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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM T-3
FOR APPLICATIONS FOR QUALIFICATION OF INDENTURES
UNDER THE TRUST INDENTURE ACT OF 1939
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JAZZ CASINO COMPANY, L.L.C.
(NAME OF APPLICANT)
512 SOUTH PETERS, NEW ORLEANS, LOUISIANA 70130
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
SECURITIES TO BE ISSUED UNDER THE INDENTURE TO BE QUALIFIED
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TITLE OF CLASS AMOUNT
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Senior Subordinated Contingent Notes $18,319,035 Annual Maximum
Due 2009 Contingent Payment Amount (1)
Approximate date of proposed issuance: February 28, 1998
Jazz Casino Company, L.L.C.
512 South Peters
New Orleans, Louisiana 70130
(Name and address of agent for service)
With a copy to:
John M. Newell, Esq.
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071-2007
(213) 485-1234
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The applicant hereby amends this application for qualification on such date
or dates as may be necessary to delay its effectiveness until (i) the 20th day
after the filing of a further amendment which specifically states that it shall
supersede this amendment, or (ii) such date as the Commission, acting pursuant
to Section 307(c) of the Trust Indenture Act of 1939, as amended (the "Act"),
may determine upon the written request of this applicant.
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(1) All payments in respect of the Senior Subordinated Contigent Notes Due
2009 will be contigent payments, and such contigent payments will be limited
to an annual aggregate maximum amount of $18,319,035.
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GENERAL
1. GENERAL INFORMATION. Furnish the following as to the applicant.
(a) Form of organization:
A limited liability company.
(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.
On November 22, 1995, Harrah's Jazz Company, a Louisiana general
partnership ("HJC"), and Harrah's Jazz Finance Corp., a Delaware corporation
and wholly-owned subsidiary of HJC ("Finance Corp."), filed voluntary
petitions for relief under Chapter 11 of the United States Bankruptcy Code
(the "Bankruptcy Code"). On December 22, 1995, Harrah's New Orleans
Investment Company, a Nevada corporation and partner in HJC ("HNOIC" and,
collectively with HJC and Finance Corp., "the Debtors"), filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code to facilitate
efforts to reorganize HJC. On or about February 26, 1997 the Debtors filed
the Third Amended Joint Plan of Reorganization (the "Plan of Reorganization")
and related Disclosure Statement (the "Disclosure Statement") with the U.S.
Bankruptcy Court for the Eastern District of Louisiana (the "Bankruptcy
Court"). By order dated February 28, 1997 the Bankruptcy Court approved the
Disclosure Statement. By order dated April 28, 1997 the Bankruptcy Court
confirmed the Plan or Reorganization.
The Effective Date of the Plan of Reorganization was and is conditioned
upon, among other things, the execution and delivery of a modified Casino
Operating Contract and all necessary approvals, if any, from the State of
Louisiana (the "State"). The State has taken the position that the State
legislature must approve the modified Casino Operating Contract, which the
State legislature failed to do in its regular session which adjourned on June
23, 1997. As a result of the State legislature's failure to approve the
modified Casino Operating Contract, the Plan of Reorganization was modified
in certain respects. On December 10, 1997 the Debtors submitted a Third
Amended Joint Plan of Reorganization As Modified Through December 10, 1997
(the "Modified Plan of Reorganization") and related Disclosure Statement (the
"Modified Disclosure Statement"). A hearing to consider the adequacy of the
Modified Disclosure Statement was held on December 10, 1997, at which the
Bankruptcy Court approved the Modified Disclosure Statement. A hearing to
consider confirmation of the Modified Plan of Reorganization is set for
January 21, 1998. The Modified Disclosure Statement is expected to be
distributed to creditors of the Debtors on or about December 18, 1997.
Accordingly, if the Modified Plan of Reorganization is confirmed, and if
certain other conditions precedent are satisfied or waived as set forth in
the Modified Plan of Reorganization, the Effective Date (as defined below)
may occur, and the Notes (as defined below) may be issued, on or about
February 28, 1998.
Under the Modified Plan of Reorganization, the assets and business of
HJC will vest in Jazz Casino Company, L.L.C., a Louisiana limited liability
company (the "Company" or "applicant"), on the date that the Modified Plan of
Reorganization is consummated (the "Effective Date"). On the Effective Date,
the holders (the "Bondholders") of the 14 1/4% First Mortgage Notes due 2001
with Contingent Payments of HJC and Finance Corp. issued under a previously
qualified indenture, will receive, pursuant to the Modified Plan of
Reorganization, among other things, a PRO RATA share of (i) $187.5 million in
aggregate principal amount of Senior Subordinated Notes due 2009 with
Contingent Payments of the Company (for which a separate application on Form
T-3 has been filed concurrently herewith) and (ii) Senior Subordinated
Contingent Notes due 2009 of the Company (the "Notes"), to be issued under
the indenture to be qualified, and a guarantee (the "Guarantee") of such
notes by JCC Holding. All payments in respect of the Notes will be contingent
payments and will be limited to 75% of Consolidated EBITDA (as defined in the
Indenture (as defined below)) of the Company over $85 million and under
$109,425,380 calculated on an annual basis. Accordingly, the aggregate
maximum contingent payment amount for any year is $18,319.035.
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The issuance of the Notes will not be registered under the Securities Act
of 1933, as amended (the "Securities Act"), pursuant to the exemption from the
registration requirements of the Securities Act provided by Section 1145 of the
Bankruptcy Code. Generally, section 1145 of the Bankruptcy Code exempts the
offer or sale of securities under a plan of reorganization from registration
under the Securities Act and under equivalent state securities and "blue sky"
laws if the following requirements are satisfied: (i) the securities are issued
by the debtor or its successor under a plan of reorganization; (ii) the
recipients of the securities hold a claim against the debtor, an interest in the
debtor or a claim for an administrative expense against the debtor; and (iii)
the securities are issued entirely in exchange for the recipient's claim against
or interest in the debtor or are issued "principally" in such exchange and
"partly" for cash or property. The Company believes that the issuance of the
Notes under the Modified Plan of Reorganization will satisfy such requirements
of section 1145 of the Bankruptcy Code and, therefore, such issuance is exempt
from the registration requirements referred to above.
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.
As of December 16, 1997:
100% of the membership interests in the Company are owned by JCC
Holding Company, a Delaware corporation ("JCC Holding").
As of the Effective Date:
100% of the membership interests in the Company will be owned by JCC
Holding; and
100% of the membership interests in JCC Development Company, L.L.C., a
Louisiana limited liability company ("JCC Development"), will be owned by JCC
Holding.
As a result of certain transactions to be consummated on the Effective
Date pursuant to the Plan of Reorganization, Harrah's Entertainment, Inc., a
Delaware corporation, and certain Bondholders may be deemed to be affiliates
of the Company. This application on Form T-3 (the "Application") will be
amended to include a complete list of affilates of the Company as of the
Effective Date.
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.
As of December 16, 1997:
None. The Company is a member managed, single member, limited liability
company formed under the Lousiana Limited Company Law, La. R.S. 12:1301 ET
SEQ., and as such the Company does not have directors and is not required to
appoint officers.
As of the Effective Date:
The Company expects to appoint officers prior to or on the Effective
Date, however, the indviduals who will serve as officers of the Company have
not yet been determined. This Application will be amended to include the
individuals who will serve as officers as of the Effective Date.
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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 December 16, 1997:
Name and Complete Title of Class Percentage of Voting
Mailing Address Owned Amount Owned Securities Owned
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JCC Holding Company Membership Interest N/A* 100%
1023 Cherry Road
Memphis, Tennessee 38117
* The Company is a single member limited liability company formed under the
Louisiana Limited Liability Company Law, La. R.S. 12:1301 ET SEQ. The sole
member, JCC Holding, presently owns, and is expected to own on the
Effective Date, all of the membership interests in the Company.
As of the Effective Date the Company expects the above list of principal
owners of voting securities will remain unchanged.
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 the filing of this application
on Form T-3 (the "Application"), no person acted as an underwriter of any
securities of the Company which are currently outstanding.
(b) None.
CAPITAL SECURITIES
7. CAPITALIZATION. (a) Furnish the following information as to each
authorized class of securities of the applicant.
As of December 16, 1997:
<TABLE>
<CAPTION>
Amount Amount
Title of Class Authorized Outstanding
-------------- ----------- -----------
<S> <C> <C>
Membership Interest N/A* N/A*
As of the Effective Date:
Amount Amount
Title of Class Authorized Outstanding
-------------- ----------- -----------
Membership Interest N/A* N/A*
Senior Subordinated Notes Due 2009 With Contingent Payments $187,500,000(1) $187,500,000
Senior Subordinated Contingent Notes Due 2009 (2) (2)
8% Convertible Junior Subordinated Debentures Due 2009 $ 26,637,000(3) $ 26,637,000(3)
</TABLE>
* The Company is a single member limited liability company formed under the
Louisiana Limited Liability Company Law, La. R.S. 12:1301 ET SEQ. The sole
member, JCC Holding, presently owns, and is expected to own on the
Effective Date, all of the membership interests in the Company.
(1) Plus additional Senior Subordinated Notes due 2009 with Contingent Payments
issued in lieu of cash interest payments in accordance with the terms of
the indenture for such securities.
(2) All payments in respect of the Notes will be contingent payments, and
such contingent payments will be limited to an annual aggregate maximum
amount of $18,319,035.
(3) Plus Additional Convertible Junior Subordinated Debentures due 2009 issued
(i) in lieu of cash interest payments in accordance with the terms of the
the indenture for such securities or (ii) pursuant to the Modified Plan of
Reorganization.
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(b) Give a brief outline of the voting rights of each class of voting
securities referred to in paragraph (a) above.
Because the Company is a member managed, single member, limited
liability company, all decisions relating to the business affairs and
properties of the Company shall be made by JCC Holding as the sole member of
the Company.
Holders of the Notes, the Senior Subordinated Contingent Notes Due 2009 and
the 8% Convertible Junior Subordinated Debentures Due 2009 do not have any
voting rights by reason of ownership of those securities.
INDENTURE SECURITIES
8. ANALYSIS OF INDENTURE PROVISIONS. Insert at this point the analysis of
indenture provisions required under section 305(a)(2) of the Trust Indenture Act
of 1939, as amended (the "TIA").
The Notes will be issued under an indenture (the "Indenture") to be dated
as of the Effective Date, between the Company, JCC Holding, as guarantor, and
Norwest Bank Minnesota, National Association, as trustee (the "Trustee"), a copy
of which is included as Exhibit T3C hereto. Capitalized terms used in this
Section 8 which are not otherwise defined below or elsewhere in the Application
have the respective meanings assigned to them in the Indenture. The following
summary of certain provisions of the Indenture does not purport to be complete
and is subject to, and is qualified in its entirety, by reference to all of the
provisions of the Indenture.
(A) EVENTS OF DEFAULT. The following are Events of Default under the
Indenture:
(1) the failure by the Company to pay any installment of
interest on the 8% Notes or any Contingent Payments on the Notes as and
when due and payable and the continuance of any such failure for 30 days;
(2) the failure by the Company to pay all or any part of the
principal, or premium, if any, on the 8% Notes when and as the same become
due and payable at maturity, redemption, by acceleration or otherwise;
(3) 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, in certain instances, the continuance of such failure for
a period of 30 days, and in other instances, 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 the Trustee by the Holders
of at least 25% in aggregate Annual Maximum Contingent Payment Amount in
respect of the Notes then outstanding;
(4) certain events of bankruptcy, insolvency or reorganization
in respect of either the Company or a Significant Subsidiary;
(5) a default in the payment of principal, premium or interest
when due at final maturity or an acceleration for any other reason of the
maturity of any Indebtedness (other than Non-recourse Indebtedness) of the
Company or any Significant Subsidiary with an aggregate principal amount in
excess of $15,000,000, including, without limitation, the Bank Credit
Facilities at such times as the aggregate principal amount of Indebtedness
thereunder exceeds $15,000,000;
(6) final unsatisfied judgments not covered by insurance (other
than with respect to Non-recourse Indebtedness) aggregating in excess of
$15,000,000, at any one time rendered against the Company or any
Significant Subsidiary of the Company and not stayed, bonded or discharged
within 60 days;
(7) the loss of the legal right of the Company to operate slot
machines at the Casino for gaming activities and such loss continuing for
more than 90 days;
(8) an event of default under, or if none is specified therein,
a failure to comply with the provisions of the Collateral Documents or the
Security Agreement and the continuance of such event of default or failure
to comply, as the case may be, for a period of 30 days after written notice
is given to the Company by the
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Trustee or to the Company and the Trustee by the Holders of at least 25%
in aggregate Annual Maximum Contingent Payment Amount in respect of the
Notes outstanding, provided that if such event of default or failure to
comply, as the case may be, materially and adversely affects (a) the
Collateral, (b) the priority or perfection of the security interests
purported to be created with respect to any material portion of the
Collateral or (c) the rights and remedies of the Collateral Agent, the
Trustee or the respective secured creditors in respect of any material
portion of the Collateral, then the event of default or failure to
comply, as the case may be, need only continue after the applicable cure
period specified in the applicable Security Agreement or Collateral
Document;
(9) any Collateral Document fails to become or ceases to be in
full force and effect (other than in accordance with its terms or the terms
of the Indenture) or ceases (once effective) to create in favor of the
Trustee, with respect to any material amount of Collateral, a valid and
perfected Lien on the Collateral to be covered thereby (unless a prior or
exclusive Lien is specifically permitted by the Indenture);
(10) the failure of the Casino Completion Date to have occurred
by 30 days following the date on which an event of default entitling the
City to terminate the Ground Lease has occurred under the Ground Lease as a
result of the failure to complete the Casino;
(11) an "Event of Default" (as defined in the Ground Lease) has
occurred; and
(12) an "Event of Default" (as defined in the 8% Notes
Indenture) has occurred.
If an Event of Default (other than an Event of Default specified in
clause (4) above), or the acceleration of the maturity of amounts owing under
the Bank Credit Facilities occurs and is continuing, then, and in every such
case, either the Trustee or the Holders of not less then 25% in aggregate
Annual Maximum Contingent Payment Amount of then outstanding Notes, by a
notice in writing to the Company and the Guarantors (and to the Trustee if
given by Holders) (an "Event of Default Notice"), may declare all of the due
and unpaid Contingent Payments, if any, to be due and payable immediately.
If an Event of Default specified in clause (4) above occurs, (i) all due and
unpaid Contingent Payments on the Notes, if any, and (ii) the Make-Whole
Amount, shall be immediately due and payable on all outstanding Notes without
any declaration or other act on the part of the Trustee or the Holders;
provided, however, that the Make-Whole Amount shall be subordinated to any
Senior Subordinated Debt including, without limitation, any Senior
Subordinated Debt to which HET has succeeded to the rights of the lenders
thereunder. The Holders of no less than a majority in aggregate Annual
Maximum Contingent Payment Amount in respect of then outstanding Notes
generally are authorized to rescind such acceleration if all existing Events
of Default, other than the non-payment of amounts which have become due
solely by such acceleration, have been cured or waived.
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 Holder 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 Contingent Payments 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.
(B) AUTHENTICATION AND DELIVERY; APPLICATION OF PROCEEDS.
The Notes shall be executed on behalf of the Company and the Guaranty
shall be executed on behalf of the Parent Guarantor by the Chairman of the
Board, the President or one of the Vice Presidents of each of them, under the
corporate seal of each respective company, reproduced thereon, and attested
by the Secretary or one of the Assistant Secretaries of each of them. The
signature of any of these officers on the Notes or Guarantees may be manual
or facsimile. 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 terms of the Indenture. There will be no
proceeds from the issuance of the Notes because such securities (together
with other securities of the Company and JCC Holding) will be issued or
distributed pursuant to the Modified Plan of Reorganization in exchange for
the satisfaction and discharge of certain claims arising from the ownership
of certain securities of or claims against the Debtors in the bankruptcy
case. Accordingly, no provisions are contained in the Indenture with respect
to the use by the Company of proceeds of the issuance of the Notes.
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(C) RELEASE AND SUBSTITUTION OF PROPERTY SUBJECT TO THE LIEN OF THE
INDENTURE.
The Company may, without requesting the release or the consent of the
Trustee or the Collateral Agent, (i) dispose of and replace any worn out or
obsolete machinery or equipment, (ii) in the ordinary course of business, (A)
sell inventory held for resale, (B) collect, liquidate, sell, factor, or
otherwise dispose of accounts receivable or notes receivable, or (C) make
Cash payments from Cash that is part of the Collateral, (iii) sell or
otherwise dispose of personal property that is no longer necessary in the
conduct of the Company's business, (iv) sell or otherwise dispose of property
in accordance with the covenant regarding asset sales set forth in the
Indenture, and (v) sell or otherwise dispose of certain parcels of, and
interests in, real property.
Subject to applicable law, the release of any Collateral from Liens
created by the Collateral Documents or the release of, in whole or in part,
the Liens created by the Collateral Documents, will not be deemed to impair
the Collateral Documents in contravention of the provisions of the Indenture
if and to the extent the Collateral or Liens are released pursuant to, and in
accordance with, the applicable Collateral Documents or pursuant to, and in
accordance with, the terms of the Indenture. To the extent applicable,
without limitation (except as provided in the last sentence of this
paragraph), the Company, the Parent Guarantor 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 Collateral Documents, to be complied with.
Any certificate or opinion required by TIA Section 314(d) may be made by two
Officers of the Company, except in cases in which TIA Section 314(d) requires
that such certificate or opinion be made by an independent person. The
Company shall not be required under this Indenture to deliver to the Trustee
any certificates or opinions required to be delivered pursuant to Section
314(d) of the TIA in connection with releases of Collateral in accordance
with clause (ii) of the preceding paragraph, unless TIA Section 314(d) would
require such certificate or opinion to be made by an independent person.
(D) SATISFACTION AND DISCHARGE.
The obligation of the Company under the Notes and the Indenture will
terminate (except for certain obligations of the Company to indemnify the
Trustee under certain circumstances and certain obligations with respect to
unclaimed funds) when all outstanding Notes theretofore authenticated and
issued have been delivered to the Trustee for cancellation and the Company
has paid all sums payable by it.
In addition, the Company may, at its option and at any time, elect to
have its obligations discharged with respect to the outstanding Notes ("Legal
Defeasance"). Such Legal Defeasance means that the Company shall be deemed
to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, and the Indenture shall cease to be of further effect as
to all outstanding Notes except as to the following obligations which will
survive unless otherwise terminated or discharged under the Indenture: (a) the
rights of Holders of outstanding Notes to receive from the trust fund
described below, payments in respect of the Contingent Payments on such Notes
when such payments are due; (b) the Company's obligations with respect to the
Notes concerning, among other things, issuing temporary Notes, registration
of Notes, mutilated, destroyed, lost or stolen Notes, and the maintenance of
an office or agency for payment and money for security payments held in
trust; (c) the rights, powers, trusts, duties, and immunities of the Trustee,
and the Company's obligations in connection therewith; and (d) the Legal
Defeasance provisions of the Indenture. The Company may cause Legal
Defeasance to occur at any time. In addition, the Company may, at its option
and at any time, elect to have its obligations released with respect to
certain covenants that are described in the Indenture ("Covenant Defeasance")
and thereafter any omission to comply with such obligations shall not
constitute a Default or Event of Default with respect to the Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance: (a)
(i) the Company must irrevocably deposit with the Trustee, in trust, for the
benefit of the Holders of the Notes, U.S. Legal Tender, non-callable
Government Notes or a combination thereof, in such amounts as will be
sufficient to pay and discharge the Maximum Contingent Payments for the
current and all future Contingent Payment Periods on the outstanding Notes on
the Interest Payment Dates in respect of such Contingent Payment Periods,
and (ii) the Holders must have a valid and perfected exclusive security
interest in such trust; (b) in the case of Legal Defeasance, the Company
shall have delivered to the Trustee an Opinion of Counsel reasonably
satisfactory to the Trustee confirming that (i) the Company has received
from, or there has been published by, the Internal Revenue Service a ruling
or (ii) since the Issue Date, there has been a change in the applicable
Federal income tax law, in either case to the effect that, and based thereon
such opinion shall confirm that, the Holders of the outstanding Notes will
not recognize income, gain or loss for Federal income tax purposes as a
result of such Legal Defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance has not occurred; (c) in the case of
Covenant Defeasance, the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Holders of the outstanding Notes
will not recognize income, gain or loss for Federal income tax purposes as a
result of such Covenant Defeasance and will be subject to Federal income tax
on the same amounts, in the same manner and at the same times as would have
been the case if such Covenant Defeasance had not occurred; (d) no Default or
Event of Default with respect to the Notes shall have occurred and be
continuing on the date of such deposit or, in so far as Events of Default
from bankruptcy or insolvency events are concerned, at any time in the period
ending on the 91st day after the date of such deposit; (e) such Legal
Defeasance or Covenant Defeasance shall not result in a breach or violation
of, or constitute a default under, the Indenture or any
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other material agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound; (f) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit made by the Company was not made by the
Company with the intent of preferring the Holders over other creditors of the
Company or with the intent of defeating, hindering, delaying or defrauding
creditors of the Company or others; and (g) the Company shall have delivered
to the Trustee an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided for relating to either the
Legal Defeasance or the Covenant Defeasance have been complied with.
(E) EVIDENCE AS TO COMPLIANCE WITH CONDITIONS AND COVENANTS.
The Company is required to furnish the Trustee, within 120 days after the
end of each 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 and the activities of its Subsidiaries 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 the Collateral Documents and further
stating, as to each such Officer signing such certificate, whether or not the
signer knows of any failure by 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 Company is also required to furnish the Trustee within 120 days after
the end of each fiscal year a written report of a firm of independent certified
public accountants stating that in conducting their audit for such fiscal year,
nothing has come to their attention that caused them to believe that the Company
or any Subsidiary of the Company was not in compliance with the provisions set
forth in certain sections of the Indenture. The Company is also required to
furnish 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 proposes to take with
respect thereto.
The Indenture provides that upon any application or request by the
Company to the Trustee to take any action under a provision of the Indenture,
the Company must furnish to the Trustee an Officers' Certificate or an
Opinion of Counsel, each stating that all conditions precedent, if any,
provided for in the Indenture relating to the proposed action have been
complied with. Any such certificate or opinion must comply with the
requirements of the TIA and the Indenture.
9. OTHER OBLIGORS. Give the name and complete mailing address of any
person, other than the applicant, who is an obligor upon the indenture
securities.
JCC Holding Company, 1023 Cherry Road, Memphis, Tennessee 38110, is a
guarantor of the Notes.
CONTENTS OF APPLICATION FOR QUALIFICATION. This application for qualification
comprises:
(a) Pages numbered __ to __, consecutively.(1)
(b) The statement of eligibility and qualification of the trustee under
the indenture to be qualified.
(c) The following exhibits in addition to those filed as part of the
statement of eligibility and qualification of the trustee:
Exhibit T3A Operating Agreement of the Company. (2)
Exhibit T3B Not applicable.
Exhibit T3C Form of Indenture to be qualified for the
Senior Subordinated Contingent Notes due 2009.
Exhibit T3D Not applicable.
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Exhibit T3E.1 Debtors' Third Amended Joint Disclosure
Statement dated February 26, 1997, and
exhibits thereto.(3)
Exhibit T3E.2 Debtors' Third Amended Joint Plan of
Reorganization dated February 26, 1997, and
exhibits thereto.(3)
Exhibit T3E.3 Letter to Creditors from Debtors' Counsel,
dated March 3, 1997. (2)
Exhibit T3E.4 Letter to Creditors from The Official
Committee of Bondholders of Harrah's Jazz
Company, dated February 28, 1997. (2)
Exhibit T3E.5 Notices of Entry of Order and Order Approving
Debtors' Third Amended Joint Disclosure
Statement and of Plan Confirmation Hearing. (2)
Exhibit T3E.6 Voting Procedures Notice. (2)
Exhibit T3E.7 Ballots. (2)
Exhibit T3E.8 Debtors' Fourth Amended Joint Disclosure
Statement, dated July 24, 1997, and
exhibits thereto.(4)
Exhibit T3E.9 Debtors' Fourth Amended Joint Plan of
Reorganization, dated July 24, 1997, and
exhibits thereto.(4)
Exhibit T3E.10 Notice of Entry of Order Approving Debtors'
Fourth Amended Joint Disclosure Statement. (2)
Exhibit T3E.11 Ballot. (2)
Exhibit T3E.12 Form of Debtors' Fifth Amended Joint
Disclosure Statement dated December 10, 1997,
and exhibit thereto. (2)
Exhibit T3E.13 Form of Debtor's Third Amended Joint Plan of
Reorganization under Chapter 11 of the
Bankruptcy Code as modified through December
10, 1997, dated December 10, 1997, and
exhibits thereto. (2)
Exhibit T3E.14 Form of Ballots. (2)
Exhibit T3E.15 Form of Letter to Creditors from Debtors'
Counsel, dated December 10, 1997. (2)
Exhibit T3E.16 Form of Notices of Entry of Order Approving
Debtors' Fifth Amended Joint Disclosure
Statement and of Plan Confirmation Hearing. (2)
Exhibit T3E.17 Form of Modified Voting Procedures. (2)
Exhibit T3F See Exhibit T3C for cross reference sheet
showing the location in the Indenture of the
provisions inserted therein pursuant to
Section 310 through 318(a), inclusive, of the
TIA.
- ------------------
(1) Pursuant to Rule 309(a) of Regulation S-T, requirements as to
sequential numbering shall not apply to this electronic format
document.
(2) Incorporated by reference to the Company's Form T-3 with respect to
the Senior Subordinated Notes due 2009 with Contingent Payments, filed
with the Securities and Exchange Commission on December 16, 1997.
(3) Incorporated by reference to HJC's Annual Report on Form 10-K for the
year ended December 31, 1996 filed with the Securities and Exchange
Commission on March 28, 1997, Registration No. 33-73370.
9
<PAGE>
(4) Incorporated by reference to Harrah's Jazz Company Quarterly Report
on Form 10-Q for the quarter ended June 30, 1997, filed with the
Securities and Exchange Commission on August 14, 1997, Registration
No. 33-73370.
10
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
applicant, Jazz Casino Company, L.L.C., a limited liability company organized
and existing under the laws 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 Memphis and
State of Tennessee, on the 16th day of December, 1997.
JAZZ CASINO COMPANY, L.L.C.
By: JCC HOLDING COMPANY
Its: Sole Member
By: /s/ FREDERICK W. BURFORD
------------------------------
Name: Frederick W. Burford
------------------------------
Title: Vice President, Secretary
and Treasurer
------------------------------
Attest: /s/ COLIN V. REED
---------------------------
Name: Colin V. Reed
----------------------
11
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
----------------------
__ CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
A U.S. NATIONAL BANKING ASSOCIATION 41-1592157
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national Identification No.)
bank)
SIXTH STREET AND MARQUETTE AVENUE
Minneapolis, Minnesota 55479
(Address of principal executive offices) (Zip code)
Stanley S. Stroup, General Counsel
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
(612) 667-1234
(Agent for Service)
----------------------
JAZZ CASINO COMPANY, L.L.C.
(Exact name of obligor as specified in its charter)
LOUISIANA APPLICATION IN PROCESS
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
512 SOUTH PETERS 70130
NEW ORLEANS, LA (Zip code)
(Address of principal executive offices)
----------------------
SENIOR SUBORDINATED CONTINGENT NOTES DUE 2009
(Title of the indenture securities)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Item 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 Company
Treasury Department
Washington, D.C.
Federal Deposit Insurance Corporation
Washington, D.C.
The Board of Governors of the Federal Reserve System
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the
trustee, describe each such affiliation.
None with respect to the trustee.
No responses are included for Items 3-14 of this Form T-1 because the obligor
is not in default as provided under Item 13.
Item 15. FOREIGN TRUSTEE. Not applicable.
Item 16. LIST OF EXHIBITS. List below all exhibits filed as a part of this
Statement of Eligibility. Norwest Bank incorporates
by reference into this Form T-1 the exhibits
attached hereto.
Exhibit 1. a. A copy of the Articles of Association of the
trustee now in effect.(1)
Exhibit 2. a. A copy of the certificate of authority of the
trustee to commence business issued June 28, 1872,
by the Comptroller of the Currency to The
Northwestern National Bank of Minneapolis.(1)
b. A copy of the certificate of the Comptroller of
the Currency dated January 2, 1934, approving the
consolidation of The Northwestern National Bank of
Minneapolis and The Minnesota Loan and Trust
Company of Minneapolis, with the surviving entity
being titled Northwestern National Bank and Trust
Company of Minneapolis.(1)
c. A copy of the certificate of the Acting
Comptroller of the Currency dated January 12, 1943,
as to change of corporate title of Northwestern
National Bank and Trust Company of Minneapolis to
Northwestern National Bank of Minneapolis.(1)
<PAGE>
d. A copy of the letter dated May 12, 1983 from the
Regional Counsel, Comptroller of the Currency,
acknowledging receipt of notice of name change
effective May 1, 1983 from Northwestern National
Bank of Minneapolis to Norwest Bank Minneapolis,
National Association.(1)
e. A copy of the letter dated January 4, 1988 from
the Administrator of National Banks for the
Comptroller of the Currency certifying approval of
consolidation and merger effective January 1, 1988 of
Norwest Bank Minneapolis, National Association with
various other banks under the title of "Norwest Bank
Minnesota, National Association.(1)
Exhibit 3. A copy of the authorization of the trustee to exercise
corporate trust powers issued January 2, 1934, by the
Federal Reserve Board.(1)
Exhibit 4. Copy of By-laws of the trustee as now in effect.(1)
Exhibit 5. Not applicable.
Exhibit 6. The consent of the trustee required by Section 321(b)
of the Act.
Exhibit 7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.(2)
Exhibit 8. Not applicable.
Exhibit 9. Not applicable.
(1) Incorporated by reference to exhibit number 25 filed with
registration statement number 33-66026.
(2) To be filed by amendment.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended,
the trustee, Norwest Bank Minnesota, National Association, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Minneapolis and State of Minnesota on the 11th day of December, 1997.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
/s/ Gavin Wilkinson
----------------------------------------
Gavin Wilkinson
Vice President
<PAGE>
EXHIBIT 6
December 11, 1997
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In accordance with Section 321(b) of the Trust Indenture Act of 1939, as
amended, the undersigned hereby consents that reports of examination of the
undersigned made by Federal, State, Territorial, or District authorities
authorized to make such examination may be furnished by such authorities to
the Securities and Exchange Commission upon its request therefor.
