<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE
Amendment No. 1 To
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 STREET, 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
-------------- ------
Senior Subordinated Notes Due 2009 $187,500,000
With Contingent Payments
Date of issuance: October 30, 1998
Jazz Casino Company, L.L.C.
512 South Peters Street
New Orleans, Louisiana 70130
(Name and address of agent for service)
With a copy to:
Michael R. McAlevey, Esq.
Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
(404) 881-7000
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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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<PAGE>
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 a voluntary
petition 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 "February 1997 Plan of
Reorganization") and related Disclosure Statement (the "February 1997
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 February 1997 Disclosure Statement.
By order dated April 28, 1997 the Bankruptcy Court confirmed the February
1997 Plan of Reorganization.
The effective date of the February 1997 Plan of Reorganization was
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 had 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. On March 16, 1998, however, the Attorney General
for the State issued an opinion that the Louisiana Gaming Control Board (the
"LGCB") has independent authority (without the necessity of any legislative
approval) to renegotiate and execute a renegotiated casino operating
contract. Accordingly, on March 20, 1998, the LGCB approved an amended and
renegotiated casino operating contract among HJC, Jazz Casino Company,
L.L.C., a Louisiana limited liability company (the "Company" or "Applicant"),
and the State, by and through the LGCB, (the "Amended and Renegotiated Casino
Operating Contract"), subject to, among other conditions, the condition that
the Louisiana Supreme Court render a final, non-appealable judgment that the
LGCB, acting on its own, is the proper party and has the legal authority to
enter into the Amended and Renegotiated Casino Operating Contract with HJC or
the Company on behalf of the State and the LGCB, without the specific
approval of the Governor or the legislature of the State. On May 15, 1998,
the Louisiana Supreme Court issued a decision confirming that the LGCB has
the independent authority to renegotiate and execute the Amended and
Renegotiated Casino Operating Contract without seeking gubernatorial or
legislative approval. The LGCB's approval of the Amended and Renegotiated
Casino Operating Contract will not become final, and the contract cannot be
executed, until, among other things, the LGCB makes a determination that
certain of the owners and operators of the Casino and officers and directors
thereof are suitable under applicable rules and regulations, and until
certain regulatory rulings and approvals are received, all of which are
expected to be received on or prior to the Effective Date. On September 3,
1998 the Debtors submitted a Third Amended Joint Plan of Reorganization As
Modified Through September 3, 1998 and related Disclosure Statement (the
"Disclosure Statement"). A hearing to consider the adequacy of the
Disclosure Statement was held on September 3, 1998, at which the Bankruptcy
Court approved the Disclosure Statement. A summary of the Disclosure
Statement was distributed to creditors of the Debtors on or about September
3, 1998. On October 13, 1998 the Debtors submitted a Third Amended and
Restated Plan of Reorganization As Modified Through October 13, 1998 (the
"Plan of Reorganization"). A hearing to consider confirmation of the Plan of
Reorganization was held on October 13, 1998 at which time the Bankruptcy
Court confirmed the Plan of Reorganization by order dated October 13, 1998.
On October 30, 1998, The Plan of Reorganization and the transactions
contemplated thereby were consumated and the Notes (as defined below) were
issued.
Under the Plan of Reorganization, the assets and business of HJC vested
in the Company on October 30, 1998, the date that the Plan of Reorganization
was 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, received, pursuant to the 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 (the "Notes"), issued under the indenture previously qualified by the
Securities and Exchange Commission on October 28, 1998, and guarantees (the
"Guarantees") of such Notes by JCC Holding Company, a Delaware Corporation
("JCC Holding"), CP Development, L.L.C., a Louisiana limited liability
company ("CP Development"), FP Development, L.L.C., a Louisiana limited
liability company ("FP Development") and JCC Development Company, L.L.C., a
Louisiana limited liability company ("JCC Development") and (ii) Senior
Subordinated Contingent Notes due 2009 of the Company (for which a separate
Application on Form T-3 has been filed and previously qualified by the
Securities and Exchange Commission on October 28, 1998, and guarantees of
such notes by JCC Holding, CP Development, FP Development and JCC
Development. The Company and each of CP Development, FP Development and JCC
Development are wholly-owned subsidiaries of JCC Holding.
<PAGE>
The issuance of the Notes was not 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 Plan of
Reorganization satisfied 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 November 10, 1998:
100% of the membership interests in the Company are owned by JCC
Holding; and
100% of the membership interests in JCC Development are owned by JCC
Holding.
100% of the membership interests in FP Development are owned by JCC
Holding.
100% of the membership interests in CP Development are owned by JCC
Holding.
As a result of certain transactions consummated on the Effective Date
pursuant to the Plan of Reorganization, Harrah's Entertainment, Inc., a
Delaware corporation ("HET"), may be deemed to be an affiliate of the Company
through its ownership of voting securities of, and affiliate status with, JCC
Holding, the sole member of the Company. The following table sets forth
certain information regarding the beneficial ownership by HET of JCC
Holding's Class B Common Stock, $0.01 par value per share (the "Class B
Common Stock") as of the Effective Date of the Plan of Reorganization. Unless
noted otherwise, the holder listed below has sole voting power and
dispositive power over the shares beneficially held by it. As of November 10,
1998, JCC Holding had 5,547,377 shares of its Class A Common Stock issued and
outstanding and 4,452,623 shares of its Class B Common Stock issued and
outstanding.
<TABLE>
<CAPTION>
CLASS A COMMON STOCK CLASS B COMMON STOCK
---------------------------------------- -------------------------------------
AMOUNT AND PERCENTAGE AMOUNT AND PERCENTAGE
NAME OF NATURE OF OF CLASS A NATURE OF OF CLASS B
BENEFICIAL OWNER BENEFICIAL OWNERSHIP COMMON STOCK BENEFICIAL OWNERSHIP COMMON STOCK
- ---------------- -------------------- ------------ -------------------- ------------
<S> <C> <C> <C> <C>
Harrah's Entertainment, Inc. ......... -- -- 4,452,623 100%(1)
</TABLE>
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(1) Shares are held of record by HET's wholly-owned subsidiary, Harrah's
Crescent City Investment Company, a Nevada Corporation ("HCCIC").
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 November 10, 1998:
None. The Company is a member managed, single member, limited liability
company formed under the Louisiana Limited Liability, Company Law, La. R.S.
12:1301 ET SEQ., and as such the Company does not have directors. The Company
has appointed the following officers:
<TABLE>
<CAPTION>
Name and Mailing
Address Title
---------------- -----------
<S> <C>
Frederick W. Burford President
512 South Peters Street
New Orleans, Louisiana 70130
L. Camille Fowler Vice President-Finance,
512 South Peters Street Treasurer and Secretary
New Orleans, Louisiana 70130
</TABLE>
3
<PAGE>
5. PRINCIPAL OWNERS OF VOTING SECURITIES. Furnish the following information
as to each person owning 10 percent or more of the voting securities of the
applicant.
As of November 10, 1998:
Name and Complete Title of Class Percentage of Voting
Mailing Address Owned Amount Owned Securities Owned
----------------- -------------- ------------ ---------------------
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 all of the membership
interests in the Company.
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, 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 November 10, 1998:
<TABLE>
<CAPTION>
Amount Amount
Title of Class Authorized Outstanding
-------------- ----------- -----------
<S> <C> <C>
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 2010 $ 27,287,500(3) $ 27,287,500(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 all of the membership interests
in the Company.
(1) Plus additional Notes issued in lieu of cash interest payments in
accordance with the terms of the Indenture (as defined below).
(2) All payments in respect of the Senior Subordinated Contingent Notes due
2009 will be contingent payments, and such contingent payments will be
limited to an annual aggregate maximum amount of $18,319,035.
(3) Plus additional 8% Convertible Junior Subordinated Debentures due 2010
issued in lieu of cash interest payments in accordance with the terms
of the indenture for such securities.
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<PAGE>
(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 manager, single member, limited
liability company, all decisions relating to the business affairs and
properties of the Company are 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 2010 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, CP
Development, FP Development and JCC Development as guarantors, 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 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 Notes when and as the same become due
and payable at maturity, redemption, by acceleration or otherwise,
including, without limitation, failure to pay any Offer to Purchase
Price or otherwise;
(3) except as provided in clauses (1) or (2) above, failure
of the Company or any Subsidiary of the Company to comply with
provisions in the Indenture regarding limitation on transactions with
affiliates, construction, limitation on use of certain funds,
restrictions on sale and issuance of Subsidiary Stock, limitation on
payment of management fees or limitation on merger, sale or
consolidation or right to require repurchase, which failure continues
for 30 days;
(4) 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 principal amount of the Notes then
outstanding;
(5) certain events of bankruptcy, insolvency or restructuring
in respect of either the Company or a Significant Subsidiary;
(6) 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 such acceleration shall be
rescinded;
(7) 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;
(8) 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;
(9) a failure to comply with the provisions of the Collateral
Documents and the continuance of such failure to comply 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 principal amount of the Notes outstanding, provided that if such
failure to comply 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 Security Agreement or applicable Collateral Document;
(10) 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 Collateral Agent with respect to any material amount of Collateral,
a valid and perfected Lien on the Collateral (except to the extent a
valid and perfected lien on the Collateral is not required at such time
under the terms of the Collateral Documents) to be covered thereby
(unless a prior or exclusive Lien is specifically permitted by the
Indenture);
(11) 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;
(12) an "Event of Default" (as defined in the Ground Lease) has
occurred; and
(13) an "Event of Default" (as defined in the Contingent Notes
Indenture) has occurred.
If an Event of Default (other than an Event of Default specified in
clause (5) above with respect to the Company), occurs and is continuing,
then, and in every such case, unless the principal of all of the Notes shall
have already become due and payable, either the Trustee or the Holders of not
less then 25% in aggregate principal 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 "Acceleration Notice"), may declare all of the
principal of the Notes, determined as set forth below, together with accrued
interest thereon, to be due and payable immediately. If an Event of Default
specified in clause (5) above occurs with respect to the Company, (i) all
principal of, premium applicable to, and accrued interest on, the Notes, 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 (A) the Primary Make-Whole
Amount shall be subordinated in right of payment to all Senior Debt and shall
rank PARI PASSU with all Senior Subordinated Debt including, without
limitation, all Senior Subordinated Debt to which HET has succeeded to the
rights of the lenders thereunder and (B) the Secondary Make-Whole Amount
shall be subordinated to all Senior Debt and all Senior Subordinated Debt
including, without limitation, all Senior Subordinated Debt to which HET has
succeeded to the rights of the lenders thereunder. The Primary Make-Whole
Amount shall be subordinated to Senior Debt in accordance with the terms of
the provision in the Indenture regarding subordination of Notes. The
Secondary Make-Whole Amount shall be subordinated to all Senior Debt and all
Senior Subordinated Debt on the terms provided in the provision in the
Indenture regarding subordination of Notes for this purpose, (treating all
Senior Subordinated Debt as if same were Senior Debt), except that no
payments whatsoever may be made with respect to the Secondary Make-Whole
Amount unless and until all Senior Debt and all Senior Subordinated Debt has
been repaid in full in cash. The Holders of no less than a majority in
aggregate principal amount 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 principal of, or interest (including Contingent Payments) on, any
Note (including the payment of the Change of Control Offer Price on the Change
of Control Purchase Date, the Redemption Price on the Redemption Date and the
Asset Sale Offer Amount on the Asset Sale Purchase Date, as the case may be),
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 by an Officer of
the Company. The signature of any such Officer on the Notes may be manual or
facsimile. To evidence its Guaranty, each Guarantor agrees that a notation
referencing such Guaranty shall be set forth on the Note. The delivery of any
Note by the Trustee, after the authentication thereof, shall constitute due
delivery of the Guaranty set forth in the Indenture on behalf of each
Guarantor. To evidence Parent Guaranty, the Parent Guarantor agrees that a
notation referencing such Parent Guaranty shall be set forth on the Note. The
delivery of any Note shall constitute due delivery of the Parant Guaranty set
forth in the Indenture on behalf of the Parent Guarantor. 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 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.
6
<PAGE>
(C) RELEASE AND SUBSTITUTION OF PROPERTY SUBJECT TO THE LIEN OF THE
INDENTURE.
The Company may, without requesting the release or consent of the
Trustee or 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 Intercreditor Agreement and 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 Guarantors 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 the 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 obligations 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 and Guarantees 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 principal of,
premium, if any, and interest (including 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 principal of and interest (including
Maximum Contingent Payments for the current and all future Contingent Payment
Periods) on the outstanding Notes on the stated maturity or on the applicable
redemption date, as the case may be, of such principal or installment of
principal or interest (including Contingent Payments); 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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<PAGE>
other material agreement or instrument (including, without limitation, the
Bank Credit Facilities) 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 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, the Collateral Documents and
the Bank Credit Facilities 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 or event of default under
the Bank Credit Facilities, an Officers' Certificate specifying such Default
or Event of Default or event of default under the Bank Credit Facilities as
applicable, 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 and an
Opinion of Counsel, each stating that all conditions precedent, if any,
provided for in the Indenture relating to the proposed action have been
compiled 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.
JCC Development Company L.L.C., 512 South Peters Street, New Orleans,
Louisiana, 70130 is a guarantor of the Notes.
FP Development L.L.C., 512 South Peters Street, New Orleans,
Louisiana, 70130 is a guarantor of the Notes.
CP Development, L.L.C., 512 South Peters Street, New Orleans,
Louisiana, 70130 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.(2)
(c) The following exhibits in addition to those filed as part of the
statement of eligibility and qualification of the trustee:
Exhibit T3A.1 Operating Agreement of the Company. (2)
Exhibit T3A.2 Articles of Organization of the Company. (2)
Exhibit T3B Not applicable.
Exhibit T3C.1 Form of Indenture to be qualified for Senior
Subordinated Notes due 2009 with Contingent
Payments. (2)
Exhibit T3C.2 Indenture dated October 30, 1998 for Senior
Subordinated Notes due 2009 with Contingent
Payments.
Exhibit T3D Not applicable.
8
<PAGE>
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' Third 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 T3E.18 Notice dated February 6, 1998 of Entry of
Order Approving Debtors' Third Amended Joint
Plan of Reorganization as Modified through
January 29, 1998. (2)
Exhibit T3E.19 Notice Dated April 8, 1998 of Entry of Order
Approving Debtors' Third Amended Joint Plan
of Reorganization as Modified through April
6, 1998. (2)
Exhibit T3E.20 Cover Letter dated September 3, 1998, to All
Creditors of Harrah's Jazz Company, Harrah's
Jazz Finance Corp. and Harrah's New Orleans
Investment Company from Debtors' Counsel. (2)
Exhibit T3E.21 Notice dated September 3, 1998 of Entry of
Order Approving the Summary of Debtors'
Sixth Amended Disclosure Statement and the
Debtors' Sixth Amended Disclosure Statement
dated as of September 3, 1998. (2)
Exhibit T3E.22 Debtors' Third Amended Joint Plan of
Reorganization as Modified through September
3, 1998, dated September 3, 1998, and
exhibits thereto. (2)
Exhibit T3E.23 Summary of Debtors' Sixth Amended Joint
Disclosure Statement dated September 3,
1998. (2)
Exhibit T3E.24 Modified Voting Procedures. (2)
Exhibit T3E.25 Debtors' Sixth Amended Joint Disclosure
Statement dated September 3, 1998, and
exhibits thereto. (2)
Exhibit T3E.26 Notice dated October 13, 1998 of Entry of
Confirmation Order Approving the Third
Amended Joint Plan of Reorganization as
Modified through October 13, 1998 and of
Hearing on Approval of the Plan
Documents. (2)
Exhibit T3E.27 Debtors' Third Amended Joint Plan of
Reorganization as Modified Through October
13, 1998.
Exhibit T3E.28 Order dated October 19, 1998 Granting Motion
to Approve Form and Execution of Plan Documents
and for Entry of Order in Aid of Consummation.
Exhibit T3E.29 Notice dated October 21, 1998 to Bondholders
re: 14-1/4% First Mortgage Notes due 2001.
Exhibit T3F See Exhibit T3C.2 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. (2)
- ------------------
(1) Pursuant to Rule 309(a) of Regulation S-T, requirements as to
sequential numbering shall not apply to this electronic format
document.
(2) Previously filed.
(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 New Orleans
and State of Louisiana, on the 9th day of November, 1998.
JAZZ CASINO COMPANY, L.L.C.
By: JCC HOLDING COMPANY
Its: Sole Member
By: /s/ L. CAMILLE FOWLER
------------------------------
Name: L. Camille Fowler
------------------------------
Title: Vice President - Finance,
Treasurer and Secretary
------------------------------
Attest: /s/ SARA B. SHULL
---------------------------
Name: Sara B. Shull
----------------------
11
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
JAZZ CASINO COMPANY, L.L.C.,
ISSUER,
JCC HOLDING COMPANY,
CP DEVELOPMENT, L.L.C.,
FP DEVELOPMENT, L.L.C. AND
JCC DEVELOPMENT COMPANY, L.L.C.,
GUARANTORS,
AND
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
TRUSTEE
------------------
INDENTURE
Dated as of October 30, 1998
------------------
$187,500,000
Senior Subordinated Notes due 2009
With Contingent Payments
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA INDENTURE
SECTION SECTION
- ------- ---------
<S> <C> <C>
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;
15.2.
(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) ............................................................................... 15.5.
(f) ............................................................................... N.A.
315 (a) ............................................................................... 8.1(b)
(b) ............................................................................... 8.5;
8.6;
15.2.
(c) ............................................................................... 8.1(a)
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
TIA INDENTURE
SECTION SECTION
- ------- ---------
<S> <C> <C>
(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.
</TABLE>
- --------------------
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
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE............................................................1
SECTION 1.1. Definitions.................................................................................1
SECTION 1.2. Incorporation by Reference of TIA..........................................................34
SECTION 1.3. Rules of Construction......................................................................34
ARTICLE II. THE SECURITIES......................................................................................35
SECTION 2.1. Form and Dating............................................................................35
SECTION 2.2. Execution and Authentication...............................................................35
SECTION 2.3. Registrar and Paying Agent.................................................................37
SECTION 2.4. Paying Agent to Hold Assets in Trust.......................................................37
SECTION 2.5. Securityholder Lists.......................................................................38
SECTION 2.6. Transfer and Exchange......................................................................38
SECTION 2.7. Replacement Securities.....................................................................38
SECTION 2.8. Outstanding Securities.....................................................................39
SECTION 2.9. Treasury Securities........................................................................39
SECTION 2.10. Temporary Securities......................................................................39
SECTION 2.11. Cancellation..............................................................................39
SECTION 2.12. Defaulted Interest........................................................................40
ARTICLE III. REDEMPTION.........................................................................................41
SECTION 3.1. Right of Redemption........................................................................41
SECTION 3.2. Redemption Pursuant to Applicable Laws.....................................................41
SECTION 3.3. Notices to Trustee.........................................................................41
SECTION 3.4. Notice of Redemption.......................................................................41
SECTION 3.5. Effect of Notice of Redemption.............................................................42
SECTION 3.6. Deposit of Redemption Price................................................................42
SECTION 3.7. Securities Redeemed in Part................................................................43
ARTICLE IV. SECURITY............................................................................................43
SECTION 4.1. Security Interest..........................................................................43
SECTION 4.2. Recording; Opinions of Counsel.............................................................43
SECTION 4.3. Disposition of Certain Collateral..........................................................44
SECTION 4.4. Net Cash Proceeds Account..................................................................46
SECTION 4.5. Certain Releases of Collateral.............................................................46
SECTION 4.6. Lien Subordination.........................................................................47
SECTION 4.7. Payment of Expenses........................................................................47
SECTION 4.8. Suits to Protect the Collateral............................................................47
SECTION 4.9. Trustee's Duties...........................................................................48
SECTION 4.10. Collateral Documents......................................................................48
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C>
ARTICLE V. COVENANTS............................................................................................49
SECTION 5.1. Payment of Securities......................................................................49
SECTION 5.2. Maintenance of Office or Agency............................................................49
SECTION 5.3. Limitation on Restricted Payments..........................................................50
SECTION 5.4. Existence..................................................................................51
SECTION 5.5. Payment of Taxes and Other Claims..........................................................51
SECTION 5.6. Maintenance of Insurance...................................................................52
SECTION 5.7. Compliance Certificate; Notice of Default..................................................52
SECTION 5.8. Reports....................................................................................52
SECTION 5.9. Waiver of Stay, Extension or Usury Laws....................................................53
SECTION 5.10. Limitation on Transactions with Affiliates................................................53
SECTION 5.11. Limitation on Incurrence of Additional Indebtedness and Disqualified
Capital Stock...........................................................................54
SECTION 5.12. Limitation on Dividends and Other Payment Restrictions Affecting
Subsidiaries............................................................................57
SECTION 5.13. Limitation on Liens.......................................................................57
SECTION 5.14. Limitation on Sales of Assets and Subsidiary Stock; Event of Loss.........................58
SECTION 5.15. Construction..............................................................................62
SECTION 5.16. Limitation on Use of Certain Funds........................................................62
SECTION 5.17. Limitation on Status as Investment Company................................................63
SECTION 5.18. Restrictions on Sale and Issuance of Subsidiary Stock.....................................63
SECTION 5.19. Limitation on Payment of Management Fees..................................................63
SECTION 5.20. Listing of Securities.....................................................................65
SECTION 5.21. Compliance with Environmental Laws........................................................65
SECTION 5.22. Limitation on Layering Debt...............................................................66
SECTION 5.23. Certain Deferrals.........................................................................66
ARTICLE VI. SUCCESSORS..........................................................................................67
SECTION 6.1. Limitation on Merger, Sale or Consolidation................................................67
SECTION 6.2. Successor Substituted......................................................................68
ARTICLE VII. EVENTS OF DEFAULT AND REMEDIES.....................................................................68
SECTION 7.1. Events of Default..........................................................................68
SECTION 7.2. Acceleration of Maturity Date; Rescission and Annulment....................................70
SECTION 7.3. Collection of Indebtedness and Suits for Enforcement by Trustee............................72
SECTION 7.4. Trustee May File Proofs of Claim...........................................................72
SECTION 7.5. Trustee May Enforce Claims Without Possession of Securities................................73
SECTION 7.6. Priorities.................................................................................73
SECTION 7.7. Limitation on Suits........................................................................74
SECTION 7.8. Unconditional Right of Holders to Receive Principal and Interest...........................74
SECTION 7.9. Rights and Remedies Cumulative.............................................................74
</TABLE>
iv
<PAGE>
<TABLE>
<S> <C>
SECTION 7.10. Delay or Omission Not Waiver..............................................................75
SECTION 7.11. Control by Holders........................................................................75
SECTION 7.12. Waiver of Past Default....................................................................75
SECTION 7.13. Undertaking for Costs.....................................................................76
SECTION 7.14. Restoration of Rights and Remedies........................................................76
ARTICLE VIII. TRUSTEE...........................................................................................76
SECTION 8.1. Duties of Trustee..........................................................................76
SECTION 8.2. Rights of Trustee..........................................................................78
SECTION 8.3. Individual Rights of Trustee...............................................................78
SECTION 8.4. Trustee's Disclaimer.......................................................................79
SECTION 8.5. Notice of Default..........................................................................79
SECTION 8.6. Reports by Trustee to Holders..............................................................79
SECTION 8.7. Compensation and Indemnity.................................................................79
SECTION 8.8. Replacement of Trustee.....................................................................80
SECTION 8.9. Successor Trustee by Merger, Etc...........................................................81
SECTION 8.10. Eligibility; Disqualification.............................................................81
SECTION 8.11. Preferential Collection of Claims against Company.........................................82
ARTICLE IX. LEGAL DEFEASANCE AND COVENANT DEFEASANCE............................................................82
SECTION 9.1. Option to Effect Legal Defeasance or Covenant Defeasance...................................82
SECTION 9.2. Legal Defeasance and Discharge.............................................................82
SECTION 9.3. Covenant Defeasance........................................................................82
SECTION 9.4. Conditions to Legal or Covenant Defeasance.................................................83
SECTION 9.5. Deposited U.S. Legal Tender and U.S. Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions...................................................84
SECTION 9.6. Repayment to Company.......................................................................85
SECTION 9.7. Reinstatement..............................................................................85
ARTICLE X. AMENDMENTS, SUPPLEMENTS AND WAIVERS..................................................................86
SECTION 10.1. Supplemental Indentures Without Consent of Holders........................................86
SECTION 10.2. Amendments, Supplemental Indentures and Waivers with Consent of Holders...................86
SECTION 10.3. Compliance with TIA.......................................................................88
SECTION 10.4. Revocation and Effect of Consents.........................................................88
SECTION 10.5. Notation on or Exchange of Securities.....................................................89
SECTION 10.6. Trustee to Sign Amendments, Etc...........................................................89
SECTION 10.7. Consent to Certain Amendments of the Ground Lease; Trustee's Actions......................89
ARTICLE XI. RIGHT TO REQUIRE REPURCHASE.........................................................................90
SECTION 11.1. Repurchase of Securities at Option of the Holder Upon Change of Control...................90
</TABLE>
v
<PAGE>
<TABLE>
<S> <C>
ARTICLE XII. GUARANTY...........................................................................................92
SECTION 12.1. Guaranty..................................................................................92
SECTION 12.2. Parent Guaranty...........................................................................94
SECTION 12.3. Execution and Delivery of Guaranty........................................................95
SECTION 12.4. Future Subsidiary Guarantors..............................................................96
SECTION 12.5. Release of Guarantors.....................................................................96
SECTION 12.6. When the Guarantor May Merge, etc.........................................................97
SECTION 12.7. Certain Bankruptcy Events.................................................................98
ARTICLE XIII. SUBORDINATION OF SECURITIES.......................................................................98
SECTION 13.1. Securities Subordinated to Senior Debt....................................................98
SECTION 13.2. Securities Subordinated to Prior Payment of All Senior Debt on
Dissolution, Liquidation, Reorganization, etc. of the Company...........................98
SECTION 13.3. Holders of Securities to be Subrogated to Right of Holders of Senior Debt................100
SECTION 13.4. Obligations of the Company Unconditional.................................................100
SECTION 13.5. Company Not to Make Payments With Respect to Securities in Certain
Circumstances..........................................................................101
SECTION 13.6. Trustee Entitled to Assume Payments Not Prohibited in Absence of Notice..................102
SECTION 13.7. Application by Trustee of Monies Deposited With It.......................................103
SECTION 13.8. Subordination Rights Not Impaired by Acts or Omissions of Company or
Holders of Senior Debt.................................................................103
SECTION 13.9. Holders of Securities Authorize Trustee to Effectuate Subordination of
Securities.............................................................................104
SECTION 13.10. Right of Trustee to Hold Senior Debt; Preservation of Trustee's Rights.................105
SECTION 13.11. Article XIII Not to Prevent Events of Default..........................................105
SECTION 13.12. Trustee Not Fiduciary for Holders of Senior Debt.......................................105
SECTION 13.13. Trust Monies Not Subordinated..........................................................105
ARTICLE XIV. SUBORDINATION OF GUARANTY.........................................................................105
SECTION 14.1. Guaranty Subordinated to Guarantor Senior Debt...........................................105
SECTION 14.2. Guaranty Subordinated to Prior Payment of All Guarantor Senior Debt on
Dissolution, Liquidation, Reorganization, etc. of the Guarantor........................106
SECTION 14.3. Holders of Securities to be Subrogated to Right of Holders of Guarantor
Senior Debt............................................................................107
SECTION 14.4. Obligations of the Guarantor Unconditional...............................................108
SECTION 14.5. Guarantors Not to Make Payments in Respect of the Guaranties in Certain
Circumstances..........................................................................108
SECTION 14.6. Trustee Entitled to Assume Payments Not Prohibited in Absence of Notice..................109
SECTION 14.7. Application by Trustee of Monies Deposited With It.......................................109
</TABLE>
vi
<PAGE>
<TABLE>
<S> <C>
SECTION 14.8. Subordination Rights Not Impaired by Acts or Omissions of a Guarantor or
Holders of Guarantor Senior Debt..................................................109
SECTION 14.9. Holders of Securities Authorize Trustee to Effectuate Subordination of
Guaranties........................................................................111
SECTION 14.10. Right of Trustee to Hold Guarantor Senior Debt; Preservation of
Trustee's Rights..................................................................111
SECTION 14.11. Article XIV Not to Prevent Events of Default...........................................111
SECTION 14.12. Trustee Not Fiduciary for Holders of Guarantor Senior Debt.............................111
SECTION 14.13. Trust Monies Not Subordinated..........................................................112
ARTICLE XV. MISCELLANEOUS......................................................................................112
SECTION 15.1. TIA Controls.............................................................................112
SECTION 15.2. Notices 112..............................................................................112
SECTION 15.3. Communications by Holders with Other Holders.............................................113
SECTION 15.4. Certificate and Opinion as to Conditions Precedent.......................................113
SECTION 15.5. Statements Required in Certificate or Opinion............................................114
SECTION 15.6. Rules by Trustee, Paying Agent, Registrar................................................114
SECTION 15.7. Legal Holidays...........................................................................114
SECTION 15.8. Governing Law............................................................................114
SECTION 15.9. No Adverse Interpretation of Other Agreements............................................115
SECTION 15.10. No Recourse Against Others.............................................................115
SECTION 15.11. Successors.............................................................................116
SECTION 15.12. Duplicate Originals....................................................................116
SECTION 15.13. Severability...........................................................................116
SECTION 15.14. Table of Contents, Headings, Etc.......................................................116
SECTION 15.15. Gaming Laws............................................................................116
SECTION 15.16. Tax Treatment..........................................................................116
SECTION 15.17. Waivers and Releases...................................................................117
</TABLE>
vii
<PAGE>
INDENTURE, dated as of October 30, 1998, between Jazz Casino
Company, L.L.C., a Louisiana limited liability company ("JCC" or the "Company"),
as issuer, JCC Holding Company, a Delaware corporation ("JCC Holding"), CP
Development, L.L.C., a Louisiana limited liability company ("CP Development"),
FP Development, L.L.C., a Louisiana limited liability company ("FP
Development"), and JCC Development Company, L.L.C., a Louisiana limited
liability company ("JCC Development"), as guarantors, 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 Notes due 2009 with Contingent Payments:
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions.
-----------
"ACCELERATION NOTICE" shall have the meaning specified in
Section 7.2.
"ACCEPTANCE AMOUNT" shall have the meaning specified in
Section 5.14.
"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.
"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 the voting Capital Stock of a person (on a fully
diluted basis) or of warrants or other rights to acquire such Capital Stock
(whether or
<PAGE>
not presently exercisable). Notwithstanding the foregoing, Affiliate shall not
include wholly-owned Subsidiaries of the Company.
"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.
"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 OFFER" shall have the meaning specified in
Section 5.14.
"ASSET SALE OFFER AMOUNT" shall have the meaning specified in
Section 5.14.
"ASSET SALE OFFER PERIOD" shall have the meaning specified in
Section 5.14.
"ASSET SALE OFFER PRICE" shall have the meaning specified in
Section 5.14.
"ASSET SALE PURCHASE DATE" shall have the meaning specified in
Section 5.14.
"ASSET SALE PUT DATE" shall have the meaning specified in
Section 5.14.
"AUTHORIZED REPRESENTATIVE" means, (i) with respect to any
person that is a corporation, or any person that has two or more Officers, any
Officer thereof, and (ii) with respect to any person that is a limited liability
company and that has fewer than two Officers, an Officer of the manager of such
liability company, and (iii) with respect to any person that is a partnership
and that has fewer than two Officers, an Officer of a general partner of such
partnership.
"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 as Administrative
Agent (as defined in the Bank Credit Facilities), or any successor or
replacement Administrative Agent, under the Bank Credit Facilities.
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"BANK CREDIT FACILITIES" means the Credit Agreement, dated as
of October 29, 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 Holding or 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.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar
Federal, state or foreign law for the relief of debtors.
"BOARD OF DIRECTORS" means, with respect to any person, the
Board of Directors of such person or any committee of the Board of Directors of
such person authorized, with respect to any particular matter, to exercise the
power of the Board of Directors of such person.
"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 capital 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
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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 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 casino 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 the Company
first opens the Casino to the public and commences business.
"CASINO OPERATING CONTRACT" means the Amended and Renegotiated
Casino Operating Contract between Harrah's Jazz Company, the Company and the
State of Louisiana by and through the Louisiana Gaming Control Board, dated as
of October 30, 1998, as it may be amended or supplemented from time to time.
"CHANGE OF CONTROL" shall be deemed to have occurred if HET or
a direct or indirect Subsidiary of HET does not have the exclusive authority to
manage the Casino.
"CHANGE OF CONTROL OFFER" shall have the meaning specified in
Section 11.1.
"CHANGE OF CONTROL OFFER PERIOD" shall have the meaning
specified in Section 11.1.
"CHANGE OF CONTROL OFFER PRICE" shall have the meaning
specified in Section 11.1.
"CHANGE OF CONTROL PAYMENT DATE" shall have the meaning
specified in Section 11.1.
"CHANGE OF CONTROL PUT DATE" shall have the meaning specified
in Section 11.1.
"CITY" means the City of New Orleans, Louisiana.
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"COLLATERAL" means the Property and assets of the Company and
the Guarantors which is now or hereafter subject to the Liens created by the
Collateral Documents.
"COLLATERAL AGENT" shall mean The Bank of New York as
collateral agent under the Collateral Documents.
"COLLATERAL DOCUMENTS" means the Security Agreement, the
Intellectual Property Security Documents, the Pledge Agreement , the Mortgages
and any other agreement executed by the Company and/or the Guarantors in favor
of the Collateral Agent for the benefit of the Secured Creditors purporting to
convey to the Collateral Agent for the benefit of the Secured Creditors a
security interest in Property, 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 October 30, 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
October 29, 1998, by HOC and HET in favor of the Bank Agent, as agent, as it may
be amended or supplemented from time to time, (iii) the LGCB Completion
Guarantee, dated as of October 30, 1998, by HOC and HET in favor of the State of
Louisiana and the Regulating Authority, as it may be amended or supplemented
from time to time, and (iv) the RDC/City Completion Guarantee, dated as of
October 29, 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 October 30, 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
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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 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 (i) any extraordinary
gain reflected in the calculation of Consolidated Net Income, (ii) any
Restricted Payments from the Company to the Parent Guarantor made pursuant to
clause (E) of the second paragraph of Section 5.3 and (iii) solely for the
purpose of calculating Contingent Payments, if any, and Incentive Management
Fees, if any, all revenues received by the Company pursuant to the Second Floor
Sublease.
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"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 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,
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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 NOTES" means the Company's Senior Subordinated
Contingent Notes due 2009.
"CONTINGENT NOTES INDENTURE" means the Indenture, dated as of
October 30, 1998, among the Company, as obligor, JCC Holding, CP Development, FP
Development and JCC Development, as guarantors, and Norwest Bank Minnesota,
National Association, as trustee, in connection with the Contingent Notes.
"CONTINGENT PAYMENT ACCRUAL" means, at any time, the total
amount of Contingent Payments accrued and unpaid through and as of such time.
"CONTINGENT PAYMENT MEASUREMENT AMOUNT" shall mean, for any
period, an amount equal to (i) the Consolidated EBITDA of the Company for such
period, (ii) plus an amount equal to the cash distributions, if any, from CP
Development and FP Development to JCC Holding during such period, (iii) after
the date on which the second floor of the Casino is open to customers, if the
JCC Development Adjustment Amount is a positive number for such period, plus an
amount equal to the JCC Development Adjustment Amount for such period, or (b) if
the JCC Development Adjustment Amount is a negative number for such period, less
an amount equal to the absolute value of the JCC Development Adjustment Amount
for such period. If the Net Working Capital of either of CP Development or FP
Development is in excess of $1,000,000 on the last day of the Semiannual Period
for which the Contingent Payment Measurement Amount is being calculated, then
the amount of Net Working Capital in excess of $1,000,000 shall be deemed to
have been distributed by CP Development and/or FP Development, as applicable, to
JCC Holding for the purposes of calculating the Contingent Payment Measurement
Amount. Notwithstanding the foregoing, in no event (including, without
limitation, with respect to clause (ii) or the previous sentence of this
definition) shall the proceeds from the sale of assets be included in the
calculation of "Contingent Payment Measurement Amount." "JCC Development
Adjustment Amount" shall mean, for any period, an amount equal to (A) the
amount, if any, of the lease payments received by the Company from JCC
Development pursuant to the Second Floor Sublease during such period, less (B)
the amount, if any, of cash transferred (whether in the form of one or more
loans or equity contributions or otherwise (except payments for goods and
services)) (collectively, "JCC Advances") by the Company to JCC Development
during such period, plus (C) the amount, if
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any, of cash transferred by JCC Development to the Company in respect of JCC
Advances during such period.
"CONTINGENT PAYMENT PERIOD" means collectively a First
Semiannual Period together with the next succeeding Second Semiannual Period.
"CONTINGENT PAYMENTS" means collectively the Initial First
Period Contingent Payments, the First Period Contingent Payments and the Second
Period Contingent Payments.
"CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES" means the 8%
Convertible Junior Subordinated Debentures due 2010 issued by the Company in
connection with the Plan of Reorganization.
"CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES INDENTURE" means
the Indenture, dated as of October 30, 1998, among the Company, as obligor, JCC
Holding, as guarantor, and Norwest Bank Minnesota, National Association, as
trustee, in connection with the Convertible Junior Subordinated Debentures.
"CP DEVELOPMENT" means CP Development, L.L.C., a Louisiana
limited liability company.
"CREDIT ENHANCEMENT FEE AGREEMENT" means the Credit
Enhancement Fee Agreement, dated as of October 30, 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 (other than
Minimum Payment Guaranty Obligations) permitted under this Indenture the
principal amount of which is $15,000,000 or more.
"DEVELOPMENT COMPANIES" means collectively CP Development, FP
Development, JCC Development, all other wholly owned Subsidiaries of JCC Holding
(other than the Company and its Subsidiaries) and all other Subsidiaries of JCC
Holding (other than the Company and its Subsidiaries) that guarantee the Bank
Credit Facilities (for so long as such guarantees remain in effect).
"DEVELOPMENT COMPANIES GUARANTY" means the Guaranty of each of
the Development Companies.
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"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.
"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 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 amount payable in
the aggregate to the Holders of the Securities on the Interest Payment Date next
following a First Semiannual Period (except for the Initial First Period) in an
amount (which may be zero but not less than zero) equal to the product of (i)
37.5% of the aggregate Contingent Payment Measurement Amount for such First
Semiannual Period and the immediately preceding Second Semiannual Period in
excess of $65,000,000 and less than $85,000,000, and (ii) a fraction (A) the
numerator of which is the aggregate principal amount of Securities (including
Secondary Securities) outstanding on the close of business on the Record Date
corresponding to such Interest Payment
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Date and (B) the denominator of which is the sum of (x) $187,500,000 and (y) the
total aggregate principal amount of Secondary Securities issued to Holders in
lieu of cash interest payments as of such Record Date.
"FIRST SEMIANNUAL PERIOD" shall mean each six month period
ending on March 31.
"FIXED INTEREST" means interest, payable semi-annually on the
Interest Payment Dates in accordance with this Indenture, at a rate per annum
for the indicated periods:
<TABLE>
<S> <C> <C>
October 30, 1998 through May 15, 1999............5.867%
May 16, 1999 through November 15, 1999.......5.927%
November 16, 1999 through May 15, 2000............5.987%
May 16, 2000 through November 15, 2000.......6.046%
November 16, 2000 through May 15, 2001............6.103%
May 16, 2001 through November 15, 2001.......6.159%
November 16, 2001 through May 15, 2003............6.214%
May 16, 2003 through November 15, 2009.......8.000%
</TABLE>
"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 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.
"FP DEVELOPMENT" means FP Development, L.L.C., a Louisiana
limited liability company.
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"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 JURISDICTION" shall mean any jurisdiction in which the
Company is licensed to conduct gaming activities.
"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, including, 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, as
intervenor, dated as of October 29, 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 REVENUES" shall have the meaning specified in the
Management Agreement as in effect on the date hereof.
"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 October 29, 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) to the
extent the same does 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. To the extent (and only to the extent) that any refinancing
Indebtedness does not comply with the requirements of the preceding clause (i),
such non-compliant amounts shall not constitute Guarantor Senior Debt. It is
understood and agreed that if
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any interest on outstanding Guarantor Senior Debt is deferred or capitalized,
any increased amounts resulting therefrom shall continue to constitute Guarantor
Senior Debt.
"GUARANTORS" means collectively the Parent Guarantor, the
Subsidiary Guarantors and the Development Companies.
"GUARANTY" shall have the meaning specified in Section 12.1.
"HARRAH'S INVESTOR" means Harrah's Crescent City Investment
Company, a Nevada corporation, and its successors.
"HARRAH'S MANAGEMENT COMPANY" means Harrah's New Orleans
Management Company, a Nevada corporation, and its successors.
"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, and its successors.
"HET/JCC AGREEMENT" means the HET/JCC Agreement, dated as of
October 30, 1998, among HET, HOC and the Company (and any substitute or
successor agreement), and any other documents entered into in connection with
(and to the extent relating directly to) such agreement, as amended, modified,
renewed, 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 GUARANTY" means the guarantees of HET and HOC
pursuant to that certain HET/HOC Guaranty and Loan Purchase Agreement, dated as
of October 29, 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 October 30, 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, and its successors.
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"HOLDER" or "SECURITYHOLDER" means the person in whose name a
Security is registered on the Registrar's books.
"HOLDER OF CONTINGENT NOTES" means the person in whose name a
Contingent Note is registered on the books of the registrar with respect to the
Contingent Notes.
"INCENTIVE MANAGEMENT FEES" shall have the meaning specified
in Section 5.19.
"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. 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.
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"INDEMNITY AGREEMENT" means the Amended and Restated
Construction Lien Indemnity Obligation Agreement, dated as of October 30, 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
principal of and interest (including Contingent Payments) on the Securities when
due and payable, whether on the Maturity Date or an Interest Payment Date, by
acceleration, Required Regulatory Redemption, acceptance of any Asset Sale
Offer, Change of Control Offer, or otherwise, and interest on the overdue
principal of, and (to the extent lawful) interest, if any, on, the Securities
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 hereunder or under the
Securities, 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.
"INITIAL FIRST PERIOD CONTINGENT PAYMENTS" means the amount
payable in the aggregate to the Holders of the Securities on the Interest
Payment Date next following the period ending on March 31, 1999 (the "Initial
First Period") in an amount (which may be zero but not less than zero) equal to
the product of (i) 75% of the Contingent Payment Measurement Amount for such
period in excess of $35,000,000 and less than $45,769,000, and (ii) a fraction
(A) the numerator of which is the aggregate principal amount of Securities
(including Secondary Securities) outstanding on the close of business on the
Record Date corresponding to such Interest Payment Date and (B) the denominator
of which is the sum of (x) $187,500,000, and (y) the total aggregate principal
amount of Secondary Securities issued to Holders in lieu of interest payments as
of such Record Date.
"INITIAL MINIMUM PAYMENT GUARANTORS" means HET and HOC.
"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 October 29, 1998, among HET and HOC, as initial Minimum Payment
Guarantors, the Bank Agent, the Trustee, the trustee under the Contingent Notes
Indenture, the Collateral Agent and the other parties named therein, as it may
be amended or supplemented from time to time.
"INTEREST PAYMENT DATE" means the stated due date, specified
in the Security, of an installment of interest on the Securities. The "First
Interest Payment Date" shall mean May 15, 1999. The "Second Interest Payment
Date" shall mean November 15, 1999. The "Third Interest Payment Date" shall mean
May 15, 2000. The "Fourth Interest Payment Date" shall mean November 15, 2000.
The "Fifth Interest Payment Date" shall mean May 15, 2001. The "Sixth Interest
Payment Date" shall mean November 15, 2001.
"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
Contingent Notes, (iii) any guarantees of the Bank Credit Facilities, (iv) any
guarantees of Interest Rate Agreements, (v) any guarantees of the Convertible
Junior Subordinated Debentures, and (vi) 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 Manager of the Company 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 Manager of the Company
in good faith. For purposes of such determination, the amount of outstanding
Investments shall be
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reduced by the fair market value (determined by the Manager of the Company in
good faith) of the net assets of any Unrestricted Subsidiary upon its
designation as a Subsidiary.
"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
15.7.
"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 shall consist of
a Primary Make-Whole Amount and a Secondary Make-Whole Amount.
"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 October 29, 1998, as it may
be amended or supplemented from time to time.
"MANAGEMENT FEE" means "MANAGEMENT FEE" as defined by the
Management Agreement.
"MANAGEMENT FEE REIMBURSEMENT AGREEMENT" means the Management
Fee Reimbursement Agreement, dated as of October 30, 1998, among the Company,
HET and HOC.
"MANAGER" means (i) for so long as a person is a limited
liability company, the Manager of such limited liability company as set forth in
its Operating Agreement or, if such limited liability company's Operating
Agreement does not provide for a Manager, the member or members of such limited
liability company, and (ii) otherwise the Board of Directors of such person.
"MATURITY DATE" means, when used with respect to any Security,
the date on which the principal of such Security becomes due and payable as
therein or herein provided, whether at Stated Maturity, a Change of Control
Payment Date, an Asset Sale Purchase Date or by declaration of acceleration,
call for redemption or otherwise.
"MAXIMUM CONTINGENT PAYMENTS" means, for any Contingent
Payment Period, an amount equal to the product of (i) $15,000,000 and (ii) a
fraction (x) the numerator of which is
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the aggregate principal amount of Securities (including Secondary Securities)
outstanding on the close of business on the Record Date corresponding to the
Interest Payment Date immediately following such Contingent Payment Period, and
(y) the denominator of which is the sum of (I) $187,500,000 and (II) the total
aggregate principal amount of Secondary Securities issued to Holders in lieu of
cash interest payments as of such Record Date.
"MINIMUM ACCUMULATION DATE" shall have the meaning specified
in Section 5.14.
"MINIMUM PAYMENT GUARANTOR" means the Initial Minimum Payment
Guarantors and any other successor or substitute entity or entities which
provides a Minimum Payment Guaranty.
"MINIMUM PAYMENT GUARANTY" means the Minimum Payment Guaranty
(as defined in the Casino Operating Contract) that the Casino Operating Contract
obligates the Company to cause to be provided to the State of Louisiana by and
through the Regulating Authority, as the same may be amended, supplemented or
modified from time to time, including any replacement or renewal thereof.
"MINIMUM PAYMENT GUARANTY DOCUMENTS" means each Minimum
Payment Guaranty and all agreements or documents (including, without limitation,
the HET/JCC Agreement) executed and delivered in connection therewith.
"MINIMUM PAYMENT GUARANTY OBLIGATIONS" shall have the meaning
specified in the Intercreditor Agreement.
"MORTGAGES" shall mean, collectively (i) the Act of Mortgage
and Collateral Assignment, dated as of October 29, 1998, by the Company, as
mortgagor, in favor of the Collateral Agent, as mortgagee for the benefit of the
Secured Creditors, (ii) the Act of Mortgage and Collateral Assignment, dated as
of October 29, 1998, by JCC Development, as mortgagor, in favor of the
Collateral Agent, as mortgagee for the benefit of the Secured Creditors, (iii)
the Act of Mortgage and Collateral Assignment, dated as of October 29, 1998, by
FP Development, as mortgagor, in favor of the Collateral Agent, as mortgagee,
for the benefit of the Secured Creditors, (iv) the Act of Mortgage and
Collateral Assignment, dated as of October 29, 1998, by CP Development, as
mortgagor, in favor of the Collateral Agent, as mortgagee for the benefit of the
Secured Creditors, and (v) any mortgage, deed of trust, assignment of leases or
rents or similar document executed and delivered at any time after the date
hereof by JCC Holding or any of its Subsidiaries to secure any obligations to
the Secured Creditors.
"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
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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 Secured Creditors pursuant to Section 4.4 and the
terms of the Security 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 Manager of the Company), 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.
"NET WORKING CAPITAL" means, for any person as of any date,
the Current Assets of such person as of such date minus the Current Liabilities
of such person as of such date. Net Working Capital shall be determined in
accordance with GAAP. "Current Assets" means all cash, cash equivalents,
inventory and accounts receivable, calculated in accordance with GAAP. "Current
Liabilities" means all current liabilities calculated in accordance with GAAP.
"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, Contingent Payments, Make-Whole Amounts, penalties fees,
indemnifications, reimbursements (including, without limitation, reimbursement
obligations with respect to letters of credit and bankers' acceptances), damages
and other liabilities payable under the documentation governing, or otherwise
relating to, any Indebtedness. Without limiting the foregoing, the "Obligations"
in respect of Senior Debt and the Notes shall include all interest accruing
after the filing of any petition or proceeding of the type referenced in Section
13.2 or 14.2 with respect to the Company or any Guarantor at (i) with respect to
Senior Debt, the relevant contract rate provided in the documentation governing
the respective issue of Senior Debt, and (ii) with respect to the Notes, the
rate specified in the Security, in each case regardless of whether such interest
is an allowed claim in the relevant proceeding.
"OFFER TO PURCHASE" means any Change of Control Offer or Asset
Sale Offer.
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"OFFER TO PURCHASE PRICE" means any Change of Control Offer
Price or Asset Sale Offer Price.
"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 Authorized Representative of such
entity 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 with respect to 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 (or any Guarantor, if applicable) 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 (or such Guarantor, if applicable).
"PARENT GUARANTOR" means JCC Holding.
"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.
"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") 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 Collateral Agent under the Collateral
Documents).
"PERMITTED GUARANTY" shall mean any guarantee of Permitted
Junior Securities (which Permitted Junior Securities constitute debt securities
issued by the Company in accordance with the definition thereof contained
herein), which guarantee is issued by a
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Guarantor or any successor corporation pursuant to a plan of reorganization or
readjustment of such Guarantor or any successor corporation pursuant to a plan
of reorganization or readjustment of such Guarantor that is subordinated to the
payment of all then outstanding Guarantor Senior Debt at least to the same
extent that the Guarantee of such Guarantor is subordinated to the payment of
all Guarantor Senior Debt on the date of the original effectiveness of this
Indenture, so long as (i) the effect of the use of this defined term in the
subordination provisions contained in Article XIV is not to cause the Securities
(or any Guarantee thereof) to be treated as part of (a) the same class of claims
as any Senior Debt or Guarantor Senior Debt or (b) any class of claims pari
passu with, or senior to, the Senior Debt or Guarantor Senior Debt for any
payment or distribution in any case or proceeding or similar event relating to
the liquidation, insolvency, bankruptcy, dissolution, winding up or
reorganization of the Company or any Guarantor and (ii) to the extent any Senior
Debt or Guarantor Senior Debt outstanding on the date of consummation of any
such plan of reorganization or readjustment is not paid in full in cash on such
date, either (a) the holders of such Senior Debt or Guarantor Senior Debt not so
paid in full in cash have consented to the terms of such plan of reorganization
or readjustment or (b) such holders receive securities which constitute Senior
Debt and Guarantor Senior Debt and which have been determined by the relevant
court to constitute satisfaction in full in money or money's worth of any Senior
Debt (and any related Guarantor Senior Debt) not paid in full in cash.
"PERMITTED INDEBTEDNESS" means any of the following:
(a) the Company and any Subsidiary 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);
(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
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(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 JUNIOR SECURITIES" shall mean debt or equity
securities of the Company or any successor corporation issued pursuant to a plan
of reorganization or readjustment of the Company that are subordinated to the
payment of all then outstanding Senior Debt at least to the same extent that the
Securities are subordinated to the payment of all Senior Debt on the date of the
original effectiveness of this Indenture so long as (i) the effect of the use of
this defined term in the subordination provisions contained in Article XIII is
not to cause the Securities to be treated as part of (a) the same class of
claims as the Senior Debt or (b) any class of claims pari passu with, or senior
to, the Senior Debt for any payment or distribution in any case or proceeding or
similar event relating to the liquidation, insolvency, bankruptcy, dissolution,
winding up or reorganization of the Company and (ii) to the extent that any
Senior Debt outstanding on the date of consummation of any such plan of
reorganization or readjustment is not paid in full in cash on such date, either
(a) the holders of any such Senior Debt not so paid in full in cash have
consented to the terms of such plan of reorganization or readjustment or (b)
such holders receive securities which constitute Senior Debt (which are
guaranteed pursuant to guarantees constituting Guarantor Senior Debt of each
Guarantor) and which have been determined by the relevant court to constitute
satisfaction in full in money or money's worth of any Senior Debt (and any
related Guarantor Senior Debt) not paid in full in cash.
"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
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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 Contingent Notes
Indenture and the Collateral Documents (which Liens may also secure
certain other indebtedness and certain refinancings thereof on the
terms provided in the Collateral Documents and the Intercreditor
Agreement);
(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 (i) 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; (ii) for so long as the Company is treated as a
corporation for federal income tax purposes and for any taxable year of the
Company in which it joins in filing a consolidated federal income tax return
with JCC Holding, a 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 (A) 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
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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 (B) 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; (iii)
payment by the Company to the Parent Guarantor in an amount not in excess of the
separate return federal and state income tax liability (if any) of the Parent
Guarantor attributable to the aggregate items of income, gain, loss, deduction
or credit generated by the Development Companies; and (iv) payment by the
Company to the Parent Guarantor in an amount not in excess of any state or local
franchise tax (or any similar tax based on assets or capital) liability of the
Parent Guarantor (except to the extent that such liability is attributable to
the Parent Guarantor's investment in an entity other than the Company (or any
Subsidiaries thereof) or the Development Companies); provided, that for purposes
of clauses (i) through (iv), any such payment can be made by the Company no
earlier than the date on which the Parent Guarantor is required to make such tax
payment for such year to the appropriate taxing authority; and provided,
further, that for purposes of clause (ii)(B) 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 Distributions 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 clause (ii) of the preceding sentence for federal income taxes.
"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 Third Amended Joint Plan of
Reorganization under Chapter 11 of the Bankruptcy Code, As Modified Through
October 13, 1998, filed with the United States Bankruptcy Court for the Eastern
District of Louisiana by Harrah's Jazz Company, Harrah's Jazz Finance Corp., and
Harrah's New Orleans Investment Company (including all exhibits and schedules
annexed thereto).
"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 October
30, 1998, executed by JCC Holding, the Company, CP Development, FP Development
and JCC Development in favor of, the Collateral Agent and the custodian named
therein for the benefit of the Secured Creditors, as the same may be amended or
supplemented from time to time.
"PRIMARY MAKE-WHOLE AMOUNT" shall mean, as of any date, the
greater of (a) zero and (b) the present value (using a discount rate equal to
the Formula Rate at such time) of the
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remaining scheduled payments of principal and Fixed Interest (excluding the
Maximum Contingent Payments for the then current and all remaining Contingent
Payment Periods) payable in respect of the Notes minus the aggregate principal
amount of the Notes outstanding on such date.
"PRINCIPAL" or "PRINCIPAL" of any Indebtedness (including the
Securities) means the principal of such Indebtedness plus any applicable
premium, if any, on such Indebtedness.
"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" means any capital addition, improvement,
extension or repair, after the Casino Completion Date, to any of the Company's
properties.
"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 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.
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"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 that are at least as favorable to the holders of the Notes as those
relating to the subordinated Indebtedness so refinanced.
"RDC" means Rivergate Development Corporation, a Louisiana
public benefit corporation.
"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 the principal amount thereof, plus accrued and unpaid
interest (including due 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).
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"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 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 (or any successor thereto).
"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
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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 Manager 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 suitable or to
otherwise qualify under any gaming laws and is not found suitable or so
qualified within a reasonable period of time. Without limiting the generality of
the foregoing, if the Company receives written notice from Harrah's Management
Company pursuant to Section 21.03 of the Management Agreement that Securities
have been transferred to a Non-Qualified Person (as defined in the Management
Agreement), the Company shall be entitled to redeem such Securities from such
Non-Qualified Person and such redemption shall be a Required Regulatory
Redemption.
"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 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, 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 in favor of
the Collateral Agent for the benefit of the Secured Creditors; (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 in favor
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of the Collateral Agent for the benefit of the Secured Creditors pursuant to the
Collateral Documents 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 Indemnity Agreement; (viii) payments to the
Minimum Payment Guarantor in respect of Minimum Payment Guaranty Obligations;
(ix) payments in respect of any Slot Machine Lease; (x) payments pursuant to
Section 6.2(q) and/or Section 6.2(s) of the Plan of Reorganization (and payments
by the Company to the Parent Guarantor to the extent the Parent Guarantor uses
such payments to make payments pursuant to section 6.2(q) and/or Section 6.2(s)
of the Plan of Reorganization); (xi) payments in respect of a Required
Regulatory Redemption of any security of the Company (and payments by the
Company to the Parent Guarantor to the extent the Parent Guarantor uses such
payments to make payments in respect of a Required Regulatory Redemption of any
security of the Parent Guarantor); (xii) payments under or in respect of the
Credit Enhancement Fee Agreement and the Management Agreement (including,
without limitation, payments of all deferred and unpaid fees or amounts owing
under or in respect of any of the foregoing); (xiii) the conversion of
Convertible Junior Subordinated Debentures into shares of Capital Stock of the
Parent Guarantor in accordance with the terms of the Convertible Junior
Subordinated Debentures Indenture; and (xiv) any payments under or pursuant to
the Bank Credit Facilities.
"REVOLVING LOANS" means collectively the Revolving Loans, the
Swingline Loans and the Letters of Credit under the Bank Credit Facilities.
"SEC" means the Securities and Exchange Commission.
"SECOND FLOOR SUBLEASE" means the Second Floor Non-Gaming
Sublease, dated as of October 29, 1998, between the Company and JCC Development
relating to JCC Development's sublease of the second floor of the Casino.
