FORMER HIGH BANK OF THE RED RIVER,
THENCE RUN NORTH 62_19'02" WEST ALONG THE FORMER HIGH BANK OF THE RED RIVER A
DISTANCE OF 127.28 FEET TO A POINT, WHICH IS ON THE PROJECTION OF THE WESTERLY
LINE OF LOT 112, RIVERSIDE SUBDIVISION,
THENCE CONTINUE NORTH 64_07'56" WEST ALONG THE FORMER HIGH BANK OF THE RED
RIVER A DISTANCE OF 101.11 FEET TO A SET 1/2" DIAMETER IRON ROD, LOCATED ON
THE PROJECTION OF THE EASTERLY LINE OF LOT 8, KAYWOOD SUBDIVISION,
THENCE RUN NORTH 28_05'04" EAST A DISTANCE OF 335.76 FEET TO A FOUND 3/4"
DIAMETER CRIMP TOP IRON PIPE BEING THE SOUTHEAST CORNER OF LOT 8 KAYWOOD
SUBDIVISION AS RECORDED IN BOOK 339, PAGE 229 OF THE CONVEYANCE RECORDS OF
BOSSIER PARISH,
THENCE CONTINUE NORTH 28_05'04" EAST ALONG THE EASTERLY LINE OF LOT 8 A
DISTANCE OF 202.64 FEET TO A FOUND 2" DIAMETER IRON PIPE BEING THE NORTHEAST
CORNER OF LOT 8,
THENCE CONTINUE NORTH 28_05'04" EAST A DISTANCE OF 50.65 FEET TO A FOUND 1/2"
DIAMETER IRON ROD,
THENCE RUN NORTH 26_06'32" EAST A DISTANCE OF 251.31 FEET TO A FOUND 5/8"
DIAMETER IRON ROD,
THENCE RUN NORTH 31_05'36" EAST A DISTANCE OF 149.25 FEET TO THE POINT OF
BEGINNING,
AND ALL THAT LAND LYING BETWEEN THE SOUTHERLY MOST LINE OF SAID DESCRIBED
TRACT AND THE EXISTING HIGH BANK OF THE RED RIVER, AND LYING BETWEEN THE
PROJECTED LINES OF THE EASTERLY AND WESTERLY BOUNDARIES OF SAID DESCRIBED
TRACT,
SAID TOTAL TRACT CONTAINING 5.753 ACRES.
(5) LOTS 1, 2 AND 4, KAYWOOD SUBDIVISION, UNIT NO. 2, A SUBDIVISION OF BOSSIER
PARISH, AND/OR CADDO PARISH, LOUISIANA AS PER PLAT RECORDED IN BOOK 450, PAGE
113 OF THE CONVEYANCE RECORDS OF BOSSIER PARISH, LOUISIANA,
(6) LOTS 6, 7 AND 8 KAYWOOD SUBDIVISION, A SUBDIVISION OF BOSSIER PARISH,
AND/OR CADDO PARISH, LOUISIANA, AS PER PLAT RECORDED IN BOOK 339, PAGE 229 OF
THE CONVEYANCE RECORDS OF BOSSIER PARISH, LOUISIANA.
(7) LOTS 110, 111 AND 112, RIVERSIDE SUBDIVISION, A SUBDIVISION OF BOSSIER
PARISH, AND/OR CADDO PARISH, LOUISIANA, AS PER PLAT RECORDED IN BOOK 60, PAGE
157 OF THE CONVEYANCE RECORDS OF BOSSIER PARISH, LOUISIANA, LESS A STRIP OF
LAND SEVEN (7') FEET IN WIDTH RUNNING BACK BETWEEN PARALLEL LINES ALONG THE
ENTIRE EASTERLY SIDE OF LOT 110.
Together with all the buildings and improvements situated on the above
described Land and all appurtenances, rights, ways, privileges, servitudes,
prescriptions and advantages thereunto belonging or in anywise appertaining,
including, but without limitation, all component parts of the above described
Land, and all component parts of any building or other construction located on
the above described Land, now or hereafter a part of or attached to said Land
or used in connection therewith.
<PAGE>
EXHIBIT E
Indebtedness of JCC under that certain Promissory Note, dated May 3, 1996,
issued by JCC and C-M of Louisiana, Inc. (n/k/a JCC) to Mark G. George, in the
original principal amount of $6,800,000, and under all agreements and
documents delivered by JCC in connection with such note.
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
FIRST TRUST NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)
United States 41-0257700
(State of Incorporation) (I.R.S. Employer
Identification No.)
First Trust Center
180 East Fifth Street
St. Paul, Minnesota 55101
(Address of Principal Executive Offices) (Zip Code)
CASINO MAGIC OF LOUISIANA CORP.
(Exact name of Registrant as specified in its charter)
Louisiana
(State of Incorporation) (I.R.S. Employer
Identification No.)
(Address of Principal Executive Offices) (Zip Code)
11-1/2% Senior Secured Notes due 1999
(Title of the Indenture Securities)
GENERAL
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.
Comptroller of the Currency
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes
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 following Item 16.
Items 3-15 are not applicable because to the best of the Trustee's
knowledge the obligor is not in default under any Indenture for which the
Trustee acts as Trustee.
16. LIST OF EXHIBITS List below all exhibits filed as a part of this
statement of eligibility and qualification. Each of the exhibits listed below
is incorporated by reference from registration number 333-1346.
1. Copy of Articles of Association.
2. Copy of Certificate of Authority to Commence Business.
3. Authorization of the Trustee to exercise corporate trust powers
(included in Exhibits 1 and 2; no separate instrument).
4. Copy of existing By-Laws.
5. Copy of each Indenture referred to in Item 4. N/A.
6. The consents of the Trustee required by Section 321(b) of the act.
7. Copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining authority.
NOTE
The answers to this statement insofar as such answers relate to what
persons have been underwriters for any securities of the obligors within three
years prior to the date of filing this statement, or what persons are owners
of 10% or more of the voting securities of the obligors, or affiliates, are
based upon information furnished to the Trustee by the obligors. While the
Trustee has no reason to doubt the accuracy of any such information, it cannot
accept any responsibility therefor.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, First Trust National Association, an Association organized and
existing under the laws of the United States, has duly caused this statement
of eligibility and qualification to be signed on its behalf by the
undersigned, thereunto duly authorized, and its seal to be hereunto affixed
and attested, all in the City of Saint Paul and State of Minnesota on the 10th
day of May, 1996.
FIRST TRUST NATIONAL ASSOCIATION
[SEAL]
/s/ R. PROKOSCH
- ------------------------------
Richard H.Prokosch
Trust Officer
/s/ K BARRETT
- ---------------------
Kathe Barrett
Assistant Secretary
<PAGE>
EXHIBIT 6
CONSENT
In accordance with Section 321(b) of the Trust Indenture Act of 1939,
the undersigned, FIRST TRUST NATIONAL ASSOCIATION hereby consents that reports
of examination of the undersigned by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and
Exchange Commission upon its request therefor.
Dated: May 10, 1996
FIRST TRUST NATIONAL ASSOCIATION
/s/ Richard H. Prokosch
- --------------------------------
Richard H. Prokosch
Trust Officer