Very truly yours,
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
/s/ Gavin Wilkinson
----------------------------------------
Gavin Wilkinson
Vice President
<PAGE>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
JAZZ CASINO COMPANY, L.L.C.,
ISSUER,
JCC HOLDING COMPANY
GUARANTOR,
AND
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
TRUSTEE
---------------------------
INDENTURE
Dated as of ___________, 1998
---------------------------
Senior Subordinated Contingent Notes due 2009
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE
TIA INDENTURE
SECTION SECTION
- ------- ---------
310 (a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . 8.10
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . 8.10
(a)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4). . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5). . . . . . . . . . . . . . . . . . . . . . . . . . . 8.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.8;
8.10;
15.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.3
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.3
313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.6
(b)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . 8.6
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.6;
15.2
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.6
314 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7;
5.8
13.2
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2
(c)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2;
8.2;
15.4
(c)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2;
15.4
(c)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1(c)
4.2
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1(c)
4.2
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.5
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5:
8.6;
i
<PAGE>
TIA INDENTURE
SECTION SECTION
- ------- ---------
15.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8;
7.11;
8.1(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.13
316 (a)(last sentence). . . . . . . . . . . . . . . . . . . . . 2.9
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . 7.12
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.7;
317 (a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.1
_________________
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
ii
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 INCORPORATION BY REFERENCE OF TIA. . . . . . . . . . . . 29
SECTION 1.3 RULES OF CONSTRUCTION. . . . . . . . . . . . . . . . . . 30
ARTICLE II
THE SECURITIES . . . . . . . . . . . . 30
SECTION 2.1 FORM AND DATING. . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.2 EXECUTION AND AUTHENTICATION . . . . . . . . . . . . . . 31
SECTION 2.3 REGISTRAR AND PAYING AGENT . . . . . . . . . . . . . . . 32
SECTION 2.4 PAYING AGENT TO HOLD ASSETS IN TRUST . . . . . . . . . . 32
SECTION 2.5 SECURITYHOLDER LISTS . . . . . . . . . . . . . . . . . . 33
SECTION 2.6 TRANSFER AND EXCHANGE. . . . . . . . . . . . . . . . . . 33
SECTION 2.7 REPLACEMENT SECURITIES . . . . . . . . . . . . . . . . . 33
SECTION 2.8 OUTSTANDING SECURITIES . . . . . . . . . . . . . . . . . 34
SECTION 2.9 TREASURY SECURITIES. . . . . . . . . . . . . . . . . . . 34
SECTION 2.10 TEMPORARY SECURITIES. . . . . . . . . . . . . . . . . . 34
SECTION 2.11 CANCELLATION. . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.12 DEFAULTED INTEREST. . . . . . . . . . . . . . . . . . . 35
ARTICLE III
REDEMPTION . . . . . . . . . . . . . 36
SECTION 3.1 RIGHT OF REDEMPTION. . . . . . . . . . . . . . . . . . . 36
SECTION 3.2 REDEMPTION PURSUANT TO APPLICABLE LAWS . . . . . . . . . 36
SECTION 3.3 NOTICES TO TRUSTEE . . . . . . . . . . . . . . . . . . . 37
SECTION 3.4 NOTICE OF REDEMPTION . . . . . . . . . . . . . . . . . . 37
SECTION 3.5 EFFECT OF NOTICE OF REDEMPTION . . . . . . . . . . . . . 38
SECTION 3.6 DEPOSIT OF REDEMPTION PRICE. . . . . . . . . . . . . . . 38
SECTION 3.7 SECURITIES REDEEMED IN PART. . . . . . . . . . . . . . . 38
ARTICLE IV
SECURITY. . . . . . . . . . . . . . 38
SECTION 4.1 SECURITY INTEREST. . . . . . . . . . . . . . . . . . . . 38
SECTION 4.2 RECORDING; OPINIONS OF COUNSEL . . . . . . . . . . . . . 39
SECTION 4.3 DISPOSITION OF CERTAIN COLLATERAL. . . . . . . . . . . . 40
iii
<PAGE>
PAGE
----
SECTION 4.4 NET CASH PROCEEDS ACCOUNT. . . . . . . . . . . . . . . . 42
SECTION 4.5 CERTAIN RELEASES OF COLLATERAL . . . . . . . . . . . . . 42
SECTION 4.6 LIEN SUBORDINATION.. . . . . . . . . . . . . . . . . . . 43
SECTION 4.7 PAYMENT OF EXPENSES. . . . . . . . . . . . . . . . . . . 43
SECTION 4.8 SUITS TO PROTECT THE COLLATERAL. . . . . . . . . . . . . 43
SECTION 4.9 TRUSTEE'S DUTIES . . . . . . . . . . . . . . . . . . . . 44
SECTION 4.10 COLLATERAL DOCUMENTS. . . . . . . . . . . . . . . . . . 44
ARTICLE V
COVENANTS. . . . . . . . . . . . . . 44
SECTION 5.1 PAYMENT OF SECURITIES. . . . . . . . . . . . . . . . . . 44
SECTION 5.2 MAINTENANCE OF OFFICE OR AGENCY. . . . . . . . . . . . . 46
SECTION 5.3 LIMITATION ON RESTRICTED PAYMENTS. . . . . . . . . . . . 46
SECTION 5.4 EXISTENCE. . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 5.5 PAYMENT OF TAXES AND OTHER CLAIMS. . . . . . . . . . . . 48
SECTION 5.6 MAINTENANCE OF INSURANCE . . . . . . . . . . . . . . . . 48
SECTION 5.7 COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT. . . . . . . . 48
SECTION 5.8 REPORTS. . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 5.9 WAIVER OF STAY, EXTENSION OR USURY LAWS. . . . . . . . . 50
SECTION 5.10 LIMITATION ON TRANSACTIONS WITH AFFILIATES. . . . . . . 50
SECTION 5.11 LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS AND
DISQUALIFIED CAPITAL STOCK . . . . . . . . . . . . . . 51
SECTION 5.12 LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES . . . . . . . . . . . . . . . . 53
SECTION 5.13 LIMITATION ON LIENS . . . . . . . . . . . . . . . . . . 54
SECTION 5.14 LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK;
EVENT OF LOSS. . . . . . . . . . . . . . . . . . . . . 55
SECTION 5.15 CONSTRUCTION. . . . . . . . . . . . . . . . . . . . . . 56
SECTION 5.16 LIMITATION ON USE OF CERTAIN FUNDS. . . . . . . . . . . 56
SECTION 5.17 LIMITATION ON LINES OF BUSINESS . . . . . . . . . . . . 57
SECTION 5.18 LIMITATION ON STATUS AS INVESTMENT COMPANY. . . . . . . 57
SECTION 5.19 RESTRICTIONS ON SALE AND ISSUANCE OF SUBSIDIARY STOCK . 57
SECTION 5.20 LIMITATION ON PAYMENT OF MANAGEMENT FEES. . . . . . . . 57
SECTION 5.21 LISTING OF SECURITIES . . . . . . . . . . . . . . . . . 59
SECTION 5.22 COMPLIANCE WITH ENVIRONMENTAL LAWS. . . . . . . . . . . 59
SECTION 5.23 LIMITATION ON LAYERING DEBT . . . . . . . . . . . . . . 60
ARTICLE VI
SUCCESSORS . . . . . . . . . . . . . 60
SECTION 6.1 LIMITATION ON MERGER, SALE OR CONSOLIDATION. . . . . . . 60
SECTION 6.2 SUCCESSOR SUBSTITUTED. . . . . . . . . . . . . . . . . . 61
iv
<PAGE>
PAGE
----
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES . . . . . . . . 62
SECTION 7.1 EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . 62
SECTION 7.2 DECLARATION OF EVENT OF DEFAULT, RESCISSION AND ANNULMENT 64
SECTION 7.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 7.4 TRUSTEE MAY FILE PROOFS OF CLAIM . . . . . . . . . . . . 66
SECTION 7.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES. . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 7.6 PRIORITIES . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 7.7 LIMITATION ON SUITS. . . . . . . . . . . . . . . . . . . 68
SECTION 7.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND
INTEREST. . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 7.9 RIGHTS AND REMEDIES CUMULATIVE . . . . . . . . . . . . . 69
SECTION 7.10 DELAY OR OMISSION NOT WAIVER. . . . . . . . . . . . . . 69
SECTION 7.11 CONTROL BY HOLDERS. . . . . . . . . . . . . . . . . . . 69
SECTION 7.12 WAIVER OF PAST DEFAULT. . . . . . . . . . . . . . . . . 69
SECTION 7.13 UNDERTAKING FOR COSTS . . . . . . . . . . . . . . . . . 70
SECTION 7.14 RESTORATION OF RIGHTS AND REMEDIES. . . . . . . . . . . 70
ARTICLE VIII
TRUSTEE . . . . . . . . . . . . . . 71
SECTION 8.1 DUTIES OF TRUSTEE. . . . . . . . . . . . . . . . . . . . 71
SECTION 8.2 RIGHTS OF TRUSTEE. . . . . . . . . . . . . . . . . . . . 72
SECTION 8.3 INDIVIDUAL RIGHTS OF TRUSTEE . . . . . . . . . . . . . . 73
SECTION 8.4 TRUSTEE'S DISCLAIMER . . . . . . . . . . . . . . . . . . 73
SECTION 8.5 NOTICE OF DEFAULT. . . . . . . . . . . . . . . . . . . . 73
SECTION 8.6 REPORTS BY TRUSTEE TO HOLDERS. . . . . . . . . . . . . . 74
SECTION 8.7 COMPENSATION AND INDEMNITY . . . . . . . . . . . . . . . 74
SECTION 8.8 REPLACEMENT OF TRUSTEE . . . . . . . . . . . . . . . . . 75
SECTION 8.9 SUCCESSOR TRUSTEE BY MERGER, ETC.. . . . . . . . . . . . 76
SECTION 8.10 ELIGIBILITY; DISQUALIFICATION . . . . . . . . . . . . . 76
SECTION 8.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY . . . 76
ARTICLE IX
LEGAL DEFEASANCE AND COVENANT DEFEASANCE. . . . . . 77
SECTION 9.1 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE 77
SECTION 9.2 LEGAL DEFEASANCE AND DISCHARGE . . . . . . . . . . . . . 77
SECTION 9.3 COVENANT DEFEASANCE. . . . . . . . . . . . . . . . . . . 77
SECTION 9.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE . . . . . . . 78
v
<PAGE>
PAGE
----
SECTION 9.5 DEPOSITED U.S. LEGAL TENDER AND U.S. GOVERNMENT
OBLIGATIONS TO BE HELD IN TRUST; OTHER
MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . 79
SECTION 9.6 REPAYMENT TO COMPANY . . . . . . . . . . . . . . . . . . 80
SECTION 9.7 REINSTATEMENT. . . . . . . . . . . . . . . . . . . . . . 80
ARTICLE X
AMENDMENTS, SUPPLEMENTS AND WAIVERS . . . . . . . 81
SECTION 10.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS. . . 81
SECTION 10.2 AMENDMENTS, SUPPLEMENTAL INDENTURES AND WAIVERS WITH
CONSENT OF HOLDERS . . . . . . . . . . . . . . . . . . 81
SECTION 10.3 COMPLIANCE WITH TIA . . . . . . . . . . . . . . . . . . 83
SECTION 10.4 REVOCATION AND EFFECT OF CONSENTS . . . . . . . . . . . 83
SECTION 10.5 NOTATION ON OR EXCHANGE OF SECURITIES . . . . . . . . . 84
SECTION 10.6 TRUSTEE TO SIGN AMENDMENTS, ETC.. . . . . . . . . . . . 84
SECTION 10.7 CONSENT TO CERTAIN AMENDMENTS OF THE GROUND LEASE;
TRUSTEE'S ACTIONS. . . . . . . . . . . . . . . . . . . 84
ARTICLE XI
[Intentionally deleted.]. . . . . . . . . . 85
ARTICLE XII
GUARANTY. . . . . . . . . . . . . . 85
SECTION 12.1 GUARANTY. . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 12.2 EXECUTION AND DELIVERY OF GUARANTY. . . . . . . . . . . 87
SECTION 12.3 FUTURE SUBSIDIARY GUARANTORS. . . . . . . . . . . . . . 87
SECTION 12.4 RELEASE OF GUARANTOR. . . . . . . . . . . . . . . . . . 87
SECTION 12.5 WHEN THE GUARANTOR MAY MERGE, ETC.. . . . . . . . . . . 89
SECTION 12.6 CERTAIN BANKRUPTCY EVENTS . . . . . . . . . . . . . . . 89
ARTICLE XIII
SUBORDINATION OF SECURITIES . . . . . . . . . 90
SECTION 13.1 SECURITIES SUBORDINATED TO SENIOR DEBT. . . . . . . . . 90
SECTION 13.2 SECURITIES SUBORDINATED TO PRIOR PAYMENT OF ALL SENIOR
DEBT ON DISSOLUTION, LIQUIDATION, REORGANIZATION,
ETC. OF THE COMPANY. . . . . . . . . . . . . . . . . . 90
SECTION 13.3 HOLDERS OF SECURITIES TO BE SUBROGATED TO RIGHT OF
HOLDERS OF SENIOR DEBT . . . . . . . . . . . . . . . . 91
SECTION 13.4 OBLIGATIONS OF THE COMPANY UNCONDITIONAL. . . . . . . . 92
vi
<PAGE>
PAGE
----
SECTION 13.5 COMPANY NOT TO MAKE PAYMENTS WITH RESPECT TO SECURITIES
IN CERTAIN CIRCUMSTANCES . . . . . . . . . . . . . . . 92
SECTION 13.6 TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT PROHIBITED IN
ABSENCE OF NOTICE. . . . . . . . . . . . . . . . . . . 94
SECTION 13.7 APPLICATION BY TRUSTEE OF MONIES DEPOSITED WITH IT. . . 94
SECTION 13.8 SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS
OF COMPANY OR HOLDERS OF SENIOR DEBT . . . . . . . . . 95
SECTION 13.9 HOLDERS OF SECURITIES AUTHORIZE TRUSTEE TO EFFECTUATE
SUBORDINATION OF SECURITIES. . . . . . . . . . . . . . 96
SECTION 13.10 RIGHT OF TRUSTEE TO HOLD SENIOR DEBT; PRESERVATION OF
TRUSTEE'S RIGHTS . . . . . . . . . . . . . . . . . . 96
SECTION 13.11 ARTICLE XIII NOT TO PREVENT EVENTS OF DEFAULT. . . . . 96
SECTION 13.12 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR DEBT . . . 97
SECTION 13.13 TRUST MONIES NOT SUBORDINATED. . . . . . . . . . . . . 97
ARTICLE XIV
SUBORDINATION OF GUARANTEE . . . . . . . . . 97
SECTION 14.1 GUARANTEE SUBORDINATED TO GUARANTOR SENIOR DEBT . . . . 97
SECTION 14.2 GUARANTEE SUBORDINATED TO PRIOR PAYMENT OF ALL GUARANTOR
SENIOR DEBT ON DISSOLUTION, LIQUIDATION, REORGANIZATION,
ETC. OF THE GUARANTOR. . . . . . . . . . . . . . . . . 98
SECTION 14.3 HOLDERS OF SECURITIES TO BE SUBROGATED TO RIGHT OF
HOLDERS OF GUARANTOR SENIOR DEBT . . . . . . . . . . . 99
SECTION 14.4 OBLIGATIONS OF THE GUARANTOR UNCONDITIONAL. . . . . . . 100
SECTION 14.5 GUARANTOR NOT TO MAKE PAYMENTS IN RESPECT OF THE
GUARANTY IN CERTAIN CIRCUMSTANCES. . . . . . . . . . . 100
SECTION 14.6 TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT PROHIBITED IN
ABSENCE OF NOTICE. . . . . . . . . . . . . . . . . . . 101
SECTION 14.7 APPLICATION BY TRUSTEE OF MONIES DEPOSITED WITH IT. . . 101
SECTION 14.8 SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS
OF A GUARANTOR OR HOLDERS OF GUARANTOR SENIOR DEBT . . 102
SECTION 14.9 HOLDERS OF SECURITIES AUTHORIZE TRUSTEE TO EFFECTUATE
SUBORDINATION OF GUARANTY . . . . . . . . . . . . . . 103
SECTION 14.10 RIGHT OF TRUSTEE TO HOLD GUARANTOR SENIOR DEBT;
PRESERVATION OF TRUSTEE'S RIGHTS. . . . . . . . . . . 103
SECTION 14.11 ARTICLE XIV NOT TO PREVENT EVENTS OF DEFAULT . . . . . 104
SECTION 14.12 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF GUARANTOR SENIOR
DEBT. . . . . . . . . . . . . . . . . . . . . . . . . 104
SECTION 14.13 TRUST MONIES NOT SUBORDINATED. . . . . . . . . . . . . 104
ARTICLE XV
MISCELLANEOUS. . . . . . . . . . . . . 104
SECTION 15.1 TIA CONTROLS. . . . . . . . . . . . . . . . . . . . . . 104
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PAGE
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SECTION 15.2 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . 105
SECTION 15.3 COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS. . . . . . 106
SECTION 15.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. . . 106
SECTION 15.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION . . . . . 106
SECTION 15.6 RULES BY TRUSTEE, PAYING AGENT, REGISTRAR . . . . . . . 107
SECTION 15.7 LEGAL HOLIDAYS. . . . . . . . . . . . . . . . . . . . . 107
SECTION 15.8 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . 107
SECTION 15.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS . . . . . 107
SECTION 15.10 NO RECOURSE AGAINST OTHERS . . . . . . . . . . . . . . 108
SECTION 15.11 SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . 108
SECTION 15.12 DUPLICATE ORIGINALS. . . . . . . . . . . . . . . . . . 108
SECTION 15.13 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . 108
SECTION 15.14 TABLE OF CONTENTS, HEADINGS, ETC.. . . . . . . . . . . 109
SECTION 15.15 GAMING LAWS. . . . . . . . . . . . . . . . . . . . . . 109
SECTION 15.16 TAX TREATMENT. . . . . . . . . . . . . . . . . . . . . 109
SECTION 15.17 WAIVERS AND RELEASES . . . . . . . . . . . . . . . . . 109
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INDENTURE, dated as of __________, 1998, between Jazz Casino
Company, L.L.C., a Louisiana limited liability company ("JCC" or "the
Company"), JCC Holding Company, a Delaware corporation ("JCC Holding"), and
Norwest Bank Minnesota, 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
Senior Subordinated Contingent Notes due 2009.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS.
"ACCUMULATED AMOUNT" shall have the meaning specified in Section 5.14.
"ACQUIRED ASSETS" means assets of any person existing at the time
such person becomes a Subsidiary of the Company or is merged or consolidated
into or with the Company or one of its Subsidiaries.
"ACQUIRED INDEBTEDNESS" means Indebtedness of any person existing at
the time such person becomes a Subsidiary of the Company or is merged or
consolidated into or with the Company or one of its Subsidiaries, and not
incurred in connection with or in anticipation of, such merger or
consolidation or of such person becoming a Subsidiary of the Company.
"ACQUISITION" means the purchase or other acquisition of any person
or substantially all the assets of any person by any other person, whether by
purchase, merger consolidation, or other transfer, and whether or not for
consideration.
"ADMINISTRATIVE SERVICES AGREEMENT" means any Administrative
Services Agreement entered into between HOC and JCC after the date hereof
relating to the performance of certain administrative services.
"AFFILIATE" means (i) any person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Company
or any of the Guarantors, (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). Notwithstanding the foregoing, Affiliate shall not include
wholly-owned Subsidiaries of the Company.
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"AFFILIATE TRANSACTION" shall have the meaning specified in Section
5.10.
"AGENT" means any Registrar, Paying Agent or co-Registrar.
"AGGREGATE AMOUNT" shall have the meaning specified in Section 5.14.
"AGGREGATE CONTINGENT PAYMENTS" means the Contingent Payments
together with all payments in respect of the Contingent Notes.
"ANNUAL MAXIMUM CONTINGENT PAYMENT AMOUNT" means, with respect to
each Security, the maximum amount of Contingent Payments the holder of such
Security may receive in a Contingent Payment Period in which Maximum
Contingent Payments are made.
"APPROVALS" means all approvals, licenses (including Gaming
Licenses), permits, authorizations, findings and other filings necessary
under applicable gaming laws.
"ASSET SALE" shall have the meaning specified in Section 5.14.
"ASSET SALE PUT DATE" shall have the meaning specified in Section
5.14.
"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 payment of such security or
instrument multiplied by the amount of each such principal payment by (ii)
the sum of all such principal payments.
"BANK AGENT" means Bankers Trust Company or any successor or
replacement Administrative Agent (as defined in the Bank Credit Agreement)
under the Bank Credit Facilities.
"BANK CREDIT FACILITIES" means the Credit Agreement, dated as of
___________, 1998 (the "Bank Credit Agreement"), among JCC, JCC Holding, the
Bank Lenders from time to time parties thereto, and Bankers Trust Company, as
administrative agent, together with the related documents thereto (including,
without limitation, any guaranty agreements and security documents), in each
case as such agreements may be amended (including any amendment and
restatement thereof), supplemented or modified from time to time, including
any agreement extending the maturity of, refinancing, replacing or otherwise
restructuring (including by way of adding Subsidiaries of JCC as additional
borrowers or guarantors thereunder) all or a portion of the Indebtedness
under such agreement or any successor or replacement agreement and whether by
the same or any other agent, lender or group of lenders.
"BANK LENDERS" means the lenders from time to time party to the Bank
Credit Facilities.
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<PAGE>
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"BANK SECURITY INTERESTS" means the Liens on the Collateral created
by the Collateral Documents for the benefit of the Bank Lenders.
"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.
"BOARD RESOLUTION" means, with respect to any person, a duly adopted
resolution of the Board of Directors (or, if such person is a limited
liability company, of the Manager) 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.
"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 by such obligations shall be the capitalized amount
of such obligations, as determined in accordance with GAAP.
"CAPITAL STOCK" means, with respect to any person, any capital stock
of such person and shares, interests, participations or other ownership
interests (however designated) of any person and any rights (other than debt
securities convertible into corporate stock), warrants and options to
purchase any of the foregoing, including (without limitation) each class of
common stock and preferred stock of such person if such person is a
corporation and each general and limited partnership interest of such person
if such person is a partnership.
"CASH" means U.S. Legal Tender or U.S. Government Obligations.
"CASH EQUIVALENT" means (i) securities issued or directly and fully
guaranteed, or secured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof) and in each case
maturing within one year after the date of acquisition, (ii) time deposits
and certificates of deposit of any commercial bank having, or which is the
principal subsidiary of a bank holding company organized under the laws of
the United States, any State thereof, the District of Columbia or any foreign
jurisdiction having capital and surplus in excess of $250,000,000 and
commercial paper issued by others rated at least A-2 or the equivalent
thereof by Standard & Poor's Corporation or at least P-2 or the equivalent
thereof by Moody's Investors Service, Inc. and in each case maturing within
one year after the date of acquisition, (iii) repurchase obligations with a
term of not more than 90 days collateralized by securities issued or directly
and fully guaranteed, or secured by the United States of
3
<PAGE>
America or any agency or instrumentality thereof (provided that the full
faith and credit of the United States of America is pledged in support
thereof) entered into with any bank or other person meeting the
qualifications specified in clause (ii) above, and (iv) investments in money
market funds substantially all of whose assets are comprised of securities of
the types described in clauses (i) through (iii).
"CASINO" means the Harrah's Casino New Orleans to be located at the
site of the former Rivergate Convention Center in New Orleans, Louisiana that
is operated in accordance with the Casino Operating Contract.
"CASINO COMPLETION DATE" means the Termination of Construction Date
(as defined in the Notes Completion Guarantee).
"CASINO OPENING DATE" means the date upon which Harrah's Management
Company first opens the Casino to the public and commences business.
"CASINO OPERATING CONTRACT" means the modified Casino Operating
Contract between the Company and the Louisiana Gaming Control Board, dated as
of __________, 1998, as it may be amended or supplemented from time to time.
"CITY" means the City of New Orleans, Louisiana.
"COLLATERAL" means the Property and assets of the Company which is
now or hereafter subject to the Liens created by the Collateral Documents.
"COLLATERAL AGENT" shall have the meaning set forth under the
definition of "Security Agreement."
"COLLATERAL DOCUMENTS" or "MORTGAGE" means the Security Agreement,
the Intellectual Property Security Documents and the Pledge Agreement and any
other agreement purporting to convey to the Collateral Agent or the Trustee
for the benefit of the Holders, a security interest in Property pursuant to
the requirements of this Indenture executed by the Company in favor of the
Collateral Agent or the Trustee for the benefit of the Holders, as the same
may be amended from time to time.
"COMPANY" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means such
successor.
"COMPANY REQUEST" means a written request of the Company or a
Guarantor, as the case may be, in the form of an Officers' Certificate.
"COMPLETION GUARANTEES" means (i) the Notes Completion Guarantee
(the "Notes Completion Guarantee"), dated as of _________, 1998, by HOC and
HET in favor of the Trustee, as trustee, as it may be amended or supplemented
from time to time, (ii) the Bank Completion Guarantee, dated as of _________,
1998, by HOC and HET in favor the
4
<PAGE>
Bank Agent, as agent, as it may be amended or supplemented from time to time,
(iii) the LGCB Completion Guarantee, dated as of _________, 1998, by HOC and
HET in favor of the Regulating Authority, as it may be amended or
supplemented from time to time, and (iv) the RDC/City Completion Guarantee,
dated as of _________, 1998, by HOC and HET in favor of the RDC and the City,
as it may be amended or supplemented from time to time.
"COMPLETION LOAN AGREEMENT" means the Amended and Restated
Completion Loan Agreement, dated as of __________, 1998, among the Company,
HOC and HET, as it may be amended or supplemented from time to time.
"CONSOLIDATED CAPITAL EXPENDITURES" means, with respect to any
person for any period, the capital expenditures of such person and its
Consolidated Subsidiaries (determined in accordance with GAAP) for such
period.
"CONSOLIDATED COVERAGE RATIO" of any person on any date of
determination (the "Transaction Date") means, the ratio, on a PRO FORMA
basis, of (a) the aggregate amount of Consolidated EBITDA of such person
attributable to continuing operations and businesses (exclusive of amounts
attributable to operations and businesses permanently discontinued or
disposed of for the Reference Period) to (b) the aggregate Consolidated Fixed
Charges of such person (exclusive of amounts attributable to operations and
businesses permanently discontinued or disposed of, but only to the extent
that the obligations giving rise to such Consolidated Fixed Charges would no
longer be obligations contributing to such person's Consolidated Fixed
Charges subsequent to the Transaction Date) during the Reference Period;
provided, that for purposes of such calculation, (i) Acquisitions which
occurred during the Reference Period or subsequent to the Reference Period
and on or prior to the date of the transaction giving rise to the need to
calculate the Consolidated Coverage Ratio shall be assumed to have occurred
on the first day of the Reference Period, (ii) transactions giving rise to
the need to calculate the Consolidated Coverage Ratio shall be assumed to
have occurred on the first day of the Reference Period, (iii) the incurrence
of any Indebtedness or issuance of any Disqualified Capital Stock during the
Reference Period or subsequent to the Reference Period and on or prior to the
Transaction Date (and the application of the proceeds therefrom to the extent
used to refinance or retire other Indebtedness) shall be assumed to have
occurred on the first day of such Reference Period, (iv) the Consolidated
Fixed Charges of such person attributable to interest on any Indebtedness or
dividends on any Disqualified Capital Stock bearing a floating interest (or
dividend) rate shall be computed on a PRO FORMA basis as if the average rate
in effect from the beginning of the Reference Period to the Transaction Date
had been the applicable rate for the entire period, unless such Person or any
of its Subsidiaries is a party to an Interest Rate Agreement (which shall
remain in effect for the 12-month period immediately following the
Transaction Date) that has the effect of fixing the interest rate on the date
of computation, in which case such rate (whether higher or lower) shall be
used, (v) there shall be excluded from Consolidated Fixed Charges any portion
of such Consolidated Fixed Charges related to any amount of Indebtedness that
was outstanding during the Reference Period but is not outstanding on the
Transaction Date, except for Consolidated Fixed Charges actually incurred
with respect to Indebtedness borrowed (as adjusted pursuant to clause (iv))
under a revolving credit or similar arrangement to the extent the commitment
thereunder remains in effect on the Transaction
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<PAGE>
Date and (vi) the Consolidated Fixed Charges of such person attributable to
interest on any Indebtedness under a revolving credit facility computed on a
PRO FORMA basis shall be computed based upon the average daily balance of
such Indebtedness during the Reference Period.
"CONSOLIDATED EBITDA" means, with respect to any person, for any
period, the Consolidated Net Income of such person for such period adjusted
(A) to add thereto (to the extent deducted from net revenues in determining
Consolidated Net Income), without duplication, the sum of (i) Permitted Tax
Distributions and, if such person is not treated as a pass through entity for
federal income tax purposes, or any similar provision of state or local law,
income tax expense (whether or not payable during such period) of such person
and its Consolidated Subsidiaries, (ii) consolidated depreciation and
amortization expense, (iii) Consolidated Fixed Charges, (iv) Aggregate
Contingent Payments, whether paid or accrued, (v) Incentive Management Fees,
whether paid or accrued, (vi) amortization expense with respect to deferred
financing fees, (vii) pre-opening expenses, (viii) any extraordinary loss
reflected in the calculation of Consolidated Net Income, (ix) other non-cash
charges, and (x) solely for the purpose of calculating Contingent Payments,
if any, and Incentive Management Fees, if any, the proceeds, if any, from the
exercise of the HET Warrant, and (B) to subtract therefrom any extraordinary
gain reflected in the calculation of Consolidated Net Income.
"CONSOLIDATED FIXED CHARGES" of any person means, for any period,
the aggregate amount (without duplication) of (a) interest (excluding, solely
for purpose of this definition, Aggregate Contingent Payments and Incentive
Management Fees, whether paid or accrued) expensed or capitalized, paid,
accrued, or scheduled to be paid or accrued in accordance with GAAP (except
as set forth below and 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 Consolidated Subsidiaries
including the interest portion of all deferred payment obligations calculated
in accordance with GAAP, and excluding original issue discount and non-cash
interest payments or accruals on any Indebtedness, and all commissions,
discounts and other fees and charges owed with respect to bankers' acceptance
financings and currency and Interest Rate Agreements and (b) the amount of
dividends payable by such person or any of its Consolidated Subsidiaries in
respect of Disqualified Capital Stock (other than by Subsidiaries of such
person to such person or such person's wholly owned 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.
"CONSOLIDATED NET INCOME" means, with respect to any person for any
period, the net income (or loss) of such person and its Consolidated
Subsidiaries (determined in accordance with GAAP) for such period, adjusted
to exclude (only to the extent included in computing such net income (or
loss) and without duplication): (a) all gains which are either
6
<PAGE>
extraordinary (as determined in accordance with GAAP) or are either unusual
or nonrecurring (including from the sale of assets outside of the ordinary
course of business or from the issuance or sale of Capital Stock), (b) the
net income, if positive, of any person, other than a Consolidated Subsidiary,
in which such person or any of its Consolidated Subsidiaries has an interest,
except to the extent of the amount of any dividends or distributions actually
paid in cash to such person or a Consolidated Subsidiary of such person
during such period, but not in excess of such person's PRO RATA share of such
person's net income for such period, (c) the net income, if positive, of any
person acquired in a pooling of interests transaction for any period prior to
the date of such acquisition, and (d) the net income, if positive, of any of
such person's Consolidated Subsidiaries to the extent that the declaration or
payment of dividends or similar distributions is not at the time permitted by
operation of the terms of its charter or bylaws or any other agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to such Consolidated Subsidiary.
"CONSOLIDATED SUBSIDIARY" means, for any person, each Subsidiary of
such person (whether now existing or hereafter created or acquired) the
financial statements of which are or are required to be consolidated for
financial statement reporting purposes with the financial statements of such
person in accordance with GAAP.
"CONSOLIDATED TANGIBLE NET WORTH" of any person at any date means,
in the case of a partnership, the partners capital and, in the case of a
corporation, the aggregate of capital, surplus and retained earnings of such
person (plus, in the case of a corporation, amounts of equity attributable to
preferred stock) and its Consolidated Subsidiaries, as would be shown on the
consolidated balance sheet of such person prepared in accordance with GAAP,
adjusted to exclude (to the extent included in calculating such equity), (a)
the amount of partners capital (or capital, surplus and accrued but unpaid
dividends, as the case may be), attributable to any Disqualified Capital
Stock, (b) all upward revaluations and other write-ups in the book value of
any asset of such person or a Consolidated Subsidiary of such person
subsequent to the Issue Date, (c) all investments in Subsidiaries that are
not Consolidated Subsidiaries and in persons that are not Subsidiaries, (d)
all unamortized debt discount and expense and unamortized deferred charges
and (e) goodwill and other intangible assets.
"CONTINGENT PAYMENT PERIOD" means collectively a First Semiannual
Period together with the next succeeding Second Semiannual Period.
"CONTINGENT PAYMENTS" means collectively the First Period Contingent
Payments and the Second Period Contingent Payments.
"CONTINGENT PAYMENT ACCRUAL" means, at any time, the total amount of
Contingent Payments accrued and unpaid through and as of such time.
"CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES" means the 8%
Convertible Junior Subordinated Debentures due 2009 issued by the Company in
connection with the Plan of Reorganization.
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"CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES INDENTURE" means the
Indenture, dated as of __________, 1998, among the Company, as obligor, and
___________________, as trustee, in connection with the Convertible Junior
Subordinated Debentures.
"CREDIT ENHANCEMENT FEE AGREEMENT" means the Credit Enhancement Fee
Agreement, dated as of ___________, 1998, between the Company and HOC.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"DEFAULT" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"DEFAULTED INTEREST" shall have the meaning specified in Section 2.12.
"DESIGNATED SENIOR DEBT" means (i) so long as any Indebtedness is
outstanding in respect of the Tranche A Term Loans or the Revolving Loans,
such Indebtedness, and (ii) thereafter, any other Senior Debt permitted under
this Indenture the principal amount of which is $15,000,000 or more.
"DESIGNATED SENIOR DEBT OF THE GUARANTORS" means (i) so long as any
Indebtedness of the Guarantors is outstanding in respect of the Tranche A
Term Loans or the Revolving Loans, such Indebtedness, and (ii) thereafter,
any other Guarantor Senior Debt permitted under this Indenture the principal
amount of which is $15,000,000 or more.
"DEVELOPMENT AGREEMENT" means that certain Development Agreement,
dated as of _____________, 1998, between the Company and a subsidiary of HOC.
"DISQUALIFIED CAPITAL STOCK" means (a) except as provided in (b),
with respect to any person, Capital Stock of such person that, by its terms
or by the terms of any security into which it is convertible, exercisable or
exchangeable, is, or upon the happening of an event or the passage of time
would be, required to be redeemed or repurchased (including at the option of
the holder thereof) by such person or any of its Subsidiaries, in whole or in
part on or prior to the Stated Maturity of the Notes, and (b) with respect to
any Subsidiary of such person (including any Subsidiary of the Company), any
Capital Stock other than any Capital Stock with no preference, privileges, or
redemption or repayment provisions.
"8% NOTES" means the Company's Senior Subordinated Notes due 2009
with Contingent Payments.
"8% NOTES INDENTURE" means the Indenture, dated as of ___________,
1998, among the Company, as obligor, JCC Holding, as guarantor, and Norwest
Bank Minnesota, National Association, as trustee, in connection with the 8%
Notes.
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"ENVIRONMENTAL LAW" means any applicable Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, guideline, written
policy and rule of common law now or hereafter in effect and in each case as
amended, and any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent decree or judgment, to the
extent binding on the Company or any of its subsidiaries, relating to the
environment, employee health and safety or Hazardous Materials, including,
without limitation, the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as the same may be amended from time to time, 42
U.S.C. Section 9601 ET SEQ.; the Resource Conservation and Recovery Act, as
the same may be amended from time to time, 42 U.S.C. Section 6901 ET SEQ.;
the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 ET SEQ.; the
Toxic Substances Control Act, 15 U.S.C. Section 2601 ET SEQ.; the Clean Air
Act, 42 U.S.C. Section 7401 ET SEQ.; the Safe Drinking Water Act, 42 U.S.C.
Section 3803 ET SEQ.; the Oil Pollution Act of 1990, 33 U.S.C. Section 2701
ET SEQ.; the Emergency Planning and the Community Right-to-Know Act of 1986,
42 U.S.C. Section 11001 ET SEQ., the Hazardous Material Transportation Act,
49 U.S.C. Section 1801 ET SEQ. and the Occupational Safety and Health Act, 29
U.S.C. Section 651 ET SEQ. (to the extent it regulates occupational exposure
to Hazardous Materials); and any state and local or foreign counterparts or
equivalents, in each case as amended from time to time.
"EVENT OF DEFAULT" shall have the meaning specified in Section 7.1.
"EVENT OF DEFAULT NOTICE" shall have the meaning specified in
Section 7.2.