"SECOND PERIOD CONTINGENT PAYMENTS" means the amount payable
in the aggregate to the Holders of the Securities on the Interest Payment Date
next following a Second Semiannual Period in an amount (which may be zero but
not less than zero) equal to (A) the product of (i) 75% of the aggregate
Contingent Payment Measurement Amount for such Second Semiannual Period and the
immediately preceding First Semiannual Period in excess of $65,000,000 and less
than $85,000,000, and (ii) a fraction (x) the numerator of which is the
aggregate principal amount of Securities (including Secondary Securities)
outstanding on the close of business on the Record Date corresponding to such
Interest Payment Date and (y) the denominator of which is the sum of (I)
$187,500,000 and (II) the total aggregate principal amount of Secondary
Securities issued to Holders in lieu of cash interest payments as of such Record
Date, less (B) the aggregate amount, if any, of First Period Contingent Payments
or Initial First Period Contingent Payments, as applicable, paid or accrued on
the immediately preceding Interest Payment Date.
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"SECOND SEMIANNUAL PERIOD" shall mean each six month period
ending on September 30.
"SECONDARY MAKE-WHOLE AMOUNT" shall mean, as of any date, the
present value (determined using a discount rate equal to the Formula Rate at
such time) of the aggregate Maximum Contingent Payments (other than accrued or
paid Contingent Payments) with respect to the then current Contingent Payment
Period and all future Contingent Payment Periods through Stated Maturity, less
the absolute value of any negative amount determined according to clause (b) of
the definition of "Primary Make-Whole Amount."
"SECONDARY SECURITIES" has the meaning set forth in Section
2.2.
"SECURED CREDITORS" means, collectively, the Minimum Payment
Guarantor, the Bank Agent and the Bank Lenders, the Trustee, the trustee under
the Contingent Notes Indenture, and other Bank Lenders (or affiliates thereof)
entering into Interest Rate Agreements with, or guaranteed by, the Company, so
long as such Bank Lender (or affiliate thereof) participates in the extension of
such Interest Rate Agreements, and their subsequent assigns, if any.
"SECURITIES" or "NOTES" means the Senior Subordinated Notes
due 2009, including any Secondary Securities issued as interest thereon, 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
October 29, 1998, executed by JCC Holding, the Company, CP Development, FP
Development and JCC Development in favor of the Collateral Agent for the benefit
of the Secured Creditors, as the same may be amended from time to time in
accordance with the terms thereof.
"SECURITY AGREEMENT (HOUSE BANK)" means the Security Agreement
(House Bank), dated as of October 30, 1998, executed by the Company in favor of
HET and HOC, as it 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 Collateral Agent for the benefit of
the Secured Creditors.
"SEMIANNUAL PERIOD" means either a First Semiannual Period or
a Second Semiannual Period, as applicable.
"SENIOR DEBT" means (i) 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
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Tranche A Term Loans or the Revolving Loans (or any previous refinancing
thereof) to the extent the same does not increase the principal amount of
Indebtedness outstanding and available thereunder (except to the extent (a)
accrued and unpaid interest and/or other amounts owing with respect to the
refinanced indebtedness is refinanced and/or (b) of the fees and expenses
incurred in connection with the refinancing indebtedness) or decrease the
weighted-average maturity thereof, and (ii) the Minimum Payment Guaranty
Obligations and any refinancing thereof in accordance with Section 5.11(f). To
the extent (and only to the extent) that any refinancing Indebtedness does not
comply with the requirements of preceding clause (i), such non-compliant amounts
shall not constitute Senior Debt. It is understood and agreed that if any
interest on outstanding Senior Debt is deferred or capitalized, any increased
amounts resulting therefrom shall continue to constitute Senior Debt.
"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.
"SLOT MACHINE LEASE" means an operating lease, if authorized
pursuant to the Company's annual operating plan, that the Company may enter into
after the date hereof with HET or a Subsidiary of HET pursuant to which the
Company may lease from HET or such Subsidiary no more than 1,100 slot machines
for use in the Casino on terms that are fair and reasonable to the Company and
at least as favorable as the terms which could be obtained by the Company in a
comparable transaction made on an arm's length basis with a person other than
HET or such Subsidiary. A Slot Machine Lease shall be deemed to be on terms
which are fair and reasonable to the Company and on terms which are at least as
favorable as the terms which could be obtained on an arm's length basis with
persons other than HET or such Subsidiary if such Slot Machine Lease (i) is
approved by a majority of the members of the Parent Guarantor'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 (ii) requires
the Company to make lease payments based on a value of such slot machines that
is equal to or less than the appraised value of such slot machines as set forth
in an appraisal of such slot machines by an appraisal firm of national
reputation.
"STATED MATURITY" means November 15, 2009.
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"SUBORDINATED CREDIT FACILITY" means the Subordinated Loan
Agreement, dated as of October 30, 1998, among the Company, 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 October 30,
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.
"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 Loans under
the Bank Credit Facilities.
"TRANCHE A-2 TERM LOAN" means the Tranche A-2 Term Loans under
the Bank Credit Facilities.
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"TRANCHE A-3 TERM LOAN" means the Tranche A-3 Term Loans 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 Loans under
the Bank Credit Facilities.
"TRANCHE B-2 TERM LOAN" means the Tranche B-2 Term Loans 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). 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 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.
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"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 outstanding principal
amount of the Notes. For purposes of this definition, "Remaining Dollar-Years"
as of any date, means the amount obtained by multiplying the aggregate
outstanding principal amount 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.
"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;
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(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 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 Guarantors and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Any reference in this Indenture to "accrued interest" includes
the amount of unpaid Contingent Payments due and payable.
SECTION 2.2. EXECUTION AND AUTHENTICATION.
(a) The Securities shall be executed on behalf of the Company
by an Officer of the Company. The signature of any such Officer on the
Securities may be manual or facsimile.
(b) Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper Officers of the Company shall bind
the Company, notwithstanding that such individual or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities.
(c) 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.
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(d) The Trustee shall authenticate Securities, excluding
Secondary Securities, for original issue in the aggregate principal amount of up
to $187,500,000 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 principal amount of Securities outstanding at any time may not
exceed $187,500,000, except for any Secondary Securities that may be issued
pursuant to this Section 2.2 and except as provided in Sections 2.7 and 2.8.
Upon the written order of the Company 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.
(e) The Company shall pay Fixed Interest and Contingent
Payments from October 30, 1998 or from the most recent Interest Payment Date to
which Fixed Interest or Contingent Payments, as applicable, has been paid or
provided for. The Company may, on any of the First Interest Payment Date, the
Second Interest Payment Date, the Third Interest Payment Date, the Fourth
Interest Payment Date, the Fifth Interest Payment Date and the Sixth Interest
Payment Date, at its option and in its sole discretion, pay Fixed Interest in
additional Securities ("Secondary Securities") in lieu of the payment in whole
or in part of Fixed Interest in cash on the Securities as provided in paragraph
1 of the Securities; PROVIDED, HOWEVER, that if any Indebtedness is outstanding
under the Tranche A-1 Term Loan or the Tranche A-2 Term Loan on any of the First
Interest Payment Date, the Second Interest Payment Date, the Third Interest
Payment Date or the Fourth Interest Payment Date, the Company shall pay the
Fixed Interest due and payable on such Interest Payment Date in Secondary
Securities in lieu of the payment of such Fixed Interest in cash; PROVIDED,
FURTHER, HOWEVER, that on the Fifth Interest Payment Date and the Sixth Interest
Payment Date the Company shall not be entitled to pay Fixed Interest due and
payable on such Interest Payment Date in Secondary Securities in lieu of the
payment of such Fixed Interest in cash if on the last Business Day of the
corresponding Semiannual Period (i) the Company has no outstanding borrowings
under the Tranche A-1 Term Loan and the Tranche A-2 Term Loan, (ii) no Revolving
Loans are outstanding, and (iii) the Company has at least $20,000,000 of cash
and Cash Equivalents. In addition, if the Company's Consolidated EBITDA is less
than $28,500,000 for the twelve month period ending on the last day of the
Semiannual Period immediately preceding any Interest Payment Date occurring
after the Sixth Interest Payment Date, the Company shall pay the Fixed Interest
due and payable on such Interest Payment Date in Secondary Securities in lieu of
the payment of such Fixed Interest in cash. Any such Secondary Securities shall
be governed by this Indenture and shall be subject to the same terms (including
Stated Maturity and rates of interest from time to time payable thereon (but not
including the issuance date)) on all other Securities.
(f) The Company shall give written notice to the Trustee of
the amount of interest to be paid in Secondary Securities not less than five
Business Days prior to the applicable Interest Payment Date, and the Trustee or
an authenticating agent (upon written order of the Company signed by an
Authorized Representatives of the Company given not less than five nor more than
45 days prior to such Interest Payment Date) shall authenticate for original
issue (PRO RATA to each Holder of any Securities on the applicable Record Date)
Secondary Securities in an aggregate principal amount equal to the amount of
cash interest not paid on such Interest Payment Date. Each issuance of Secondary
Securities in lieu of the payment of Fixed
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Interest in cash on the Securities shall be made PRO RATA with respect to the
outstanding Securities, and the Company shall have the right to aggregate
amounts of interest payable in the form of Secondary Securities to a Holder of
outstanding Securities and issue to such holder a single Secondary Security in
payment thereof. Secondary Securities may be denominated a separate series if
the Company deems it necessary to do so in order to comply with any law or other
applicable regulation or requirement, with appropriate distinguishing
designations.
(g) 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.
(h) Securities shall be issuable only in registered form
without coupons in denominations of $1.00 and any integral multiple thereof;
PROVIDED, HOWEVER, that the Company may at its option pay cash in lieu of
issuing Secondary Securities in any denominations of less than $1.00.
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, any Subsidiary
of 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 and/or Secondary Securities held by the
Paying Agent for the payment of principal of, or interest on, the Securities,
and shall notify the Trustee in writing of any Default by the Company in
making any such payment. If the
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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 and/or Secondary Securities 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 and/or Secondary Securities
held by it to the Trustee and to account for any assets distributed. Upon
distribution to the Trustee of all assets and/or Secondary Securities 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 and/or
Secondary Securities.
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, 3.7, 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 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.
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Every replacement Security is an additional obligation of the
Company and the Guarantors.
SECTION 2.8. OUTSTANDING SECURITIES. Securities outstanding at
any time are all the Securities that have been authenticated by the Trustee,
including Secondary Securities, except those canceled 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 on a Redemption Date or the Maturity Date the Paying Agent
(other than the Company or an Affiliate of the Company) holds U.S. Legal Tender
or U.S. Government Obligations sufficient to pay all of the principal and
interest (including Contingent Payments) due on the Securities payable on that
date and payment of the Securities called for redemption is not otherwise
prohibited, then on and after that date such Securities cease to be outstanding
and interest (including Contingent Payments) on them ceases to accrue unless the
Company defaults in its obligations with respect thereto.
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 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 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.
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
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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 canceled 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. Interest (including
Contingent Payments) on any Security which is payable, and is 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.
Any interest (including Contingent Payments) on any Security
which is payable, but is not punctually paid or duly provided for, on any
Interest Payment Date plus, to the extent lawful, any interest payable on the
defaulted interest (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 (a "Special Record Date"), 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 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
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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 interest (including
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, then the Redemption Price shall be the
principal amount thereof, plus accrued and unpaid interest to the date of
redemption (or such lesser amount as may be required by applicable law or by
order of any Gaming Authority). The Company shall tender the Redemption Price
(together with any accrued and unpaid interest) to the Trustee no less than 20
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.
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 aggregate principal amount of the Securities 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 20 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
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give the notice of redemption in the Company's name and at the Company's
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 the principal amount, equal to $1.00 or any integral
multiple thereof, of such Security to be redeemed and that, after the
Redemption Date, and upon surrender of such Security, a new Security or
Securities in aggregate principal amount equal to 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 aggregate principal amount of
such Securities to be redeemed and the aggregate principal amount of
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.
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.
Interest (including 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.
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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 equal in principal amount to 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 Guarantors
and, as applicable, the Trustee, the other Secured Creditors and the Collateral
Agent for the benefit of the Secured Creditors 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 is to be held by the Collateral Agent for
the benefit of the Secured Creditors, subject to the terms of the Intercreditor
Agreement, the Collateral Documents and Section 4.6.
(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
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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
October 30, 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 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
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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 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, release or
otherwise dispose of, free from the security interests under the
Collateral Documents, the Intercreditor Agreement and hereunder, any
Collateral as permitted by and pursuant to the express terms of any of
the Collateral Documents;
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 Mortgages 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.
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(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 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 the Collateral Agent for the benefit of
the Secured Creditors. 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 Intercreditor Agreement and 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 Guarantors 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
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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.
SECTION 4.6. LIEN SUBORDINATION.
(a) The Trustee and each Holder acknowledge that, as more
fully set forth in the Collateral Documents and the Intercreditor Agreement, 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 rights of holders
of Senior Debt to receive proceeds from the disposition of Collateral, and is
pari passu with the rights of the Holders of Contingent Notes and the rights of
holders of Senior Subordinated Debt to receive proceeds from the disposition of
Collateral.
(b) The priorities set forth in this Section 4.6 and the
Intercreditor Agreement 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 any Secured Creditor under the applicable law.
(c) The priorities set forth in this Section 4.6 and in the
Intercreditor Agreement shall be as set forth herein notwithstanding any defects
in connection with the creation, perfection or priority of the Security
Interests. 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 Security Interests, and provided further, that
nothing herein shall be deemed or construed to prevent the Minimum Payment
Guarantor or 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.
(d) To the extent the priorities set forth in this Section 4.6
are inconsistent with the Intercreditor Agreement, the terms of the
Intercreditor Agreement shall control.
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.
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 enforcement of, or compliance
with, such enactment, rule or order would impair the
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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, or any other documents
contemplated hereunder to the contrary:
(a) This Indenture and the Collateral Documents shall grant no
Liens, or any other security or other interests or right in or to (i) the Casino
Operating Contract, (ii) the House Bank (as defined in the Management
Agreement), and (iii) the Louisiana Gaming Gross Revenue Share Payments
(including the State's Interest in Daily Collections), as such terms are defined
in the Casino Operating Contract;
(b) The Casino Operating Contract and the Louisiana Gaming
Gross Revenue Share Payments (including the State's Interest in Daily
Collections), are not part of the Collateral and are not included within the
definition of Collateral;
(c) The Security Interests in favor of the Secured Creditors
(other than the Minimum Payment Guarantor) granted by the Collateral Documents
are subordinated to the Security Interests securing the Minimum Payment Guaranty
Obligations; and
(d) The Security Agreement (House Bank) (i) is not included
within the definition of Collateral Documents, and (ii) grants the Minimum
Payment Guarantor (but not the other Secured Creditors) a security interest in
the House Bank.
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ARTICLE V.
COVENANTS
SECTION 5.1. PAYMENT OF SECURITIES.
(a) The Company shall duly and punctually pay the principal of
and interest (including Contingent Payments) on the Securities at the places, on
the dates and in the manner provided in the Securities and this Indenture. An
installment of principal of or interest (including 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 and/or, to the extent permitted or required by Section
2.2, Secondary Securities, deposited and designated 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 principal,
interest or Secondary Securities to the Holders pursuant to this Indenture.
(b) If, on any Interest Payment Date, no Contingent Payments
are due and payable to Holders pursuant to the definition of Initial First
Period Contingent Payments, First Period Contingent Payments or Second Period
Contingent Payments, as applicable, no Contingent Payments shall be accrued or
paid on such Interest Payment Date. If and to the extent that, the Contingent
Payment Measurement Amount 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 paid or accrued, if any, and the amount of such
Maximum Contingent Payments with respect to such period will never be accrued or
paid.
(c) The Company shall pay interest (including post-petition
interest in any proceeding under any applicable Bankruptcy Law) on overdue
principal and on overdue installments of interest (including due and unpaid
Contingent Payments) at the rate of 8% per annum compounded semi-annually, to
the extent lawful.
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
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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
respect to each such Contingent Payment Period and (b) the Maximum Contingent
Payments (in this instance only, as defined in the Contingent Notes Indenture)
with respect to the Contingent Notes with respect to each such Contingent
Payment Period.
The foregoing clauses (1), (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, (E) dividends and distributions (other than Permitted Tax
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
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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,
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, its Subsidiaries and the
Development Companies), and (F) Restricted Investments by the Company in any of
the Development Companies, and Restricted Payments by the Company to the Parent
Guarantor to the extent the Parent Guarantor uses such Restricted Payment to
make an Investment in any of the Development Companies. The full amount of any
Restricted Payment made pursuant to either of clauses (A), (B) and (F) (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), (E) and (F) 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 and
Article XII, the Company and the Guarantors shall do or cause to be done all
things necessary to preserve and keep in full force and effect their
existence, rights (charter and statutory) and franchises in accordance with
the respective organizational documents of each of them; provided, however,
that neither the Company nor any Guarantor shall be required to preserve 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 Subsidiary 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
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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, the Collateral Documents and the Bank Credit
Facilities 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
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, or an event of default under
the Bank Credit Facilities, an Officers' Certificate specifying such Default or
Event of Default under the Indenture, or event of default under the Bank Credit
Facilities, as applicable, 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
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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, if any, the
Contingent Payment Accrual amount, if any, and the Company's Consolidated EBITDA
and the Contingent Payment Measurement Amount with respect to the most recently
ended fiscal quarter, and in the case of annual reports, the audited Contingent
Payments made, if any, the audited Contingent Payment Accrual amount, if any,
and audited Consolidated EBITDA and the Contingent Payment Measurement Amount
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 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 principal of or
interest (including 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
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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; PROVIDED, FURTHER, HOWEVER, (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 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 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
Management Fee Reimbursement Agreement, the Collateral Documents, the Security
Agreement (House Bank), the Completion Guarantees, the Completion Loan
Agreement, the Indemnity Agreement, the HET Loan Guaranty, the Credit
Enhancement Fee Agreement, the Minimum Payment Guaranty Documents, the HET/JCC
Agreement, the Second Floor Sublease, the Subordinated Credit Facility, a Slot
Machine Lease, 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, and (iv) Restricted Payments to the extent permitted by Section 5.3.
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
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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 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 its Subsidiaries may incur (i)
Indebtedness evidenced by the Notes (including the issuance of Secondary
Securities in lieu of cash interest payments pursuant to the terms of this
Indenture) and represented by this Indenture up to the amounts specified herein
and therein as of the date hereof and thereof and (ii) Indebtedness evidenced by
the Contingent Notes and represented by the Contingent 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 (the "FF&E
Basket") during the period from the Issue Date until the third anniversary of
the Casino Opening Date; on the third anniversary of the Casino Opening Date,
the FF&E Basket shall increase by $2,000,000; and the FF&E Basket shall increase
by an additional $2,000,000 on each subsequent anniversary of the Casino Opening
Date; provided, however, 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 Subsidiary 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 Subsidiary may incur Refinancing
Indebtedness with respect to any Indebtedness or Disqualified Capital Stock, as
applicable, described in
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clauses (a) through (e), (h), (i), (o) and (p) 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 and any Subsidiary may incur Indebtedness
pursuant to, or in respect of, (i) the Tranche A-1 Term Loans in an aggregate
principal amount outstanding at any time not to exceed $10,000,000, (ii) the
Tranche A-2 Term Loans in an aggregate principal amount outstanding at any time
not to exceed $20,000,000, (iii) the Tranche A-3 Term Loans in an aggregate
principal amount outstanding at any time not to exceed $30,000,000, (iv) the
Tranche B-1 Term Loans in an aggregate principal amount outstanding at any time
not to exceed $30,000,000, and (v) the Tranche B-2 Term Loans in an aggregate
principal amount outstanding at any time not to exceed $121,500,000 (in each
case, less the amount of any permanent reductions in the principal amounts
thereunder pursuant to Section 5.14);
(i) the Company and any of its Subsidiaries may incur
Indebtedness incurred pursuant to the Completion Guarantees (including without
limitation under the Completion Loan Agreement), the HET Loan Guaranty and the
Indemnity Agreement or arising as a result of any payment made thereunder;
(j) the Company and any Subsidiary may defer and accrue all
fees and all other amounts owing under the Management Agreement and the Credit
Enhancement Fee 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 Interest Rate Agreements in the ordinary course of business;
(m) the Company and its Subsidiaries may incur Indebtedness
pursuant to, or in respect of, the Subordinated Credit Facility in an aggregate
principal amount outstanding at any time not to exceed $22,500,000 (excluding
accrued and unpaid interest);
(n) the Company and its Subsidiaries may incur Indebtedness
evidenced by (i) the Convertible Junior Subordinated Debentures in an aggregate
principal amount outstanding at any time not to exceed $27,500,000 and (ii)
additional Convertible Junior Subordinated Debentures in lieu of cash interest
payments thereon in accordance with the terms of the Convertible Junior
Subordinated Debentures Indenture;
(o) the Company and any Subsidiary may incur Indebtedness
pursuant to, or in connection with, any Minimum Payment Guaranty Documents or
Minimum Payment Guaranty Obligations; and
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(p) the Company and any Subsidiary may incur Indebtedness
which constitutes Protective Advances (as defined in the Intercreditor
Agreement) in accordance with the terms of the Intercreditor 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 Company except (a) restrictions imposed by the Bank Credit Facilities,
the Notes, the Contingent Notes, this Indenture, the Contingent Notes Indenture,
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 HET Loan
Guaranty or the Minimum Payment Guaranty Documents, (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, and the Parent Guarantor and the
Development Companies will not, 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 in favor
of the Collateral Agent for the benefit of the Secured Creditors created by the
Collateral
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Documents and the Intercreditor Agreement and any other future Liens in favor of
the Collateral Agent for the benefit of the Secured Creditors affecting other
Property of the Parent Guarantor, the Company, its Subsidiaries or the
Development Companies securing the Indebtedness described in the Intercreditor
Agreement or the Collateral Documents, (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 the acquired or leased FF&E,
(d) Liens in favor of the Collateral Agent, for the benefit of the Secured
Creditors to secure Indebtedness described in the Intercreditor Agreement or the
Collateral Documents, in Property used as a substitute Property in consideration
of the release of Property in which a Lien is granted pursuant to the Collateral
Documents or the Intercreditor Agreement, (e) Liens securing Subordinated Debt;
provided, that the instrument creating such Lien contains provisions expressly
subordinating such Subordinated Debt to the Notes and the Contingent Notes and
subordinating such Liens to the Liens securing the Notes and the Contingent
Notes and (f) a Lien on the House Bank (as defined in the Security Agreement
(House Bank)) in favor of the Minimum Payment Guarantor. Notwithstanding the
foregoing, Liens granted pursuant to clauses (b) and (d) above shall only be
released in accordance with the Intercreditor Agreement or the Collateral
Documents.
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 (i) within 210 days after the date of such Asset
Sale applied (A) first, to amounts outstanding (and/or permanent reductions in
commitments) under, or in respect of, the Tranche A Term Loans with a permanent
reduction of the amounts available under, or in respect of, Tranche A Term
Loans, and to amounts outstanding (and/or permanent reductions in commitments)
under, or in respect of, the Tranche B Term Loans and/or the Revolving Loans,
with a permanent reduction of the amounts available under, or in respect of, the
Tranche B Term Loans and/or the Revolving Loans; PROVIDED, HOWEVER, that the
amount of Net Cash Proceeds applied to amounts outstanding (and/or permanent
reductions in commitments) under, or in respect of, the Tranche B Term Loans
and/or the Revolving Loans pursuant to this clause (A) shall in no event exceed
$12,500,000; and (B) second, to the extent not applied (or required to be
applied) pursuant to clause (A), (I) to the repurchase of the Notes pursuant to
an irrevocable, unconditional offer (the "Asset Sale Offer") to repurchase the
Notes at the Asset Sale Offer Price made within 180 days of such Asset Sale, and
(II) to amounts outstanding (and/or permanent reductions in commitments) under,
or in respect of, Revolving Loans and Senior Subordinated Debt with a permanent
reduction of the amounts available under, or in respect of, Revolving Loans and
Senior Subordinated Debt (with the portion of the Aggregate Amount to be applied
to the repurchase of the Notes pursuant to the
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Asset Sale Offer (the "Asset Sale Offer Amount") being equal to the Aggregate
Amount (less that portion of the Aggregate Amount applied as provided in clause
(i)(A) above and clause (ii) below) multiplied by a fraction, the numerator of
which is the aggregate principal amount of the Notes then outstanding (less an
amount equal to the Accumulated Amount at such time, determined prior to any
increase thereto as a result of the respective Asset Sale) and the denominator
of which is the aggregate principal amount of Notes then outstanding (less an
amount equal to the Accumulated Amount at such time, determined prior to any
increase thereto as a result of the respective Asset Sale) plus the principal
amount of Indebtedness then outstanding and amounts available under, or in
respect of, Revolving Loans and Senior Subordinated Debt and/or (ii) the
Aggregate Amount (less that portion of the Aggregate Amount applied as provided
in clause (i) above) is reinvested by the Company to make replacements,
improvements or additions to existing properties or new properties and such
reinvestment is made or committed to be made (such commitment to be established
by (A) the purchase of a new property, the ground-breaking or the commencement
of construction, in each case within 180 days of such Asset Sale or (B) promptly
placing the Net Cash Proceeds in a Restricted Funds Account, provided that such
Net Cash Proceeds are invested as aforesaid in existing properties or new
properties within three years of being placed in such Restricted Funds Account)
within 180 days of such Asset Sale, (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, (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 and (5) no Minimum
Payment Guaranty Obligations are due and unpaid. 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;
(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;
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(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; and
(v) the Company may enter into, and comply with its
obligations under, the Second Floor Sublease.
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 Secured Creditors), 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 to amounts outstanding
(and/or permanent reductions in commitments) under, or in respect of,
Indebtedness described in clause (1)(i)(A) of Section 5.14(a) with a permanent
reduction of the amounts available under or in respect of, such Indebtedness. To
the extent that there are no amounts outstanding, and there are no amounts
available under, or in respect of, Indebtedness described in clause (1)(i)(A) of
Section 5.14(a), at such time, the Company shall commence an Asset Sale Offer to
the Holders to purchase, on a PRO RATA basis, for U.S. Legal Tender Securities
having a principal amount equal to the Asset Sale Offer Amount, at a purchase
price (the "Asset Sale Offer Price") equal to 100% of principal amount, plus
accrued but unpaid interest (including Contingent Payments) to, and including,
the date (the "Asset Sale Purchase Date") the Securities tendered are purchased
and paid for in accordance with this Section 5.14. Notice of an Asset Sale Offer
shall be sent, not later than 20 Business Days prior to the close of business on
the Asset Sale Put Date (as defined below), by first-class mail, by the Company
to each Holder at its registered address, with a copy to the Trustee. The notice
to the Holders shall contain all information, instructions and materials
required by applicable law or otherwise material to such Holders' decision to
tender Securities pursuant to the Asset Sale Offer. The notice, which (to the
extent consistent with this Indenture) shall govern the terms of the Asset Sale
Offer, shall state:
(1) that the Asset Sale Offer is being made
pursuant to such notice and this Section 5.14;
(2) the Asset Sale Offer Amount, the
Accumulated Amount, the Asset Sale Offer Price (including the
amount of accrued and unpaid interest), the Asset Sale Put
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Date, and the "Asset Sale Purchase Date," which Asset Sale
Purchase Date shall be on or prior to 30 Business Days (or
later, if required by law) following the date the Accumulated
Amount was greater than $15,000,000;
(3) that any Security or portion thereof not
tendered or accepted for payment will continue to accrue
interest (including Contingent Payments) if interest is then
accruing;
(4) that, unless the Company defaults in
depositing U.S. Legal Tender with the Paying Agent (which may
not for purposes of this Section 5.14, notwithstanding
anything in this Indenture to the contrary, be the Company or
any Affiliate of the Company) in accordance with the last
paragraph of this clause (b), any Security, or portion thereof
accepted for payment pursuant to the Asset Sale Offer shall
cease to accrue interest (including Contingent Payments) after
the Asset Sale Purchase Date;
(5) that Holders electing to have a
Security, or portion thereof, purchased pursuant to an Asset
Sale Offer will be required to surrender their Security, with
the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Security completed, to the Paying Agent (which
may not for purposes of this Section 5.14, notwithstanding any
other provision of this Indenture, be the Company or any
Affiliate of the Company) at the address specified in the
notice prior to the close of business on the third Business
Day prior to the Asset Sale Purchase Date (the "Asset Sale Put
Date");
(6) that Holders will be entitled to
withdraw their elections, in whole or in part, if the Paying
Agent (which may not for purposes of this Section 5.14,
notwithstanding any other provision of this Indenture, be the
Company or any Affiliate of the Company) receives, up to the
close of business on the Asset Sale Put Date, a telegram,
telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of the Securities the
Holder is withdrawing and a statement that such Holder is
withdrawing his election to have such principal amount of
Securities purchased;
(7) that if Securities in a principal amount
in excess of the principal amount of Securities to be acquired
pursuant to the Asset Sale Offer are tendered and not
withdrawn, the Company shall purchase Securities on a PRO RATA
basis (with such adjustments as may be deemed appropriate by
the Company so that only Securities in denominations of $1.00
or integral multiples of $1.00 shall be acquired;
(8) that Holders whose Securities were
purchased only in part will be issued new Securities equal in
principal amount to the unpurchased portion of the Securities
surrendered; and
(9) the circumstances and relevant facts
regarding such Asset Sales.
Any such Asset Sale Offer shall comply with all applicable
provisions of Federal and state laws, including those regulating tender offers,
if applicable, and any provisions of this
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Indenture that conflict with such laws shall be deemed to be superseded by the
provisions of such laws.
No later than 12:00 noon New York City time on an Asset Sale
Purchase Date, the Company shall (i) accept for payment Securities or portions
thereof properly tendered pursuant to the Asset Sale Offer (on a PRO RATA basis
if required pursuant to paragraph (7) above), (ii) deposit with the Paying Agent
U.S. Legal Tender sufficient to pay the Asset Sale Offer Price for all
Securities or portions thereof so accepted and (iii) deliver to the Trustee
Securities so accepted together with an Officers' Certificate setting forth the
Securities or portions thereof being purchased by the Company. The Paying Agent
shall promptly mail or deliver to Holders of Securities so accepted payment in
an amount equal to the Asset Sale Offer Price for such Securities, and the
Trustee shall promptly authenticate and mail or deliver to such Holders a new
Security equal in principal amount to any unpurchased portion of the Security
surrendered. Any Securities not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof.
(a) Notwithstanding the foregoing, if the amount required to
acquire all Securities tendered by Holders pursuant to the Asset Sale Offer (the
"Acceptance Amount") shall be less than the Asset Sale Offer Amount, the excess
of the Asset Sale Offer Amount over the Acceptance Amount may be used by the
Company for general corporate purposes without regard to the restrictions set
forth in this Section 5.14, unless otherwise restricted by the other provisions
of this Indenture. Upon consummation of any Asset Sale Offer made in accordance
with the terms of Section 5.14(b), the Accumulated Amount as of the Minimum
Accumulation Date shall be reduced to zero and accumulations thereof shall be
deemed to recommence from the day next following such Minimum Accumulation Date,
and all Liens in such Accumulated Amount created pursuant to Section 5.14(a)
shall be released.
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 due and payable on the Notes
and Contingent Payments (in this instance only, as defined in the Contingent
Notes Indenture) due and payable on the Contingent Notes, (c) to pay all Minimum
Payment Guaranty Obligations, (d) to pay all amounts, including without
limitation, all fees and payments of interest due and payable on the
Subordinated Credit Facility, the Completion Loan Agreement, the Convertible
Junior Subordinated Debentures and the
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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 Notes pursuant to an
Offer to Purchase, (k) to pay costs and expenses (including the costs and
expenses of the Parent Guarantor) 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
Company or as may be required by law, the computation of federal states, local
or foreign taxes and other governmental charges, indemnification agreements,
insurance premiums, surety bonds and insurance brokers' fees, directors',
officers' and employees' compensation and benefits, and any other administrative
expenses incurred in the ordinary course of business, and (l) after the Casino
Opening Date, for general corporate purposes.
SECTION 5.17. 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 5.18. 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 5.19. 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 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 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
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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 interest (including Contingent Payments) has 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 interest (including Contingent Payments) or principal 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 (A) 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, the Fourth Interest Payment Date, the
Fifth Interest Payment Date and the Sixth Interest Payment Date, and
(B) the Company has achieved negative cash flow (other than cash flow
deficiencies resulting from payments of principal or interest in
respect of the Tranche A-1 Term Loans or the Tranche A-2 Term Loans)
for the Semiannual Period corresponding to such Interest Payment Date
(excluding capital expenditures (but including the Company's
contributions to the Capital Replacement Fund, as defined in and
pursuant to Section 7.07 of the Management Agreement as in effect on
the Issue Date) as a use of cash and excluding financings as a source
of cash), Base Management Fees shall be deferred for such Semiannual
Period to the extent of such negative cash flow; to the extent Harrah's
Management Company received Base Management Fees for such Semiannual
Period that are required to be deferred pursuant to this Section
5.19(b)(i), the Company shall cause Harrah's Management Company to
return such Base Management Fees to the Company and such Base
Management Fees shall upon such return be deemed to be deferred for
such Semiannual Period;
(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 Semiannual Period
corresponding to such Interest Payment Date; to the extent Harrah's
Management Company received Incentive Management Fees for such
Semiannual Period, the Company shall cause Harrah's Management Company
to return such Incentive
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Management Fees to the Company and such Incentive Management Fees shall
upon such return be deemed to be deferred for such Semiannual Period;
(iii) if the Company's Consolidated EBITDA is less
than $28,500,000 for the twelve month period ending on the last day of
the Semiannual Period immediately preceding any Interest Payment Date
occurring after the Sixth Interest Payment Date, Base Management Fees
shall be deferred for the Semiannual Period corresponding to such
Interest Payment Date; to the extent Harrah's Management Company
received Base Management Fees for such Semiannual Period, the Company
shall cause Harrah's Management Company to return such Base Management
Fees to the Company and such Base Management Fees shall upon such
return be deemed to be deferred for such Semiannual Period; and
(iv) at such time as, and to the extent that,
Consolidated EBITDA exceeds $65,000,000 for any First Semiannual Period
and the immediately following Second Semiannual Period, the Company
may, after the payment of any amounts owing under the Bank Credit
Facilities for such period, pay all deferred Base Management Fees (pro
rata with any due and unpaid fees owing by the Company under the
Minimum Payment Guaranty Documents); and at such time as, and to the
extent that, Consolidated EBITDA exceeds $75,000,000 for any First
Semiannual Period and the immediately following Second Semiannual
Period, the Company may, after the payment of any amounts owing under
the Bank Credit Facilities for such period, and after the payment of
all deferred Base Management Fees and all accrued and unpaid fees owing
by the Company under the Minimum Payment Guaranty Documents, pay all
deferred Incentive Management Fees.
SECTION 5.20. 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 5.21. COMPLIANCE WITH ENVIRONMENTAL LAWS.
(a) The Company and each of the Guarantors will 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 the
Guarantors, 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 Guarantor will generate, use, treat, store, release or dispose
of, or permit the generation, use, treatment, storage, release or disposal of
Hazardous Materials on any
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Real Property now or hereafter owned or operated by the Company or any
Guarantor, 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 principal amount 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 Guarantor, 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 principal amount of the Securities at the time outstanding
reasonably believe that the Company or any such Guarantor 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 against the Company or any such Guarantor 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 and
any such Guarantor 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 5.22. LIMITATION ON LAYERING DEBT. Neither the Company, the
Parent Guarantor, nor any Subsidiary Guarantor may create, incur, assume or
suffer to exist any Indebtedness, except for Senior Subordinated Debt and
Indebtedness evidenced by the Contingent Notes, that is subordinate in right of
payment to any other Indebtedness of the Company or such 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 (i) in
the case of the Company, the Securities, (ii) in the case of the Subsidiary
Guarantors, the Guaranty, and (iii) in the case of the Parent Guarantor, the
Parent Guaranties.
SECTION 5.23. CERTAIN DEFERRALS. The Company shall, if required by the
terms of the Completion Loan Agreement, defer its payment obligations thereunder
in accordance with the Completion Loan Agreement as in effect on the Issue Date.
The Company shall, if required under the terms of the Credit Enhancement Fee
Agreement, defer the payment of its fees owing thereunder in accordance with the
terms of the Credit Enhancement Fee Agreement as in effect on the Issue Date.
The Company shall, if required by the terms of the Subordinated Credit Facility,
defer payments of interest thereunder in accordance with the terms of the
Subordinated Credit Facility as in effect on the Issue Date.
ARTICLE VI.
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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 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.
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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.
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 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 Notes when and as the same
become due and payable at maturity, redemption, by acceleration or
otherwise, including, without limitation, failure to pay any Offer to
Purchase Price, or otherwise;
(3) except as provided in clauses (1) or (2) of this
Section 7.1, failure of the Company or any Subsidiary of the Company to
comply with any provision of Section 5.10, 5.15, 5.16, 5.18, 5.19 or
6.1 or Article XI, 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
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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 principal amount of the Notes then outstanding;
(5) the filing by the Parent Guarantor, the Company
or any Significant Subsidiary of the Company (in each 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 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 such acceleration shall be rescinded;
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(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) a failure to comply with the provisions of the
Collateral Documents and the continuance of such failure to comply 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 principal amount of the Notes outstanding, provided
that if such failure to comply 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 failure to comply need only
continue after the applicable cure period specified in the applicable
Collateral Document;
(12) [Intentionally deleted]
(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 Collateral Agent, with respect to any material amount of
Collateral, a valid and perfected Lien on the Collateral (except to the
extent a valid and perfected Lien on the Collateral is not required at
such time under the terms of the Collateral Documents) 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
Contingent Notes Indenture) has occurred.
SECTION 7.2. ACCELERATION OF MATURITY DATE; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default specified in Section
7.1(5), (6) or (7) with respect to the Company), occurs and is continuing, then,
and in every such case, unless the principal of all of the Securities shall have
already become due and payable, either the Trustee or the Holders of not less
then 25% in aggregate principal amount of then outstanding Securities, by a
notice in writing to the Company and the Guarantors (and to the Trustee if given
by Holders)
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(an "Acceleration Notice"), may declare all of the principal of the Securities,
determined as set forth below, together with accrued interest thereon, to be due
and payable immediately. If an Event of Default specified in Section 7.1(5), (6)
or (7) occurs with respect to the Company, (i) all principal of, premium
applicable to, and accrued interest on, the Securities, 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 (A) the Primary Make-Whole Amount shall be subordinated
in right of payment to all Senior Debt and shall rank PARI PASSU with all Senior
Subordinated Debt including, without limitation, all Senior Subordinated Debt to
which HET has succeeded to the rights of the lenders thereunder and (B) the
Secondary Make-Whole Amount shall be subordinate to all Senior Debt and all
Senior Subordinated Debt including, without limitation, all Senior Subordinated
Debt to which HET has succeeded to the rights of the lenders thereunder. The
Primary Make-Whole Amount shall be subordinated to Senior Debt in accordance
with the terms of Article XIII.
The Secondary Make-Whole Amount shall be subordinated to all
Senior Debt and all Senior Subordinated Debt on the terms provided in Article
XIII (for this purpose, treating all Senior Subordinated Debt as if same were
Senior Debt), except that no payments whatsoever may be made with respect to the
Secondary Make-Whole Amount unless and until all Senior Debt and all Senior
Subordinated Debt has been repaid in full in cash.
At any time after such a declaration of acceleration 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 principal 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 interest (including 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 interest (including Contingent Payments) at the
rate borne by the Securities,
(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
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(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.
SECTION 7.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY TRUSTEE. The Company covenants that if an Event of Default in
payment of principal, premium, or interest (including 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
principal and interest (including Contingent Payments), and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and on any overdue interest (including Contingent Payments), at the
rate borne by the Securities, 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 principal of the Securities shall then be
due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal or interest (including
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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
principal and interest (including 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
(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 principal or interest (including 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 principal of and interest (including 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
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of any kind, according to the amounts due and payable on such Securities for
principal and interest (including Contingent Payments), respectively; and
THIRD: To whomsoever may be lawfully entitled thereto, the
remainder, if any.
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 principal
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 principal 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 principal of, and interest (including
Contingent Payments) on, such Security on the Maturity Dates of such payments as
expressed in such Security (in the case of Required Regulatory Redemption, the
Redemption Price on the applicable Redemption Date, in the case of the Change of
Control Offer Price, on the applicable Change of Control Purchase Date, and in
the case of the Offer Price on the Asset Sale Purchase 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.
SECTION 7.9. RIGHTS AND REMEDIES CUMULATIVE. Except as
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen
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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 principal 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 principal amount
of the outstanding Securities may, by written notice to the Trustee on behalf of
all Holders, prior to the declaration of acceleration of the maturity of the
Securities, waive any past default hereunder and its consequences, except a
default
(A) in the payment of the principal of, premium, if
any, or interest (including 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
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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
principal amount of the outstanding Securities, or to any suit instituted by any
Holder for enforcement of the payment of principal of, or premium (if any) or
interest (including Contingent Payments) on, any Security on or after the
Maturity Date of such Security.
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.
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.
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(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.
(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.
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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 15.4 and 15.5. 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 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 Authorized Representative 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; PROVIDED, HOWEVER,
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that the Trustee shall use reasonable good faith efforts so that it at no time
becomes a Bank Lender; PROVIDED, FURTHER, that the foregoing proviso shall in no
event operate to prevent the Trustee from acquiring all or any portion of the
equity interests in any other person which itself is a Bank Lender (and as a
result of which the Trustee could become a Bank Lender). 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 principal of, or
interest (including Contingent Payments) on, any Security (including the payment
of the Change of Control Offer Price on the Change of Control Purchase Date, the
Redemption Price on the Redemption Date and the Asset Sale Offer Amount on the
Asset Sale Purchase Date, as the case may be), 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.
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
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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 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 principal of or interest (including 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
principal amount of the outstanding Securities may remove the Trustee by so
notifying the Company and the Trustee
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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 principal amount of the Securities may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that
and provided that all sums owing to the Trustee provided for in Section 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 principal 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
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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.
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 principal of, premium, if any, and
interest (including 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, 5.18, 5.19, 5.20,
5.21 and 5.22 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"
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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 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(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 principal of and interest
(including Maximum Contingent Payments for the current and all future Contingent
Payment Periods) on the outstanding Securities on the stated maturity or on the
applicable redemption date, as the case may be, of such principal or installment
of principal or interest (including Contingent Payments); 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);
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(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 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 (including, without
limitation, the Bank Credit Facilities) 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 principal, premium, if any, and interest
(including 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 the principal of or interest (including Contingent Payments) on any
Security and remaining unclaimed for two years after such principal or interest
has 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 principal of or interest (including 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, the Intercreditor
Agreement, 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 principal 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, the Intercreditor Agreement, 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 provisions of any of the Collateral
Documents, the Intercreditor Agreement, this Indenture or the Securities or of
modifying in any manner the rights of the Holders under any of the Collateral
Documents, the Intercreditor Agreement, this Indenture or the Securities.
Subject to Section 7.8
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and the last sentence of this paragraph, the Holder or Holders of a majority in
aggregate principal amount of then outstanding Securities may waive compliance
by the Company or any Guarantor with any provision of any of the Collateral
Documents, the Intercreditor Agreement, 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, or the Change of
Control Offer Period or the Asset Sale Offer Period on, any Security;
(2) reduce the principal amount of any Security;
(3) reduce the rate or extend the time for payment of
interest (including Contingent Payments) on any Security;
(4) make the principal of, or the interest (including
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) reduce any Purchase Price;
(7) alter the redemption provisions of Article III or
the Securities in a manner adverse to any Holder;
(8) make any changes in the provisions concerning
waivers of Defaults or Events of Default by Holders of the Securities
or change the percentage of principal amount 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 the principal of, interest (including
Contingent Payments) on, or redemption payment with respect to, any
Security; or
(9) 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.
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
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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 principal amount of 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 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
principal and premium of and interest (including 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.
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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 Ground Lease, and
any and all other leases now or hereafter subject to the Mortgages, 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 Mortgages, assuring (i)
that such amendment does not impair or invalidate the lien of the
Mortgages 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.
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ARTICLE XI.
RIGHT TO REQUIRE REPURCHASE
SECTION 11.1. REPURCHASE OF SECURITIES AT OPTION OF THE HOLDER
UPON CHANGE OF CONTROL.
(a) In the event that a Change of Control (the date on which
such event occur being referred to as the "Change of Control Date") occurs, each
Holder of Securities shall have the right, at such Holder's option, subject to
the terms and conditions hereof, to require the Company to repurchase all or any
part of such Holder's Notes (provided, that the principal amount of such Notes
at maturity must be $1.00 or an integral multiple thereof) on the date that is
no later than 30 Business Days after the occurrence of such Change of Control
(the "Change of Control Payment Date"), at a cash price (the "Change of Control
Offer Price") equal to 101% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the Change of Control Payment Date.
(b) In the event that, pursuant to this Section 11.1, the
Company shall be required to commence an offer to purchase Notes (a "Change of
Control Offer"), the Company shall follow the procedures set forth in this
Section 11.1 as follows:
(1) the Change of Control Offer shall commence within
10 Business Days following the Change of Control Date;
(2) the Change of Control Offer shall remain open for
20 Business Days and no longer, except to the extent that a longer
period is required by applicable law (the "Change of Control Offer
Period");
(3) within 5 Business Days following the expiration
of a Change of Control Offer (and in any event not later than 35
Business Days following the Change of Control Date), the Company shall
purchase all of the tendered Securities at the Change of Control Offer
Price together with accrued interest to the Change of Control Payment
Date;
(4) if the Change of Control Payment Date is on or
after an interest payment record date and on or before the related
interest payment date, any accrued interest will be paid to the Person
in whose name a Security is registered at the close of business on such
record date, and no additional interest (including Contingent Payments)
will be payable to Securityholders who tender Securities pursuant to
the Change of Control Offer and who are paid on the Change of Control
Payment Date;
(5) the Company shall provide the Trustee with notice
of the Change of Control Offer at least 5 Business Days before the
commencement of any Change of Control Offer; and
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(6) on or before the commencement of any Change of
Control Offer, the Company or the Trustee (upon the request and at the
expense of the Company) shall send, by first-class mail, a notice to
each of the Securityholders, which (to the extent consistent with this
Indenture) shall govern the terms of the Change of Control Offer and
shall state:
(i) that the Change of Control Offer is being made
pursuant to this Section 11.1;
(ii) the Change of Control Offer Price (including the
amount of accrued and unpaid interest), the Change of Control
Payment Date and the Change of Control Put Date (as defined
below);
(iii) that any Security or portion thereof not
tendered or accepted for payment will continue to accrue
interest (including Contingent Payments);
(iv) that, unless (a) the Company defaults in
depositing U.S. Legal Tender with the Paying Agent (which may
not for purposes of this Section 11.1, notwithstanding
anything in this Indenture to the contrary, be the Company or
any Affiliate of the Company) in accordance with the last
paragraph of this clause (b) or (b) such Change of Control
payment is prevented for any reason, any Security or portion
thereof accepted for payment pursuant to the Change of Control
Offer shall cease to accrue interest (including Contingent
Payments) after the Change of Control Payment Date;
(v) that Holders electing to have a Security, or
portion thereof, purchased pursuant to a Change of Control
Offer will be required to surrender the Security, with the
form entitled "Option of Holder to Elect Purchase" on the
reverse of the Security completed, to the Paying Agent (which
may not for purposes of this Section 11.1, notwithstanding
anything in this Indenture to the contrary, be the Company or
any Affiliate of the Company) at the address specified in the
notice prior to the close of business on the fifth Business
Day prior to the Change of Control Payment Date (the "Change
of Control Put Date");
(vi) that Holders will be entitled to withdraw their
elections, in whole or in part, if the Paying Agent (which,
for purposes of this Section 11.1, notwithstanding any other
provision of this Indenture, may not be the Company or an
Affiliate of the Company) receives, up to the close of
business on the Change of Control Put Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Securities the Holder is
withdrawing and a statement that such Holder is withdrawing
his election to have such principal amount of Securities
purchased; and
(vii) a brief description of the events resulting in
such Change of Control.
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No later than 12:00 noon, New York City Time, on a Change of
Control Payment Date, the Company shall (i) accept for payment Securities or
portions thereof properly tendered pursuant to the Change of Control Offer prior
to the close of business on the Final Change of Control Put Date, (ii)
irrevocably deposit with the Paying Agent U.S. Legal Tender sufficient to pay
the Change of Control Offer Price (including accrued and unpaid interest) of all
Securities so tendered and (iii) deliver to the Trustee Securities so accepted
together with an Officers' Certificate listing the Securities or portions
thereof being purchased by the Company. The Paying Agent shall on the Change of
Control Payment Date pay to the Holders of Securities so accepted an amount
equal to the Change of Control Offer Price (including accrued and unpaid
interest), and the Trustee shall promptly authenticate and mail or deliver to
such Holders a new Security equal in principal amount to any unpurchased portion
of the Security surrendered. Any Securities not so accepted shall be promptly
mailed or delivered by the Company to the Holder thereof.
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, Article XIV 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 principal and premium (if any) of and interest
(including Contingent Payments to the extent due and payable hereunder) on the
Securities will be paid in full when due, whether at the maturity or Interest
Payment Date, by acceleration, Required Regulatory Redemption, upon a Change of
Control, Offer to Purchase, 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, upon an Offer to Purchase 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
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Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company or right to require the
prior disposition of the assets of the Company to meet its obligations, protest,
notice and all demands whatsoever and covenants that this Guaranty will not be
discharged except by complete performance of the obligations contained in the
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 the principal of, premium, if any, and
interest (including Contingent Payments to the extent due and payable hereunder)
on all Securities issued hereunder shall have been paid in full. Each Guarantor
further agrees that, as between such Guarantor, on the one hand, and the Holders
and the Trustee, on the other hand, (i) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Section 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 of acceleration of those
obligations as provided in Section 7.2, those obligations (whether or not due
and payable) will forthwith become due and payable by each of the Guarantors for
the purpose of this Guaranty.
(d) It is the intention of each Guarantor and the Company that
the obligations of each Guarantor hereunder shall be, 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 principal of,
premium, if any, and interest (including 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. PARENT GUARANTY.
(a) In consideration of good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and subject to Article
III, Article XIV and subsection (d) below, the Parent Guarantor hereby
irrevocably and unconditionally guarantees (the "Parent Guaranty" and, together
with the Guaranty of the Parent Guarantor, the "Parent Guaranties") to each
holder of a Development Companies Guaranty and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of the Development
Companies Guaranty or the obligations of any of the Development Companies under
the Development Companies Guaranty, that all obligations of each of the
Development Companies to the Holders or the Trustee under the Guaranty will be
promptly paid in full or performed, all in accordance with the terms of the
Development Companies Guaranty.
(b) The Parent Guarantor hereby agrees that its obligations
with regard to this Parent Guaranty shall be unconditional, irrespective of the
validity, regularity or enforceability of the Development Companies Guaranty 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 any Development Company, any action to
enforce the same or any other circumstances that might otherwise constitute a
legal or equitable discharge or defense of any Development Company under the
Development Companies Guaranty. The Parent Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of any Development Company, any right to require a
proceeding first against any Development Company or right to require the prior
disposition of the assets of any Development Company to meet its obligations,
protest, notice and all demands whatsoever and covenants that this Parent
Guaranty will not be discharged except by complete performance of the
obligations of the Development Companies under the Development Companies
Guaranty.
(c) If any Holder or the Trustee is required by any court or
otherwise to return to any Development Company, or any Custodian, Trustee, or
similar official acting in relation to such Development Company, any amount paid
by such Development Company to the Trustee or such Holder, this Parent Guaranty,
to the extent theretofore discharged, shall be reinstated in full force and
effect. The Parent 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 the principal of, premium, if any, and interest (including
Contingent Payments to the extent due and payable hereunder) on all Securities
issued hereunder shall have been paid in full. The Parent Guarantor further
agrees that, as between such Development Company, on the one hand, and the
Holders and the Trustee, on the other hand, (i) the maturity of the obligations
guaranteed hereby may be accelerated as provided in section 7.2 for the purposes
of this Parent Guaranty, notwithstanding any stay, injunction or other
prohibition preventing such acceleration as to any Development Company of the
obligations guaranteed hereby, and (ii) in the event of any declaration of
acceleration of those obligations as provided in section 7.2, those obligations
(whether or not due and payable) will forthwith become due and payable by the
Parent Guarantor for the purpose of this Parent Guaranty.
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(d) It is the intention of the Parent Guarantor and the
Development Companies that the obligations of the Parent Guarantor hereunder
shall be, but not in excess of, the maximum amount permitted by applicable law.
Accordingly, if the obligations in respect of the Parent Guaranty would be
annulled, avoided or subordinated to the creditors of the Parent Guarantor by a
court of competent jurisdiction in a proceeding actually pending before such
court as a result of a determination both that the Parent Guaranty was made
without fair consideration and, immediately after giving effect thereto, or at
the time that any demand is made thereupon, the Parent Guarantor was insolvent
or unable to pay its debts as they mature or left with an unreasonably small
capital, then the obligations of the Parent Guarantor under the Parent 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) The Parent Guarantor shall be subrogated to all rights of
the Holders against the Development Companies under the Development Companies
Guaranty in respect of any amounts paid by the Parent Guarantor pursuant to the
provisions of the Parent Guaranty; provided, however, that the Parent Guarantor
shall not be entitled to enforce or to receive any payments arising out of, or
based upon, such right of subrogation until the principal of, premium, if any,
and interest (including Contingent Payments to the extent due and payable
hereunder) on all Securities issued hereunder shall have been paid in full.
SECTION 12.3. EXECUTION AND DELIVERY OF GUARANTY.
(a) To evidence its Guaranty set forth in Section 12.1, each
Guarantor agrees that a notation referencing such Guaranty shall be set forth on
the Security.
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.
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.
(b) To evidence the Parent Guaranty set forth in Section 12.2,
the Parent Guarantor agrees that a notation referencing such Parent Guaranty
shall be set forth on the Security.
The Parent Guarantor agrees that the Parent Guaranty set forth
in Section 12.2 shall remain in full force and effect and apply to each
Development Companies Guaranty notwithstanding any failure to endorse on each
Development Company Guaranty a notation of such Parent Guaranty.
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The delivery of any Security shall constitute due delivery of
the Parent Guaranty set forth in this Indenture on behalf of the Parent
Guarantor.
SECTION 12.4. FUTURE SUBSIDIARY GUARANTORS. The Company shall
cause each person that is or becomes a Subsidiary of the Company after the Issue
Date to execute an Indenture supplemental hereto for the purpose of adding such
Subsidiary as a Guarantor hereunder.
SECTION 12.5. RELEASE OF GUARANTORS.
(a) The Parent Guarantor shall be released from all of its
obligations under the Parent Guaranties and under this Indenture if:
(i) (A) 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;
(B) 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 Parent Guaranties and this Indenture;
(C) 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
(D) 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 12.5 and that all conditions precedent herein provided
for relating to such transaction have been complied with; or
(ii) 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.
(b) In the event (a) of a sale or other disposition of all of
the assets of any Subsidiary Guarantor or Development Company, by way of merger,
consolidation or otherwise, or a sale or other disposition of all of the capital
stock (or membership interests) of any Subsidiary Guarantor or Development
Company, or (b) that the Company designates a Subsidiary Guarantor to be an
Unrestricted Subsidiary, or such Guarantor ceases to be a Subsidiary of the
Company, then such Guarantor (in the event of a sale or other disposition, by
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way of such a merger, consolidation or otherwise, of all of the capital stock of
such Guarantor or any such designation) or the entity acquiring the property (in
the event of a sale or other disposition of all of the assets of such Guarantor)
shall be released and relieved of any obligations under its Guaranty. In the
case of a sale, assignment, lease, transfer, conveyance or other disposition of
all or substantially all of the assets of Subsidiary Guarantor or Development
Company, upon the assumption provided in Section 12.6, such Subsidiary Guarantor
or Development Company shall be discharged from all further liability and
obligation under this Indenture. Upon delivery by the Company to the Trustee of
an Officers' Certificate to the effect of the foregoing, the Trustee shall
execute any documents reasonably required in order to evidence the release of
any Subsidiary Guarantor or Development Company from its obligations under the
Guaranty.
(c) Upon any assumption of the Guaranty or Parent Guaranty by
any Person pursuant to this Section, such Person may exercise every right and
power of a Guarantor under this Indenture with the same effect as if such
successor corporation had been named as a Guarantor herein, and all the
obligations of the released Guarantor under the Guaranty and/or Parent Guaranty,
as applicable, and the Indenture shall terminate.
(d) In the event that a Development Company is released by the
Bank Agent from such Development Company's obligations in respect of its
guarantee of the Bank Credit Facilities, such Development Company shall be
released and relieved of its obligations under its Guaranty and shall be
discharged of all further liability and obligation under this Indenture.
SECTION 12.6. WHEN THE GUARANTOR MAY MERGE, ETC. A 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 Company or a Guarantor shall be the continuing
person, or the Person (if other than the Company or a Guarantor) formed
by such consolidation or into which the Guarantor is merged or to which
the assets of the 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 such Guarantor under the Guaranty and/or Parent Guaranty, as
applicable, 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 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.
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Upon any consolidation or merger, or any sale, conveyance or
lease of all or substantially all of the assets of a Guarantor, in accordance
with this Section, the successor corporation formed by such consolidation or
into which the 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 Guarantor under this Indenture with the same effect as if such successor
corporation had been named as a Guarantor herein, and all the obligations of the
predecessor Guarantor hereunder and under the Guaranty and/or Parent Guaranty,
as applicable, and the Indenture shall terminate.