"EVENT OF LOSS" means, with respect to any property or asset, any
(i) loss, destruction or damage of such property or asset, or (ii) any
condemnation, seizure or taking, by exercise of the power of eminent domain
or otherwise, of such property or asset, or confiscation or requisition of
the use of such property or asset.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
"FIRST PERIOD CONTINGENT PAYMENTS" means the amounts payable in the
aggregate to the Holders of the Securities on the Interest Payment Date next
following the six-month period ending on ____________ (the "First Semiannual
Period") in an amount equal to the product of (i) 75% of the Company's
Consolidated EBITDA for the First Semiannual Period in excess of $45,769,000
and less than $58,921,061, and (ii) a fraction (A) the numerator of
which is the aggregate Annual Maximum Contingent Payment Amount in respect of
the Securities outstanding on the close of business on the Record Date
corresponding to such Interest Payment Date and (B) the denominator of which
is $18,319,035.
"FORMULA RATE" means, with respect to any Note, one-half percent per
annum plus (a) the rate of interest per annum equal to the yield to maturity
of the United States Treasury Security having a maturity equal to the
Weighted Average Life to Maturity at such time of such Note, provided that if
there shall be more than one United States Treasury Security having a
maturity equal to the Weighted Average Life to Maturity of such Note, the
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Formula Rate shall be equal to the average of the yields to maturity
(expressed as a rate per annum) of such United States Treasury Securities, or
(b) if no United States Treasury Security shall have a maturity equal to the
Weighted Average Life to Maturity of such Note, the rate of interest per
annum to maturity (expressed as a rate per annum) of the United States
Treasury Security having a maturity as close as possible to, but less than,
the Weighted Average Life to Maturity of such Note. For purposes of this
definition, "United States Treasury Security" means, at any time, each of the
United States Treasury notes, bonds, three month bills, six month bills and
one year bills having the maturities and yields to maturity as set forth in
the then most recently published Federal Reserve Board Statistical Release,
provided (A) if, for any particular maturity set forth in such Federal
Reserve Board Statistical Release, more than one date is associated therewith
for which a yield to maturity is set forth, then the yield to maturity for
the most recent date associated with such maturity shall be used for purposes
of determining the Formula Rate and (B) if, for any particular maturity and
the most recent date associated therewith that is set forth in such Federal
Reserve Board Statistical Release, more than one yield to maturity is set
forth therein, then the average yield associated with such maturity and such
date shall be used for purposes of determining the Formula Rate. For
purposes of this definition, "Federal Reserve Board Statistical Release"
means the weekly Statistical Release H.15(519) of the Federal Reserve Board
of Governors or any successor or substitute publication.
"GAAP" means United States generally accepted accounting principles
as in effect on the date of this Indenture.
"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 applicable to gaming in any Gaming Jurisdiction.
"GAMING LICENSE" means every material license, material franchise or
other material authorization on the Issue Date or thereafter required to own,
lease, operate or otherwise conduct or manage a casino facility in any state,
local or other jurisdiction including, without limitation, any applicable
material liquor licenses, and with respect to the Company (and without
limitation), the Casino Operating Contract.
"GENERAL DEVELOPMENT AGREEMENT" means the Amended and Restated
General Development Agreement among the Company, the RDC and the City dated
as of __________, 1998, as amended or supplemented from time to time.
"GOVERNMENTAL AUTHORITY" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States or foreign government, any state, province or any city or
other political subdivision and whether now or hereafter in existence, or any
officer or official thereof, and any maritime authority.
"GROSS REVENUE" means all revenues and income of any nature derived
directly or indirectly from the Casino, or from the use or operation thereof,
including without
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limitation, win (gaming) (i.e., the difference between gaming wins and losses
before deducting cost and expenses determined according to Casino Standard
Accounting Principles (as the term is defined in the Management Agreement, as
in effect on the Issue Date)), food and beverage revenue, telephone,
telegraph, satellite or cable video and telex revenue, entertainment revenue,
parking revenue, rental payment from any lessees or concessionaires,
merchandise sales revenue, interest income, and the actual cash proceeds of
business interruption, increased cost of operation, use occupancy or similar
insurance.
"GROUND LEASE" means the Amended and Restated Ground Lease for the
site of the Casino among the Company, the RDC and the City, as Intervenor,
dated as of __________, 1998, as amended or supplemented from time to time.
"GUARANTOR SENIOR DEBT" means Indebtedness, including any obligation
for interest which would accrue but for any proceeding referred to in Section
14.2 at the relevant contractual rate, whether or not an allowed claim in any
such proceeding, of the Guarantors in respect of the Tranche A Term Loans or
the Revolving Loans, and any Refinancing (in whole or in part) of the Tranche
A Term Loans or the Revolving Loans (or any previous Refinancing thereof).
"GUARANTORS" means collectively the Parent Guarantor and the
Subsidiary Guarantors.
"GUARANTY" shall have the meaning specified in Section 12.1.
"HARRAH'S INVESTOR" means Harrah's Crescent City Investment Company,
a Nevada corporation.
"HARRAH'S MANAGEMENT COMPANY" means Harrah's New Orleans Management
Company, a Nevada corporation.
"HAZARDOUS MATERIALS" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; (b) any chemicals, materials or substances defined as or included
in the definition of "hazardous substances," "hazardous waste," "hazardous
materials," "extremely hazardous substances," "restricted hazardous waste,"
"toxic substances," "toxic pollutants," "contaminants," or "pollutants," or
words of similar import, under any applicable Environmental Law; and (c) any
other chemical, material or substance, exposure to which is prohibited,
limited or regulated by any governmental authority under Environmental Laws.
"HET" means Harrah's Entertainment, Inc., a Delaware corporation.
"HET/JCC AGREEMENT" means the Agreement, dated as of ______________,
1998, among HET, HOC and the Company, as it may be amended, modified,
renewed,
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extended or replaced from time to time, pursuant to which HET and HOC shall
provide the Minimum Payment Guaranty for certain periods and subject to
certain terms and conditions set forth therein.
"HET LOAN GUARANTEE" means the guarantees of HET and HOC pursuant to
that certain Guaranty and Loan Purchase Agreement, dated as of __________,
1998, among HET, HOC and Bankers Trust Company, as administrative agent.
"HET WARRANT" means the warrants granted to Harrah's Investor in
connection with the Plan of Reorganization pursuant to that certain Warrant
Agreement, dated as of ________, 1998, between JCC Holding and Harrah's
Investor, as it may be amended from time to time.
"HOC" means Harrah's Operating Company, Inc., a Delaware corporation.
"HOLDER" or "SECURITYHOLDER" means the person in whose name a
Security is registered on the Registrar's books.
"HOLDER OF 8% NOTES" means the person in whose name an 8% Note is
registered on the books of the registrar with respect to the 8% Notes.
"INCUR" shall have the meaning specified in Section 5.11.
"INCURRENCE DATE" 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),
including accrued and unpaid Aggregate Contingent Payments, (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, if and to the extent any of the foregoing
described in clauses (i), (ii) and (iii) would appear as a liability on the
balance sheet of such Person, (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 Rate
Agreements 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; (d) all obligations to
purchase, redeem or acquire any Capital Stock; and (e) 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 obligations secured
thereby shall have been assumed by or shall otherwise be such person's legal
liability, provided, that the amount of such obligations 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.
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In addition, "Indebtedness" of any person shall include Indebtedness
described in the foregoing clauses (a) (i), (ii) and (iii) that would not
appear as a liability on the balance sheet of such person if (l) such
Indebtedness is the obligation of a partnership or joint venture that is not
a Subsidiary of such person (a "Joint Venture"), (2) such person or a
Subsidiary of such person is a general partner of the Joint Venture (a
"General Partner"), and (3) there is recourse, by contract or operation of
law, with respect to payment of such obligation to property or assets of such
person or a Subsidiary of such person; then such Indebtedness shall be
included in an amount not to exceed (x) the greater of (A) the net assets of
the General Partner, and (B) the amount of such obligations to the extent
that there is recourse, by contract or operation of law, to the property or
assets of such person or a Subsidiary of such person (other than the General
Partner) or (y) if less than the amounts determined pursuant to clause (x)
above, the actual amount of such Indebtedness that is recourse to such
person, if the Indebtedness is evidenced by a writing and is for a
determinable amount.
"INDEMNITY AGREEMENT" means the Amended and Restated Construction
Lien Indemnity Obligation Agreement, dated as of __________, 1998, between
the Company and HOC.
"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 Securities (and any other
obligor hereunder or under the Securities) now or hereafter existing, to pay
Contingent Payments on the Securities when due and payable, whether on an
Interest Payment Date, by acceleration, Required Regulatory Redemption, or
otherwise, and interest (to the extent lawful) on overdue Contingent
Payments, if any, and all other amounts due or to become due in connection
with this Indenture, the Securities and the Collateral Documents, 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 Securities) 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 Collateral Documents.
"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 Collateral Documents into Cash, Cash Equivalents 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.
"INTELLECTUAL PROPERTY SECURITY DOCUMENTS" means the Assignment of
Security Interests in United States Trademarks and Patents and the Assignment
of Security Interest in
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United States Copyrights, each substantially in the form annexed to the
Security Agreement and executed in favor of the Collateral Agent.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement, dated
as of __________, 1998, among the Company, Administrative Agent under the
Bank Credit Facilities, the Trustee, the Collateral Agent and the other
parties named therein, as it may be amended or supplemented from time to time.
"INTEREST" shall have the meaning set forth in Section 5.1.
"INTEREST PAYMENT DATE" means the stated due date of an installment
of interest on the Securities.
"INTEREST RATE AGREEMENT" means the obligations of any person
pursuant to any interest rate swap agreement, interest rate collar agreement
or other similar agreement or arrangement, in each case designed to protect
such person or any of its Subsidiaries against fluctuations in interest rates.
"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 or on behalf of, 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); (c) other than (i) any guarantees of the Notes, (ii) any
guarantees of the 8% Notes, (iii) any guarantees of the Bank Credit
Facilities, (iv) any guarantees of Interest Rate Agreements, and (v) any
guarantees of Indebtedness or other liabilities of the Company or its
Subsidiaries by the Guarantors, including, without limitation, the Parent
Guarantor, the Company or its Subsidiaries, 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; (d) the
making of any capital contribution by such person to such other person; or
(e) the designation by the Board of Directors of the Manager of a Subsidiary
to be an Unrestricted Subsidiary in accordance with the definition of
"UNRESTRICTED SUBSIDIARY." The Company shall be deemed to make an
"Investment" in an amount equal to the fair market value of the net assets of
any Subsidiary, at the time that such Subsidiary is designated an
Unrestricted Subsidiary and, any property transferred to an Unrestricted
Subsidiary from the Company or one of its Subsidiaries shall be deemed an
Investment valued at its fair market value at the time of such transfer, as
determined by the Board of Directors of the Company in good faith. For
purposes of such determination, the amount of outstanding Investments shall
be reduced by the fair market value (determined by the Board of Directors of
the Manager in good faith) of the net assets of any Unrestricted Subsidiary
upon its designation as a Subsidiary.
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"ISSUE DATE" means the date of first issuance of the Notes under
this Indenture.
"JCC DEVELOPMENT" means JCC Development Company, L.L.C., a Louisiana
Limited liability company.
"LEASEHOLDS" of any person means all the right, title and interest
of such person as lessee or licensee in, to and under any lease.
"LEGAL HOLIDAY" shall have the meaning provided in Section 13.7.
"LICENSING AGREEMENT" means the Licensing Agreement, dated as of
__________, 1998, between Harrah's Las Vegas, Inc. and JCC relating to JCC's
use of "Harrah's" in the name of the Casino and on its signage and
advertising.
"LIEN" means any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind, whether or not filed, recorded or otherwise
perfected under applicable law (including, without limitation, any
conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give any security interest
in and any filing or other agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"MAKE-WHOLE AMOUNT" with respect to the Notes means, as of any date,
the greater of (a) zero and (b) the remainder of the present value
(determined using a discount rate equal to the Formula Rate at such time) of
the remaining Maximum Contingent Payments payable in respect of the Notes.
"MANAGEMENT AGREEMENT" means the Second Amended and Restated
Management Agreement between the Company and Harrah's Management Company
relating to the management of the Casino dated as of __________, 1998, as it
may be amended or supplemented from time to time.
"MANAGEMENT FEE" means "Management Fee" as defined by the Management
Agreement.
"MANAGER" means (i) for so long as the Company is a limited
liability company, the Manager of the Company as set forth in the Company's
Operating Agreement or, if the Company's Operating Agreement does not provide
for a Manager, the member or members of the Company, and (ii) otherwise the
Board of Directors of the Company.
"MAXIMUM CONTINGENT PAYMENTS" means, for any Contingent Payment
Period, an amount equal to the product of (i) $18,319,035 and (ii) a fraction
(x) the numerator of which is the aggregate Annual Maximum Contingent
Payment Amount in respect of the Securities outstanding on the close of
business on the Record Date corresponding to the
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Interest Payment Date immediately following such Contingent Payment Period,
and (y) the denominator of which is $18,319,035.
"MINIMUM ACCUMULATION DATE" shall have the meaning specified in
Section 5.14.
"MINIMUM PAYMENT GUARANTY" means the guaranty that the Casino
Operating Contract obligates the Company to cause to be provided to the
Regulating Authority guaranteeing the Company's $100,000,000 annual minimum
payment obligation to the Regulating Authority under the Casino Operating
Contract.
"MINIMUM PAYMENT GUARANTOR" means any person that provides the
Minimum Payment Guaranty to the State.
"MINIMUM PAYMENT GUARANTOR SECURITY INTEREST" means a first priority
Lien on the Collateral for the Benefit of the Minimum Payment Guarantor to
secure the Company's obligation to pay any amounts owing to the Minimum
Payment Guarantor including, without limitation, (i) any fees owing to the
Minimum Payment Guarantor in connection with providing the Minimum Payment
Guaranty, (ii) any termination payment owing by the Company to the Minimum
Payment Guarantor in connection with the Minimum Payment Guaranty, and (iii)
payments of principal and interest in respect of Indebtedness incurred by the
Company to the Minimum Payment Guarantor as a result of drawings (including
interest thereon) by the Regulating Authority under the Minimum Payment
Guaranty.
"MORTGAGE" shall have the meaning set forth under the definition of
"Collateral Documents."
"NET CASH PROCEEDS" means the aggregate amount of U.S. Legal Tender
or Cash Equivalents received by the Company in the case of a sale of
Qualified Capital Stock and by the Company and its Subsidiaries in respect of
an Asset Sale, less, in each case, the sum of all fees, commissions and other
expenses incurred in connection with such sale of Qualified Capital Stock or
Asset Sale, and, in the case of an Asset Sale only, less (a) the amount
(estimated reasonably and in good faith by the Company) of income, franchise,
sales and other applicable taxes required to be paid by the Company or any of
its Subsidiaries in connection with such Asset Sale and (b) the aggregate
amount of U.S. Legal Tender or Cash Equivalents so received which is used to
retire (in whole or in part) any existing Indebtedness of the Company or its
Subsidiaries (owed to a person other than an Affiliate) which was secured by
the assets that were the subject of such Asset Sale and which was required to
be repaid (which repayment, in the case of a revolving credit arrangement or
multiple advance arrangement, reduces the commitment thereunder) in
connection with such Asset Sale.
"NET CASH PROCEEDS ACCOUNT" means the separate custodial account
established and maintained by the Company in the name of the Collateral Agent
for the benefit of the Holders and the Bank Lenders pursuant to Section 4.4
and the terms of the Security
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Agreement into which the Net Cash Proceeds from Asset Sales and Insurance
Proceeds are to be deposited.
"NET PROCEEDS" means the aggregate Net Cash Proceeds and fair market
value of property and assets (valued at the fair market value thereof at the
time of receipt in good faith by the Board of Directors of the Manager),
other than securities of the Company or any of its Subsidiaries, received by
the Company after payment of expenses, commissions, discounts and the like
incurred in connection therewith.
"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 none of the Company, the
Guarantors or any of their Subsidiaries provides any credit support or is
liable.
"NOTES." See "SECURITIES."
"OBLIGATIONS" means all obligations for principal, premium,
interest, penalties fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing, or otherwise relating
to, any Indebtedness.
"OFFICER" means, with respect to any person, 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 such
person.
"OFFICERS' CERTIFICATE" means, with respect to the Company or any
Guarantor, a certificate signed by any Officer of the Company (or, if the
Company does not have any Officers, by an Officer of the Manager) or such
Guarantor and otherwise complying with the requirements of Sections 15.4(1)
and 15.5.
"OPEN ACCESS PROGRAM" means the program required under the General
Development Agreement and the Ground Lease pursuant to which the Company is
to facilitate the participation by minorities, women and disadvantaged
persons and business enterprises in developing, constructing and operating
the Casino.
"OPINION OF COUNSEL" means a written opinion from legal counsel to
the Company reasonably acceptable to the Trustee and which complies with the
requirements of Sections 15.4 and 15.5. Unless otherwise required by this
Indenture, the counsel may be in-house counsel to the Company.
"PARENT GUARANTOR" means JCC Holding.
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"PARTIAL PERIOD CONTINGENT PAYMENTS" means (A) with respect to a
First Semiannual Period, the product of (i) the fraction, the numerator of
which is the number of days from the end of the previous Second Semiannual
Period to the date giving rise to such calculation and the denominator of
which is 180 (but in no event shall such fraction be greater than 1.0), and
(ii) the Contingent Payments for the prior First Semiannual Period, and (B)
with respect to a Second Semiannual Period, the product of (i) the fraction,
the numerator of which is the number of days from the end of the previous
First Semiannual Period to the date giving rise to such calculation and the
denominator of which is 180 (but in no event shall such fraction be greater
than 1.0), and (ii) the Contingent Payments for the prior Second Semiannual
Period.
"PAYING AGENT" shall have the meaning specified in Section 2.3.
"PERFORMANCE BOND INDEMNITY AGREEMENT" means the Performance Bond
Indemnity Agreement, dated as of __________, 1998, between the Company and
HOC.
"PERMITTED FF&E FINANCING" means Indebtedness which is Non-recourse
Indebtedness to the Company or any of its Subsidiaries or any of their
properties (other than as provided in this definition) that is incurred to
finance the acquisition or lease after the Casino Completion Date of newly
acquired or leased furniture, fixtures or equipment ("FF&E") used directly in
the operation of the Casino or a Related Business and secured by a Lien on
such FF&E (which Lien, subject to certain limitations, shall be the only
Permitted 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 and the Collateral
Agent under the Collateral Documents).
"PERMITTED INDEBTEDNESS" means any of the following:
(a) the Company and any Guarantor may incur Indebtedness solely in
respect of bankers' acceptances, letters of credit and payment and
performance bonds (to the extent that such incurrence does not result in
the incurrence of any obligation for the payment of borrowed money of any
person other than the Company or such Subsidiary), all in the ordinary
course of business, in amounts and for the purposes customary in the
Company's industry for gaming operations similar to those of the Company;
provided, that the aggregate principal amount outstanding of such
Indebtedness (including any Indebtedness issued to refinance, refund or
replace such Indebtedness) shall at no time exceed $5,000,000;
(b) the Company may incur Indebtedness to any Subsidiary, and any
Subsidiary may incur Indebtedness to any other Subsidiary or to the
Company; PROVIDED, however, that such obligations, in any case, shall be
subordinated to such entity's obligations pursuant to the Notes; PROVIDED
FURTHER that, in the case of Indebtedness of the Company to any of its
Subsidiaries, any disposition, pledge or transfer of any such Indebtedness
by the Subsidiary to a person (other than a Subsidiary) shall be deemed to
be an incurrence of such Indebtedness by the Company not permitted by this
clause (b);
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(c) the Company and any of its Subsidiaries may incur Indebtedness
representing the balance deferred and unpaid of the purchase price of any
property or services used in the ordinary course of their business that
would constitute ordinarily a trade payable to trade creditors; and
(d) the Company and any of its Subsidiaries may post a bond or surety
obligation (or incur an indemnity or similar obligation) in order to
prevent the impairment or loss of or to obtain the Casino Operating
Contract, to the extent required by applicable law and consistent in
character and amount with customary industry practice.
"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 Subsidiary thereof if adequate reserves
with respect thereto are maintained on the books of the Company or such
Subsidiary, as the case may be, in accordance with GAAP;
(b) statutory Liens of carriers, warehousemen, mechanics, landlords,
laborers, materialmen, repairmen or other like Liens arising by operation
of 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 60
days or (ii) such Liens are being contested in good faith and by
appropriate proceedings by the Company or a Subsidiary thereof and adequate
reserves with respect thereto are maintained on the books of the Company or
such Subsidiary, as the case may be, in accordance with GAAP;
(c) easements, rights-of-way, zoning and similar restrictions and
other similar encumbrances or title defects incurred 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 or proposed to be used by the Company or such Subsidiary) or interfere
with the ordinary conduct of the business of the Company or such
Subsidiary; 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;
(d) Liens existing on the Issue Date;
(e) pledges or deposits made in the ordinary course of business in
connection with worker's compensation, unemployment insurance and other
types of social legislation;
(f) Liens created by this Indenture, the 8% Notes Indenture and the
Collateral Documents;
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(g) Liens that secure Acquired Indebtedness or Liens on Acquired
Assets, provided, in each case, that such Liens do not secure any other
property or assets and were not put in place in connection with or in
anticipation of such acquisition, merger or consolidation;
(h) any judgment Lien unless it constitutes an Event of Default;
(i) Liens to secure payment or performance bonds to the extent
permitted under clause (a) under the definition of "Permitted
Indebtedness;"
(j) Liens incurred in the ordinary course of business securing
Indebtedness under Interest Rate Agreements;
(k) leases or subleases granted to other persons in the ordinary
course of business not materially interfering with the conduct of the
business of the Company or any of its Subsidiaries or materially detracting
from the value of the relative assets of the Company or such Subsidiary of
the Company; and
(l) Liens arising from precautionary Uniform Commercial Code
financing statement filings regarding operating leases entered into by the
Company or any of its Subsidiaries in the ordinary course of business.
"PERMITTED TAX DISTRIBUTIONS" means (A) for so long as the Company is
treated as a pass through entity for federal income tax purposes, distributions
to equity holders of the Company in an amount not to exceed the Tax Amount for
such period and (B) for so long as the Company is a corporation and for any
taxable year of the Company in which it joins in filing a consolidated federal
income tax return with JCC Holding, payment (including any estimated tax payment
based on any estimated tax liability for such year) by the Company to the Parent
Guarantor in an amount not in excess of the lesser of (i) the separate return
federal income tax liability (if any) of the affiliated group (within the
meaning of Section 1504 of the Internal Revenue Code of 1986, as amended) of
which the Company would be the parent (the "JCC Group") if it were not a member
of another affiliated group for that or any other taxable year, and (ii) the
actual tax liability (if any) of the affiliated group of which the Company is
actually a member (the "Guarantor Group") for such year allocable to the JCC
Group; PROVIDED, that such payment can be made by the Company no earlier than
the date on which the Guarantor Group is required to make federal income tax
payments for such year to the Internal Revenue Service; and PROVIDED, FURTHER,
that for purposes of clause (ii) the actual tax liability of the Guarantor Group
shall be computed without regard to any income, gain, loss, deduction or credit
generated by a corporation other than the Parent Guarantor, the Company or a
Subsidiary of the Company. In the event that the Parent Guarantor and any
member of the JCC Group join in filing any combined or consolidated (or similar)
state or local income or franchise tax returns, then Permitted Tax Distribution
shall include payments with respect to such state or local income or franchise
taxes determined in a manner as similar as possible to that provided in the
preceding sentence for federal income taxes.
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"PERSON" means any individual, limited liability company, corporation,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
"PLAN OF REORGANIZATION" means the plan of reorganization of Harrah's
Jazz Company, Harrah's Jazz Finance Corp., and Harrah's New Orleans Investment
Company (including all exhibits and schedules annexed thereto), as amended,
under chapter 11 of the United States Bankruptcy Code.
"PLANS" means all drawings, plans and specifications prepared by or on
behalf of the Company or one of its Subsidiaries, as the same may be amended or
supplemented from time to time in good faith, and, if required by applicable
law, submitted to and approved by the building or other relevant department,
which describe and show the Casino, or a Project Expansion, as the case may be,
and the labor and materials necessary for construction thereof.
"PLEDGE AGREEMENT" means the Pledge Agreement, dated ________, 1998,
executed by the Company in favor of the Collateral Agent, as it may be amended
or supplemented from time to time.
"PRINCIPAL" of any Indebtedness (including the Securities) means the
principal of such Indebtedness plus any applicable premium, if any, on such
Indebtedness.
"PRINCIPAL" shall have the meaning set forth in Section 5.1.
"PROJECT COSTS" means, with respect to a Project Expansion, the
aggregate costs required to complete such Project Expansion, through the Project
Expansion Termination of Construction Date with respect to such Project
Expansion in accordance with the Plans therefor and applicable legal
requirements, as set forth in a statement submitted to, and receipted for by,
the Trustee, setting forth in reasonable detail all amounts theretofore expended
and any anticipated costs and expenses estimated to be incurred and reserves to
be established in connection with the construction and development of such
Project Expansion, including direct costs related thereto such as construction
management, architectural engineering and interior design fees, site work,
utility installations and hook-up fees, construction permits, certificates and
bonds, land and lease acquisition costs and the cost of furniture, fixtures,
furnishings, machinery and equipment (including gaming equipment), but excluding
the following: principal or interest payments on any Indebtedness (other than
interest on Indebtedness in respect of such Project Expansion which is required
to be capitalized in accordance with GAAP, which shall be included in
determining Project Costs).
"PROJECT EXPANSION TERMINATION OF CONSTRUCTION DATE" means that date
by which (a) a temporary certificate of occupancy has been issued for the
Project Expansion by the building department and other relevant agencies;
(b) all required Approvals with respect to the Project Expansion have been
obtained by the Company and its Subsidiaries and their respective officers,
directors and equityholders; (c) a notice of completion has been duly recorded;
(d) all materialmen's claims, mechanics' liens or other liens or claims for
liens
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directly related to the Casino have been paid or satisfactory provisions have
been made for such payment, and the period of time for filing such claims and
liens has expired; (e) an Officers' Certificate has been delivered to the
Trustee certifying that the Project Expansion Termination of the Construction
Date has occurred; (f) a certificate has been delivered by the general
contractor and an architect engaged with respect to the Project Expansion to
the Trustee certifying that the Project Expansion has been substantially
completed in accordance with the Plans therefor and all applicable building
laws, ordinances and regulations; (g) the Project Expansion is in a condition
(including the installation of fixtures, furnishings and equipment) to
receive customers in the ordinary course of business; (h) the Project
Expansion is open for business to the general public. For purposes of the
preceding sentence, satisfactory provision for payment of claims, liens and
claims for liens shall be deemed to have been made if a bond, escrow or trust
account for payment has been established with an independent third party
satisfactory to the Trustee in an amount at least equal to the total of such
outstanding claims, liens and claims for liens.
"PROJECT EXPANSION" means any capital addition, improvement, extension
or repair to the Casino after the Casino Completion Date or to a Related
Business property.
"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.
"PURCHASE PRICE" means any Change of Control Offer Price or Asset Sale
Offer Price.
"QUALIFIED CAPITAL STOCK" means any Capital Stock of the Company that
is not Disqualified Capital Stock.
"QUALIFIED EXCHANGE" means any defeasance, redemption, repurchase or
other acquisition of (a) Capital Stock or Indebtedness of the Company with the
Net Proceeds received by the Company from the substantially concurrent sale of
Qualified Capital Stock or in exchange for Qualified Capital Stock or (b)
subordinated Indebtedness of the Company through the issuance of new
subordinated Indebtedness of the Company, provided that any new subordinated
Indebtedness (l) shall be in a principal amount that does not exceed the
principal amount (after deduction of reasonable and customary fees and expenses
incurred in connection with the refinancing) so refinanced (or, if the
subordinated Indebtedness being refinanced provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration thereof, then such lesser amount as of the date of determination),
plus the lesser of (x) the stated amount of any premium required to be paid in
connection with such a refinancing pursuant to the terms of the Indebtedness
being refinanced and (y) the amount of premium actually paid at such time to
refinance the Indebtedness; (2) has an Average Life greater than or equal to the
Average Life of the subordinated Indebtedness so refinanced; (3) has a stated
maturity for its final scheduled principal payment not sooner than the stated
maturity of the subordinated Indebtedness so refinanced; and (4) is expressly
subordinated in right of payment to the Notes pursuant to subordination
provisions
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that are at least as favorable to the holders of the Notes as those relating
to the subordinated Indebtedness so refinanced.
"RDC" means the Rivergate Development Corporation, a Louisiana public
benefit corporation established by the City.
"REAL PROPERTY" of any person shall mean all the right, title and
interest of such person in and to land, improvements and fixtures, including
Leaseholds.
"RECORD DATE" means a Record Date specified in the Securities whether
or not such Record Date is a Business Day.
"REDEMPTION DATE," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to Article III of
this Indenture and Paragraph 5 in the applicable form of Security.
"REDEMPTION PRICE," when used with respect to any Security to be
redeemed, means a price for such Security established by the Board of Directors
in good faith, plus accrued and unpaid Contingent Payments to the Redemption
Date (or such lesser amount as may be required by applicable law or by order of
any Gaming Authority).
"REFERENCE PERIOD" with regard to any person means the four full
fiscal quarters (or such lesser period during which such person has been in
existence) ended immediately preceding any date upon which any determination is
to be made pursuant to the terms of the Notes or this Indenture; provided, that
the Consolidated Fixed Charges of such person, to the extent such person has
been in existence for a shorter period than four full fiscal quarters, shall be
computed on an annualized basis.
"REFINANCING" shall have the meaning set forth in the definition of
"Refinancing Indebtedness."
"REFINANCING INDEBTEDNESS" means Indebtedness or Disqualified Capital
Stock 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 (a
"Refinancing"), any Indebtedness or Disqualified Capital Stock in a principal
amount or, in the case of Disqualified Capital Stock, liquidation preference,
not to exceed (after deduction of (a) any accrued and unpaid interest and/or
other amounts owing with respect to such Indebtedness which is included in the
Refinancing, and (b) reasonable and customary fees and expenses incurred in
connection with the Refinancing) the lesser of (i) the principal amount or, in
the case of Disqualified Capital Stock, liquidation preference, of the
Indebtedness or Disqualified Capital Stock 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 plus, in either case, the lesser of the amount of premium
actually paid at such time to refinance the Indebtedness and the stated amount
of any premium required to be paid in connection with such a Refinancing
pursuant to the terms of the Indebtedness being
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refinanced; PROVIDED, HOWEVER, that (A) Refinancing Indebtedness of any
Subsidiary of the Company shall only be used to Refinance outstanding
Indebtedness or Disqualified Capital Stock of such Subsidiary, (B)
Refinancing Indebtedness shall (x) not have an Average Life shorter than the
Indebtedness or Disqualified Capital Stock 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 or Disqualified Capital Stock 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 (or redemption payment) of the Indebtedness (or
Disqualified Capital Stock) to be so refinanced which was scheduled to come
due prior to the Stated Maturity of the Notes.
"REGISTRAR" shall have the meaning specified in Section 2.3.
"REGULATING AUTHORITY" means the Louisiana Gaming Control Board.
"RELATED BUSINESS" means any gaming business conducted by the Company
and its Subsidiaries within the State of Louisiana and any and all related
businesses in support of and ancillary to any such gaming business, including
the development and build-out of the non-gaming space on the second floor of the
Casino for non-gaming entertainment purposes and for leasing such space to
tenants with non-gaming businesses.
"REQUIRED REGULATORY REDEMPTION" means a redemption by the Company,
any Guarantor or any Subsidiary of the Company or any Guarantor of any of such
person's securities pursuant to, and in accordance with, any order of any
Governmental Authority with appropriate jurisdiction and authority relating to a
Gaming License held by the Company or an Affiliate of the Company (including HET
and any Affiliate of HET) or a wholly owned Subsidiary of the Company, or to the
extent necessary in the reasonable, good faith judgment of the Board of
Directors of HET, in the case of HET or one of its affiliates, or the Board of
Directors of the Manager, to prevent the loss, failure to obtain or material
impairment or to secure the reinstatement of, any such Gaming License, where
such redemption or acquisition is required because the holder or beneficial
owner of such security 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 FUNDS ACCOUNT" means a segregated bank account under the
control of the Company or a Subsidiary, the proceeds of which are invested in
cash or Cash Equivalents pending any use pursuant to Section 5.14.
"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 the Casino consistent with industry practice
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, (b) any payment on account of the purchase,
redemption or other acquisition or retirement
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for value of Capital Stock of such person or any Subsidiary of such person,
(c) any purchase, redemption, or other acquisition or retirement for value
of, or any defeasance of, any subordinated Indebtedness, directly or
indirectly, by such person or a Subsidiary of such person prior to the
scheduled maturity, any scheduled repayment of principal, or scheduled
sinking fund payment, as the case may be, of such Indebtedness (including any
payment in respect of any amendment of the terms of any such subordinated
Indebtedness, which amendment is sought in connection with any such
acquisition of such Indebtedness or seeks to shorten any such due date), (d)
any Restricted Investment by such person, (e) any interest paid on
Indebtedness incurred in accordance with the provisions of clause (k) under
Section 5.11, and (f) any principal payments to HOC or HET (or any assignees
thereof) pursuant to the Subordinated Credit Facility, the Completion Loan
Agreement, the Performance Bond Indemnity Agreement, or the Indemnity
Agreement; provided, however, that the term "Restricted Payment" does not
include (i) any dividend, distribution or other payment on or with respect to
Capital Stock of an issuer to the extent payable solely in shares of
Qualified Capital Stock of such issuer; (ii) any dividend, distribution or
other payment to the Company, or to any of its directly or indirectly wholly
owned Subsidiaries, by the Company or any of its Subsidiaries; (iii)
Investments in or loans to the Company or any of its wholly owned
Subsidiaries so long as all of the Capital Stock of such Subsidiary has been
pledged as collateral for the Notes in favor of the Holders; (iv) Investments
by the Company in a person, if as a result of such Investment (a) such person
becomes a wholly owned Subsidiary of the Company and all of the Capital Stock
of such person has been pledged as Collateral for the Notes in favor of the
Holders pursuant to the Pledge Agreement or (b) such person is merged,
consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
wholly owned Subsidiary of the Company; (v) payments of interest in respect
of the Subordinated Credit Facility; (vi) payments of interest in respect of
the Completion Loan Agreement; (vii) payments of interest in respect of the
Performance Bond Indemnity Agreement; (viii) payments of interest in respect
of the Indemnity Agreement; (ix) Credit Enhancement Fees, as defined in, and
paid pursuant to, the Credit Enhancement Fee Agreement; and (x) any payments
to the Minimum Payment Guarantor in connection with providing the Minimum
Payment Guaranty, including without limitation, (I) payments of principal and
interest in respect of Indebtedness incurred by the Company to the Minimum
Payment Guarantor as a result of drawings by the Regulating Authority under
the Minimum Payment Guaranty, (II) payments of fees to the Minimum Payment
Guarantor in connection with providing the Minimum Payment Guaranty, and
(III) any termination payment owing by the Company to the Minimum Payment
Guarantor in connection with the Minimum Payment Guaranty.
"REVOLVING LOANS" means the Revolving Loans under the Bank Credit
Facilities.
"SEC" means the Securities and Exchange Commission.
"SECOND PERIOD CONTINGENT PAYMENTS" means the amounts payable in the
aggregate to the Holders of the Securities on the Interest Payment Date next
following the six-month period ending on ________ (the "Second Semiannual
Period"), in an amount (which may not be less than zero) equal to (A) the
product of (i) 75% of the Company's
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aggregate Consolidated EBITDA for the First Semiannual Period and the Second
Semiannual Period in excess of $85,000,000 and less than $109,425,380, and
(ii) a fraction (x) the numerator of which is the aggregate Annual Maximum
Contingent Payment Amount in respect of the Securities outstanding on the
close of business on the Record Date corresponding to such Interest Payment
Date and (y) the denominator of which is $18,319,035, LESS (B) the aggregate
amount, if any, of First Period Contingent Payments, whether paid or accrued,
in respect of the immediately preceding First Semiannual Period.
"SECURITIES" or "NOTES" means the Senior Subordinated Contingent Notes
due 2006, in each case, issued under this Indenture, as the same may be amended
or modified from time to time in accordance with the terms hereof.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"SECURITY AGREEMENT" means the Security Agreement, dated as of
__________, 1998, by and among the Company, the Trustee and
______________________, as Collateral Agent (the "Collateral Agent"), as the
same may be amended from time to time in accordance with the terms thereof.
"SECURITYHOLDER." See "HOLDER."
"SECURITY INTERESTS" means the Liens on the Collateral created by the
Collateral Documents in favor of the Trustee for the benefit of the Holders.
"SENIOR DEBT" means Indebtedness, including any obligation for
interest which would accrue but for any proceeding referred to in Section 13.2
at the relevant contractual rate, whether or not an allowed claim in any such
proceeding, of the Company in respect of the Tranche A Term Loans, the Revolving
Loans, and any Refinancing (in whole or in part) of the Tranche A Term Loans or
the Revolving Loans (or any previous Refinancing thereof).
"SENIOR SUBORDINATED DEBT" means Indebtedness, including any
obligation for interest which would accrue but for any proceeding referred to in
Section 13.2 at the relevant contractual rate, whether or not an allowed claim
in any such proceeding, of the Company in respect of the Tranche B Term Loans
and any Refinancing (in whole or in part) of such Indebtedness (or any previous
Refinancing thereof) which do not increase the principal amount of Indebtedness
outstanding and available thereunder (except to the extent (i) accrued and
unpaid interest and/or other amounts owing with respect to the refinanced
indebtedness is refinanced and/or (ii) of the fees and expenses incurred in
connection with the refinancing indebtedness) or decrease the weighted-average
maturity thereof.
"SIGNIFICANT SUBSIDIARY" of a person means a Subsidiary of such person
which, together with its Consolidated Subsidiaries, has assets or revenues equal
to or greater than 10% of the assets or revenues, respectively, of such person
and its Subsidiaries on a consolidated basis.
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"SPECIFIED REAL ESTATE" means the parcels of real property owned by
the Company commonly known as 3 Canal Place (designated Parcel VII in
[insert reference to description of this property]) and Fulton Mall
(designated Parcels I, III, V and VI of
[insert reference to description of this property]).
"STATED MATURITY" means ______________, 2009.
"SUBORDINATED CREDIT FACILITY" means the credit agreement (the
"Subordinated Credit Agreement"), dated as of August ___, 1997, among the
Company, the Parent Guarantor, HET and HOC, together with any related
documents, as such agreement may be amended, supplemented or modified from
time to time.
"SUBORDINATED INDEBTEDNESS" means, with respect to any Notes,
Indebtedness of the Company that is subordinated in right of payment to such
Notes in any respect or has a stated maturity on or after the Stated Maturity
of such Notes.
"SUBORDINATED INDEBTEDNESS" means with respect to any Notes,
Indebtedness of the Company that is subordinated in right of payment to such
Notes in all respects and has no scheduled installment of principal due, by
redemption, sinking fund payment or otherwise, on or prior to the Stated
Maturity of such Notes.
"SUBORDINATION AGREEMENT" means that certain Manager Subordination
Agreement (Senior Subordinated Notes), dated as of __________, 1998, by and
among the Company, Harrah's Management and the Trustee.
"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. Notwithstanding the foregoing, an Unrestricted
Subsidiary shall not be a Subsidiary of the Company or any Guarantor.
"SUBSIDIARY GUARANTORS" means each existing or future Subsidiary of
the Company.
"TAX AMOUNT" means, with respect to any period, without duplication,
the amount of taxable income in respect of the income of the Company of any
member multiplied by the highest marginal combined federal, state and local
tax rates applicable to corporations for such period.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of the execution of this Indenture.
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"TRANCHE A TERM LOANS" means, collectively, the Tranche A-1 Term
Loan, the Tranche A-2 Term Loan and the Tranche A-3 Term Loan.
"TRANCHE A-1 TERM LOAN" means the Tranche A-1 Term Loan under the
Bank Credit Facilities.
"TRANCHE A-2 TERM LOAN" means the Tranche A-2 Term Loan under the
Bank Credit Facilities.
"TRANCHE A-3 TERM LOAN" means the Tranche A-3 Term Loan under the
Bank Credit Facilities.
"TRANCHE B TERM LOANS" means, collectively, the Tranche B-1 Term
Loan and the Tranche B-2 Term Loan.
"TRANCHE B-1 TERM LOAN" means the Tranche B-1 Term Loan under the
Bank Credit Facilities.
"TRANCHE B-2 TERM LOAN" means the Tranche B-2 Term Loan under the
Bank Credit Facilities.
"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
matter, 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.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company that,
at the time of determination, shall be an Unrestricted Subsidiary (as
designated by the Manager of the Company, as provided below) provided that
such Subsidiary does not and shall not engage, to any substantial extent, in
any line or lines of business activity other than a Related Business. The
Manager of the Company may designate any person to be an Unrestricted
Subsidiary if (a) no Default or Event of Default is existing or will occur as
a consequence thereof, (b) immediately after giving effect to such
designation, on a PRO FORMA basis, the Company could incur at least $1.00 of
additional Indebtedness pursuant to paragraph (a) of Section 5.11 and (c)
such Subsidiary does not own any Capital Stock of, or own or hold any Lien on
any property of, the Company or any other Subsidiary. Any such designation
also constitutes a Restricted Payment in an amount equal to the net assets of
such Subsidiary at
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the time of the designation for purposes of Section 5.3. The Manager of the
Company may designate any Unrestricted Subsidiary to be a Subsidiary,
provided, that (i) no Default or Event of Default is existing or will occur
as a consequence thereof and (ii) immediately after giving effect to such
designation, on a PRO FORMA basis, the Company could incur at least $1.00 of
Indebtedness pursuant to paragraph (a) of Section 5.11. Each such
designation shall be evidenced by filing with the Trustee a certified copy of
the resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions.
"U.S. GOVERNMENT OBLIGATIONS" means direct non-callable obligations
of, or noncallable obligations guaranteed by, the United States of America
for the payment of which obligation 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 is legal tender for the payment of
public and private debts.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, with respect to the
Notes, as of any date, the number of years obtained by dividing the then
Remaining Dollar-Years of the Notes by the aggregate Annual Maximum
Contingent Payment Amount in respect of the Notes. For purposes of this
definition, "Remaining Dollar-Years" as of any date, means the amount
obtained by multiplying the aggregate Annual Maximum Contingent Payment
Amount in respect of the Notes as of such date by the number of years
(calculated at the nearest one-twelfth) which shall elapse between such date
and Stated Maturity.
"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% (other than director's qualifying shares)
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 SECURITIES" means the Securities.
"INDENTURE SECURITYHOLDER" means a Holder or a Securityholder.
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"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee.
"OBLIGOR" on the indenture securities means the Company and any
other obligor on the Securities.
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.
ARTICLE II
THE SECURITIES
SECTION 2.1 FORM AND DATING.
The Securities and the Trustee's certificate of authentication, in
respect thereof, shall be substantially in the form of EXHIBIT A hereto,
which is incorporated into and made a part of this Indenture. The Securities
may have notations, legends or endorsements required by law, stock exchange
rule or usage. The Company shall approve the form of the Securities and any
notation, legend or endorsement on them. Any such notations, legends or
endorsements not contained in the form of Security attached as EXHIBIT A
hereto shall be
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delivered in writing to the Trustee. Each Security shall be dated the date
of its authentication.
The terms and provisions contained in the form of Securities shall
constitute, and are hereby expressly made, a part of this Indenture and, to
the extent applicable, the Company, the Parent Guarantor 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.
The Securities shall be executed on behalf of the Company and the
Guaranty shall be executed on behalf of the Parent Guarantor by the Chairman
of the Board, the President or one of the Vice Presidents of each of them,
under the corporate seal of each respective company, reproduced thereon, and
attested by the Secretary or one of the Assistant Secretaries of each of
them. The signature of any of these officers on the Securities or Guarantees
may be manual or facsimile.
Securities or Guarantees bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the Company or the
Parent Guarantor shall bind the Company or the Guarantors, as the case may
be, notwithstanding that such individual or any of them have ceased to hold
such offices prior to the authentication and delivery of such Securities.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security, but
such signature shall be conclusive evidence that the Security has been
authenticated pursuant to the terms of this Indenture.
The Trustee shall authenticate Securities for original issue with an
aggregate Annual Maximum Contingent Payment Amount of up to $18,319,035 upon
a written order of the Company in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of Securities to be
authenticated and the date on which the Securities are to be authenticated.
The aggregate Annual Maximum Contingent Payment Amount in respect of
Securities outstanding at any time may not exceed $18,319,035, except as
provided in Sections 2.7 and 2.8. Upon the written order of the Company and
the Parent Guarantor in the form of an Officers' Certificate, the Trustee
shall authenticate Securities in substitution of Securities originally issued
to reflect any name change of the Company or the Parent Guarantor.
The Company shall pay Contingent Payments, if any are due and
payable pursuant to and in accordance with the terms of the Securities and
this Indenture, at the places, on the dates and in the manner provided in the
Securities and Indenture. The first Interest Payment Date shall be
_____________, 1998 and the final Interest Payment Date shall be
_____________, 2009.
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The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Securities 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 its Subsidiaries.
Securities shall be issuable only in registered form without coupons
in denominations of $97.70 in Annual Maximum Contingent Payment Amount 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 Securities 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 Securities 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 Securities may
be served. The Company may act as its own Registrar or Paying Agent, except
that, for the purposes of Articles III, IX, XI and Section 5.14, neither the
Company nor any Affiliate of the Company shall act as Paying Agent. The
Registrar shall keep a register of the Securities and of 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 until
such time as the Trustee has resigned or a successor has been appointed. The
Company may change any Registrar, Paying Agent or co-Registrar without notice
to any Holder.
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 Contingent Payments on the Securities, and shall notify the
Trustee in writing of any Default by the Company 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
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account for any assets distributed. Upon distribution to the Trustee of all
assets that shall have been delivered by the Company to the Paying Agent, the
Paying Agent (if other than the Company) shall have no further liability for
such assets.
SECTION 2.5 SECURITYHOLDER 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 Securities are presented to the Registrar or a co-Registrar
with a request to register the transfer of such Securities or to exchange
such Securities for an equal principal amount of Securities of other
authorized denominations, the Registrar or co-Registrar shall register the
transfer or make the exchange as requested if its reasonable requirements for
such transaction are met; PROVIDED, HOWEVER, that the Securities 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
Securities 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 Section 2.2, 2.10,
3.6, 5.14, 10.5, or 11.1).
SECTION 2.7 REPLACEMENT SECURITIES.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims and submits an affidavit or other evidence,
satisfactory to the Trustee, to the Trustee to the effect that the Security
has been lost, destroyed or wrongfully taken, the Company and the Parent
Guarantor shall issue and the Trustee shall authenticate a replacement
Security 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 Security is replaced. The Company may charge such Holder for
its reasonable, out-of-pocket expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company and the Guarantors.
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SECTION 2.8 OUTSTANDING SECURITIES.
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee, except those cancelled by it, those delivered
to it for cancellation and those described in this Section 2.8 as not
outstanding. A Security does not cease to be outstanding because the Company or
an Affiliate of the Company holds the Security, except as provided in Section
2.9.
If a Security is replaced pursuant to Section 2.7 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a BONA FIDE purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section 2.7.
If upon Stated Maturity, (i) Contingent Payments are due and payable
on such date and 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 Contingent Payments due on the Securities payable on that date,
then on and after that date the Securities cease to be outstanding and holders
thereof cease to have any rights to receive Contingent Payments, or (ii) no
Contingent Payments are due and payable on such date, then on and after such
date the Securities cease to be outstanding and holders thereof cease to have
any rights to receive Contingent Payments.
SECTION 2.9 TREASURY SECURITIES.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, amendment, supplement, waiver or
consent, Securities 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 Securities that the
Trustee knows or has reason to know are so owned shall be disregarded.
SECTION 2.10 TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the Company and
the Parent Guarantor may execute, and upon a written order of the Company in the
form of an Officer's Certificate, the Trustee shall authenticate temporary
Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company reasonably and in
good faith considers appropriate for temporary Securities. Without unreasonable
delay, the Company and the Parent Guarantor shall execute, and upon written
order of the Company in the form of an Officer's Certificate, the Trustee shall
authenticate definitive Securities in exchange for temporary Securities. Until
so exchanged, the temporary Securities shall in all respects be entitled to the
same benefits under this Indenture as permanent Securities authenticated and
delivered hereunder.
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SECTION 2.11 CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities 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
Securities surrendered for transfer, exchange, payment or cancellation. Subject
to Section 2.7, the Company may not issue new Securities to replace Securities
they have paid or delivered to the Trustee for cancellation. No Securities
shall be authenticated in lieu of or in exchange for any Securities cancelled as
provided in this Section 2.11, except as expressly permitted in the form of
Securities and as permitted by this Indenture. If the Company shall acquire any
of the Securities, such acquisition shall not operate as a redemption or
satisfaction of the obligations represented by such Securities unless and until
surrendered to the Trustee pursuant to this Section 2.11.
SECTION 2.12 DEFAULTED INTEREST.
Contingent Payments on any Security which are payable, and are
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the person in whose name that Security (or one or more predecessor
Securities) is registered at the close of business on Record Date for such
interest.
Contingent Payments on any Security which are payable, but are not
punctually paid or duly provided for, on any Interest Payment Date plus, to the
extent lawful, any interest payable on the defaulted Contingent Payments (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
registered holder on the relevant Record Date, and such Defaulted Interest may
be paid by the Company, at its election in each case, as provided in clause (1)
or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the persons in whose names the Securities (or their respective
predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Security and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of Cash equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such Cash when deposited to be
held in trust for the benefit of the persons entitled to such Defaulted
Interest as provided in this clause (1). Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall
be not more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the expense
of the Company, shall
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cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder at his address as it appears in the Security register not
less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been mailed as aforesaid, such Defaulted Interest shall be
paid to the persons in whose names the Securities (or their respective
predecessor Securities) are registered on such Special Record Date and
shall no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause,
such manner shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the rights to Contingent Payments accrued and
unpaid, and to accrue, which were carried by such other Security.
ARTICLE III
REDEMPTION
SECTION 3.1 RIGHT OF REDEMPTION.
Except as provided in Section 3.2 and paragraph 5 of the Notes, the
Notes may not be redeemed prior to maturity.
SECTION 3.2 REDEMPTION PURSUANT TO APPLICABLE LAWS.
Notwithstanding any other provision of this Indenture, the Notes shall
be redeemable in whole or in part, at any time pursuant to, and in accordance
with, a Required Regulatory Redemption. If the Company requires the redemption
of any Security pursuant to this Section 3.2, the Company shall tender the
Redemption Price to the Trustee no less than 30 and no more than 60 days after
the Company gives the Securityholder or owner of a beneficial or voting interest
written notice of redemption or such earlier date as may be required by
applicable law. The Company shall notify the Trustee (a "Trustee Redemption
Notice") of any disposition or redemption required under this Section 3.2, and
upon receipt of such notice, the Trustee shall not accord any rights or
privileges under this Indenture or any Security to any Securityholder or owner
of a beneficial or voting interest who is required to dispose of any Security or
tender it for redemption, except to pay the Redemption Price upon tender of such
Security.
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SECTION 3.3 NOTICES TO TRUSTEE.
If the Company is required to redeem Securities pursuant to Section
3.2, the Company shall notify the Trustee in writing of the Securities to be
redeemed, the Securities to be redeemed, the date on which the applicable
Securities are to be redeemed (the "Redemption Date") and whether the Company
would like the Trustee to give notice of redemption to the Holders.
SECTION 3.4 NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail a notice of redemption by first class mail, postage
prepaid, to each Holder whose Securities are to be redeemed (unless a shorter
notice period shall be required by applicable law). At the Company's request,
the Trustee shall give the notice of redemption in the Company's name and at the
Company' expense. Each notice for redemption shall identify the Securities to
be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price, including the amount of accrued and
unpaid interest to be paid upon such redemption;
(3) the name, address and telephone number of the Paying Agent;
(4) that Securities called for redemption must be surrendered to
the Paying Agent at the address specified in such notice to collect the
Redemption Price;
(5) if any Security is being redeemed in part, the portion of
such Security to be redeemed and that, after the Redemption Date, and upon
surrender of such Security, a new Security or Securities representing the
unredeemed portion thereof will be issued;
(6) if less than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the Securities to be redeemed and the Securities to be
outstanding after such partial redemption;
(7) the CUSIP number of the Securities to be redeemed;
(8) the circumstances pursuant to which the Required Regulatory
Redemption is being effected; and
(9) that the notice is being sent pursuant to this Section 3.4
and Paragraph 5 of the Securities.
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SECTION 3.5 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.4,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price. Upon surrender to the Trustee or Paying Agent,
such Securities called for redemption shall be paid at the Redemption Price.
SECTION 3.6 DEPOSIT OF REDEMPTION PRICE.
On or before the Redemption Date, the Company shall deposit with the
Paying Agent U.S. Legal Tender sufficient to pay the Redemption Price of all
Securities to be redeemed on such Redemption Date. The Paying Agent shall
promptly return to the Company any U.S. Legal Tender so deposited which is not
required for that purpose upon the written request of the Company.
Contingent Payments on the Securities to be redeemed will cease to
accrue on the date on which the Trustee receives the Trustee Redemption Notice,
whether or not such Securities are presented for payment.
SECTION 3.7 SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is to be redeemed in part, the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder, without service charge, a new Security or Securities representing the
unredeemed portion of the Security surrendered.
ARTICLE IV
SECURITY
SECTION 4.1 SECURITY INTEREST.
(a) In order to secure the prompt and complete payment and
performance in full of the Indenture Obligations, the Company, the Parent
Guarantor and, as applicable, the Trustee and the Collateral Agent have entered
into this Indenture and the Collateral Documents. Each Holder, by accepting a
Security, agrees to all of the terms and provisions of this Indenture, the
Intercreditor Agreement and the Collateral Documents, and the Trustee agrees to
all of the terms and provisions of this Indenture, the Intercreditor Agreement
and the Collateral Documents, as this Indenture, the Intercreditor Agreement and
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 the only security for the Indenture
Obligations. The Collateral is to be held by the Collateral Agent for the
benefit of the Bank Lenders, the Holders, and the Holders of 8% Notes,
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subject to the terms of the Intercreditor Agreement, the Collateral Documents
and Section 4.6. The Trustee and each Holder acknowledge that, as more fully
set forth in the Collateral Documents, the rights of the Holders (and of the
Trustee on their behalf) to receive proceeds from the disposition of the
Collateral is subordinated to the Bank Security Interests securing Senior
Debt.
(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, except that, as set forth in Section 4.5, TIA Section 314(d) need not
be complied with in certain respects.
SECTION 4.2 RECORDING; OPINIONS OF COUNSEL.
(a) The Company 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
has 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. The Company 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.
(b) The Company shall furnish to the Trustee, concurrently with the
execution and delivery of this Indenture and the Collateral Documents and
promptly after the execution and delivery of any amendment thereto or any other
instrument of further assurance, an 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 Collateral
Documents, any such amendment and all other instruments of further assurance
have been properly recorded, registered and filed and all such other action has
been taken to the extent necessary to make effective valid security interests
and to perfect the security interests intended to be created by this Indenture
and the Collateral Documents, and reciting the details of such action, or (ii)
no such action is necessary to effect and maintain in full force and effect the
validity and perfection of the security interests under the Collateral Documents
and hereunder.
(c) The Company shall furnish to the Trustee, on or prior to
___________, of each year commencing in 1999, an Opinion(s) of Counsel, dated as
of such date, stating that, in the opinion of such counsel, subject to customary
exclusions and exceptions reasonably acceptable to the Trustee, either (A) all
such action has been taken with respect to the recording, registering, filing,
rerecording and refiling of this Indenture, all supplemental indentures, the
Collateral Documents, financing statements, continuation statements and all
other instruments of further assurance as is necessary to maintain the validity
and perfection of 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 and such other actions taken that are
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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 in full force and effect the validity and perfection
of the security interests under the Collateral Documents and hereunder.
SECTION 4.3 DISPOSITION OF CERTAIN COLLATERAL.
(a) The Company may, without requesting the release or consent of
the Trustee or the Collateral Agent, 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) in the ordinary course of the Company's business and
consistent with industry practices, 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, (B) in the ordinary course of the Company's business and
consistent with industry practices, 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 or (C) make ordinary course of business Cash
payments (including scheduled repayments of Indebtedness permitted to be
incurred hereby) from Cash that is at any time part of the Collateral;
(iii) abandon, sell, assign, transfer, license or otherwise
dispose of, free from the security interests under the Collateral Documents
and hereunder, any personal property the use of which is no longer
necessary or desirable in the proper conduct of the business of the Company
and its Subsidiaries and the maintenance of its earnings and is not
material to the conduct of the business of the Company and its
Subsidiaries;
(iv) subject to the provisions of the Collateral Documents
pertaining to disposal of real property, sell, assign, transfer, license or
otherwise dispose of, free from the security interests under the Collateral
Documents and hereunder, any assets or property in accordance with Section
5.14 (including, without limitation, pursuant to the penultimate paragraph
in Section 5.14(a)); provided that the Collateral Agent shall have a valid
and perfected security interest in all net proceeds that are not Net Cash
Proceeds from such disposition (except those fees, commissions and other
expenses and taxes deducted in the definition of "Net Cash Proceeds") and
in any assets or
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property acquired with the proceeds from such disposition in the same
priority as such assets or property so disposed of; and
(v) sell, assign, transfer, license or otherwise dispose of,
free from the security interests under the Collateral Documents and
hereunder, the Specified Real Estate; provided that the Collateral Agent
shall have a valid and perfected security interest in all net proceeds from
such disposition or any assets or property acquired with the proceeds of
such disposition in the same priority as the Specified Real Estate so
disposed of;
PROVIDED; HOWEVER, that the Company may either (x) release from the leasehold
estate of the Ground Lease the surface rights with respect to a triangular
piece of land approximately 5,400 square feet in area which area is adjacent
to Poydras Street and Convention Center Boulevard and can be measured from
the corner of Poydras Street and Convention Center Boulevard moving along
Poydras Street approximately sixty-five feet and Convention Center Boulevard
approximately one hundred fifty-five feet (so long as no portion of the
Casino is constructed on such triangular piece of land) for the purpose of
reconfiguring the intersection of Convention Center Boulevard and Poydras
Street, or (y) grant, or consent to the grant of, a right of way, servitude
or other right of use over the aforesaid triangular piece of land (so long as
no portion of the Casino is constructed on such triangular piece) to the
extent necessary to reconfigure the intersection of Convention Center
Boulevard and Poydras Street, provided that the first priority lien of the
Mortgage is maintained (less and except a lien on that portion of the real
property underlying the aforesaid triangular piece to be released in the
event of a release or less and except a first priority lien on said
triangular piece of real property in the event of a grant of or consent to a
right of way, servitude or other right of use over said triangular piece of
land). The Trustee agrees, upon the reasonable request and at the sole
expense of the Company, to promptly execute, or cause the Collateral Agent to
promptly execute such documentation as may be necessary to effect any
release, grant or consent permitted by this subsection.
(b) Notwithstanding the provisions of subsection (a) above, the
Company shall not dispose of or transfer (by lease, assignment, license, sale
or otherwise) or pledge, mortgage or otherwise encumber Collateral pursuant
to the provisions of Section 4.3(a)(ii) or (iii) with a fair value of 10% or
more of the aggregate fair value of all Collateral then existing in any
transaction or any series of related transactions.
(c) In the event that the Company 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 without consent of the
Trustee or the Collateral Agent, and the Company requests the Trustee or the
Collateral Agent 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 (or instruct the Collateral Agent to do so),
prepared by the Company, upon delivery to the Trustee of an Officers'
Certificate by the Company reciting the sale, exchange or other disposition
made or proposed to be made and describing in reasonable detail the property
affected thereby, and certifying that such
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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 without any
release or consent of the Trustee or the Holders. Each of the Trustee and
the Collateral Agent shall be authorized to conclusively rely on such
certification.
(d) 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 NET CASH PROCEEDS ACCOUNT.
All Cash received by the Company or its subsidiaries as Net Cash
Proceeds from an Asset Sale or as Insurance Proceeds shall be deposited in
the Net Cash Proceeds Account, in which account there shall be, subject to
the lien subordination provisions set forth in the Intercreditor Agreement,
the Collateral Documents and Section 4.6, a perfected security interest in
favor of (i) the Collateral Agent for the benefit of the Bank Lenders as
security for the prompt and complete payment and performance in full of the
obligations under the Bank Credit Facilities, and (ii) the Holders, without
preference, priority, or distinction of any Holder over any other Holder by
reason of difference in time of issuance, sale or otherwise, as security for
the prompt and complete payment and performance in full of the Indenture
Obligations. The funds from time to time on deposit in the Net Cash Proceeds
Account may be disbursed from such account only for the purposes and in the
manner provided for in the Intercreditor Agreement, the Security Agreement,
the Bank Credit Facilities and this Indenture.
SECTION 4.5 CERTAIN RELEASES OF COLLATERAL.
Subject to applicable law, the release of any Collateral from Liens
created by the Collateral Documents or the release of, in whole or in part,
the Liens created by the Collateral Documents, will not be deemed to impair
the Collateral Documents 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 applicable Collateral Documents or pursuant to, and in
accordance with, the terms hereof. To the extent applicable, without
limitation (except as provided in the last sentence of this paragraph), the
Company, the Parent Guarantor and each obligor on the Securities shall cause
TIA Section 314(d), relating to the release of property or securities from
the Liens of the Collateral Documents, to be complied with. Any certificate
or opinion required by TIA Section 314(d) may be made by two Officers of the
Company, except in cases in which TIA Section 314(d) requires that such
certificate or opinion be made by an independent person. The Company shall
not be required under this Indenture to deliver to the Trustee any
certificates or opinions required to be delivered pursuant to Section 314(d)
of the TIA in connection with releases of Collateral in accordance with
Section 4.3(a)(ii) hereunder, unless TIA Section 314(d) would require such
certificate or opinion to be made by an independent person.
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SECTION 4.6 LIEN SUBORDINATION.
(a) Bank Security Interests in the Collateral securing Senior Debt
shall be senior and prior in right to the Security Interests. The Trustee
and each Holder acknowledge that the rights of the Bank Lenders in respect of
Senior Debt to receive proceeds from the disposition of the Collateral is
senior to the rights of the Holders to receive proceeds from the disposition
of the Collateral. Bank Security Interests in the Collateral securing Senior
Subordinated Debt are PARI PASSU with the Security Interests, and the rights
of Bank Lenders in respect of Senior Subordinated Debt to receive proceeds
from the disposition of the Collateral is PARI PASSU with the rights of the
Holders, or the Trustee on their behalf, to receive proceeds from the
disposition of the Collateral.
(b) The priorities set forth in this Section 4.6 are applicable
irrespective of the order of creation, attachment or perfection of any Liens
or security interests or any priority that might otherwise be available to
the Holders, the Trustee, or any Bank Lender under the applicable law.
(c) The priorities set forth in this Section 4.6 are premised upon
the assumption that the Bank Security Interests are duly and properly created
and perfected and are not avoidable for any reason. Accordingly, to the
extent that (but only for so long as) any Bank Security Interests are not
duly and properly created and perfected or are avoidable for any reason, then
the subordinations provided for in this Section 4.6 shall not be effective as
to the particular Collateral subject to such Bank Security Interests;
provided, however, that the Trustee and each Holder, by accepting a Security,
agree not to contest, or to bring (or voluntarily join in) any action or
proceeding for the purpose of contesting the validity, perfection or priority
(as herein provided) of, or seeking to avoid, any Bank Security Interests,
and provided further, that nothing herein shall be deemed or construed to
prevent any Bank Lender from commencing an action or proceeding to assert any
right or claim it may have arising under or in connection with any Collateral
Documents.
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 and the Collateral Agent 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, the Intercreditor
Agreement and to the provisions of the Collateral Documents, 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 Collateral Documents 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
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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 and shall not impose any duty
upon the Trustee to exercise any such powers and duties, except as expressly
provided in this Indenture or the TIA. 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.
SECTION 4.10 COLLATERAL DOCUMENTS.
Notwithstanding any provision of this Indenture or the Collateral
Documents to the contrary, (A) this Indenture and the Collateral Documents
shall grant no security or other interest or right in or to (i) the Casino
Operating Contract, (ii) the House Bank (as defined in the Management
Agreement), or (iii) the Louisiana Gaming Gross Revenue Share Payments
(including the Gaming Board's Interest in Daily Collections) (as such terms
are defined in the Casino Operating Contract), and (B) the Security Interests
in favor of the Holders, and the Trustee on their behalf, granted by this
Indenture and the Collateral Documents are subordinated to the Minimum
Payment Guarantor Security Interest.
ARTICLE V
COVENANTS
SECTION 5.1 PAYMENT OF SECURITIES.
The Company shall duly and punctually pay the Contingent Payments on
the Securities, if any are due and payable pursuant to and in accordance with
the terms of the Securities and this Indenture, at the places, on the dates
and in the manner provided in the Securities and this Indenture. An
installment of Contingent Payments on the Securities 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
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for and sufficient to pay the installment, and has not received instructions
from the Company not to make such payment and is not otherwise prohibited
from paying such Contingent Payments to the Holders pursuant to this
Indenture. If and to the extent that, JCC's Consolidated EBITDA for any
Contingent Payment Period is less than the amount required to cause the
Maximum Contingent Payments for such Contingent Payment Period to become due,
the difference between the amount of the Contingent Payments actually made,
if any, and the amount of such Maximum Contingent Payments will never be
accrued or paid. Contingent Payments, if any, paid or accrued in respect of
the Notes shall be comprised of, in part, a payment of principal
("Principal") and, in part, a payment of interest ("Interest") thereon at 16%
per annum from the Issue Date (with semi-annual compounding). In accordance
with the preceding sentence, set forth in the table below is, for each
Interest Payment Date, the percentage of Principal and the percentage of
Interest of which Contingent Payments, if any, paid or accrued on such dates
shall be comprised:
Interest Percentage Percentage
Payment Date of Principal of Interest
------------ ------------ -----------
First 92.593% 7.407%
Second 85.734 14.266
Third 79.383 20.617
Fourth 73.503 26.497
Fifth 68.058 31.942
Sixth 63.017 36.983
Seventh 58.349 41.651
Eighth 54.027 45.973
Ninth 50.025 49.975
Tenth 46.319 53.681
Eleventh 42.888 57.112
Twelfth 39.711 60.289
Thirteenth 36.770 63.230
Fourteenth 34.046 65.954
Fifteenth 31.524 68.476
Sixteenth 29.189 70.811
Seventeenth 27.027 72.973
Eighteenth 25.025 74.975
Nineteenth 23.171 76.829
Twentieth 21.455 78.545
Twenty First 19.866 80.134
Twenty Second 18.394 81.606
The Company shall pay interest (including post-petition interest in
any proceeding under any applicable Bankruptcy Law) on overdue Contingent
Payments at the rate of 8% per annum compounded semi-annually, to
the extent lawful.
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SECTION 5.2 MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, The City of
New York, an office or agency where Securities may be presented or
surrendered for payment, where Securities may be surrendered for registration
of transfer or exchange and where notices and demands to or upon the Company
in respect of the Securities and this Indenture may be served. The Company
shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the Trustee set
forth in Section 15.2.
The Company may also from time to time designate one or more other
offices or agencies where the Securities 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 of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York, for such purposes. The Company
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 hereby initially designates the Corporate Trust Office of
the Trustee as such office.