SECTION 12.7. CERTAIN BANKRUPTCY EVENTS. Each Guarantor
hereby covenants and agrees that in the event of the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Company, such Guarantor shall
not file (or join in any filing of), or otherwise seek to participate in the
filing of, any motion or request seeking to stay or to prohibit (even
temporarily) execution on the Guaranty or the Parent Guaranty and hereby waives
and agrees not to take the benefit of any such stay of execution, whether under
Section 362 or 105 of the United States Bankruptcy Code or otherwise.
ARTICLE XIII.
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 the principal of, premium, if any, and
interest (including Contingent Payments and any Make-Whole Amount) thereon and
any interest payable on such interest (including Contingent Payments and any
Make-Whole Amount), 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,
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(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 principal,
premium, if any, or interest (including Contingent Payments and any
Make-Whole Amount), in respect of the Securities or in respect of any
Offer to Purchase Price;
(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, Permitted Junior Securities), 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 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,
Permitted Junior Securities), shall be received by the Trustee or the
Holders before all Obligations in respect of Senior Debt are paid in
full, in cash or Cash Equivalents, 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 in
cash or Cash Equivalents, 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
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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 Indebtedness 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 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 principal of, premium, if any, and interest (including Contingent
Payments) on, the Securities, including the Change of Control Offer Price, if
applicable, 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 the principal of, premium, if
any, and interest (including Contingent Payments) on, the Securities, and the
Change of Control Offer Price, if applicable, 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 principal
of, premium, if any, or interest (including
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Contingent Payments) on, the Securities, or the Change of Control Offer Price,
if applicable, in respect of any 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, 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, including, without limitation, principal of, premium, if any, or
interest (including Contingent Payments and any Make-Whole Amount), in respect
of the Securities in cash or property or to acquire or repurchase any of the
Securities.
(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, 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 (except in the form of
Secondary Securities in accordance with the provisions of this Indenture),
including, without limitation, the principal of, premium, if any, or interest
(including Contingent Payments and any Make-Whole Amount), 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, 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 the (i) holders of Designated Senior
Debt representing a majority of the principal amount thereof or their
representative, or (ii) the Minimum Payment Guarantor, 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 on behalf of the Company with
respect to Obligations, including, without limitation, the principal of,
premium, if any, or interest (including Contingent Payments and any Make-Whole
Amount), 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 or Minimum Payment Guaranty
Obligations 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
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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;
PROVIDED, HOWEVER, that (a) a default or event of default that resulted in the
commencement of a 180-day period may be the basis for the commencement of
another 180-day period if such default or event of default was cured or waived
for at least 90 days, (b) for the purpose of this clause (iii), separate
breaches of the same covenant shall be deemed to give rise to separate defaults
or events of default, and (c) for purposes of this clause (iii), any breach of a
financial covenant for a subsequent period shall be deemed to give rise to a
separate default or event of default.
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, 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 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
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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 the principal of, premium, if any,
or interest (including Contingent Payments and any Make-Whole Amount) on, any
Securities or Offer to Purchase Price in respect of 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 (including, without limitation, the payment of principal
of, premium, if any, or interest (including Contingent Payments and any
Make-Whole Amount) on, or Offer to Purchase Price in respect of, any Security)
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,
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.
Subject to the definition of Senior Debt and 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:
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(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;
(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 which rank PARI PASSU or junior in right of payment to the
Securities) 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
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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. Subject to Section 8.3, 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 principal of, premium, if any, or
interest (including Contingent Payments) on, the Securities, the Change of
Control Offer Price in respect of 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.
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 principal of, premium,
if any, or interest (including Contingent Payments) on, the Securities, or
Change of Control Purchase Price in respect of 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, including without limitation, principal of,
premium, if any, and interest (including Contingent Payments), in respect of the
Securities in accordance with the provisions (other than this Section 13.13) of
this Article XIII.
ARTICLE XIV.
SUBORDINATION OF GUARANTY
SECTION 14.1. GUARANTY SUBORDINATED TO GUARANTOR SENIOR DEBT.
Each Guarantor, for itself, its successors and assigns, covenants and agrees,
and each Holder of any
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Securities, by his or its acceptance thereof, likewise covenants and agrees,
that payments by such Guarantor in respect of the Guaranty and/or the Parent
Guaranty, as applicable (the "Guaranties"), 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 Guaranties" means any
payment made by or on behalf of a Guarantor in respect of the Guaranties,
including, but not limited to, any payment on account of the principal of,
premium, if any, or interest (including Contingent Payments and any Make-Whole
Amount) on the Securities in cash or property or to acquire or repurchase any of
the Securities.
SECTION 14.2. GUARANTY 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
Guaranties 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 connection with an
issuance of Permitted Junior Securities, such Permitted Junior
Securities may be guaranteed, on a subordinated basis, by one or more
Permitted Guaranties), 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
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character, whether in cash, property or securities (other than, to
the extent issued in connection with an issuance of Permitted Junior
Securities, such Permitted Junior Securities may be guaranteed, on a
subordinated basis, by one or more Permitted Guaranties), 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 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, in cash or
Cash Equivalents, 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 Indebtedness of the Guarantor that, by its terms, ranks pari
passu with the Guaranties) 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 principal of, premium, if any, and interest
(including Contingent Payments) on, the Securities, including the Offer to
Purchase Price, if any, 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
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(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.
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 Guaranties, 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 Guaranties.
SECTION 14.5. GUARANTORS NOT TO MAKE PAYMENTS IN RESPECT OF
THE GUARANTIES IN CERTAIN CIRCUMSTANCES.
(a) Upon the maturity of any Guarantor Senior Debt by lapse of
time, acceleration or otherwise, 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 Guaranties 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, 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 Guaranties shall be made.
(c) No payment in respect of the Guaranties 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
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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 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 Guaranties 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 (including, without limitation, the payment of principal
of, or premium (if any) or interest (including Contingent Payments and any
Make-Whole Amount) on, or the Offer to Purchase Price in respect of, any
Security) 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.
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
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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 Guaranties 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.
Subject to the definition of Guarantor Senior Debt and 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;
(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
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(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 Guaranties or any liability or
liabilities which rank pari passu or junior in right of payment to the
Guaranties) 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 GUARANTIES. 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 Guaranties or applicable law.
SECTION 14.10. RIGHT OF TRUSTEE TO HOLD GUARANTOR SENIOR DEBT;
PRESERVATION OF TRUSTEE'S RIGHTS. Subject to Section 8.3, 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.
SECTION 14.11. ARTICLE XIV NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment in respect of the Guaranties, 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.
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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
Guaranties 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 Guaranties 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.
SECTION 15.2. NOTICES. Any notices or other communications to
the Company, any 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 or any Subsidiary Guarantor:
512 South Peters
New Orleans, Louisiana 70130
Attention: Corporate Secretary
if to the Parent Guarantor or any Development Company:
512 South Peters
New Orleans, Louisiana 70130
Attention: Corporate Secretary
if to the Trustee:
Norwest Bank Minnesota, National Association
Norwest Center
6th and Marquette
Minneapolis, Minnesota 55479-0069
Attention: Corporate Trust Department
The Company, the Guarantors or the Trustee by notice to each
other party may designate additional or different addresses as shall be
furnished in writing by such party. Any
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notice or communication to the Company, any Guarantor 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.
In addition to any other notices required or permitted to be
given pursuant to this Indenture, the Trustee shall, promptly after its delivery
of any written notice to the Company (x) which specifically states that an Event
of Default is in existence or (y) pursuant to the first paragraph of Section 7.2
(or promptly after its receipt of any such notice delivered to it by the
Holders), send to the Regulating Authority (at the address set forth below) a
copy of such written notice; provided, however, that any failure or delay in
giving any such notice shall not affect or impair the validity of said notice or
any action taken pursuant thereto (or otherwise pursuant to this Indenture, any
Collateral Document or the Intercreditor Agreement) and shall give rise to no
liability (monetary or otherwise) on the part of the Trustee or any Secured
Creditor to any Holder, the Regulating Authority or any other Person. All
notices to the Regulating Authority pursuant to this paragraph shall be mailed
(or sent by reputable courier) to the Regulating Authority at the following
address (or such other address as the Regulating Authority provides to the
Trustee from time to time for its receipt of notices pursuant to this
paragraph):
Louisiana Gaming Control Board
9100 Bluebonnet Centre Blvd.
Suite 500
Baton Rouge, LA 70809
Attention: Chairman
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
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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.
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
interest (including 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
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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.
SECTION 15.10. NO RECOURSE AGAINST OTHERS. A direct or
indirect stockholder, incorporator, 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 the 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.
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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.
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 are and shall remain
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 as the same may be amended from time to time (collectively, the
"Gaming Regulations"), and in particular, without limitation, the exercise of
remedies under the Collateral Documents with respect to the Collateral will be
subject to the Gaming Regulations. The Company represents and warrants that all
requisite approvals under the Gaming Regulations have been obtained for the
execution and issuance of this Indenture, the Collateral Documents, the
Securities and the security interests thereunder.
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 Section 1.1275-4(a)(1) and (5); (iii) use a discount rate with
respect to the non-contingent component of a Security for purposes of Treasury
Regulation Sections 1.1275-4(c) and 1.1274-2(c) & (g) such that the issue price
of such component will be equal to 100% of the original principal amount of such
component; and (iv) treat all Contingent Payments as consisting of principal and
interest such that each payment of principal is accompanied by a payment of
interest at 12% 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 12% per annum (compounded semi-annually).
116
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SECTION 15.17. WAIVERS AND RELEASES.
(a) NO ASSURANCES
(i) As a condition to the effectiveness of the
confirmation of the Plan of Reorganization, the Initial Minimum Payment
Guarantors have entered into the HET/JCC Agreement in favor of the Regulating
Authority. The HET/JCC Agreement provides that the Initial Minimum Payment
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 Minimum Payment 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 conditions specified therein.
The Initial Minimum Payment Guarantors have expressly informed the Trustee on
behalf of the Holders that the Initial Minimum Payment Guarantors have not
agreed to renew the HET/JCC Agreement beyond March 31, 2004, or in any prior
year where the Initial Minimum Payment 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 Minimum Payment Guarantors have informed
the Trustee on behalf of the Holders that any decision the Initial Minimum
Payment Guarantors make concerning whether to renew any Minimum Payment
Guaranty or the HET/JCC Agreement will be made in the Initial Minimum Payment
Guarantors' sole discretion, acting only in their best interests. The Trustee
on behalf of the Holders hereby acknowledges that (A) the Initial Minimum
Payment Guarantors are not obligated to, and have not given any assurances to
the Trustee that the Initial Minimum Payment Guarantors 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 Minimum Payment Guarantors'
obligation to furnish a Minimum Payment Guaranty does not renew under the
express terms of Section 1(b) thereof, (B) the Initial Minimum Payment
Guarantors have the right to make any such renewal decision by considering
only their best interests, and (C) the Initial Minimum Payment Guarantors need
not consider the interests of any other parties in making any such renewal
decision, notwithstanding that the Initial Minimum Payment Guarantors are
involved in a number of capacities in respect of the Company.
(ii) The Trustee and the Holders hereby agree that
the Initial Minimum Payment 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 Minimum Payment 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.
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(iii) The Trustee and the Holders hereby agree and
acknowledge that any future representation, warranty, assurance or other
guaranty by the Initial Minimum Payment 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 Minimum Payment
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 Minimum Payment Guarantors'
decision either to renew or not renew any Minimum Payment Guaranty or the
HET/JCC Agreement, (B) the Initial Minimum Payment 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 Minimum Payment 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
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 Minimum Payment 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.
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(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 Minimum Payment Guarantors have informed it (i)
not to infer or assume that the Initial Minimum Payment Guarantors will renew
any Minimum Payment Guaranty or the HET/JCC Agreement; (ii) that the Initial
Minimum Payment Guarantors will consider only their own best interests in
determining whether to renew any Minimum Payment Guaranty or the HET/JCC
Agreement; (iii) that the Initial Minimum Payment 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 Minimum Payment Guarantors without the prior written
agreement of the Initial Minimum Payment Guarantors, and any such amendment or
modification shall have no force or effect in respect of the Initial Minimum
Payment Guarantors or any Minimum Payment Guaranty provided thereby.
(SIGNATURE PAGE FOLLOWS)
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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: /s/ L. Camille Fowler
-----------------------------------------
Name: L. Camille Fowler
Title: Vice President-Finance, Secretary
and Treasurer
JCC HOLDING COMPANY,
a Delaware corporation
By: /s/ L. Camille Fowler
-----------------------------------------
Name: L. Camille Fowler
Title: Vice President-Finance, Secretary
and Treasurer
CP DEVELOPMENT, L.L.C.,
a Louisiana limited liability company
By: /s/ L. Camille Fowler
-----------------------------------------
Name: L. Camille Fowler
Title: Vice President-Finance, Secretary
and Treasurer
S-1
<PAGE>
FP DEVELOPMENT, L.L.C.,
a Louisiana limited liability company
By: /s/ L. Camille Fowler
-----------------------------------------
Name: L. Camille Fowler
Title: Vice President-Finance, Secretary
and Treasurer
JCC DEVELOPMENT COMPANY, L.L.C.,
a Louisiana limited liability company
By: /s/ L. Camille Fowler
-----------------------------------------
Name: L. Camille Fowler
Title: Vice President-Finance, Secretary
and Treasurer
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By: /s/ Raymond S. Haverstock
-----------------------------------------
Name: Raymond S. Haverstock
Title: Vice President
S-2
<PAGE>
Exhibit A
[FORM OF NOTE]
JAZZ CASINO COMPANY, L.L.C.
SENIOR SUBORDINATED NOTE
DUE 2009 WITH CONTINGENT PAYMENTS
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, the
principal sum of ____________________ Dollars, on November 15, 2009.
Interest Payment Dates: May 15 and November 15. The first
Interest Payment Date is May 15, 1999.
Record Dates: May 1 and November 1. The first Record Date is
May 1, 1999.
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:
-----------------------------------------
President
A-2
<PAGE>
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the
within-mentioned Indenture.
--------------------------------------------
Norwest Bank Minnesota,
National Association, as Trustee
By:
-----------------------------------------
Authorized Signatory
Dated:
A-3
<PAGE>
JAZZ CASINO COMPANY, L.L.C.
SENIOR SUBORDINATED NOTES
DUE 2009 WITH CONTINGENT PAYMENTS
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 Fixed Interest on the principal amount
of this Security, plus the Contingent Payments, from October 30, 1998 or from
the most recent Interest Payment Date to which Fixed Interest or Contingent
Payments, as applicable, has been paid or provided for. "Fixed Interest" means
interest, payable semi-annually on the Interest Payment Dates in accordance with
this Indenture, at a rate per annum of, for the indicated periods:
<TABLE>
<S> <C> <C>
October 30, 1998 through May 15, 1999..........5.867%
May 16, 1999 through November 15, 1999....5.927%
November 16, 1999 through May 15, 2000..........5.987%
May 16, 2000 through November 15, 2000.....6.046%
November 16, 2000 through May 15, 2001..........6.103%
May 16, 2001 through November 15, 2001.....6.159%
November 16, 2001 through May 15, 2003..........6.214%
May 16, 2003 through November 15, 2009.....8.000%
</TABLE>
The Company may, on any of the First Interest Payment Date, the Second Interest
Payment Date, the Third Interest Payment Date, the Fourth Interest Payment Date,
the Fifth Interest Payment Date and the Sixth Interest Payment Date, at its
option and in its sole discretion, pay Fixed Interest in additional Securities
("Secondary Securities") in lieu of the payment in whole or in part of Fixed
Interest in cash on the Securities; PROVIDED, HOWEVER, that if any Indebtedness
is outstanding under the Tranche A-1 Term Loan or the Tranche A-2 Term Loan on
any of the First Interest Payment Date, the Second Interest Payment Date, the
Third Interest Payment Date or the Fourth Interest Payment Date, the Company
shall pay the Fixed Interest due and payable on such
A-4
<PAGE>
Interest Payment Date in Secondary Securities in lieu of the payment of such
Fixed Interest in cash; PROVIDED, FURTHER, HOWEVER, that on the Fifth Interest
Payment Date and the Sixth Interest Payment Date the Company shall not be
entitled to pay Fixed Interest due and payable on such Interest Payment Date in
Secondary Securities in lieu of the payment of such Fixed Interest in cash if on
the last Business Date of the corresponding Semiannual Period (i) the Company
has no outstanding borrowings under the Tranche A-1 Term Loan and the Tranche
A-2 Term Loan, (ii) no Revolving Loans are outstanding, and (iii) the Company
has at least $20,000,000 of cash and Cash Equivalents. In addition, if the
Company's Consolidated EBITDA is less than $28,500,000 for the twelve month
period ending on the last day of the Semiannual Period immediately preceding any
Interest Payment Date occurring after the Sixth Interest Payment Date, the
Company shall pay the Fixed Interest due and payable on such Interest Payment
Date in Secondary Securities in lieu of the payment of such Fixed Interest in
cash. If, pursuant to this paragraph, the Company issues Secondary Securities in
lieu of cash payment, in whole or in part, of Fixed Interest, it shall give
notice to the Trustee not less than five Business Days prior to the applicable
Interest Payment Date, and shall instruct the Trustee (upon written order of the
Company signed by an Officer of the Company given not less than five nor more
than 45 days prior to such Interest Payment Date) to authenticate Secondary
Securities, dated such Interest Payment Date, in a principal amount equal to the
amount of Fixed Interest not paid in cash in respect of this Security on such
Interest Payment Date. Each issuance of Secondary Securities in lieu of cash
payments of Fixed Interest on the Securities shall be made PRO RATA with respect
to the outstanding Securities. Any such Secondary Securities shall be governed
by the Indenture and shall be subject to the same terms (including the maturity
date and the rate of interest from time to time payable thereon) as this
Security (except, as the case may be, with respect to the title, issuance date
and aggregate principal amount). The term Securities shall include the Secondary
Securities that may be issued under the Indenture.
Interest on this Security will be payable semiannually on May
15 and November 15, commencing May 15, 1999, to the person in whose name this
Security is registered at the close of business on May 1 or November 1,
preceding such Interest Payment Date (each, a "Record Date"). Interest on this
Security will be computed on the basis of a 360-day year, consisting of twelve
30-day months.
In addition to regular semiannual payments of Fixed Interest,
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, if any are due and payable in
accordance with the terms of this Security and the Indenture.
Any reference in this Security to "accrued interest" includes
the amount of unpaid Contingent Payments due and payable. For purposes of
determining accrued Contingent Payments due and payable per $1.00 principal
amount of Notes with respect to a Semiannual Period prior to the completion of
such period, such Contingent Payments due and payable per $1.00 principal amount
of Notes shall be equal to the Partial Period Contingent Payments. To the extent
it is lawful, the Company promises to pay interest on any interest payment due
but unpaid (including any due and unpaid Contingent Payments) on such principal
amount at a rate of 8% per annum compounded semi-annually.
A-5
<PAGE>
2. METHOD OF PAYMENT.
The Company shall pay interest (including Contingent Payments)
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. Holders must surrender Securities to a
Paying Agent to collect principal payments. Except as provided below, the
Company shall pay principal and interest in such coin or currency of the United
States of America as at the time of payment shall be legal tender for payment of
public and private debts ("U.S. Legal Tender") (or, pursuant to Paragraph 1
hereof, in Secondary Securities). However, the Company may pay principal and
interest by wire transfer of Federal funds, or interest by its check payable in
such U.S. Legal Tender (or, pursuant to Paragraph 1 hereof, in Secondary
Securities). The Company may deliver any such interest payment to the Paying
Agent or the Company may mail any such interest 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 payments must be made by wire transfer of Federal funds (or,
pursuant to Paragraph 1 hereof, in Secondary Securities).
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 October 30, 1998 (the "Indenture"), among the Company, JCC Holding, CP
Development, FP Development, JCC Development 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
aggregate principal amount to $187,500,000, except for Secondary Securities and
except as otherwise provided in the Indenture.
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 Manager 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
A-6
<PAGE>
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. In such event, the Redemption
Price shall be the principal amount thereof, plus accrued and unpaid interest to
the Redemption Date (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 20 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 bear interest (including 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, in
denominations of $1.00 and integral multiples of $1.00. 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 principal or interest (including
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.
10. LEGAL DEFEASANCE OR COVENANT DEFEASANCE PRIOR TO REDEMPTION OR MATURITY.
If the Company at any time irrevocably deposits with the
Trustee, in trust, for the benefit of the Holders, U.S. Legal Tender, U.S.
Government Obligations or a combination
A-7
<PAGE>
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 principal of and interest (including Maximum Contingent
Payments) on the Securities maturity 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 principal of and interest
(including 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 principal 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, the Intercreditor Agreement 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. CHANGE OF CONTROL.
In the event there shall occur any Change of Control, each
Holder of Securities shall have the right, at such Holder's option but subject
to the limitations and conditions set forth in the Indenture, to require the
Company to purchase on the Change of Control Payment Date in the manner
specified in the Indenture, all or any part (in integral multiples of $1.00) of
such Holder's Securities at a Change of Control Offer Price equal to 101% of the
principal amount thereof, together with accrued and unpaid interest, if any, to
the Change of Control Payment Date.
A-8
<PAGE>
14. SECURITY.
In order to secure the obligations under the Indenture, the
Company, the Guarantors and the Trustee or the Collateral Agent have entered
into the Collateral Documents in order to create security interests in certain
assets and properties of the Company. As more fully set forth in the Collateral
Documents and Section 4.6 of the Indenture, the rights of the Holders (and the
Trustee on their behalf) to receive proceeds from the disposition of such assets
and properties are subordinated to security interests in such 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.
15. 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 (in accordance with Section 5.14 of the Indenture)
either to reinvest the proceeds of such Asset Sale in its business or to repay
certain indebtedness and, to the extent that no amounts of such indebtedness are
outstanding, and no amounts of such indebtedness are available, to repay certain
other indebtedness and to make an offer to purchase each Holder's Securities at
100% of the principal amount thereof, together with accrued and unpaid interest,
if any, to the purchase date.
16. 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.
17. 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.
18. DEFAULTS AND REMEDIES.
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of 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 aggregate principal 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 principal or interest
(including Contingent Payments)), if it determines that withholding notice is in
their interest.
A-9
<PAGE>
19. 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; PROVIDED, HOWEVER, that the Trustee shall use reasonable good faith
efforts so that it at no time becomes a Bank Lender; PROVIDED, FURTHER, that the
foregoing proviso shall in no event operate to prevent the Trustee from
acquiring all or any portion of the equity interests in any other person which
itself is a Bank Lender (and as a result of which the Trustee could become a
Bank Lender).
20. NO RECOURSE AGAINST OTHERS.
An incorporator, director, officer, employee, stockholder or
member, 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.
21. SUBORDINATION.
The Notes are subordinated to Senior Debt to the extent
provided in the Indenture. The Company agrees, and each Holder by accepting a
Note agrees, to such subordination and authorizes the Trustee to give it effect.
22. 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.
23. 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).
24. 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
A-10
<PAGE>
accuracy of such numbers as printed on the Securities and reliance may be placed
only on the other identification numbers printed hereon.
25. 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 Section
1.1275-4(a)(1) and (5); (iii) use a discount rate with respect to the
non-contingent component of a Security for purposes of Treasury Regulation
Sections 1.1275-4(c) and 1.1274-2(c) & (g) such that the issue price of such
component will be equal to 100% of the original principal amount of such
component; and (iv) treat all Contingent Payments as consisting of principal and
interest such that each payment of principal is accompanied by a payment of
interest at 12% 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 12% per annum (compounded semi-annually).
26. SUBORDINATED GUARANTY.
For value received and pursuant to and in accordance with the
terms of the Indenture, each of JCC Holding, CP Development, FP Development, and
JCC Development has unconditionally guaranteed on a subordinated basis as
provided in Article XIV of the Indenture (the "Guaranty") to each Holder of a
Security and the Trustee the due and punctual payment of the principal of,
premium (if any), and interest (including Contingent Payments) on, such Security
when and as the same shall become due and payable for any reason in accordance
with the terms of such Security and the Indenture. For value received and
pursuant to and in accordance with the terms of the Indenture, JCC Holding has
unconditionally guaranteed, on a subordinated basis as set forth in Article XIV
of the Indenture, to each holder of a Guaranty that the obligations of each of
CP Development, FP Development and JCC Development under the Guaranty will be
promptly paid in full or performed in accordance with the terms of the Guaranty
and the Indenture. The guarantors may be released from their respective
guaranties in accordance with the terms of the Indenture.
A-11
<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-12
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to any of the following provisions of the Indenture, check the
appropriate box:
/ / Section 5.14; / / Article XI.
If you want to elect to have only part of this Security purchased by the Company
pursuant to the Indenture, state the principal amount you want to be purchased:
$
----------------------
Date: Signature:
------------------------------- ---------------------------
(Sign exactly as your name appears on the other side of this Security)
A-13
<PAGE>
EXHIBIT T3E.27
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
<TABLE>
<S> <C>
In the Matter of: : No. 95-14545 TMB
: Section A
HARRAH'S JAZZ COMPANY, :
: jointly administered
Debtor. : with
:
- ----------------------------------------
:
In the Matter of: : No. 95-14544 TMB
: Section A
HARRAH'S JAZZ FINANCE CORP., :
: Chapter 11
Debtor. : Reorganization
:
- ----------------------------------------
:
In the Matter of: : No. 95-14871 TMB
: Section A
HARRAH'S NEW ORLEANS :
INVESTMENT COMPANY, :
: Chapter 11
Debtor. : Reorganization
:
- ----------------------------------------
</TABLE>
THIRD AMENDED JOINT PLAN OF REORGANIZATION
UNDER CHAPTER 11 OF THE BANKRUPTCY CODE,
AS MODIFIED THROUGH OCTOBER 13, 1998
October 13, 1998
<PAGE>
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
<TABLE>
<S> <C>
In the Matter of: : No. 95-14545 TMB
: Section A
HARRAH'S JAZZ COMPANY, :
: jointly administered
Debtor. : with
:
- ----------------------------------------
:
In the Matter of: : No. 95-14544 TMB
: Section A
HARRAH'S JAZZ FINANCE CORP., :
: Chapter 11
Debtor. : Reorganization
:
- ----------------------------------------
:
In the Matter of: : No. 95-14871 TMB
: Section A
HARRAH'S NEW ORLEANS :
INVESTMENT COMPANY, :
: Chapter 11
Debtor. : Reorganization
:
- ----------------------------------------
</TABLE>
THIRD AMENDED JOINT PLAN OF REORGANIZATION
UNDER CHAPTER 11 OF THE BANKRUPTCY CODE,
AS MODIFIED THROUGH OCTOBER 13, 1998
<TABLE>
<S> <C>
Dated: October 13, 1998 JENNER & BLOCK
One IBM Plaza
Chicago, Illinois 60611
Telephone: (312) 222-9350
Fax: (312) 840-7353
WILLIAM HARDY PATRICK III, A
PROFESSIONAL CORPORATION
10636 Linkwood Court
Baton Rouge, Louisiana 70810-2854
Telephone: (504) 767-1460
Fax: (504) 769-0010
Attorneys for Harrah's Jazz Company
and Harrah's Jazz Finance Corp.
</TABLE>
<PAGE>
<TABLE>
<S> <C>
HELLER, DRAPER, HAYDEN &
HORN, L.L.C.
650 Poydras Street, Suite 2500
New Orleans, Louisiana 70130-6103
Telephone: (504) 568-1888
Fax: (504) 522-0949
Attorneys for Harrah's New Orleans
Investment Company
LATHAM & WATKINS
885 Third Avenue
New York, New York 10022
Telephone: (212) 906-1200
Fax: (212) 751-4864
Attorneys for
Harrah's Entertainment, Inc.
</TABLE>
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<S> <C> <C> <C>
ARTICLE I. DEFINITION AND CONSTRUCTION OF TERMS...................................................... 2
A. Definitions............................................................................ 2
B. Other Terms............................................................................ 24
C. Construction of Certain Terms.......................................................... 25
ARTICLE II. TREATMENT OF ADMINISTRATIVE
EXPENSE CLAIMS AND PRIORITY TAX CLAIMS.................................................... 25
2.1. Administrative Expense Claims................................................. 25
2.2. Priority Tax Claims........................................................... 26
ARTICLE III. CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS............................................. 27
A. HJC Classification..................................................................... 27
B. Finance Corp. Classification........................................................... 27
C. HNOIC Classification................................................................... 28
ARTICLE IV. TREATMENT OF CLAIMS AND EQUITY INTERESTS.................................................. 29
A. HJC Treatment.......................................................................... 29
4.1. Class A1 -- Other Priority Claims............................................. 29
4.2. Class A2 -- Non-Bondholder Secured Claims..................................... 29
4.3. Class A3 -- Bank Claims....................................................... 29
4.4. Class A4 -- Bondholder Claims................................................. 31
4.5. Class A5 -- Old Indenture Predecessor Trustee and Old Indenture Predecessor
Collateral Agent Claims.......................................... 32
4.6. Class A6 -- WARN Act Claims................................................... 32
4.7. Class A7 -- General Unsecured Claims.......................................... 32
4.8. Class A8 -- Penalty Claims.................................................... 33
4.9. Class A9 -- Equity Interests.................................................. 33
B. Finance Corp. Treatment................................................................ 33
4.10. Class B1 -- Other Priority Claims............................................. 33
4.11. Class B2 -- Bank Claims....................................................... 33
4.12. Class B3 -- Bondholder Claims................................................. 33
4.13. Class B4 -- WARN Act Claims................................................... 34
4.14. Class B5 -- General Unsecured Claims.......................................... 34
4.15. Class B6 - Penalty Claims..................................................... 34
4.16. Class B7 -- Equity Interests.................................................. 34
C. HNOIC Classification................................................................... 34
4.17. Class C1 -- Other Priority Claims............................................. 34
4.18. Class C2 -- Secured Claims.................................................... 35
4.19. Class C3 -- WARN Act Claims................................................... 35
4.20. Class C4 -- Unsecured Claims (for which HJC is liable)........................ 35
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C> <C>
4.21. Class C5 -- General Unsecured Claims.......................................... 35
4.22. Class C6 -- Showboat Claim.................................................... 36
4.23. Class C7 -- Penalty Claims.................................................... 36
4.24. Class C8 -- Equity Interests.................................................. 37
ARTICLE V. SETTLEMENT OF CERTAIN CLAIMS AND
PROSECUTION AND ASSIGNMENT OF CERTAIN CLAIMS.............................................. 37
5.1. Release by Debtors of Causes of Action Against the HET Group, Debtors Group,
Bondholders Committee Group, NOLDC Group and Grand Palais Group............... 37
5.2. Release by Bondholders of Causes of Action Against HET Group, Debtors
Group, Bondholders Committee Group, City Group, State Group, NOLDC
Group, Grand Palais Group and the Bank/Underwriter Group...................... 37
5.3. Release by Debtors of Causes of Action Against State Group.................... 39
5.4. Release by Debtors of Causes of Action Against City and RDC................... 39
5.5. Release by Debtors of Causes of Action Against Bank/Underwriter Group......... 39
5.6. Release by Grand Palais Bondholders of Causes of Action Against HET Group,
Debtors Group, Bondholders Committee Group, City Group, State Group,
NOLDC Group, Grand Palais Group and the Bank/Underwriter Group................ 39
5.7. Injunction Against Commencement of Individual Actions Against HET Group,
Debtors Group, Bondholders Committee Group, City Group, State Group,
NOLDC Group, Grand Palais Group and the Bank/Underwriter Group................ 41
5.8. Extinguishment of Certain Causes of Action Under the Avoiding Power
Provisions.................................................................... 41
5.9. Assignment and Prosecution of Assigned Litigation Claims, Judgment Reduction
Protection and Distribution of Recoveries from Assigned Litigation Claims..... 41
5.10. Approval of Other Settlement Agreements....................................... 45
ARTICLE VI. MEANS FOR IMPLEMENTATION
AND EXECUTION OF THE PLAN................................................................. 45
A. General Implementation Matters......................................................... 45
6.1. General Corporate Matters..................................................... 45
6.2. Effective Date Transactions................................................... 46
B. New Entities and Their Governance...................................................... 52
6.3. General....................................................................... 52
6.4. Board of Directors and Initial Members of New Entities........................ 52
6.5. Officers of New Entities...................................................... 52
6.6. Suitability Determinations.................................................... 53
6.7. Entity Action................................................................. 53
C. Distributions.......................................................................... 53
6.8. Generally..................................................................... 53
6.9. Services of Old Indenture Trustee............................................. 53
6.10. Distributions to be Made to Bondholders as of Distribution Record Date........ 54
6.11. Cancellation and Surrender of Existing Securities and Agreements.............. 54
6.12. Distributions of Cash......................................................... 55
6.13. Timing of Distributions....................................................... 55
6.14. Hart-Scott-Rodino Compliance.................................................. 55
6.15. Minimum Distributions; No Duplicative Distributions; No Interest.............. 55
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C> <C> <C>
6.16. Fractional Distributions...................................................... 55
6.17. Delivery of Distributions..................................................... 56
6.18. Fees and Expenses of Disbursing Agents........................................ 56
6.19. Time Bar to Cash Payments..................................................... 57
6.20. Transfer of Release Pool Distributions........................................ 57
D. Procedure for Resolving Disputed Claims................................................ 57
6.21. Objection Deadline............................................................ 57
6.22. Authority to Oppose Claims.................................................... 57
6.23. No Distributions Pending Allowance............................................ 57
6.24. Determination by Bankruptcy Court............................................. 57
6.25. Treatment of Disputed Claims.................................................. 58
ARTICLE VII. ACCEPTANCE OR REJECTION OF THE PLAN....................................................... 58
7.1. Classes Entitled to Vote...................................................... 58
7.2. Class Acceptance Requirement.................................................. 58
7.3. Cramdown...................................................................... 58
ARTICLE VIII. EXECUTORY CONTRACTS AND UNEXPIRED LEASES.................................................. 59
8.1. Assumption or Rejection of Executory Contracts and Unexpired Leases........... 59
8.2. Retiree Benefits.............................................................. 61
ARTICLE IX. EFFECT OF CONFIRMATION OF PLAN............................................................ 61
9.1. Revesting of Assets........................................................... 61
9.2. Discharge of Debtors.......................................................... 62
9.3. Dissolution of Debtors........................................................ 62
9.4. Exculpations.................................................................. 62
ARTICLE X. CONDITIONS PRECEDENT TO
CONFIRMATION AND EFFECTIVE DATE........................................................... 63
10.1. Condition Precedent to Confirmation of the Plan............................... 63
10.2. Conditions Precedent to Effective Date........................................ 63
10.3. Waiver of Conditions.......................................................... 65
10.4. Effect of Failure of Conditions............................................... 66
ARTICLE XI. RETENTION OF JURISDICTION................................................................. 66
ARTICLE XII. MISCELLANEOUS PROVISIONS.................................................................. 67
12.1. Exemption from Transfer Taxes................................................. 67
12.2. Post-Confirmation Date Fees and Expenses of Professional Persons.............. 68
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C> <C> <C>
12.3. Committees.................................................................... 68
12.4. Amendment or Modification of the Plan; Severability........................... 68
12.5. Revocation or Withdrawal of the Plan.......................................... 68
12.6. Existing Agreements........................................................... 69
12.7. Notices....................................................................... 69
12.8. Governing Law................................................................. 70
12.9. Withholding and Reporting Requirements........................................ 70
12.10. Headings...................................................................... 70
12.11. Exhibits...................................................................... 70
12.12. JCC Intermediary.............................................................. 71
12.13. Filing of Additional Documents................................................ 71
12.14. Controlling Effect of Agreements with State/LGCB.............................. 71
12.15. Rights of State and LGCB...................................................... 71
</TABLE>
iv
<PAGE>
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
<TABLE>
<S> <C>
In the Matter of: : No. 95-14545 TMB
: Section A
HARRAH'S JAZZ COMPANY, :
: jointly administered
Debtor. : with
:
- ----------------------------------------
:
In the Matter of: : No. 95-14544 TMB
: Section A
HARRAH'S JAZZ FINANCE CORP., :
: Chapter 11
Debtor. : Reorganization
:
- ----------------------------------------
:
In the Matter of: : No. 95-14871 TMB
: Section A
HARRAH'S NEW ORLEANS :
INVESTMENT COMPANY, :
: Chapter 11
Debtor. : Reorganization
:
- ----------------------------------------
</TABLE>
THIRD AMENDED JOINT PLAN OF REORGANIZATION
UNDER CHAPTER 11 OF THE BANKRUPTCY CODE,
AS MODIFIED THROUGH OCTOBER 13, 1998
The Bankruptcy Court (as defined below) has previously entered an order
dated April 28, 1997 confirming the Third Amended Joint Plan of Reorganization
Under Chapter 11 of the Bankruptcy Code, As Modified (the "Original Plan"),
which was filed by Harrah's Jazz Company, as debtor and debtor-in-possession
("HJC"), Harrah's Jazz Finance Corp., as debtor and debtor-in-possession
("Finance Corp."), Harrah's New Orleans Investment Company, as debtor and
debtor-in-possession ("HNOIC" and, together with HJC and Finance Corp.,
collectively, the "Debtors") and Harrah's Entertainment, Inc. ("HET" and,
together with the Debtors, collectively, the "Proponents"), a Delaware
corporation. The Bankruptcy Court subsequently entered an order dated January
29, 1998 confirming the Third Amended Joint Plan of Reorganization Under Chapter
11 of the Bankruptcy Code, as Modified Through January 29, 1998 (the "January
29, 1998 Plan"), and an order dated April 6, 1998 confirming the Third Amended
Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code, as
Modified Through April 6, 1998 (the "April 6, 1998 Plan"). The Proponents
propose the following further modifications of the Original Plan pursuant to
Section 1127(b) of title 11 of the United States Code. This Plan (as defined
below), if confirmed as to each of the Debtors, provides for the transfer of all
property of the Debtors (except for property distributed pursuant to the Plan)
to JCC, CP Development and FP Development (each as defined below) as successor
to each of the Debtors. If the Plan is not confirmed as to each of the Debtors,
it may not be confirmed as to any of the Debtors.
<PAGE>
ARTICLE I.
DEFINITION AND CONSTRUCTION OF TERMS
A. Definitions
As used herein, the following terms have the respective meanings specified
below, unless the context otherwise requires:
1.1. A Term Loan means the senior secured term loan in the principal amount
of $60 million to be obtained by JCC on the Effective Date pursuant to Section
6.2(h) of the Plan, which loan shall consist of Tranche A-1, Tranche A-2 and
Tranche A-3 and have the terms and conditions set forth in the Bank Term Sheet
and such other terms and conditions as shall be set forth in the A Term Loan
Documents.
1.2. A Term Loan Documents means, collectively, the loan agreement and all
other loan and security documents governing the terms and conditions of the A
Term Loan, which documents shall be satisfactory in form and substance to the
Bondholders Committee (in its sole discretion) and HET (in its sole discretion)
on behalf of the Proponents and if a party thereto, HJC (which approval shall
not be unreasonably withheld or delayed). The forms of the A Term Loan Documents
shall be filed with the Bankruptcy Court as Plan Documents pursuant to Section
6.2(t) of the Plan.
1.3. Administrative Agent shall have the meaning assigned such term in the
Old Bank Credit Agreement.
1.4. Administrative Expense Claim means with respect to any Debtor, any
claim against such Debtor under Sections 503(b), 507(a)(1) or 507(b) of the
Bankruptcy Code, including, without limitation, any actual and necessary
expenses of preserving the estate of the Debtor, any actual and necessary
expenses of operating the business of the Debtor, all compensation or
reimbursement of expenses allowed by the Bankruptcy Court under Section 330 or
503 of the Bankruptcy Code (including, without limitation, any attorneys' fees
or other expenses of Fidelity which are allowed by the Bankruptcy Court under
Section 503(b) of the Bankruptcy Code), the reasonable travel and other expenses
of members of the Committees in connection with their duties as Committee
members which are allowed by the Bankruptcy Court, and any fees or charges
assessed against the estate of the Debtor under Section 1930 of chapter 123 of
Title 28 of the United States Code.
1.5. Affiliate shall have the meaning assigned to such term in Section
101(2) of the Bankruptcy Code. For purposes of this Plan, NOLDC, HNOIC and Grand
Palais shall be deemed to be Affiliates of HJC.
1.6. Allowed, when used with respect to any Claim (except for a Claim that
is an Administrative Expense Claim) or any Equity Interest, means a Claim or
Equity Interest to the extent that (a)(i) a proof of claim or interest is timely
and properly filed prior to the Bar Date or (ii) if no proof of claim or
interest was filed, such Claim or Equity Interest is listed on the Schedules of
the applicable Debtor as liquidated in amount and non-disputed or noncontingent,
and (b)(i) no Debtor or other party in interest entitled to do so has made an
objection to the allowance thereof on or before the applicable period of
limitation fixed by the Bankruptcy Code, the Bankruptcy Rules, the Bankruptcy
Court or the Plan or (ii) such Claim or Equity Interest has been allowed by a
Final Order. Unless otherwise specified herein, Allowed Claims shall not include
interest on such Claims for the period from and after the Commencement Date, nor
shall they include any Claim which may be disallowed under Section 502(d) of the
Bankruptcy Code. Allowed, when used with respect to any
2
<PAGE>
Administrative Expense Claim, means an Administrative Claim that has become
"Allowed" pursuant to the procedures set forth in Article II of the Plan.
1.7. Allowed General Unsecured Claim shall have the meaning assigned to
such term in Section 4.7(a) of the Plan.
1.8. Allowed General Unsecured Creditor shall have the meaning assigned to
such term in Section 4.7(b) of the Plan.
1.9. Amended and Restated Canal Street Casino Lease means that certain
Amended and Restated Canal Street Casino Lease to be executed on or before and
as of the Effective Date by JCC and the RDC, with the City as Intervenor, and
incorporating amendments to the Canal Street Casino Lease that are described in
the City Agreement.
1.10. Amended and Renegotiated Casino Operating Contract means the Casino
Operating Contract, as renegotiated between HJC and the LGCB and amended,
substantially in the form attached to the April 6, 1998 Plan as Exhibit B and
incorporated herein by reference, subject to such further modifications as might
be approved by the LGCB, the Bondholders Committee and the Proponents, which is
to be executed on or before the Effective Date by HJC and the LGCB and assigned
to JCC as of the Effective Date in accordance with the provisions of Section
8.1(g) of this Plan.
1.11. Amended and Restated Completion Loan Documents means that certain
Amended and Restated Completion Loan Agreement to be executed by JCC, HET and
HOCI on or before and as of the Effective Date, as described in the term sheet
attached hereto as Exhibit A, and all other loan or security agreements,
instruments or documents executed in connection therewith. The Amended and
Restated Completion Loan Agreement and all such other loan or security
agreements, instruments and documents shall be satisfactory in form and
substance to the Bondholders Committee (in its sole discretion), HET (in its
sole discretion) on behalf of the Proponents, and if a party thereto, HJC (which
approval shall not be unreasonably withheld or delayed). The forms of the New
Completion Loan Documents shall be filed with the Bankruptcy Court as Plan
Documents pursuant to Section 6.2(t) of the Plan. JCC's repayment obligations
under the Amended and Restated Completion Loan Documents shall be unsecured
obligations of JCC and shall be junior in right of payment to the New Bonds and
the New Contingent Bonds.
1.12. Amended and Restated Construction Lien Indemnity Obligation Agreement
means that certain Amended and Restated Construction Lien Indemnity Obligation
Agreement to be entered into by JCC and HOCI on or before and as of the
Effective Date, as described in the term sheet attached hereto as Exhibit B. The
form of the Amended and Restated Construction Lien Indemnity Obligation
Agreement shall be filed with the Bankruptcy Court as a Plan Document pursuant
to Section 6.2(t) of the Plan.
1.13. Amended and Restated General Development Agreement means that certain
Amended and Restated General Development Agreement to be executed on or before
and as of the Effective Date by JCC and the RDC, with the City as Intervenor,
and incorporating the amendments to the General Development Agreement that are
described in the City Agreement.
1.14. Amended and Restated Management Agreement means that certain Second
Amended and Restated Management Agreement to be executed on or before and as of
the Effective Date by JCC and HNOMC, as described in the term sheet attached
hereto as Exhibit C.
1.15. April 6, 1998 Plan shall have the meaning assigned to such term in
the preamble hereof.
3
<PAGE>
1.16. Architect means Perez Ernst Farnet/Modus, Inc. Architects and
Planners and its successors and assigns.
1.17. Architect Contract means the Design Agreement dated January 16, 1995
(and effective November 15, 1994), between HJC, as prepetition debtor, and
Architect, together with any amendments thereto executed prior to the
Commencement Date of the Chapter 11 Case of HJC.
1.18. Assigned Bondholder Litigation Claims means any and all claims and
causes of action, including, without limitation, Avoidance Claims, of any
Releasing Bondholder (in its capacity as a Bondholder) which, as of the
Effective Date, exists or may exist against any or all of (i) the
Non-Participating Banks, and (ii) any Underwriter which fails to execute the
Bank/Underwriter Release to the extent such Releasing Bondholder, through an
appropriate indication on the ballot provided to such holder or in such other
manner as may be prescribed by an applicable order of the Bankruptcy Court, has
affirmatively evidenced its intent to be a Releasing Bondholder and as a
consequence to assign all such claims and causes of action to JCC.
1.19. Assigned Debtor Litigation Claims means any and all claims and causes
of action, including, without limitation, Avoidance Claims, of any Debtor which,
as of the Effective Date, exists or may exist against any or all of (i) the
Non-Participating Banks and (ii) any Underwriter which fails to execute the
Bank/Underwriter Release.
1.20. Assigned Litigation Claims means all Assigned Debtor Litigation
Claims and all Assigned Bondholder Litigation Claims.
1.21. Avoidance Claims means all rights, claims, causes of action, avoiding
powers, suits and proceedings of or brought by or on behalf of any Debtor or any
Person and arising under any or all of Sections 510 and 544 through 554 of the
Bankruptcy Code.
1.22. B Term Loan means the secured term loan in the principal amount of
$151.5 million to be obtained by JCC on the Effective Date pursuant to Section
6.2(h) of the Plan, which loan shall consist of Tranche B-1 and Tranche B-2 and
shall have the terms and conditions set forth in the Bank Term Sheet and such
other terms and conditions as shall be set forth in the B Term Loan Documents.
1.23. B Term Loan Documents means, collectively, the loan agreement and all
other loan and security documents governing the terms and conditions of the B
Term Loan, which documents shall be satisfactory in form and substance to the
Bondholders Committee (in its sole discretion) and HET (in its sole discretion)
on behalf of the Proponents and if a party thereto, HJC (which approval shall
not be unreasonably withheld or delayed). The forms of the B Term Loan Documents
shall be filed with the Bankruptcy Court as Plan Documents pursuant to Section
6.2(t) of the Plan.
1.24. Bank Reserve Fund shall have the meaning assigned to such term in
Section 4.3(b) of the Plan.
1.25. Bank Term Sheet means the term sheet attached hereto as Exhibit F.
1.26. Bank/Underwriter Group means each Participating Bank and Underwriter
which executes the Bank/Underwriter Release and FNBC in any capacity and their
respective Affiliates, predecessors, successors and assigns and the officers,
directors, employees, attorneys, financial advisors, accountants, agents or
other representatives of each of the foregoing.
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1.27. Bank/Underwriter Release means, collectively, the mutual releases
described in the Bank Term Sheet, the Underwriter Term Sheet and the FNBC
Settlement Agreement, including, without limitation, mutual releases between the
Participating Banks, the Underwriters, the Old Bank Collateral Agent, the Old
Indenture Predecessor Trustee, the Old Indenture Predecessor Collateral Agent,
on the one hand, and the other Released Parties, on the other hand. The
Bank/Underwriter Release shall be in form and substance satisfactory to the
non-Debtor parties thereto (in their sole discretion), HJC (which shall not
unreasonably withhold or delay its approval), HET (in its sole discretion) on
behalf of the other Proponents and the Bondholders Committee (in its sole
discretion).
1.28. Bankruptcy Code means Title 11 of the United States Code, as amended
from time to time, as applicable to the Chapter 11 Cases.
1.29. Bankruptcy Court means the United States District Court for the
Eastern District of Louisiana having jurisdiction over the Chapter 11 Cases and,
to the extent of any reference made pursuant to section 157 of Title 28 of the
United States Code, the unit of such District Court pursuant to section 157 of
Title 28 of the United States Code.
1.30. Bankruptcy Rules means the Federal Rules of Bankruptcy Procedure, as
amended from time to time, as applicable to the Chapter 11 Cases, including the
Local Rules of the Bankruptcy Court.
1.31. Banks means, collectively, Bankers Trust Company, as Bank and
Administrative Agent, The Boatmen's National Bank of St. Louis, Prime Income
Trust, Van Kampen Merritt Prime Rate Income Trust, Senior High Income Portfolio,
Inc., Senior High Income Portfolio II, Inc., Senior Strategic Income Fund, Inc.,
as Banks, and First National Bank of Commerce, as Bank (but not as Collateral
Agent), and their successors and assigns, as the foregoing terms are defined in
the Old Bank Credit Agreement.
1.32. Bar Date shall mean the applicable dates fixed by the Bankruptcy
Court or this Plan for filing proofs of claim or interests in the Chapter 11
Cases: (i) in the case of Rejection Claims, the date set forth in Section 8.1(f)
of the Plan, (ii) April 1, 1997 (subject to revocation under certain
circumstances), with respect to Claims of the Bondholders and the Old Indenture
Trustee other than contractual Claims based on the principal of or interest on
the Old Bonds, and certain Claims against HNOIC held by NOLDC, HJC, Finance
Corp., Grand Palais and/or their shareholders, and (iii) May 15, 1996, with
respect to all other pre-petition Unsecured Claims other than Claims which were
included in any Schedule and not listed therein as "disputed," "unliquidated" or
"contingent" and to which such scheduled amounts the holders of such Claims
agree.
1.33. Basin Street Casino Lease means that certain Temporary Casino Lease
dated March 14, 1994, between the RDC and HJC, as prepetition debtor, with the
City as Intervenor, together with any amendments thereto executed prior to the
Commencement Date of the Chapter 11 Case of HJC.
1.34. Basin Street Casino Lease Termination Agreement means that certain
Basin Street Casino Lease Termination Agreement entered into by JCC and the RDC,
with the City as Intervenor, dated as of January 15, 1997.
1.35. Bondholder Claims means all of the respective Claims of holders and
beneficial owners of the Old Bonds against any or all of the Debtors.
1.36. Bondholder Deficiency Amount shall have the meaning assigned to such
term in Section 5.9(f)(vi) of the Plan.
1.37. Bondholder Term Sheet means the term sheet attached hereto as Exhibit
D.
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1.38. Bondholders means the holders and beneficial owners of the Old Bonds.
1.39. Bondholders Committee means the statutory committee of Bondholders
appointed by the United States Trustee in the Chapter 11 Case of HJC pursuant to
Section 1102 of the Bankruptcy Code.
1.40. Bondholders Committee Group means the Bondholders Committee, and each
of the current and former members thereof in its capacities as a member of the
Bondholders Committee and as a Bondholder, and each Professional Person retained
by the Bondholders Committee.
1.41. Bondholders Director Nominees shall have the meaning assigned to such
term in Section 6.4 of the Plan.
1.42. Broadmoor means Broadmoor, a Louisiana general partnership, and its
successors and assigns.
1.43. Broadmoor Construction Agreement means that certain Construction
Agreement dated October 10, 1994, between HJC, as prepetition debtor, and
Broadmoor, together with any amendments thereto executed prior to the
Commencement Date of the Chapter 11 Case of HJC.
1.44. Broadmoor Release means the Release, in a form mutually acceptable to
the parties thereto, to be executed on or before and as of the Effective Date by
Broadmoor, and providing for releases in favor of the Debtors, the Debtors
Group, the HET Group, the NOLDC Group (but only if the applicable Persons in the
NOLDC Group execute and deliver on or before the Effective Date the NOLDC
Shareholders/HET Settlement Agreement) and the Grand Palais Group (but only if
the applicable Persons in the Grand Palais Group execute and deliver on or
before the Effective Date the applicable GP Representative/HET Settlement
Agreements). Neither the Broadmoor Settlement Agreement nor the Broadmoor
Release shall provide for any release of claims by or against either of
Honore/Broadmoor, a joint venture, or Honore Construction Company, Inc.
1.45. Broadmoor Settlement Agreement means the Settlement Agreement dated
October 15, 1996, between HJC and Broadmoor and attached to the Original Plan as
Exhibit H and incorporated by reference herein, as the same may be amended.
1.46. Business Day means any day other than a Saturday, Sunday or any other
day on which commercial banks in New York, New York are required or authorized
to close.
1.47. Canal Street Casino Lease means that certain Amended Lease Agreement
dated March 15, 1994, between the RDC and HJC, as prepetition debtor, with the
City as Intervenor, together with any amendments thereto executed prior to the
Commencement Date of the Chapter 11 Case of HJC.
1.48. Casino means that certain casino to be constructed on the real
property leased by HJC on Canal Street in New Orleans, Louisiana, together with
the parking lot adjacent thereto.
1.49. Casino Operating Contract means that certain Casino Operating
Contract dated as of July 15, 1994, between the LEDGC, and HJC, as prepetition
debtor, together with any amendments thereto executed prior to the Commencement
Date of the Chapter 11 Case of HJC.
1.50. Centex-Landis means Centex Landis Construction Co., Inc., and its
successors and assigns.
1.51. Centex-Landis Construction Agreement means that certain Construction
Agreement dated October 10, 1994, between HJC, as prepetition debtor, and
Centex-Landis, together with any amendments thereto executed prior to the
Commencement Date of the Chapter 11 Case of HJC.
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1.52. Centex-Landis Release means the Release, substantially in the form
attached to the Centex-Landis Settlement Agreement, to be executed on or before
and as of the Effective Date by Centex-Landis, providing for releases in favor
of the Debtors, the Debtors Group, the HET Group, the NOLDC Group (but only if
the applicable Persons in the NOLDC Group execute and deliver on or before the
Effective Date the NOLDC Shareholders/HET Settlement Agreement) and the Grand
Palais Group (but only if the applicable Persons in the Grand Palais Group
execute and deliver on or before the Effective Date the applicable GP
Representative/HET Settlement Agreements).
1.53. Centex-Landis Settlement Agreement means the Settlement Agreement
dated November 25, 1996, between HJC and Centex-Landis and attached to the
Original Plan as Exhibit L and incorporated by reference herein, as the same may
be amended.
1.54. Certified WARN Act Class means the class of holders of WARN Act
Claims certified for settlement purposes by the Bankruptcy Court pursuant to
Bankruptcy Rule 7023 by order dated December 10, 1996.
1.55. Chapter 11 Cases means the above-captioned cases under Chapter 11 of
the Bankruptcy Code commenced by each Debtor and currently pending in the
Bankruptcy Court.
1.56. City means the City of New Orleans, Louisiana.
1.57. City Agreement means that certain Agreement Regarding Modifications
And Related Agreements In Respect Of Amended And Restated Canal Street Casino
Lease, Termination Of Basin Street Casino Lease, Amended And Restated General
Development Agreement, The Conditional Use Ordinances And Other Regulatory
Matters dated as August 15, 1996, by and among the City, RDC and HJC, a copy of
which is attached to the Original Plan as Exhibit A and incorporated by
reference herein, as the same may be amended, amended and restated, supplemented
or otherwise modified from time to time.
1.58. City Group means the City, the Mayor of the City, the City Council of
the City, the members of the City Council, the RDC, all boards, commissions,
agencies and other instrumentalities of the City and the officers, directors,
employees, staff members, attorneys, financial advisors, accountants, agents and
other representatives of each of the foregoing.
1.59. City/RDC Release means the City Release Agreement, in the form
attached hereto as Exhibit E (or as modified on terms satisfactory to HET and
with the consent of HJC (which consent may not be unreasonably withheld or
delayed)) to be executed on or before and as of the Effective Date by the City,
the RDC, the Debtors, NOLDC, Grand Palais, HET, HOCI, HNOMC, JCC and/or certain
of their respective Affiliates, and providing for, among other things, mutual
releases in favor of the City, the RDC and their respective Affiliates, on the
one hand, and the Debtors, the Debtors Group, the New Entities, the HET Group,
the Bank/Underwriter Group, the Bondholders Committee Group, the NOLDC Group
(but only if the applicable Persons in the NOLDC Group execute and deliver on or
before the Effective Date the NOLDC Shareholders/HET Settlement Agreement) and
the Grand Palais Group (but only if the applicable Persons in the Grand Palais
Group execute and deliver on or before the Effective Date the applicable GP
Representative/HET Settlement Agreements), on the other hand.
1.60. Claim shall have the meaning assigned to such term in Section 101(5)
of the Bankruptcy Code.
1.61. Class A New Common Stock means the Class A Common Stock of JCC
Holding authorized pursuant to Section 6.2(d) and (f) of the Plan. Class A New
Common Stock shall have a par value of $.01 per
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share and such rights with respect to dividends, liquidation, voting and other
matters as are provided for by applicable nonbankruptcy law or in the JCC
Holding Certificate of Incorporation and JCC Holding Bylaws.
1.62. Class A 33 Act Registration Statement shall have the meaning assigned
to such term in Section 6.2(q) of the Plan.
1.63. Class A 34 Act Registration Statement shall have the meaning assigned
to such term in Section 6.2(q) of the Plan.
1.64. Class B New Common Stock means the Class B Common Stock of JCC
Holding authorized pursuant to Sections 6.2(d), (e) and (f) of the Plan. Class B
New Common Stock shall have a par value of $.01 per share and such rights with
respect to dividends, liquidation, voting and other matters as are provided for
by applicable nonbankruptcy law or in the JCC Holding Certificate of
Incorporation and JCC Holding Bylaws.
1.65. Class B Registration Rights Agreement shall have the meaning assigned
to such term in Section 6.2(r) of the Plan.
1.66. Class B Registration Statement shall have the meaning assigned to
such term in Section 6.2(r) of the Plan.