SECTION 5.3 LIMITATION ON RESTRICTED PAYMENTS.
The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, make any Restricted Payment if, after giving
effect thereto on a PRO FORMA basis, (l) a Default or an Event of Default
shall have occurred and be continuing, (2) immediately after giving effect to
such Restricted Payment on a PRO FORMA basis, the Consolidated Coverage Ratio
of the Company for the Reference Period immediately preceding the Restricted
Payment would be less than 2.0 to 1, (3) the aggregate amount of all
Restricted Payments made by the Company and its Subsidiaries, including after
giving effect to such proposed Restricted Payment, would exceed the sum of
(a) 50% of the aggregate Consolidated Net Income of the Company and its
Consolidated Subsidiaries for the period (taken as one accounting period)
commencing on the first day of the first full fiscal quarter commencing after
the Casino Opening Date, to and including the last day of the fiscal quarter
ended immediately prior to the date of each such calculation (or, in the
event Consolidated Net Income for such period is a deficit, then minus 100%
of such deficit), minus 100% of the amount of any writedowns, writeoffs, or
negative extraordinary charges (other than any related to the Casino prior to
the Casino Completion Date) not otherwise reflected in Consolidated Net
Income during such period, plus (b) the aggregate Net Cash Proceeds
(including the fair market value of non-cash proceeds, as determined in good
faith by the Manager of the Company) received by the Company as a capital
contribution or from the sale of its Qualified Capital Stock (other than to a
Subsidiary of the Company and other than in connection with a Qualified
Exchange) after the Casino Completion Date, or (4) during each of the two
full consecutive Contingent Payment Periods preceding the proposed Restricted
Payment, the Company has not paid (a) the Maximum Contingent Payments with
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respect to each such Contingent Payment Period and (b) the Maximum Contingent
Payments (in this instance only, as defined in the 8% Notes Indenture) with
respect to the 8% Notes with respect to each such Contingent Payment Period.
The foregoing clauses (2), (3) and (4) of the immediately preceding
paragraph, however, will not prohibit (A) the payment of any dividend on or
redemption of Qualified Capital Stock within 60 days after the date of its
declaration or authorization, respectively, if such dividend or redemption
could have been made on the date of such declaration or authorization in
compliance with the foregoing provisions, (B) the redemption or distribution
or other Restricted Payment with respect to Capital Stock or Indebtedness
pursuant to, and in accordance with, any Required Regulatory Redemption
effected in accordance with this Indenture (including dividends and
distributions to the Parent Guarantor to permit the Parent Guarantor to
effect a Required Regulatory Redemption), (C) a Qualified Exchange, (D)
dividends and distributions by the Company to the Parent Guarantor in an
amount equal to all Permitted Tax Distributions, to the extent such are
actually so applied by the Parent Guarantor, and (E) dividends and
distributions by the Company to the Parent Guarantor to the extent necessary
to permit the Parent Guarantor to pay the Parent Guarantor's reasonable
professional fees and expenses in connection with complying with its
reporting obligations (including its obligations set forth in Section 5.8)
and obligations to prepare and distribute business records, financial
statements or other documents to any lender or other persons having business
dealings with the Parent Guarantor or as may be required by law, the Parent
Guarantor's costs and related expenses in connection with the computation of
federal, state, local or foreign taxes and other governmental charges other
than Permitted Tax Distributions, indemnification agreements, insurance
premiums, surety bonds and insurance brokers' fees, and the Parent
Guarantor's expenses for directors', officers' and employees' compensation
and benefits, and any other administrative expenses incurred in the ordinary
course of business practices, (all, in the case of this clause (E) to be
limited in an amount proportionate to the percentage of the book value of the
Parent Guarantor's assets which is fairly attributable, at the time of such
Restricted Payment, to the Company and its Subsidiaries). The full amount of
any Restricted Payment made pursuant to either of clauses (A) and (B) (but
not those made pursuant to clauses (C), (D) or (E)) will be deducted in the
calculation of the aggregate amount of Restricted Payments thereafter
available to be made pursuant to clause (3) of the immediately preceding
paragraph.
In addition to, and notwithstanding anything to the contrary in, the
foregoing, the Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, make any Restricted Payment (other than pursuant
to clauses (B), (C), (D) and (E) of the immediately preceding paragraph)
prior to the last day of the Company's first full fiscal quarter during or
prior to which the Casino Completion Date shall have occurred.
SECTION 5.4 EXISTENCE.
Subject to Article VI, the Company and its Subsidiaries shall do or
cause to be done all things necessary to preserve and keep in full force and
effect their existence, rights (charter and statutory) and franchises and the
corporate or other existence of each of their Subsidiaries in accordance with
the respective organizational documents of each of them;
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provided, however, that neither the Company nor any Guarantor shall be
required to preserve, with respect to itself or any of its Subsidiaries, any
right or franchise if (a) the Manager shall determine reasonably and in good
faith that the preservation thereof is no longer desirable in the conduct of
the business of the Company or Guarantors 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 each of the Guarantors shall, and shall cause each
of its Subsidiaries to, pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material 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 upon any of their material
properties and assets and (ii) all material 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 whose amount, applicability or validity is being contested in
good faith by appropriate proceedings and for which adequate reserves have
been established in accordance with GAAP.
SECTION 5.6 MAINTENANCE OF INSURANCE.
On the Issue Date, and at all times thereafter, the Company and its
Subsidiaries shall have in effect customary comprehensive general liability,
property and casualty and business interruption insurance, shall have
completion, payment or performance or similar bonds in place for the Casino
and shall cause the builders of the Casino to maintain builder's risk
coverage insurance, in each case on terms and in an amount reasonably
believed by the Company to be 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
its Subsidiaries, taken as a whole.
SECTION 5.7 COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT.
(a) The Company shall deliver to the Trustee, within 120 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 and the activities of its Subsidiaries 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 the Collateral Documents
and further stating, as to each such Officer signing such certificate,
whether or not the signer knows of any failure by 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
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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.
(b) So long as not contrary to the then current recommendation of
the American Institute of Certified Public Accountants, the Company shall
deliver to the Trustee within 120 days after the end of its fiscal year a
written report of a firm of independent certified public accountants with an
established national reputation stating that in conducting their audit for
such fiscal year, nothing has come to their attention that caused them to
believe that of Company or any Subsidiary of the Company was not in
compliance with the provisions set forth in Section 5.3, 5.11, 5.14, or 5.19
of this Indenture.
(c) The Company shall, so long as any of the Securities 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 proposes 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 or Event of 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 JCC Holding shall file (which filing may be on a consolidated
basis) with the SEC (to the extent permitted under the Exchange Act) on or
prior to the date they are or would have been required to file such with the
SEC (the "Required Filing Date"), annual and quarterly consolidated financial
statements substantially equivalent to financial statements that would have
been included in reports filed with the SEC if the Company or JCC Holding, as
applicable, 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 such reporting entity's certified independent public accountants
as such would be required in such reports to the SEC and, in each case,
together with a management's discussion and analysis of financial condition
and results of operations which would be so required. The Company and JCC
Holding shall also include in such reports the anticipated completion date of
the Casino and, in the case of quarterly reports, the Contingent Payments
made, the Contingent Payment Accrual amount and Consolidated EBITDA with
respect to the most recently ended fiscal quarter of the Company, and in the
case of annual reports, the audited Contingent Payments made, the audited
Contingent Payment Accrual amount and audited Consolidated EBITDA for the
most recently ended fiscal year and for each of the Semiannual Periods ending
in such fiscal year. The Company and JCC Holding shall also file all other
reports and information that they are or would have been required with the
SEC prior to the Required Filing Date. The Company and JCC Holding will also
provide copies of such annual and quarterly reports to the Trustee within 30
days after the Required Filing Date; provided, that the Company and JCC
Holding shall not be in default of the provisions of this Section 5.8 for any
failure to file reports with the SEC solely by refusal by the SEC to accept
the same for filing, it being understood that
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in such event, such reports shall be delivered to the Trustee as described
herein as if they had been filed with the SEC.
SECTION 5.9 WAIVER OF STAY, EXTENSION OR USURY LAWS.
The Company and each Guarantor covenant (to the extent that they may
lawfully do so) that they 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 each Guarantor from paying all or any
portion of the Contingent Payments on the Securities 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
waive all benefit or advantage of any such law insofar as such law applies to
the Securities, and covenant that they 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.
Neither the Company nor any of its Subsidiaries will enter into any
contract, arrangement, understanding or transaction with an Affiliate (an
"Affiliate Transaction") except for (i) transactions evidenced by an
Officers' Certificate addressed and delivered to the Trustee stating that
such Affiliate Transaction is made in good faith and that the terms of such
Affiliate Transaction are fair and reasonable to the Company or such
Subsidiary, as the case may be, and at least as favorable as the terms which
could be obtained by the Company or such Subsidiary, as the case may be, in a
comparable transaction made on an arm's length basis with persons who are not
Affiliates; PROVIDED, HOWEVER, that any such transaction shall be deemed to
be on terms which are fair and reasonable to the Company or such Subsidiary,
as applicable, and on terms which are at least as favorable as the terms
which could be obtained on an arm's length basis with persons who are not so
affiliated, if such transaction is approved by a majority of the members of
the Manager's Board of Directors (or, if the Company is a corporation, by the
members of the Company's Board of Directors) who are disinterested in the
terms thereof; and, PROVIDED, FURTHER, (a) that Affiliate Transactions during
a single fiscal year involving HET or any Subsidiary of HET shall not in the
aggregate involve consideration to either party in excess of a threshold to
be determined by the Manager's Board of Directors (or, if the Company is a
corporation, by the members of the Company's Board of Directors) (including,
without limitation, any decisions regarding the exercise, waiver or
modification of rights or obligations, or the determination of fees with
respect to project development services, under the Management Agreement),
unless such Affiliate Transactions (y) have been approved by the Board of
Directors of the Manager (or, if the Company is a corporation, by the
Company's Board of Directors) or such Subsidiary, as applicable, in
accordance with the applicable governance documents of such entity, or (z)
are pursuant to or in connection with agreements or plans (including, without
limitation, any business plans, operating plans, financing plans or marketing
plans) (I) approved by the Board of Directors of the Manager (or, if the
Company is a corporation, of the Company) or
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such Subsidiary, as applicable, in accordance with the governance documents
of such entity, (II) approved by the Bankruptcy Court for the Eastern
District of Louisiana in connection with the Plan of Reorganization, or (III)
entered into by the Company prior to, on, or substantially concurrently with,
the Issue Date, and (b) that with respect to any Affiliate Transaction
(including any series of related transactions) involving consideration to
either party in excess of $2.5 million, the Company must, prior to the
consummation thereof, obtain a written favorable opinion as to the fairness
of such transaction to the Company or Subsidiary, as the case may be, from a
financial point of view from an independent investment banking firm of
national reputation, or (in the case of a real estate transaction) an
independent investment banking firm or a real estate appraisal firm of
national reputation, (ii) transactions solely between the Company and any
wholly owned Subsidiaries or solely among wholly owned Subsidiaries, (iii)
transactions effected pursuant to, and in accordance with the terms of, the
Management Agreement, the Completion Guarantees, the Administrative Services
Agreement, the Licensing Agreement, the Development Agreement, the Completion
Loan Agreement, the Indemnity Agreement, the Performance Bond Indemnity
Agreement, the HET Loan Guarantee, the Credit Enhancement Fee Agreement, the
Minimum Payment Guaranty, the HET/JCC Agreement, the HET Warrant, and any
payments under the Bank Credit Facilities, as such terms in such agreements
exist on the Issue Date or, in the case of the Bank Credit Facilities, as
they may be subsequently amended, modified, supplemented or replaced in a
manner that is not disadvantageous to the Holders in any material respect,
and (iv) Restricted Payments to the extent permitted by Section 5.3.
Notwithstanding the foregoing, this covenant shall not restrict the
disposition of the Specified Real Estate to an Affiliate at a purchase price
no less than the lesser of the cost to the Company of such real estate or its
then current fair market value determined by the members of the Manager's
Board of Directors (or, if the Company is a corporation, the members of the
Company's Board of Directors) who are disinterested in the transaction.
SECTION 5.11 LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS AND
DISQUALIFIED CAPITAL STOCK.
Except as set forth below, the Company will not, and the Company
will not 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), 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 from and after the Issue Date.
Notwithstanding the foregoing:
(a) the Company and its Subsidiaries may incur Subordinated
Indebtedness and Disqualified Capital Stock (i) if no Default or Event of
Default shall have occurred and be continuing at the time of, or would
occur after giving effect on a PRO FORMA basis to, such incurrence of
Subordinated Indebtedness or Disqualified Capital Stock, (ii) in an
aggregate principal amount of up to $30 million if, on the date of such
incurrence (the "Incurrence Date"), the Consolidated Coverage Ratio of the
Company for the Reference Period immediately preceding the Incurrence Date,
after giving effect on a PRO FORMA basis to such incurrence of such
Subordinated
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Indebtedness or Disqualified Capital Stock, would be at least
2.5 to 1, and (iii) in an aggregate principal amount of up to $50 million
if, on the Incurrence Date, the Consolidated Coverage Ratio of the Company
for the Reference Period immediately preceding such Incurrence Date, after
giving effect on a PRO FORMA basis to such incurrence of such Subordinated
Indebtedness or Disqualified Capital Stock, would be at least 3.0 to 1;
(b) the Company and the Guarantors may incur (i) Indebtedness
evidenced by the Notes and represented by this Indenture as specified
herein as of the dates hereof and (ii) Indebtedness evidenced by the 8%
Notes (including the issuance of additional 8% Notes in lieu of cash
interest payments in accordance with the terms of the 8% Notes Indenture)
and represented by the 8% Notes Indenture up to the amounts specified
therein as of the date thereof;
(c) the Company and any Subsidiary may incur Permitted FF&E Financing
in an aggregate principal amount of up to $25 million, provided, that in
each case the aggregate amount of Indebtedness incurred pursuant to this
paragraph (c) (including any Indebtedness issued to refinance, replace or
refund such Indebtedness) with respect to each item of FF&E shall not
constitute more than 100% of the cost to the Company and such Subsidiary of
such item of FF&E so purchased or leased;
(d) the Company and any Guarantor may incur Indebtedness the proceeds
of which are used for working capital pursuant to, or in respect of, the
Revolving Loans in an aggregate amount outstanding at any time (including
any Indebtedness issued to refinance, replace or refund such Indebtedness)
not to exceed $25 million;
(e) the Company and any Subsidiary may incur (i) Non-recourse
Indebtedness and (ii) up to $50 million in aggregate principal amount of
Subordinated Indebtedness, in each case in respect of the Project Cost of a
Project Expansion;
(f) the Company and any Guarantor may incur Refinancing Indebtedness
with respect to any Indebtedness or Disqualified Capital Stock, as
applicable, described in clauses (a) through (e) and (h) and (i) of this
covenant so long as, in the case of Indebtedness used to refinance, refund,
or replace Indebtedness in clauses (c), (d) and (e), such Refinancing
Indebtedness satisfies the applicable requirements of such clauses;
(g) the Company and any Subsidiary may incur Permitted Indebtedness;
(h) the Company or any Guarantor may incur Indebtedness pursuant to,
or in respect of, (i) the Tranche A-1 Term Loan in an aggregate principal
amount outstanding at any time not to exceed $10,000,000, (ii) the Tranche
A-2 Term Loan in an aggregate principal amount outstanding at any time not
to exceed $20,000,000, and (iii) the Tranche A-3 Term Loan in an aggregate
principal amount outstanding at any time not to exceed $30,000,000, (iv)
the Tranche B-1 Term Loan in an aggregate principal amount outstanding at
any time not to exceed $30,000,000, and (v) the
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Tranche B-2 Term Loan in an aggregate principal amount outstanding at any
time not to exceed $105,000,000, (in each case, less the amount of any
permanent reductions in amounts available to be borrowed thereunder
pursuant to Section 5.14);
(i) the Company or any of its Subsidiaries may incur Indebtedness
incurred pursuant to the Completion Guarantees (including, without
limitation, under the Completion Loan Agreement), the HET Loan Guarantee,
the Indemnity Agreement and the Performance Bond Indemnity Agreement or
arising as a result of any payment made thereunder;
(j) the Company and any Subsidiary may accrue Management Fees and all
other amounts owing under the Management Agreement;
(k) the Company and any Subsidiary may incur Subordinated
Indebtedness to any of the stockholders of JCC Holding;
(l) the Company and its Subsidiaries may incur Indebtedness under the
Interest Rate Agreements in the ordinary course of business;
(m) the Company and its Subsidiaries may incur Subordinated
Indebtedness pursuant to, or in respect of, the Subordinated Credit
Facility in an aggregate principal amount outstanding at any time not to
exceed $20 million; and
(n) the Company and its Subsidiaries may incur Subordinated
Indebtedness evidenced by (i) the Convertible Junior Subordinated
Debentures in an aggregate principal amount outstanding at any time not to
exceed $27,000,000, and (ii) additional Convertible Junior Subordinated
Debentures in lieu of cash interest payments in accordance with the terms
of the Convertible Junior Subordinated Debentures Indenture; and
(o) the Company and any Guarantor may incur Indebtedness pursuant to,
or in connection with, any Minimum Payment Guaranty including, without
limitation, the HET/JCC Agreement.
Notwithstanding the other provisions of this covenant, neither the
Company nor any of its Subsidiaries may incur any Indebtedness or issue any
Disqualified Capital Stock pursuant to clause (a), (c) or (e) until the
Casino Completion Date shall have occurred in accordance with the terms of
this Indenture.
SECTION 5.12 LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES.
The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, create, assume or suffer to exist any consensual
encumbrance or restriction on the ability of any of its Subsidiaries 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, the
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Company except (a) restrictions imposed by the Bank Credit Facilities, the
Notes, the 8% Notes, this Indenture, the 8% Notes Indenture, the Performance
Bond Indemnity Agreement, the Subordinated Credit Facility, the Convertible
Junior Subordinated Debentures (or the indenture in respect of the
Convertible Junior Subordinated Debentures), the Ground Lease, the General
Development Agreement, the Casino Operating Contract, the Completion Loan
Agreement, the Indemnity Agreement, the Minimum Payment Guaranty or the
HET/JCC Agreement, (b) reasonable and customary provisions restricting
subletting or assignment of any agreement entered into in the ordinary course
of business, consistent with industry practices, (c) restrictions imposed by
applicable law or as a result of regulatory action, (d) restrictions under
any Acquired Indebtedness or any agreement relating to any property, asset,
or business acquired by the Company or any of its Subsidiaries, which
restrictions existed at the time of acquisition, were not put in place in
connection with or in anticipation of such acquisition and are not applicable
to any person, other than the person acquired or to any property, asset or
business other than the property, assets and business so acquired in each
case, (e) any such encumbrance or restriction in existence on the Issue Date
and any such other encumbrance or restriction no more restrictive than those
in existence as of the Issue Date, including, without limitation, those
contained in the agreements (as of the Issue Date) referred to in clause (a)
of this Section 5.12, (f) any restrictions with respect solely to a
Subsidiary of the Company imposed pursuant to a binding agreement (subject
only to reasonable and customary closing conditions and termination
provisions) which has been entered into for the sale or disposition of all or
substantially all of the Capital Stock or assets of such Subsidiary, provided
such restrictions apply solely to the Capital Stock or assets of such
Subsidiary to be sold, (g) restrictions on the transfer of collateral (1)
used to secure Indebtedness permitted to be incurred by this Indenture or (2)
encumbered by Liens permitted by this Indenture and (h) restrictions incurred
in connection with any asset sale for the benefit of the purchaser of such
assets.
SECTION 5.13 LIMITATION ON LIENS.
The Company will not, and will not 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, except (a) Permitted Liens, (b) Liens on the Casino which secure
the Notes and the 8% Notes, or Indebtedness other than the Notes and the 8%
Notes, which Liens may secure such other Indebtedness junior, but not senior,
to the Notes and the 8% Notes, provided that substantially concurrently with
the granting of such Lien all of the Net Proceeds from such Indebtedness are
used to finance at least 75% of the Project Costs of a Project Expansion, (c)
Liens incurred pursuant to Permitted FF&E Financing incurred in accordance
with the provisions of clause (c) under Section 5.11, which Liens may be
exclusive Liens on such Permitted FF&E Financing, (d) Liens incurred in
respect of the Minimum Payment Guaranty including, without limitation, the
HET/JCC Agreement which Liens may secure Indebtedness incurred in connection
with the Minimum Payment Guaranty including, without limitation, the HET/JCC
Agreement, senior to the Liens in respect of the Notes, (e) Liens incurred in
respect of the Revolving Loans entered into in accordance with the provisions
of clause (d) under Section 5.11, which Liens may secure Indebtedness
incurred pursuant to the Revolving Loans senior to the Liens in respect of
the Notes, (f) Liens securing Subordinated Indebtedness that is
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incurred in accordance with the provisions of clause (a) under Section 5.11,
which Liens may secure such Subordinated Indebtedness junior to the Liens in
respect of the Notes, (g) Liens incurred in connection with the incurrence of
Refinancing Indebtedness in accordance with the provisions of clause (f)
under Section 5.11, provided, that such Liens are not more adverse to the
interests of the Holders of the Notes than the Liens replaced or extended
thereby, provided that such Liens replaced or extended were permitted by the
terms of this Indenture, (h) Liens securing Senior Debt which Indebtedness is
incurred in accordance with the provisions of clause (h) under Section 5.11,
which Liens may secure such Indebtedness senior to the Liens in respect of
the Notes; and (i) Liens securing Senior Subordinated Debt which Indebtedness
is incurred in accordance with the provisions of clause (h) under Section
5.11, which Liens may secure such Indebtedness on an equal and ratable basis
with the Liens in respect of the Notes.
SECTION 5.14 LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK;
EVENT OF LOSS.
(a) The Company and each of its Subsidiaries will not, in one or a
series of related transactions, convey, sell, transfer, assign or otherwise
suffer to dispose of, directly or indirectly, any of their property, business or
assets (other than the Capital Stock or other interests of an Unrestricted
Subsidiary), including without limitation upon any sale or other transfer or
issuance of any Capital Stock of any Subsidiary of the Company or any sale and
leaseback transaction, whether by the Company or a Subsidiary of the Company or
through the issuance, sale or transfer of Capital Stock by a Subsidiary of the
Company (an "Asset Sale"), unless (l) the Net Cash Proceeds from an Asset Sale
(the "Aggregate Amount") are utilized in accordance with Section 5.14 of the 8%
Notes Indenture, (2) at least 75% of the consideration for such conveyance,
sale, transfer or other disposition or issuance (treating for this purpose as
U.S. Legal Tender or Cash Equivalents (A) property that promptly after such
Asset Sale is converted into U.S. Legal Tender or Cash Equivalents and (B) any
liabilities that are assumed by the transferee in such Asset Sale) consists of
U.S. Legal Tender or Cash Equivalents, (3) 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 and (4) the Manager of the
Company determines in good faith that the Company or such Subsidiary, as
applicable, receives fair market value for such Asset Sale. For purposes of
this covenant and subject to the provisions hereof as to the amount so received
and the application of the proceeds thereof, the receipt by the Company of
proceeds due to an Event of Loss shall constitute an Asset Sale.
Notwithstanding the foregoing provisions of the prior paragraph:
(i) the Company and its Subsidiaries may in the ordinary course
of business for the casino industry, convey, sell, lease, transfer, assign,
or otherwise dispose of assets acquired and held for resale in the ordinary
course of business;
(ii) the Company and its Subsidiaries may convey, sell or dispose
of, lease, transfer or otherwise dispose of assets pursuant to and in
accordance with the limitation on mergers, sales or consolidations
provisions in the Indenture;
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(iii) the Company and its Subsidiaries may sell or dispose of
damaged, worn out or other obsolete property in the ordinary course of
business so long as such property is no longer necessary for the proper
conduct of the business of the Company or such Subsidiary as applicable;
and
(iv) the Company and its Subsidiaries may convey, sell, transfer,
assign or otherwise dispose of assets to the Company or any of its wholly
owned Subsidiaries.
The term "Asset Sale" shall not include (and this covenant shall not
apply to) any single sale of assets or series of related sales of assets, or
Event of Loss, at any time while the Notes are outstanding to the extent the Net
Proceeds therefrom do not exceed $15,000,000, and any dispositions as described
in the immediately preceding paragraph.
The Company shall accumulate all Net Cash Proceeds from Asset Sales
(to be maintained in the Net Cash Proceeds Account in which, subject to the lien
subordination provisions set forth in the Intercreditor Agreement, the
Collateral Documents and Section 4.6, the Collateral Agent shall have a
perfected security interest on behalf of the Bank Lenders and the Holders), and
the aggregate amount of such accumulated Net Cash Proceeds not used for the
purposes permitted by this Section 5.14(a) and within the time provided by this
Section 5.14(a) shall be referred to as the "Accumulated Amount."
(b) For the purposes of this Section 5.14, "Minimum Accumulation
Date" means each date on which the Accumulated Amount exceeds $15,000,000. Not
later than 10 Business Days after each Minimum Accumulation Date, the Company
shall apply such Accumulated Amount in accordance with Section 5.14 of the 8%
Notes Indenture.
SECTION 5.15 CONSTRUCTION.
The Company shall cause construction of the Casino to be prosecuted
with diligence and continuity in a good and workmanlike manner in accordance
with the Plans, subject to Force Majeure (as defined in the General Development
Agreement).
SECTION 5.16 LIMITATION ON USE OF CERTAIN FUNDS.
The Company will use (i) borrowings under the Tranche A Term Loans,
the Tranche B Term Loans and the Subordinated Credit Facility, (ii) proceeds
from the Convertible Junior Subordinated Debentures, and (iii) any equity
contributions it received in connection with the consummation of the Plan of
Reorganization, (a) to pay all regularly scheduled payments of, interest on,
fees and other amounts (other than principal payments) until the regularly
scheduled date of repayment occurs with respect thereto as provided in the Bank
Credit Facilities due and payable pursuant to the Bank Credit Facilities, (b) to
pay all regularly scheduled payments of Fixed Interest and Contingent Payments
(in this instance only, as defined in the 8% Notes Indenture) due and payable on
the 8% Notes and Contingent Payments due and payable on the Notes, (c) to pay
all amounts, including, without limitation, all fees and payments of principal
and interest, due and payable in
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connection with the Minimum Payment Guaranty including, without limitation,
the HET/JCC Agreement, (d) to pay all regularly scheduled payments of
interest due and payable on the Subordinated Credit Facility, the Completion
Loan Agreement, the Convertible Junior Subordinated Debentures, the Indemnity
Agreement and the Performance Bond Indemnity Agreement, (e) to pay all costs
of construction and development of the Casino (including, without limitation,
the costs set forth in the Pre-Opening Budget attached to the Management
Agreement as Exhibit H, including, without limitation, costs related to
construction management, architectural engineering and interior design, site
work, utility installations and hook-up fees, construction permits,
certificates and bonds, furniture, fixtures, furnishings, machinery and
equipment (including gaming equipment)), (f) to pay all amounts owing under
the Ground Lease, the General Development Agreement, the Casino Operating
Contract and any other agreement entered into in connection with the
construction or development of the Casino, as well as all amounts owing to
the City, the State of Louisiana, the Regulating Authority, the RDC or any
other governmental authority, agency, board, subdivision or special purpose
corporation thereof, (g) to pay amounts due and owing under the Management
Agreement, (h) to pay Credit Enhancement Fees (as defined in the Credit
Enhancement Fee Agreement), (i) for the repurchase of any securities of the
Company, any Guarantor or any Subsidiary thereof, including the Notes,
pursuant to a Required Regulatory Redemption, (j) for repurchases of 8% Notes
pursuant to an Offer to Purchase (as defined in the 8% Notes Indenture), and
(k) after the Casino Opening Date, for general corporate purposes.
SECTION 5.17 LIMITATION ON LINES OF BUSINESS.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly engage to any substantial extent in any line or lines of
business activity other than in a Related Business.
SECTION 5.18 LIMITATION ON STATUS AS INVESTMENT COMPANY.
The Company will not, and will not permit any of its Subsidiaries to,
be required to register as an "investment company" (as that term is defined in
the Investment Company Act of 1940, as amended), or otherwise be subject to
regulation under the Investment Company Act.
SECTION 5.19 RESTRICTIONS ON SALE AND ISSUANCE OF SUBSIDIARY STOCK.
The Company will not sell, and will not permit any of its Subsidiaries
to issue or sell, any shares of Disqualified Capital Stock of any Subsidiary to
any person other than the Company or a wholly owned Subsidiary of the Company.
SECTION 5.20 LIMITATION ON PAYMENT OF MANAGEMENT FEES.
(a) The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, pay to any stockholder of the Company or any of such
stockholder's Affiliates, Management Fees in the aggregate (for all such
stockholders and Affiliates) in
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excess of 3% of Gross Revenues of the Casino ("Base Management Fees");
PROVIDED, HOWEVER, that if Consolidated EBITDA of the Company exceeds
$40,000,000 in any First Semiannual Period, additional Management Fees
("Incentive Management Fees") may be paid for such First Semiannual Period
year up to an amount equal to 7% of Consolidated EBITDA for such First
Semiannual Period in excess of $40,000,000; and if Consolidated EBITDA of the
Company exceeds an aggregate of $75,000,000 for a Second Semiannual Period
and the immediately preceding First Semiannual Period, Incentive Management
Fees may be paid for such Second Semiannual Period up to an amount equal to
(a) 7% of the aggregated Consolidated EBITDA for such First Semiannual Period
and Second Semiannual Period in excess of $75,000,000, less (b) an amount
equal to the Incentive Management Fees, if any, paid with respect to the
immediately preceding First Semiannual Period. Incentive Management Fees with
respect to a Semiannual Period may be made no earlier than the next Business
Day following the date on which all accrued Contingent Payments have been
paid for all periods through such Semiannual Period; PROVIDED FURTHER,
HOWEVER, that the Management Agreement shall provide that Harrah's Management
Company shall refund to the Company any Incentive Management Fees paid by the
Company to Harrah's Management Company in respect of such First Semiannual
Period if Consolidated EBITDA of the Company does not exceed an aggregate of
$75,000,000 for such First Semiannual Period and immediately succeeding
Second Semiannual Period. No Base Management Fees may be paid, and no
Incentive Management Fees may be accrued or paid, during or with respect to
any period in which the Company is in default with respect to Contingent
Payments on the Notes; Base Management Fees accrued during such period may be
paid in the event that such default is cured.
(b) Notwithstanding subsection (a) above:
(i) if the Company pays Fixed Interest in Secondary Securities
in lieu of paying Fixed Interest in cash on any of the First Interest Payment
Date, the Second Interest Payment Date, the Third Interest Payment Date and
the Fourth Interest Payment Date, Base Management Fees shall be deferred for
the six month period beginning on such Interest Payment Date if the Manager
determines that the cash that would otherwise have been required to pay Fixed
Interest on such Interest Payment Date is required by the Company to fund
cash flow deficiencies (other than cash flow deficiencies resulting from
payments of principal or interest in respect of the Tranche A-1 Term Loan or
the Tranche A-2 Term Loan); PROVIDED, HOWEVER, that such deferred Base
Management Fees may be paid to Harrah's Management Company at such time and
to the extent that Consolidated EBITDA exceeds $65,000,000 for the
twelve-month period ending on the next Interest Payment Date;
(ii) if the Company pays Fixed Interest in Secondary Securities
in lieu of paying Fixed Interest in cash on any of the Third Interest Payment
Date, the Fourth Interest Payment Date, the Fifth Interest Payment Date and
the Sixth Interest Payment Date, Incentive Management Fees shall be deferred
for the six month period beginning on such Interest Payment Date; PROVIDED,
HOWEVER, that such deferred Incentive Management Fees may be paid to Harrah's
Management Company at such time and to the extent that Consolidate EBITDA
exceeds $75,000,000 for the twelve-month period ending on the next Interest
Payment Date; and
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(iii) if Consolidate EBITDA is less than $28,500,000 for any
twelve-month period ending one month prior to any Interest Payment Date
occurring after the Sixth Interest Payment Date, Base Management Fees shall
be deferred for the six-month period ending on such Interest Payment Date.
SECTION 5.21 LISTING OF SECURITIES.
The Company covenants and agrees that it will, as promptly as
practicable, use its best efforts to list the Notes on such securities
exchanges or quotation systems as may be required from time to time, by
written order, regulation or otherwise, in order for the Holders to maintain
their suitability under Louisiana gaming laws or regulations.
SECTION 5.22 COMPLIANCE WITH ENVIRONMENTAL LAWS.
(a) The Company will comply, and will cause each of its
subsidiaries to comply, in all material respects with all Environmental Laws
applicable to the ownership or use of its Real Property now or hereafter
owned or operated by the Company or any of its subsidiaries, will within a
reasonable time-period pay or cause to be paid all costs and expenses
incurred in connection with such compliance and will keep or cause to be kept
all such Real Property free and clear of any Liens imposed pursuant to such
Environmental Laws, except as could not reasonably be expected to have a
material adverse effect, singly or in the aggregate, on the properties,
business, results of operations, financial condition, business affairs or
prospects of the Company (a "Material Adverse Effect"). Except as could not
reasonably be expected to have a Material Adverse Effect, neither the Company
nor any of its subsidiaries will generate, use, treat, store, release or
dispose of, or permit the generation, use, treatment, storage, release or
disposal of Hazardous Materials on any Real Property now or hereafter owned
or operated by the Company or any of its subsidiaries, or transport or permit
the transportation of Hazardous Materials to or from any such Real Property
except for Hazardous Materials used or stored at any such Real Properties in
material compliance with all applicable Environmental Laws and reasonably
required in connection with the operation, use and maintenance of any such
Real Property.