1.67. Class C5 Cash Amount shall have the meaning assigned to such term in
Section 4.21 of the Plan.
1.68. Class C5 Claims Reserve shall have the meaning assigned to such term
in Section 4.21 of the Plan.
1.69. COC Fiscal Year means the 12-month period ending March 31 for
purposes of the Amended and Renegotiated Casino Operating Contract.
1.70. Commencement Date means the date on which the applicable Debtor
commenced its Chapter 11 Case: (i) November 22, 1995, with respect to the
Chapter 11 Cases of HJC and Finance Corp. and (ii) December 22, 1995, with
respect to HNOIC.
1.71. Committees mean the Bondholders Committee and the Unsecured Creditors
Committee.
1.72. Completion Loan Documents means the Completion Loan Agreement dated
as of October 12, 1994, by and among HJC, as prepetition debtor, HET, HOCI,
NOLDC, Grand Palais and Grand Palais Management Companies, L.L.C., and the
Completion Loan Documents (as defined in the Completion Loan Agreement),
together with any amendments thereto executed prior to the Commencement Date of
the Chapter 11 Case of HJC.
1.73. Completion Notice shall have the meaning assigned such term in
Section 5.9(f)(ii) of the Plan.
1.74. Confirmation Date means the date on which the Clerk of the Bankruptcy
Court enters an order confirming this Plan.
1.75. Confirmation Hearing means the hearing convened to consider
confirmation of the Plan.
1.76. Confirmation Order means the order of the Bankruptcy Court entered
April 28, 1997 and confirming the Original Plan, together with any subsequent
orders pursuant to Sections 1127, 1128 and 1129 of the Bankruptcy Code approving
modifications to the Original Plan.
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1.77. Construction Lien Indemnity Obligation Agreement means that certain
Construction Lien Indemnity Obligation Agreement dated October 12, 1994, by and
among HJC, as prepetition debtor, HOCI, NOLDC, Grand Palais, and Grand Palais
Management Company, L.L.C., together with any amendments thereto executed prior
to the Commencement Date of the Chapter 11 Case of HJC.
1.78. Contingent Claim means a Claim that is contingent or unliquidated on
the Effective Date, including, without limitation, any Rejection Claim or
Deficiency Claim which has not been allowed on the Effective Date.
1.79. Convertible Junior Subordinated Debenture Documents means,
collectively, the Convertible Junior Subordinated Debentures, and, if
applicable, all other security agreements, mortgages, indentures and other
documents governing the terms and conditions of the obligations of HJC (and JCC
as HJC's successor) in respect of the Convertible Junior Subordinated
Debentures. The Convertible Junior Subordinated Debenture Documents shall be
satisfactory in form and substance to the non-Debtor parties thereto (in their
sole discretion), the Bondholders Committee (in its sole discretion) and HET (in
its sole discretion) on behalf of the Proponents, and if HJC is a party thereto,
HJC (which approval shall not be unreasonably withheld or delayed). The forms of
the Convertible Junior Subordinated Debenture Documents shall be filed with the
Bankruptcy Court as Plan Documents pursuant to Section 6.2(t) of the Plan.
1.80. Convertible Junior Subordinated Debentures means the convertible
junior subordinated debentures to be issued by JCC on the Effective Date
pursuant to Sections 4.3(a) and 6.2(h) hereof in the approximate principal
amount of $15 million to the Underwriters (or Affiliates thereof), in the
approximate principal amount of $11.637 million to Bankers Trust Company (or an
Affiliate thereof) and the Participating Banks (plus additional convertible
junior subordinated debentures purchased pursuant to clause (C) of the first
sentence of Section 4.3(a)(ii) of the Plan) and in the principal amount of
$400,000 to FNBC (which amount is in addition to the $357,150 in principal
amount of Convertible Junior Subordinated Debentures to be purchased by FNBC as
a Participating Bank). These convertible junior subordinated debentures shall
have the terms and conditions set forth in the Convertible Junior Subordinated
Debenture Documents.
1.81. CP Development means CP Development, L.L.C., a Louisiana limited
liability company, and its successors and assigns, to which all right, title and
interest of the Debtors in the 3CP Property shall be transferred on the
Effective Date.
1.82. Creditor means the holder of an Allowed Claim.
1.83. Debtors means HJC, Finance Corp. and HNOIC.
1.84. Debtors Group means each Debtor's officers, directors, employees,
attorneys, financial advisors, accountants and, in the case of HJC, the members
of its Executive Committee and its Reorganization Steering Committee.
1.85. Deficiency Claim means a Claim equal to the amount, if any, by which
the total Allowed Claim of any Creditor exceeds the sum of (i) any Setoff or
Recoupment Claims of the Creditor against the applicable Debtor provided for by
applicable law and preserved by Section 553 of the Bankruptcy Code plus (ii) the
portion of such Claim that is a Secured Claim; provided, however, that if the
Class of which such Claim is a part makes the election provided for by Section
1111(b)(2) of the Bankruptcy Code, there shall be no Deficiency Claim in respect
of such Claim.
1.86. Derivative Claim means any claim, demand, suit, action or cause of
action in law, equity or otherwise which is the property of any of the Debtors
or their respective estates.
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1.87. Development Services Agreement means the Development Services
Agreement to be executed on or before the Effective Date by JCC and the Harrah's
Investor and containing the terms and conditions described in the term sheet
attached hereto as Exhibit I. The Development Services Agreement shall be in
form and substance satisfactory to the Harrah's Investor, HET (in its sole
discretion) on behalf of the Proponents and the Bondholders Committee (in its
sole discretion).
1.88. DIP Indebtedness means, as of the date of determination, the balance
of principal, accrued interest and other amounts then outstanding in respect of
the debtor-in-possession loans (exclusive of any loans made under the Junior
Subordinated Credit Facility) made by HOCI or any of its Affiliates at any time
on or before the Effective Date to HJC pursuant to orders of the Bankruptcy
Court entered at any time on or before the Effective Date.
1.89. DIP Lender means HOCI and/or any Affiliate which advanced any funds
constituting DIP Indebtedness.
1.90. DIP Loan Claim means, collectively, any and all Claims based on the
DIP Indebtedness.
1.91. Director Nominees shall have the meaning assigned to such term in
Section 6.4 of the Plan.
1.92. Disbursing Agent means any Person designated by HET (in its sole
discretion) on behalf of the Proponents or designated in the Plan to make
distributions required under the Plan, which may include, without limitation,
any JCC Entity, the Old Indenture Successor Trustee or any financial institution
of recognized standing.
1.93. Disbursing Agreements means those agreements referenced in Section
6.8 of the Plan. The form of the Disbursing Agreement(s) shall be filed with the
Bankruptcy Court as Plan Document(s) pursuant to Section 6.2(t) of the Plan.
1.94. Disclosure Statement means the disclosure statement relating to this
Plan, as approved by the Bankruptcy Court pursuant to Section 1125 of the
Bankruptcy Code.
1.95. Disputed means, with respect to a Claim or Equity Interest, (i) any
Claim (including any Administrative Expense Claim) or Equity Interest as to
which any Debtor or any other party in interest has interposed a timely
objection or request for estimation in accordance with the Bankruptcy Code and
the Bankruptcy Rules, which objection or request for estimation has not been
withdrawn or determined by a Final Order in favor of the holder thereof, (ii)
any Claim or Equity Interest as to which a proof of claim or interest was
required to be filed by order of the Court but as to which a proof of claim or
interest was not timely or properly filed, and (iii) any Contingent Claim until
such Claim becomes fixed and absolute by Final Order, settlement or otherwise.
1.96. Disputed Claim Amount means, as to a particular Class on the date of
determination, the aggregate amount of Disputed Claims in that Class that are
not Contingent Claims. For purposes of calculating the initial distributions to
be made to holders of Allowed Class C5 Claims pursuant to Section 4.21 of the
Plan, the Disputed Claim Amount for each Disputed Claim shall be based upon
either (i) the amount of such Creditor's Disputed Claim as set forth in its
filed proofs of claim or (ii) the amount at which the Bankruptcy Court may
estimate such Disputed Claim.
1.97. Distribution Record Date means the Effective Date, unless otherwise
ordered by the Bankruptcy Court, and shall be used to determine which holders of
the Old Bonds are entitled to receive distributions, other than distributions
from the Release Pool, provided under the Plan.
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1.98. Effective Date means a Business Day selected by HET (in its sole
discretion) on behalf of the Proponents after the first Business Day (A) which
is on or after the date of the entry of the Confirmation Order and (B) on which
(i) the Confirmation Order is not stayed and (ii) all conditions to the
effectiveness of the Plan have been satisfied or waived as provided in Article X
of the Plan, but not later than October 31, 1998, which date may be extended by
HET (in its sole discretion) on behalf of the Proponents with the written
consent of the Bondholders Committee, the LGCB and the City (each of whose
consent may be withheld in its sole discretion).
1.99. 8/95 WARN Act Claimant means any holder of a WARN Act Claim who was
terminated from his or her casino position in August, 1995.
1.100. 11/95 WARN Act Claimant means any holder of a WARN Act Claim who was
terminated from his or her casino position on or about November 22, 1995.
1.101. Encumbrance means any Lien, imperfection of title, option or
restriction of any kind affecting any property.
1.102. Equity Interest shall have the meaning assigned to the term "Equity
Security" in Section 101(16) of the Bankruptcy Code.
1.103. Estimation Order shall have the meaning assigned to such term in
Section 4.3(b)(ii) of the Plan.
1.104. Existing Lender's Title Insurance Policy means that certain lender's
title insurance policy previously issued by First American Title Insurance
Company for the benefit of the Banks and the Bondholders and certain other
parties, together with all reinsurance agreements, endorsements and supplements
thereto.
1.105. Existing Owners' Title Insurance Policy means that certain Policy of
Title Insurance issued by First American Title Insurance Company with an
original effective date of March 16, 1994, Policy Number D 102631 to HJC, as
superseded and replaced by a policy of the same policy number with an effective
date of November 16, 1994, together with all reinsurance agreements,
endorsements and supplements thereto.
1.106. Fee Application means an application of a Professional Person under
Section 330, 503 or 506(b) of the Bankruptcy Code for allowance of compensation
and reimbursement of expenses in any Chapter 11 Case.
1.107. Fee Claim means a Claim under Section 330, 503 or 506(b) of the
Bankruptcy Code for allowance of compensation and reimbursement of expenses in
any Chapter 11 Case.
1.108. Fidelity means, collectively, Fidelity Management and Research
Company and Fidelity Management Trust Company.
1.109. Final Order means an order of the Bankruptcy Court or any other
court of competent jurisdiction (a) which has become final for purposes of 28
U.S.C. Section 158 or 1291 or such analogous law or rule in the case of an order
of a state court and (b)(i) as to which the time to appeal, petition for
certiorari, or move for reargument or rehearing has expired and as to which no
appeal, petition for certiorari, or other proceedings for reargument or
rehearing shall then be pending or as to which any right to appeal, petition for
certiorari, reargue, or rehear shall have been waived in writing in form and
substance satisfactory to HET (in its sole discretion) on behalf of the
Proponents or JCC or (ii) in the event that an appeal, writ of certiorari, or
reargument or rehearing thereof has been sought which shall have been determined
by the highest court to which such order was appealed, or certiorari, reargument
or rehearing shall have been denied or resulted in
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no modification of such order and the time to take any further appeal, petition
for certiorari or move for reargument or rehearing shall have expired; provided,
however, that the possibility that a motion under Rule 60 of the Federal Rules
of Civil Procedure, or Bankruptcy Rule 9024 or other analogous rules governing
procedure in cases before the court, if not the Bankruptcy Court, may be filed
with respect to such order shall not cause such order not to be a Final Order.
1.110. Finance Corp. means Harrah's Jazz Finance Corp., a Delaware
corporation, as debtor and debtor in-possession.
1.111. First American Settlement Agreement means that certain settlement
agreement by and between HJC and First American Title Insurance Company, dated
as of December 18, 1996, providing for, among other things, the issuance of new
owner's and lender's title insurance policies.
1.112. FNBC means First National Bank of Commerce and its successors and
assigns.
1.113. FNBC Cash Collateral shall have the meaning assigned to such term in
Section 6.2(k)(ii) of the Plan.
1.114. FNBC Settlement Agreement means the letter agreement dated April 24,
1997, among HJC, HET, FNBC, the Bondholders Committee and Bankers Trust Company
attached hereto as Exhibit H.
1.115. FP Development means FP Development, L.L.C., a Louisiana limited
liability company, and its successors and assigns, to which all right, title and
interest of the Debtors in the Fulton Property shall be transferred on the
Effective Date.
1.116. Fulton Property means real property owned by HJC located in New
Orleans, Louisiana bounded by Fulton Street, Lafayette Street, Poydras Street
and South Peters Street, commonly known as 224 Poydras Street, 228 Poydras
Street, 237 Lafayette Street/550 South Peters Street, 508-510 South Peters
Street, 512-526 South Peters Street, 528 South Peters Street/529 Fulton Street
and 530 South Peters Street, together with any easements, rights of servitude
and other rights appurtenant thereto and any improvements thereupon, which shall
be transferred to FP Development on the Effective Date.
1.117. General Development Agreement means that certain Amended General
Development Agreement dated March 15, 1994, between HJC, as prepetition debtor,
and the RDC, with the City as Intervenor, together with any amendments thereto
executed prior to the Commencement Date of the Chapter 11 Case of HJC.
1.118. Grand Palais means Grand Palais Casino, Inc., a Delaware
corporation, and its successors and assigns.
1.119. Grand Palais Bondholders means the holders and beneficial owners of
the Grand Palais Senior Secured Bonds.
1.120. Grand Palais Group means Grand Palais, and its Affiliates (other
than the Debtors), predecessors, successors and assigns and the officers,
directors, employees, attorneys, financial advisors, accountants, agents and
other representatives of each of the foregoing.
1.121. GP Representative/HET Settlement Agreements means, collectively,
(i) the settlement agreements to be executed on or before the Effective Date by
the person(s) authorized under applicable law to act on behalf of Grand Palais,
Christopher B. Hemmeter ("Hemmeter"), Hemmeter's Chapter 7 bankruptcy trustee,
Cezar M. Froelich ("Froelich"), Eddie L. Sapir ("Sapir"), William Broadhurst
("Broadhurst") and
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certain of their Affiliates on the one hand, and HET, HOCI and HNOMC, on the
other hand, (ii) the releases attached as exhibits to such settlement
agreements, pursuant to which the authorized representative(s) of Grand Palais,
Hemmeter, Hemmeter's Chapter 7 bankruptcy trustee, Froelich, Sapir, Broadhurst
and certain of their Affiliates on the one hand, and HET, HOCI, HNOIC, HNOMC and
certain Affiliates thereof, on the other hand, shall release certain claims and
causes of action against each other, (iii) the further releases provided for in
such settlement agreements in favor of the Bondholders Committee Group, the
Debtors Group, the Bank/Underwriter Group, the State Group and the City Group,
and (iv) all other agreements, instruments and documents executed or to be
executed in connection with these settlement agreements. The GP
Representative/HET Settlement Agreements shall be in the form and substance
satisfactory to the parties thereto.
1.122. Grand Palais Indenture means that certain Amended and Restated
Indenture, dated as of November 16, 1994, between Grand Palais and Fleet
National Bank of Connecticut (formerly known as Shawmut Bank Connecticut,
National Association), as trustee, governing the terms of the Grand Palais
Senior Secured Bonds, as the same may be amended from time to time.
1.123. Grand Palais Releasing Bondholder shall have the meaning set forth
in Section 5.6 of the Plan.
1.124. Grand Palais Senior Secured Bonds means the 18.25% Senior Secured
Pay-In-Kind Notes, due November 1, 1997, issued by Grand Palais pursuant to the
Grand Palais Indenture.
1.125. Grand Palais Settlement Consideration shall have the meaning
assigned such term in Section 6.2(f)(i) of the Plan.
1.126. Harrah's Director Nominees shall have the meaning assigned to such
term in Section 6.4 of the Plan.
1.127. Harrah's Investor means, collectively, Harrah's Crescent City
Investment Company, a Nevada corporation and wholly-owned subsidiary of HET, HET
and/or any Affiliates of HET as the holder(s) of the shares of New Common Stock
issued pursuant to Sections 6.2(e) and 6.2(f) of the Plan, and its (their)
successors and assigns.
1.128. Harrah's New Equity Investment shall have the meaning assigned to
such term in Section 6.2(e) of the Plan.
1.129. HET means Harrah's Entertainment, Inc., a Delaware corporation,
formerly known as The Promus Companies, Incorporated, and its successors and
assigns.
1.130. HET Group means HET, HOCI, HNOMC, the Harrah's Investor and their
respective Affiliates (other than the Debtors), predecessors, successors and
assigns and the officers, directors, employees, attorneys, financial advisors,
accountants, agents and other representatives of each of the foregoing.
1.131. HET/JCC Agreement means that certain HET/JCC Agreement executed by
HET and HOCI in favor of the LGCB and attached as an exhibit to the Amended and
Restated Casino Operating Contract.
1.132. HET Loan Guarantee means, collectively, the payment guarantees or
"put" agreements by HET and HOCI with respect to (i) Tranche A-2 of the A Term
Loan, (ii) Tranche B-2 of the B Term Loan, and (iii) the Working Capital
Facility on terms satisfactory to such lenders and HET. The forms of the HET
Loan Guarantee shall be filed with the Bankruptcy Court as Plan Documents
pursuant to Section 6.2(t) of the Plan.
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1.133. HET Warrant means warrants to purchase additional shares of New
Common Stock such that, upon exercise of the warrants in their entirety, HET and
its subsidiaries (including Harrah's Investor) would own in the aggregate 50.0%
of the New Common Stock issued on the Effective Date, as described in the
Bondholder Term Sheet attached hereto as Exhibit E, and which shall be (i)
satisfactory in form and substance to HET (in its sole discretion) on behalf of
the Proponents and the Bondholders Committee (in its sole discretion) and (ii)
filed with the Bankruptcy Court as a Plan Document pursuant to Section 6.2(t) of
the Plan.
1.134. HJC means Harrah's Jazz Company, a Louisiana general partnership, as
debtor and debtor in-possession.
1.135. HNOIC means Harrah's New Orleans Investment Company, a Nevada
corporation, as debtor and debtor in-possession.
1.136. HNOMC means Harrah's New Orleans Management Company, a Nevada
corporation, and its successors and assigns.
1.137. HOCI means Harrah's Operating Company, Inc., a Delaware corporation,
formerly known as Embassy Suites, Inc., and its successors and assigns.
1.138. Indenture Trustee Charging Lien means any Lien or other priority in
payment available to the Old Indenture Trustee pursuant to the Old Indenture or
otherwise against distributions made to the Bondholders under the Plan for
payment of any fees, costs, disbursements or amounts incurred by the Old
Indenture Trustee.
1.139. Indenture Trustee Claim means a contractual Claim held by the Old
Indenture Trustee for compensation, reimbursement of costs or disbursements
(including, without limitation, the costs and expenses of its attorneys,
accountants and financial advisors), or indemnity arising from the Old Indenture
or otherwise, regardless of whether such fees and expenses are incurred prior or
subsequent to the Commencement Date.
1.140. Initial Class C5 Distribution Date shall have the meaning assigned
to such term in Section 4.21 of the Plan.
1.141. Insider shall have the meaning assigned to such term in Section
101(31) of the Bankruptcy Code.
1.142. January 29, 1998 Plan shall have the meaning assigned to such term
in the preamble hereof.
1.143. JCC means Jazz Casino Company, L.L.C., a Louisiana limited liability
company, and its successors and assigns, to which all of the property of the
Debtors and their estates shall be transferred on the Effective Date (except as
otherwise provided in the Plan).
1.144. JCC Development means JCC Development Company, L.L.C., a Louisiana
limited liability company, and its successors and assigns, which shall lease the
second floor of the Casino building from JCC and develop it for non-gaming uses.
1.145. JCC Entities means JCC, JCC Intermediary (to the extent JCC
Intermediary is formed) and JCC Holding, and their respective successors and
assigns.
1.146. JCC Holding means JCC Holding Company, a Delaware corporation, and
its successors and assigns, which shall be a holding company owning directly or
indirectly all of the membership interests of JCC
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Intermediary (to the extent JCC Intermediary is formed), JCC, JCC Development,
CP Development and FP Development.
1.147. JCC Holding Bylaws means the Bylaws of JCC Holding, containing,
among other things, the applicable corporate governance provisions in the
Bondholder Term Sheet, and in the form to be filed with the Bankruptcy Court as
a Plan Document pursuant to Section 6.2(t) of the Plan.
1.148. JCC Holding Certificate of Incorporation means the Restated
Certificate of Incorporation of JCC Holding, containing, among other things, the
applicable corporate governance provisions in the Bondholder Term Sheet, and in
the form to be filed with the Bankruptcy Court as a Plan Document pursuant to
Section 6.2(t) of the Plan.
1.149. JCC Intermediary means JCC Intermediary Company, L.L.C., a Louisiana
limited liability company, and its successors and assigns, which shall be a
holding company owning all of the membership interest(s) in JCC. As set forth in
Section 12.12 hereof, the formation of JCC Intermediary shall be at the election
of HET (in its sole discretion) on behalf of the Proponents.
1.150. JCC Intermediary Operating Agreement means, to the extent JCC
Intermediary is formed, the operating agreement of JCC Intermediary, containing,
among other things, the applicable governance provisions in the Bondholder Term
Sheet, and in the form to be filed with the Bankruptcy Court as a Plan Document
pursuant to Section 6.2(t) of the Plan.
1.151. JCC Intermediary Organizational Documents means, collectively, the
articles of organization and initial report of JCC Intermediary and any other
documents required under the law of the State of Louisiana to form JCC
Intermediary as a limited liability company, each in the form to be filed with
the Bankruptcy Court as a Plan Document pursuant to Section 6.2(t) of the Plan.
1.152. JCC Operating Agreement means the operating agreement of JCC,
containing, among other things, the applicable governance provisions in the
Bondholder Term Sheet, and in the form to be filed with the Bankruptcy Court as
a Plan Document pursuant to Section 6.2(t) of the Plan.
1.153. JCC Organizational Documents means, collectively, the articles of
organization and the initial report of JCC and any other documents required
under the law of the State of Louisiana to form JCC as a limited liability
company, each in the form to be filed with the Bankruptcy Court as a Plan
Document pursuant to Section 6.2(t) of the Plan.
1.154. Junior Subordinated Credit Facility means the junior subordinated
credit facility in the aggregate principal amount of $22.5 million to be
provided by HET (or an Affiliate of HET) to JCC on the Effective Date pursuant
to Section 6.2(i) of the Plan, which junior subordinated credit facility shall
have such terms and conditions as may be agreed to by the Bondholders Committee
(in its sole discretion), the Participating Banks (in their sole discretion),
such Affiliate of HET, and HET (in its sole discretion) on behalf of the
Proponents, and if HJC is a party to the Junior Subordinated Loan Documents,
with the consent of HJC, which consent shall not be unreasonably withheld or
delayed.
1.155. Junior Subordinated Loan Documents means, collectively, the loan
agreement and all other loan documents and, if applicable, security documents
governing the terms and conditions of the Junior Subordinated Credit Facility,
which documents shall be satisfactory in form and substance to the Bondholders
Committee, the Participating Banks (in their sole discretion) and HET (in its
sole discretion) on behalf of the Proponents and if HJC is a party thereto, HJC,
which approval shall not be unreasonably withheld or delayed. The form of the
Junior Subordinated Loan Documents shall be filed with the Bankruptcy Court as
Plan Documents pursuant to Section 6.2(t) of the Plan.
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1.156. LEDGC means the Louisiana Economic Development and Gaming
Corporation.
1.157. LGCB means the Louisiana Gaming Control Board and its successors and
assigns.
1.158. Lien shall have the meaning assigned to such term in Section 101(37)
of the Bankruptcy Code.
1.159. Litigation Costs means (i) all reasonable fees, costs and expenses
(including all attorneys' and other professionals' fees and expenses) of or
incurred by JCC in prosecuting, settling or otherwise in connection with any
Assigned Litigation Claim or any action in which any Assigned Litigation Claim
is asserted or otherwise in connection with its performance of tasks and duties
pursuant to Section 5.9 of the Plan, (ii) all reasonable fees, costs and
expenses of Selected Counsel payable by JCC pursuant to clause (i) of the second
sentence of Section 5.9(d) hereof, and (iii) all reasonable out-of-pocket costs
and expenses of any Released Party reimbursable by JCC pursuant to clause (ii)
of the second sentence of Section 5.9(d) hereof.
1.160. Litigation Defendant means any Person against whom an Assigned
Litigation Claim is asserted at any time by JCC.
1.161. Major Bondholders means each member of the Bondholders Committee in
its capacity as a Bondholder or a member of the Bondholders Committee as of the
Voting Record Date.
1.162. Management Agreement means that certain Amended and Restated
Management Agreement for the Harrah's New Orleans Casino dated March 14, 1995,
between HJC, as prepetition debtor, and HNOMC, together with any amendments
thereto executed prior to the Commencement Date of the Chapter 11 Case of HJC.
1.163. Minimum Payment Guarantor Lien means the Lien securing certain
obligations of JCC under the HET/JCC Agreement, as well as the obligations of
JCC to any successor or substitute guarantor providing the Minimum Payment
Guaranty.
1.164. Minimum Payment Guaranty means a guaranty in the maximum stated
amount of $100 million for the benefit of the LGCB to assure payment of certain
obligations under the Amended and Renegotiated Casino Operating Contract. The
form of the Minimum Payment Guaranty shall be filed with the Bankruptcy Court as
a Plan Document pursuant to Section 6.2(t) of the Plan and is attached to the
Amended and Renegotiated Casino Operating Contract.
1.165. Modified Contracts means (i) the Canal Street Casino Lease, (ii) the
General Development Agreement, (iii) the Broadmoor Construction Agreement, (iv)
the Management Agreement, (v) the Architect Contract, (vi) the Completion Loan
Documents, (vii) the Construction Lien Indemnity Obligation Agreement, (viii)
the Ticket Purchase Agreement dated July 19, 1996, and (ix) the Centex-Landis
Construction Agreement, in each case as modified (or in the case of the Basin
Street Casino Lease, as modified and terminated) on the Effective Date in the
manner provided in Section 8.1(a) of the Plan.
1.166. New Bond Documents means the New Indenture, the New Bonds, the New
Contingent Bonds, and all other security agreements, mortgages, indentures and
other documents of any kind and nature evidencing a Lien or other Encumbrance or
other obligation of JCC in respect of the New Bonds or New Contingent Bonds. The
forms of the New Bond Documents shall be filed with the Bankruptcy Court as Plan
Documents pursuant to Section 6.2(t) of the Plan.
1.167. New Bonds means the Senior Subordinated Notes due 2009 with
Contingent Payments of JCC to be issued under the Plan in the aggregate
noncontingent principal amount of $187.5 million, as more particularly described
in the Bondholder Term Sheet attached as Exhibit D hereto.
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1.168. New Bonds 33 Act Registration Statement shall have the meaning set
forth in Section 6.2(s) of the Plan.
1.169. New Common Stock means the Class A New Common Stock and Class B New
Common Stock of JCC Holding.
1.170. New Completion Guarantees means the completion guarantees to be
executed and delivered on or before and as of the Effective Date by HET and HOCI
in favor of (i) the holders of the New Bonds as described in the Bondholder Term
Sheet, (ii) the LGCB and the City and RDC, on terms substantially similar to the
terms of the completion guarantee in favor of the holders of the New Bonds, and
(iii) the lenders under the A Term Loan, the B Term Loan and the Working Capital
Facility on terms satisfactory to such lenders and HET and HOCI. The forms of
these completion guarantees shall be filed with the Bankruptcy Court as Plan
Documents pursuant to Section 6.2(t) of the Plan.
1.171. New Contingent Bonds means the Senior Subordinated Contingent Notes
due 2009 to be issued under the Plan, as more particularly described in the
Bondholder Term Sheet attached as Exhibit D hereto.
1.172. New Entities means, collectively, JCC Holding, JCC Intermediary (if
formed), JCC, JCC Development, CP Development and FP Development.
1.173. New Indenture means, collectively, the indentures, as described in
the Bondholder Term Sheet, to be entered into by JCC and the trustees thereunder
and effective on or before and as of the Effective Date governing the terms and
conditions under which the New Bonds and New Contingent Bonds, respectively,
will be issued, subject to such modification as hereinafter may be made by HET
(in its sole discretion) on behalf of the Proponents with the consent of the
Bondholders Committee (which consent may be withheld in its sole discretion)
that do not adversely affect the rights of the holders of the New Bonds and New
Contingent Bonds and filed with the Bankruptcy Court as Plan Documents pursuant
to Section 6.2(t) of the Plan or as shall thereafter be required by the
Securities and Exchange Commission in connection with its qualification under
the Trust Indenture Act.
1.174. New Indenture Trustee means the Person selected on or before the
Effective Date by HET (in its sole discretion) on behalf of the Proponents and
with the consent of the Bondholders Committee (which consent may be withheld in
its sole discretion) to serve as the trustee under the New Indenture if such
Person is eligible under the Trust Indenture Act and the New Indenture to serve
as the trustee under the New Indenture.
1.175. NOLDC means New Orleans/Louisiana Development Corporation, a
Louisiana corporation, as debtor and debtor-in-possession.
1.176. NOLDC/Grand Palais Settlement Agreement means, collectively, (i) the
Settlement Agreement to be executed on or before and as of the Effective Date by
the NOLDC Shareholders and Grand Palais, (ii) mutual releases, in the forms
attached as exhibits to such Settlement Agreement, pursuant to which NOLDC, the
NOLDC Shareholders and certain Affiliates thereof, on the one hand, and Grand
Palais and certain Affiliates, on the other hand, release certain claims and
causes of action against each other, and (iii) all other agreements, instruments
or documents executed or to be executed in connection with the Settlement
Agreement. The NOLDC/Grand Palais Settlement Agreement shall be in form and
substance satisfactory to the NOLDC Shareholders and Grand Palais.
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1.177. NOLDC Group means NOLDC, the NOLDC Shareholders, and their
respective Affiliates (other than the Debtors), predecessors, successors and
assigns and the officers, directors, employees, attorneys, financial advisors,
accountants, agents and other representatives of each of the foregoing.
1.178. NOLDC Plan means the plan of reorganization to be confirmed pursuant
to a Final Order in the bankruptcy case of NOLDC, which plan of reorganization
and Final Order shall be in form and substance satisfactory to the NOLDC
Shareholders and HET in its sole discretion on behalf of the Proponents.
1.179. NOLDC Shareholders means T. George Solomon, Jr., Calvin Fayard, Carl
J. Eberts, Ronald M. Lamarque, Duplain W. Rhodes, III, Louie Roussel, III,
Michael X. St. Martin, John J. Cummings, III and Wendell H. Gauthier, and their
respective heirs, assigns and personal representatives.
1.180. NOLDC Shareholders/HET Settlement Agreement means, collectively, (i)
the Settlement Agreement to be executed on or before the Effective Date by the
NOLDC Shareholders, HET, HOCI and HNOMC, (ii) the mutual releases, in the forms
attached as exhibits to such Settlement Agreement, pursuant to which NOLDC, the
NOLDC Shareholders and certain Affiliates thereof, on the one hand, and HET
HOCI, HNOIC, HNOMC and certain Affiliates thereof, on the other hand, release
certain claims and causes of action against each other, (iii) the further
releases provided for in such settlement agreement in favor of the Bondholders
Committee Group, the Debtors Group, the Bank/Underwriter Group, the State Group
and the City Group, and (iv) all other agreements, instruments or documents
executed or to be executed in connection with the Settlement Agreement. The
NOLDC Shareholders/HET Settlement Agreement shall be in form and substance
satisfactory to the NOLDC Shareholders and HET and shall be approved by the
bankruptcy court in the Chapter 11 case of NOLDC either pursuant to Section
1123(b)(3)(A) of the Bankruptcy Code as part of the NOLDC Plan or pursuant to
Bankruptcy Rule 9019 by separate Final Order (in form and substance satisfactory
to the NOLDC Shareholders and HET).
1.181. Non-Participating Banks means each Bank which is not a Participating
Bank.
1.182. Objection Deadline means the date by which objections to Claims
shall be filed with the Bankruptcy Court and served upon the respective holders
of each of the Claims as provided in Section 6.21 of the Plan.
1.183. Old Bank Collateral Agent means First National Bank of Commerce and
its successors and assigns, as collateral agent for the Banks under the Old Bank
Credit Documents.
1.184. Old Bank Credit Agreement means that certain Credit Agreement dated
as of November 8, 1994, among Bankers Trust Company, as Administrative Agent and
Bank, the other Banks listed therein and HJC and Finance Corp., as prepetition
debtors, together with any amendments thereto executed prior to the Commencement
Date of the Chapter 11 Case of HJC.
1.185. Old Bank Credit Documents means the Old Bank Credit Agreement, all
Credit Documents (as defined in the Old Bank Credit Agreement), and all other
security agreements, mortgages, indentures and documents of every kind and
nature evidencing any Claims of any or all Banks, together with any amendments
thereto executed prior to the Commencement Date of the Chapter 11 Case of HJC.
1.186. Old Bond Documents means the Old Indenture, the Old Bonds, the
Collateral Documents (as defined in the Old Indenture), and all other security
agreements, mortgages, indentures and other documents of every kind and nature
evidencing a Lien or other Encumbrance or other obligation of any Debtor
relating to any Claim in respect of the Old Indenture or any of the Old Bonds,
together with any amendments thereto executed prior to the Commencement Date of
the Chapter 11 Case of HJC.
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1.187. Old Bonds means the 14-1/4% First Mortgage Notes due 2001 in the
aggregate principal amount of $435 million issued by HJC and Finance Corp., as
prepetition debtors, pursuant to the Old Indenture.
1.188. Old Completion Guarantees means (i) the Notes Completion Guaranty
dated as of November 16, 1994, by HET and HOCI in favor of the Old Indenture
Trustee and the City and the RDC, (ii) the LEDGC Completion Guaranty dated as of
November 16, 1994 by HET and HOCI in favor of LEDGC and (iii) the Bank
Completion Guaranty dated as of November 16, 1996, by HET and HOCI in favor of
the Administrative Agent (as defined in the Old Bank Credit Agreement).
1.189. Old Indenture means that certain Indenture dated as of November 15,
1994, between HJC and Finance Corp., as prepetition debtors, and First National
Bank of Commerce, as trustee, governing the terms of the Old Bonds, together
with any amendments thereto executed prior to the Commencement Date of the
Chapter 11 Cases of HJC and Finance Corp.
1.190. Old Indenture Predecessor Collateral Agent means First National Bank
of Commerce and its successors and assigns, as the predecessor collateral agent
for the Old Indenture Trustee and the Bondholders under the Old Bond Documents.
1.191. Old Indenture Predecessor Trustee means First National Bank of
Commerce as predecessor trustee under the Old Indenture and its successors and
assigns.
1.192. Old Indenture Successor Trustee means Norwest Bank Minnesota, N.A.,
as successor indenture trustee under the Old Indenture, and its successors and
assigns.
1.193. Old Indenture Trustee means, collectively, Norwest Bank Minnesota,
N.A., a successor indenture trustee, and First National Bank of Commerce, as
predecessor indenture trustee, under the Old Indenture, and their respective
successors and assigns.
1.194. Operating Agreements means the JCC Operating Agreement, the JCC
Intermediary Operating Agreement (if JCC Intermediary is formed), the operating
agreement for CP Development, the operating agreement for FP Development, and
the operating agreement for JCC Development.
1.195. Organizational Documents means the JCC Holding Bylaws, the JCC
Holding Certificate of Incorporation, the JCC Intermediary Organizational
Documents (if JCC Intermediary is formed), the JCC Organizational Documents, and
the articles of organization, initial reports and other documents required under
the laws of the State of Louisiana to form CP Development, FP Development and
JCC Development as limited liability companies.
1.196. Original Confirmation Date means April 28, 1997, the date the
Bankruptcy Court entered an order confirming the Original Plan.
1.197. Original Plan shall have the meaning assigned to such term in the
preamble hereof.
1.198. Other Priority Claim means, with respect to any Debtor, any Claim,
against such Debtor entitled to priority in right of payment under any or all of
Sections 507(a)(3) through (a)(7) of the Bankruptcy Code.
1.199. Participating Banks means Bankers Trust Company, as Bank and
Administrative Agent, and any other Bank which elects through an appropriate
indication on the ballot provided to such Bank or otherwise in writing on or
before the Effective Date to be treated as a "Participating Bank" pursuant to
Section
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4.3(a) of the Plan and for all other purposes under the Plan. No Bank shall be
treated as a Participating Bank for voting purposes unless it makes such
election prior to the deadline for submitting completed ballots. The term
"Participating Banks" shall include FNBC, provided that FNBC shall not have any
obligations under the Bank Term Sheet but shall instead be subject to the
provisions of the FNBC Settlement Agreement.
1.200. Penalty Claims means (a) Claims for fines, penalties or forfeiture
or for multiple, exemplary or punitive damages, to the extent that such fine,
penalty, forfeiture or damages are not compensation for actual pecuniary loss
suffered by the holder of such Claim, (b) Claims filed after the Bar Date, (c)
Claims increased through amendment after the Bar Date which the Bankruptcy Court
determines do not relate back to the applicable original timely filed Claim, but
only to the extent of the amount of such increase, (d) Claims subject to
subordination under Section 510 of the Bankruptcy Code, including, without
limitation, Securities Laws Claims, and (e) Claims for post-petition attorneys'
fees except to the extent allowed under Section 506(b) of the Bankruptcy Code.
1.201. Person means a person, a corporation, a partnership, an association,
a joint stock company, a joint venture, a limited liability company, an estate,
a trust, an unincorporated organization, a government or any subdivision thereof
or any other entity.
1.202. Plan means this Third Amended Joint Plan of Reorganization Under
Chapter 11 of the Bankruptcy Code, as Modified Through October 13, 1998
(including all exhibits and schedules annexed hereto), either in its present
form or as it may be altered, amended, or modified from time to time.
1.203. Plan Documents means all of the agreements, instruments and
documents referenced in Section 6.2 of the Plan and all other agreements,
instruments and documents as HET, in its sole discretion, on behalf of the
Proponents deems necessary or appropriate to effectuate the terms and conditions
of or transactions contemplated by the Plan.
1.204. Priority Tax Claim means a Claim of a governmental unit of the kind
specified in Sections 502(i) and 507(a)(8) of the Bankruptcy Code.
1.205. Professional Person means a Person retained or to be compensated
pursuant to Section 327, 328, 330, 503(b), 506(b) or 1103 of the Bankruptcy
Code.
1.206. Pro Rata Share or Pro Rata Interest means a proportionate share, so
that the ratio of the consideration distributed on account of an Allowed Claim
in a class to the amount of such Allowed Claim is the same as the ratio of the
amount of the consideration distributed on account of all Allowed Claims in such
class to the amount of all Allowed Claims in such class, or if the context so
requires, to the amount of all Allowed Claims in a designated portion of such
class.
1.207. Proponents means the Debtors and HET as proponents of the Plan.
1.208. RDC means Rivergate Development Corporation, a Louisiana public
benefit corporation, and its successors and assigns.
1.209. Registrar means the registrar under the Old Indenture of transfers
and exchanges of Old Bonds.
1.210. Rejection Claim means any Claim of any party to an executory
contract or unexpired lease with any Debtor arising from the rejection by such
Debtor of such executory contract or unexpired lease.
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1.211. Release Claims means any actions, causes of action, in law or in
equity, suits, debts, Liens, liabilities, claims, demands, damages, punitive
damages, losses, costs or expenses and reasonable attorneys' fees of any kind or
nature whatsoever, whether fixed or contingent, known or unknown, and whenever
arising (including, without limitation, claims based on legal fault,
misrepresentations or omissions, negligence, offense, quasi-offense, contract,
quasi-contract or any other theory), which in any way relate to any Debtor, the
business affairs or operations of any Debtor, the issuance by any Debtor of any
securities or the Casino or the Temporary Casino (as defined in the Basin Street
Casino Lease), including, but not limited to, the licensing, leasing, financing,
arranging, development, construction, promotion, management or operation
thereof, or other matters relating to any Debtor or any successor to any of them
in connection with the Casino or the Temporary Casino, except to the extent any
of the foregoing arises under any of the Plan Documents on or after the
Effective Date.
1.212. Release Pool shall have the meaning assigned to such term in Section
6.2(f) of the Plan.
1.213. Release Pool Distribution Record Date means May 5, 1997, the date
set by the Bankruptcy Court for determining which holders of the Old Bonds are
entitled to receive distributions from the Release Pool provided under the Plan.
1.214. Release Pool Transferee shall have the meaning assigned to such term
in Section 6.20 of the Plan.
1.215. Release Pool Transfer Form shall have the meaning assigned to such
term in Section 6.20 of the Plan.
1.216. Released Avoidance Claims means any and all Avoidance Claims which
are released pursuant to Section 5.8 of the Plan.
1.217. Released Parties means the Debtors and the New Entities and each
Person in any or all of the HET Group, the Debtors Group, the Bondholders
Committee Group, the City Group, the State Group, the Bank/Underwriter Group,
the NOLDC Group (if the applicable Persons in the NOLDC Group execute and
deliver on or before the Effective Date the NOLDC Shareholders/HET Settlement
Agreement) and the Grand Palais Group (if the applicable Persons in the Grand
Palais Group execute on or before the Effective Date the applicable GP
Representative/HET Settlement Agreements).
1.218. Releases means the City/RDC Release, the State/LGCB Release, the
Centex-Landis Release, the Broadmoor Release, the NOLDC Shareholders/HET
Settlement Agreement, the GP Representative/HET Settlement Agreements, the NOLDC
Shareholders/Grand Palais Settlement Agreement and the Bank/Underwriter Release.
1.219. Releasing Bondholders shall have the meaning assigned to such term
in Section 5.2 of the Plan, and shall include, without limitation, each Major
Bondholder.
1.220. Schedules means the schedules of assets and liabilities and the
statement of financial affairs filed by each Debtor as required by Section 521
of the Bankruptcy Code and Bankruptcy Rule 1007, and all amendments thereto
through the Confirmation Date.
1.221. SEC means the Securities and Exchange Commission or its successors
and assigns.
1.222. Secured Claim means an Allowed Claim held by any Person to the
extent of the value, as set forth in the Plan or as determined by a Final Order
of the Bankruptcy Court pursuant to Section 506(a) of the Bankruptcy Code, of
any interest in property of the applicable Debtor's estate securing such Allowed
Claim.
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1.223. Securities Laws Claim means an Allowed Claim held by any Person for
rescission, damages or reimbursement, indemnification or contribution arising
out of a purchase or sale of any security (including, without limitation, any
Old Bonds) of either Debtor or any Affiliate thereof.
1.224. Selected Counsel shall have the meaning assigned to such term in
Section 6.2(t)(iv) hereof.
1.225. Setoff or Recoupment Claim or Setoff means a Claim which is secured
by setoff or recoupment rights of a Creditor of a Debtor, provided for by
applicable law and preserved by Section 553 of the Bankruptcy Code.
1.226. Showboat means Showboat, Inc., and its successors and assigns.
1.227. State means the State of Louisiana.
1.228. State Group means the State, the Governor of the State, the LEDGC,
the LGCB, the Riverboat Gaming Commission, the Attorney General of the State,
all boards, commissions, agencies, and other instrumentalities of the State, and
all of their respective predecessors, successors, and assigns, and the officers,
directors, employees, staff, members, attorneys, financial advisors,
accountants, agents, and other representatives of each of the foregoing.
1.229. State/LGCB Release means the Release in a form mutually acceptable
to the parties thereto, to be executed on or before and as of the Effective Date
by the Attorney General of the State of Louisiana on behalf of the State Group,
the Debtors, NOLDC, Grand Palais, HET, HOCI, HNOMC, JCC and/or certain of their
respective Affiliates, and providing for mutual releases in favor of the State
Group, on the one hand, and the Debtors, the New Entities, the HET Group, the
Debtors Group, the Bank/Underwriter Group, the Bondholders Committee Group, the
NOLDC Group (but only if the applicable Persons in the NOLDC Group execute and
deliver on or before the Effective Date the NOLDC Shareholders/HET Settlement
Agreement), and the Grand Palais Group (but only if the applicable Persons in
the Grand Palais Group execute and deliver on or before the Effective Date the
applicable GP Representative/HET Settlement Agreements), on the other hand.
1.230. Subsequent Bank Distribution Date shall have the meaning set forth
in Section 4.3(b) of the Plan.
1.231. Surety Bond shall have the meaning set forth in Section 6.2(g) of
the Plan.
1.232. Third Party Claim means any claim or action (whether legal or
equitable, by subrogation or otherwise) by a Litigation Defendant against any
Released Party that seeks to hold such Person liable, in whole or in part, for
(i) any Assigned Litigation Claim, in whole or in part, brought at any time by
JCC against such Litigation Defendant or (ii) any claim or action, in whole or
in part, arising from any of the same transactions, occurrences, or facts upon
which such Assigned Litigation Claim brought at any time by JCC against such
Litigation Defendant is based in whole or in part.
1.233. 3CP Property means the parcel of real property owned by HJC located
at 3 Canal Place in New Orleans, Louisiana, bounded by the Canal Place shopping
center, Canal Street and that parcel of land adjacent to the Entergy Delta
substation which acts as a continuation of Iberville Street known as Lot S-1,
together with any easements, rights of servitude and other rights appurtenant
thereto and any improvements thereupon, which shall be transferred to CP
Development on the Effective Date.
1.234. Total Claims Amount means, as to a particular class, the sum of (i)
the aggregate amount of Allowed Claims in that class and (ii) the Disputed Claim
Amounts in that class.
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<PAGE>
1.235. Tranche A-1 means the $10 million A-1 tranche of the A Term Loan.
1.236. Tranche A-2 means the $20 million A-2 tranche of the A Term Loan.
1.237. Tranche A-3 means the $30 million A-3 tranche of the A Term Loan.
1.238. Tranche B-1 means the $30 million B-1 tranche of the B Term Loan.
1.239. Tranche B-2 means the $121.5 million B-2 tranche of the B Term Loan.
1.240. Trust Indenture Act means the Trust Indenture Act of 1939, 15 U.S.C.
Sections 77aaa-77bbbb, as now in effect or hereinafter amended.
1.241. Trustee Account shall have the meaning assigned to such term in
Section 4.5(b) of the Plan.
1.242. Underwriter Term Sheet means the term sheet attached hereto as
Exhibit G.
1.243. Underwriters means Salomon Smith Barney, Donaldson, Lufkin &
Jenrette and BT Alex. Brown Incorporated as underwriters of the Old Bonds.
1.244. Unknown Claim means any Claim which any party asserting such Claim
does not know or suspect to exist in his, her, or its favor at the time of the
giving of the applicable releases and waivers set forth in this Plan which, if
known by him, her or it, might have affected his, her or its decision regarding
such releases and waivers.
1.245. Unsecured Claim means any Claim that is not a Secured Claim,
Administrative Expense Claim, Priority Tax Claim, Penalty Claim or Other
Priority Claim.
1.246. Unsecured Creditors Committee means the statutory committee of
unsecured creditors appointed by the United States Trustee in the Chapter 11
Case of HJC pursuant to Section 1102 of the Bankruptcy Code.
1.247. Unsubscribed Release Pool Shares means the shares of New Common
Stock in the Release Pool equal to the product of (i) 1,500,000 times (ii) a
fraction, the numerator of which is the aggregate principal amount of Old Bonds
held by Bondholders on the Release Pool Distribution Record Date that are not
Releasing Bondholders, and the denominator of which is $435 million. All
Unsubscribed Release Pool Shares which are distributed to the Releasing
Bondholders in accordance with the provisions of this Plan shall be shares of
Class A New Common Stock, and all Unsubscribed Release Pool Shares which are
distributed to Harrah's Investor in accordance with the provisions of this Plan
shall be shares of Class B New Common Stock.
1.248. Valuation Order means the order, if any, entered by the Bankruptcy
Court on or before the Effective Date determining that the value of the Assigned
Debtor Litigation Claims (net of all estimated Litigation Costs and the
estimated aggregate amount of all Third Party Claims) is greater than the sum of
(i) the Bondholder Deficiency Amount, plus (ii) the $2,265,000 to be distributed
to the applicable holders of Allowed Class A6 Claims, plus (iii) the aggregate
amount of all Allowed Claims in Class A7, plus (iv) the aggregate amount of all
cure payments made as provided in Section 8.1(e) of the Plan.
1.249. Voting Record Date means November 25, 1996, the date set by the
Bankruptcy Court for determining which holders of Old Bonds were entitled to
vote to accept or reject the Original Plan and are entitled to change their
acceptances or rejections of the Original Plan.
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<PAGE>
1.250. Wachtell Fees and Expenses shall have the meaning assigned to such
term in Section 4.3(a)(ii) of the Plan.
1.251. WARN Act Claim means any Claim against any or all of the Debtors
arising under the Worker Adjustment and Retraining Notification Act of 1988, 29
U.S.C. Section 2101 et seq. and/or the Employee Retirement Income Security Act
of 1974 as amended, 29 U.S.C. Section 1001 et seq.
1.252. WARN Act Counsel means the law firms of Robein, Urann & Lurye,
P.L.C., Lowe, Stein, Hoffman, Alweiss & Hauver, and Shields, Mott, Lund &
Burnside, as counsel to the class representatives of the holders of WARN Act
Claims.
1.253. WARN Act Settlement means the settlement agreement approved by the
Bankruptcy Court by order dated February 20, 1997, providing for the settlement
of the respective WARN Act Claims of the members of the Certified WARN Act Class
against any or all of the Debtors, HNOMC and Affiliates of HNOMC.
1.254. Withheld Funds means the funds withdrawn by or on behalf of any or
all of the Banks from one or more accounts of HJC on November 21 or 22, 1995,
(less the amount of any such funds which were subsequently returned to HJC), to
the extent such funds were not, prior to the commencement of the Chapter 11 Case
of HJC, legally and properly setoff or otherwise legally and properly applied
against the outstanding balance of the prepetition indebtedness (exclusive of
contingent indebtedness or obligations) owing to the Banks under the Old Bank
Credit Documents as of the commencement of the Chapter 11 Case of HJC, plus
interest thereon either (i) in the amount of interest actually credited to the
account(s) at which the Withheld Funds have been deposited, if HET, on behalf of
the Plan Proponents, the Bondholders Committee and Bankers Trust Company so
agree in their respective sole discretion, or (ii) if there is no such
agreement, at a rate to be determined by the Bankruptcy Court.
1.255. Working Capital Facility means the revolving credit facility in the
principal amount of $25,000,000 to be provided by Bankers Trust Company and any
other Participating Banks to JCC on the Effective Date pursuant to Section
6.2(i) of the Plan, which revolving credit facility shall have the terms and
conditions set forth in the Bank Term Sheet and such other terms and conditions
as shall be set forth in the Working Capital Loan Documents.
1.256. Working Capital Loan Documents means, collectively, the loan
agreement and all other loan and security documents governing the terms and
conditions of the Working Capital Facility, which documents shall be
satisfactory in form and substance to the Bondholders Committee (in its sole
discretion) and HET (in its sole discretion) on behalf of the Proponents, and if
HJC is a party to the Working Capital Loan Documents, with the consent of HJC,
which consent shall not be unreasonably withheld or delayed. The forms of the
Working Capital Loan Documents shall be filed with the Bankruptcy Court as Plan
Documents pursuant to Section 6.2(t) of the Plan.
1.257. 34 Act shall have the meaning assigned to such term in Section
6.2(q) of the Plan.
B. Other Terms
A term used herein that is not defined herein shall have the meaning
ascribed to that term, if any, in the Bankruptcy Code.
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<PAGE>
C. Construction of Certain Terms
(a) The words "herein," "hereof," "hereto," "hereunder," and others of
similar import refer to the Plan as a whole and not to any particular section,
subsection, or clause contained in the Plan.
(b) Wherever from the context it appears appropriate, each term stated in
either the singular or the plural shall include the singular and the plural and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, the feminine and the neuter.
(c) The rules of construction used in Section 102 of the Bankruptcy Code
shall apply to the construction of this Plan.
ARTICLE II.
TREATMENT OF ADMINISTRATIVE
EXPENSE CLAIMS AND PRIORITY TAX CLAIMS
2.1. Administrative Expense Claims. All Administrative Expense Claims
against any of the Debtors shall be treated as follows:
(a) Time for Filing Administrative Expense Claims. The holder of an
Administrative Expense Claim, other than (i) a Fee Claim, (ii) a liability
incurred and payable in the ordinary course of business by any Debtor in
accordance with any budget which is then in effect and has been approved by the
DIP Lender and filed with the Bankruptcy Court (including, without limitation,
the fees payable to the U.S. Trustee under 28 U.S.C. Section 1930), (iii) the
DIP Loan Claim or (iv) an Administrative Expense Claim which was allowed prior
to the Original Confirmation Date, must file with the Bankruptcy Court and serve
on the Proponents and their counsel, a request for payment of such
Administrative Expense Claim within thirty days after the Original Confirmation
Date, or in the case of any Administrative Expense Claim incurred after the
Original Confirmation Date, within thirty days after the latter of (i) the date
of incurrence of such Administrative Expense Claim, and (ii) the Confirmation
Date. Such request must set forth at a minimum (i) the Debtor that is liable for
the Claim, (ii) the name of the holder of the Claim, (iii) the amount of the
Claim, and (iv) the basis of the Claim. Failure to file this request timely and
properly shall result in the Administrative Expense Claim being forever barred
and discharged.
(b) Time for Filing Fee Claims. Each Professional Person, Old Indenture
Trustee or other Person that holds or asserts an Administrative Expense Claim
that is a Fee Claim incurred before the Effective Date shall be required to file
with the Bankruptcy Court, and serve on all parties required to receive notice,
a final Fee Application within sixty days after the Effective Date. The failure
to file any such final Fee Application timely shall result in the applicable Fee
Claim being forever barred and discharged.
(c) Allowance of Administrative Expense Claims. An Administrative Expense
Claim with respect to which a request for payment has been properly filed
pursuant to Section 2.1(a) of the Plan shall become an Allowed Administrative
Expense Claim if no objection is filed within thirty days after the filing and
service of such request for payment of such Administrative Expense Claim. If an
objection is filed within such thirty-day period, the Administrative Expense
Claim shall become an Allowed Administrative Expense Claim only to the extent
allowed by Final Order. An Administrative Expense Claim that is a Fee Claim and
with respect to which a Fee Application has been properly filed pursuant to
Section 2.1(b) of the Plan, shall become an Allowed Administrative Expense Claim
only to the extent allowed by Final Order.
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<PAGE>
(d) Payment of Allowed Administrative Expense Claims. Each holder of an
Allowed Administrative Expense Claim against a Debtor shall receive (i) the
amount of such holder's Allowed Claim in one cash payment on, or as soon as
practicable thereafter, the later of the Effective Date and the day on which
such Claim becomes an Allowed Claim (but in no event after the tenth (10th)
Business Day after the later of those two dates), or (ii) such other treatment
as may be agreed upon in writing by the applicable Debtor (prior to the
Effective Date) or JCC (from and after the Effective Date) and such holder;
provided, however, that an Administrative Expense Claim representing a liability
incurred in the ordinary course of business of a Debtor (including, without
limitation, the fees payable to the U.S. Trustee under 28 U.S.C. Section 1930)
may be paid in the ordinary course of business by such Debtor, and provided
further, that the payment of an Allowed Administrative Expense Claim
representing a right to payment under Sections 365(b)(l)(A), 365(b)(l)(B), or
Section 365(d)(3) of the Bankruptcy Code may be made in one or more cash
payments over a period of time as is determined to be appropriate by the
Bankruptcy Court.
(e) Waiver or Cancellation of Certain Administrative Expense Claims. Solely
for purposes of this Plan, and subject to the occurrence of the Effective Date,
HET, NOLDC and Grand Palais and their respective Affiliates and Insiders shall
be deemed to have waived or agreed to cancel any Administrative Expense Claim
other than (i) any Administrative Expense Claim covered by any insurance policy
assumed pursuant to Section 8.1(c) hereof (provided, however, that any such
Administrative Claim shall be payable only from available coverage under such
insurance policy (and not be payable by any Debtor) and only to the extent
permitted under the NOLDC Shareholders/HET Settlement Agreement or GP
Representative/HET Settlement Agreements, as applicable) and (ii) in the case of
HET and its Affiliates and Insiders, the principal amount of the DIP
Indebtedness outstanding on the Effective Date, which shall be converted to
equity and contributed by the Harrah's Investor as part of the Harrah's New
Equity Investment or any Administrative Expense Claim for unreimbursed premiums
or other unreimbursed amounts paid for insurance coverage provided to any Debtor
under any insurance policy assumed pursuant to Section 8.1(c) of the Plan. The
respective distributions to which the Bondholders and, if applicable, the Old
Indenture Trustee are entitled under Article IV hereto shall be deemed to be in
complete satisfaction, discharge and release of any Administrative Expense Claim
or any superpriority administrative expense claim or any lien securing any of
the foregoing of the Bondholders or the Old Indenture Trustee, as applicable,
other than the Administrative Expense Claims of Fidelity, the respective Fee
Claims of the members of the Bondholders Committee and the Professional Persons
retained by the Bondholders Committee, any Bondholder or the Old Indenture
Trustee, which Fee Claims shall be governed by the applicable provisions of the
Plan and the Bankruptcy Code.
(f) DIP Loan Claim. In consideration of, among other things, the execution
and delivery of the Releases and the other releases provided pursuant to or in
connection with the Plan and the issuance of New Common Stock in accordance with
the provisions of Sections 6.2(e) and (f) of the Plan, the principal amount of
the DIP Indebtedness outstanding on the Effective Date shall be converted to
equity and contributed by the Harrah's Investor to JCC Holding as part of the
Harrah's New Equity Investment on the Effective Date. All accrued interest on
the DIP Indebtedness outstanding as of the Effective Date shall be canceled.
2.2. Priority Tax Claims. Except to the extent that the holder of an
Allowed Priority Tax Claim agrees to a different treatment, JCC shall pay to
each holder of an Allowed Priority Tax Claim, at the sole option of JCC, (a)
cash in an amount equal to such Allowed Priority Tax Claim on the later of the
Effective Date and the date such Priority Tax Claim becomes an Allowed Priority
Tax Claim, or as soon thereafter as is practicable (but in no event after the
tenth (10th) Business Day after the later of those two dates), or (b) equal
quarterly cash payments in an aggregate amount equal to such Allowed Priority
Tax Claim, together with interest at a fixed annual rate to be determined by the
Bankruptcy Court or otherwise agreed to by JCC and such holder, over a period
through the sixth anniversary of the date of assessment of such Allowed Priority
Tax Claim, or upon such other terms determined by the Bankruptcy Court to
provide the holder of such Allowed Priority Tax Claim deferred cash payments
having a value, as of the Effective Date, equal to such Allowed Priority Tax
Claim.
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<PAGE>
ARTICLE III.
CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS
Claims, other than Administrative Expense Claims and Priority Tax Claims,
are classified for all purposes, including voting, confirmation, and
distribution pursuant to the Plan, as follows:
A. HJC Classification
<TABLE>
<S> <C>
Class A1 -- Other Priority Claims: Class A1 consists of all Allowed Other Priority Claims
against HJC.
Class A2 -- Non-Bondholder Secured Class A2 consists of all Allowed Secured Claims against
Claims: HJC other than the Secured Claims specified in Class A3 or
A4 of the Plan.
Class A3 -- Bank and Old Bank Class A3 consists of two separate subclasses. Class
Collateral Agent Claims: A3(a) consists of all Allowed Secured Claims of the
Participating Banks and the
Old Bank Collateral Agent
against HJC, and Class A3(b)
consists of all Allowed
Secured Claims of the
Non-Participating Banks
against
HJC.
Class A4 -- Bondholder Claims: Class A4 consists of all Allowed Secured and Unsecured
Claims of the Bondholders against HJC.
Class A5 -- Old Indenture Predecessor Class A5 consists of all Allowed Secured Claims of the
Trustee and Old Indenture Old Indenture Predecessor Trustee and the Old Indenture
Collateral Agent Claims: Collateral Agent against HJC.
Class A6 -- WARN Act Claims: Class A6 consists of all Allowed WARN Act Claims against
HJC of holders who are part of the Certified WARN Act
Class and are bound by the WARN Act Settlement.
Class A7 -- General Unsecured Claims: Class A7 consists of all Allowed Unsecured Claims against
HJC other than the Unsecured Claims of the Bondholders
and the Unsecured Claims in Class A6 or A8.
Class A8 -- Penalty Claims Class A8 consists of all Allowed Penalty Claims against
HJC.
Class A9 -- HJC Equity Interests: Class A9 consists of all Allowed Equity Interests in HJC,
and any option, warrant or other agreement requiring the
issuance of any such Equity Interest.
</TABLE>
B. Finance Corp. Classification
<TABLE>
<S> <C>
Class B1 -- Other Priority Claims: Class B1 consists of all Allowed Other Priority Claims
against Finance Corp.
</TABLE>
27
<PAGE>
<TABLE>
<S> <C>
Class B2 -- Bank Claims: Class B2 consists of all Allowed Secured Claims of the
Banks and the Old Bank Collateral Agent against Finance
Corp.
Class B3 -- Bondholder Claims: Class B3 consists of all Allowed Secured and Unsecured
Claims against Finance Corp. of the Bondholders.
Class B4 -- WARN Act Claims: Class B4 consists of all Allowed WARN Act Claims against
Finance Corp. of holders who are part of the Certified
WARN Act Class and are bound by the WARN Act
Settlement.
Class B5 -- General Unsecured Claims: Class B5 consists of all Allowed Unsecured Claims against
Finance Corp. other than the Unsecured Claims of the
Bondholders.
Class B6 -- Penalty Claims Class B6 consists of all Allowed Penalty Claims against
Finance Corp.
Class B7 -- Equity Interests: Class B7 consists of all Allowed Equity Interests in Finance
Corp., and any option, warrant or other agreement requiring
the issuance of any such Equity Interest.
C. HNOIC Classification
Class C1 -- Other Priority Claims: Class C1 consists of all Allowed Other Priority Claims
against HNOIC.
Class C2 -- Secured Claims: Class C2 consists of all Allowed Secured Claims against
HNOIC.
Class C3 -- WARN Act Claims: Class C3 consists of all Allowed WARN Act Claims against
HNOIC of holders who are part of the Certified WARN Act
Class and are bound by the WARN Act Settlement.
Class C4 -- Unsecured Claims (for Class C4 consists of all Allowed Unsecured Claims
which HJC is liable): against HNOIC for which HJC is also liable.
Class C5 -- General Unsecured Claims: Class C5 consists of all Allowed Unsecured Claims against
HNOIC other than Unsecured Claims in Class C3, C4, C6
or C7.
Class C6 -- Showboat Claim: Class C6 consists of all Allowed Claims of NOLDC against
HNOIC for reimbursement of a portion of the amount owing
by NOLDC to Showboat.
Class C7 -- Penalty Claims Class C7 consists of all Allowed Penalty Claims against
HNOIC.
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
Class C8 -- Equity Interests: Class C8 consists of all Allowed Equity Interests in HNOIC,
and any option, warrant or other agreement requiring the
issuance of any such Equity Interest.
</TABLE>
ARTICLE IV.
TREATMENT OF CLAIMS AND EQUITY INTERESTS
A. HJC Treatment
4.1. Class A1 -- Other Priority Claims.
(a) Impairment and Voting. Class A1 is impaired by the Plan. Each holder of
an Allowed Claim in Class A1 is entitled to vote to accept or reject the Plan.
(b) Distributions. JCC shall pay to each holder of an Allowed Claim in
Class A1 cash in an amount equal to such Allowed Claim on the later of the
Effective Date and the date such Claim becomes an Allowed Claim, or as soon as
practicable thereafter.
4.2. Class A2 -- Non-Bondholder Secured Claims.
(a) Impairment and Voting. Class A2 is impaired by the Plan. Each holder of
an Allowed Claim in Class A2 is entitled to vote to accept or reject the Plan.
(b) Reinstatement of Claims or Surrender of Collateral. Except as provided
in the immediately following two sentences, notwithstanding any contractual
provision or applicable law that entitles the holder of an Allowed Claim in
Class A2 to demand or receive payment of such Claim prior to the stated maturity
of such Claim from and after the occurrence of a default, each Allowed Claim in
Class A2 will be reinstated and rendered unimpaired in accordance with Section
1124(2) of the Bankruptcy Code. JCC may, in its discretion, assign, abandon or
surrender any property securing any Secured Claim in Class A2 to the holder of
such Secured Claim. The Court will determine the value of any such property so
assigned, abandoned or surrendered, and any Deficiency Claim resulting therefrom
will be paid as a Class A7 or A8 Claim.
4.3. Class A3 -- Bank Claims.
(a) Class A3(a) -- Claims of Participating Banks and Old Bank Collateral
Agent.
(i) Impairment and Voting. Class A3(a) is impaired by the Plan. Each
holder of an Allowed Secured Claim in Class A3(a) is entitled to vote to accept
or reject the Plan. Solely for voting purposes, each Participating Bank shall be
deemed to have an Allowed Class A3(a) Claim in the aggregate amount set forth in
clauses (A) through (D) of the first sentence of Section 4.3(a)(ii) hereof.
(ii) Allowance and Distributions. The Claim of each holder in Class
A3(a) shall be allowed in an amount equal to: (A) with respect to any holder
that participated in the pre-petition standby letter of credit issued by Bankers
Trust Company in the amount of $5,000,000 and previously drawn in full by
Broadmoor as the beneficiary, such holder's Pro Rata Share of the sum of
$5,000,000 plus all unpaid interest thereon (at the nondefault rate specified in
the Old Bank Credit Documents) and unpaid fees in respect of such letter of
credit that accrue through the Effective Date: (B) with respect to any holder
that participated in the undrawn Standby Letter of Credit S-10269 issued by
Bankers Trust Company in the amount of $1,500,000 in favor of the City, such
holder's Pro Rata Share of the unpaid fees in respect of such letter of credit
that
29
<PAGE>
accrue through the Effective Date; (C) the amount paid by such holder in respect
of the fees and expenses of Wachtell, Lipton, Rosen & Katz, as the restructuring
counsel of the Administrative Agent that accrue through the Effective Date (the
"Wachtell Fees and Expenses") (which shall not include any fees and expenses in
connection with the Convertible Junior Subordinated Debentures, the A Term Loan,
the B Term Loan, and/or the Working Capital Facility), provided that such holder
purchases on the Effective Date additional Convertible Junior Subordinated
Debentures in an amount equal to its Pro Rata Share of the Wachtell Fees and
Expenses; and (D) in the case of the Administrative Agent, all unpaid facing
fees arising under the Old Bank Credit Agreement through the Effective Date;
provided, however, that the Class A3(a) Claims of FNBC as a Participating Bank
and as Old Bank Collateral Agent shall be allowed and otherwise treated in
accordance with the provisions of the FNBC Settlement Agreement. Each Allowed
Class A3(a) Claim shall be paid from the Withheld Funds on the Effective Date by
the Administrative Agent and, to the extent such Withheld Funds are insufficient
to pay the Allowed Class A3(a) Claims of FNBC, the unpaid portion of FNBC's
Allowed Class A3(a) Claims shall be paid by JCC. Any remaining Withheld Funds
shall be remitted by the Administrative Agent to the Old Bank Collateral Agent
for distribution pursuant to Section 4.3(b)(ii) hereof. The Participating Banks
and FNBC as the Old Bank Collateral Agent waive all of their other Class A3(a)
Claims against the Debtor, and shall not receive any distribution on account
thereof. As a condition to the allowance of their respective Class A3(a) Claims,
the holders of Class A3(a) Claims shall purchase on the Effective Date
Convertible Junior Subordinated Debentures in an aggregate principal amount
equal to the sum of (x) $11,000,000 plus (y) in the case of any holders of Class
A3(a) Claims electing to have the portion of their Class A3(a) Claim described
in clause (C) above allowed, the aggregate amount of Class A3(a) Claims allowed
pursuant to such clause (C). The $11,000,000 portion of the Convertible Junior
Subordinated Debentures to be purchased by each holder of a Class A3(a) Claim
pursuant to clause (x) in the immediately preceding sentence shall be based on
the ratio of the amount of fees and expenses paid to such holder in connection
with the credit facility under the Old Bank Credit Documents to the aggregate
amount of fees and expenses paid to all holders of Class A3(a) Claims in
connection with such credit facility. Notwithstanding anything to the contrary
herein, FNBC shall be obligated to purchase the principal amount of Convertible
Junior Subordinated Debentures specified in the FNBC Settlement Agreement, and
$357,150 of such principal amount shall be deemed to have been purchased by FNBC
as a holder of Class A3(a) Claims and shall be credited against the $11 million
in aggregate principal amount of Convertible Junior Subordinated Debentures to
be purchased by holders of Class A3(a) Claims pursuant to clause (x) of the
third-to-last sentence of this Section 4.3(a)(ii).
(b) Class A3(b) -- Claims of Non-Participating Banks.
(i) Impairment and Voting. Class A3(b) is impaired by the Plan. Each
holder of an Allowed Secured Claim in Class A3(b) is entitled to vote to accept
or reject the Plan.
(ii) Distributions. The amount of the Allowed Secured Claim of each
holder in Class A3(b) shall be estimated for distribution purposes on or before
the Effective Date. As soon as practicable after the later of the Effective Date
and the date on which all of the Allowed Secured Claims in Class A3(b) have been
estimated pursuant to an order of the Bankruptcy Court (the "Estimation Order"),
the Old Bank Collateral Agent (A) shall distribute to each such holder from the
Withheld Funds remitted to the Old Bank Collateral Agent pursuant to Section
4.3(a)(ii) hereof an amount of cash equal to the lesser of (I) the portion of
such holder's estimated Allowed Secured Claim that has been liquidated as of the
date of such Estimation Order, and (II) the product of (x) the amount of such
Withheld Funds and (y) a fraction, the numerator of which is the amount
specified in the immediately preceding clause (I) above and the denominator of
which is the aggregate amount of each holder's estimated Allowed Secured Claim
that has been liquidated as of the date of the Estimation Order, (B) shall
retain a portion of such Withheld Funds (the "Bank Reserve Fund") equal to the
aggregate amount of each such holder's estimated Class A3(b) Claim that remains
Contingent as of such date, which Bank Reserve Fund shall secure the
unliquidated portion of each holder's unliquidated estimated Class A3(b) Claims,
and (C) shall remit promptly to JCC the balance of such Withheld Funds. On the
tenth (10th) Business Day ("Subsequent Bank Distribution Date") after each
six-month anniversary of the Effective
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<PAGE>
Date, and upon receipt of the appropriate documentation from the applicable
holder, Old Bank Collateral Agent shall distribute to each holder of an
estimated or actual Allowed Class A3(b) Claim an amount equal to the lesser of
(A) the portion of such Claim, if any, that has been liquidated during the
six-month period ending on such sixth (6th) month anniversary date, and (B) the
product of (x) the remaining amount of funds in the Bank Reserve Fund times (y)
a fraction, the numerator of which is the amount specified in the immediately
preceding clause (A) and the denominator of which is the aggregate amount of all
such estimated or actual Allowed Secured Claims that have been liquidated during
such six month period. In the event the Claims of the holders in Class A3(b) are
allowed as Secured Claims in an aggregate amount in excess of the amount of
Withheld Funds distributed to the Old Bank Collateral Agent pursuant to Section
4.3(a)(ii) hereof, then each such holder shall receive the "indubitable
equivalent" (within the meaning of Section 1129(b)(2)(A)(iii) of the Bankruptcy
Code) as determined by Final Order of the Bankruptcy Court with respect to that
portion of such holder's Allowed Secured Claim in excess of its Pro Rata Share
of such Withheld Funds. In the event that the Secured Claim of any holder in
Class A3(b) is, pursuant to a Final Order, disallowed or allowed in an amount
less than the amount of distributions previously made on account of such Claim,
such holder shall promptly remit to JCC the excess of any such distributions
over the amount of its Allowed Secured Claim, if any. Upon the liquidation and
payment in full of all Allowed Class A3(b) Claims, the Old Bank Collateral Agent
shall remit promptly to JCC the remaining balance in the Bank Reserve Fund.
4.4. Class A4 -- Bondholder Claims.
(a) Impairment and Voting. Class A4 is impaired by the Plan. Each holder of
an Allowed Claim in Class A4 as of the Voting Record Date is entitled to vote to
accept or reject the Plan.
(b) Allowance and Distributions. The Claim of each record holder of Old
Bonds as of the Distribution Record Date or the Release Pool Distribution Record
Date, as applicable, to the extent such Claim is based on the principal of and
accrued interest on the Old Bonds owned as of the Distribution Record Date or
the Release Pool Distribution Record Date, as applicable, shall be allowed in
the aggregate amount of the principal of such Old Bonds plus accrued interest
(calculated in accordance with the provisions of the Old Indenture) through and
including the Effective Date. On the Effective Date or as soon as practicable
thereafter but in no event after the tenth (10th) Business Day after the
Effective Date (or in the case of clause (v), as provided in Section 5.2
hereof), each record holder of an Allowed Claim in Class A4 shall receive (i)
8.529 shares of Class A New Common Stock for each $1,000 of the principal amount
of the Old Bonds held by such holder on the Distribution Record Date, (ii) $431
in principal amount of New Bonds for each $1,000 of the principal amount of the
Old Bonds held by such holder on the Distribution Record Date, (iii) its Pro
Rata Share of the New Contingent Bonds, (iv) its Pro Rata Share of the interests
in proceeds of Assigned Litigation Claims allocated to holders of Allowed Class
A4 Claims (as of the Distribution Record Date) and/or Releasing Bondholders (as
of the Release Pool Distribution Record Date), as applicable, under Section 5.9
of the Plan, and (v) in the case of any holder which is a Releasing Bondholder,
as consideration for its release of claims against the Released Parties if such
holder specifically elects to release such claims as provided in Section 5.2 of
the Plan, from the Release Pool, 3.448 shares of Class A New Common Stock for
each $1,000 in principal amount of Old Bonds held by such holder on the Release
Pool Distribution Record Date plus its Pro Rata Share (based on the total
principal amount of Old Bonds held by all Releasing Bondholders) of Class A New
Common Stock consisting of 86.67% of the Unsubscribed Release Pool Shares. The
foregoing distributions shall be deemed to include the distribution to which
each holder of an Allowed Claim in Class A4 is entitled as a holder of an
Allowed Claim in Class B3.
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4.5. Class A5 -- Old Indenture Predecessor Trustee and Old Indenture
Predecessor Collateral Agent Claims.
(a) Impairment and Voting. Class A5 is impaired by the Plan. FNBC, as the
sole holder of Claims in Class A5, is entitled to vote to accept or reject the
Plan.
(b) Distributions. All of FNBC's Claims as Old Indenture Predecessor
Trustee and Old Indenture Predecessor Collateral Agent shall be allowed and
otherwise treated in accordance with the provisions of the FNBC Settlement
Agreement.
4.6. Class A6 -- WARN Act Claims.
(a) Impairment and Voting. Class A6 is impaired by the Plan. Each holder of
an Allowed Claim in Class A6 is entitled to vote to accept or reject the Plan.
Solely for purposes of voting, each holder of a WARN Act Claim shall be deemed
to have an Allowed WARN Act Claim in the amount of $1.00.
(b) Distributions and Other Treatment. On or as soon as practicable after
the Effective Date, JCC shall pay the sum of $2.265 million minus the fees and
expenses of WARN Act Counsel incurred in connection with its representation of
the holders of WARN Act Claims, and a portion of certain taxes attributable to
the WARN Act settlement (all as more fully described in the February 20, 1997
Bankruptcy Court order approving the settlement of WARN Act Claims), to holders
of Allowed 11/95 WARN Act Claims based on their respective Pro Rata Interests in
the balance of the $2.265 million payment, subject to any tax or other
withholdings required by law. The Allowed amount of the WARN Act Claim of each
11/95 WARN Act Claimant for purposes of determining his or her Pro Rata Interest
shall be determined by WARN Act Counsel in its reasonable discretion pursuant to
a set of objective and nondiscriminatory criteria to be filed with the
Bankruptcy Court on or before the Effective Date. In addition, to the extent
such positions are or become available, JCC shall offer each 11/95 WARN Act
Claimant re-employment to his or her former position or, if his or her former
position no longer exists or is not then available, to a substantially
equivalent position, prior to offering employment to such position to any other
Person other than any 11/95 WARN Act Claimant. As for the 8/95 WARN Act
Claimants, JCC (A) shall place each 8/95 WARN Act Claimant on a preferential
rehire list for one year following the date on which the Casino opens for
business, and (B) to the extent such positions are or become available, shall
offer re-employment to his or her former position or, if his or her former
position no longer exists or is not then available, to a substantially
equivalent position, prior to offering employment to such position to any Person
other than any 11/95 WARN Act Claimant, any 8/95 WARN Act Claimant or any Person
who was formerly employed and laid off by the Flamingo Casino.
4.7. Class A7 -- General Unsecured Claims.
(a) Impairment and Voting. Class A7 is impaired by the Plan. Each holder of
an Allowed Claim in Class A7 (an "Allowed General Unsecured Claim") is entitled
to vote to accept or reject the Plan.
(b) Distributions. JCC shall pay to each holder of an Allowed General
Unsecured Claim (an "Allowed General Unsecured Creditor") cash in an amount
equal to such Allowed General Unsecured Claim on the later of the Effective Date
and the date on which such Claim becomes an Allowed Claim, or as soon as
practicable thereafter. Solely for purposes of this Plan, and subject to the
occurrence of the Effective Date, HNOIC, Finance Corp., HET, NOLDC, Grand Palais
and all of their respective Affiliates and Insiders shall be deemed to have
waived any Class A7 Claim except (i) any Allowed Class A7 claim covered by any
insurance policy assumed pursuant to Section 8.1(c) hereof (provided that any
such Allowed Class A7 Claim shall be payable only from available coverage under
such insurance policy (and not be payable by any Debtor) and only to the extent
permitted under the NOLDC Shareholders/HET Settlement Agreement or GP
Representative/HET Settlement Agreements, as applicable), (ii) in the case of
HET and its Affiliates and
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Insiders, any Class A7 Claim for unreimbursed premiums or other unreimbursed
amounts paid for insurance coverage provided to any Debtor under any insurance
policy assumed pursuant to Section 8.1(c) of the Plan, and (iii) the Allowed
Class A7 Claim of Deborah Sulzer in the amount of $39,579.52 as reflected in
Claim No. 490.
4.8. Class A8 -- Penalty Claims. Class A8 is impaired by the Plan. The
holders of Class A8 Claims shall not receive any distributions on account of
such Claims, and on the Effective Date, all Class A8 Claims shall be
extinguished; provided, however, that if a Valuation Order is entered on or
before the Effective Date, each holder of an Allowed Claim in Class A8 shall
receive its Pro Rata Share of the interests in the proceeds of Assigned Debtor
Litigation Claims as allocated to holders of Allowed Class A8 Claims under
Section 5.9 of the Plan. Each holder of a Class A8 Claim is conclusively
presumed to have rejected the Plan as a holder of a Class A8 Claim and is not
entitled to vote to accept or reject the Plan.
4.9. Class A9 -- Equity Interests. Class A9 is impaired by the Plan. The
holders of Equity Interests in Class A9 shall not receive any distributions on
account of such Equity Interests. On the Effective Date, all Equity Interests in
HJC shall be extinguished. Each holder of an Equity Interest in Class A9 is
conclusively presumed to have rejected the Plan as a holder of a Class A9 Equity
Interest and is not entitled to vote to accept or reject the Plan.
B. Finance Corp. Treatment
4.10. Class B1 -- Other Priority Claims.
(a) Impairment and Voting. Class B1 is impaired by the Plan. Each holder of
an Allowed Claim in Class B1 is entitled to vote to accept or reject the Plan.
(b) Distributions. JCC shall pay to each holder of an Allowed Claim in
Class B1 cash in an amount equal to such Allowed Claim on the later of the
Effective Date and the date such Claim becomes an Allowed Claim, or as soon as
practicable thereafter.
4.11. Class B2 -- Bank Claims.
(a) Impairment and Voting. Class B2 is impaired by the Plan. Each holder of
an Allowed Secured Claim in Class B2 is entitled to vote to accept or reject the
Plan.
(b) Distributions. As soon as practicable after the later of the Effective
Date and the date on which all of the Allowed Secured Claims in Class B2 have
been allowed or disallowed by Final Order, each holder of an Allowed Class B2
Claim is entitled to receive from JCC its pro rata share (based on the ratio of
its Allowed Class B2 Claim to the aggregate amount of all Allowed Secured Claims
in Class B2 and Class B3) of $1,000 in cash. The distribution to which each
holder of an Allowed Class B2 Claim which is also a holder of an Allowed Class
A3(a) Claim is entitled shall be deemed part of, and satisfied upon receipt of,
the distributions which such holder is entitled to receive as a holder of an
Allowed Class A3(a) Claim.
4.12. Class B3 -- Bondholder Claims.
(a) Impairment and Voting. Class B3 is impaired by the Plan. Each holder of
an Allowed Secured Claim in Class B3 as of the Voting Record Date is entitled to
vote to accept or reject the Plan.
(b) Distributions. Each holder of an Allowed Claim in Class B3 is entitled
to receive its Pro Rata Share of shares of Class A New Common Stock and New
Bonds which, in the aggregate, have a value equal to the product of (i) $1,000
and (ii) a fraction, the numerator of which is the aggregate amount of Allowed
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Secured Claims in Class B3, and the denominator of which is the aggregate amount
of Allowed Secured Claims in Class B2 and Class B3. The distribution to which
each holder of an Allowed Class B3 Claim is entitled shall be deemed part of,
and satisfied upon receipt of, the distributions which such holder is entitled
to receive as a holder of an Allowed Class A4 Claim.
4.13. Class B4 -- WARN Act Claims.
(a) Impairment and Voting. Class B4 is impaired by the Plan. Each holder of
an Allowed Claim in Class B4 is entitled to vote to accept or reject the Plan.
(b) Distributions and Other Treatment. Each holder of an Allowed Claim in
Class B4 shall be deemed to have received on account of his or her Class B4
Claims, and in full satisfaction thereof, the distribution and/or other
treatment he or she receives as a holder of a Class A6 Claim pursuant to Section
4.6 of the Plan. No other distribution shall be provided to such holder on
account of his or her Class B4 Claims.
4.14. Class B5 -- General Unsecured Claims.
(a) Impairment and Voting. Class B5 is impaired by the Plan. Each holder of
an Allowed Claim in Class B5 is entitled to vote to accept or reject the Plan.
(b) Distributions. JCC shall pay to each holder of an Allowed Claim in
Class B5 cash in an amount equal to such Allowed Claim on the later of the
Effective Date and the date on which such Claim becomes an Allowed Claim, or as
soon as practicable thereafter. Solely for purposes of this Plan, and subject to
the occurrence of the Effective Date, HNOIC, HJC, HET, NOLDC, Grand Palais and
all of their respective Affiliates and Insiders shall be deemed to have waived
their right to receive any distribution as a holder of a Class B5 Claim.
4.15. Class B6 - Penalty Claims. The holders of Class B6 Claims shall not
receive any distributions on account of such Claims, and on the Effective Date,
all Class B6 Claims shall be extinguished; provided, however, that if a
Valuation Order is entered on or before the Effective Date, each holder of an
Allowed Class B6 Claim shall be deemed to have received on account of its Class
B6 Claim, and in full satisfaction thereof, the distribution it receives as a
holder of a Class A8 Claim pursuant to Section 4.8 of the Plan. Each holder of a
Class B6 Claim is conclusively presumed to have rejected the Plan as a holder of
a Class B6 Claim and is not entitled to vote to accept or reject the Plan.
4.16. Class B7 -- Equity Interests. Class B7 is impaired by the Plan. The
holders of Equity Interests in Class B7 shall not receive any distributions on
account of such Equity Interests. On the Effective Date, all Equity Interests in
Finance Corp. shall be extinguished. Each holder of an Equity Interest in Class
B7 is conclusively presumed to have rejected the Plan as a holder of a Class B7
Equity Interest and is not entitled to vote to accept or reject the Plan.
C. HNOIC Classification
4.17. Class C1 -- Other Priority Claims.
(a) Impairment and Voting. Class C1 is impaired by the Plan. Each holder of
an Allowed Claim in Class C1 is entitled to vote to accept or reject the Plan.
(b) Distributions. JCC shall pay to each holder of an Allowed Claim in
Class C1 cash in an amount equal to such Allowed Claim on the later of the
Effective Date and the date such Claim becomes an Allowed Claim, or as soon as
practicable thereafter.
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4.18. Class C2 -- Secured Claims.
(a) Impairment and Voting. Class C2 is impaired by the Plan. Each holder of
an Allowed Claim in Class C2 is entitled to vote to accept or reject the Plan.
(b) Reinstatement of Claims or Surrender of Collateral. Except as provided
in the immediately following two sentences, notwithstanding any contractual
provision or applicable law that entitles the holder of an Allowed Claim in
Class C2 to demand or receive payment of such Claim prior to the stated maturity
of such Claim from and after the occurrence of default, each Allowed Claim in
Class C2 will be reinstated and rendered unimpaired in accordance with Section
1124(2) of the Bankruptcy Code. JCC may, in its discretion, assign, abandon or
surrender any property securing any Secured Claim in Class C2 to the holder of
such Secured Claim. The Court will determine the value of any such property so
assigned, abandoned or surrendered, and any Deficiency Claim resulting therefrom
will be paid as a Class C5 or C7 Claim.
4.19. Class C3 -- WARN Act Claims.
(a) Impairment and Voting. Class C3 is impaired by the Plan. Each holder of
an Allowed Claim in Class C3 is entitled to vote to accept or reject the Plan.
(b) Distributions and Other Treatment. Each holder of an Allowed Claim in
Class C3 shall be deemed to have received on account of his or her Class C3
Claims, and in full satisfaction thereof, the distribution and/or other
treatment he or she receives as a holder of a Class A6 Claim pursuant to Section
4.6 of the Plan. No other distribution shall be provided to such holder on
account of his or her Class C3 Claims.
4.20. Class C4 -- Unsecured Claims (for which HJC is liable).
(a) Impairment and Voting. Class C4 is impaired by the Plan. Each holder of
an Allowed Claim in Class C4 is entitled to vote to accept or reject the Plan.
(b) Distributions. Each holder of an Allowed Claim in Class C4 shall be
deemed to have received on account of its Class C4 Claims, and in full
satisfaction thereof, the distribution it receives as an Allowed General
Unsecured Creditor pursuant to Section 4.7 of the Plan. No other distribution
shall be provided to such holder on account of its Class C4 Claims.
4.21. Class C5 -- General Unsecured Claims.
(a) Impairment and Voting. Class C5 is impaired. Each holder of an Allowed
Claim in Class C5 is entitled to vote to accept or reject the Plan.
(b) Distributions. To the extent there are any holders of Allowed Claims in
Class C5, each such holder shall receive the lesser of the amount of its Allowed
Class C5 Claim or its Pro Rata Share of $1,000 in cash (the "Class C5 Cash
Amount") to be provided by JCC and distributed as follows:
(i) On the ninetieth (90th) day after the Effective Date or
as soon as practicable thereafter (the "Initial Class C5
Distribution Date"), each holder of an Allowed Claim in Class C5
on the Initial Class C5 Distribution Date shall receive, as an
initial distribution of the Class C5 Cash Amount, an amount equal
to the product of (A) the amount of such holder's Allowed Class
C5 Claim times (B) a fraction, (x) the numerator of which is the
aggregate amount of Allowed Class C5 Claims on the Initial Class
C5 Distribution Date, and (y) the
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denominator of which is the Total Claims Amount for Class C5 on
the Initial Class C5 Distribution Date.
(ii) As soon as reasonably practicable after making the
initial distribution of the Class C5 Cash Amount, JCC will
deposit the remaining portion of the Class C5 Cash Amount in an
interest-bearing, money market account (such deposit, together
with any interest thereon, the "Class C5 Claims Reserve").
(iii) No payment or distribution of any portion of the Class
C5 Cash Amount shall be made with respect to any Disputed Claim
unless and until such Claim becomes an Allowed Claim, and no
holder of a Class C5 Claim shall receive more than one hundred
percent (100%) of its Allowed Class C5 Claim or be entitled to
any post-petition interest thereon.
(iv) As soon as practicable after any Disputed Claim becomes
an Allowed Class C5 Claim by Final Order, JCC shall make an
initial distribution to the holder of such Allowed Claim from the
Class C5 Claims Reserve in an amount equal to the product of (A)
the Class C5 Cash Amount times (B) a fraction, (x) the numerator
of which is the amount of such holder's Allowed Class C5 Claim
and (y) the denominator of which is the Total Claims Amount for
Class C5 on the Initial Class C5 Distribution Date.
(v) As soon as practicable after all Disputed Claims have
been allowed or disallowed by Final Order, and after all interim
distributions have been made pursuant to clause (iv) above, JCC
shall distribute to each holder of an Allowed Class C5 Claim its
Pro Rata Share of any remaining funds in the Class C5 Claims
Reserve, but in no event more than the amount of such holder's
Class C5 Claim then outstanding (exclusive of post-petition
interest). Any funds remaining in the Class C5 Claims Reserve
after payment in full of all Allowed Class C5 Claims shall become
the exclusive property of JCC free and clear of all Claims and
shall be subject to its exclusive control.
Solely for purposes of this Plan, and subject to the occurrence of the Effective
Date, HJC, Finance Corp., HET, NOLDC, Grand Palais and all of their Affiliates
and Insiders shall be deemed to have waived any right to receive any
distribution as a holder of a Class C5 Claim.
4.22. Class C6 -- Showboat Claim.
(a) Impairment and Voting. Class C6 is impaired by the Plan. NOLDC, as the
only holder of a Class C6 Claim, is entitled to vote to accept or reject the
Plan.
(b) Distributions. In accordance with the terms of the NOLDC Plan and the
NOLDC Shareholders/HET Settlement Agreement, consideration shall be furnished
directly to Showboat in exchange for a full release from Showboat to NOLDC. This
transaction will result in a release of NOLDC's Class C6 Claim. No distributions
shall be provided to NOLDC on account of its Class C6 Claim.
4.23. Class C7 -- Penalty Claims. The holders of Class C7 Claims shall not
receive any distributions on account of such Claims, and on the Effective Date,
all Class C7 Claims shall be extinguished; provided, however, that if a
Valuation Order is entered on or before the Effective Date, each holder of an
Allowed Claim in Class C7 shall be deemed to have received on account of its
Class C7 Claim, and in full satisfaction thereof,
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the distribution it receives as a holder of a Class A8 Claim pursuant to Section
4.8 of the Plan. Each holder of a Class C7 Claim is conclusively presumed to
have rejected the Plan as a holder of Class C7 Claim and is not entitled to vote
to accept or reject the Plan.
4.24. Class C8 -- Equity Interests. Class C8 is impaired by the Plan. The
holder of Equity Interests in Class C8 shall not receive any distributions on
account of such Equity Interests. On the Effective Date, all Equity Interests in
HNOIC shall be extinguished. The holder of Equity Interests in Class C8 is
conclusively presumed to have rejected the Plan as a holder of Class C8 Equity
Interests and is not entitled to vote to accept or reject the Plan.
ARTICLE V.
SETTLEMENT OF CERTAIN CLAIMS AND
PROSECUTION AND ASSIGNMENT OF CERTAIN CLAIMS
5.1. Release by Debtors of Causes of Action Against the HET Group, Debtors
Group, Bondholders Committee Group, NOLDC Group and Grand Palais Group. Pursuant
to Section 1123(b)(3)(A) of the Bankruptcy Code, in consideration of, among
other things, (i) the execution and delivery of the HET Loan Guarantee by HET
and the New Completion Guarantees by HET and HOCI and the provision of the
Surety Bond, (ii) the DIP Lender's consent to the conversion to equity and
contribution of the principal amount of the DIP Indebtedness outstanding on the
Effective Date as part of the Harrah's New Equity Investment, (iii) the Harrah's
New Equity Investment, (iv) the waiver by Persons in the HET Group, the NOLDC
Group and the Grand Palais Group of any right to distributions as holders of
certain Class A6 and/or Class C5 Claims, (v) certain pre-development and
development services by HET and its Affiliates performed prior to the Effective
Date, and (vi) other good and valuable consideration, without which this Plan
could not be confirmed and consummated, on the Effective Date, each Debtor shall
be conclusively and irrevocably deemed to have released any and all Release
Claims of such Debtor or its estate against, respectively, (i) each Person in
the HET Group, (ii) each Person in the Debtors Group, (iii) each Person in the
Bondholders Committee Group, (iv) each Person in the NOLDC Group but only if the
applicable Persons in the NOLDC Group execute and deliver on or before the
Effective Date the NOLDC Shareholders/HET Settlement Agreement, and (v) each
Person in the Grand Palais Group but only if the applicable Persons in the Grand
Palais Group execute and deliver on or before the Effective Date the applicable
GP Representative/HET Settlement Agreements. The Confirmation Order shall
constitute an order approving as a compromise and settlement pursuant to Section
1123(b)(3)(A) of the Bankruptcy Code the foregoing releases and the respective
releases of the Debtors contained in the NOLDC Shareholders/HET Settlement
Agreement and the GP Representative/HET Settlement Agreements and the Debtors'
execution and delivery of the applicable release agreements in the forms
attached as exhibits to the NOLDC Shareholders/HET Settlement Agreement and the
GP Representative/HET Settlement Agreements.
5.2. Release by Bondholders of Causes of Action Against HET Group, Debtors
Group, Bondholders Committee Group, City Group, State Group, NOLDC Group, Grand
Palais Group and the Bank/Underwriter Group. Pursuant to Section 1123(b)(3)(A)
of the Bankruptcy Code, in consideration of (i) Harrah's Investor's contribution
of 200,000 shares of New Common Stock to the Release Pool, and (ii) JCC
Holding's contribution of 1,300,000 shares of New Common Stock to the Release
Pool on the Effective Date, each Bondholder that, through an appropriate
indication on the ballot previously provided to such Bondholder in connection
with the voting on the Original Plan or through an appropriate indication on the
Bondholder release form provided to it by the Proponents, has affirmatively
evidenced its intent to release the Persons in the HET Group, the Debtors Group,
the Bondholders Committee Group, the City Group, the State Group, the NOLDC
Group, the Grand Palais Group and the Bank/Underwriter Group, respectively
(each, a "Releasing Bondholder"), shall be conclusively and irrevocably deemed
to have (i) released each Person in the HET
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Group, the Debtors Group, the Bondholders Committee Group, the City Group, the
State Group, the NOLDC Group, the Grand Palais Group and the Bank/Underwriter
Group, respectively, from any and all Release Claims that such Releasing
Bondholder, or any of its predecessors-in-interest, successors or assigns, has
or may have as of the Effective Date arising in whole or in part from any acts,
omissions, activities and/or events prior to the Effective Date, and (ii)
released, waived and agreed not to bring any Claims against HET or HOCI, whether
a known Claim or an Unknown Claim, that may arise in any way, in whole or in
part, out of (a) the decision of HET or HOCI either to renew or not renew the
HET/JCC Agreement or any Minimum Payment Guaranty, (b) HET's or HOCI's acting in
their own best interests in connection with the execution of, renewal of or
failure to renew the HET/JCC Agreement or any Minimum Payment Guaranty, and/or
(c) any alleged assurance or guarantee by HET or HOCI concerning the financial
results of the Casino, unless such Claim is based 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,
provided, however, that such release in this clause (ii) hereof shall not bar or
release any Claims against HET or HOCI for (x) any breach of the HET/JCC
Agreement or any Minimum Payment Guaranty to which HET or HOCI is a party, (y)
mismanagement of the Casino after the Effective Date or (z) any other conduct,
act or omission occurring after the Effective Date which is not directly related
to the matters set forth in this clause (ii)(a) through (c) above; further
provided, however, that (A) the foregoing release by the Releasing Bondholders
shall not be effective or enforceable as to (i) any Person in the NOLDC Group
unless the applicable Persons in the NOLDC Group execute and deliver on or
before the Effective Date the NOLDC Shareholders/HET Settlement Agreement, and
(ii) any Person in the Grand Palais Group unless the applicable Persons in the
Grand Palais Group execute and deliver on or before the Effective Date the
applicable GP Representative/HET Settlement Agreements; (B) each Major
Bondholder shall be conclusively and automatically deemed to be a Releasing
Bondholder without the necessity of taking the action otherwise required of any
Bondholder to become a Releasing Bondholder and regardless of the manner in
which such Major Bondholder fills out its ballot with respect to this Plan or
filled out its ballot with respect to the Original Plan or the January 29, 1998
Plan; (C) the release provisions in any ballot or other writing previously
executed by any Bondholder to evidence its agreement to the foregoing release,
unless revoked pursuant to clause (D) below, shall be binding on such Bondholder
and any transferee of the Old Bonds held by such Bondholder; and (D) any
Bondholder who agreed to the foregoing release in connection with the Original
Plan shall be entitled to revoke such agreement by evidencing in writing its
intent to do so in any manner and subject to such conditions and within any time
period set by the Bankruptcy Court. Nothing in the foregoing release by the
Releasing Bondholders constitutes a release of any claims or causes of action of
any Releasing Bondholders against any Persons other than the Released Parties,
including, without limitation, any claims or causes of action against any or all
of the Non-Participating Banks and any Underwriter which fails to execute and
deliver the Bank/Underwriter Release. On, or as soon as practicable after the
Effective Date, (i) each Releasing Bondholder shall receive from the Release
Pool 3.448 shares of Class A New Common Stock for each $1,000 in principal
amount of Old Bonds held by such Releasing Bondholder on the Release Pool
Distribution Record Date plus its Pro Rata Share (based on the total principal
amount of Old Bonds held by all Releasing Bondholders on the Release Pool
Distribution Record Date) of Class A New Common Stock consisting of 86.67% of
the Unsubscribed Release Pool Shares, and (ii) Harrah's Investor shall receive
from the Release Pool Class B New Common Stock consisting of 13.33% of the
Unsubscribed Release Pool Shares. Notwithstanding the foregoing, and except as
otherwise provided for in Section 6.20 of this Plan, (i) no Releasing Bondholder
shall be entitled to any distribution from the Release Pool unless such holder
is a Bondholder of record on the Release Pool Distribution Record Date (or, in
the case of a beneficial owner of any Old Bonds, is the beneficial owner of Old
Bonds on the Release Pool Distribution Record Date that are held on its behalf
by a Person which is a holder of record on the Release Pool Distribution Record
Date) and has not assigned or otherwise transferred its claims, if any, against
any Person in the HET Group, the Debtors Group, the Bondholders Committee Group,
the City Group, the State Group, the NOLDC Group, the Grand Palais Group or the
Bank/Underwriter Group to be released pursuant to this Section 5.2, except that
any Releasing Bondholder may transfer its Old Bonds on or after the Release Pool
Distribution Record Date subject to clause (ii) below, (ii) the foregoing
release by each Releasing Bondholder shall be binding on any subsequent
transferee of the Old Bonds held by such Releasing Bondholder on the Release
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Pool Distribution Record Date, and (iii) the foregoing release by each Releasing
Bondholder which is a beneficial owner of any Old Bonds shall be binding on any
record holder, participant or nominee with respect to such Old Bonds. The
Confirmation Order shall constitute an order approving the foregoing release as
a compromise and settlement pursuant to Section 1123(b)(3)(A) of the Bankruptcy
Code.
5.3. Release by Debtors of Causes of Action Against State Group. Pursuant
to Section 1123(b)(3)(A) of the Bankruptcy Code, in consideration of and subject
to, the execution and delivery of the State/LGCB Release and the Amended and
Renegotiated Casino Operating Contract by LGCB and/or the State, as applicable,
on the Effective Date, each Debtor shall be conclusively and irrevocably deemed
to have released each Person in the State Group from any and all Release Claims
of such Debtor or its estate only to the extent set forth in the State/LGCB
Release. The Confirmation Order shall constitute an order approving the
foregoing release as a compromise and settlement pursuant to Section
1123(b)(3)(A) of the Bankruptcy Code.
5.4. Release by Debtors of Causes of Action Against City and RDC. Pursuant
to Section 1123(b)(3)(A) of the Bankruptcy Code, in consideration of, and
subject to, the execution and delivery by the City and the RDC of the City/RDC
Release and the other documents set forth in Section 6.2(o) of the Plan, on the
Effective Date, each Debtor shall be conclusively and irrevocably deemed to have
released each of the City and the RDC from any and all Release Claims of such
Debtor or its estate only to the extent set forth in the City/RDC Release. The
Confirmation Order shall constitute an order approving the foregoing release as
a compromise and settlement pursuant to Section 1123(b)(3)(A) of the Bankruptcy
Code.
5.5. Release by Debtors of Causes of Action Against Bank/Underwriter Group.
Pursuant to Section 1123(b)(3)(A) of the Bankruptcy Code, in consideration of,
and subject to, the execution and delivery by each Participating Bank, FNBC and
each Underwriter of the Bank/Underwriter Release and the provision by certain
Persons in the Bank/Underwriter Group of the A Term Loan, the B Term Loan and
the Working Capital Facility and the purchase of the Convertible Junior
Subordinated Debentures by the Underwriters, FNBC, Bankers Trust Company, and
any other Participating Banks, all as more particularly described in the Bank
Term Sheet, the FNBC Settlement Agreement and the Underwriter Term Sheet, on the
Effective Date, each Debtor shall be conclusively and irrevocably deemed to have
released any and all Release Claims of such Debtor or its estate against each
Person in the Bank/Underwriter Group. The Confirmation Order shall constitute an
order approving as a compromise and settlement pursuant to Section 1123(b)(3)(A)
of the Bankruptcy Code the foregoing releases and the Debtors' execution and
delivery of the Bank/Underwriter Release. Except as provided in Section 4.3 and
4.11 hereof, each Person in the Bank/Underwriter Group shall be deemed to have
waived any Claim against any Debtor or NOLDC (except for FNBC with respect to
NOLDC as set forth in the NOLDC Plan and the NOLDC Shareholders/HET Settlement
Agreement) and any right to receive any distribution on account of any such
Claim. Without limiting the foregoing and except for its Lien on the FNBC Cash
Collateral, FNBC shall be deemed to have released all of its Liens (including,
without limitation, its Indenture Trustee Charging Lien) on any and all (i)
assets of each Debtor (including, without limitation, all cash collateral held
by the Old Indenture Trustee) and (ii) any distributions made or to be made
under the Plan.
5.6. Release by Grand Palais Bondholders of Causes of Action Against HET
Group, Debtors Group, Bondholders Committee Group, City Group, State Group,
NOLDC Group, Grand Palais Group and the Bank/Underwriter Group. Pursuant to
Section 1123(b)(3)(A) of the Bankruptcy Code, in consideration of, among other
things, (i) the Grand Palais Settlement Consideration, (ii) the execution and
delivery of the HET Loan Guarantee and the New Completion Guarantees by HET and
HOCI and the provision of the Surety Bond, (iii) the DIP Lender's consent to the
conversion to equity and contribution of the principal amount of the DIP
Indebtedness outstanding on the Effective Date as part of the Harrah's New
Equity Investment, (iv) the Harrah's New Equity Investment, (v) the waiver by
Persons in the HET Group, the NOLDC Group and the Grand Palais Group of any
right to distributions as holders of certain Class A7 and/or Class C5 Claims,
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(vi) certain pre-development and development services by HET and its Affiliates
performed prior to the Effective Date, (vii) the provision by certain Persons in
the Bank/Underwriter Group of certain financing to JCC, and (viii) other good
and valuable consideration, without which this Plan could not be confirmed and
consummated, on the Effective Date, each Grand Palais Bondholder that, through
an appropriate indication on the release solicitation statement provided to such
Grand Palais Bondholder by the Disbursing Agent or in such other manner as may
be prescribed by an applicable order of the Bankruptcy Court, has affirmatively
evidenced its intent to release the Persons in the HET Group, the Debtors Group,
the Bondholders Committee Group, the City Group, the State Group, the NOLDC
Group, the Grand Palais Group and the Bank/Underwriter Group, respectively
(each, a "Grand Palais Releasing Bondholder"), shall be conclusively and
irrevocably deemed to have (i) released each Person in the HET Group, the
Debtors Group, the Bondholders Committee Group, the City Group, the State Group,
the NOLDC Group, the Grand Palais Group and the Bank/Underwriter Group,
respectively, from any and all Release Claims that such Grand Palais Releasing
Bondholder, or any of its predecessors-in-interest, successors or assigns, has
or may have as of the Effective Date arising in whole or in part from any acts,
omissions, activities and/or events prior to the Effective Date, and (ii)
released, waived and agreed not to bring any Claims against HET or HOCI, whether
a known Claim or an Unknown Claim, that may arise in any way, in whole or in
part, out of (a) the decision of HET or HOCI either to renew or not renew the
HET/JCC Agreement or any Minimum Payment Guaranty, (b) HET's or HOCI's acting in
their own best interests in connection with the execution, renewal or failure to
renew the HET/JCC Agreement or any Minimum Payment Guaranty, and/or (c) any
alleged assurance or guarantee by HET or HOCI concerning the financial results
of the Casino, unless such Claim is based 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; provided,
however, that the foregoing release by the Grand Palais Releasing Bondholders
shall not be effective or enforceable as to (i) any Person in the NOLDC Group
unless the applicable Persons in the NOLDC Group execute and deliver on or
before the Effective Date the NOLDC Shareholders/HET Settlement Agreement; and
(ii) any Person in the Grand Palais Group unless the applicable Persons in the
Grand Palais Group execute and deliver on or before the Effective Date the
applicable GP Representative/HET Settlement Agreements. On, or as soon as
practicable after the Effective Date, each Grand Palais Releasing Bondholder
shall receive its pro rata share of the Grand Palais Settlement Consideration
(with respect to each Grand Palais Releasing Bondholder, such pro rata share for
such Grand Palais Releasing Bondholder shall be determined by the ratio between
the aggregate principal amount of Grand Palais Senior Secured Bonds beneficially
owned by such Grand Palais Releasing Bondholder and the aggregate principal
amount of Grand Palais Senior Secured Bonds beneficially owned by all of the
Grand Palais Releasing Bondholders, each calculated as of the Distribution
Record Date). Notwithstanding the foregoing, (i) no Grand Palais Releasing
Bondholder shall be entitled to any distribution of the Grand Palais Settlement
Consideration unless such holder is a Grand Palais Bondholder of record on the
Distribution Record Date (or, in the case of a beneficial owner of any Grand
Palais Senior Secured Bonds, is the beneficial owner of Grand Palais Senior
Secured Bonds on the Distribution Record Date that are held on its behalf by a
Person which is a holder of record on the Distribution Record Date) and has not
assigned or otherwise transferred its claims, if any, against any Person in the
HET Group, the Debtors Group, the Bondholders Committee Group, the City Group,
the State Group, the NOLDC Group, the Grand Palais Group or the Bank/Underwriter
Group to be released pursuant to this Section 5.6, except that any Grand Palais
Releasing Bondholder may transfer its Grand Palais Senior Secured Bonds, subject
to clause (ii) below, (ii) the foregoing release by each Grand Palais Releasing
Bondholder shall be binding on any subsequent transferee of the Grand Palais
Senior Secured Bonds held by such Grand Palais Releasing Bondholder on the
Distribution Record Date, and (iii) the foregoing release by each Grand Palais
Releasing Bondholder which is a beneficial owner of any Grand Palais Senior
Secured Bonds shall be binding on any record holder, participant or nominee with
respect to such Grand Palais Senior Secured Bonds. The Confirmation Order shall
constitute an order approving the foregoing release as a compromise and
settlement pursuant to Section 1123(b)(3)(A) of the Bankruptcy Code.
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5.7. Injunction Against Commencement of Individual Actions Against HET
Group, Debtors Group, Bondholders Committee Group, City Group, State Group,
NOLDC Group, Grand Palais Group and the Bank/Underwriter Group. To implement the
Releases and the release provisions of Sections 5.1, 5.2, 5.3, 5.4, 5.5 and 5.6
of the Plan, the Confirmation Order shall constitute and provide for an
injunction by the Bankruptcy Court as of the Effective Date against (a) any
Releasing Bondholder or any Grand Palais Releasing Bondholder from (i)
commencing or continuing in any manner any action or other proceeding of any
kind against any Released Party or any property of any Released Party, (ii)
enforcing, attaching, collecting and/or recovering by any manner or means any
judgment, award, decree or order against any Released Party or any property of
any Released Party, (iii) creating, perfecting or enforcing any Encumbrance of
any kind against any Released Party or any property of any Released Party, or
(iv) asserting any right of setoff, right of subrogation or recoupment against
any Released Party or any property of any Released Party, in each case to the
extent any of the foregoing is released, waived or otherwise prohibited by the
release provisions of Section 5.2 or 5.6 of the Plan, as applicable, (b) except
as provided in the FNBC Settlement Agreement or Section 6.1(k)(ii), 6.2(l)(i) or
6.2(l)(ii) hereof, any party to any of the Releases from (i) commencing or
continuing in any manner any action or other proceeding of any kind against any
Released Party or any property of any Released Party, (ii) enforcing, attaching,
collecting and/or recovering by any manner or means any judgment, award, decree
or order against any Released Party or any property of any Released Party, (iii)
creating, perfecting or enforcing any Encumbrance of any kind against any
Released Party or any property of any Released Party, or (iv) asserting any
right of setoff, right of subrogation or recoupment against any Released Party
or any property of any Released Party, in each case to the extent any of the
foregoing is released, waived or otherwise prohibited by the applicable
Release(s), and (c) any Creditor, any holder of an Equity Interest or any other
party in interest in any of the Chapter 11 Cases from commencing or continuing
any Derivative Claim against any Released Party; provided, however, that the
foregoing injunction against the Releasing Bondholders and the Grand Palais
Releasing Bondholders shall not be effective or enforceable as to (i) any Person
in the NOLDC Group unless the applicable Persons in the NOLDC Group execute and
deliver on or before the Effective Date the NOLDC Shareholders/HET Settlement
Agreement, (ii) any Person in the Grand Palais Group unless the applicable
Persons in the Grand Palais Group execute and deliver on or before the Effective
Date the applicable GP Representative/HET Settlement Agreements, and (iii) any
claim or cause of action other than a Release Claim that is released pursuant to
Section 5.2 or 5.6 of the Plan or a Derivative Claim.
5.8. Extinguishment of Certain Causes of Action Under the Avoiding Power
Provisions. On the Effective Date, Avoidance Claims against any Released Party,
any Bondholder or any other Person other than the Non-Participating Banks and
any Underwriter which fails to execute and deliver the Bank/Underwriter Release
shall be released, discharged and extinguished, whether or not then pending.
5.9. Assignment and Prosecution of Assigned Litigation Claims, Judgment
Reduction Protection and Distribution of Recoveries from Assigned Litigation
Claims.
(a) On the Effective Date, the Debtors and the Releasing Bondholders (to
the extent provided in the definition of Assigned Litigation Claims and without
any representations or warranties (except as to ownership)) shall be deemed to
have assigned their respective Assigned Litigation Claims to JCC. At the
direction of (x) a majority of the Bondholders Director Nominees in the case of
any and all Assigned Bondholder Litigation Claims and (y) both a majority of all
directors of JCC and a majority of the Bondholders Director Nominees in the case
of any and all Assigned Debtor Litigation Claims, JCC, in its sole discretion,
and either in its own name or in the name, place and stead of the Debtors and
their estates and/or the Releasing Bondholders, as the case may be, shall have
the exclusive right to prosecute or otherwise enforce or, subject to the
provisions of Section 5.9(c) hereof, to waive or release any or all Assigned
Litigation Claims; provided, however, that JCC shall be prohibited from
asserting or maintaining any Assigned Litigation Claims after its delivery of a
Completion Notice. Without limiting the generality of the foregoing, JCC shall
have the authority
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(in its sole discretion), on behalf of the Releasing Bondholders, to opt out of
any class actions affecting any Assigned Litigation Claims.
(b) JCC shall pay all Litigation Costs.
(c) Subject to the remaining provisions of this Section 5.9(c), JCC shall
be entitled to settle any Assigned Litigation Claim. JCC shall not settle any
Assigned Litigation Claim against any Litigation Defendant without either (A)
obtaining from the Litigation Defendant a written release in favor of each
Released Party of all Third Party Claims, or (B) to the extent written releases
are not provided in favor of any Released Party as contemplated in clause (A),
obtaining the written consent of such Released Party, as applicable, to the
settlement. Each Released Party may withhold its written consent to any such
settlement in its sole discretion, and shall not have any duties to any Person
in making its discretionary determination as to whether to provide such written
consent.
(d) In the event any Third Party Claim is brought against any Released
Party, or such Released Party is required to participate by way of discovery or
otherwise in connection with any Assigned Litigation Claim brought by JCC
against a Litigation Defendant, the Released Party shall select counsel (the
"Selected Counsel") in its sole discretion from a pre-approved list of law
firms, to be mutually agreed upon after good faith negotiations between the
Bondholders Committee and HET (in its sole discretion) on behalf of the
Proponents, to represent such Released Party, including to defend against,
negotiate, settle or otherwise deal with such Third Party Claim; provided,
however, that if two or more Released Parties (other than any Person in the HET
Group) require counsel pursuant to this sentence in connection with the same
action, the same Selected Counsel shall represent all such Released Parties
unless a conflict of interest precludes such joint representation; and provided,
further, that if two or more Persons in the HET Group require counsel pursuant
to this sentence in connection with the same action, the same Selected Counsel
selected by HET (in its sole discretion) shall represent all such Persons unless
a conflict of interest precludes such joint representation. Subject to the
provisions of Sections 5.9(e) and (f) hereof and the immediately following
sentence, JCC shall, promptly upon request by the applicable Released Party, (i)
pay for all reasonable fees, costs and expenses incurred by the Selected Counsel
on behalf of the Released Party (except to the extent any such fees, costs and
expenses are incurred in connection with a Third Party Claim which is based on
any claim asserted by any non-releasing parties against the applicable
Litigation Defendant), (ii) reimburse the Released Party for its reasonable
out-of-pocket costs and expenses (i.e., litigation costs) in defense of such
Third Party Claim (except to the extent such Third Party Claim is based on any
claim asserted by any non-releasing parties against the applicable Litigation
Defendant) or in connection with its participation by way of discovery or
otherwise with any Assigned Litigation Claim brought by JCC against a Litigation
Defendant, and (iii) indemnify the Released Party for any liability incurred in
respect of any judgment or settlement of a Third Party Claim that is not
satisfied pursuant to Section 5.9(e) hereof (except to the extent such Third
Party Claim is based on a settlement or judgment obtained by any non-releasing
parties against the applicable Litigation Defendant). Any and all
indemnification liability of JCC to each Released Party pursuant to clause (iii)
of the immediately preceding sentence shall be limited to the aggregate proceeds
of Assigned Litigation Claims that are available to pay such liability pursuant
to Section 5.9(f). The Released Party shall cooperate fully with JCC and
Selected Counsel in connection with the prosecution of any Assigned Litigation
Claim and the defense of any Third Party Claim. In the event a Third Party Claim
is brought against a Released Party, such Released Party shall assert all
available defenses and/or claims or actions arising from the same transactions,
occurrences, or facts on which such Third Party Claim is based, in whole or in
part, held by such Released Party against such Litigation Defendant in order to
reduce, setoff, or recoup against any recovery sought by such Litigation
Defendant against such Released Party. The Released Party shall not settle any
Third Party Claim without the prior written consent of JCC (in its sole
discretion) to any such settlement. The Released Party shall promptly notify JCC
in writing of the assertion of any Third Party Claim against such Released Party
or a request to participate by way of discovery or otherwise in connection with
any Assigned Litigation Claim brought by JCC against a Litigation Defendant.