(b) At the written request of the Trustee or the Holders of a
majority in aggregate Annual Maximum Contingent Payment Amount in respect of
the Securities at the time outstanding, which request shall specify in
reasonable detail the basis therefor, at any time and from time to time, the
Company will provide, at its expense, an environmental site assessment report
concerning any Real Property now or hereafter owned or operated by the
Company or any of its subsidiaries, prepared by an environmental consulting
firm approved by the Trustee, indicating the presence or absence of Hazardous
Materials and the potential cost of any removal or remedial action in
connection with any Hazardous Materials on such Real Property; provided that
such request may be made only if (i) there has occurred and is continuing an
Event of Default, (ii) the Trustee or the Holders of a majority in aggregate
Annual Maximum Contingent Payment Amount in respect of the Securities at the
time outstanding reasonably believe that the Company or any such subsidiary
or any such Real Property is not in material compliance with any
Environmental Law, or (iii) circumstances exist that reasonably could be
expected to form the basis of a material Environmental Claim
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against the Company or any such subsidiary or any such Real Property. If the
Company fails to provide the same within 90 days after such request was made,
the Trustee may order the same, and the Company shall grant and hereby grants
to the Trustee and the Holders and their agents access to such Real Property
and specifically grants the Trustee and the Holders an irrevocable
non-exclusive license, subject to the rights of tenants, to undertake such an
assessment, all at the Company's expense.
SECTION 5.23 LIMITATION ON LAYERING DEBT.
Neither the Company nor the Parent Guarantor may create, incur,
assume or suffer to exist any Indebtedness, except for Senior Subordinated
Debt, that is subordinate in right of payment to any other Indebtedness of
the Company or the Parent Guarantor, as applicable, unless, by its terms or
the terms of the instrument creating or evidencing it, such Indebtedness is
subordinate in right of payment to the Securities or, in the case of the
Parent Guarantor, the Guaranty.
ARTICLE VI
SUCCESSORS
SECTION 6.1 LIMITATION ON MERGER, SALE OR CONSOLIDATION.
The Company shall not consolidate with or merge with or into another
person or, directly or indirectly, sell, lease or convey all or substantially
all of its assets (computed on a consolidated basis, including, without
limitation, as set forth in the last paragraph of this Section 6.1), whether
in a single transaction or a series of related transactions, to another
person or group of affiliated persons, unless:
(i) either (a) the Company is the continuing entity or (b) the
resulting, surviving or transferee entity is a corporation or partnership
organized under the laws of the United States, any state thereof or the
District of Columbia (provided that at all times at least one obligor with
respect to the Securities is such a corporation) and expressly assumes by
supplemental indenture all of the obligations of the Company in connection
with the Securities, this Indenture and the Collateral Documents;
(ii) no Default or Event of Default shall exist or shall occur
immediately after giving effect on a PRO FORMA basis to such transaction;
(iii) immediately after giving effect to such transaction on
a PRO FORMA basis, the Consolidated Tangible Net Worth of the consolidated
surviving or transferee entity is at least equal to the Consolidated
Tangible Net Worth of the Company immediately prior to such transaction;
(iv) other than in the case of a transaction solely between the
Company and any wholly owned Subsidiary of the Company or solely between
wholly
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owned Subsidiaries of the Company, immediately after giving effect
to such transaction on a PRO FORMA basis, the consolidated surviving or
transferee entity would immediately thereafter be permitted to incur at
least $1.00 of additional Indebtedness pursuant to clause (a) under Section
5.11; and
(v) such transaction will not result in the loss of any Gaming
License relating to the Company.
For purposes of this Section 6.1, the Consolidated Coverage Ratio
shall be determined on a PRO FORMA consolidated basis (giving PRO FORMA
effect to the transaction and any related incurrence of Indebtedness or
Disqualified Capital Stock).
For purposes of the first sentence of this Section 6.1, the sale,
lease, conveyance or transfer of all or substantially all of the properties
and assets of one or more Subsidiaries of the Company, which properties and
assets, if held by the Company instead of such Subsidiaries, would constitute
all or substantially all of the properties and assets of the Company on a
consolidated basis, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.
Notwithstanding the foregoing, the Company is permitted to
reorganize as a corporation in accordance with the procedures established in
the Indenture, PROVIDED that the Company shall have delivered to the Trustee
an opinion of counsel reasonably acceptable to the Trustee confirming that
such reorganization is not adverse to Holders of the Notes (it being
recognized that such reorganization shall not be deemed adverse to the
Holders of the Notes solely because (i) of the accrual of deferred tax
liabilities resulting from such reorganization or (ii) the successor or
surviving corporation (a) is subject to income tax as a corporate entity or
(b) is considered to be an "includible corporation" of an affiliated group of
corporations within the meaning of the Internal Revenue Code of 1986, as
amended, or any similar state or local law).
SECTION 6.2 SUCCESSOR SUBSTITUTED.
Upon any consolidation or merger or any sale, lease, conveyance or
transfer of all or substantially all of the assets of the Company in
accordance with Section 6.1, the successor entity formed by such
consolidation or into which the Company is merged or to which such sale,
lease, conveyance or transfer is made, shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under the Notes,
this Indenture and the Collateral Documents with the same effect as if such
successor corporation had been named therein as the Company, and the Company
will be released from its obligations under this Indenture, the Collateral
Documents and the Notes, except as to any obligations that arise from or as a
result of such transaction.
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ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
SECTION 7.1 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 8% Notes or any Contingent Payments on the Notes as and
when due and payable and the continuance of any such failure for 30 days;
(2) the failure by the Company to pay all or any part of the
principal, or premium, if any, on the 8% Notes when and as the same become
due and payable at maturity, redemption, by acceleration or otherwise;
(3) except as provided in clauses (1) or (2) of this Section
7.1, failure of the Company or any Guarantor to comply with any provision
of Section 5.10, 5.15, 5.16, 5.19, 5.20 or 6.1, which failure continues for
30 days;
(4) 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 the Trustee by the Holders of
at least 25% in aggregate Annual Maximum Contingent Payment Amount in
respect of the Notes then outstanding;
(5) the filing by the Company or any Significant Subsidiary of
the Company (in either case, a "Debtor") of a petition commencing a
voluntary case under section 301 of title 11 of the United States Code, or
the commencement by a Debtor of a case or proceeding under any other
Bankruptcy Law seeking the adjustment, restructuring, or discharge of the
debts of such Debtor, or the liquidation of such Debtor, including without
limitation the making by a Debtor of an assignment for the benefit of
creditors; or the taking of any corporate action by a Debtor in furtherance
of or to facilitate, conditionally or otherwise, any of the foregoing;
(6) the filing against a Debtor of a petition commencing an
involuntary case under section 303 of title 11 of the United States Code,
with respect to which case (a) such Debtor consents or fails to timely
object to the entry of, or fails to seeks the stay and dismissal of, an
order of relief, (b) an order for relief is entered and is pending and
unstayed on the 60th day after the filing of the petition commencing such
case, or if stayed, such stay is subsequently lifted so that such
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order for relief is given full force and effect, or (c) no order for relief
is entered, but the court in which such petition was filed has not entered
an order dismissing such petition by the 60th day after the filing thereof;
or the commencement under any other Bankruptcy Law of a case or proceeding
against a Debtor seeking the adjustment, restructuring, or discharge of the
debts of such Debtor, or the liquidation of such Debtor, which case or
proceeding is pending without having been dismissed on the 60th day after
the commencement thereof;
(7) the entry by a court of competent jurisdiction or by the
Regulating Authority of a judgment, decree or order appointing a receiver,
liquidator, trustee, custodian or assignee of a Debtor or of the property
of a Debtor, or directing the winding up or liquidation of the affairs or
property of a Debtor, and (a) such Debtor consents or fails to timely
object to the entry of, or fails to seek the stay and dismissal of, such
judgment, decree, or order, or (b) such judgment, decree or order is in
full force and effect and is not stayed on the 60th day after the entry
thereof, or, if stayed, such stay is thereafter lifted so that such
judgment, decree or order is given full force and effect;
(8) a default in the payment of principal, premium or interest
when due at final maturity or an acceleration for any other reason of the
maturity of any Indebtedness (other than Non-recourse Indebtedness) of the
Company or any Significant Subsidiary with an aggregate principal amount in
excess of $15,000,000, including, without limitation, the Bank Credit
Facilities at such times as the aggregate principal amount of Indebtedness
thereunder exceeds $15,000,000; provided that an Event of Default shall not
be deemed to occur with respect to the failure to make such payment at
final maturity or the acceleration of the maturity of Indebtedness of the
Company or any Significant Subsidiary if the event that caused such
acceleration shall be cured, or such acceleration shall be rescinded, or
the Indebtedness shall be repaid in full, in each such case within 10 days;
(9) final unsatisfied judgments not covered by insurance (other
than with respect to Non-recourse Indebtedness) aggregating in excess of
$15,000,000, at any one time rendered against the Company or any
Significant Subsidiary of the Company and not stayed, bonded or discharged
within 60 days;
(10) the loss of the legal right of the Company to operate slot
machines at the Casino for gaming activities and such loss continuing for
more than 90 days;
(11) an event of default under, or if none is specified therein,
a failure to comply with the provisions of the Collateral Documents (other
than the Security Agreement) and the continuance of such event of default
or failure to comply, as the case may be, for a period of 30 days after
written notice is given to the Company by the Trustee or to the Company and
the Trustee by the Holders of at least 25% in aggregate Annual Maximum
Contingent Payment Amount in respect of the Notes outstanding, provided
that if such event of default or failure to comply, as
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the case may be, materially and adversely affects (1) the Collateral,
(2) the priority or perfection of the security interests purported to be
created with respect to any material portion of the Collateral or (3) the
rights and remedies of the Collateral Agent, the Trustee or the respective
secured creditors in respect of any material portion of the Collateral, then
the event of default or failure to comply, as the case may be, need only
continue after the applicable cure period specified in the applicable
Collateral Document;
(12) the occurrence of an event of default under the Security
Agreement and the continuance of such failure or event of default for a
period of 30 days after written notice is given to the Company by the
Collateral Agent or the Trustee or to the Company and the Trustee by the
Holders of at least 25% in aggregate Annual Maximum Contingent Payment
Amount in respect of the Notes outstanding, provided, that if such failure
or event of default materially and adversely effects (a) the Collateral (as
defined in the Security Agreement), (b) the priority of perfection of the
security interests purported to be created with respect to any material
portion of such Collateral or (c) the rights and remedies of the Collateral
Agent, the Trustee or Holders of Notes in respect of any material portion
of such Collateral, then the failure or event of default need only continue
after the cure period specified in the Security Agreement;
(13) any Collateral Document fails to become or ceases to be in
full force and effect (other than in accordance with its terms or the terms
hereof) or ceases (once effective) to create in favor of the Trustee, with
respect to any material amount of Collateral, a valid and perfected Lien on
the Collateral to be covered thereby (unless a prior or exclusive Lien is
specifically permitted by this Indenture);
(14) the failure of the Casino Completion Date to have occurred
by 30 days following the date on which an event of default entitling the
City to terminate the Ground Lease has occurred under the Ground Lease as a
result of the failure to complete the Casino;
(15) an "Event of Default" (as defined in the Ground Lease) has
occurred; and
(16) an "Event of Default" (as defined in the 8% Notes Indenture)
has occurred.
SECTION 7.2 DECLARATION OF EVENT OF DEFAULT, RESCISSION AND
ANNULMENT.
If (x) an Event of Default (other than an Event of Default specified
in Section 7.1(5), (6) or (7)), or (y) the acceleration of the maturity of
amounts owing under the Bank Credit Facilities occurs and is continuing, then,
and in every such case, either the Trustee or the Holders of not less then 25%
in aggregate Annual Maximum Contingent Payment Amount of then outstanding
Securities, by a notice in writing to the Company and the Guarantors (and to the
Trustee if given by Holders) (an "Event of Default Notice"), may
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declare all of the due and unpaid Contingent Payments, if any, to be due and
payable immediately. If an Event of Default specified in Section 7.1(5), (6)
or (7) occurs, (i) all due and unpaid Contingent Payments on the Securities,
if any, and (ii) the Make-Whole Amount, shall be immediately due and payable
on all outstanding Securities without any declaration or other act on the
part of the Trustee or the Holders; PROVIDED, HOWEVER, that the Make-Whole
Amount shall be subordinated to any Senior Subordinated Debt including,
without limitation, any Senior Subordinated Debt to which HET has succeeded
to the rights of the lenders thereunder.
At any time after such a declaration being made and before a judgment
or decree for payment of the money due has been obtained by the Trustee as
hereinafter provided in this Article VII, the Holders of a majority in aggregate
Annual Maximum Contingent Payment Amount of then outstanding Securities, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences and may waive, on behalf of all Holders, an
Event of Default or an event which with notice or lapse of time or both would
become an Event of Default if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue Contingent Payments on all Securities,
(B) principal of (and premium, if any, applicable to) any
Securities which would become due otherwise than by such declaration
of acceleration, and interest thereon at the rate borne by the
Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue Contingent Payments at the rate of 8% per annum,
(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 nonpayment of amounts
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 7.12.
Notwithstanding the previous sentence of this Section 7.2, no rescission,
amendment or waiver shall be effective for any Event of Default or event which
with notice or lapse of time or both would be an Event of Default with respect
to any covenant or provision which cannot be modified or amended without the
consent of the Holder of each outstanding Security, unless all such affected
Holders agree, in writing, to rescind such acceleration or waive such Event of
Default or event. No such waiver shall cure or waive any subsequent default or
impair any right consequent thereon.
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SECTION 7.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if an Event of Default in payment of
Contingent Payments specified in Section 7.1(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 Securities, the whole amount then due and payable
on such Securities for Contingent Payments, and, to the extent that payment of
such interest shall be legally enforceable, interest on any overdue Contingent
Payments, at the rate of 8% per annum, 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
Securities 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 Securities, 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 7.4 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
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the Trustee shall have made any
demand on the Company for the payment of overdue Contingent Payments) 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 Contingent
Payments owing and unpaid in respect of the Securities 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
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(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 8.7.
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 Securities
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 7.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities 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 Securities in respect of which
such judgment has been recovered.
SECTION 7.6 PRIORITIES.
Subject to the Intercreditor Agreement, Section 4.6, Article XIII and
Article XIV, any money collected by the Trustee pursuant to this Article VII
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 Contingent
Payments, upon presentation of the Securities 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 8.7:
SECOND: To the Holders in payment of the amounts then due and unpaid
for Contingent Payments on the Securities 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 Securities for
Contingent Payments; and
THIRD: To whomsoever may be lawfully entitled thereto, the remainder,
if any.
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SECTION 7.7 LIMITATION ON SUITS.
No Holder of any Security 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 Annual Maximum
Contingent Payment Amount of then outstanding Securities 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 Annual Maximum Contingent Payment Amount of the outstanding Securities;
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 7.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND
INTEREST.
Notwithstanding any other provision of this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the Contingent Payments (if Contingent Payments are due and
payable in accordance with the terms of the Securities and this Indenture) on
such Security on the Interest Payment Dates of such payments as expressed in
such Security (in the case of Required Regulatory Redemption, the Redemption
Price on the applicable Redemption Date) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.
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SECTION 7.9 RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities 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 7.10 DELAY OR OMISSION NOT WAIVER.
No delay or omission by the Trustee or by any Holder of any Security
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 VII 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 7.11 CONTROL BY HOLDERS.
Subject to the terms of the Intercreditor Agreement with respect to
actions taken under the Collateral Documents, the Holder or Holders of a
majority in aggregate Annual Maximum Contingent Payment Amount of then
outstanding Securities 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 7.12 WAIVER OF PAST DEFAULT.
Subject to Section 7.8, the Holder or Holders of not less than a
majority in aggregate Annual Maximum Contingent Payment Amount of the
outstanding Securities may, by written notice to the Trustee on behalf of all
Holders, prior to the delivery of an Event of Default Notice, waive any past
default hereunder and its consequences, except a default
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(A) in the payment of Contingent Payments on any Security as
specified in clauses (1) and (2) of Section 7.1, or
(B) in respect of a covenant or provision hereof which, under
Article X, cannot be modified or amended without the consent of the Holder
of each outstanding Security 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 7.13 UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Security
by its 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 7.13 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 Annual Maximum Contingent Payment Amount of the outstanding
Securities, or to any suit instituted by any Holder for enforcement of the
payment of Contingent Payments (if Contingent Payments are due and payable in
accordance with the terms of the Securities and this Indenture) on any Security
on or after the applicable Interest Payment Date.
SECTION 7.14 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 Guarantors, 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.
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ARTICLE VIII
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 8.1 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. 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 8.1.
(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, PROVIDED, HOWEVER, that in the event the Trustee in its
reasonable judgment determines that complying with such order or directive
would subject it or its officers or directors to unreasonable or onerous
requirements, the Trustee may, at its option, resign as Trustee in lieu of
complying with such order or directive; and PROVIDED, FURTHER, that no
resignation shall become effective until a successor Trustee is appointed
and delivers a written acceptance in accordance with Section 8.8 hereof.
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(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 in accordance with a direction
received by it pursuant to Section 7.11.
(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), (d) and (f) of this Section 8.1.
(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 8.2 RIGHTS OF TRUSTEE.
Subject to Section 8.1:
(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 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 conferred upon it by this Indenture or the TIA.
(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
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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.
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
7.1(1), 7.1(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) Unless otherwise specifically provided for in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
SECTION 8.3 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of any of the Securities, may make loans to, accept deposits
from, and perform services for the Company or its Affiliates, 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 8.10 and 8.11.
SECTION 8.4 TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities and it shall not be responsible for any
statement in the Securities, 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 8.5 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 Securityholder 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 Contingent Payments on any Security (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 Securityholders.
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SECTION 8.6 REPORTS BY TRUSTEE TO HOLDERS.
If required by law, within 60 days after each May 15 beginning with
the May 15 following the date of this Indenture, the Trustee shall mail to each
Securityholder 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
Sections 313(b) and 313(c).
The Company shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or automatic quotation system.
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the SEC and each stock exchange,
if any, on which the Securities are listed.
SECTION 8.7 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, bad faith or
willful misconduct on its part, arising out of or in connection with (a) 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 and (b) the actual or alleged presence of Hazardous Materials
in the air, surface water or groundwater or on the surface or subsurface of any
real property owned, leased or at any time operated by the Company or any of its
Subsidiaries, the release, generation, storage, transportation, handling or
disposal of Hazardous Materials at any location, whether or not owned or
operated by the Company or any of its Subsidiaries, the non-compliance of any
real property with foreign, federal, state and local laws, regulations, and
ordinances (including applicable permits thereunder) applicable to any real
property, or any environmental claim relating in any way to the Company or any
of its Subsidiaries, their operations, or any real property owned, leased or at
any time operated by the Company or any of its Subsidiaries, including, in each
case, without limitation, the reasonable fees and disbursements of counsel and
other consultants incurred in connection with any such investigation,
litigation, or other proceeding (but excluding any losses, liabilities, claims,
damages or expenses to the extent incurred by reason of the gross negligence or
willful misconduct of the person to be indemnified). The Trustee shall notify
the Company promptly of any claim asserted against the Trustee for which it may
seek indemnity. The
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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 8.7, the
Trustee shall have a lien prior to the Securities on all assets held or
collected by the Trustee, in its capacity as Trustee, except assets held in
trust to pay Contingent Payments on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 7.1(5), (6) or (7) 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 8.7 and any lien arising
hereunder shall survive the resignation or removal of the Trustee, the discharge
of the Company's obligations pursuant to Article IX and any rejection or
termination of this Indenture under any Bankruptcy Law.
SECTION 8.8 REPLACEMENT OF TRUSTEE.
The Trustee may resign by so notifying the Company in writing. The
Holder or Holders of a majority in Annual Maximum Contingent Payment Amount of
the outstanding Securities 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 8.10;
(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 becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holder
or Holders of a majority in Annual Maximum Contingent Payment Amount of the
Securities may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
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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 8.7 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 8.7,
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 aggregate Annual Maximum Contingent Payment
Amount of the outstanding Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 8.10, any Securityholder
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
8.8, the Company's obligations under Section 8.7 shall continue for the benefit
of the retiring Trustee.
SECTION 8.9 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 8.10 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 $100,000,000 as set forth in its most recent published
annual report of condition. The Trustee shall comply with TIA Section 310(b).
SECTION 8.11 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.
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ARTICLE IX
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 9.1 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may elect to have either Section 9.2 or 9.3 be applied to
all outstanding Securities upon compliance with the conditions set forth below
in this Article IX.
SECTION 9.2 LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 9.1 of the option applicable
to this Section 9.2, the Company shall be deemed to have been discharged from
their obligations with respect to all outstanding Securities on the date the
conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For
this purpose, such Legal Defeasance means that the Company shall be deemed to
have paid and discharged the entire Indebtedness represented by the outstanding
Securities, which shall thereafter be deemed to be "outstanding" only for the
purposes of Section 9.5 and the other Sections of this Indenture referred to in
(a) and (b) below, and to have satisfied all its other obligations under such
Securities and this Indenture (and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging the same), except
for the following which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of outstanding Securities to receive
solely from the trust fund described in Section 9.4, and as more fully set forth
in such section, payments in respect of the Contingent Payments on such
Securities when such payments are due, (b) the Company's obligations with
respect to such Securities under Sections 2.4, 2.6, 2.7, 2.10, 5.2 and 5.4,
(c) the rights, powers, trusts, duties and immunities of the Trustee hereunder
and the Company's obligations in connection therewith, and (d) this Article IX.
Subject to compliance with this Article IX, the Company may exercise its option
under this Section 9.2 notwithstanding the prior exercise of its option under
Section 9.3 with respect to the Securities.
SECTION 9.3 COVENANT DEFEASANCE.
Upon the Company's exercise under Section 9.1 of the option applicable
to this Section 9.3, the Company shall be released from its obligations under
the covenants contained in Sections 5.3, 5.6, 5.7, 5.8, 5.10, 5.11, 5.12, 5.13,
5.14, 5.15, 5.16, 5.17, 5.19, 5.20. 5.21, 5.22 and 5.23 and Article VI with
respect to the outstanding Securities on and after the date the conditions set
forth below are satisfied (hereinafter, "Covenant Defeasance"), and the
Securities shall thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder. For this
purpose, such Covenant Defeasance means that, with respect to the outstanding
Securities, the Company need not comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference
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elsewhere herein to any such covenant or by reason of any reference in any
such covenant to any other provision herein or in any other document, but,
except as specified above, the remainder of this Indenture and such
Securities shall be unaffected thereby. In addition, upon the Company's
exercise under Section 9.1 of the option applicable to this Section 9.3,
Sections 7.1(3), 7.1(4) and 7.1(8), 7.1(9), 7.1(10), 7.1(11), 7.1(12),
7.1(13), 7.1(14), 7.1(15) and 7.1(16) shall not constitute Events of Default.
SECTION 9.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 9.2 or Section 9.3 to the outstanding Securities:
(a) (1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 8.10 who shall agree to comply with the provisions of this Article IX
applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities, (i) U.S. Legal Tender in an
amount, or (ii) U.S. Government Obligations which through the scheduled payment
of principal and interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment, U.S. Legal
Tender in an amount, or (iii) a combination thereof, in such amounts, as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay and discharge and which shall be applied by the Trustee (or
other qualifying trustee) to pay and discharge the Maximum Contingent Payments
for the current and all future Contingent Payment Periods on the outstanding
Securities on the Interest Payment Dates in respect of such Contingent Payment
Periods; provided that the Trustee shall have been irrevocably instructed to
apply such U.S. Legal Tender or the proceeds of such U.S. Government Obligations
to said payments with respect to the Securities and (2) the Holders must have a
valid and perfected exclusive security interest in such trust;
(b) In the case of an election under Section 9.2, the Company shall
have delivered to the Trustee an Opinion of Counsel in the United States
reasonably satisfactory to the Trustee confirming that (i) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (ii) since the Issue Date, there has been a change in the applicable
Federal income tax law, in either case to the effect that, and based thereon
such opinion shall confirm that, the Holders of the outstanding Securities will
not recognize income, gain or loss for Federal income tax purposes as a result
of such Legal Defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Legal Defeasance has not occurred (assuming that the Maximum Contingent
Payments had been made for the current and all future Contingent Payment
Periods);
(c) In the case of an election under Section 9.3, the Company shall
have delivered to the Trustee an Opinion of Counsel in the United States to the
effect that the Holders of the outstanding Securities will not recognize income,
gain or loss for Federal
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income tax purposes as a result of such Covenant Defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such Covenant Defeasance had
not occurred (assuming that the Maximum Contingent Payments had been made for
the current and all future Contingent Payment Periods);
(d) No Default or Event of Default with respect to the Securities
shall have occurred and be continuing on the date of such deposit or, in so far
as Section 7.1(5), 7.1(6) or 7.1(7) is concerned, at any time in the period
ending on the 91st day after the date of such deposit (it being understood that
this condition shall not be deemed satisfied until the expiration of such
period);
(e) Such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;
(f) In the case of an election under either Section 9.2 or 9.3, the
Company shall have delivered to the Trustee an Officers' Certificate stating
that the deposit made by the Company pursuant to its election under Section 9.2
or 9.3, as applicable, was not made by the Company with the intent of preferring
the Holders over other creditors of the Company or with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or others; and
(g) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel in the United States, each stating that
all conditions precedent provided for relating to either the Legal Defeasance
under Section 9.2 or the Covenant Defeasance under Section 9.3 (as the case may
be) have been complied with as contemplated by this Section 9.4.
SECTION 9.5 DEPOSITED U.S. LEGAL TENDER AND U.S. GOVERNMENT
OBLIGATIONS TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 9.6, all money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this Section 9.5, the "Trustee") pursuant
to Section 9.4 in respect of the outstanding Securities shall be held in trust
and applied by the Trustee, in accordance with the provisions of such Securities
and this Indenture, to the payment, either directly or through any Paying Agent
as the Trustee may determine, to the Holders of such Securities of all sums due
and to become due thereon in respect of Contingent Payments, but such money need
not be segregated from other funds except to the extent required by law.
The Company agrees to pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the U.S. Legal Tender or U.S.
Government Obligations deposited pursuant to Section 9.4 or the principal and
interest received in respect
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thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of the outstanding Securities.
Anything in this Article IX to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any U.S. Legal Tender or U.S. Government Obligations
held by it as provided in Section 9.4 which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 9.4(a)), are in excess of the amount thereof which
would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
SECTION 9.6 REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of Contingent Payments on any
Security and remaining unclaimed for two years after such Contingent Payments
have become due and payable shall be paid to the Company on its request; and
the Holder of such Security shall thereafter look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money shall thereupon cease; PROVIDED, HOWEVER, that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in
the NEW YORK TIMES and THE WALL STREET JOURNAL (national edition), notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such notification or
publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
SECTION 9.7 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 9.2 or 9.3,
as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 9.2 or 9.3 until such time as the Trustee or Paying Agent
is permitted to apply such money in accordance with Section 9.2 and 9.3, as
the case may be; provided, however, that, if the Company makes any payment of
Contingent Payments on any Security following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money held by the Trustee or
Paying Agent.
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ARTICLE X
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holder, the Company and 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 Securities, this Indenture, or any of the Collateral
Documents, in form satisfactory to the Trustee and the Company, 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 Securities;
(4) to provide for uncertificated Securities in addition to or
in place of certificated Securities;
(5) to evidence the succession of another person to the Company,
and the assumption by any such successor of the obligations of the Company,
herein and in the Securities in accordance with Article VI; or
(6) to comply with the TIA.
SECTION 10.2 AMENDMENTS, SUPPLEMENTAL INDENTURES AND WAIVERS WITH
CONSENT OF HOLDERS.
Subject to Section 7.8 and the last sentence of this paragraph, with
the consent of the Holders of not less than a majority in aggregate Annual
Maximum Contingent Payment Amount of then outstanding Securities, 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 any of the Collateral Documents, this Indenture or the Securities 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
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provisions of any of the Collateral Documents, this Indenture or the
Securities or of modifying in any manner the rights of the Holders under any
of the Collateral Documents, this Indenture or the Securities. Subject to
Section 7.8 and the last sentence of this paragraph, the Holder or Holders of
a majority in aggregate Annual Maximum Contingent Payment Amount of then
outstanding Securities may waive compliance by the Company or any Guarantor
with any provision of any of the Collateral Documents, this Indenture or the
Securities. Notwithstanding the foregoing provisions of this Section 10.2, no
such amendment, supplemental indenture or waiver shall, without the consent
of the Holder of each outstanding Security affected thereby:
(1) change the Stated Maturity of any Security;
(2) reduce the Annual Maximum Contingent Payment Amount of any
Security;
(3) reduce or extend the time for payment of Contingent Payments
on any Security;
(4) make the Contingent Payments on any Security payable with
anything or in any manner other than as provided for in this Indenture and
the Securities as in effect on the Issue Date;
(5) make any changes in Section 7.8 or this third sentence of
this Section 10.2 (except, in the case of this third sentence, to add any
additional provision of this Indenture to this sentence);
(6) alter the redemption provisions of Article III or the
Securities in a manner adverse to any Holder;
(7) make any changes in the provisions concerning waivers of
Defaults or Events of Default by Holders of the Securities or change the
percentage of Securities whose Holders must consent to an amendment,
supplement or waiver of any provision of this Indenture or the Securities
(except to increase any required percentage) or make any changes in the
provisions concerning the rights of Holders to recover Contingent Payments
on, or redemption payment with respect to, any Security; or
(8) make the Securities subordinated in right of payment to any
extent or under any circumstances (except as permitted by this Indenture)
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.
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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 or
waiver.
After an amendment, supplement or waiver under this Section 10.2 or
10.4 becomes effective, it shall bind each Holder, subject to the limitations
set forth above.
In connection with any amendment, supplement or waiver under this
Article X, 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 10.3 COMPLIANCE WITH TIA.
Every amendment, waiver or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 10.4 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 Security or portion of a Security that evidences the
same debt as the consenting Holder's Security, even if notation of the
consent is not made on any Security. However, any such Holder or subsequent
Holder may revoke the consent as to his Security or portion of his Security
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 Securities
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 Securityholder, unless it makes a change described in any of
clauses (1) through (9) of Section 10.2, in which case, the amendment,
supplement or waiver shall bind only each Holder of a Security who has
consented to it and every subsequent Holder of a Security or portion of a
Security that evidences the same (or a portion of the same) debt as the
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consenting Holder's Security with respect to which a consent was given;
provided, that any such waiver shall not impair or affect the right of any
Holder to receive payment of Contingent Payments on a Security, on or after
the respective dates set for such amounts to become due and payable expressed
in such Security, or to bring suit for the enforcement of any such payment on
or after such respective dates.
SECTION 10.5 NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the Trustee
or require the Holder to put an appropriate notation on the Security. The
Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determine, the Company in exchange for the Security shall issue, the
Guarantors shall endorse and the Trustee shall authenticate a new Security that
reflects the changed terms. Any failure to make the appropriate notation or to
issue a new Security shall not affect the validity of such amendment, supplement
or waiver.
SECTION 10.6 TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article X, 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 X is authorized or
permitted by this Indenture.
SECTION 10.7 CONSENT TO CERTAIN AMENDMENTS OF THE GROUND LEASE;
TRUSTEE'S ACTIONS.
To the extent required under the Ground Lease, the Collateral Agent
and the Trustee, on behalf of the Holders, hereby waive their right to consent
or shall be authorized to waive its consent, as the case may be, to any future
amendment, modification or change of such lease, and any and all other leases
now or hereafter subject to the Collateral Mortgage, provided that:
(a) such amendment, modification or change would not (i) have a
material adverse effect on the Collateral, (ii) have a material adverse
effect on the rights of the Holders or the Collateral Agent under the
Ground Lease or such other lease, as the case may be; or (iii) materially
increase the payment obligations under the Ground Lease, or such other
lease, as the case may be; and
(b) contemporaneously with the execution of such amendment,
modification or change, the Collateral Agent shall receive, at no cost to
the Holders or the Collateral Agent, an endorsement to the mortgagee's
title insurance policy insuring the Collateral Mortgage, assuring (i) that
such amendment does not impair or
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invalidate the lien of the Collateral Mortgage and (ii) that such
amendment does not affect the coverage afforded by the
above-referenced title insurance policy.
Except as set forth above, the Trustee may request the consent and
approval of the Holders as a condition to giving any consent or approval under
the Ground Lease, or any other lease or the Casino Operating Contract and shall
have no responsibility or liability for failing to give any such consent or
approval absent direction from the Holders.
ARTICLE XI
[Intentionally deleted.]
ARTICLE XII
GUARANTY
SECTION 12.1 GUARANTY.
(a) In consideration of good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, and subject to Article III and
subsection (d) below, each of the Guarantors hereby irrevocably and
unconditionally guarantees (the "Guaranty") to each Holder of a Security
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 Securities or the obligations of the Company under this Indenture or the
Securities, that: (w) the Contingent Payments, to the extent due and payable
hereunder, on the Securities will be paid in full when due, by acceleration,
Required Regulatory Redemption, or otherwise; (x) all other obligations of the
Company to the Holders or the Trustee under this Indenture or the Securities
will be promptly paid in full or performed, all in accordance with the terms of
this Indenture and the Securities; and (y) in case of any extension of time of
payment or renewal of any Securities 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, Required Regulatory
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 Securities 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
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and covenants that this Guaranty will not be discharged except by complete
performance of the obligations contained in the Securities 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 the Company or such
Guarantor, any amount paid by 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 obligations guaranteed hereby may be declared due and payable
as provided in Section 7.2 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 as provided in Section 7.2, those obligations 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, 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 the 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, or at the time that any demand is made thereupon, 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 an amount, if any, that 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 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 reductions, if any,
required by this paragraph shall be determined in accordance with applicable
law.
(e) Each Guarantor shall be subrogated to all rights of the Holders
against the Company under the Securities, this Indenture or the Collateral
Documents in respect of any amounts paid by such Guarantor pursuant to the
provisions of such Guaranty or this Indenture; PROVIDED, HOWEVER, that the
Guarantor shall not be entitled to enforce or to receive any payments arising
out of, or based upon, such right of subrogation until the Contingent Payments,
to the extent due and payable hereunder, on all Securities issued hereunder
shall have been paid in full.