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(e) In the event JCC is entitled to any recovery by judgment or settlement
against any Litigation Defendant in connection with any Assigned Litigation
Claim, and such Litigation Defendant is entitled to any recovery by way of
judgment or settlement against any Released Party based upon any Third Party
Claim, then (i) the recovery to which JCC would otherwise be entitled against
such Litigation Defendant shall be reduced (through a reduction or credit
against any judgment or settlement obtained against such Litigation Defendant or
through some other appropriate action achieving the same result) by an amount
equal to the aggregate recovery to which such Litigation Defendant is entitled
against such Released Party based upon any Third Party Claim, and (ii) such
reduction in JCC's recovery against such Litigation Defendant shall discharge
and satisfy in full any recovery to which such Litigation Defendant is entitled
against such Released Party based upon any Third Party Claim; provided, however,
that any recovery in favor of JCC shall be reduced only to the extent necessary
to satisfy that portion of any judgment or settlement obtained against a
Released Party by a Litigation Defendant on account of a Third Party Claim, (and
not to the extent such Third Party Claim is based on a judgment or settlement
obtained by non-releasing parties against such Litigation Defendant). To
facilitate the orderly and expeditious resolution of all Assigned Litigation
Claims and related Third Party Claims and the orderly and expeditious
distribution of the proceeds of Assigned Litigation Claims in accordance with
the provisions of Section 5.9(f) hereof, the Confirmation Order shall require
each Litigation Defendant against which JCC has asserted an Assigned Litigation
Claim to assert, on or before the earlier of (x) the 170th day after the
commencement of such action by JCC, and (y) the entry of a Final Order
adjudicating all claims asserted in such action, and maintain exclusively in
such action all Third Party Claims arising in whole or in part from the same
transactions, occurrences, or facts on which any such Assigned Litigation Claim
is based in whole or in part, and each Litigation Defendant shall be forever
barred from asserting in any other forum or action any Third Party Claim not
asserted in accordance with the provisions of this sentence.
(f) Any proceeds recovered by JCC on account of any and all Assigned
Litigation Claims shall be held in escrow in an interest-bearing account shall
be applied and/or distributed only in the manner and pursuant to the terms set
forth below:
(i) First, to the payment of all accrued and unpaid
Litigation Costs and to the extent JCC has paid, without
reimbursement, any Litigation Costs, to JCC in the amount of
such unreimbursed Litigation Costs.
(ii) Second, as a reserve for payment of future
Litigation Costs in an aggregate amount no less than $2
million or such lesser amount, if any, as jointly determined
by (i) JCC and (ii) HET in its sole discretion; provided,
however, that if (x) JCC has, by written notice to HET (the
"Completion Notice"), irrevocably determined that it will
not assert or maintain any further Assigned Litigation
Claims, and (y) as of the thirtieth (30th) day after HET's
receipt of the Completion Notice, all previously asserted
Assigned Litigation Claims and Third Party Claims have been
conclusively resolved by Final Order or settlement pursuant
to Section 5.9(c) hereof, or in the case of any Assigned
Litigation Claims, have been dismissed, then on or as soon
as practicable after the thirtieth (30th) day after HET's
receipt of the Completion Notice, any remaining funds in the
reserve established pursuant to this Clause (ii) shall be
distributed in accordance with the provisions of Clauses
(iii) through (ix) of this Section 5.9(f).
(iii) Third, to the extent any Released Party has
incurred any liability based on any Third Party Claim
asserted by any Litigation Defendant that has not been
satisfied by a corresponding reduction in any recovery
obtained by JCC against such Litigation Defendant as
provided in Section 5.9(e) hereof, then any
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remaining distributable proceeds of any Assigned Litigation
Claims shall be distributed pro rata to each such Released Party
for application to such liability.
(iv) Fourth, in the event (A) there are any pending
Third Party Claims that have not been conclusively resolved
by Final Order or settlement pursuant to Section 5.9(c)
hereof, or (B) any Assigned Litigation Claim has been
pending for less than six months, then any remaining
distributable proceeds of any Assigned Litigation Claims
shall be held in escrow as a reserve for satisfying any
liability incurred by any Released Party in respect of any
Third Party Claim.
After all amounts in Clauses (i) through (iv) have been paid or fully reserved
for, and if (A) there are no pending Third Party Claims that have not been
conclusively resolved by Final Order or settlement pursuant to Section 5.9(c)
hereof, and (B) no Assigned Litigation Claim has been pending for less than six
months, then any remaining proceeds of any Assigned Bondholder Litigation Claims
shall be distributed in their entirety to:
(v) The Releasing Bondholders pro rata (based on the
ratio of the aggregate principal amount of Old Bonds
beneficially owned by such Releasing Bondholder to the
aggregate principal amount of Old Bonds beneficially owned
by all of the Releasing Bondholders).
After all amounts in Clauses (i) through (iv) have been paid or fully reserved
for, and if (A) there are no pending Third Party Claims that have not been
conclusively resolved by Final Order or settlement pursuant to Section 5.9(c)
hereof, and (B) no Assigned Litigation Claim has been pending for less than six
months, then any remaining distributable proceeds of Assigned Debtor Litigation
Claims shall be distributed pursuant to Clauses (vi) through (ix) below;
provided, however, that if the Bankruptcy Court does not enter a Valuation Order
on or before the Effective Date, all such remaining proceeds of Assigned Debtor
Litigation Claims shall be retained in their entirety by JCC free and clear of
all Claims and subject to JCC's exclusive control.
(vi) First, to the holders of Allowed Class A4 Claims,
their respective Pro Rata Interests in any remaining
distributable proceeds of Assigned Debtor Litigation Claims
up to an amount equal to the difference (the "Bondholder
Deficiency Amount") between (A) the aggregate amount of
Allowed Class A4 Claims (which shall be deemed to be $435
million plus accrued interest thereon, unless the Bankruptcy
Court otherwise orders) and (B) the sum of (I) $187.5
million, and (II) the estimated value of the Class A New
Common Stock to be distributed to the holders of Allowed
Class A4 Claims.
(vii) Second, to Harrah's Investor, any remaining
distributable funds up to the sum of (A) the aggregate
amount of the Allowed Claims in Class A7, plus (B) the
aggregate amount of all cure payments made as provided in
Section 8.1(e) of the Plan, plus (C) the $2,265,000 to be
distributed to the applicable holders of Allowed Class A6
Claims pursuant to Section 4.6 of the Plan.
(viii) Third, to the holders of Allowed Class A8
Claims, their respective Pro Rata Interests in any remaining
distributable proceeds of Assigned Debtor Litigation Claims
up to the aggregate amount necessary to pay all such Allowed
Claims in full (without any post-petition interest thereon
unless the Bankruptcy Court otherwise orders); provided,
however, that the Bankruptcy Court may allocate the funds
distributable under this Clause (viii) to the holders
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of Allowed Class A8 Claims in any other manner which the
Bankruptcy Court determines is required under the Bankruptcy
Code.
(ix) Fourth, to the holders of Allowed Claims in
Classes A4 and A8, and Harrah's Investor, their respective
pro rata interests in any remaining distributable proceeds
of Assigned Debtor Litigation Claims (based on the ratio of
their respective Allowed Claims (or in the case of Harrah's
Investor, the aggregate amount of Allowed Claims in Class A7
plus the aggregate amount of cure payments made as provided
in Section 8.1(e) of the Plan, plus the $2,265,000 to be
distributed to the applicable holders of Allowed Class A6
Claims pursuant to Section 4.6 of the Plan) to the aggregate
amount of the Allowed Claims in Classes A4, A7 and A8 plus
the aggregate amount of cure payments made as provided in
Section 8.1(e) of the Plan, plus the $2,265,000 to be
distributed to the applicable holders of Allowed Class A6
Claims pursuant to Section 4.6 of the Plan).
(g) The interests in the proceeds of Assigned Litigation Claims granted
pursuant to the Plan shall not be transferable except in accordance with the
laws of descent and distribution or by operation of law.
5.10. Approval of Other Settlement Agreements. Except to the extent the
Bankruptcy Court has entered a separate order providing for such approval, the
Confirmation Order shall constitute an order (a) approving as a compromise and
settlement pursuant to Section 1123(b)(3)(A) of the Bankruptcy Code, the
Broadmoor Settlement Agreement, the Broadmoor Release, the Centex-Landis
Settlement Agreement, the Centex-Landis Release, the First American Settlement
Agreement, the NOLDC Shareholders/HET Settlement Agreement, the NOLDC/Grand
Palais Settlement Agreement, the GP Representative/HET Settlement Agreements,
the FNBC Settlement Agreement and all other settlement agreements entered into
or to be entered into by any Debtor and any other Person as contemplated by the
Plan and all other agreements, instruments or documents relating to any of the
foregoing to which any Debtor is a party and (b) authorizing the Debtors'
execution and delivery of the Broadmoor Settlement Agreement, the Broadmoor
Release, the Centex-Landis Settlement Agreement, the Centex-Landis Release, the
First American Settlement Agreement, the NOLDC Shareholders/HET Settlement
Agreement, the NOLDC/Grand Palais Settlement Agreement, the GP
Representative/HET Settlement Agreements, the FNBC Settlement Agreement and all
other settlement agreements entered into or to be entered into by any Debtor or
any other Person as contemplated by the Plan and all related agreements,
instruments or documents to which any Debtor is a party.
ARTICLE VI.
MEANS FOR IMPLEMENTATION
AND EXECUTION OF THE PLAN
A. General Implementation Matters
6.1. General Corporate Matters. Except as provided in Section 12.12 hereof,
on or before the Effective Date, each New Entity shall take such action as is
necessary under the laws of the State of Delaware (in the case of JCC Holding),
the State of Louisiana (in the case of JCC, JCC Intermediary (if formed), CP
Development, FP Development and JCC Development) and any other applicable law to
effect the terms and provisions of the Plan. Among other actions, on or before
the Effective Date, each New Entity shall (i) file its applicable Organizational
Documents with the Secretary of State of Delaware (in the case of JCC Holding)
or the State of Louisiana (in the cases of the other New Entities) in accordance
with the applicable state law, and (ii) in the cases of JCC, JCC Intermediary,
CP Development, FP Development and JCC Development
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enter into the applicable Operating Agreements. The JCC Holding Certificate of
Incorporation shall comply with the requirements of Section 1123(a)(6) of the
Bankruptcy Code.
6.2. Effective Date Transactions.
(a) Membership Interests. On or before the Effective Date, (i) if JCC
Intermediary is formed, JCC Intermediary shall receive 100% of the membership
interests in JCC, JCC Development, CP Development and FP Development, or (ii) if
JCC Intermediary is not formed, JCC Holding shall receive 100% of the membership
interests in JCC, JCC Development, CP Development and FP Development. Such
membership interests shall have rights with respect to distributions,
liquidation, voting and other matters as are provided for by applicable
nonbankruptcy law and in the applicable Organizational Documents and Operating
Agreements.
(b) JCC Intermediary Membership Interest(s). If JCC Intermediary is formed,
on or before the Effective Date, JCC Holding shall receive 100% of the
membership interest(s) in JCC Intermediary. Such membership interest(s) shall
have rights with respect to distributions, liquidation, voting and other matters
as are provided for by applicable nonbankruptcy law and in the JCC Intermediary
Organizational Documents and JCC Intermediary Operating Agreement.
(c) New Bond Documents. On the Effective Date, (i) JCC and the New
Indenture Trustee shall enter into the New Indenture and shall execute and
deliver all instruments, agreements, legal opinions and other operative
documents contemplated by the New Indenture, and (ii) JCC shall execute and
deliver all other New Bond Documents.
(d) Distribution to Creditors. On, or as soon as practicable after, the
Effective Date but in no event after the tenth (10th) Business Day after the
Effective Date (or in the case of holders of Allowed Class C5 Claims, on the
Initial Class C5 Distribution Date), or as otherwise provided in the Plan, JCC
and, in the case of the New Common Stock, JCC Holding will issue and deliver to
the Disbursing Agents for distribution to the applicable holders of Allowed
Claims in accordance with the Plan (i) the New Bonds, New Contingent Bonds and
Convertible Junior Subordinated Debentures, (ii) cash in the amount determined
pursuant to the provisions of Article IV, and (iii) shares of Class A and Class
B New Common Stock in the respective amounts determined pursuant to the
provisions of Article IV.
(e) Purchase of New Common Stock by Harrah's Investor. On the Effective
Date, Harrah's Investor shall pay to JCC Holding, as an equity contribution, an
amount equal to the difference between $75 million and the principal amount of
DIP Indebtedness then outstanding, which shall be converted to equity and
contributed to JCC Holding on the Effective Date (the "Harrah's New Equity
Investment"). In consideration of, among other things, the Harrah's New Equity
Investment and the DIP Lender's consent to the conversion to equity and
contribution of the principal amount of the DIP Indebtedness outstanding on the
Effective Date, on the Effective Date JCC Holding shall sell to Harrah's
Investor 4,990,000 shares of New Common Stock, a portion of which shall be
issued by JCC Holding to certain other Persons in accordance with the provisions
of Section 6.2(f) hereof. All shares of New Common Stock purchased by Harrah's
Investor and issued by JCC Holding to Harrah's Investor pursuant to this Section
or to the Disbursing Agent for the benefit of Harrah's Investor pursuant to
Section 6.2(f) hereof shall be shares of Class B New Common Stock, and all
shares purchased by Harrah's Investor and issued by JCC Holding directly to the
Disbursing Agent for the benefit of the Releasing Bondholders or the Grand
Palais Releasing Bondholders pursuant to Section 6.2(f) shall be shares of Class
A New Common Stock. On the Effective Date, all proceeds from the Harrah's New
Equity Investment shall be contributed as an equity contribution by JCC Holding
(i) if JCC Intermediary has been formed, to JCC Intermediary, which, in turn,
shall contribute such amounts as an equity contribution to JCC, or (ii) if JCC
Intermediary has not been formed, to JCC.
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(f) Transfer of New Common Stock to Certain Persons in Settlement of
Claims.
(i) NOLDC Shareholders and Grand Palais. On the later
of the Effective Date and the date on which the NOLDC
Shareholders/HET Settlement Agreement is executed and
delivered by all of the parties thereto and is approved by
the bankruptcy court in the Chapter 11 case of NOLDC either
pursuant to Section 1123(b)(3)(A) of the Bankruptcy Code as
part of the NOLDC Plan or pursuant to Bankruptcy Rule 9019
by separate Final Order, each of the nine NOLDC Shareholders
shall have an option, on the terms set forth in the NOLDC
Shareholders/HET Settlement Agreement, to purchase .33% of
the shares of New Common Stock (for an aggregate of up to 3%
of the shares of New Common Stock), and FNBC shall have the
option to purchase 1.5% of the shares of New Common Stock,
which shares are to be initially distributed to Harrah's
Investor pursuant to Section 6.2(e) hereof. On the later of
the Effective Date and the date on which the GP
Representative/HET Settlement Agreements are executed and
delivered by all of the parties thereto, JCC Holding shall,
in accordance with the provisions of the GP
Representative/HET Settlement Agreements, issue directly to
the Disbursing Agent on behalf of the Grand Palais Releasing
Bondholders a number of shares of Class A New Common Stock
to be specified in the GP Representative/HET Settlement
Agreements (the "Grand Palais Settlement Consideration"),
which shares would otherwise be distributed to Harrah's
Investor pursuant to Section 6.2(e) hereof. In no event
shall the aggregate number of shares of New Common Stock
distributed to the NOLDC Shareholders, FNBC and Grand Palais
Releasing Bondholders pursuant to this Section exceed
800,000 shares.
(ii) Releasing Bondholders. On the Effective Date, JCC
Holding shall issue directly to the Disbursing Agent on
behalf of the Releasing Bondholders and, if applicable,
Harrah's Investor, 1,500,000 shares of Class A New Common
Stock (or Class B New Common Stock with respect to any
shares distributed to Harrah's Investor) (such shares,
collectively, the "Release Pool"). The Release Pool shall
include 200,000 shares of New Common Stock to which Harrah's
Investor would otherwise be entitled pursuant to the second
sentence of Section 6.2(e). The remaining 1,300,000 shares
of New Common Stock in the Release Pool shall be issued by
JCC Holding in consideration of, among other things, (i) the
execution and delivery of the HET Loan Guarantee and the New
Completion Guarantees by HET and HOCI and the provision of
the Surety Bond, (ii) DIP Lender's consent to the conversion
to equity and contribution of the principal amount of the
DIP Indebtedness outstanding on the Effective Date as part
of the Harrah's New Equity Investment, (iii) the Harrah's
New Equity Investment, (iv) the waiver by Persons in the HET
Group, the NOLDC Group and the Grand Palais Group of any
right to distributions as holders of certain Class A7 and/or
Class C5 Claims, (v) certain pre-development and development
services by HET and its Affiliates performed prior to the
Effective Date, (vi) the execution and delivery by the City
and the RDC of the agreements referenced in Section 6.2(o)
hereof and the City/RDC Release, (vii) the execution and
delivery by the LGCB and/or the State of the agreements
referenced in Section 6.2(n) hereof and the State/LGCB
Release and (viii) other good and valuable consideration
from the various beneficiaries of the releases provided by
the Releasing Bondholders pursuant to Section 5.2 hereof,
without which this Plan could not be confirmed and
consummated. The 1,500,000 shares of New
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Common Stock in the Release Pool shall be distributed in
accordance with the provisions of Sections 4.4(b) and 5.2
hereof.
(g) New Completion Guarantees; Amended and Restated Construction Lien
Indemnity Obligation Agreement; Minimum Payment Guaranty. On the Effective Date,
HET, HOCI (in the case of clauses (i) through (v)) and JCC (in the case of
clauses (iii) through (v)) shall execute and deliver (i) the HET Loan Guarantee,
(ii) the New Completion Guarantees, (iii) the Amended and Restated Construction
Lien Indemnity Obligation Agreement, (iv) the Amended and Restated Completion
Loan Documents, and (v) a Minimum Payment Guaranty for the COC Fiscal Year
ending March 31, 2000. On the Effective Date, the Old Completion Guarantees
shall be terminated and canceled to the extent any of such guarantees has not
been previously terminated and canceled. On the Effective Date, a surety bond
(the "Surety Bond") shall be obtained to assure completion of the construction
of the Casino. As consideration for the HET Loan Guarantee, HET will be paid an
annual credit support fee based on the average aggregate principal amount of
outstanding indebtedness guaranteed by HET pursuant thereto as set forth in
Exhibit A hereto, and JCC Holding shall issue to HET or its designee the HET
Warrant. Pursuant to the HET/JCC Agreement, and subject to the non-renewal and
termination provisions thereof, as consideration for providing a Minimum Payment
Guaranty, HET and HOCI, among other things, will be paid an annual guarantee fee
of $6 million for the COC Fiscal Years ending March 31, 2000 and 2001 and $5
million for the COC Fiscal Years ending March 31, 2002, 2003 and 2004, all
payable quarterly; provided, however, that HET and HOCI will be paid a pro rata
fee based on an annual fee of $6 million for the COC Fiscal Year ending March
31, 2000, if it is a partial COC Fiscal Year.
(h) Bank/Underwriter Financing. On or before the Effective Date, JCC and
the applicable Persons in the Bank/Underwriter Group shall execute and deliver
the A Term Loan Documents, the B Term Loan Documents, the Working Capital Loan
Documents and the Convertible Junior Subordinated Debenture Documents, pursuant
to which JCC will obtain the A Term Loan, the B Term Loan and the Working
Capital Credit Facility and issue the Convertible Junior Subordinated
Debentures.
(i) HET Affiliate Financing and Development Services Agreement. On or
before the Effective Date, JCC and HET (or an Affiliate of HET) shall execute
and deliver the Junior Subordinated Loan Documents pursuant to which JCC shall
obtain the Junior Subordinated Credit Facility. On or before the Effective Date,
the Harrah's Investor and JCC shall execute and deliver the Development Services
Agreement.
(j) Releases. On the Effective Date, each of the City, RDC, Centex-Landis,
Broadmoor, the Debtors, JCC and the applicable Persons in the HET Group, the
NOLDC Group and the Grand Palais Group shall execute and deliver the City/RDC
Release, the Centex-Landis Release or the Broadmoor Release, as the case may be.
On or before the Effective Date, (i) the NOLDC Shareholders, HET, the Debtors,
JCC and the other parties thereto shall execute and deliver the NOLDC
Shareholder/HET Settlement Agreement, (ii) Grand Palais, HET, the Debtors, JCC
and the other parties thereto shall execute and deliver the applicable GP
Representative/HET Settlement Agreements, and (iii) Grand Palais, NOLDC, the
NOLDC Shareholders and the other parties thereto shall execute and deliver the
NOLDC/Grand Palais Settlement Agreement. On or before the Effective Date, the
Debtors, the Underwriters, the Participating Banks, FNBC (in all capacities) and
the other parties thereto, as the case may be, shall execute and deliver the
Bank/Underwriter Release.
(k) Cancellation of Old Indenture, Old Bond Documents and Existing Lenders'
Title Insurance Policy.
(i) On the Effective Date, except as otherwise provided
in this Section or in Sections 6.9 and 6.10 of the Plan, (A)
the Old Indenture shall be terminated and canceled, (B) the
other Old Bond Documents, and all Liens granted under the
Old Bond Documents, shall be terminated and canceled, and
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(C) all collateral pledged or otherwise granted as security
pursuant to the Old Bond Documents shall be released by the
Old Indenture Trustee or the Old Indenture Predecessor
Collateral Agent, as applicable, and shall be repledged to
secure the obligations secured by the Minimum Payment
Guarantor Lien and the A Term Loan, B Term Loan, the Working
Capital Facility, the New Bonds and the New Contingent Bonds
pursuant to the Construction Loan Documents, the Working
Capital Loan Documents and the New Bond Documents, as
applicable; provided, however, that, except for the
termination of the Indenture Trustee Charging Lien, nothing
in this Plan shall terminate or impair the rights, if any,
of FNBC under the Old Bond Documents against any Persons
other than the Debtors or the New Entities. The Old
Indenture Predecessor Trustee, the Old Indenture Trustee
Collateral Agent, and any other holder of any Liens under
the Old Bond Documents and/or the Old Bank Credit Documents
shall execute and deliver all termination statements,
mortgage releases and other instruments or documents
reasonably requested by JCC to effectuate or evidence the
release of any such Liens.
(ii) On the Effective Date, all of FNBC's claims or
other rights to indemnity and/or reimbursement under the Old
Indenture and the other Old Bond Documents and all Liens
securing same (including the Indenture Trustee Charging
Lien) shall be canceled and extinguished except as follows:
On the Effective Date, JCC (A) shall assume on an unsecured
basis any obligation of HJC under the Old Bond Documents to
indemnify FNBC for attorneys' fees or other costs of defense
incurred in connection with any claim asserted by any Person
against FNBC and (B) shall assume as an in rem obligation
limited in recourse solely to the FNBC Cash Collateral any
other indemnification obligations of HJC under the Old Bond
Documents. As security for the assumed indemnification
obligations of JCC set forth in the immediately preceding
sentence and in Section 6.2(l)(ii) hereof, FNBC shall be
authorized to retain $100,000 plus any interest accruing
thereon from and after the Effective Date (such amount and
accrued interest, collectively, the "FNBC Cash Collateral")
until the later of (x) the first anniversary of the
Effective Date or (y) the date of resolution by final
unappealable judgment of any litigation filed against FNBC
within one year of the Effective Date to which FNBC is
entitled to indemnity under the Old Bank Credit Documents
and/or Old Bond Documents, at which time the then remaining
balance of the FNBC Cash Collateral shall be released to
JCC.
(iii) If, pursuant to the First American Settlement
Agreement, First American Title Insurance Company issues one
or more new lender's title insurance policies satisfactory
to the Persons in the Bank/Underwriter Group which are
parties to the A Term Loan Documents, B Term Loan Documents
and/or Working Capital Loan Documents, then the Existing
Lender's Title Insurance Policy shall be deemed terminated
as of the Effective Date, and First American Title Insurance
Company shall not have any further liability thereunder.
(l) Cancellation of Old Bank Credit Documents.
(i) On the Effective Date, except as otherwise provided
in this Section, the Old Bank Credit Documents, and all
Liens granted thereunder, shall
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be terminated and canceled to the extent the foregoing have
not been previously terminated and canceled, and all
collateral pledged or otherwise granted as security pursuant
to the Old Bond Documents or the Old Bank Credit Documents
shall be released by the Banks and, in the case of any
collateral held by any Bank or the Old Bank Collateral
Agent, promptly returned to JCC; provided, however, that to
the extent provided in Section 4.3 of the Plan, the
Administrative Agent and the Old Bank Collateral Agent may
retain, for application to any Allowed Secured Claim of any
Bank or Old Bank Collateral Agent or as security for any
Disputed Secured Claims of any Bank or Old Bank Collateral
Agent, a portion of the Withheld Funds as specified in
Section 4.3 hereof; provided, further, that nothing in the
Plan shall terminate or impair the rights, if any, of FNBC
under the Old Bank Credit Documents against any Persons
other than the Debtors or the New Entities.
(ii) On the Effective Date, all of FNBC's claims or
other rights to indemnity and/or reimbursement under the Old
Bank Credit Documents and all Liens securing same shall be
canceled and extinguished except as follows: On the
Effective Date, JCC (A) shall assume on an unsecured basis
any obligation of HJC under the Old Bank Credit Documents to
indemnify FNBC for any attorneys' fees or other costs of
defense incurred in connection with any claim asserted by
any Person against FNBC, and (B) shall assume as an in rem
obligation limited in recourse solely to the FNBC Cash
Collateral any other indemnification obligations of HJC
under the Old Bank Credit Documents. As set forth in Section
6.2(k)(ii) hereof, the FNBC Cash Collateral shall secure,
among other things, the assumed indemnification obligations
of JCC set forth in this Section 6.2(l)(ii).
(m) Cancellation of Equity Interests. On the Effective Date, all Equity
Interests in each Debtor shall be canceled.
(n) Agreements with the State Group. On the Effective Date, HJC shall
execute the Amended and Renegotiated Casino Operating Contract, and shall
thereupon assign the Amended and Renegotiated Casino Operating Contract to JCC,
which assignment shall take place pursuant to and in accordance with applicable
State law and the agreement of the parties thereto. On the Effective Date, upon
the assignment of the Amended and Renegotiated Casino Operating Contract from
HJC to JCC, JCC shall undertake the obligations of HJC thereunder, and shall
execute the State/LGCB Release and all other agreements, instruments and
documents necessary or appropriate to evidence or consummate the transactions
contemplated therein.
(o) Agreements with City and RDC. Provided that the City Council shall have
enacted the ordinance(s) approving the Lease Documentation (as defined in the
City Agreement), on the Effective Date, JCC, the City and RDC shall enter into
the Amended and Restated Canal Street Casino Lease Agreement, Amended and
Restated General Development Agreement and all other agreements, instruments and
documents necessary or appropriate to evidence or consummate the transactions
contemplated therein. Unless earlier terminated in accordance with the
provisions thereof, the City Agreement shall remain in full force and effect
through the occurrence of the Effective Date.
(p) Agreements with HNOMC. On the Effective Date, JCC and HNOMC shall enter
into the Amended and Restated Management Agreement and all other agreements,
instruments and documents necessary or appropriate to evidence or consummate the
transactions contemplated therein.
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(q) Registration and Listing of Class A New Common Stock. The JCC Entities
shall use their best efforts to cause the Class A New Common Stock to be listed
on a national securities exchange or quoted on NASDAQ upon the Effective Date.
JCC Holding shall also use its best efforts to be, on or prior to the Effective
Date, a reporting company under the Securities Exchange Act of 1934, as amended
(the "34 Act"), with respect to the Class A New Common Stock. JCC Holding shall
file a registration statement under the 34 Act (the "Class A 34 Act Registration
Statement") no later than promptly after the date of entry of the Final Order
approving the Disclosure Statement. If the Class A 34 Act Registration Statement
is not effective by the later of (i) 60 days after the filing of such
registration statement with the SEC (provided, however, that this clause (i) is
not applicable if JCC Holding did not file such registration statement prior to
the date which is five days after the date of entry of the Final Order approving
the Disclosure Statement), (ii) 60 days after the date of entry of the Final
Order approving the Disclosure Statement, (iii) 30 days after receipt of any SEC
comments on such registration statement, and (iv) the Effective Date, then the
JCC Entities shall pay to the Bondholders an amount equal to $.05 per week for
each $1,000 of Class A New Common Stock (based on the greater of (x) the market
value of such Class A New Common Stock at such time and (y) $15.00 per share) to
be registered, which amount shall increase by $.05 every 45 days to a maximum of
$.30 per week.
In addition, to the extent that it is reasonably determined that the
registration of public resales by any Bondholder of any Class A Common Stock
received by such Bondholder under the Plan is required by law, JCC Holding will
file a registration statement (the "Class A 33 Act Registration Statement") with
respect to such resales promptly after the Effective Date. If such Class A 33
Act Registration Statement is not effective within 120 days after it is filed,
then the JCC Entities shall pay to the Bondholders an amount equal to $.05 per
week for each $1,000 of Class A New Common Stock (based on the greater of (x)
the market value of such Class A New Common Stock at such time and (y) $15.00
per share) to be registered, which amount shall increase by $.05 every 45 days
to a maximum of $.30 per week.
(r) Registration of Class B New Common Stock. On the Effective Date, JCC
Holding and Harrah's Investor shall enter into a Registration Rights Agreement
(the "Class B Registration Rights Agreement") containing such terms and
conditions as are customary under the circumstances, including the following:
(i) upon the request of Harrah's Investor, which
request may not be made prior to the second anniversary of
the opening of the Casino, JCC Holding shall promptly file
with the Securities and Exchange Commission and cause to
become effective as soon as reasonably practicable
thereafter a registration statement on the appropriate form
(the "Class B Registration Statement") relating to all
shares of Class B New Common Stock held by Harrah's
Investor, including any shares of Class B New Common Stock
obtained by Harrah's Investor pursuant to the exercise of
the HET Warrant; and
(ii) JCC Holding shall cause such Class B Registration
Statement to be continually effective, subject to customary
exceptions, through the third anniversary of the date on
which the Class B Registration Statement first becomes
effective.
(s) Registration of New Bonds. To the extent that it is reasonably
determined that the registration of public resales by any Bondholder of any New
Bonds or New Contingent Bonds received by such Bondholder under the Plan is
required by law, JCC will file a registration statement (the "New Bonds 33 Act
Registration Statement") with respect to such resales promptly after the
Effective Date. If such New Bonds 33 Act Registration Statement is not effective
within 120 days after it is filed, then the JCC Entities shall pay to the
Bondholders an amount equal to $.05 per week for each $1,000 of securities which
amount shall increase by $.05 every 45 days to a maximum of $.30 per week.
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(t) Plan Documents. All Plan Documents shall be in form and substance
satisfactory to the Bondholders Committee in its sole discretion and to HET (in
its sole discretion) on behalf of the Proponents, and if a party thereto, HJC
(which consent shall not be unreasonably withheld or delayed). The forms of the
respective Organizational Documents and any shareholders' agreements relating to
any New Entity shall be filed with, and approved by, the Bankruptcy Court on or
before the Effective Date. In addition, the operative Plan Documents specified
in Sections 1.2, 1.11 - 1.12, 1.23, 1.79, 1.93, 1.132 - 1.133, 1.147 - 1.148,
1.152 - 1.153, 1.155, 1.164, 1.166, 1.170, 1.173 and 1.256 hereof shall be filed
with the Bankruptcy Court on or before the Effective Date.
(u) Continued DIP Financing. Through the later of October 31, 1998 and such
later date to which the DIP Lender may consent, and subject to any necessary
additional approval by the Bankruptcy Court, HJC shall request, and the DIP
Lender shall provide to HJC debtor-in-possession financing in an aggregate
principal amount, together with all other outstanding DIP Indebtedness, of up to
$60 million (plus any additional amounts which the DIP Lender elects to advance
in its sole discretion) on terms and conditions set forth in the Final Order (1)
Authorizing Debtor-in-Possession To Incur Post-Petition Secured Indebtedness,
(2) Granting Security Interests And Priority Pursuant To 11 U.S.C. Section 364,
And (3) Modifying The Automatic Stay entered by the Bankruptcy Court on or about
August 26, 1998. Such additional debtor-in-possession financing shall be used to
fund expenditures necessary to recommence construction of the Casino and any
other amounts necessary for the completion of the Chapter 11 Case of HJC and the
consummation of the Plan.
(v) Dismissal of Litigation. Upon the earlier of (i) the date provided for
in a release executed pursuant to this Plan, and (ii) 180 days following the
Confirmation Date, the Debtors shall voluntarily dismiss with prejudice all
litigation (including any adversary proceedings) as to, and to the extent of,
any Claims that are released pursuant to this Plan.
B. New Entities and Their Governance
6.3. General. From and after the Effective Date, the management, control
and operation of each New Entity shall become the general responsibility of its
Board of Directors or managing member, as applicable, pursuant to the
Organizational Documents and Operating Agreement, if any, applicable to such
entity.
6.4. Board of Directors and Initial Members of New Entities. Subject to the
provisions of Section 6.6 hereof, the initial Board of Directors of JCC Holding
shall consist of six members, three of whom shall be elected by the Bondholders
Committee (the "Bondholders Director Nominees") and the remaining three of whom
shall be elected by the holders of a majority of the outstanding shares of Class
B New Common Stock (the "Harrah's Director Nominees" and together with the
Bondholders Director Nominees, collectively the "Director Nominees"), and their
names shall be disclosed at or prior to the Confirmation Hearing; provided,
however, that if any Director Nominee has not been found suitable by LGCB (or
deemed exempt or waived from such suitability requirements) on or before the
Effective Date, the number of Director Nominees which each of the Bondholders
Committee and such majority holders of Class B New Common Stock is entitled to
elect shall be so reduced (until all six Director Nominees have been found
suitable by LGCB or deemed exempt or waived from such suitability requirements)
so that each of the Bondholders Committee and such majority holders of Class B
New Common Stock has the equivalent number of Director Nominees appointed to the
Board of Directors of JCC Holding. Subject to the provisions of Section 6.6
hereof, (a) the initial member of JCC, CP Development, FP Development and JCC
Development shall be (i) JCC Intermediary, if JCC Intermediary is formed, or
(ii) JCC Holding, if JCC Intermediary is not formed, and (b) the initial member
of JCC Intermediary (if formed) shall be JCC Holding.
6.5. Officers of New Entities. The initial officers of each New Entity
shall be selected by their respective Board of Directors or initial member, as
applicable, and to the extent such officers have been
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selected, their names shall be disclosed at or prior to the Confirmation
Hearing. The selection of officers of each New Entity after the Effective Date
shall be as provided in the Organizational Documents and Operating Agreement, if
any, applicable to such entity.
6.6. Suitability Determinations. Notwithstanding anything to the contrary
hereunder, any Person required by the Louisiana Economic Development and Gaming
Control Act, the rules and regulations of the LGCB (as said rules and
regulations may be amended from time to time), and the Amended and Renegotiated
Casino Operating Contract, to be found suitable by the LGCB must meet the
suitability requirements of the Louisiana Economic Development and Gaming
Control Act, the rules and regulations of the LGCB (as said rules and
regulations may be amended from time to time), and the Amended and Renegotiated
Casino Operating Contract.
6.7. Entity Action. As of the Effective Date, each New Entity shall be
deemed to have adopted the Organizational Documents and Operating Agreement, if
any, applicable to such entity. Except as specifically provided in the Plan, the
adoption of the Organizational Documents and Operating Agreement, if any,
applicable to each New Entity, the selection of the directors and/or officers,
as the case may be, of each New Entity, the distribution of cash, the issuance
and distribution of New Bonds, New Contingent Bonds, and Class A and Class B New
Common Stock and the adoption, execution and delivery of all contracts,
instruments, indentures, modifications and other agreements relating to any of
the foregoing, and other matters provided for under the Plan involving corporate
or other action to be taken or required of the applicable New Entity or Debtor
shall be deemed to have occurred and be effective as provided herein, and shall
be authorized and approved in all respects without any requirement of further
action by the respective stockholders, initial members, officers or directors of
the New Entities and Debtors. To the extent required by law, the Board of
Directors or managing member, as the case may be, of each New Entity shall take
such action as may be necessary from time to time to approve the issuance of any
New Bonds, New Contingent Bonds or Class A and Class B New Common Stock and such
other action, if any, as may be required to meet the requirements of the Plan or
any of the New Bonds, New Contingent Bonds or Class A and Class B New Common
Stock issued pursuant thereto. Any officer of any New Entity is authorized to
execute and deliver on behalf of such New Entity or any Debtor from and after
its dissolution any Plan Document or any other certificates, instruments or
documents relating thereto.
C. Distributions
6.8. Generally. All distributions required hereunder to holders of Allowed
Claims shall be made by a Disbursing Agent pursuant to a Disbursing Agreement,
provided that no Disbursing Agreement shall be required if any JCC Entity makes
such distributions or if the Old Indenture Successor Trustee makes such
distributions pursuant to Section 6.9 hereof. The Disbursing Agent may
designate, employ or contract with other Persons to assist in or perform the
distribution of the property to be distributed. The Disbursing Agent and such
other Persons shall serve without bond.
6.9. Services of Old Indenture Trustee. The Old Indenture Successor Trustee
(or its nominee, designee or affiliate) is designated a Disbursing Agent for
purposes of effecting distributions to the Bondholders pursuant to the Plan. Any
reference in this Plan to "Disbursing Agent" in respect of distributions to be
made to the Bondholders shall be deemed to refer to the Old Indenture Successor
Trustee or its nominee, designee or affiliate. All distributions to be made to
the Bondholders under the Plan will be made to the Old Indenture Successor
Trustee in accordance with the Old Indenture, applicable law and the Plan, and
the Old Indenture Successor Trustee shall, as soon as reasonably practicable, in
accordance with the Old Indenture, applicable law and the Plan, deliver the
distributions, free and clear of any Indenture Trustee Charging Lien, which Lien
shall be canceled and extinguished on the Effective Date.
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6.10. Distributions to be Made to Bondholders as of Distribution Record
Date. Only Bondholders of record as of the Distribution Record Date, or the
Release Pool Distribution Record Date as to distributions from the Release Pool,
shall be entitled to receive the distributions provided for in Article IV of the
Plan; provided, however, that any Bondholder which is a record holder but not
the beneficial owner of any Old Bond shall not be entitled to retain any
distributions made hereunder on account of such Old Bond, but instead shall
receive and hold in trust such distributions on behalf of such beneficial owner
and shall promptly cause such distributions to be remitted to the beneficial
owner. As of the close of business on the Distribution Record Date or the
Release Pool Distribution Record Date, as applicable, the transfer ledgers in
respect of the Old Bonds shall be closed for purposes of making the
distributions required to be made to the Bondholders pursuant to Article IV of
the Plan. Except as otherwise provided herein, the JCC Entities, the Old
Indenture Successor Trustee and their respective agents shall have no obligation
to recognize any transfer of the Old Bonds occurring after the close of business
on the Distribution Record Date or the Release Pool Distribution Record Date, as
applicable, for purposes of such distributions. Except as otherwise provided
herein, the JCC Entities, the Old Indenture Successor Trustee and their
respective agents shall recognize and, for purposes of making such distributions
under the Plan, will only deal with those Bondholders of record reflected on the
transfer ledgers maintained by the Registrar for the Old Bonds as of the close
of business on the Distribution Record Date or the Release Pool Distribution
Date, as applicable; provided that nothing contained herein shall be deemed to
prohibit or otherwise restrict the right of any such Bondholder to transfer the
Old Bonds at any time. As of the Effective Date, the Debtors and the JCC
Entities shall have no further obligations under the Old Indenture. The Old
Indenture shall continue in effect for the sole purpose of allowing the Old
Indenture Successor Trustee to make distributions on account of the Allowed
Claims of the Bondholders under the Plan, and upon completion of such
distributions, the Old Indenture shall terminate and have no further force or
effect; provided, however, that except for the termination of the Indenture
Trustee Charging Lien, such termination of the Old Indenture shall not terminate
or impair the rights, if any, of FNBC under the Old Indenture (i) against any
Persons other than the Debtors or the New Entities or (ii) against any of the
Debtors and the New Entities, but solely to the extent provided in Section
6.2(k) hereof and/or the FNBC Settlement Agreement. Any actions taken by the Old
Indenture Trustee that are not for the purpose authorized in the Plan shall be
null and void.
6.11. Cancellation and Surrender of Existing Securities and Agreements.
(a) On the Effective Date, the promissory notes, share certificates and
other instruments evidencing any Claim or Equity Interest shall be deemed
canceled without further act or action under any applicable agreement, law,
regulation, order, or rule, and the obligations of any Debtor under the
agreements, indentures and certificates of designations governing such Claims
and Equity Interests, as the case may be, shall be discharged.
(b) Each holder of a promissory note, share certificate or other instrument
evidencing a Claim or Equity Interest shall surrender such promissory note,
share certificate or instrument to JCC or, in the case of Old Notes, to the Old
Indenture Successor Trustee. No distribution of property hereunder shall be made
to or on behalf of any such holders unless and until such promissory note or
instrument is received by JCC or the Old Indenture Successor Trustee or the
unavailability of such note or instrument is established to the reasonable
satisfaction of JCC or the Old Indenture Successor Trustee. JCC or the Old
Indenture Successor Trustee may require any entity delivering an affidavit of
loss and indemnity to furnish a bond in form and substance (including, without
limitation, with respect to amount) reasonably satisfactory to JCC or the Old
Indenture Successor Trustee. Any holder that fails within one year after the
date of entry of the Confirmation Order (i) to surrender or cause to be
surrendered such promissory note or instrument, (ii) to execute and deliver an
affidavit of loss and indemnity reasonably satisfactory to JCC or the Old
Indenture Successor Trustee, and (iii) if requested, to furnish a bond
reasonably satisfactory to JCC or the Old Indenture Successor Trustee upon
request shall be deemed to have forfeited all rights, Claims, and interests and
shall not participate in any distribution hereunder.
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6.12. Distributions of Cash. Any payment of cash made by JCC pursuant to
the Plan shall be made by check drawn on a domestic bank, or at the option of
JCC, by wire transfer from a domestic bank; except that payment to foreign
holders of Allowed Claims may be in such funds and by such means (as determined
by JCC) as are customary or necessary in a particular foreign jurisdiction.
6.13. Timing of Distributions. Any payment or distribution required to be
made under the Plan on a day other than a Business Day shall be due on the next
succeeding Business Day.
6.14. Hart-Scott-Rodino Compliance. Any shares of Class A or Class B New
Common Stock to be distributed under the Plan to any Person required to file a
Pre-merger Notification and Report Form under the Hart-Scott-Rodino Antitrust
Improvement Act of 1976, as amended, shall not be distributed until the
notification and waiting periods applicable under such Act to such Person shall
have expired or been terminated.
6.15. Minimum Distributions; No Duplicative Distributions; No Interest. No
payment of cash less than ten dollars is required to be made by JCC to any
holder of a Claim unless a request therefor is made in writing to JCC.
Notwithstanding anything to the contrary in this Plan, to the extent more than
one Debtor is liable for any Allowed Claim (including, without limitation, any
Allowed WARN Act Claim), any distribution to which a holder of such Allowed
Claim is entitled from any Debtor under the Plan shall be reduced pro tanto by
any distribution received from any other Debtor on account of such Allowed
Claim, and the portion of the Allowed Claim to which the received distribution
relates shall be deemed satisfied and discharged. Except as otherwise expressly
provided herein, no holder of any Allowed Claim shall be entitled to any
post-petition interest on such Claim.
6.16. Fractional Distributions. Except as otherwise provided in this
Section, (i) no fractional shares of New Common Stock or cash in lieu thereof
shall be distributed, and (ii) no New Contingent Bonds shall be issued in any
nominal (face) amount that contains a fraction of a dollar.
(a) Section 4.4(b)(i) Distributions of New Common Stock. The amount of New
Common Stock distributed to each recordholder shall be determined by excluding
the fractional shares of New Common Stock distributable to each such
recordholder. The fractional portion of any distribution of New Common Stock to
any recordholder of Old Bonds pursuant to Section 4.4(b)(i) hereof shall be
determined based upon such recordholder's aggregate holding of Old Bonds on the
Distribution Record Date, without regard to the number or amount of
participants, respondents or beneficial owners for which such recordholder acts
as nominee. The fractional shares which, but for this Section 6.16, would be
distributed to each recordholder of Old Bonds under Section 4.4(b)(i) hereof
shall be cumulated, and one additional share of New Common Stock shall be
distributed as part of such distribution in descending order to each of the
recordholders whose respective distributions under Section 4.4(b)(i) hereof have
the highest fractional amounts until the aggregate amount of all fractional
shares of New Common Stock distributable under Section 4.4(b)(i) hereof
(exclusive of the fractional portion of such aggregate amount) has been
distributed to the applicable recordholders of Old Bonds. For purposes of this
section, the term "recordholder" means those Persons listed as holders of the
Old Bonds on the books and records of the Registrar for the Old Bonds as of the
close of business on the Distribution Record Date.
(b) Section 4.4(b)(v) Distributions of New Common Stock. Distributions of
New Common Stock to Releasing Bondholders pursuant to Section 4.4(b)(v) hereof
shall be made directly to or for the benefit of Releasing Bondholders
constituting beneficial owners of Old Bonds on the Release Pool Distribution
Record Date. In connection with the distribution of New Common Stock under
Section 4.4(b)(v) hereof, the fractional shares which, but for this Section
6.16, would be distributed to Releasing Bondholders under Section 4.4(b)(v)
hereof shall be cumulated, and one share of additional New Common Stock shall be
distributed as part of such distribution in descending order to each of the
Releasing Bondholders whose respective distributions under
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Section 4.4(b)(v) hereof have the highest fractional amounts until the aggregate
amount of fractional shares of New Common Stock distributable under Section
4.4(b)(v) hereof (exclusive of the fractional portion of such aggregate amount)
has been distributed to the applicable Releasing Bondholders.
(c) Section 4.4(b)(iii) Distributions of New Contingent Bonds. Unless
otherwise ordered by the Bankruptcy Court, the New Contingent Bonds issued
pursuant to Section 4.4(b)(iii) hereof shall bear a nominal (face) amount equal
to, subject to the third sentence of this Section 6.16(c), the maximum
contingent payment to which a holder of such New Contingent Bonds may be
entitled during any one-year period following the Effective Date. The Old
Indenture Successor Trustee shall distribute the New Contingent Bonds pro rata
to all recordholders of Old Bonds pursuant to Section 4.4(b)(iii) hereof based
upon such recordholder's aggregate holding of Old Bonds on the Distribution
Record Date, without regard to the number or amount of participants, respondents
or beneficial owners for which such recordholder acts as nominee. Unless
otherwise ordered by the Bankruptcy Court, the Old Indenture Successor Trustee
shall round up or down (in its sole discretion) all New Contingent Bonds issued
pursuant to Section 4.4(b)(iii) hereof, such that no New Contingent Bonds are
issued in any face amount that contains a fraction of a dollar. Recordholders of
Old Bonds shall be determined based upon such recordholder's aggregate holding
of Old Bonds on the Distribution Record Date, without regard to the number or
amount of participants, respondents or beneficial owners for which such
recordholder acts as nominee. For purposes of this section, the term
"recordholder" means those Persons listed as holders of the Old Bonds on the
books and records of the Registrar for the Old Bonds as of the close of business
on the Distribution Record Date.
6.17. Delivery of Distributions. Subject to Bankruptcy Rule 9010,
distributions to holders of Allowed Claims shall be made at the address of each
such holder as set forth on the Schedules filed by the applicable Debtor with
the Bankruptcy Court, unless superseded by the address as set forth on proofs of
claim filed by such holders or other writing notifying the applicable Debtor of
a change of address (or at the last known address of such a holder if no proof
of claim is filed or if the applicable Debtor has not been notified in writing
of a change of address). In the case of the Bondholders, distributions may be
made at the addresses of the registered Bondholders contained in the records of
the Registrar as of the Distribution Record Date or, with respect to the Release
Pool Distribution in the manner specified in the proof of ownership or other
document delivered by each Releasing Bondholder to the Balloting Agent. If any
distribution to a holder of an Allowed Claim is returned as undeliverable, no
further distributions to such holder shall be made, unless and until JCC or the
Disbursing Agent is notified of such holder's then current address, at which
time all missed distributions shall be made to such holder together with any
interest or dividends earned thereon. Amounts in respect of the undeliverable
distributions made through the Disbursing Agent shall be returned to the
Disbursing Agent making such distribution until such distributions are claimed.
All Claims for undeliverable distributions shall be made on or before the later
of the first anniversary of the Effective Date and the date ninety (90) days
after such Claim is Allowed. After such date, all unclaimed property held for
distribution to any holder of an Allowed Claim shall be revested in and returned
to JCC except for any unclaimed New Common Stock which shall be revested in and
returned to JCC Holding, and the Claim of any holder with respect to such
property shall be discharged and forever barred.
6.18. Fees and Expenses of Disbursing Agents. Except as otherwise ordered
by the Bankruptcy Court, the amount of any reasonable fees and expenses incurred
by a Disbursing Agent, including, but not limited to, the Old Indenture
Successor Trustee, on or after the Confirmation Date, and any compensation and
expense reimbursement claims (including reasonable fees and expenses of its
attorneys and other agents) made by such Disbursing Agent shall be repaid by JCC
in accordance with the applicable Disbursing Agreement or the Old Indenture, as
the case may be, without further order of the Bankruptcy Court; provided,
however, that the Bankruptcy Court will hear and determine any disputes in
respect of such fees and expenses. In addition, the amount of any reasonable
fees and expenses incurred by FNBC as Old Bank Collateral Agent, Old Indenture
Predecessor Trustee and/or Old Indenture Predecessor Collateral Agent on or
after the Confirmation Date to consummate the transactions contemplated by the
Plan shall be paid by JCC, without further order of
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the Bankruptcy Court; provided, however, that the Bankruptcy Court will
determine and hear any disputes in respect of such fees and expenses.
6.19. Time Bar to Cash Payments. Checks issued by JCC in respect of Allowed
Claims shall be null and void if not negotiated within ninety (90) days after
the date of issuance thereof. Any amounts paid to the Disbursing Agent in
respect of such a check shall be promptly returned to JCC by the Disbursing
Agent. Requests for reissuance of any check shall be made directly to JCC by the
holder of the Allowed Claim with respect to which such check originally was
issued. Any claim in respect of such a voided check shall be made on or before
the later of the first anniversary of the Effective Date and the date ninety
(90) days after such Claim is Allowed, and the failure timely to make any such
claim shall result in such claim being forever barred and discharged.
6.20. Transfer of Release Pool Distributions. Upon request of the Debtors
or the Bondholders Committee, the Bankruptcy Court may enter an order with or
without notice or hearing establishing a form (the "Release Pool Transfer Form")
and procedure whereby Releasing Bondholders who, on or after the Release Pool
Distribution Record Date but prior to the Distribution Record Date, sold,
assigned or otherwise transferred their rights under the Plan to receive
distributions in accordance with Section 4.4(b)(v) hereof to a third party (each
such third party, a "Release Pool Transferee") may designate a Release Pool
Transferee to receive directly such Releasing Bondholder's distribution of New
Common Stock from the Release Pool pursuant to Section 4.4(b)(v) hereof;
provided, however, that no person (including a Disbursing Agent, any of the
Proponents or any of the New Entities) shall have any liability to a Release
Pool Transferee in the event that a distribution of New Common Stock from the
Release Pool is for any reason whatsoever made to the Releasing Bondholder
instead of the Release Pool Transferee designated in such Release Pool Transfer
Form; provided, further, that any Release Pool Transfer Form shall contain an
acknowledgment by the Release Pool Transferee that it is the beneficial owner of
the Old Bonds to which such Release Pool Transfer Form relates as of the
Distribution Record Date.
D. Procedure for Resolving Disputed Claims
6.21. Objection Deadline. As soon as practicable, but in no event later
than ninety (90) days after the Effective Date, unless otherwise ordered by the
Bankruptcy Court, objections to Claims shall be filed with the Bankruptcy Court
and served upon the holders of each of the Claims to which objections are made.
6.22. Authority to Oppose Claims. On and after the Effective Date, except
for the Assigned Litigation Claims, the objecting to, disputing, defending
against, and otherwise opposing, and the making, asserting, filing, litigation,
settlement or withdrawal of all objections to, Claims shall be the exclusive
responsibility of JCC. The managing member of JCC shall have the power, without
notice to or approval of the Bankruptcy Court, in the exercise of its business
judgment to preserve, fail to preserve, settle, compromise or litigate any claim
or cause of action (except for any claims or causes of action released or to be
released pursuant to or in connection with this Plan and any Assigned Litigation
Claims) before any applicable or appropriate court, panel, agency or tribunal
(including, where appropriate, the Bankruptcy Court) that JCC may have against
any Person based on acts, omissions or events prior to the Effective Date.
6.23. No Distributions Pending Allowance. Notwithstanding any other
provision in the Plan, no payment or distribution shall be made with respect to
any Claim to the extent it is a Disputed Claim unless and until such Claim
becomes an Allowed Claim.
6.24. Determination by Bankruptcy Court. The amount of any Disputed Claim,
and the rights of the holder of such Claim, if any, to payment in respect
thereof shall be determined by the Bankruptcy Court, unless it shall have sooner
become an Allowed Claim.
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6.25. Treatment of Disputed Claims. Cash, shares of New Common Stock, New
Bonds and/or New Contingent Bonds, as applicable, shall be distributed by JCC or
JCC Holding (in the case of the New Common Stock) to a holder of a Disputed
Administrative Expense Claim or Disputed Claim when, and to the extent that,
such Disputed Administrative Expense Claim or Disputed Claim becomes an Allowed
Administrative Expense Claim or Allowed Claim pursuant to a Final Order. Such
distribution shall be made in accordance with the Plan to the holder of such
Claim based upon the amount in which such Disputed Administrative Expense Claim
or Disputed Claim becomes an Allowed Administrative Expense Claim or Allowed
Claim, as the case may be.
ARTICLE VII.
ACCEPTANCE OR REJECTION OF THE PLAN
7.1. Classes Entitled to Vote. Each holder of an Allowed Claim in a Class
of Claims against any Debtor which may be impaired under the Plan, including any
holder of an Allowed Claim in Classes A1, A2, A3(a), A3(b), A4, A5, A6, A7, B1,
B2, B3, B4, B5, C1, C2, C3, C4, C5 or C6 shall be entitled to vote separately to
accept or reject the Plan. Each holder of a Claim in a Class of Claims which is
unimpaired under the Plan shall be deemed to have accepted the Plan pursuant to
Section 1126(f) of the Bankruptcy Code. Each holder of a Claim in a Class of
Claims or an Equity Interest in a Class of Equity Interests which are not
receiving any distributions under the Plan shall be deemed to have rejected the
Plan pursuant to Section 1126(g) of the Bankruptcy Code.
7.2. Class Acceptance Requirement. An impaired Class of Claims shall have
accepted the Plan if (i) the holders (other than any holder designated under
Section 1126(e) of the Bankruptcy Code) of at least two-thirds in amount of the
Allowed Claims actually voting in such Class have voted to accept the Plan and
(ii) the holders (other than any holder designated under Section 1126(e) of the
Bankruptcy Code) of more than one-half in number of the Allowed Claims actually
voting in such Class have voted to accept the Plan. An impaired Class of Equity
Interests shall have accepted the Plan if the holders (other than any holder
designated under Section 1126(e) of the Bankruptcy Code) of at least two-thirds
in amount of the Allowed Equity Interests actually voting in such Class have
voted to accept the Plan. For purposes of calculating the number of Allowed
Claims in a class of Claims held by holders of Allowed Claims in such class that
have voted to accept or reject the Plan under Section 1126(c) of the Bankruptcy
Code, all Allowed Claims in such class held by one entity or any Affiliate shall
be aggregated and treated as one Allowed Claim in such class.
7.3. Cramdown. In the event that any impaired class or classes of Claims
shall not accept the Plan, the Proponents reserve the right to (a) request that
the Bankruptcy Court confirm the Plan in accordance with Section 1129(b) of the
Bankruptcy Code and/or (b) modify the Plan pursuant to the provisions of Section
12.4 of the Plan to provide treatment sufficient to assure that the Plan does
not discriminate unfairly, and is fair and equitable, with respect to the class
or classes not accepting the Plan, and, in particular, the treatment necessary
to meet the requirements of Sections 1129(a) and (b) of the Bankruptcy Code with
respect to the rejecting classes and any other classes affected by such
modifications. The Proponents acknowledge that the Plan, in the form of the
"Third Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy
Code, as Modified Through October 13, 1998" cannot be confirmed under the
cramdown requirements of Section 1129(b) of the Bankruptcy Code if Class A4 does
not accept the Plan.
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ARTICLE VIII.