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SECTION 12.2 EXECUTION AND DELIVERY OF GUARANTY.
To evidence its Guaranty set forth in Section 12.1, each Guarantor
agrees that a notation of such Guaranty substantially in the form annexed hereto
as EXHIBIT B shall be endorsed on each Security authenticated and delivered by
the Trustee and that this Indenture shall be executed on behalf of such
Guarantor by its Chairman of the Board, its President or one of its Vice
Presidents, by manual or facsimile signature, under a facsimile of its seal
reproduced thereon and attested to by another Officer other than the Officer
executing the Indenture.
Each Guarantor agrees that its Guaranty set forth in Section 12.1
shall remain in full force and effect and apply to all the Securities
notwithstanding any failure to endorse on each Security a notation of such
Guaranty.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security on which a Guaranty is
endorsed, the Guaranty shall be valid nevertheless.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guaranty set forth in
this Indenture on behalf of each Guarantor.
SECTION 12.3 FUTURE SUBSIDIARY GUARANTORS.
The Company shall cause each person that is or becomes a Subsidiary of
the Company after the Issue Date to execute a Guaranty in the form of Exhibit B
hereto and cause such Subsidiary to execute an Indenture supplemental hereto for
the purpose of adding such Subsidiary as a Guarantor hereunder.
SECTION 12.4 RELEASE OF GUARANTOR.
The Parent Guarantor shall be released from all of its obligations
under the Guaranty and under this Indenture if:
(a) (i) the Company or the Parent Guarantor has transferred all or
substantially all of its properties and assets to any Person (whether by
sale, merger or consolidation or otherwise), or has merged into or
consolidated with another Person, pursuant to a transaction in compliance
with this Indenture;
(ii) the corporation to whom all or substantially all of the
properties and assets of the Company or the Parent Guarantor are
transferred, or whom the Company or the Parent Guarantor has merged
into or consolidated with, has expressly assumed, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Parent
Guarantor under the Guaranty and this Indenture;
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(iii) immediately before and immediately after giving effect
to such transaction, no Event of Default, and no event or condition
which, after notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing; and
(iv) the Parent Guarantor has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and such supplemental indenture
comply with this Section 12.3 and that all conditions precedent herein
provided for relating to such transaction have been complied with; or
(b) the Parent Guarantor liquidates (other than pursuant to any
Bankruptcy Law) and complies, if applicable, with the provisions of this
Indenture; PROVIDED that if a Person and its Affiliates, if any, shall
acquire all or substantially all of the assets of the Parent Guarantor upon
such liquidation the Parent Guarantor shall liquidate only if:
(i) the Person and each such Affiliate (or the common corporate
parent of such Person and its Affiliates, if such Person and its
Affiliates are wholly owned by such parent) which acquire or will
acquire all or a portion of the assets of the Parent Guarantor shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of the Parent Guarantor, under the Guaranty and this
Indenture and such Person or any of such Affiliates (or such parent)
shall be a corporation organized and existing under the laws of the
United States or any State thereof or the District of Columbia;
(ii) immediately after giving effect to such transaction, no
Event of Default, and no event or condition which, after notice or
lapse of time or both, would become an Event of Default, shall have
occurred and be continuing; and
(iii) the Parent Guarantor has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
such liquidation and such supplemental indenture comply with this
Section 12.3 and that all conditions precedent herein provided for
relating to such transaction have been complied with; or
(c) the Company ceases for any reason to be a "wholly owned
subsidiary" (as such term is defined in Rule 1-02(aa) of the Regulation S-X
promulgated by the Commission) of the Parent Guarantor.
Upon any assumption of the Guaranty by any Person pursuant to this
Section, such Person may exercise every right and power of the Parent Guarantor
under this Indenture with the same effect as if such successor corporation had
been named as the Parent Guarantor herein, and all the obligations of the Parent
Guarantor, hereunder and under such Parent Guaranty and the Indenture shall
terminate.
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SECTION 12.5 WHEN THE GUARANTOR MAY MERGE, ETC.
The Parent Guarantor shall not consolidate with or merge with or into
any other Person or, directly or indirectly, sell, lease or convey all or
substantially all of its assets (computed on a consolidated basis), whether in a
single transaction or a series of related transactions, to another Person,
unless:
(a) either the Parent Guarantor shall be the continuing person, or
the Person (if other than the Parent Guarantor) formed by such
consolidation or into which the Parent Guarantor is merged or to which the
assets of the Parent Guarantor are transferred shall be a corporation
organized and validly existing under the laws of the United States or any
State thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, all the obligations of the Parent
Guarantor under the Guaranty and this Indenture;
(b) immediately after giving effect to such transaction, no Event of
Default, and no event or condition which, after notice or lapse of time or
both, would become an Event of Default, shall have occurred and be
continuing; and
(c) the Parent Guarantor has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, sale, conveyance or lease and such supplemental
indenture comply with this Section and that all conditions precedent herein
provided for relating to such transaction have been complied with.
Upon any consolidation or merger, or any sale, conveyance or lease of
all or substantially all of the assets of the Parent Guarantor, in accordance
with this Section, the successor corporation formed by such consolidation or
into which the Parent Guarantor is merged or to which such transfer is made
shall succeed to, and be substituted for, and may exercise every right and power
of, the Parent Guarantor under this Indenture with the same effect as if such
successor corporation had been named as the Parent Guarantor herein, and all the
obligations of the predecessor Parent Guarantor hereunder and under the Guaranty
and the Indenture shall terminate.
SECTION 12.6 CERTAIN BANKRUPTCY EVENTS.
The Parent Guarantor hereby covenants and agrees that in the event of
the insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Company, the Parent 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.
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ARTICLE XIII
SUBORDINATION OF SECURITIES
SECTION 13.1 SECURITIES SUBORDINATED TO SENIOR DEBT.
The Company, for itself, its successors and assigns, covenants and
agrees, and each Holder of any Securities, by his or its acceptance thereof,
likewise covenants and agrees, that the indebtedness evidenced by the Securities
(and any renewals or extensions thereof), including any interest payable on
Contingent Payments, and requirements that the Company make repurchases or
redemptions shall be subordinate and subject in right of payment, to the extent
and in the manner hereinafter set forth, to the prior payment in full in cash or
Cash Equivalents of all Obligations in respect of Senior Debt, and that each
holder of Senior Debt whether now outstanding or hereafter created, incurred,
assumed or guaranteed shall be deemed to have acquired Senior Debt in reliance
upon the covenants and provisions contained in this Indenture and the
Securities.
SECTION 13.2 SECURITIES SUBORDINATED TO PRIOR PAYMENT OF ALL SENIOR
DEBT ON DISSOLUTION, LIQUIDATION, REORGANIZATION, ETC. OF THE COMPANY.
Upon any payment or distribution of the assets of the Company of any
kind or character, whether in cash, property or securities (including any
Collateral at any time securing the Securities) to creditors upon any
dissolution, winding-up, total or partial liquidation, reorganization, or
recapitalization or readjustment of the Company or its property or securities
(whether voluntary or involuntary, or in bankruptcy, insolvency, reorganization,
liquidation, or receivership proceedings, or upon an assignment for the benefit
of creditors, or any other marshalling of the assets and liabilities of the
Company or otherwise), then in such event,
(i) all holders of Senior Debt shall first be entitled to
receive payment in full, in cash or Cash Equivalents, of all Obligations in
respect of Senior Debt before any payment is made on account of
Obligations, including, without limitation, the Contingent Payments, in
respect of the Securities;
(ii) any payment or distribution of assets of the Company, of any
kind or character, whether in cash, property or securities (other than, to
the extent issued in exchange for the Securities, Qualified Capital Stock
of the Company and debt securities of the Company that are subordinated to
the Senior Debt (and any securities issued in exchange for Senior Debt) to
the same extent the Securities are subordinated to Senior Debt (and any
securities issued in exchange for Senior Debt)), to which the Holders, or
the Trustee on behalf of the Holders, would be entitled except for the
provisions of this Article XIII, shall be paid or delivered by any debtor
or other person making such payment or distribution, directly to the
holders of the Senior Debt or their representative or representatives, or
to the trustee or trustees under any indenture pursuant to which any
instruments evidencing any of such Senior Debt may have been issued,
ratably according to the aggregate amounts remaining
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unpaid on account of the Senior Debt held or represented by each, for
application to payment of all Obligations in respect of Senior Debt
remaining unpaid, to the extent necessary to pay all Obligations in respect
of Senior Debt in full, in cash or Cash Equivalents, after giving effect to
any concurrent payment or distribution to the holders of such Senior Debt;
and
(iii) in the event that, notwithstanding the foregoing
provisions of this Section 13.2, any payment or distribution of assets of
the Company, whether in cash, property or securities (other than, to the
extent issued in exchange for the Securities, Qualified Capital Stock of
the Company and debt securities of the Company that are subordinated to the
Senior Debt (and any securities issued in exchange for Senior Debt) to the
same extent the Securities are subordinated to Senior Debt (and any
securities issued in exchange for Senior Debt)), shall be received by the
Trustee or the Holders before all Obligations in respect of Senior Debt are
paid in full, such payment or distribution (subject to the provisions of
Sections 13.6 and 13.7) shall be held in trust for the benefit of, and
shall be immediately paid or delivered by the Trustee or such Holders, as
the case may be, to the holders of Senior Debt remaining unpaid or
unprovided for, or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing any of such Senior Debt may have been issued, ratably according
to the aggregate amounts remaining unpaid on account of the Obligations in
respect of Senior Debt held or represented by each, for application to the
payment of all Obligations in respect of Senior Debt remaining unpaid, to
the extent necessary to pay all Obligations in respect of Senior Debt in
full after giving effect to any concurrent payment or distribution to the
holders of such Senior Debt.
Without limiting the foregoing, the Company shall give prompt written
notice to the Trustee and any Paying Agent of any action or plan of dissolution,
winding-up, liquidation or reorganization of the Company or any other facts
known to it which would cause a payment to violate this Article XIII.
Upon any payment or distribution of assets of the Company referred to
in this Article XIII, the Trustee, subject to the provisions of Section 8.1 and
Section 8.2, and the Holders shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such dissolution,
winding-up, liquidation or reorganization proceeding is pending, or a
certificate of the liquidating trustee or agent or other person making any
distribution to the Trustee or to the Holders, for the purpose of ascertaining
the persons entitled to participate in such distribution, the holders of the
Senior Debt and other Debt of the Company, the amount thereof payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XIII.
SECTION 13.3 HOLDERS OF SECURITIES TO BE SUBROGATED TO RIGHT OF
HOLDERS OF SENIOR DEBT.
Subject to the payment in full of all Obligations in respect of Senior
Debt in cash or Cash Equivalents, the Holders of the Securities shall be
subrogated (equally and
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ratably with the holders of all Senior Subordinated Debt) to the rights of
the holders of Senior Debt to receive payments or distributions of assets of
the Company applicable to the Senior Debt until the accrued and unpaid
Contingent Payments shall be paid in full, and for purposes of such
subrogation, no payments or distributions to the holders of Senior Debt of
assets, whether in cash, property or securities, distributable to the holders
of Senior Debt under the provisions hereof to which the Holders would be
entitled except for the provisions of this Article XIII, and no payment over
pursuant to the provisions of this Article XIII to the holders of Senior Debt
by the Holders shall, as between the Company, its creditors (other than the
holders of Senior Debt) and the Holders, be deemed to be a payment by the
Company to or on account of Senior Debt, it being understood that the
provisions of this Article XIII are, and are intended, solely for the purpose
of defining the relative rights of the Holders, on the one hand, and the
holders of Senior Debt, on the other hand.
SECTION 13.4 OBLIGATIONS OF THE COMPANY UNCONDITIONAL.
Nothing contained in this Article XIII or elsewhere in this Indenture
or in any Security (but subject to the provisions of Section 3.2) is intended to
or shall impair or affect, as between the Company, its creditors (other than the
holders of Senior Debt) and the Holders, the obligation of the Company, which is
absolute and unconditional, to pay to the Holders Contingent Payments on the
Securities, as and when the same shall become due and payable in accordance with
their terms, or to affect the relative rights of the Holders and creditors of
the Company other than the holders of Senior Debt, nor shall anything herein or
therein prevent or limit the Trustee or any Holder from exercising all remedies
otherwise permitted by applicable law upon the happening of an Event of Default
hereunder, subject to the provisions of Article VII hereof and to the rights, if
any, under this Article XIII of the holders of Senior Debt in respect of assets,
whether in cash, property or securities, of the Company received upon the
exercise of any such remedy. Nothing contained in this Article XIII or
elsewhere in this Indenture or in the Securities, shall, except during the
pendency of any dissolution, winding-up, total or partial liquidation,
reorganization, recapitalization or readjustment of the Company or its
securities (whether voluntary or involuntary, or in bankruptcy, insolvency,
reorganization, liquidation or receivership proceedings, or upon an assignment
for the benefit of creditors, or any other marshalling of assets and liabilities
of the Company or otherwise), affect the obligation of the Company to make, or
prevent the Company from making, at any time (except under the circumstances
described in Section 13.5 hereof), payment of Contingent Payments on the
Securities.
SECTION 13.5 COMPANY NOT TO MAKE PAYMENTS WITH RESPECT TO SECURITIES
IN CERTAIN CIRCUMSTANCES.
(a) Upon the maturity of any Senior Debt by lapse of time,
acceleration or otherwise, but subject to the provisions of Section 3.2, all
principal thereof and interest thereon and all other Obligations in respect
thereof shall first be paid in full in cash or Cash Equivalents, or such payment
duly provided for, and, in the case of Senior Debt in respect of letters of
credit to the extent they have not been drawn upon, be fully secured by cash
collateral, before any payment is made on account of Obligations in respect of
the Securities in cash or property or to acquire or repurchase any of the
Securities.
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(b) Upon the happening of a default or an event of default (as such
term is used in the documentation governing Senior Debt) in respect of the
payment of any Obligations in respect of Senior Debt ("Payment Default"), but
subject to the provisions of Section 3.2, then, unless and until such default or
event of default shall have been cured or waived by the holders of such Senior
Debt or shall have ceased to exist, no payment shall be made by or on behalf of
the Company with respect to Obligations, including in respect of the Securities
in cash or property or to acquire or repurchase any of the Securities.
(c) Upon the happening of a default or an event of default with
respect to any Senior Debt as such terms are used in the documentation governing
Senior Debt), other than a default in payment of the principal of, premium, if
any, or interest on the Senior Debt, or if an event of default would result upon
any payment with respect to the Securities, but subject to the provisions of
Section 3.2, upon written notice, which notice shall specify that such notice
constitutes a payment blockage notice pursuant to and for purposes of, this
Section 13.5(c), of the default given to the Company and the Trustee by holders
of Designated Senior Debt representing a majority of the principal amount
thereof or their representative, then, unless and until such default or event of
default has been cured or waived or otherwise has ceased to exist, no payment
may be made by or no behalf of the Company with respect to Obligations in
respect of the Securities in cash or property, or to acquire or repurchase any
of the Securities for cash or property. Notwithstanding the foregoing, unless
the Designated Senior Debt in respect of which such default or event of default
exists has been declared due and payable in its entirety, in the case of a
default, within 30 days and, in the case of an event of default, within 180 days
after the date written notice of such default or event of default is delivered
as set forth above (the "Payment Blockage Period"), and such declaration has not
been rescinded, the Company is required (subject to the provisions of Section
13.2 and Sections 13.5(a) and (b), to the extent then applicable) then to pay
all sums not paid to the Holders of the Securities during the Payment Blockage
Period due to the foregoing prohibitions and to resume all other payments as and
when due on the Securities. Any number of such notices may be given; PROVIDED,
HOWEVER, that (i) during any 360 consecutive days, the aggregate of all Payment
Blockage Periods shall not exceed 180 days, (ii) there shall be a period of at
least 180 consecutive days during each continuous 360-day period when no Payment
Blockage Period is in effect, and (iii) any default or event of default that
resulted in the commencement of a 180-day period may not be the basis for the
commencement of any other 180-day period.
In the event that, notwithstanding the foregoing provisions of this
Section 13.5, any payment or distribution of assets of the Company, whether in
cash, property or securities (other than, to the extent issued in exchange for
the Securities, Qualified Capital Stock of the Company and debt securities of
the Company that are subordinated to the Senior Debt (and any securities issued
in exchange for Senior Debt) to the same extent the Securities are subordinated
to Senior Debt (and any securities issued in exchange for Senior Debt)), shall
be received by the Trustee or the Holders at a time when such payment or
distribution should not have been made because of this Section 13.5, such
payment or distribution (subject to the provisions of Sections 13.6 and 13.7)
shall be held in trust for the benefit of the holders of, and shall be paid or
delivered by the Trustee or such Holders, as the case may be, to the holders of
the Senior Debt remaining unpaid or
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unprovided for or their representative or representatives, or to the trustee
or trustees under any indenture pursuant to which any instruments evidencing
any of such Senior Debt may have been issued, ratably according to the
aggregate amounts remaining unpaid on account of the Senior Debt held or
represented by each, for application to the payment of all Obligations in
respect of Senior Debt remaining unpaid, to the extent necessary to pay all
Obligations in respect of Senior Debt in full, in cash or Cash Equivalents,
after giving effect to any concurrent payment or distribution to the holders
of such Obligations in respect of Senior Debt.
SECTION 13.6 TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT PROHIBITED IN
ABSENCE OF NOTICE.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or
by the Trustee, unless and until the Trustee shall have received written
notice thereof at its Corporate Trust Office from the Company or any
Guarantor or from one or more holders of Senior Debt or from any
representative thereof or trustee therefor, and, prior to the receipt of any
such written notice, the Trustee, subject to the provisions of Sections 8.1
and 8.2 hereof, shall be entitled to assume conclusively that no such facts
exist, and shall be fully protected in making any such payment in any such
event.
The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself or itself to be a holder of
Senior Debt (or a trustee on behalf of such holder) to establish that such
notice has been given by a holder of Senior Debt or a trustee on behalf of
any such holder. In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a
holder of Senior Debt to participate in any payment or distribution pursuant
to this Article XIII, the Trustee may request such Person to furnish evidence
to the reasonable satisfaction of the Trustee as to the amount of Senior Debt
held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to
the rights of such Person under this Article XIII, and, if such evidence is
not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.
SECTION 13.7 APPLICATION BY TRUSTEE OF MONIES DEPOSITED WITH IT.
Any deposit of monies by the Company with the Trustee or any Paying
Agent (whether or not in trust) for the payment of Contingent Payments on any
Securities shall be subject to the provisions of Sections 13.1, 13.2, 13.3
and 13.5 hereof, except that, if prior to the opening of business on the
second Business Day next prior to the date on which, by the terms of this
Indenture, any such monies may become payable for any purpose, the Trustee
shall not have received with respect to such monies the notice provided for
in Section 13.6, then the Trustee shall have the full power and authority to
receive such monies and to apply such monies to the purpose for which they
were received, and shall not be affected by any notice to the contrary which
may be received by it on or after such date; without, however,
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limiting any rights that holders of Senior Debt may have to recover any such
payments from the Holders in accordance with the provisions of this Article
XIII.
SECTION 13.8 SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS
OF COMPANY OR HOLDERS OF SENIOR DEBT.
No right of any present or future holder of any Senior Debt to
enforce subordination, as herein provided, shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the
Company or by any act or failure to act, in good faith, by any such holder,
or by any non-compliance by the Company with the terms, provisions and
covenants of this Indenture, the Securities, or any other agreement or
instrument regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Each Holder of any Securities, by his acceptance thereof,
undertakes and agrees for the benefit of each holder of Senior Debt to
execute, verify, deliver and file any proofs of claim, consents, assignments
or other instruments that any holder of Senior Debt may at any time require
in order to prove and realize upon any rights or claims pertaining to the
Securities and to effectuate the full benefit of the subordination contained
in this Article XIII, and upon failure of any Holder of any Security so to
do, any such holder of Senior Debt (or a trustee or representative on its
behalf) shall be deemed to be irrevocably appointed the agent and
attorney-in-fact of the Holder of such Security to execute, verify, deliver
and file any such proofs of claim, consents, assignments or other instrument.
Without limiting the effect of the first paragraph of this Section
13.8, any holder of Senior Debt may at any time and from time to time without
the consent of or notice to any Holder, without impairing or releasing any of
the rights of any such holder of Senior Debt hereunder, upon or without any
terms or conditions and in whole or in part:
(1) change the manner, place or terms of payment, or change or
extend the time of payment of or increase the amount of, renew or alter,
any Senior Debt or any other liability of the Company to such holder, any
security therefor, or any liability incurred directly or indirectly in
respect thereof, and the provisions hereof shall apply to the Senior Debt
of such holder as so changed, extended, renewed or altered;
(2) sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or however securing,
any Senior Debt or any other liability of the Company to such holder or any
other liabilities incurred directly or indirectly in respect thereof or
hereof, or any offset against it;
(3) exercise or refrain from exercising any rights or remedies
against the Company or others or otherwise act or refrain from acting or
for any reason fail to file, record or otherwise perfect any security
interest in or lien on any property of the Company or any other Person;
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(4) settle or compromise any Senior Debt or any other liability
of the Company to such holder or any security therefor, or any liability
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Company to creditors of the Company
other than such holder; and
(5) apply any sums by whomsoever paid and however realized to
any liability or liabilities of the Company to such holder (other than in
respect of the Securities or any liability or liabilities in respect of
Senior Subordinated Debt) regardless of what liability or liabilities of
the Company to such holder remain unpaid.
SECTION 13.9 HOLDERS OF SECURITIES AUTHORIZE TRUSTEE TO EFFECTUATE
SUBORDINATION OF SECURITIES.
Without purporting to limit the authority of the Trustee as may be
appropriate in other circumstances, each Holder by his or its acceptance
thereof irrevocably authorizes and expressly directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate
the subordination provided in this Article XIII and appoints the Trustee his
attorney-in-fact for such purpose, including, in the event of any
dissolution, winding-up or liquidation or reorganization under Bankruptcy Law
of the Company (whether in bankruptcy, insolvency or receivership proceedings
or otherwise), the timely filing of a claim for the unpaid balance of its or
his Securities in the form required in such proceedings and the causing of
such claim to be approved. If the Trustee does not file a claim or proof of
debt substantially in the form required in such proceeding at least one day
before the expiration of the time to file such claims or proofs, then any of
the holders of Senior Debt have the right to file such proof of claim or debt
on behalf of the Holders, and to take any action with respect to such proof
of claim or debt permitted to be taken by the holders of Senior Debt pursuant
to this Indenture, the Securities or by law; PROVIDED, HOWEVER, that no such
action by holders of Senior Debt shall in any way limit or affect the rights
of the Holders or the Trustee hereunder or under the Securities or applicable
law.
SECTION 13.10 RIGHT OF TRUSTEE TO HOLD SENIOR DEBT; PRESERVATION OF
TRUSTEE'S RIGHTS.
The Trustee, in its individual capacity, shall be entitled to all
of the rights set forth in this Article Thirteen in respect of any Senior
Debt at any time held by it to the same extent as any other holder of Senior
Debt, and nothing in this Indenture shall be construed to deprive the Trustee
of any of its rights as such holder. Nothing in this Article XIII shall
apply to claims of, or payment to, the Trustee under or pursuant to Section
8.7.
SECTION 13.11 ARTICLE XIII NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment on account of Contingent Payments on
the Securities by reason by any provision in this Article XIII shall not be
construed as preventing the occurrence of an Event of Default under Section
7.1 hereof.
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SECTION 13.12 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR DEBT.
The provisions of this Indenture are not intended to create, nor
shall they create, any trust or fiduciary relationship between the Trustee
and the holders of Senior Debt, nor shall any implied covenants or
obligations with respect to holders of Senior Debt (other than those
expressly set forth herein) be read into this Indenture against the Trustee.
Accordingly, notwithstanding any provision of this Article XIII to the
contrary, the Trustee shall not be liable to any such holders if it shall, in
good faith, inadvertently pay over or distribute to Holders or the Company or
any other person monies or assets to which any holders of Senior Debt shall
be entitled by virtue of this Article XIII or otherwise.
SECTION 13.13 TRUST MONIES NOT SUBORDINATED.
Notwithstanding anything contained herein to the contrary and
subject to the prior satisfaction of all of the conditions set forth in
Article IX, payments from money held in trust under Article IX by the Trustee
for the payment of Contingent Payments on the Securities shall not be
subordinated to the prior payment of any Senior Debt of the Company or
subject to the restrictions set forth in this Article Thirteen and none of
the Holders shall be obligated to pay over any such amount to the Company or
any holder of Senior Debt of the Company or any other creditor of the
Company, in each case so long as (and only so long as) at the time the
respective amounts were deposited pursuant to Article IX, such amounts would
have been permitted to be paid directly in respect of Obligations in respect
of the Securities in accordance with the provisions (other than this Section
13.13) of this Article XIII.
ARTICLE XIV
SUBORDINATION OF GUARANTEE
SECTION 14.1 GUARANTEE SUBORDINATED TO GUARANTOR SENIOR DEBT.
Each Guarantor, for itself, its successors and assigns, covenants
and agrees, and each Holder of any Securities, by his or its acceptance
thereof, likewise covenants and agrees, that payments by such Guarantor in
respect of the Guaranty shall be subordinate and subject in right of payment,
to the extent and in the manner hereinafter set forth, to the prior payment
in full, in cash or Cash Equivalents, of all Obligations in respect of
Guarantor Senior Debt, and that each holder of Guarantor Senior Debt whether
now outstanding or hereafter created, incurred, assumed or guaranteed shall
be deemed to have acquired Guarantor Senior Debt in reliance upon the
covenants and provisions contained in this Indenture and the Securities. For
purposes of this Article XIV, "payment in respect of the Guaranty" means any
payment made by or on behalf of a Guarantor in respect of the Guaranty,
including, but not limited to, any payment of Contingent Payments on the
Securities in cash or property or to acquire or repurchase any of the
Securities.
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SECTION 14.2 GUARANTEE SUBORDINATED TO PRIOR PAYMENT OF ALL GUARANTOR
SENIOR DEBT ON DISSOLUTION, LIQUIDATION, REORGANIZATION, ETC. OF THE GUARANTOR.
Upon any payment or distribution of the assets of any Guarantor of
any kind or character, whether in cash, property or securities (including any
Collateral at any time securing the Securities) to creditors upon any
dissolution, or winding-up, or total or partial liquidation, or
reorganization, or recapitalization or readjustment of such Guarantor or its
property or securities (whether voluntary or involuntary, or in bankruptcy,
insolvency, reorganization, liquidation, or receivership proceedings, or upon
an assignment for the benefit of creditors, or any other marshalling of the
assets and liabilities of such Guarantor or otherwise), then in such event,
(i) the holders of all Guarantor Senior Debt shall first be
entitled to receive payment in full, in cash or Cash Equivalents, before
any payment of Obligations in respect of the Guaranty are made;
(ii) any payment or distribution of assets of any Guarantor of
any kind or character, whether in cash, property or securities (other than,
to the extent issued in exchange for the Securities, Qualified Capital
Stock of such Guarantor and debt securities that are subordinated to the
Guarantor Senior Debt (and any Securities issued in exchange for Guarantor
Senior Debt) to the same extent the Securities are subordinated to the
Guarantor Senior Debt (and any securities issued in exchange for Guarantor
Senior Debt)), to which the Holders, or the Trustee on behalf of the
Holders, would be entitled except for the provisions of this Article XIV,
shall be paid or delivered by any debtor or other person making such
payment or distribution, directly to the holders of the Guarantor Senior
Debt or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing
any of such Guarantor Senior Debt may have been issued, ratably according
to the aggregate amounts remaining unpaid on account of the Guarantor
Senior Debt held or represented by each, for application to payment of all
Obligations in respect of Guarantor Senior Debt remaining unpaid, to the
extent necessary to pay all Obligations in respect of Guarantor Senior Debt
in full, in cash or Cash Equivalents, after giving effect to any concurrent
payment or distribution to the holders of such Guarantor Senior Debt; and
(iii) in the event that, notwithstanding the foregoing
provisions of this Section 14.2, any payment or distribution of assets of
any Guarantor of any kind or character, whether in cash, property or
securities (other than, to the extent issued in exchange for the
Securities, Qualified Capital Stock of such Guarantor and debt securities
that are subordinated to the Guarantor Senior Debt (and any Securities
issued in exchange for Guarantor Senior Debt) to the same extent the
Securities are subordinated to the Guarantor Senior Debt (and any
securities issued in exchange for Guarantor Senior Debt)), shall be
received by the Trustee or the Holders before all Obligations in respect of
Guarantor Senior Debt are paid in full, in cash or Cash Equivalents, such
payment or distribution (subject to the provisions of Sections 14.6 and
14.7) shall be held in trust for the benefit of, and shall be immediately
paid or
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delivered by the Trustee or such Holders, as the case may be, to the
holders of Guarantor Senior Debt remaining unpaid or unprovided for, or
their representative or representatives, or to the trustee or trustees
under any indenture pursuant to which any instruments evidencing any of
such Guarantor Senior Debt may have been issued, ratably according to the
aggregate amounts remaining unpaid on account of the Obligations in respect
of Guarantor Senior Debt held or represented by each, for application to
the payment of all Obligations in respect of Guarantor Senior Debt
remaining unpaid, to the extent necessary to pay all Obligations in respect
of Guarantor Senior Debt in full after giving effect to any concurrent
payment or distribution to the holders of such Guarantor Senior Debt.
Without limiting the foregoing, each Guarantor shall give prompt
notice to the Trustee and any Paying Agent of any dissolution, winding-up,
liquidation or reorganization of such Guarantor or any other facts known to
it which would cause a payment to violate this Article XIV.
Upon any payment or distribution of assets of any Guarantor
referred to in this Article XIV, the Trustee, subject to the provisions of
Section 8.1 and Section 8.2, and the Holders shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceeding is pending,
or a certificate of the liquidating trustee or agent or other person making
any distribution to the Trustee or to the Holders, for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Guarantor Senior Debt and other Debt of such Guarantor, the
amount thereof payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article XIV.
SECTION 14.3 HOLDERS OF SECURITIES TO BE SUBROGATED TO RIGHT OF
HOLDERS OF GUARANTOR SENIOR DEBT.
Subject to the payment in full of all Obligations in respect of
Guarantor Senior Debt in cash or Cash Equivalents, the Holders of the
Securities shall be subrogated (equally and ratably with the holders of all
Debt of the Guarantor that, by its terms, ranks PARI PASSU with the Guaranty)
to the rights of the holders of Guarantor Senior Debt to receive payments or
distributions of assets of each Guarantor applicable to the Guarantor Senior
Debt until the Obligations in respect of the Securities shall be paid in
full, and for purposes of such subrogation, no payments or distributions to
the holders of Guarantor Senior Debt of assets, whether in cash, property or
securities, distributable to the holders of Guarantor Senior Debt under the
provisions hereof to which the Holders would be entitled except for the
provisions of this Article XIV, and no payment over pursuant to the
provisions of this Article XIV to the holders of Guarantor Senior Debt by the
Holders shall, as between such Guarantor, its creditors (other than the
holders of Guarantor Senior Debt) and the Holders, be deemed to be a payment
by such Guarantor to or on account of Guarantor Senior Debt, it being
understood that the provisions of this Article XIV are, and are intended,
solely for the purpose of defining the relative rights of the Holders, on the
one hand, and the holders of Guarantor Senior Debt, on the other hand.
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SECTION 14.4 OBLIGATIONS OF THE GUARANTOR UNCONDITIONAL.
Nothing contained in this Article XIV or elsewhere in this Indenture
or in any Security (but subject to the provisions of Section 3.2) is intended to
or shall impair or affect, as between each Guarantor, its creditors (other than
the holders of Guarantor Senior Debt) and the Holders, the obligation of such
Guarantor under the Guaranty, or to affect the relative rights of the Holders
and creditors of such Guarantor, other than the holders of Guarantor Senior
Debt, nor shall anything herein or therein prevent or limit the Trustee or any
Holder from exercising all remedies otherwise permitted by applicable law upon
the happening of an Event of Default hereunder, subject to the provisions of
Article VII hereof and to the rights, if any, under this Article XIV of the
holders of Guarantor Senior Debt in respect of assets, whether in cash, property
or securities, of the Guarantor, received upon the exercise of any such remedy.
Nothing contained in this Article XIV or elsewhere in this Indenture or in the
Securities, shall, except during the pendency of any dissolution, winding-up,
total or partial liquidation, reorganization, recapitalization or readjustment
of such Guarantor or its securities (whether voluntary or involuntary, or in
bankruptcy, insolvency, reorganization, liquidation or receivership proceedings,
or upon an assignment for the benefit of creditors, or any other marshalling of
assets and liabilities of the Guarantor or otherwise), affect the obligation of
such Guarantor to make, or prevent such Guarantor from making, at any time
(except under the circumstances described in Section 14.5 hereof), any payment
in respect of the Guaranty.
SECTION 14.5 GUARANTOR NOT TO MAKE PAYMENTS IN RESPECT OF THE
GUARANTY IN CERTAIN CIRCUMSTANCES.
(a) Upon the maturity of any Guarantor Senior Debt by lapse of time,
acceleration or otherwise, but subject to the provisions of Section 3.2, all
principal thereof and interest thereon and all other Obligations in respect
thereof shall first be paid in full in cash or Cash Equivalents, or such payment
duly provided for, and, in the case of Guarantor Senior Debt in respect of
letters of credit to the extent they have not been drawn upon, be fully secured
by cash collateral, before any payment on account of Obligations in respect of
the Guaranty are made.