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
8.1. Assumption or Rejection of Executory Contracts and Unexpired Leases.
(a) Assumption of Modified Contracts. On the Effective Date, JCC (as HJC's
successor) shall assume, or at JCC's option HJC shall assume and assign to JCC
(i) the Canal Street Casino Lease as amended and restated pursuant to, and enter
into, the Amended and Restated Canal Street Casino Lease Agreement, (ii) the
General Development Agreement as amended and restated pursuant to, and enter
into, the Amended and Restated General Development Agreement, (iii) the
Broadmoor Construction Agreement as modified in accordance with the Broadmoor
Settlement Agreement, (iv) the Management Agreement as amended and restated
pursuant to, and enter into, the Amended and Restated Management Agreement, (v)
the Architect Contract as modified, if necessary, on terms acceptable to the
parties thereto, (vi) the Completion Loan Documents as amended and restated
pursuant to, and enter into, the Amended and Restated Completion Loan Documents,
(vii) the Construction Lien Indemnity Obligation Agreement as amended and
restated pursuant to, and enter into, the Amended and Restated Construction Lien
Indemnity Obligation Agreement, (viii) the Ticket Purchase Agreement dated July
19, 1995, as amended pursuant to the Agreement to Amend and Assume Executory
Contract between HJC and The Audubon Institute and attached as Exhibit I to the
Original Plan and incorporated by reference herein, and (ix) the Centex-Landis
Construction Agreement as modified in accordance with the Centex-Landis
Settlement Agreement.
(b) Other Executory Contracts. All executory contracts and unexpired leases
that exist between any Debtor and any Person are hereby rejected, except for any
executory contract or unexpired lease (in certain instances, as modified) (i)
which is to be assumed by JCC, assigned to JCC, or revested in HJC pursuant to
Section 8.1(a), 8.1(c), 8.1(g) or 9.1(a) of the Plan, (ii) which has been
assumed or assumed and assigned (in certain instances, as modified) pursuant to
an order of the Bankruptcy Court entered prior to the Confirmation Date, (iii)
which has been entered into by HJC after the Commencement Date in the ordinary
course of business or pursuant to an order of the Bankruptcy Court, (iv) as to
which a motion for approval of the assumption or assumption and assignment of
such contract (in certain instances, as modified) has been filed prior to and is
pending on the Confirmation Date or (v) which (in certain instances, as
modified) is set forth in a schedule (acceptable to the Bondholders Committee
(in its sole discretion) and HET (in its sole discretion) on behalf of the
Proponents) filed prior to the conclusion of the Confirmation Hearing. Subject
to the occurrence of the Effective Date, the rejection of any executory contract
or unexpired lease pursuant to this Article VIII shall be effective upon the
earliest of (i) the Confirmation Date, (ii) the date on which the applicable
Debtor or JCC notifies the non-debtor party to such contract or lease of the
effectiveness of such rejection, and (iii) the date specified as the effective
date of rejection in any order of the Bankruptcy Court.
(c) Insurance Policies.
(i) Existing Owner's Title Insurance Policy. If the First American
Settlement Agreement becomes effective on or before the Effective Date
(including, without limitation, the issuance of new owner's and lender's title
insurance policies on or before the Effective Date), the Existing Owner's Title
Insurance Policy shall be deemed rejected and terminated as of the Effective
Date in accordance with the terms of the First American Settlement Agreement. If
the First American Settlement Agreement either has not become effective by the
date agreed to by the parties or has become ineffective for any reason, then HJC
or JCC (as HJC's successor), with the consent of HET (in its sole discretion) on
behalf of the Proponents, shall be entitled, upon ten days' prior notice, to
seek to assume the Existing Owner's Title Insurance Policy pursuant to Section
365(a) of the Bankruptcy Code. If the First American Settlement Agreement has
not become effective by the time at which all other conditions to the Effective
Date have been satisfied or waived, then HJC or JCC (as HJC's successor), with
the consent of HET (in its sole discretion) on behalf of the Proponents, shall
be entitled,
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upon ten days' prior notice, to seek to assume the Existing Owner's Title
Insurance Policy pursuant to Section 365(a) of the Bankruptcy Code. To the
extent HJC or JCC, as applicable, seeks to assume the Existing Owner's Title
Insurance Policy in accordance with the provisions of this Section, First
American Title Insurance Company shall be entitled to oppose such assumption on
any grounds other than on the grounds that the Confirmation Date has already
occurred.
(ii) Other Insurance Policies. The directors and officers liability
insurance policy of HJC and all other insurance policies and any agreements,
documents or instruments relating thereto, (including, without limitation, any
retrospective premium rating plans relating to such policies), except for the
Existing Owner's Title Insurance Policy and those policies (and any agreements,
documents or instruments relating thereto) set forth in a schedule to be filed
prior to the commencement of the Confirmation Hearing, are treated as executory
contracts under the Plan and shall be assumed by JCC, or assumed by HJC and
assigned to JCC, on the Effective Date pursuant to Section 365(a) of the
Bankruptcy Code. Notwithstanding the foregoing, distributions under the Plan to
any holder of a Claim covered by any of the insurance policies to be assumed
pursuant to this Section shall be in accordance with the treatment provided
under Article IV of the Plan.
(d) Approval of Assumption or Rejection of Leases and Contracts. Entry of
the Confirmation Order shall constitute (i) the approval, pursuant to Sections
365(a) and 1123(b)(2) of the Bankruptcy Code, of the assumption or assumption
and assignment of the executory contracts and unexpired leases assumed pursuant
to Sections 8.1(a), (b) and (c) hereof, (ii) the extension of time pursuant to
Section 365(d)(4) of the Bankruptcy Code within which HJC may assume or reject
the unexpired leases specified in Sections 8.1(a), (b) and (c) hereof through
the Confirmation Date, and (iii) the approval, pursuant to Sections 365(a) and
1123(b)(2) of the Bankruptcy Code, of the rejection of the executory contracts
and unexpired leases rejected pursuant to Section 8.1 hereof.
(e) Cure of Defaults. All cure payments which may be required by Section
365(b)(1) of the Bankruptcy Code under any executory contract or unexpired lease
which is assumed under this Plan shall be made by JCC on the Effective Date or
as soon as practicable thereafter. All requests for cure payments by a party to
such assumed contract or lease must be filed pursuant to Section 2.1(a), unless
such cure payments are agreed to by such non-debtor party, HJC (on or before the
Effective Date), JCC (after the Effective Date), HET (in its sole discretion) on
behalf of the other Proponents and the Bondholders Committee (in its sole
discretion) or are otherwise determined by the Bankruptcy Court upon appropriate
notice and hearing. In the event of a dispute regarding the amount of any cure
payment, the ability of JCC to provide adequate assurance of future performance
or any other matter pertaining to assumption, JCC shall make such cure payments
required by Section 365(b)(1) of the Bankruptcy Code following the later of the
Effective Date (or as soon as practicable thereafter) and the date of the entry
of a Final Order resolving such dispute. Without limiting the foregoing, in
connection with JCC's assumption of the Amended and Restated Canal Street Casino
Lease Agreement, JCC will cure any and all defaults in the annual payment of
$200,000.00 to the Audubon Park Commission pursuant to Section 4.7 of the Canal
Street Casino Lease. Notwithstanding anything to the contrary herein, any
payments to be made by JCC to the State or the LGCB shall be paid in accordance
with the provisions of the Amended and Renegotiated Casino Operating Contract
without any requirement of filing any type of request for payments.
(f) Bar Date for Filing Proofs of Claim Relating to Executory Contracts and
Unexpired Leases Rejected Pursuant to the Plan. Claims arising out of the
rejection of an executory contract or unexpired lease pursuant to Section 8.1
must be filed with the Bankruptcy Court no later than thirty days after entry of
the Confirmation Order. Any Claims not filed within such time will be forever
barred from assertion against the Debtors, their estates, and their property.
Unless otherwise ordered by the Bankruptcy Court, all Claims arising from the
rejection of executory contracts and unexpired leases shall be treated as Claims
in Class A7, A8, B5, B6, C4, C5, C6, or C7 as applicable, under the Plan. To the
extent necessary, entry of the Confirmation Order
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shall amend and supersede any previously entered order of the Bankruptcy Court
regarding procedures for payment of such Claims.
(g) Assignment of Amended and Renegotiated Casino Operating Contract. On
the Effective Date, upon the revesting of the Casino Operating Contract in HJC,
HJC shall enter into the Amended and Renegotiated Casino Operating Contract, and
shall thereupon assign the Amended and Renegotiated Casino Operating Contract to
JCC, which assignment shall take place pursuant to and in accordance with
applicable State law and the agreement of the parties thereto. On the Effective
Date, upon the assignment of the Amended and Renegotiated Casino Operating
Contract from HJC to JCC, JCC shall undertake the obligations of HJC thereunder,
and shall execute the State/LGCB Release and all other agreements, instruments
and documents necessary or appropriate to evidence or consummate the
transactions contemplated therein.
8.2. Retiree Benefits. Payments, if any, due to any person for the purpose
of providing or reimbursing payments for retired employees and their spouses and
dependents for medical, surgical or hospital care benefits, or benefits in the
event of sickness, accident, disability or death under any plan, fund or program
(through the purchase of insurance or otherwise) maintained or established in
whole or in part by any Debtor prior to the Commencement Date shall be continued
by JCC for the duration of the period such Debtor has obligated itself to
provide such benefits.
ARTICLE IX.
EFFECT OF CONFIRMATION OF PLAN
9.1. Revesting of Assets.
(a) On the Effective Date, all of HJC's right, title and interest in and to
the Casino Operating Contract shall revest in HJC, which Casino Operating
Contract shall then be modified by the Amended and Renegotiated Casino Operating
Contract and assigned to JCC in accordance with applicable State law, the
agreement of the parties thereto and the provisions of Section 8.1(g) hereof. In
addition, on the Effective Date all right, title and interest of the Debtors in
the Fulton Property shall vest in FP Development, and all right, title and
interest of the Debtors in the 3CP Property shall vest in CP Development. All
other property of the estates (including, without limitation, all present and
future claims and causes of action) of the Debtors shall vest in JCC on the
Effective Date, and JCC shall be deemed to be the successor to each of the
Debtors; provided that none of the New Entities or any of their respective
property shall be subject to any of the Claims or Equity Interests against or in
any Debtor except as expressly provided in this Plan. For Federal income tax
purposes, the vesting of the property of the estates of the Debtors shall be
solely in JCC Holding and shall be deemed to have occurred as follows: (i) a
deemed exchange by the Bondholders of the Old Bonds for all of the assets of HJC
(including any Assigned Litigation Claims assigned by HJC to JCC), and (ii) a
deemed exchange by the Bondholders of such HJC assets (not including any
Assigned Litigation Claims assigned by HJC to JCC) with JCC Holding for shares
of Class A New Common Stock (which shares, along with Class A New Common Stock
received in exchange for certain releases, will represent 50.1% of the value of
JCC Holding's outstanding New Common Stock), the New Bonds and the New
Contingent Bonds (each of which shall be considered obligations of JCC Holding).
For Federal income tax purposes, JCC Holding, FP Development, CP Development,
JCC Intermediary (if formed) and JCC shall be treated as a single taxable
entity, and all assets of any such entities shall be deemed to be owned by JCC
Holding for federal income tax purposes. In the event that JCC files an election
to be treated as a corporation for federal income tax purposes, JCC shall be
treated as a separate taxable entity and the HJC assets that are deemed to be
exchanged with JCC Holding for the New Bonds and New Contingent Bonds shall
instead be deemed to be exchanged with JCC for such New Bonds and New Contingent
Bonds.
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(b) From and after the Effective Date, the New Entities may operate their
business, and may use, acquire, and dispose of property free of any restrictions
of the Bankruptcy Code.
(c) As of the Effective Date, all property of the Debtors shall be free and
clear of all Claims and Equity Interests of holders thereof, except as provided
in the Plan.
(d) Pursuant to Section 1123(b)(3) of the Bankruptcy Code, except (i) those
rights, causes of action and claims released or to be released pursuant to or in
connection with the Plan, (ii) HJC's right, title and interest in and to the
Casino Operating Contract, which shall revest in HJC on the Effective Date,
(iii) as otherwise provided in Section 5.9 hereof with respect to Assigned
Litigation Claims, and (iv) rights relating to the 3CP Property and Fulton
Property which shall be transferred to CP Development and FP Development,
respectively, JCC, in its sole discretion, and either in its own name or in the
name, place and stead of the Debtors and their estates, shall have the exclusive
right to enforce or waive or release any and all present or future rights or
causes of action against any Person and rights of the Debtors that arose before
or after the Commencement Date, and shall be entitled to retain all proceeds
thereof. CP Development, in its sole discretion, and either in its own name or
in the name, place and stead of the Debtors and their estates, shall have the
exclusive right to enforce or waive or release any and all present or future
rights or causes of action against any Person and rights of the Debtors that
arose before or after the Commencement Date relating to the 3CP Property, and
shall be entitled to retain all proceeds thereof. FP Development, in its sole
discretion, and either in its own name or in the name, place and stead of the
Debtors and their estates, shall have the exclusive right to enforce or waive or
release any and all present or future rights or causes of action against any
Person and rights of the Debtors that arose before or after the Commencement
Date relating to the Fulton Property, and shall be entitled to retain all
proceeds thereof.
9.2. Discharge of Debtors. The rights afforded herein and the treatment of
all Claims and Equity Interests herein shall be in exchange for and in complete
satisfaction, discharge, and release of Claims and Equity Interests of any
nature whatsoever, including any interest accrued on such Claims from and after
the Commencement Date, against any or all Debtors, or any of their assets or
properties. Except as otherwise provided herein, on the Effective Date (a) all
such Claims against, and Equity Interests in, the Debtors shall be satisfied,
discharged, and released in full and (b) all Persons shall be precluded from
asserting against any Debtor or New Entity, or its successors, or their
respective assets or properties any other or further Claims or Equity Interests
based upon any act or omission, transaction, or other activity of any kind or
nature, whether known or unknown, that occurred prior to the Effective Date,
whether or not (i) a proof of claim or interest based upon such Claim or Equity
Interest is filed or deemed filed under Section 501 of the Bankruptcy Code, (ii)
such Claim or Equity Interest is allowed under Section 502 of the Bankruptcy
Code, or (iii) the holder of such Claim or Equity Interest has accepted the
Plan. Except as provided herein, the Confirmation Order shall be a judicial
determination of discharge of all liabilities of the Debtors. As provided in
Section 524 of the Bankruptcy Code, such discharge shall void any judgment
against any Debtor or any New Entity at any time obtained to the extent it
relates to a Claim or Equity Interest discharged, and shall operate as an
injunction against the prosecution of any action against any Debtor or any New
Entity, or the property of any of them, to the extent it relates to a Claim or
Equity Interest discharged. Nothing in this Plan, including this Section 9.2,
shall be construed as or constitute a release of any Claim against HJC arising
under the Casino Operating Contract, which Casino Operating Contract shall
revest in HJC on the Effective Date, be modified by the Amended and Renegotiated
Casino Operating Contract, and be assigned to JCC in accordance with applicable
State law, the agreement of the parties, and the provisions of Section 8.1(g)
hereof.
9.3. Dissolution of Debtors. On or after the Effective Date, each Debtor
shall be dissolved, liquidated or otherwise terminated under applicable law.
9.4. Exculpations. Subject to the occurrence of the Effective Date, neither
the Debtors, the New Entities, the Committees, nor any of their respective
members (including, in the case of HJC, its executive
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committee members and reorganization steering committee members), officers,
directors, employees, agents or professionals shall have or incur any liability
to any holder of a Claim or Equity Interest for any act, event or omission in
connection with, or arising out of, the Chapter 11 Cases (including the
activities and deliberations of the Committees), the confirmation of the Plan,
the consummation of the Plan, or the administration of the Plan or the property
to be distributed under the Plan, except for willful misconduct or gross
negligence. Such exculpation shall not extend to any prepetition act, event or
omission of any party nor shall it extend to any post-petition act of any party
other than in connection with that party's official capacity in the Chapter 11
Cases.
ARTICLE X.
CONDITIONS PRECEDENT TO
CONFIRMATION AND EFFECTIVE DATE
10.1. Condition Precedent to Confirmation of the Plan. Confirmation of the
Plan will not occur unless all of the following conditions precedent have been
satisfied or have been waived by HET (in its sole discretion) on behalf of the
Proponents subject to the provisions of Section 10.3 hereof:
(a) The Confirmation Order and the Plan as confirmed pursuant to the
Confirmation Order shall be in form and substance satisfactory to HJC (which may
not unreasonably withhold or delay its approval) and HET (in its sole
discretion) on behalf of the other Proponents, and shall confirm the Plan as to
each of the Debtors. Without limiting the foregoing, the Confirmation Order
shall expressly provide that pursuant to Sections 364(f) and 1145 of the
Bankruptcy Code, all New Common Stock, New Bonds, New Contingent Bonds,
Convertible Junior Subordinated Debentures, the HET Warrant, all guarantees of
the New Bonds and the New Contingent Bonds, all shares of New Common Stock
issuable upon conversion of the Convertible Junior Subordinated Debenture and
the HET Warrant, and all other securities issued in connection with the Plan
(including, without limitation, all shares of New Common Stock in the Release
Pool which are distributed to the Releasing Bondholders or Harrah's Investor
pursuant to Section 5.2 hereof or to the NOLDC Shareholders and Grand Palais
Releasing Bondholders pursuant to Section 6.2(f) hereof) shall be (i) exempt
from Section 5 of the Securities Act of 1933, as amended, and any state or local
law requiring registration for offer or sale of a security or registration for
offer or sale of a security or registration or licensing of an issuer of,
underwriter of, or broker or dealer in, a security, and (ii) otherwise entitled
to all of the benefits and protections afforded by Section 1145 of the
Bankruptcy Code.
10.2. Conditions Precedent to Effective Date. The Effective Date of the
Plan will not occur unless all of the following conditions precedent have been
satisfied or waived by HET (in its sole discretion) on behalf of the Proponents,
but only as permitted by Section 10.3 hereof:
(a) Each of the conditions precedent set forth in Section 10.1 hereof shall
have been satisfied or waived by HET (in its sole discretion) on behalf of the
Proponents subject to the provisions of Section 10.3 hereof.
(b) The Confirmation Order shall have been entered and shall not be stayed.
(c) The Effective Date shall occur no later than October 31, 1998, unless
extended pursuant to Section 10.4 of the Plan.
(d) All those transactions described in Section 6.2 hereof shall have been
effected, and all of the agreements and instruments described in Section 6.2
hereof shall have been executed and delivered, and all other agreements and
instruments to be delivered under or necessary to effectuate the Plan shall have
been
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executed and delivered, and all executory contracts and unexpired leases to be
assumed by or assigned to JCC as provided in Section 8.1 hereof shall have been
assumed by or assigned to JCC. The Amended and Renegotiated Casino Operating
Contract, the State/LGCB Release, and all other agreements, instruments and
documents necessary to evidence or consummate the transactions contemplated
therein shall have been executed and delivered by the parties thereto. All other
cure or other payments required to be paid in connection with the assumption of
any executory contract or unexpired lease shall be acceptable to HET (in its
sole discretion) on behalf of the Proponents and the Bondholders Committee (in
its sole discretion).
(e) The New Indenture shall have been qualified under the Trust Indenture
Act.
(f) Tranches A-1 and A-3 of the A Term Loan, Tranche B-1 of the B Term Loan
and the Convertible Junior Subordinated Debentures shall be fully funded
concurrently with the occurrence of the Effective Date, and the A Term Loan
Documents, the B Term Loan Documents, the Working Capital Loan Documents and the
Convertible Junior Subordinated Debenture Documents shall have been executed and
delivered.
(g) The Junior Subordinated Loan Documents shall have been executed and
delivered.
(h) The Bankruptcy Court shall have entered an (i) order (which may be the
Confirmation Order) estimating, for purposes of distribution, the maximum amount
of the Allowed Secured Claims of the NonParticipating Banks in an aggregate
amount no greater than the amount of the Withheld Funds which the Administrative
Agent is obligated to remit to the Old Bank Collateral Agent pursuant to Section
4.3(a)(ii) hereof, or (ii) to the extent such Allowed Secured Claims of the
Non-Participating Banks are estimated by the Bankruptcy Court to exceed the
amount of such portion of the Withheld Funds, an order (which may be the
Confirmation Order) granting the Banks the indubitable equivalent of that
portion of the Allowed Secured Claims in excess of the amount of such portion of
the Withheld Funds, which indubitable equivalent shall be acceptable to HET (in
its sole discretion) on behalf of all Proponents.
(i) The LGCB, the State and the City and their respective agencies and
instrumentalities shall have given or issued all necessary approvals, consents,
waivers, and permits and licenses or modifications thereof (including any
modifications to any conditional use ordinances), if any, and, in the case of
LGCB, shall have (i) made all suitability determinations and given all approvals
required by the Louisiana Economic Development and Gaming Control Act, the rules
and regulations of the LGCB (as said rules and regulations are in effect at such
time as the issuance of the approvals and making of suitability determinations)
and the Amended and Renegotiated Casino Operating Contract, and (ii) consented
to the assignment of the Amended and Renegotiated Casino Operating Contract to
JCC, in each case to the extent necessary to enter into the agreements
contemplated by this Plan. The City Council shall have enacted the ordinance(s)
approving the Lease Documentation (as defined in the City Agreement).
(j) HET shall have received all approvals, consents and waivers from its
board of directors or its lenders or any other third parties which HET
determines in its sole discretion to be necessary or appropriate in order for it
or any of its Affiliates to take any of the actions, execute and deliver any of
the agreements, instruments or documents, or consummate any of the transactions
contemplated by the Plan.
(k) The NOLDC Plan shall have been confirmed by a Final Order (in form and
substance satisfactory to the NOLDC Shareholders and HET), and the NOLDC
Shareholders/HET Settlement Agreement and the GP Representative/HET Settlement
Agreements shall have been executed and delivered by all of the parties thereto,
and the NOLDC Shareholders/HET Settlement Agreement shall have been approved by
the bankruptcy court in the Chapter 11 case of NOLDC either pursuant to Section
1123(b)(3)(A) of the Bankruptcy Code as part of the NOLDC Plan, or pursuant to
Bankruptcy Rule 9019 by separate Final Order (in form and substance satisfactory
to the NOLDC Shareholders and HET).
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(l) The Bankruptcy Court shall have entered an order (which may be the
Confirmation Order) approving the A Term Loan, the B Term Loan, the Working
Capital Credit Facility, the Convertible Junior Subordinated Debentures and the
Junior Subordinated Credit Facility, respectively, which order shall be in form
and substance satisfactory to HET (in its sole discretion) on behalf of the
Proponents, and the non-Debtor parties providing such financing (in their sole
discretion).
(m) The Bondholders Committee shall have approved in its sole discretion
all of the Plan Documents.
(n) Except as provided in the FNBC Settlement Agreement or Section
6.2(k)(ii), 6.2(l)(i) or 6.2(l)(ii) hereof, the assets of the New Entities shall
not be subject to any Liens other than the Minimum Payment Guarantor Lien and
the Liens securing the A Term Loan, the B Term Loan, the Working Capital
Facility, the New Bonds, and the New Contingent Bonds, and if applicable, the
Convertible Junior Subordinated Debentures and the Junior Subordinated Credit
Facility, or any Liens expressly permitted under the HET/JCC Agreement, the A
Term Loan Documents, the B Term Loan Documents, the Working Capital Loan
Documents, the Junior Subordinated Loan Documents, the Convertible Junior
Subordinated Debenture Documents or the New Indenture or any other Liens as may
be approved by the Bondholders Committee (in its sole discretion) and HET (in
its sole discretion) on behalf of the Proponents.
(o) The Debtors and the Bondholders Committee shall have requested a
determination by the Bankruptcy Court that the value of the Assigned Debtor
Litigation Claims (net of all estimated Litigation Costs and the estimated
aggregate amount of all Third Party Claims) is no greater than the sum of (i)
the Bondholder Deficiency Amount, plus (ii) the aggregate amount of the Allowed
Class A7 Claims, plus (iii) the aggregate amount of the cure payments made as
provided in Section 8.1(e) of the Plan, plus (iv) the $2,265,000 to be
distributed to the applicable holders of Allowed Class A6 Claims pursuant to
Section 4.6 of the Plan, and the Bankruptcy Court shall have entered an order
(which may be the Confirmation Order) adjudicating this issue.
(p) (i) The First American Settlement Agreement shall have become effective
or (ii) JCC shall have assumed the Existing Owner's Title Insurance Policy.
(q) The LGCB shall have found suitable (or deemed exempt or waived from
such suitability requirements) in accordance with its rules and regulations (as
said rules and regulations are in effect at the time of the suitability
determinations) at least one proposed officer of JCC Holding and at least two of
the proposed directors of JCC Holding (including at least one Bondholders
Director Nominee and one Harrah's Director Nominee).
10.3. Waiver of Conditions. HET (in its sole discretion) on behalf of the
Proponents may waive any condition or any portion of any condition set forth in
this Article X, without notice and without leave or order of the Bankruptcy
Court but only with the written consent of both the Bondholders Committee (which
consent may be withheld in its sole discretion), and HJC (which consent may not
be unreasonably withheld or delayed) and to the extent such waiver is
inconsistent with the City Agreement, the written consent of the City; provided,
however, that HET on behalf of the Proponents may not waive, (i) without the
consent of the City, any condition to the Effective Date set forth in Sections
10.2(b), (c) or (i) hereof or Section 10.2(d) hereof (but only to the extent
Section 10.2(d) requires the execution and delivery of the City/RDC Release, the
Amended and Restated Canal Street Casino Lease Agreement, and the other
agreements, instruments and documents referenced in Section 6.2(o) hereof), and
(ii) without the consent of LGCB, any condition to the Effective Date set forth
in Sections 10.2(b), (c), (i) or (q) hereof or Section 10.2(d) hereof (but only
to the extent Section 10.2(d) relates to execution and delivery of the Amended
and Renegotiated Casino Operating Contract, the State/LGCB Release and the other
agreements, instruments and documents referenced in Section 6.2(n) hereof).
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10.4. Effect of Failure of Conditions. In the event that all of the
conditions specified in Section 10.1 or 10.2 have not been satisfied or waived
in accordance with the provisions of this Article X on or before October 31,
1998 (which date may be extended by HET (in its sole discretion) on behalf of
the Proponents only with the written consent of the Bondholders Committee, the
City and the LGCB (each of whose consent may be withheld in its sole
discretion)), and upon notification submitted by HET to the Bankruptcy Court and
counsel for the Committees, (a) the Confirmation Order shall be vacated, (b) no
distributions under the Plan shall be made, (c) the Debtors and all holders of
Claims and Equity Interests shall be restored to the status quo ante as of the
day immediately preceding the date the January 29, 1998 Plan was confirmed as
though such date never occurred, and (d) all the Debtors' respective obligations
with respect to the Claims and Equity Interests shall remain unchanged and
nothing contained herein or in the Disclosure Statement shall be deemed an
admission or statement against interest or to constitute a waiver or release of
any claims by or against any Debtor or any other Person or to prejudice in any
manner the rights of any Debtor or any Person in any further proceedings
involving any Debtor or Person. Nothing in this Section 10.4 shall be deemed to
impair the right of any party to seek revocation of the Confirmation Order under
Section 1144 of the Bankruptcy Code or other applicable law (if any).
ARTICLE XI.
RETENTION OF JURISDICTION
11.1. To the maximum extent permitted by the Bankruptcy Code or other
applicable law, the Bankruptcy Court shall have jurisdiction of all matters
arising out of, and related to, the Chapter 11 Cases and the Plan pursuant to,
and for the purposes of, Sections 105(a) and 1142 of the Bankruptcy Code and
for, among other things, the following nonexclusive purposes:
(a) To construe and to take any action to enforce this Plan and to issue
such orders as may be necessary for the implementation, execution and
confirmation of this Plan;
(b) To determine the allowance or classification of Claims or Equity
Interests and to determine any objections thereto;
(c) To determine rights to distribution pursuant to this Plan;
(d) To hear and determine applications for the assumption or rejection of
executory contracts or unexpired leases and the allowance of Claims resulting
therefrom;
(e) To determine any and all applications, motions, adversary proceedings,
contested matters and other litigated matters that may be pending in the
Bankruptcy Court on or initiated after the Effective Date;
(f) To hear and determine any objection to Administrative Expense Claims or
to Claims or to Equity Interests;
(g) To hear and determine any causes of action brought or continued by any
Debtor or New Entity as assignee of the Debtors (with respect to the Assigned
Debtor Litigation Claims or otherwise) or the Releasing Bondholders (with
respect to the Assigned Bondholder Litigation Claims), to the maximum extent
permitted under applicable law;
(h) To enter and implement such orders as may be appropriate in the event
the Confirmation Order is for any reason stayed, revoked, modified, or vacated;
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(i) To determine such other matters and for such other purposes as may be
provided in the Confirmation Order;
(j) To hear and determine matters concerning any Release and to enforce the
injunctions set forth in the Plan, including those set forth in Sections 2.2,
5.7, and 9.2 hereof;
(k) To consider any modifications of the Plan, to cure any defect or
omission, or reconcile any inconsistency in any order of the Bankruptcy Court,
including, without limitation, the Confirmation Order;
(l) To hear and determine all Fee Applications;
(m) To hear and determine disputes arising in connection with the
interpretation, implementation, or enforcement of the Plan or any transactions
contemplated by the Plan;
(n) To hear and determine all questions and disputes regarding title to,
and any action to recover any of, the assets or property of any Debtor or its
estate, wherever located;
(o) To hear and determine any disputes relating to the Liens, Encumbrances
or other claims filed by any immediate or remote subcontractors, laborers,
suppliers or vendors against any of the property of any Debtor;
(p) To hear and determine matters concerning state, local, and Federal
taxes in accordance with Sections 346, 505, and 1146 of the Bankruptcy Code;
(q) To consider and act on the compromise and settlement of any claim
against any Debtor or its estate;
(r) To hear any other matter not inconsistent with the Bankruptcy Code;
(s) To enter a final decree closing the Chapter 11 Cases;
(t) To effectuate the provisions of Section 10.4 of the Plan; and
(u) To enter such orders as may be appropriate to evidence, for recordation
purposes, the transfer to and vesting in JCC, CP Development and FP Development
of the Debtors' immovable property and other instruments creating rights in and
to immovable property, and the execution and delivery of the sublease of the
second floor of the Casino by JCC and JCC Development;
provided, that nothing in the Plan or the Confirmation Order is intended or
shall be construed to alter the jurisdiction, if any, of the Bankruptcy Court to
determine issues regarding the contractual or other relationships between the
Debtors and JCC and the State Group, nor shall the Plan or the Confirmation
Order be construed as to the State Group as consenting to any jurisdiction by
the Bankruptcy Court.
ARTICLE XII.
MISCELLANEOUS PROVISIONS
12.1. Exemption from Transfer Taxes. Pursuant to Section 1146(c) of the
Bankruptcy Code, the issuance, transfer or exchange of notes or equity
securities under the Plan, the creation of any mortgage, deed of trust or other
security interest, the making or assignment of any lease or sublease, or the
making or delivery
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of any deed or other instrument of transfer under, in furtherance of, or in
connection with the Plan, including any merger agreements or agreements of
consolidation, deeds, bills of sale or assignments executed in connection with
any of the transactions contemplated under the Plan shall not be subject to any
stamp, real estate transfer, mortgage recording or other similar tax.
12.2. Post-Confirmation Date Fees and Expenses of Professional Persons.
After the Confirmation Date, each Debtor (before the Effective Date) and JCC
(from and after the Effective Date) shall, in the ordinary course of business
and with such approval of the Bankruptcy Court as it may require, pay the
reasonable fees and expenses incurred after the Confirmation Date by the
Professional Persons employed by such Debtor or in the case of HJC, either
Committee, to the extent such fees and expenses are related to implementation
and consummation of the Plan. No such fees and expenses shall be paid, however,
except upon receipt by such Debtor or JCC, as applicable, of a written invoice
from the Professional Person seeking fee and expense reimbursement.
12.3. Committees. The appointment of the Committees shall terminate on the
Effective Date except that the professionals of the Committees shall be entitled
to prosecute their respective applications for final allowances of compensation
and reimbursement of expenses.
12.4. Amendment or Modification of the Plan; Severability.
(a) This Plan may not be altered, amended or modified without the written
consent of HET (in its sole discretion) on behalf of the Proponents and the
written consent of the Bondholders Committee (which consent may be withheld in
its sole discretion) and the consent of HJC (which consent may not be
unreasonably withheld or delayed by HJC). Subject to the first sentence of this
Section 12.4(a), the treatment of any Claim provided for under the Plan may be
modified with the consent of the holder of such Claim or the approval of the
Bankruptcy Court.
(b) In the event that the Bankruptcy Court determines, prior to the
Confirmation Date, that any provision in the Plan is invalid, void or
unenforceable, such provision shall be invalid, void or unenforceable with
respect to the holder or holders of such Claims or Equity Interests as to which
the provision is determined to be invalid, void or unenforceable. The
invalidity, voidness or unenforceability of any such provision shall in no way
limit or affect the enforceability and operative effect of any other provision
of the Plan.
12.5. Revocation or Withdrawal of the Plan.
(a) HET (in its sole discretion) on behalf of the Proponents and with the
written consent of HJC (which consent may not be unreasonably withheld or
delayed) reserves the right to revoke or withdraw the Plan prior to the
Confirmation Date.
(b) If the Plan is revoked or withdrawn prior to the Confirmation Date in
accordance with Section 12.5(a) hereof, then the Plan shall be deemed null and
void. In such event, (i) the Debtors and all holders of Claims and Equity
Interests shall be restored to the status quo ante as of the day immediately
preceding the date the January 29, 1998 Plan was confirmed as though such date
never occurred, and (ii) all the Debtors' respective obligations with respect to
the Claims and Equity Interests shall remain unchanged and nothing contained
herein or in the Disclosure Statement shall be deemed an admission or statement
against interest or to constitute a waiver or release of any claims by or
against any Debtor or any other Person or to prejudice in any manner the rights
of any Debtor or any Person in any further proceedings involving any Debtor or
Person.
(c) Notwithstanding anything to the contrary in this Plan, (i) none of HET,
HOCI, HNOMC, HNOIC, Harrah's Investor, DIP Lender and their respective
Affiliates shall have any obligations or liabilities (including, without
limitation, any obligation to provide the Harrah's New Equity Investment) under
the Plan
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or any Plan Documents at any time prior to the Effective Date, and (ii) HET and
HNOIC expressly reserve their respective rights in their sole discretion to
withdraw as Proponents of this Plan or to otherwise terminate their support for
this Plan.
12.6. Existing Agreements. Unless otherwise ordered by the Bankruptcy Court
or the context clearly requires otherwise, all references in any settlement
agreement, agreement regarding the assumption or rejection of executory
contracts, plan exhibits or other writings to the confirmation, consummation or
Effective Date of the Original Plan, the January 29, 1998 Plan and/or the April
6, 1998 Plan shall be deemed to refer to this Plan.
12.7. Notices. Any notice required or permitted to be provided under the
Plan shall be in writing and served by either (a) certified mail, return receipt
requested, postage prepaid, (b) hand delivery, or (c) reputable overnight
delivery service, freight prepaid, to be addressed as follows:
HARRAH'S ENTERTAINMENT, INC.
1023 Cherry Road
Memphis, Tennessee 38117
Attn: General Counsel
with a copy to:
LATHAM & WATKINS
885 Third Avenue
New York, New York 10022
Attn: Robert J. Rosenberg, Esq.
HARRAH'S JAZZ COMPANY and
HARRAH'S JAZZ FINANCE CORP.
to its counsel:
JENNER & BLOCK
One IBM Plaza
Chicago, Illinois 60611
Attn: Daniel R. Murray, Esq.
and
WILLIAM HARDY PATRICK III, A
PROFESSIONAL CORPORATION
10636 Linkwood Court
Baton Rouge, Louisiana 70810-2854
Attn: William H. Patrick, Esq.
HARRAH'S NEW ORLEANS INVESTMENT COMPANY
1023 Cherry Road
Memphis, Tennessee 38117
Attn: General Counsel
with a copy to:
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HELLER, DRAPER, HAYDEN & HORN, L.L.C.
650 Poydras Street, Suite 2500
New Orleans, Louisiana 70130-6103
Attn: Edward M. Heller, Esq.
BONDHOLDERS COMMITTEE
MERRILL LYNCH ASSET MANAGEMENT
800 Scudders Mill Road
Plainsboro, NJ 08536
Attn: Bradley J. Lucido, Esq.
HARRIS ASSOCIATES L.P.
2 North LaSalle Street, Suite 500
Chicago, IL 60602-3790
Attn: John Raitt
STANDARD MORTGAGE COMPANY
300 Plaza, One Shell Square
New Orleans, LA 70139
Attn: Edgar Bright, Jr.
with a copy to:
WEIL GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, NY 10153-0001
Attn: John K. Cunningham, Esq.
MCGLINCHEY STAFFORD
643 Magazine Street
New Orleans, LA 70130
Attn: Rudy J. Cerone, Esq.
12.8. Governing Law. Except to the extent the Bankruptcy Code or Bankruptcy
Rules are applicable, the rights and obligations arising under this Plan shall
be governed by, and construed and enforced in accordance with, the laws of the
State of Louisiana, without giving effect to the principles of conflicts of law
thereof.
12.9. Withholding and Reporting Requirements. In connection with the Plan
and all instruments issued in connection therewith and distributions thereon,
the Debtors or the New Entities, as the case may be, shall comply with all
withholding and reporting requirements imposed by any Federal, state, local, or
foreign taxing authority and all distributions hereunder shall be subject to any
such withholding and reporting requirements.
12.10. Headings. Headings are used in the Plan for convenience and
reference only, and shall not constitute a part of the Plan for any other
purpose.
12.11. Exhibits. All exhibits and schedules to the Plan are incorporated
into and are a part of the Plan as if set forth in full herein.
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12.12. JCC Intermediary. Notwithstanding anything to the contrary in the
Plan or any Plan Document, any provisions herein or therein relating to JCC
Intermediary shall be applicable only if JCC Intermediary is formed at the
election of HET (in its sole discretion) on behalf of the Proponents.
12.13. Filing of Additional Documents. On or before substantial
consummation of the Plan, HET (in its sole discretion) on behalf of the
Proponents and before the Effective Date, with the consent of HJC (which consent
shall not be unreasonably withheld or delayed), may file with the Bankruptcy
Court such agreements and other documents as may be necessary or appropriate to
effectuate and further evidence the terms and conditions of the Plan, which
agreements and other documents shall be in form and substance satisfactory to
the Bondholders Committee in its sole discretion, and to the extent required
under applicable laws, rules and regulations or the Amended and Renegotiated
Casino Operating Contract, shall be approved by LGCB.
12.14. Controlling Effect of Agreements with State/LGCB. Except as
otherwise provided in this Section 12.14 of the Plan, in the event of any
conflict between any provision of this Plan and the provisions of any of the
contracts or agreements entered into between the State and/or the LGCB on the
one hand and HJC, JCC or any other Person on the other hand (including
particularly, but not limited to, the Amended and Renegotiated Casino Operating
Contract, the State/LGCB Release and the Minimum Payment Guaranty), the
provisions of any of said contracts and agreements shall control the rights of
the parties to the particular contracts and agreements. Notwithstanding any
provision of this Plan, the Confirmation Order, the Casino Operating Contract,
the Amended and Renegotiated Casino Operating Contract, the State/LGCB Release
or any other document necessary to effectuate and implement this Plan to the
contrary, nothing contained in this Plan, the Confirmation Order, the Casino
Operating Contract, the Amended and Renegotiated Casino Operating Contract, the
State/LGCB Release or any such other document shall release any obligation of
HJC arising under the Casino Operating Contract or the Amended and Renegotiated
Casino Operating Contract, and the Casino Operating Contract, as modified by and
restated in the Amended and Renegotiated Casino Operating Contract, shall remain
in force and effect.
12.15. Rights of State and LGCB. Notwithstanding any other provisions of
this Plan (including, without limitation, Sections 5.3, 5.10, 6.2(n), 8.1(d),
8.1(g) or 9.1(a)) or the Confirmation Order to the contrary, if any, nothing
contained in this Plan or the Confirmation Order is intended to require, or
shall be construed as requiring, that the LGCB and/or the State (i) enter into
the Amended and Renegotiated Casino Operating Contract, the State/LGCB Release,
or any other agreements or contracts contemplated by the Plan, or (ii) be bound
by any such contract, release or agreement without their express written consent
as evidenced by their execution thereof, whether or not the provisions of this
Section 12.15 are referred to in the other provisions of this Plan or the
Confirmation Order.
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Dated: October 13, 1998
Respectfully submitted:
/s/ DANIEL R. MURRAY
---------------------------------------
JENNER & BLOCK
One IBM Plaza
Chicago, Illinois 60611
Telephone: (312) 222-9350
Fax: (312) 527-0484
/s/ WILLIAM H. PATRICK
---------------------------------------
WILLIAM HARDY PATRICK, III,
A PROFESSIONAL LAW CORPORATION
10636 Linkwood Court
Baton Rouge, Louisiana 70810-2854
Telephone: (504) 767-1460
Fax: (504) 769-0010
Attorneys for Harrah's Jazz Company
and Harrah's Jazz Finance Corp.
/s/ ILLEGIBLE
---------------------------------------
HELLER, DRAPER, HAYDEN & HORN, L.L.C.
650 Poydras Street, Suite 2500
New Orleans, Louisiana 70130
Telephone: (504) 568-1888
Fax: (504) 522-0949
Attorneys for Harrah's New Orleans
Investment Company
/s/ ILLEGIBLE
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LATHAM & WATKINS
885 Third Avenue
New York, New York 10022
Telephone: (212) 906-1200
Fax: (212) 751-4864
Attorneys for Harrah's Entertainment, Inc.
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HARRAH'S JAZZ COMPANY
By: Harrah's New Orleans Investment Company
By: /s/ COLIN V. REED
-----------------------------------
Name:
Title:
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HARRAH'S JAZZ COMPANY
By: New Orleans/Louisiana Development
Corporation
By: /s/ DEBORAH SULZER
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Name: Deborah Sulzer
Title: Vice President
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HARRAH'S JAZZ COMPANY
By: Grand Palais Casino, Inc.
By: /s/ CHRISTOPHER B. HEMMETER
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Name: Christopher B. Hemmeter
Title: Chairman
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HARRAH'S JAZZ FINANCE CORP.
By: /s/ COLIN V. REED
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Name:
Title:
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HARRAH'S NEW ORLEANS INVESTMENT COMPANY
By: /s/ COLIN V. REED
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Name:
Title:
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HARRAH'S ENTERTAINMENT, INC.
By: /s/ COLIN V. REED
----------------------------------
Name:
Title:
78
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INDEX OF EXHIBITS
<TABLE>
<S> <C>
Exhibit A Amended and Restated Completion Loan Agreement Term Sheet
Exhibit B Amended and Restated Construction Lien Indemnity Obligation
Agreement Term Sheet
Exhibit C Amended and Restated Management Agreement Term Sheet
Exhibit D Bondholder Term Sheet
Exhibit E Form of City Release Agreement
Exhibit F Term Sheet for Settlement Agreement among Debtors and
Participating Banks
Exhibit G Term Sheet for Settlement Agreement among Debtors and
Underwriters
Exhibit H FNBC Settlement Agreement
Exhibit I Term Sheet for Development Services Agreement
</TABLE>
<PAGE>
Exhibit A
Term Sheet
September 3, 1998
Amended and Restated
Completion Loan Agreement
<PAGE>
Exhibit A
Term Sheet
September 3, 1998
Amended and Restated
Completion Loan Agreement
This term sheet outlines the principal terms of proposed modifications of and
agreements related to that certain Completion Loan Agreement, dated as of
October 12, 1994, as amended by that certain First Amendment to Completion Loan
Agreement dated as of November 8, 1994, by and among Harrah's Jazz Company, a
Louisiana general partnership ("HJC"), Embassy Suites, Inc. (now known as
Harrah's Operating Company, Inc.), a Delaware corporation ("HOCI"), The Promus
Companies Incorporated (now known as Harrah's Entertainment, Inc.), a Delaware
corporation ("HET"), Harrah's New Orleans Investment Company, a Nevada
corporation ("HNOIC"), Grand Palais Casino, Inc., a Delaware corporation, Grand
Palais Management Company, L.L.C., a Delaware limited liability company, and New
Orleans/Louisiana Development Corporation, a Louisiana corporation (the "Prior
Completion Loan Agreement"). This term sheet is attached to and incorporated
into that certain plan of reorganization in the bankruptcy proceedings of HJC
(the "Plan").
1. Documentation. This term sheet is not intended to be a legally binding
agreement but is intended to be the basis for negotiation of definitive
modifications of and agreements related to an amendment and restatement in its
entirety of the Prior Completion Loan Agreement in connection with the Plan. As
set forth more fully in the Plan, if the Plan is not consummated within the time
period specified therein, the parties shall have no further obligations to
pursue the matters described herein.
2. HET and HOCI Approvals
(a) The amended and restated Completion Loan Agreement (the "Amended Completion
Loan Agreement") shall reflect the substitution of Jazz Casino Company, L.L.C.
(the "Company") for HJC under the Amended Completion Loan Agreement as
contemplated by the Plan.
(b) The Amended Completion Loan Agreement shall reflect HET's and HOCI's
approval of the changes in the plans and specifications for the Casino and the
completion of the Casino in phases as contemplated by the Plan.
3. Reorganized Debt Structure. The Prior Completion Loan Agreement, including
without limitation the definitions of "Bank Loan Documents," "Bank Notes," First
Mortgage Notes," "Prior Debt," and "Public Debt," shall be amended to reflect
the ownership, equity, financing and capital structure of the Company as
contemplated by the Plan.
A-1
<PAGE>
4. Completion Loans. The Amended Completion Loan Agreement shall provide that
any amounts (i) expended by HET and/or HOCI pursuant to any of the completion
guarantees to be provided by HET and HOCI as contemplated by the Plan, (ii)
expended by the completion guarantors pursuant to the Performance Bond Indemnity
Agreement (as defined in the Amended Completion Loan Agreement), or (iii)
advanced pursuant to the HET/HOC Guaranty and Loan Purchase Agreement (as
defined in the A Term Loan Documents) shall be unsecured loans ("Completion
Loans") to the Company bearing interest at a rate of eight percent (8%) per
annum and having a maturity date that is six (6) months following the maturity
of the New Bonds and the New Contingent Bonds (each as defined in the Plan)
pursuant to the Plan. Subject to meeting certain "Restricted Payment" tests
contained in the indenture for the New Bonds and in the A Term Loan, B Term Loan
and Working Capital Facility Documents (each as defined in the Plan), early
repayment of the Completion Loans will be permitted. In addition, HET and/or
HOCI as the completion guarantors will be required to make Completion Loans to
the extent that the total cost to complete the Casino (to the point at which the
Casino contains 100,000 square feet of net gaming space) exceeds the budgeted
cost to complete the Casino.
5. Use of Available Funds. The Amended Completion Loan Agreement shall provide
that at such time that there is a demand, call, notice or requirement for
performance of any completion guarantee, without any further action by the
parties to the Amended Completion Loan Agreement the completion guarantors shall
be entitled to control the disbursement and use of certain available funds of
the Company and to apply such available funds of the Company to any and all
costs required to complete the Casino, including, without limitation, drawing or
using any portion of the A Term Loan and the B Term Loan up to the total amount
available thereunder, or taking any other action which the completion guarantors
reasonably determine to be necessary or helpful to obtain the available funds of
the Company to be applied to the cost to complete the Casino. The Amended
Completion Loan Agreement shall also provide that the Company shall use all of
its available funds other than available cash flow for the construction and
development of the Casino.
6. Completion Guarantee Fee and Financing Advisory Fee. Except for the guarantee
fees payable in connection with the HET Loan Guarantee, no further fee shall be
paid by the Company to HET or HOCI in respect of (i) issuing the completion
guarantees, and (ii) HOCI's services and advice in connection with arranging the
financing for completion of the Casino. HET and HOCI shall waive their right to
receive the fee of Eleven Million Eight Hundred Thousand Dollars ($11,800,00)
provided for in Section 7(b) of the Prior Completion Loan Agreement.
7. Elimination of Consulting Fees. The Amended Completion Loan Agreement shall
reflect the elimination of all consulting fees referenced in the definition of
"Consulting Fees" and "Consulting Agreements" in the Prior Completion Loan
Agreement.
8. Entry Agreement. The Company will use its best efforts to cause the City and
the RDC to execute an entry agreement in favor of the completion guarantors in
substantially the form of the entry agreement executed in connection with the
Prior Completion Loan Agreement.
A-2
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Exhibit B
Term Sheet
September 3, 1998
Amended and Restated
Construction Lien Indemnity Obligation Agreement
<PAGE>
Exhibit B
Term Sheet
September 3, 1998
Amended and Restated
Construction Lien Indemnity Obligation Agreement
This term sheet outlines the principal terms of proposed modifications of and
agreements related to that certain Construction Lien Indemnity Obligation
Agreement, dated as of October 12, 1994, by and among Harrah's Jazz Company, a
Louisiana general partnership ("HJC"), Embassy Suites, Inc. (now known as
Harrah's Operating Company, Inc.), a Delaware corporation ("HOCI"), Harrah's New
Orleans Investment Company, a Nevada corporation ("HNOIC"), Grand Palais Casino,
Inc., a Delaware corporation ("Grand Palais"), Grand Palais Management Company,
L.L.C., a Delaware limited liability company ("Grand Palais LLC"), and New
Orleans/Louisiana Development Corporation, a Louisiana corporation (the "Prior
CLIOA"). This term sheet is attached to and incorporated into that certain plan
of reorganization in the bankruptcy case of HJC (the "Plan").
1. Documentation. This term sheet is not intended to be a legally binding
agreement but is intended to be the basis for negotiation of definitive
modifications of and agreements related to an amendment and restatement in its
entirety of the Prior CLIOA in connection with the Plan. As set forth more fully
in the Plan, if the Plan is not consummated within the period specified therein,
the parties shall have no further obligations to pursue the matters described
herein.
2. Substitution and Elimination of Parties. The amended and restated
Construction Lien Indemnity Obligation Agreement (the "Amended CLIOA") shall
reflect (i) the substitution of Jazz Casino Company, L.L.C. (the "Company") for
HJC under the Amended CLIOA as successor to HJC's right, title and interest in
the Prior CLIOA, and (ii) the elimination of HNOIC, Grand Palais, Grand Palais
LLC and NOLDC as parties thereto.
3. Construction Lien Indemnity Obligations. It is anticipated that a new
Construction Lien Indemnity Agreement will be required to be delivered to the
title company providing a lender's policy of title insurance in connection with
the new construction financing contemplated by the Plan. Said new Construction
Lien Indemnity Agreement is anticipated to indemnify the Company's title
insurers regarding mechanic's liens claiming priority to Casino financing. The
Amended CLIOA shall provide that any amounts expended by HOCI pursuant to said
new Construction Lien Indemnity Agreement shall be obligations of the Company
payable on demand by HOCI if allowed pursuant to the restricted payments
covenants in the New Indenture and Working Capital Loan Documents (as defined in
the Plan). Such obligations shall bear interest at a rate of eight percent (8%)
per annum.
B-1
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4. No Additional Fees. The Amended Construction Lien Indemnity Obligation
Agreement shall provide that no additional fees shall be payable to HOCI in
respect of its agreement to enter into the Amended Construction Lien Indemnity
Obligation Agreement.
B-2
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Exhibit C
Term Sheet
September 3, 1998
Amended and Restated
Casino Management Agreement
<PAGE>
Exhibit C
Term Sheet
September 3, 1998
Amended and Restated
Casino Management Agreement
This term sheet outlines the principal terms of proposed modifications
of and agreements related to that certain Amended and Restated Management
Agreement, dated as of March 15, 1994 (the "Management Agreement"), by and among
Harrah's New Orleans Management Company, a Nevada corporation ("Manager"), and
Harrah's Jazz Company, a Louisiana general partnership ("HJC"). This term sheet
is attached to and incorporated into that certain plan of reorganization in the
bankruptcy case of Owner (the "Plan").
1. Documentation. This term sheet is not intended to be a legally binding
agreement but is intended to be the basis for negotiation of definitive
modifications of and agreements related to the Management Agreement in
connection with the Plan. As set forth more fully in the Plan, if the Plan is
not consummated within the time period specified therein, the parties shall have
no further obligations to pursue the matters described herein.
2. Manager Approvals
(a) New Owner. The Management Agreement shall be amended and restated
(the "Second Amended Management Agreement") to reflect the substitution of Jazz
Casino Company, L.L.C., a Louisiana limited liability company, as "Owner" under
the Second Amended Management Agreement as successor to all of HJC's right,
title and interest in the Second Amended Management Agreement.
(b) Modified Project. The Second Amended Management Agreement,
including without limitation Section 2.03 - "Development" and the approved
Program Plans attached as Exhibit "G" to the Second Amended Management
Agreement, shall reflect Manager's approval of the build out of the casino to be
located at the Rivergate site (the "Casino") as described in the Plan.
3. Development and Construction. The Second Amended Management Agreement,
including without limitation the definitions of "Completion Deadline" and
"Opening Date," shall tie any development, construction and related deadlines to
the development, construction and opening of the Casino.
4. Reserve Fund for Capital Replacements and Capital Improvements; Periodic
Contributions to Reserve Fund. The capital reserve provisions will be revised to
conform to the proposed changes in the City Lease whereby Manager on behalf of
Owner shall deposit into the reserve
<PAGE>
fund one-twelfth of Three Million Dollars ($3,000,000) for each month of the
first twelve (12) month period following the completion of the Casino,
one-twelfth of Four Million Dollars ($4,000,000) for each month of the second
twelve (12) month period following the completion of the Casino, one-twelfth of
Five Million Dollars ($5,000,000) for each month of the third twelve (12) month
period following the Completion of Casino, and two percent (2%) of gross
revenues of the Casino for each fiscal month thereafter.
5. Management Fees
(a) Base and Incentive Fee. Section 9.01 of the Second Amended
Management Agreement will reflect that Owner agrees to pay to Manager a
management fee (the "Management Fee") having two components. The first component
(the "Base Fee") shall equal three percent (3.0%) of gross revenues of the
Casino. The second component (the "Incentive Fee") shall equal seven percent
(7.0%) of consolidated EBITDA (the EBITDA definition in the Second Amended
Management Agreement will be the same as the EBITDA definition in the Indenture)
in excess of (i) $40 million for the six month period ending on the date which
is six months after the opening of the Casino and each anniversary of such date,
and (ii) $75 million for the twelve month period ending on the date which is
twelve months after the opening of the Casino and each anniversary of such date,
less the Incentive Fee paid to the Manager for the prior six (6) months;
provided however, that the Manager shall refund to JCC all fees paid by JCC
under subsection (i) hereof if EBITDA does not exceed $75 million for the twelve
month period ending on the date which is twelve months after the opening of the
Casino and each anniversary of such date, with appropriate proration of such
threshold for any partial year following the opening date of the Casino and
preceding the termination of the Second Amended Management Agreement, as the
case may be. The Base Fee shall be payable to Manager monthly subject to the
priorities set forth in the Second Amended Management Agreement. The Incentive
Fee, if any, shall be payable to Manager at six (6) month intervals on the next
business day following actual cash payment of all accrued fixed interest and
contingent interest, if any, on the New Bonds and the New Contingent Bonds (both
of which are as defined in the Plan) pursuant to the Plan and subject to the
priorities set forth in the Second Amended Management Agreement.
(b) Defaults. No Base Fee shall be paid, and no Incentive Fee shall be
accrued or paid, during or with respect to any period in which Owner is in
default with respect to interest or principal payments under the New Bonds, the
New Contingent Bonds or the Bank Loans. In the case of any such default, any
unpaid Base Fees shall be deferred and payable at such time as any such default
is cured.
(c) Deferral of Management Fees
(i) The New Bonds provide for 6 elections by Owner to pay
semi-annual interest in kind rather than in cash for the first 3 year period of
the term of the New Bonds and for further elections by Owner to pay semi-annual
interest in kind thereafter if the Consolidated EBITDA for the prior twelve (12)
months have not exceeded $28,500,000 (collectively the "PIK Elections"). If
Owner is required by the Indenture or by the Credit Agreement to defer Base
C-2
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Fees, Manager consents and agrees to such deferrals of Base Fees. Any such
election or elections shall be by written notice from Owner to Manager
specifying the amount required to be deferred under the Indenture and/or the
Credit Agreement (the "Deferral Amount"). Such Deferral Amount shall first be
applied to any Base Management Fees then unpaid and thereafter accruing during
the applicable six (6) month period. To the extent any such Deferral Amount
shall exceed the projected amount of any unpaid and thereafter accruing Base
Management Fees for the applicable six (6) month period or if such six (6) month
deferral period shall have already elapsed, Manager shall refund to Owner the
remaining amount of such Deferral Amount not to exceed the amount of any Base
Management Fees previously paid to Manager with respect to any portion of the
applicable six (6) month period accruing prior to Owner's PIK election. To the
extent Manager is required to refund to Owner any Incentive Fee or any deferred
Base Management Fees pursuant to this Section 5, HET shall guarantee such
repayment. Owner and Manager acknowledge that the Indenture and the Credit
Agreement require that the Incentive Management Fee be deferred during any
corresponding PIK Election. Manager consents to such deferrals of Incentive Fees
as may be required by the Indenture and Credit Agreement.