(b) Upon the happening of a default or an event of default (as such
term is used in such instrument) in respect of the payment of any Guarantor
Senior Debt ("Payment Default"), but subject to the provisions of Section 3.2,
then, unless and until such default shall have been cured or waived by the
holders of such Guarantor Senior Debt or shall have ceased to exist, no payment
in respect of the Guaranty shall be made.
(c) No payment in respect of the Guaranty may be made during any
Payment Blockage period. Notwithstanding the foregoing, unless the Designated
Senior Debt or Guarantor Senior Debt in respect of which such default or event
of default exists has been declared due and payable in its entirety during the
Payment Blockage Period, and such declaration has not been rescinded, the
Guarantors are required (subject to the provisions of Section 14.2 and Sections
14.5(a) and (b), to the extent then applicable) then to pay all sums
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not paid to the Holders of the Securities during the Payment
Blockage Period due to the foregoing prohibitions and to resume all
other payments as and when due on the Securities.
SECTION 14.6 TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT PROHIBITED IN
ABSENCE OF NOTICE.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee, unless and until the Trustee shall have received written notice
thereof at its Corporate Trust Office from the Company or any Guarantor or from
one or more holders of Guarantor Senior Debt or from any representative thereof
or trustee therefor, and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of Sections 8.1 and 8.2 hereof, shall be
entitled to assume conclusively that no such facts exist, and shall be fully
protected in making any such payment in any such event.
The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself or itself to be a holder of
Guarantor Senior Debt (or a trustee on behalf of such holder) to establish that
such notice has been given by a holder of Guarantor Senior Debt or a trustee on
behalf of any such holder. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person
as a holder of Guarantor Senior Debt to participate in any payment or
distribution pursuant to this Article XIV, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Guarantor Senior Debt held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article XIV, and, if
such evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 14.7 APPLICATION BY TRUSTEE OF MONIES DEPOSITED WITH IT.
Any deposit of monies by any Guarantor with the Trustee or any Paying
Agent (whether or not in trust) for any payment in respect of the Guaranty shall
be subject to the provisions of Sections 14.1, 14.2, 14.3 and 14.5 hereof except
that, if prior to the opening of business on the second Business Day next prior
to the date on which, by the terms of this Indenture, any such monies may become
payable for any purpose the Trustee shall not have received with respect to such
monies the notice provided for in Section 14.6, then the Trustee shall have the
full power and authority to receive such monies and to apply such monies to the
purpose for which they were received, and shall not be affected by any notice to
the contrary which may be received by it on or after such date; without,
however, limiting any rights that holders of Guarantor Senior Debt may have to
recover any such payments from the Holders in accordance with the provisions of
this Article XIV.
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SECTION 14.8 SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS
OF A GUARANTOR OR HOLDERS OF GUARANTOR SENIOR DEBT.
No right of any present or future holder of any Guarantor Senior
Debt to enforce subordination, as herein provided, shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of any
Guarantor or by any act or failure to act, in good faith, by any such holder,
or by any non-compliance by such Guarantor with the terms, provisions and
covenants of this Indenture, the Securities, or any other agreement or
instrument regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Each Holder of any Securities, by his acceptance thereof, undertakes
and agrees for the benefit of each holder of Guarantor Senior Debt to
execute, verify, deliver and file any proofs of claim, consents, assignments
or other instruments that any holder of Guarantor Senior Debt may at any time
require in order to prove and realize upon any rights or claims pertaining to
the Guaranty and to effectuate the full benefit of the subordination
contained in this Article XIV; and upon failure of any Holder of any Security
so to do, any such holder of Guarantor Senior Debt (or a trustee or
representative on its behalf) shall be deemed to be irrevocably appointed the
agent and attorney-in-fact of the Holder of such Security to execute, verify,
deliver and file any such proofs of claim, consents, assignments or other
instrument.
Without limiting the effect of the first paragraph of this Section
14.8, any holder of Guarantor Senior Debt may at any time and from time to
time without the consent of or notice to any Holder, without impairing or
releasing any of the rights of any such holder of Guarantor Senior Debt
hereunder, upon or without any terms or conditions and in whole or in part:
(1) change the manner, place or terms of payment, or change or
extend the time of payment of or increase the amount of, renew or alter,
any Guarantor Senior Debt or any other liability of the Guarantors to such
holder, any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the provisions hereof shall apply to the
Guarantor Senior Debt of such holder as so changed, extended, renewed or
altered;
(2) sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or however securing,
any Guarantor Senior Debt or any other liability of the Guarantors to such
holder or any other liabilities incurred directly or indirectly in respect
thereof or hereof, or any offset against it;
(3) exercise or refrain from exercising any rights or remedies
against the Guarantors or others or otherwise act or refrain from acting or
for any reason fail to file, record or otherwise perfect any security
interest in or lien on any property of the Guarantors or any other Person;
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(4) settle or compromise any Guarantor Senior Debt or any other
liability of the Company to such holder or any security therefor, or any
liability incurred directly or indirectly in respect thereof or hereof, and
may subordinate the payment of all or any part thereof to the payment of
any liability (whether due or not) of the Guarantors to creditors of the
Guarantors other than such holder; and
(5) apply any sums by whomsoever paid and however realized to
any liability or liabilities of the Guarantors to such holder (other than
in respect of the Guaranty or any liability or liabilities which rank PARI
PASSU or junior in right of payment to the Guaranty) regardless of what
liability or liabilities of the Guarantors to such holder remain unpaid.
SECTION 14.9 HOLDERS OF SECURITIES AUTHORIZE TRUSTEE TO EFFECTUATE
SUBORDINATION OF GUARANTY.
Without purporting to limit the authority of the Trustee as may be
appropriate in other circumstances, each Holder by his or its acceptance thereof
irrevocably authorizes and expressly directs the Trustee on his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
provided in this Article XIV and appoints the Trustee his attorney-in-fact for
such purpose, including, in the event of any dissolution, winding-up or
liquidation or reorganization under Bankruptcy Law of any Guarantor (whether in
bankruptcy, insolvency or receivership proceedings or otherwise), the timely
filing of a claim for the unpaid balance of its or his Securities in the form
required in such proceedings and the causing of such claim to be approved. If
the Trustee does not file a claim or proof of debt substantially in the form
required in such proceeding at least one day before the expiration of the time
to file such claims or proofs, then any of the holders of Guarantor Senior Debt
have the right to file such proof of claim or debt on behalf of the Holders, and
to take any action with respect to such proof of claim or debt permitted to be
taken by the holders of Guarantor Senior Debt pursuant to this Indenture, the
Securities or by law; PROVIDED, HOWEVER, that no such action by holders of
Guarantor Senior Debt shall in any way limit or affect the rights of the Holders
or the Trustee hereunder or under the Guaranty or applicable law.
SECTION 14.10 RIGHT OF TRUSTEE TO HOLD GUARANTOR SENIOR DEBT;
PRESERVATION OF TRUSTEE'S RIGHTS.
The Trustee, in its individual capacity, shall be entitled to all of
the rights set forth in this Article XIV in respect of any Guarantor Senior Debt
at any time held by it to the same extent as any other holder of Guarantor
Senior Debt, and nothing in this Indenture shall be construed to deprive the
Trustee of any of its rights as such holder. Nothing in this Article XIV shall
apply to claims of, or payment to, the Trustee under or pursuant to Section 8.7.
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SECTION 14.11 ARTICLE XIV NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment in respect of the Guaranty, by reason by
any provision in this Article XIV shall not be construed as preventing the
occurrence of an Event of Default under Section 7.1 hereof.
SECTION 14.12 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF GUARANTOR SENIOR
DEBT.
The provisions of this Indenture are not intended to create, nor shall
they create, any trust or fiduciary relationship between the Trustee and the
holders of Guarantor Senior Debt, nor shall any implied covenants or obligations
with respect to holders of Guarantor Senior Debt (other than those expressly set
forth herein) be read into this Indenture against the Trustee. Accordingly,
notwithstanding any provision of this Article XIV to the contrary, the Trustee
shall not be liable to any such holders if it shall, in good faith,
inadvertently pay over or distribute to Holders or the Guarantor or any other
person monies or assets to which any holders of Guarantor Senior Debt shall be
entitled by virtue of this Article or otherwise.
SECTION 14.13 TRUST MONIES NOT SUBORDINATED.
Notwithstanding anything contained herein to the contrary and subject
to the prior satisfaction of all of the conditions set forth in Article IX,
payments from money held in trust under Article IX by the Trustee for any
payment in respect of the Guaranty shall not be subordinated to the prior
payment of any Guarantor Senior Debt or subject to the restrictions set forth in
this Article XIV and none of the Holders shall be obligated to pay over any such
amount to the Guarantors or any holder of Guarantor Senior Debt or any other
creditor of the Company, in each case so long as (and only so long as) at the
time the respective amounts were deposited pursuant to Article IX, such amounts
would have been permitted to be paid directly in respect of the Guaranty in
accordance with the provisions (other than this Section 14.13) of this Article
XIV.
ARTICLE XV
MISCELLANEOUS
SECTION 15.1 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.
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SECTION 15.2 NOTICES.
Any notices or other communications to the Company, the Parent
Guarantor 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:
Jazz Casino Company, L.L.C.
512 South Peters
New Orleans, Louisiana 70130
Attention: Corporate Secretary
if to the Parent guarantor:
[Insert JCC Holding's address]
if to the Trustee:
Norwest Bank Minnesota, National Association
Norwest Center
6th and Marquette
Minneapolis, Minnesota 55479
The Company, JCC Holding 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, JCC Holding 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 is
acknowledged, if telecopied; and five 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 Securityholder 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 Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
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SECTION 15.3 COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Guarantors, the Trustee, the Registrar and any
other person shall have the protection of TIA Section 312(c).
SECTION 15.4 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 15.5 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.
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SECTION 15.6 RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
The Trustee may make reasonable rules for action by or at a meeting
of Securityholders. The Paying Agent or Registrar may make reasonable rules
for its functions.
SECTION 15.7 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 Contingent Payments shall
accrue for the intervening period.
SECTION 15.8 GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES 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 THE GUARANTORS 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
SECURITIES, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID
COURTS. THE COMPANY AND THE GUARANTORS IRREVOCABLY WAIVE, TO THE FULLEST
EXTENT THEY MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, 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 15.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company, the Guarantors or any of their
Subsidiaries. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
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SECTION 15.10 NO RECOURSE AGAINST OTHERS.
A direct or indirect stockholder, member, director, officer,
partner, employee, as such, of the Company or the Guarantors or any affiliate
of either (including, without limitation, Harrah's Investor, Harrah's
Management Company, HET and HOC, but excluding the Company and Guarantors
themselves) shall not have any liability for any obligations of the Company
or the Guarantors under the Securities or this Indenture or for any claim
based on, in respect of or by reason of such obligations PROVIDED, HOWEVER,
that nothing contained in this Section 15.10 shall (i) impair the validity of
the Indebtedness evidenced by this Indenture or the Securities, (ii) prevent
the taking of any action permitted by law against the Company or the assets
of the Company or the proceeds of such assets, (iii) in any way affect or
impair the right of the Collateral Agent, the Trustee or any Holder to take
any action permitted by law to realize upon any of the Collateral or any
other security which may secure the Company's or the Guarantors' obligations,
or (iv) be construed to limit in any respect the validity and enforceability
of (x) the Notes Completion Guarantee or the obligations of HET or HOC
thereunder or (y) the Subordination Agreement or the obligations thereunder
of the parties thereto. Notwithstanding the foregoing, nothing in this
Section 15.10 shall be deemed to release the Company or any officer of the
Company from liability under this Indenture, the Notes or any of the
Collateral Documents for its fraudulent actions, intentional material
misrepresentations, gross negligence or willful misconduct or for any of its
obligations or liabilities under any agreement, document, instrument or
certificate executed by such person in its individual capacity in connection
with the transactions contemplated by this Indenture, the Notes and the
Collateral Documents. Each Securityholder by accepting a Security waives and
releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Securities.
SECTION 15.11 SUCCESSORS.
All agreements of the Company and the Guarantors in this Indenture
and the Securities shall bind their successors. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION 15.12 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 15.13 SEVERABILITY.
In case any one or more of the provisions in this Indenture or in
the Securities 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.
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SECTION 15.14 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference 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.
SECTION 15.15 GAMING LAWS.
This Indenture, the Collateral Documents, the Securities and the
security interests thereunder are subject to the Louisiana Economic
Development and Gaming Corporation Act, La. R.S. 27:1 ET SEQ., La. R.S.
27:201 ET SEQ., and the rules and regulations thereunder (the "Gaming
Regulations") (and the Company represents and warrants that all requisite
approvals thereunder have been obtained), and the exercise of remedies under
the Collateral Documents with respect to the Collateral will be subject to
the Gaming Regulations.
SECTION 15.16 TAX TREATMENT.
The Company, each Guarantor, and each Holder of a Security by
acceptance of a Security, agree to (i) treat a Security as evidence of
indebtedness for federal, state and local income tax purposes; (ii) treat all
Contingent Payments with respect to the Security as "contingent" and not as
either "remote or incidental" for purposes of Treasury Regulation Sections
1.1275-4(a)(1) and (5); and (iii) treat all Contingent
Payments as consisting of principal and interest such that each payment of
principal is accompanied by a payment of interest at 16% per annum (compounded
semi-annually) such that the test rate for the Securities for purposes of
Treasury Regulation Section 1.1275-4(c)(4)(ii)(A) will be 16% per annum
(compounded semi-annually).
SECTION 15.17 WAIVERS AND RELEASES.
(a) NO ASSURANCES
(i) As a condition to the effectiveness of the confirmation of
the Plan of Reorganization, HET and HOC (the "Initial Guarantors") have
entered into the HET/JCC Agreement in favor of the Regulating Authority. The
HET/JCC Agreement provides that the Initial Guarantors will provide the
Minimum Payment Guaranty required under the Casino Operating Contract for the
Fiscal Years (as defined in the Casino Operating Contract) ending March 31,
1999 and March 31, 2000, renewable for the four Fiscal Years thereafter
through March 31, 2004, subject to termination or non-renewal in accordance
with the terms of the HET/JCC Agreement. As a prerequisite to maintaining
the effectiveness of the Casino Operating Contract, the Casino Operating
Contract requires that the Company annually provide the Minimum Payment
Guaranty to the Regulating Authority. In entering into the HET/JCC
Agreement, the Initial Guarantors have no obligation to provide a Minimum
Payment Guaranty for the entire term of the Casino Operating Contract, but
rather have agreed only to provide a Minimum Payment Guaranty for the period
and on terms and
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conditions specified therein. The Initial Guarantors have expressly informed
the Trustee on behalf of the Holders that the Initial Guarantors have not
agreed to renew the HET/JCC Agreement beyond March 31, 2004, or in any prior
year where the Initial Guarantors' obligation to furnish a Minimum Payment
Guaranty does not renew by the express terms of Section 1(b) of the HET/JCC
Agreement. The Initial Guarantors have informed the Trustee on behalf of the
Holders that any decision the Initial Guarantors make concerning whether to
renew any Minimum Payment Guaranty or the HET/JCC Agreement will be made in
the Initial Guarantors' sole discretion, acting only in their best interests.
The Trustee on behalf of the Holders hereby acknowledges that (A) the
Initial Guarantors are not obligated to, and have not given any assurances to
the Trustee that the Initial Holders will, renew the HET/JCC Agreement beyond
March 31, 2004, or renew any Minimum Payment Guaranty for any earlier Fiscal
Year in which the Initial Guarantors' obligation to furnish a Minimum Payment
Guaranty does not renew under the express terms of Section 1(b) thereof, (B)
the Initial Guarantors have the right to make any such renewal decision by
considering only their best interests, and (C) the Initial Guarantors need
not consider the interests of any other parties in making any such renewal
decision, notwithstanding that the Initial Guarantors are involved in a
number of capacities in respect of the Company.
(ii) The Trustee and the Holders hereby agree that the Initial
Guarantors, by entering into the HET/JCC Agreement or providing a Minimum
Payment Guaranty or otherwise, are not now, and in the past have not, made
any assurances or guarantees concerning the financial results of the Casino,
nor are or have the Initial Guarantors made any assurances or guarantees that
the Casino will be financially successful or will perform as projected in the
projections and/or feasibility studies included in the Disclosure Statement
distributed in connection with the Plan of Reorganization confirmation
process.
(iii) The Trustee and the Holders hereby agree and acknowledge
that any future representation, warranty, assurance or other guaranty by the
Initial Guarantors or any of their subsidiaries or other affiliates to the
Trustee or the Holders concerning the renewal of any Minimum Payment Guaranty
or the HET/JCC Agreement, the operation of the Casino, the financial results
of the Casino, or any other matter concerning the Casino or the Plan of
Reorganization shall only be effective if set forth in writing and properly
executed by the party to be charged.
(b) RELEASES
(i) The Trustee and the Holders hereby release and waive and
agree not to bring any Claims against the Initial Guarantors, whether a known
Claim or an Unknown Claim, that may arise in any way, in whole or in part,
out of (A) the Initial Guarantors' decision either to renew or not renew any
Minimum Payment Guaranty or the HET/JCC Agreement, (B) the Initial Guarantors
acting in their own best interests in connection with the execution, renewal
or failure to renew any Minimum Payment Guaranty or the HET/JCC Agreement,
and/or (C) any alleged assurance or guarantee by the Initial Guarantors
concerning the operation of the Casino, the financial results of the Casino
or any other matter concerning the Casino or the Plan of Reorganization,
unless such Claim is based
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on a writing (but in any event cannot be based on the HET/JCC Agreement or
any Minimum Payment Guaranty) properly executed by the party against whom
such a claim is being made.
(ii) The Trustee and the Holders also hereby specifically waive
any rights each might have under Louisiana Civil Code Article 3083 and all
other applicable or similar laws to this same or similar effect as the
matters described in Section 15.17(b)(i) hereof, including but not limited
to, any purported right to challenge the validity or seek rescission of, or
to vitiate, the releases set forth above in Section 15.17(b)(i) hereof on the
ground that any information was kept concealed from it and agrees that no
remedy shall be available for any such alleged non-disclosure, and that the
right to rescind the above release on any such ground is hereby expressly
waived.
(c) DEFINITIONS. For the purposes of Sections 15.17(b)(i) and (ii)
hereof:
(i) "Claim" or "Claims" shall mean any action or actions,
cause or causes of action, in law or equity, suits, debts, liens,
liabilities, claims, demands, damages, punitive damages, losses, costs or
expenses, and/or reasonable attorneys' fees of any nature whatsoever.
(ii) "Initial Guarantors" shall include HET, HOC, Harrah's New
Orleans Investment Company, Harrah's Crescent City Investment Company,
Harrah's New Orleans Management Company, their successors and assigns, and
all direct or indirect subsidiaries, and each of their parents, subsidiaries,
officers, directors, corporate representatives, employees, agents, lawyers
and accountants and all persons acting or claiming through, under or in
concert with any of them.
(iii) "Unknown Claim" or "Unknown Claims" means any and all
Claims, including without limitation, any Claim which any of the parties
hereto does not know or even suspect to exist in his, her, or its favor at
the time of the giving of the releases and waivers set forth in Section 15.17
hereof which, if known by him, her or it might have affected his, her or its
decision regarding the releases and waivers. Each of the parties
acknowledges that he, she or it might hereafter discover facts in addition to
or different from those which he, she, or its now knows or believes to be
true with respect to the matters herein released and waived, but each shall
be deemed to have fully, finally and forever released any and all Claims.
(d) NO THIRD PARTY BENEFICIARIES. The Trustee and the Holders
hereby acknowledge that each Minimum Payment Guaranty and the HET/JCC
Agreement provide that there shall be no third party beneficiaries thereof.
The Trustee and the Holders also hereby agree that each shall not claim or
assert it is a third party beneficiary or possesses any derivative claims
under any Minimum Payment Guaranty or the HET/JCC Agreement.
(e) DISCLOSURE. The Trustee on behalf of the Holders hereby
acknowledges that the Initial Guarantors have informed it (i) not to infer or
assume that the Initial Guarantors will renew any Minimum Payment Guaranty or
the HET/JCC Agreement; (ii) that the Initial Guarantors will consider only
their own best interests in determining whether
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to renew any Minimum Payment Guaranty or the HET/JCC Agreement; (iii) that
the Initial Guarantors are involved in a number of different capacities in
connection with the reorganization of Harrah's Jazz Company, the governance
of the Company and JCC Holding, and the operation of the Casino; and (iv)
that there can be no assurance that the Casino will perform as set forth in
the projections and/or feasibility study set forth in the Disclosure
Statement circulated in connection with the Plan of Reorganization.
(f) AMENDMENT OF OBLIGATIONS. Each Minimum Payment Guaranty
provided under the HET/JCC Agreement is provided on the express condition
that the Company shall not amend or modify the Casino Operating Contract in
any way to increase the obligations under any Minimum Payment Guaranty or
adversely affect the Initial Guarantors without the prior written agreement
of the Initial Guarantors, and any such amendment or modification shall have
no force or effect in respect of the Initial Guarantors or any Minimum
Payment Guaranty provided thereby.
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<PAGE>
SIGNATURE
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
JAZZ CASINO COMPANY, L.L.C.,
a Louisiana limited liability company
By:
---------------------------------
Name:
Title:
JCC HOLDING COMPANY,
a Delaware corporation
By:
---------------------------------
Name:
Title:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By:
---------------------------------
Name:
Title:
113
<PAGE>
Exhibit A
[FORM OF NOTE]
JAZZ CASINO COMPANY, L.L.C.
SENIOR SUBORDINATED CONTINGENT NOTES
DUE 2009
No. $
Jazz Casino Company, L.L.C., a Louisiana limited liability company
(hereinafter called the "Company," which term includes any successor entity
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to ____________________________, or registered assigns,
Contingent Payments, consisting of Principal and Interest, as and if required
pursuant to and in accordance with the terms of this Security and the
Indenture, up to an Annual Maximum Contingent Payment Amount of $__________
Dollars.
Interest Payment Dates: ____________ and ____________. The first
Interest Payment Date is __________, 1998 and the final Interest Payment Date
is _______________, 2009.
Record Dates: _______________ and ______________. The first Record
Date is ______________, 1998.
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.
A-1
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Instrument to be duly
executed.
Dated:
JAZZ CASINO COMPANY, L.L.C.
By:
-----------------------------------
Name:
Title:
A-2
<PAGE>
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned
Indenture.
Norwest Bank Minnesota,
National Association
By:
-------------------------------------
Authorized Signatory
Dated:
A-3
<PAGE>
JAZZ CASINO CORPORATION
SENIOR SUBORDINATED CONTINGENT NOTES DUE 2006
THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN THE INTERCREDITOR
AGREEMENT (AS DEFINED IN THE INDENTURE), WHICH INTERCREDITOR AGREEMENT, AMONG
OTHER THINGS, ESTABLISHES CERTAIN RIGHTS WITH RESPECT TO THE SECURITY FOR THIS
NOTE AND THE SHARING OF PROCEEDS THEREOF WITH CERTAIN OTHER SECURED CREDITORS.
COPIES OF SUCH INTERCREDITOR AGREEMENT WILL BE FURNISHED TO ANY HOLDER OF THIS
NOTE UPON REQUEST TO THE COMPANY.
1. INTEREST.
Jazz Casino Company, L.L.C., a Louisiana limited liability company
(the "Company"), promises to pay Contingent Payments, if any are due and payable
pursuant to and in accordance with the terms of this Security and the Indenture,
at the places, on the dates and in the manner provided in this Security and the
Indenture. The first Interest Payment Date shall be _____________, 1998 and the
final Interest Payment Date shall be ___________, 2009. Contingent Payments, if
any, paid or accrued in respect of this Security shall be comprised of, in part,
a payment of Principal and, in part, a payment of Interest thereon at 16% per
annum from the Issue Date (with semi-annual compounding) in accordance with
Section 5.1 of the Indenture.
Contingent Payments on this Security, if any are due and payable
pursuant to and in accordance with the terms of this Security and the Indenture,
will be payable semiannually on ____________ and __________, commencing
______________, 1998, to the person in whose name this Security is registered at
the close of business on _____________ or _______________, preceding such
Interest Payment Date (each, a "Record Date").
The Company will pay on each Interest Payment Date to the Holder of
this Security at the close of business on the immediately preceding Record Date
such Holder's PRO RATA amount of Contingent Payments, based upon the aggregate
Annual Maximum Contingent Payment Amount of the Securities owned by the such
Holder.
For purposes of determining accrued Contingent Payments due and
payable with respect to a First Semiannual Period or a Second Semiannual Period
prior to the completion of such period, such Contingent Payments due and payable
shall be equal to the Partial Period Contingent Payments. To the extent it is
lawful, the Company promises to pay interest on any Contingent Payment due but
unpaid at a rate of 8% per annum compounded semi-annually.
A-4
<PAGE>
2. METHOD OF PAYMENT.
The Company shall pay Contingent Payments, if any are due and payable
pursuant to and in accordance with the terms of this Security and the Indenture,
on the Securities (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 Contingent Payments 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
Contingent Payments by wire transfer of Federal funds, or Contingent Payments by
its check payable in such U.S. Legal Tender. The Company may deliver any such
Contingent Payment to the Paying Agent or the Company may mail any such
Contingent Payment to a Holder at the Holder's registered address.
Notwithstanding the preceding two sentences, in the case of Securities of which
The Depository Trust Company or its nominee is the Holder, such Contingent
Payments must be made by wire transfer of Federal funds.
3. PAYING AGENT AND REGISTRAR.
Initially, Norwest Bank Minnesota, 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.
4. INDENTURE.
The Company issued the Securities under an Indenture, dated as of
___________, 1998 (the "Indenture"), between the Company, the JCC Holding and
the Trustee. Capitalized terms herein are used as defined in the Indenture
unless otherwise defined herein. The terms of the Securities 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 Securities
are subject to all such terms, and Holders of Securities are referred to the
Indenture and said Act for a statement of them. The Securities are secured
obligations of the Company limited in maximum aggregate Annual Maximum
Contingent Payment Amount to $18,319,035.
5. REDEMPTION.
The Securities may not be redeemed, except that the Securities may be
redeemed at any time pursuant to, and in accordance with, any order of any
Governmental Authority with appropriate jurisdiction and authority relating to a
Gaming License held by the Company or an Affiliate or wholly owned Subsidiary of
the Company, or to the extent necessary in the reasonable, good faith judgment
of the Board of Directors of Harrah's Entertainment, Inc. ("HET"), in the case
of HET or one of its affiliates, or the Board of Directors of the Company, to
prevent the loss, failure to obtain or material impairment or to secure the
reinstatement of, any such Gaming License, where such redemption or acquisition
is required because the Holder or beneficial owner of such Security is required
to be found
A-5
<PAGE>
suitable or to otherwise qualify under any gaming laws and is not found
suitable or so qualified within a reasonable period of time. In such event,
the Redemption Price shall be a price for such Security established by the
Board of Directors in good faith, plus accrued and unpaid Contingent Payments
to the date of redemption (or such lesser amount as may be required by
applicable law or by order of any Gaming Authority).
Any redemption of the Notes shall comply with Article III of the
Indenture.
6. NOTICE OF REDEMPTION.
Notice of redemption will be mailed by first class mail at least 30
days but not more than 60 days before the Redemption Date (unless a shorter
notice period shall be required by applicable laws or by order of any Gaming
Authority) to each Holder of Securities to be redeemed at his registered
address. Securities 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 Securities called for redemption shall
have been deposited with the Paying Agent (other than the Company or an
Affiliate thereof) on such Redemption Date, the Securities called for redemption
will cease to accrue Contingent Payments and the only right of the Holders of
such Securities will be to receive payment of the Redemption Price, including
any accrued and unpaid interest to the Redemption Date.
7. DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are in registered form, without coupons. A Holder may
register the transfer of, or exchange Securities 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 Securities selected for redemption.
8. PERSONS DEEMED OWNERS.
The registered Holder of a Security may be treated as the owner of it
for all purposes.
9. UNCLAIMED MONEY.
If money for the payment of Contingent Payments 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.
A-6
<PAGE>
10. LEGAL DEFEASANCE OR COVENANT DEFEASANCE PRIOR TO REDEMPTION OR MATURITY.
If the Company at any time deposits with the Trustee, in trust, for
the benefit of the Holders, U.S. Legal Tender, U.S. Government Obligations or a
combination thereof in such amounts as will be sufficient in the opinion of a
nationally recognized firm of independent public accountants selected by the
Trustee, to pay and discharge the Maximum Contingent Payments on the Securities
for the current and all future Contingent Payment Periods on the Interest
Payment Dates in respect of such Contingent Payment Periods and comply with the
other provisions of the Indenture relating thereto, the Company may elect to
have the obligations of the Company and the Guarantors discharged (in which case
the Indenture would cease to be of further effect, except as to certain limited
obligations and to the rights of Holders to receive payments when due) or to be
discharged from certain provisions of the Indenture and the Securities
(including the financial covenants, but excluding the obligation to pay the
Contingent Payments on the Securities).
11. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the written consent of the Holders of a majority in
aggregate Annual Maximum Contingent Payment Amount of the Securities 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 Securities then outstanding. Without notice
to or consent of any Holder, the parties thereto may amend or supplement the
Indenture, the Collateral Documents or the Securities to, among other things,
cure any ambiguity, defect or inconsistency, provide for uncertificated
Securities in addition to or in place of certificated Securities, or make any
other change that does not adversely affect the rights of any Holder of a
Security.
12. 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.
13. SECURITY.
In order to secure the obligations under the Indenture, the Company,
the Parent Guarantor and the Trustee or the Collateral Agent have entered into a
security agreement in order to create security interests in certain assets and
properties of the Company. As more fully set forth in the security agreement
and Section 4.6 of the Indenture, the rights of the Holders (and the Trustee on
their behalf) to receive proceeds from the disposition such assets and
properties are subordinated to security interests in such
A-7
<PAGE>
assets and properties in favor of other secured creditors, and rank pari
passu with security interests in such assets and properties in favor of other
secured creditors.
14. SALE OF ASSETS.
The Indenture imposes certain limitations on the ability of the
Company and its Subsidiaries to sell assets. In the event the proceeds from a
permitted Asset Sale exceed certain amounts, as specified in the Indenture, the
Company will be required either to reinvest the proceeds of such Asset Sale in
its business or to repay certain senior indebtedness and, to the extent that no
amounts of such senior indebtedness are outstanding, and no amounts of such
indebtedness are available, to repay certain other indebtedness and to make an
offer to purchase the Company's 8% Notes.
15. GAMING LAWS.
The rights of the Holder of this Security and any owner of any
beneficial interest in this Security are subject to the gaming laws, regulations
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 Securities 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 Annual Maximum Contingent Payment Amount of
Securities then outstanding may declare all the Securities to be due and payable
immediately in the manner and with the effect provided in the Indenture.
Holders of Securities may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may require indemnity satisfactory to it
before it enforces the Indenture or the Securities. Subject to certain
limitations, Holders of a majority in Annual Maximum Contingent Payment Amount
of the Securities then outstanding may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Holders of Securities notice of
any continuing Default or Event of Default (except a Default in payment of
Contingent Payments), if it determines that withholding notice is in their
interest.
18. TRUSTEE DEALINGS WITH THE COMPANY.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of any of the Securities, make loans
to, accept deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with the Company, the Guarantors or their
respective Affiliates with the same rights it would have if it were not the
Trustee.
A-8
<PAGE>
19. NO RECOURSE AGAINST OTHERS.
An incorporator, director, officer, employee or stockholder, as such,
of the Company or any Guarantor or any affiliate thereof (including, without
limitation, Harrah's Investor, Harrah's Management Company, HET and HOC, but
excluding the Company and Guarantors themselves) shall not have any liability
for any obligation of the Company or the Guarantors under the Securities or the
Indenture or for any claim based on, in respect of or by reason of such
obligations, subject to certain exceptions set forth in the Indenture. Each
Holder of a Security by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Securities.
20. AUTHENTICATION.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on the other side of this
Security.
21. ABBREVIATIONS AND DEFINED TERMS.
Customary abbreviations may be used in the name of a Holder of a
Security 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 Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
23. TAX TREATMENT
The Company, each Guarantor, and each Holder of a Security by
acceptance of a Security, agree to (i) treat a Security as evidence of
indebtedness for federal, state and local income tax purposes; (ii) treat all
Contingent Payments with respect to the Security as "contingent" and not as
either "remote or incidental" for purposes of Treasury Regulation Sections
1.1275-4(a)(1) and (5); and (iii) treat all Contingent Payments as consisting
of principal and interest such that each payment of principal is accompanied
by a payment of interest at 16% per annum (compounded semi-annually) such that
the test rate for the Securities for purposes of Treasury Regulation Section
1.1275-4(c)(4)(ii)(A) will be 16% per annum (compounded semi-annually).
A-9
<PAGE>
[FORM OF ASSIGNMENT]
I or we assign this Security 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 Security on the books
of the Company. The agent may substitute another to act for him.
Dated: Signed:
-------------------------- ---------------------------------
(Sign exactly as your name appears on the other side of this Security)
- -------------------------------------------
Signature guarantee should be made by a guarantor institution participating in
the Securities Transfer Agents Medallion Program or in such other guarantee
program acceptable to the Trustee.
A-10
<PAGE>
Exhibit B
FORM OF GUARANTY
For value received, JCC Holding Company, a Delaware corporation,
hereby unconditionally guarantees (on a subordinated basis as provided in
Article XIV of the Indenture) to the Holder of the Security upon which this
Guaranty is endorsed the due and punctual payment, as set forth in the Indenture
pursuant to which such Security and this Guaranty were issued, of the Contingent
Payments on such Security when and as the same shall become due and payable for
any reason according to the terms of such Security and Article XII of the
Indenture. The Guaranty of the Security upon which this Guaranty is endorsed
will not become effective until the Trustee signs the certificate of
authentication on such Security.
JCC HOLDING COMPANY
By:
------------------------------------
Attest:
--------------------------------
B-1