(ii) Any Management Fees deferred pursuant to Section 5(c)(i)
above shall bear interest at eight percent (8.0%), which shall accrue until such
deferred Management Fees are repaid. Interest on Base Fees shall accrue (A) from
the date the Base Fees would otherwise have been payable, if the Base Fees were
not paid pursuant to Section 5(c)(i) hereof, or (B) from the date the Base Fees
were refunded by Manager, if the Base Fees were refunded pursuant to Section
5(c)(i) hereof. Following such time as Owner has achieved Consolidated EBITDA of
not less than Sixty Five Million Dollars ($65,000,000) for the preceding twelve
(12) month period, any Base Management Fees deferred pursuant to Section 5(c)(i)
hereof together with interest thereon shall be payable to Manager pro rata with
any deferred guaranty fees out of excess cash flow (remaining after application
of the excess cash flow sweep required by the Credit Agreement for the Bank
Loans) to the extent Consolidated EBITDA exceeds Sixty Five Million Dollars
($65,000,000). Following such time as Owner has achieved Consolidated EBITDA of
not less than Seventy Five Million and 00/100 Dollars ($75,000,000) for the
preceding twelve (12) month period, any incentive fees deferred pursuant to this
Article 9.01(c) together with interest thereon shall be payable to Manager,
after repayment of any deferred Base Management Fees and deferred guaranty fees
out of excess cash flow (remaining after application of the excess cash flow
sweep required by the Credit Agreement for the Bank Loans) to the extent
Consolidated EBITDA exceeds Seventy Five Million and 00/100 Dollars
($75,000,000).
6. Termination Rights and Termination Fees
(a) Change of Control of Owner. Following the Transition Date (as
defined in the Certificate of Incorporation of JCC Holding), if any entity
(including any Controlled Affiliates, as defined in the Second Amended
Management Agreement, of such entity and any entity of which such entity is a
Controlled Affiliate) which (i) controls or operates, or, as of the date the
Plan is consummated, is licensed or qualified to control or operate in any of
the states of Illinois, Indiana, Louisiana, Mississippi, Missouri, Nevada or New
Jersey, a casino or casino hotel facility, or (ii) has been, within the five (5)
years prior to the date the Plan is consummated, involved in litigation
C-3
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with Harrah's Entertainment, Inc. which Harrah's Entertainment, Inc. has
disclosed in an Annual Report on Form 10-K on or prior to the date the Plan is
consummated, or which Harrah's Entertainment, Inc. would be required to disclose
in its next Annual Report on Form 10-K following the date the Plan is
consummated, acquires twenty percent (20%) or more of the outstanding shares of
JCC Holding and the Board of Directors of JCC Holding shall not consist of a
majority of Continuing Directors, Manager shall be entitled to terminate this
Agreement upon ninety (90) days' written notice to Owner, but shall not be
entitled to receive a Termination Fee as defined in Article 17.02 of the Second
Amended Management Agreement.
(b) Sale of Casino. Following the Transition Date, if Owner shall sell,
assign or transfer any of its direct or indirect legal or beneficial interest in
the Casino, to any person other than a Qualified Purchaser (as defined in
Article 21.02(c) of the Second Amended Management Agreement) approved by Manager
pursuant to Article 21.02(d) of the Second Amended Management Agreement and
which assumes and agrees to perform all obligations of Owner under the Second
Amended Management Agreement, Manager shall be entitled to terminate the Second
Amended Management Agreement upon the closing of such sale, assignment or
transfer, but shall not be entitled to receive a Termination Fee.
(c) Failure to Open. The Second Amended Management Agreement shall
terminate without any further action of JCC or the Manager immediately upon the
termination of the Amended Ground Lease by the RDC as a result of JCC's failure
timely to complete construction of the Casino, and the Manager shall not be
entitled to any Termination Fee.
(d) Condemnation. If the Casino is condemned, the Manager shall be
entitled to seek its share of any condemnation proceeds but shall not be
entitled to any Termination Fee.
(e) Default by Owner. Upon a default by Owner or failure of Owner to
complete any obligatory reconstruction or restoration of the Casino after an
insured casualty or partial condemnation, the Manager shall be entitled to
receive a Termination Fee.
7. Assignment or Transfer of Title by Owner. The Second Amended Management
Agreement will provide no restriction on transfers of ownership interests in the
ultimate parent of Owner; provided, however, if a Non-Qualified Person shall
have a legal or beneficial interest in the equity or debt of the Company, and
such situation is not cured within forty five (45) days, or such shorter period
as may be required by any governmental entity with authority over the Casino,
Manager shall have the right to terminate the Second Amended Management
Agreement and collect the Termination Fee. The Second Amended Management
Agreement shall provide that a "Non-Qualified Person" shall be any person or
entity that
(a) controls or operates, or, as of the date the Plan is consummated,
is licensed or qualified to control or operate in any of the states of Illinois,
Indiana, Louisiana, Mississippi, Missouri, Nevada or New Jersey, a casino or
casino hotel facility; and
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(b) has been, within the five (5) years prior to the date the Plan is
consummated, involved in litigation with Harrah's Entertainment, Inc. which
Harrah's Entertainment, Inc. has disclosed in an Annual Report on Form 10-K on
or prior to the date the Plan is consummated, or which Harrah's Entertainment,
Inc. would be required to disclose in its next Annual Report on Form 10-K
following the date the Plan is consummated; and
(c) would, if associated with Owner or Owner's affiliates or with
Manager, in the reasonable judgment of Manager or any licensing authority,
impair or cause the denial, suspension or revocation of any gaming registration,
permit, license, right or entitlement or alcoholic beverage registration,
permit, license, right or entitlement held or applied for by Owner, Manager or
any affiliate of Manager or Owner.
8. Competition. The covenant not to compete will be revised to apply to Owner
and Manager and their respective affiliates.
9. Miscellaneous
(a) Casino Operational Standards. The definition of Casino Operational
Standards in the Second Amended Management Agreement shall provide that the
standard of the physical plant of the Casino may be measured against the
Harrah's Atlantic City Casino and that the operational practices of the Casino
shall be gauged against the operational practices of the Harrah's Atlantic City
Casino.
(b) Payments. A general catch-all provision will be added to the Second
Amended Management Agreement as Article 6.05 allowing Manager to make payments
in accordance with the Second Amended Management Agreement.
(c) Choice of Law. The choice of law will be Nevada, except as
mandatory provisions of the Gaming Act as to which the external laws of the
State of Louisiana shall apply without regard to principles of conflicts of law.
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Exhibit D
September 3, 1998
Bondholder Term Sheet
Summary of Restructuring
<PAGE>
Exhibit D
September 3, 1998
Bondholder Term Sheet
Summary of Restructuring
A. New Capital
1. Capital Structure. Jazz Casino Company, L.L.C., a Louisiana limited
liability company ("JCC") will fund the completion of construction of the casino
at the Rivergate site in New Orleans (the "Casino") through (i) a $60 million
term loan (the "A Term Loan") from a syndicate of lenders led by Bankers Trust
Company ("BTCo"), (ii) a $151.5 million term loan from BTCo (the "B Term Loan"
and, together with the A Term Loan, the "Term Loans"), (iii) the sale of
approximately $27 million aggregate principal amount of Convertible Junior
Subordinated Debentures of JCC (the "Convertible Junior Subordinated
Debentures"), (iv) a credit facility pursuant to which Harrah's Entertainment
Inc. ("HET") and Harrah's Operating Company, Inc. ("HOCI"), a wholly-owned
subsidiary of HET, will make available up to $22.5 million of subordinated
indebtedness (the "Junior Subordinated Credit Facility") to fund project costs,
and (v) an equity investment by Harrah's Crescent City Investment Company (the
"Harrah's Investor") in an amount equal to the difference between $75 million
and the then outstanding principal amount of debtor-in-possession financing
provided at any time on or before the Effective Date (the "New Equity
Investment"). JCC will also have up to $25 million available for working capital
purposes under a working capital line of credit (the "Working Capital Facility"
and, together with the Term Loans, the "Bank Loans").
2. The Bank Loans. The Bank Loans will be on the terms and conditions
set forth in Exhibit F to the Third Amended Joint Plan of Reorganization, as
Modified through August 12, 1998 (the "Plan") and will have such other terms and
conditions as are acceptable to HET and the committee (the "Bondholders'
Committee") made up of holders (the "Bondholders") of the 14 1/4% First Mortgage
Notes due 2001 (the "Old Bonds") of Harrah's Jazz Company ("HJC").
B. New Entities
1. Assets and Ownership of the New Entities. The assets and business,
except certain excess real property, of HJC will be transferred to JCC on the
Effective Date as set forth in the Plan, subject to any gaming regulatory
approvals and state law and, to the extent practicable, taking into account
economic efficiencies and simplicity of execution. Title to certain excess real
property owned by HJC will vest in each of CP Development, L.L.C. ("CPD") and FP
Development, L.L.C. ("FPD"), both of which are newly formed Louisiana limited
liability companies. JCC will enter into a sublease of the second floor of the
Casino with JCC Development, L.L.C., a Louisiana limited liability company. CPD,
FPD and JCC Development will each provide mortgages (which may be released or
subordinated under terms and conditions acceptable to the Banks, the
Bondholder's Committee and the Proponents) and guarantees for the benefit of the
banks, bondholders and Minimum Payment Guarantors. JCC, JCC Development,
<PAGE>
CPD and FPD will be wholly-owned by JCC Intermediary Company, L.L.C., a
Louisiana limited liability company ("JCC Intermediary"), which, in turn, will
be wholly-owned by JCC Holding Company, a Delaware corporation ("JCC Holding"
and, together with JCC and JCC Intermediary, the "JCC Entities" and the JCC
Entities, together with CPD, FPD, and JCC Development, the "New Entities").
Pending the resolution of certain structural considerations, JCC Intermediary
may be eliminated prior to the Effective Date. In such case, JCC, JCC
Development, CPD and FPD will be wholly-owned subsidiaries of JCC Holding. HET,
the bondholders of Grand Palais, and the shareholders of NOLDC will receive a
49.9% stock ownership in JCC Holding (of which 2.0% will be allocated to
Releasing Bondholders, as provided in the Plan); provided that HET will hold not
less than 51% of such 49.9% stock ownership and will, for as long as the
corporate governance provisions described below are in effect, maintain a
majority interest thereof. Of the remaining 50.1%, 37.1% of the stock of JCC
Holding will be issued to the Bondholders, and the remaining 13.0% of the stock
of JCC Holding will be allocated to Releasing Bondholders, as provided in the
Plan of Reorganization. Accordingly, under the Plan, Releasing Bondholders will
receive an aggregate of 15% of the stock of JCC Holding.
2. Flip Events. Generally, the directors designated by the Class B
Stockholders (the "Class B Directors") will supervise the day-to-day activities
with respect to the New Entities unless one of the following events ("Flip
Events") occurs: (i) (a) JCC is in default in any material respect under the
Bonds (as hereinafter defined) or the JCC Entities are in default in any
material respect under any material agreements with the City of New Orleans (the
"City") or the State of Louisiana (the "State"), any other financing agreements,
any other material contracts or any of their organizational documents, and (b)
such default by the JCC Entities is caused by HET, HOCI or Harrah's New Orleans
Management Company (the "Casino Manager") related events, (ii) the Casino
Manager is in default in any material respect under its management agreement,
HET or HOCI is in default in any material respect under the completion
guaranties or HET or its affiliates are in default in any material respect under
any other material agreements relating to the Casino between HET or its
affiliates and the City or the State or any agency or instrumentality of the
City or State, (iii) a filing for bankruptcy by or against HET, HOCI, the Casino
Manager, any direct or indirect parent thereof, or any affiliate of HET which is
controlled by HET (an "HET Controlled Affiliate") if the filing by or against
such HET Controlled Affiliate has or is reasonably likely to have an adverse
effect on JCC, the Casino or the suitability of any person required to be found
suitable under Louisiana gaming laws, or (iv) the Louisiana Gaming Control Board
(the "LGCB") makes the determination that HET or its affiliate is unsuitable to
own an equity interest in JCC Holding.
3. Effect of Flip Event. Upon the occurrence of a Flip Event, the
directors of JCC Holding selected by the former Bondholders (the "Independent
Directors") will supervise the day-to-day activities with respect to the New
Entities; provided, however, that if all defaults causing a Flip Event to have
occurred are cured, the Class B Directors will resume supervising the day-to-day
activities of the New Entities.
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4. Significant Transactions. Notwithstanding the foregoing, approval by
the Independent Directors of JCC Holding will be required if a New Entity
proposes to engage in a Significant Transaction. "Significant Transactions"
shall include, without limitation, (i) amendments of the organizational
documents of any of the New Entities, (ii) any merger, consolidation, lease or
sale of a material portion of their respective businesses or assets, (iii) any
material transaction or transactions, except for certain excluded transactions,
during a single fiscal year with HET or an HET Controlled Affiliate (including
any decisions regarding the exercise, waiver or modification of rights or
obligations under the management agreement) which in the aggregate involve
consideration in excess of a threshold to be determined by the board of
directors of JCC Holding, (iv) declarations of dividends, (v) amendment of any
material agreements with the City or the State, (vi) bankruptcy events, (vii)
incurrence of, or assumption of liability for, indebtedness for borrowed money,
other than indebtedness incurred pursuant to the Plan, the amendment of the
terms of any indebtedness for borrowed money or any modification, consent or
waiver thereunder, (viii) any issuance of securities, (ix) any repurchase of
securities of a New Entity, (x) any change in the independent auditors, and (xi)
approval of JCC's annual operating plan and annual capital budget.
5. After a Flip Event. If a Flip Event has not occurred, or has
occurred other than as the result of a willful action or failure to act by the
Class B Directors, HET, the Casino Manager, or an HET Controlled Affiliate, as
determined by Speedy Arbitration, the approval by the Class B Directors will be
required if any of the JCC Entities proposes to engage in Significant
Transactions. Speedy Arbitration shall mean an arbitration in which a single
arbitrator is selected by HET or its subsidiary and the Bondholders Committee,
the arbitration is binding, and the arbitration occurs on an expeditious
schedule as determined by the arbitrator. An arbitrator or a mechanism for
arbitration shall be identified and set forth in the appropriate organizational
documents. If a Flip Event has occurred and the approval of the Class B
Directors is not required for a Significant Transaction, any action or inaction
by the Independent Directors during the period after the Flip Event and prior to
the cure of all defaults giving rise thereto shall not disproportionately affect
any group of holders of equity of the JCC Entities. Such approval by the
Independent Directors and the Class B Directors, respectively, will, in certain
cases, require a majority thereof and in other cases will require unanimity.
6. Independent Directors; Extraordinary Flip Event. JCC Holding's board
of directors will consist of an equal number of Independent Directors and Class
B Directors, but (i) the Independent Directors will constitute a majority of the
audit committee, (ii) one Independent Director will be added to the board if a
Flip Event (including a Flip Event resulting from Casino Manager bankruptcy
events, but excluding a Flip Event resulting from HET bankruptcy events) occurs
as the result of a willful action or failure to act by the Class B Directors,
HET, the Casino Manager, or an HET Controlled Affiliate as determined in a
Speedy Arbitration process (an "Extraordinary Flip Event"); provided, however,
that such additional Independent Director will be removed if such Extraordinary
Flip Event is cured, and (iii) unless an Extraordinary Flip Event has occurred
and has not been cured, one Class B Director will be added to the board in the
event that
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at least 20% of the outstanding shares of Class A Stock of JCC Holding are
acquired (a "Change of Control") by any entity (including any parent and any
controlled affiliates) (a "Conflicted Entity") (a) which controls or operates,
or is licensed in any of Illinois, Indiana, Louisiana, Mississippi, Missouri,
Nevada or New Jersey to control or operate, as of the Effective Date, a casino
or casino hotel facility, or (b) which has been involved in material litigation
with HET within the five years prior to the Effective Date; provided, however,
that such additional Class B Director will be removed if (x) the percentage of
Class A Stock of JCC Holding owned by such Conflicted Entity falls below 20%, or
(y) an Extraordinary Flip Event occurs after such Change of Control.
7. Classes of Directors. JCC Holding's board will be divided into three
classes of directors with staggered terms of office.
8. Class A and Class B Directors. Until the Transition Date (as
hereinafter defined) there shall be an equal number of Independent Directors and
Class B Directors in each of the three classes of directors. When an Independent
Director's term of office expires, the remaining Independent Directors will
constitute the committee authorized to nominate the candidate for such
Independent Director's position, and when a Class B Director's term of office
expires, the remaining Class B Directors will constitute the committee
authorized to nominate the candidate for such Class B Director's position.
9. JCC and JCC Intermediary Governance. JCC shall be a member managed
Louisiana limited liability company with JCC Holding as its sole member manager.
If JCC Intermediary is utilized, the sole member manager of JCC Intermediary
will be JCC Holding, and JCC Intermediary will be the sole member manager of
JCC.
10. Director Compensation. The JCC Entities will pay reasonable
directors' fees and long term compensation to all of the Independent Directors
(and, until the Transition Date, to Class B Directors who are not employees of
HET), will pay the reasonable out-of-pocket expenses of all of their directors,
and will carry adequate D&O insurance for the benefit of all of their directors.
11. Classes of Stock and Conversion of Stock. Until the Transition Date
there will be two outstanding classes of common stock of JCC Holding, one class
to be received by the Bondholders ("Class A Stock") and one class to be received
by HET, the bondholders of Grand Palais and the shareholders of NOLDC ("Class B
Stock"), which will be identical in all respects except (i) holders of Class A
Stock will elect the Independent Directors and holders of Class B Stock will
elect the Class B Directors, (ii) shares of Class B Stock will be converted into
shares of Class A Stock upon transfer to any entity except HET, the bondholders
of Grand Palais, NOLDC, any shareholder of NOLDC, and any of such entities'
affiliates (collectively, "Class B Entities"), and (iii) subject to certain
exceptions upon a Change of Control, shares of Class A Stock upon transfer to a
Class B Entity will be converted into shares of Class B Stock.
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12. Capital Budget. All changes to JCC's capital budget prior to
termination of the Completion Guarantee (as defined herein), except for changes
which reduce the scope or character of the Casino, as reflected in the approved
Plans and Specifications, or which exceed $5 million or such other threshold as
may be determined by the board of directors of JCC Holding, will be approved by
the Gaming Committee of JCC Holding's board of directors; thereafter all changes
to JCC's capital budget up to $250,000 will be approved by the Gaming Committee
and all changes to JCC's capital budget between $250,000 and $2 million will be
approved by the Capital Committee of JCC Holding's board of directors
(consisting of a single Independent Director and a single Class B Director until
the Transition Date). The capital budget itself will be approved by the board of
directors of JCC Holding.
13. Transition Date. The governance provisions set forth in Sections
B.2, 3, 4, 5, 6, 8 and 11 shall terminate upon the Transition Date. The
"Transition Date" shall occur on the earliest of (i) the third anniversary of
the date which the Casino is open to customers, (ii) the end of two consecutive
12-month periods in each of which the Contingent Payments under the New Bonds
and the New Contingent Bonds equals or exceeds $15 million, and (iii) the end of
a period consisting of 30 consecutive trading days during which the average
daily closing Minimum Market Value (as defined below) equals or exceeds $435
million (as adjusted by the board of directors in good faith to account for
purchases of common stock or issuances of additional common stock). The "Minimum
Market Value" is, for each trading day, the sum of (i) the closing bid price of
a share of Class A Stock multiplied by the aggregate number of such shares
issued and outstanding plus (ii) the closing bid price per $1,000 of New Bonds
and New Contingent Bonds, divided by $1,000, and multiplied by the aggregate
principal amount of such Bonds outstanding.
C. Fiduciary Considerations
All definitive documentation implementing the transactions contemplated
by this term sheet will provide the Bondholders' Committee with a "fiduciary
out" in the event that there is a superior offer with respect to the Old Notes.
The Bondholders' Committee has agreed not to solicit any other sponsors after
August 23, 1996 (the "No Shop Date"). After the No Shop Date, if the
Bondholders' Committee supports a plan of reorganization not supported by HET,
or withdraws its support for a plan of reorganization supported by HET, then at
such time, HET shall be entitled to receive the immediate repayment of its DIP
loans (including all amounts advanced thereunder and accrued interest on such
advances). In addition, if after the date on which HET, the City, the State and
the Bondholders' Committee are definitively committed to support a plan of
reorganization supported by HET (the "Definitive Commitment Date"), the
Bondholders' Committee supports a plan of reorganization not supported by HET,
or withdraws its support for a plan of reorganization supported by HET, then HET
shall be entitled to receive from HJC a "break-up" fee of $2.5 million at such
time and the Bondholders' Committee shall not support any plan that does not
provide that HET shall be entitled to receive from HJC $5 million at the time of
the confirmation of such other plan and $5 million at the time of consummation
of
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such other plan. The Definitive Commitment Date shall be the date on which the
HET, the Bondholders Committee, the City and the State have negotiated and
agreed to definitive documentation. All such definitive documentation shall be
in form and substance acceptable to the Bondholders Committee.
D. Old Notes
The holders of $435 million of the existing Old Bonds will receive: (i)
$187.5 million of Senior Subordinated Notes with Contingent Payments of JCC (the
"New Bonds") having the terms described on the attached term sheet; (ii) the
Senior Subordinated Contingent Notes (the "New Contingent Bonds" and, together
with the New Bonds, the "Bonds") having the terms defined in the attached term
sheet; and (iii) 37.1% of the stock of JCC Holding. The Releasing Bondholders
shall receive 13.0% of the stock of JCC Holding to be allocated among the
Releasing Bondholders, as described herein.
E. Management Agreement
1. Management Fees. The Casino Manager will receive 3.0% of gross
revenues ("Base Management Fee") and 7.0% of EBITDA above (i) $40 million for
the six-month period ending on the date which is six months after the opening of
the Casino and each anniversary of such date, and (ii) $75 million for the
twelve month period ending on the date which is twelve months after the opening
of the Casino and each anniversary of such date, less the Incentive Fee paid to
the Casino Manager for the prior six months ("Incentive Management Fee") for
managing the Casino; provided, however, that the Casino Manager shall refund to
JCC all fees paid by JCC under subsection (i) hereof if EBITDA does not exceed
$75 million for the twelve month period ending on the date which is twelve
months after the opening of the Casino and each anniversary of such date.
"EBITDA" means earnings before interest, taxes, depreciation and amortization
but after payment of the Base Management Fee. The definition of EBITDA for
purposes of the Incentive Management Fee shall be the same as for purposes of
the New Contingent Bonds.
2. Payment of Base Management Fees. The Base Management Fee will be
paid monthly; provided, however, that HET will unconditionally guarantee the
repayment to JCC of the Casino Manager's obligation to repay any Base Management
Fees required as a result of a PIK election.
3. Payment of Incentive Management Fees. The Incentive Management Fee,
if any, will be paid at six month intervals on the next business day following
actual cash payment of all accrued fixed interest and contingent interest, if
any, on the Bonds. No Base Management Fee will be paid, and no Incentive
Management Fee will be accrued or paid, during or with respect to any period in
which JCC is in default with respect to interest or principal payments under the
Bonds.
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4. Deferrals. JCC shall have the option of making the first six
semi-annual interest payments of fixed interest on the New Bonds in kind rather
than in cash (the "PIK Periods"); provided however, that the first four
semi-annual interest payments must be paid in kind if Tranches A-1 and/or A-2
are outstanding at the end of the corresponding PIK Periods.
a. The Casino Manager will defer Base Management Fees for the
corresponding first, second, third or fourth PIK Period to the extent the cash
savings resulting from the PIK election is needed for cash flow deficiencies
other than repayment of Tranche A-1 and Tranche A-2, and such deferred Base
Management Fee plus applicable interest shall be due and payable to the Casino
Manager, pro rata with any deferred guaranty fees, out of excess cash flow
(remaining after application of the excess cash flow sweep required by the
Credit Agreement for the Bank Loans) at such time and to the extent that EBITDA
exceeds $65 million.
b. Any Incentive Management Fee payable to the Casino Manager will
be deferred during the corresponding third, fourth, fifth or sixth PIK Periods
if the respective third, fourth, fifth or sixth PIK election, as the case may
be, is required under the bank credit agreement or elected by JCC, and such
deferred Incentive Management Fees shall be due and payable to the Casino
Manager, after repayment of any deferred Base Management Fees and deferred
guaranty fees, out of excess cash flow (remaining after application of the
excess cash flow sweep required by the Credit Agreement for the Bank Loans) at
such times as and to the extent that EBITDA exceeds $75 million.
c. If EBITDA is less than $28.5 million for the twelve-month
period ending one month prior to each semi-annual New Bond interest payment date
beginning with the fourth year after the Effective Date, the Base Management
Fee, Bank Loan principal, and HET guaranty fees will be deferred, and the
Bondholders will receive PIK interest.
d. JCC may not pay fixed interest in kind for the fifth and sixth
PIK-periods if (i) Tranches A-1 and A-2 have been fully repaid, (ii) there are
no outstanding drawings under the Revolving Credit Facility, and (iii) the
Casino has accumulated cash availability of at least $20 million.
5. Subordination of Management Fees and Other Amounts. In the event of
any payment default on the Bonds, any other default that results in acceleration
of the Bonds, the bankruptcy of JCC, or similar matters, any accrued but unpaid
Base Management Fees or Incentive Management Fees shall be subordinated to
payments on the Bonds in the following order:
a. Fixed interest on New Bonds
b. Principal amount of New Bonds
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c. Base Management Fee
d. Contingent Payments on New Bonds and New Contingent Bonds
e. Amounts advanced under Completion Guarantee
f. Incentive Management Fee
6. Year 2000 Compliance. The Management Agreement shall contain a
covenant from the Manager regarding Year 2000 compliance.
F. DIP Financing
1. Prior DIP Loans. HET, or an affiliate of HET, has advanced over $40
million to recommence construction of the Casino and fund other amounts
necessary for the continuation of the HJC bankruptcy case and the consummation
of the Plan in the form of debtor-in-possession ("DIP") loans.
2. Additional DIP Loans. The JCC Entities will need additional funds
prior to the Effective Date. HET, or an affiliate of HET, will provide
additional DIP financing in accordance with the HET DIP order entered by the
Bankruptcy Court.
3. Repayment. Principal on the DIP loans will be (i) repaid in full in
cash upon consummation of a plan of reorganization, or (ii) converted into the
New Equity Investment (and count toward the $75 million equity investment) on a
dollar-for-dollar basis. The Plan shall provide that any HET claim for interest
on the DIP Loans will be canceled upon consummation of the Plan. The DIP loans
shall be entitled to an administrative priority superior to the priority of all
other creditors in the bankruptcy.
4. Collateral. The DIP loans will receive a primary lien on all assets
of the estate, including the Fulton Street and 3CP properties, all gaming
equipment (subject to regulatory approval), all cash collateral (including the
cash collateral held by FNBC), and all causes of action of the Estate other than
insider claims.
5. Funding. Prior to the termination of the DIP loans (by acceleration,
maturity or otherwise), HET will fund sufficient amounts under the DIP loans to
provide for the payment of administrative expense claims for fees, expenses and
costs of professionals properly retained pursuant to court order, including
professionals properly retained pursuant to court order by the debtors and the
creditors' committees (including, without limitation, the Bondholders Committee)
to the extent such fees, expenses and costs (i) are payable pursuant to a court
order entered prior to such termination of the DIP loans, or (ii) are provided
for in a budget approved by HET.
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6. Termination. Upon the termination of the DIP loans (by acceleration,
maturity or otherwise), HET's administrative priority claims and the liens and
security interests granted under the terms of the DIP loans shall not have
priority over, and shall be subordinate and junior to, up to an aggregate of
$1.5 million of unpaid administrative expense claims for fees, expenses and
costs of professionals properly retained pursuant to court order, including
professionals properly retained pursuant to court order by the debtors and the
creditors' committees (including, without limitation, the Bondholders'
Committee).
7. Call. The DIP loans may be called at par plus accrued interest at
any time at the discretion of the Bondholders' Committee.
G. Agreements with City and State
1. City and LGCB. Any plan of reorganization of HJC is subject to the
approval of the LGCB (LEDGC's successor) and the City of New Orleans, except to
the extent such approvals are not required under bankruptcy law.
2. Agreement. As part of its Plan, HJC will seek certain agreements
with the City and State. Any agreements between HJC, on the one hand, and the
City or the State, on the other hand, shall be satisfactory to the Bondholders'
Committee, in its sole discretion.
H. Completion Guarantee
1. Form of Completion Guarantee. For the benefit of holders of the
Bonds, HET and HOCI will unconditionally and irrevocably guarantee completion of
the project (the "Completion Guarantee") as discussed below, in accordance with
the City and State requirements, subject only to force majeure, on terms
substantially identical to the terms to be contained in HET's and HOCI's
completion guarantee in favor of the State and the City delivered in connection
with the Plan (including without limitation, collateral, guaranties or third
party financial support). In any event, such Completion Guarantee shall not
contain any financing condition precedent to the obligations of HET or HOCI.
2. Reimbursement of Completion Guarantors. The obligation of JCC to
repay amounts advanced by HET or HOCI will be an unsecured obligation and junior
in right of payment to the full $187.5 million of New Bonds and all amounts
owing under the New Contingent Bonds. Such repayment obligation will have an
interest rate of 8% per annum and will mature 6 months after the maturity of the
Bonds; provided, however, that early repayment of such obligation will be
permitted if allowed pursuant to a "Restricted Payments" test to be negotiated
in the indenture for the Bonds.
3. Scope of Completion Guarantee. The Completion Guarantee will cover
the costs of construction, equipment, opening (pre-opening expenses and
cashloads) and opening working capital for the Casino and Second Floor Shell
Construction in accordance with an
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agreed-upon list of Casino and Second Floor Shell Construction completion
specifications. The Casino shall consist of approximately 100,000 square feet of
net gaming space on the first floor, a 250-seat buffet, two parking garages, an
underground tunnel between the Casino and the parking garages and approximately
15,000 square feet of multi-function, special event, food service and
meeting-room space on the first floor. The Second Floor Shell Construction shall
consist of an additional approximately 130,000 square feet of multipurpose
non-gaming entertainment space on the second floor of the premises constructed
to the point at which the shell of the structure is complete and the space is
suitable for tenant build-out.
4. Working Capital. The $25 million Working Capital Facility will be
obtained from a third party lender prior to the initial opening of the Casino.
Upon the completion of the Casino and Second Floor Shell Construction, pursuant
to the Completion Guarantee, JCC will have available for working capital (i) $5
million of cash, (ii) $10 million on deposit with the Casino Manager or
available under the Working Capital Facility to fund the Minimum Balance (as
defined in the Management Agreement), and (iii) the Working Capital Facility
Maximum Amount of availability for drawdown(s) under the Working Capital
Facility. The "Working Capital Facility Maximum Amount" equals $25 million
reduced by the amount of funds, if any, not to exceed $2 million, available
under any letter of credit sub-facility under the Working Capital Facility for
purposes other than those relating to project costs of the Casino and further
reduced by a drawing of up to $10 million to be deposited in the Bank Account
(as defined in the Management Agreement) to fund the Minimum Balance. The
Completion Guarantee shall not cover any operating losses following the
completion of the Casino and Second Floor Shell Construction.
I. HET/JCC Agreement
1. Guaranty. HET and HOCI will enter into an agreement with JCC (the
"HET/JCC Agreement") to provide a Minimum Payment Guaranty (as defined in the
Amended and Renegotiated Casino Operating Contract) to the LGCB, subject to
renewal or early termination in accordance with the terms of the HET/JCC
Agreement.
2. Interest. Any drawing on a Minimum Payment Guaranty shall bear
interest at the bank facility Tranche A-3 interest rate. For purposes of
computing the minimum annual payments to the LGCB, the Casino's fiscal year (a
"COC Fiscal Year") will begin on April 1.
3. Renewal. HET and HOCI will commit to provide a Minimum Payment
Guaranty through the COC Fiscal Year ending March 31, 2004; provided that the
obligation of HET and HOCI to provide a Minimum Payment Guaranty pursuant to the
HET/JCC Agreement shall not renew for any of the COC Fiscal Years beginning
April 1, 2000, 2001, 2002 or 2003 if prior to such date: (i) there has been a
JCC bankruptcy or a cessation of Casino operations; (ii) there are any unpaid
guaranty fees (other than fees deferred as agreed in the HET/JCC Agreement);
(iii) there are any unreimbursed drawings on a Minimum Payment Guaranty; (iv) in
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the case of a renewal for the COC Fiscal Year beginning April 1, 2000, the
project has failed to generate positive EBITDA for the period of operations
commencing with the opening of the Casino and ending January 31, 2000, however,
there shall be no EBITDA test for the period of operations ending January 31,
2000 if such period of operations commenced after August 1, 1999; (v) in the
case of the COC Fiscal Years beginning April 1, 2001, 2002, and 2003, the
project has failed to generate EBITDA as of the twelve month period ending
November 30 of the prior calendar year in an amount equal to $15 million as of
the twelve month period ending November 30, 2000, $20 million as of the twelve
month period ending November 30, 2001, and $25 million as of the twelve month
period ending November 30, 2002; (vi) HET, HOCI or the Casino Manager or any of
HET's affiliates has been determined to be unsuitable or the Casino Manager has
been removed as manager of the Casino; (vii) JCC has breached any of the
covenants under Section 5 of the HET/JCC Agreement; (viii) an Excusable
Temporary Cessation of Operations has occurred and is continuing and has not
been cured in accordance with the terms of the Amended and Renegotiated Casino
Operating Contract; or (ix) the Amended and Renegotiated Casino Operating
Contract has been terminated. The HET/JCC Agreement will contain provisions to
adjust the EBITDA test for purposes of clauses (iv) and (v) above if an
Excusable Temporary Cessation of Operations has occurred during a COC fiscal
year.
4. Definition of EBITDA. For purposes of clauses I.3(d) and I.3.(e)
above, EBITDA shall mean operating income determined according to generally
accepted accounting principles plus depreciation and amortization determined
according to generally accepted accounting principles, but will not include any
extraordinary non-cash items, such as the write down of assets, or pre-opening
expenses.
5. Notice. HET and HOCI shall give JCC at least ninety days prior
written notice of any such non-renewal pursuant to clauses I.3(b) and I.3(e)
above. HET shall give JCC at least thirty days prior written notice of any such
non-renewal pursuant to clause I.3.(d). above.
6. Cancellation. Commencing with the COC Fiscal Year ending March 31,
2002, upon ninety days written notice prior to the first day of the respective
COC Fiscal Year, JCC may cancel the commitment of HET and HOCI to provide a
Minimum Payment Guaranty for the COC Fiscal Year ending March 31, 2002 upon
payment of a termination fee of $1 million in cash and may cancel the commitment
of HET and HOCI to provide a Minimum Payment Guaranty for the COC Fiscal Years
ending March 31, 2003 and 2004 without any fee.
7. Restriction on Termination. Notwithstanding any other provision
hereof, JCC will be restricted from terminating the HET/JCC Agreement unless JCC
has obtained a replacement guaranty or letter of credit which meets the
requirements of the Amended and Renegotiated Casino Operating Contract and which
does not result in increased cost to JCC (after giving effect to payment to HET
and HOCI of the termination fee, if applicable), the Amended and Renegotiated
Casino Operating Contract no longer requires JCC to provide a guaranty or
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letter of credit, or the LGCB waives the requirement that JCC provide a guaranty
or letter of credit.
8. Fee. HET and HOCI, collectively, will receive a $6 million per annum
guaranty fee for the COC Fiscal Years ending March 31, 2000 and 2001 and $5
million per annum guaranty fee for the COC Fiscal Years ending March 31, 2002,
2003 and 2004, all payable quarterly. HET and HOCI, collectively, shall receive
a pro rata fee based on an annual fee of $6 million for any partial COC Fiscal
Year ending March 31, 2000. HET and HOCI shall not receive a guaranty fee for
any COC Fiscal Year in which a Minimum Payment Guaranty is not provided and
shall repay to JCC any guaranty fee previously advanced to it in respect of such
COC Fiscal Year.
9. Deferred Fees. If EBITDA is less than $28.5 million for the twelve
month period ending one month prior to each semi-annual New Bond interest
payment date beginning with the fourth year after the Effective Date, the
guaranty fee to HET and HOCI will be deferred. JCC's obligation under the
HET/JCC Agreement to pay the per annum guaranty fee and any termination fee to
HET and HOCI and to reimburse HET and HOCI for any drawings (including interest
thereon) by the LGCB under a Minimum Payment Guaranty will be secured by a first
lien on the Casino assets.
10. Collateral. The collateral to be provided to HET and HOCI pursuant
to the HET/JCC Agreement is to be substantially as provided to the LGCB pursuant
to the State Mortgage and Security Documents attached as exhibits to the LGCB
April, 1997 approved Casino Operating Contract. The mortgages, security
agreement and other lien documents will be joint documents in favor of the
Minimum Payment Guarantors and the Banks and Bondholders, subject to the terms
of a Minimum Payment Guarantor/Bank-Bondholder intercreditor agreement setting
forth their lien priorities and other intercreditor matters and all in a form
satisfactory to the Bondholders Committee. The HET/JCC Agreement shall contain
covenants in favor of HET and HOCI (i) requiring JCC to maintain insurance, pay
taxes and impositions, repair and maintain the Casino, and keep the lease in
effect, as was the case for the LGCB pursuant to Section 20.4(d) of the Amended
and Renegotiated Casino Operating Contract, and (ii) on terms and conditions to
be agreed by the parties, restricting indebtedness and liens by JCC and
restricting dividends, merger and asset disposition. The parties agree that any
successor guarantor may be secured by the first lien position of HET and HOCI,
subject to payment of any unpaid fees or obligations to HET and HOCI in respect
of the HET/JCC Agreement.
J. Resale Issues
1. Listing. The JCC Entities will use their best efforts to cause the
Class A Common Stock of JCC Holding to be listed on a national securities
exchange or quoted on NASDAQ upon the Effective Date.
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2. Reporting Company. JCC Holding shall use its best efforts to be, on
or prior to the Effective Date, a reporting company under the Securities
Exchange Act of 1934, as amended (the "34 Act"), with respect to its Class A
Common Stock. JCC Holding will file a registration statement under the 34 Act
(the "34 Act Registration Statement") no later than promptly after the court
approves the disclosure statement for the Plan.
3. Effect of 34 Act Registration Not Becoming Effective. If the 34 Act
Registration Statement is not effective by the later of (i) 60 days after the
filing of such registration statement with the SEC (provided, however, that this
clause (i) is not applicable if JCC Holding did not file such registration
statement prior to the date which is five days after final court approval of the
disclosure statement for the plan of reorganization), (ii) 60 days after final
court approval of the disclosure statement for the plan of reorganization, (iii)
30 days after receipt of any SEC comments on such registration statement, and
(iv) the Effective Date, then JCC Holding shall pay to the Bondholders an amount
equal to $.05 per week for each $1,000 of securities to be registered, which
amount shall increase by $.05 every 45 days to a maximum of $.30 per week.
4. Registration For Public Resales. In addition, to the extent that it
is reasonably determined that the registration of public resales by any
Bondholder of any securities received by such Bondholder under the Plan is
required by law, the JCC Entities will file a registration statement (the "33
Act Registration Statement") with respect to such resales promptly after the
Effective Date. If such 33 Act Registration Statement is not effective within
120 days after it is filed, then JCC shall pay to the Bondholders an amount
equal to $.05 per week for each $1,000 of securities to be registered, which
amount shall increase by $.05 every 45 days to a maximum of $.30 per week.
5. Registration Rights Agreement. On the Effective Date, JCC Holding
and HET, or an affiliate of HET, will enter into a registration rights agreement
containing such terms and conditions as are customary under the circumstances,
including the following: (i) upon the request of HET, or an affiliate of HET,
which request may not be made prior to the second anniversary of the opening of
the Casino, JCC Holding must promptly file with the SEC and cause to become
effective as soon as reasonably practicable thereafter a registration statement
on the appropriate form relating to all shares of Class B Common Stock of JCC
Holding held by HET, or an affiliate of HET, including any shares obtained
pursuant to the exercise of warrants by HET, or an affiliate of HET; and (ii)
JCC Holding will cause such registration statement to be continually effective,
subject to customary exceptions, through the third anniversary of the day on
which such registration statement first becomes effective.
K. HET Warrant
In lieu of the warrants set forth in the Third Amended Plan of
Reorganization as confirmed on April 6, 1998 of HJC, HET, or its affiliate, will
receive warrants to purchase an
D-13
<PAGE>
amount of common stock of JCC Holding so that upon the exercise of all such
warrants HET, or its affiliate, will own 50.0% of JCC Holding's common stock.
The number of shares issuable upon exercise of such warrants shall be adjusted
as necessary to reflect, among other things, the transfer of shares upon
exercise of the options held by FNBC and the NOLDC shareholders to purchase from
HET or one of its subsidiaries up to 4.5% of the common stock of JCC Holding and
the issuance of shares if all or a portion of the Convertible Junior
Subordinated Debentures are converted. The warrants will be exercisable at any
time, in whole or in part, after the Transition Date until the sixth anniversary
of the opening of the Casino in whole or in part at a price of $15.00 per share.
If at any time after the Transition Date the market trading price of the JCC
Holding common stock has exceeded $20.00 for sixty consecutive days, the board
of directors of JCC Holding may elect to give written notice to HET of an
election to redeem 75% of the warrants at $.05 per warrant unless HET, or its
affiliate, exercises the warrants within forty-five days after the date of such
notice. If (i) an election to redeem warrants is made by JCC Holding, and (ii)
HET or its affiliate exercises warrants with respect to that number of shares
which at the time of exercise would cause HET and its affiliates to own in the
aggregate 50% of JCC Holding's common stock, then none of the then unexercised
warrants which were called for redemption shall be redeemed. Prior to the
Transition Date, and except as provided in Section B.11.iii hereof, all JCC
Holding common stock directly or indirectly owned by HET and its affiliates
shall be Class B Common Stock, and all Class A Common Stock acquired by HET and
its affiliates prior to the Transition Date shall promptly be converted to Class
B Common Stock.
L. Litigation and Claims
1. Releases. As provided in the Third Amended Plan of Reorganization as
confirmed on April 6, 1998, the Bondholders will release HET, the bondholders of
Grand Palais, and the shareholders of NOLDC and their affiliates.
2. Assigned Claims. As provided in the Third Amended Plan of
Reorganization as confirmed on April 6, 1998, on the Effective Date, HJC,
Harrah's Jazz Finance Corp. and Harrah's New Orleans Investment Company and the
releasing Bondholders will assign their respective Assigned Litigation Claims
(as defined in the Third Amended Plan of Reorganization as confirmed in April,
1997) to JCC, without any representations or warranties. The prosecution of the
Assigned Litigation Claims, judgment reduction protection and distribution of
recoveries from Assigned Litigation Claims will occur as provided in the Third
Amended Plan as confirmed on April 6, 1998.
3. Other Claims. Treatment of chapter 11 administrative expenses and
all other claims in the HJC chapter 11 case shall be on terms and conditions
satisfactory to the Bondholders' Committee. It is understood that provision for
satisfaction of such expense claims has been included in the HJC reorganization
budget.
D-14
<PAGE>
M. Miscellaneous
1. Support of Plan. The Bondholders Committee will join the Proponents
of the Plan of Reorganization of HJC and HJFC in urging the Bondholders not to
change their earlier support of the Plan of Reorganization.
2. Counsel Fees. The fees and expenses of Weil, Gotshal & Manges and
McGlinchey Stafford shall not be capped and shall be paid in accordance with the
existing HJC monthly budget process.
3. Investment Advisor Fees. All rights of Ladenberg with respect to
fees and expenses are reserved.
4. No Other Obligations. HET will not be required to provide equity,
guaranties, loans or other financial commitment beyond those described in the
Third Amended Plan of Reorganization as confirmed on April 6, 1998, in the Term
Sheet attached as Exhibit F to the Plan, and in this Bondholder Term Sheet. The
Bondholders will not be required to provide any concessions beyond those
described in the Third Amended Plan of Reorganization as confirmed on April 6,
1998, in the Term Sheet attached as Exhibit F to the Plan, and in this
Bondholder Term Sheet.
5. Waivers and Release. The New Bonds Indenture and the New Contingent
Bonds Indenture shall contain waiver and release provisions regarding any
non-renewal of a Minimum Payment Guaranty in accordance with the terms of the
HET/JCC Agreement or non-renewal of the HET/JCC Agreement after March 31, 2004.
D-15
<PAGE>
SUMMARY OF TERM SHEET
SENIOR SUBORDINATED NOTES WITH CONTINGENT PAYMENTS
--------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Issuer: Jazz Casino Company, L.L.C. ("JCC"), a
Louisiana limited liability company
Issue: Senior Subordinated Notes With Contingent
Payments (the "New Bonds").
Principal Amount: $187,500,000.
Maturity: 2009 (11 years).
Fixed Interest: The interest will be as follows for the
first 10 semi-annual periods:
1 - 5.867%
2 - 5.927%
3 - 5.987%
4 - 6.046%
5 - 6.103%
6 - 6.159%
7 - 6.214%
8 - 6.214%
9 - 6.214%
10 - 6.214%
and then 8% thereafter, payable in kind from
the Effective Date for six semi-annual
periods (the "PIK Periods"), and payable
semi-annually in cash, in arrears,
thereafter.
JCC shall have the option of making the
first six semi-annual interest payments in
kind rather than in cash; provided, however,
that the first four semi-annual interest
payments must be paid in kind if Tranches
A-1 and/or A-2 are outstanding at the end of
the corresponding PIK Periods. If EBITDA is
less than $28.5 million for the twelve-month
period ending one month prior to each
semi-annual interest payment date beginning
with the fourth year after the Effective
Date, the semi-annual interest payment may
be paid in kind.
</TABLE>
D-16
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Contingent Payments: Payable semi-annually and limited to 75%
of EBITDA over $65 million and under $85
million calculated on a fiscal-year basis.
If, and to the extent that, JCC's EBITDA
results for any year are less than the
amount required to cause maximum contingent
payments for such year to become due, the
incremental amount between the contingent
payments actually earned for such year and
the maximum contingent payments for such
year will never be paid. Procedures to
address seasonality and tax considerations
in connection with semi-annual payments will
be developed. "EBITDA" means earnings before
interest, taxes, depreciation and
amortization but after payment of the Base
Management Fee; provided, however, that the
fee to HET under the HET/JCC Agreement will
be treated as an operating expense for
purposes of calculating EBITDA. For federal
income tax purposes, all contingent payments
will be recharacterized as principal and
interest using a 12% discount factor.
Collateral: The New Bonds will be secured by a lien
on all assets of JCC Holding, JCC, JCC
Development, CPD and FPD (excluding the
Amended and Renegotiated Casino Operating
Contract, the Casino's bankroll and the
Gross Revenue Share payments) junior to the
liens securing certain obligations of JCC
under the HET/JCC Agreement, the A Term
Loan, the Working Capital Facility and any
refinancings of the A Term Loan and the
Working Capital Facility which do not
increase the principal amount of
indebtedness outstanding and available
thereunder or decrease the weighted-average
maturity thereof (collectively, the "Senior
Permitted Refinancings"), and pari passu
with the liens securing the New Contingent
Bonds (described below), the B Term Loan and
any refinancings of the B Term Loan which do
not increase the principal amount of
indebtedness outstanding and available
thereunder or decrease the weighted-average
maturity thereof (collectively, the "Senior
Subordinated Permitted Refinancings").
Optional Redemption: The New Bonds will not be redeemable prior
to maturity.
</TABLE>
D-17
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Mandatory Redemption: The New Bonds will not be subject to
mandatory prepayment prior to maturity.
Change of Control Put to be triggered by
changes in the manager or other similar
events.
Ranking: The New Bonds will be secured obligations of
JCC, subordinated in right of payment to
certain obligations of JCC under the HET/JCC
Agreement, the A Term Loan, the Working
Capital Facility and the Senior Permitted
Refinancings, and pari passu with the New
Contingent Bonds, the B Term Loan and the
Senior Subordinated Permitted Refinancings.
With the exception of the certain
obligations of JCC under the HET/JCC
Agreement, the A Term Loan, the Working
Capital Facility, the Senior Permitted
Refinancings, the New Contingent Bonds, the
B Term Loan, the Senior Subordinated
Permitted Refinancings and certain special
purpose indebtedness, any other indebtedness
for borrowed money of JCC must be
subordinated to the New Bonds.
Summary of Certain Covenants: Including, but not limited to: Limitation
on Restricted Payments; Limitation on
Dividends Affecting Subsidiaries; Limitation
on Indebtedness; Limitation on Payment of
Management Fees; Limitation on Asset Sales;
Limitation on Transactions with Affiliates
(except for affiliate transactions approved
by the board of directors of JCC Holding
within limitations to be established by the
board of directors of JCC Holding);
Limitation on Mergers and Consolidations;
Limitation on Liens; and Change of Control.
</TABLE>
D-18
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Make Whole Provisions: The provisions in the Indenture regarding
the Make-Whole Amount shall be revised as
follows:
- The Make-Whole Amount with respect to
the Notes shall consist of a Primary
Make-Whole Amount and a Secondary
Make-Whole Amount.
- The Primary Make-Whole Amount shall
mean, as of any date, the greater of
(a) zero and (b) the remainder of the
present value (using a discount rate
equal to the Formula Rate at such time)
of any unpaid scheduled payments of
principal and interest with respect to
any remaining periods (excluding
Maximum Contingent Payments) payable
in respect of the Notes minus the
principal amount of the Notes
outstanding on such date.
- Formula Rate and Maximum Contingent
Payments are as defined in the
previously circulated draft of the
Indenture.
- The Secondary Make-Whole Amount shall
mean, as of any date, the present value
(determined using a discount rate equal
to the Formula Rate at such time) of
any unpaid Maximum Contingent Payments
with respect to any remaining periods
less any negative amount determined
according to clause (b) of the
definition of the Primary Make-Whole
Amount.
- Upon acceleration of the Notes (i) all
principal and then accrued and unpaid
interest (including then accrued and
unpaid Contingent Payments) shall be
immediately due, (ii) the Primary
Make-Whole Amount and the Secondary
Make-Whole Amount shall be immediately
due, (iii) the Secondary Make-Whole
Amount shall be subordinate to all of
the bank debt including any bank debt
to which HET succeeds as guarantor, and
(iv) the Primary Make-Whole Amount
shall be pari passu with Tranche B of
the bank debt including any bank debt
to which HET succeeds as guarantor.
</TABLE>
D-19
<PAGE>
SUMMARY OF TERM SHEET
SENIOR SUBORDINATED CONTINGENT NOTES
------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Issuer: Jazz Casino Company, L.L.C. ("JCC"), a
Louisiana limited liability company.
Issue: Senior Subordinated Contingent Notes (the
"New Contingent Bonds").
Final Contingent 2009 (11 years).
Payment:
Stated Interest: None.
Semi-Annual Payments: Subject to contingency described below, the
New Contingent Bonds will be self-amortizing
with semi-annual payments as described
below.
Contingent Payments: All payments will be contingent and will be
limited to 75% of EBITDA over $85 million
and under $109,425,380 calculated on a
fiscal year basis. If, and to the extent
that, JCC's EBITDA results for any year are
less than the amount required to cause
maximum contingent payments for such year to
become due, the incremental amount between
the contingent payments actually earned for
such year and the maximum contingent
payments for such year will never be paid.
Procedures to address seasonality and tax
considerations in connection with
semi-annual payments will be developed.
"EBITDA" means earnings before interest,
taxes, depreciation and amortization but
after payment of the Base Management Fee;
provided, however, that the fee to HET under
the HET/JCC Agreement will be treated as an
operating expense for purposes of
calculating EBITDA. For federal income tax
purposes, the contingent interest will be
recharacterized as principal and interest
using a 16% discount factor.
</TABLE>
D-20
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Collateral: The New Contingent Bonds will be secured by
a lien on all assets of JCC Holding, JCC,
JCC Development, CPD and FPD (excluding the
Amended and Renegotiated Casino Operating
Contract, the Casino's bankroll and the
Gross Revenue Share Payments) junior to the
liens securing certain obligations of JCC
under the HET/JCC Agreement, the A Term
Loan, the Working Capital Facility and any
refinancings of the A Term Loan and the
Working Capital Facility which do not
increase the principal amount of
indebtedness outstanding and available
thereunder or decrease the weighted-average
maturity thereof (collectively, the "Senior
Permitted Refinancings"), and pari passu
with the liens securing the New Bonds, the B
Term Loan and any refinancings of the B Term
Loan which do not increase the principal
amount of indebtedness outstanding and
available thereunder or decrease the
weighted-average maturity thereof
(collectively, the "Senior Subordinated
Permitted Refinancings").
Optional Redemption: The New Contingent Bonds will not be
redeemable prior to maturity.
Mandatory Redemption: The New Contingent Bonds will not be subject
to mandatory prepayment prior to maturity.
Ranking: The New Contingent Bonds will be secured
obligations of JCC, subordinated in right of
payment to certain obligations of JCC under
the HET/JCC Agreement, the A Term Loan, the
Working Capital Facility and the Senior
Permitted Refinancings, and pari passu with
the New Bonds, the B Term Loan and the
Senior Subordinated Permitted Refinancings.
With the exception of the certain
obligations of JCC under the HET/JCC
Agreement, the A Term Loan, the Working
Capital Facility, the Senior Permitted
Refinancings, the New Bonds, the B Term
Loan, the Senior Subordinated Permitted
Refinancings and certain special purpose
indebtedness, any other indebtedness for
borrowed money of JCC must be subordinated
to the New Contingent Bonds.
</TABLE>
D-21
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Summary of Certain Covenants: Including, but not limited to: Limitation on
Restricted Payments; Limitation on Dividends
Affecting Subsidiaries; Limitation on
Indebtedness; Limitation on Payment of
Management Fees; Limitation on Asset Sales;
Limitation on Transactions with Affiliates
(except for affiliate transactions approved
by the board of directors of JCC Holding
within limitations to be established by the
board of directors of JCC Holding);
Limitation on Mergers and Consolidations;
Limitation on Liens.
Make Whole Provisions; The New Contingent Bonds will contain
Liquidated Damages: appropriate provisions so that in the event
of a payment default or bankruptcy, the New
Contingent Bondholders will be made whole
for any accelerated maturity (which shall
consist solely of Contingent Payments that
are due but have not yet been paid),
reduction in anticipated yield or any other
expenses or costs; provided that the amount
of future Contingent Payments shall be
subordinated to the bank claims including
bank claims to which HET as guarantor
succeeds.
</TABLE>
D-22
<PAGE>
Exhibit E
September 3, 1998
Form of City Release Agreement
<PAGE>
CITY RELEASE AGREEMENT
THIS CITY RELEASE AGREEMENT (the "Agreement") is entered into
this ____ day of __________, 1998 by and among RIVERGATE DEVELOPMENT
CORPORATION, a Louisiana public benefit corporation ("RDC"), CITY OF NEW
ORLEANS, LOUISIANA ("City"), HARRAH'S ENTERTAINMENT, INC., a Delaware
corporation ("HET"), HARRAH'S OPERATING COMPANY, INC., a Delaware corporation
("HOCI"), HARRAH'S NEW ORLEANS MANAGEMENT COMPANY, a Nevada corporation
("HNOMC"), HARRAH'S NEW ORLEANS INVESTMENT COMPANY, a Nevada corporation
("HNOIC"), HARRAH'S JAZZ COMPANY, a Louisiana general partnership ("HJC"), NEW
ORLEANS/LOUISIANA DEVELOPMENT CORPORATION, a Louisiana corporation ("NOLDC"),
GRAND PALAIS CASINO, INC., a Delaware corporation ("Grand Palais"), JAZZ CASINO
COMPANY, L.L.C. a Louisiana limited liability company ("JCC"), and HARRAH'S JAZZ
FINANCE CORPORATION, a Delaware corporation ("HJFC").
RECITALS
A. HJC and HJFC filed voluntary petitions for relief under
Chapter 11 of the United States Bankruptcy Code on November 22, 1995. HNOIC
filed a voluntary petition for relief under Chapter 11 of the United States
Bankruptcy Code on December 22, 1995. The cases are now pending in the United
States Bankruptcy Court for the Eastern District of Louisiana (the "Bankruptcy
Court"), Case Nos. 95-14544, 95-14545 and 95-14871. The cases are being jointly
administered.
B. HJC, RDC and City entered into that certain Amended Lease
Agreement effective as of March 15, 1994 (the "Original Lease Agreement")
C. HJC and certain other parties (collectively, the
"Proponents") have submitted, and the Bankruptcy Court has entered an order
confirming, a plan of reorganization in the bankruptcy proceedings of HJC, HJFC
and HNOIC (the "Plan").
D. As provided by the Plan, JCC has succeeded to certain
rights and obligations of HJC under the Original Lease Agreement and the
Original Lease Agreement has been superseded by that certain Amended and
Restated Lease Agreement by and among RDC, City and JCC of even date herewith
and exhibits thereto (including, without limitation, the Casino Management
Agreement and Second Floor Sublease) (collectively, the "Amended and Restated
Lease"). In addition, JCC has assumed certain rights and obligations pursuant to
that certain Amended and Restated General Development Agreement by and among
RDC, City and JCC of even date herewith and exhibits thereto (including, without
limitation, the Completion Guarantee and Performance Bond) (the "Amended and
Restated GDA"), and that certain Amended and Restated Open Access Program
attached to the Amended and Restated Lease as Exhibit G (the "Amended and
Restated OAP").
<PAGE>
E. RDC, City and JCC have previously entered into that certain
Basin Street Casino Lease Termination Agreement and the exhibits thereto and an
Agreement dated January 15, 1997, in connection therewith (collectively, the
"Termination Agreement").
F. RDC, City, HET, HOCI, HNOMC, HNOIC, HJC, NOLDC, Grand
Palais, JCC and HJFC desire to enter into certain settlements and releases on
the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, RDC, City, HET, HOCI, HNOMC, HNOIC, HJC, NOLDC, Grand Palais, JCC
and HJFC agree as follows:
1. Effectiveness
(a) This Agreement shall be effective upon its execution by
all parties hereto and the occurrence of the Effective Date of the Plan. The
"Effective Date" shall have the meaning set forth in the Plan.
(b) The release by the City Releasors (as hereinafter defined)
set forth in Section 2(a) hereof shall not be effective or enforceable as to (i)
the NOLDC Releasees (as hereinafter defined) unless NOLDC and the other NOLDC
Releasees which are parties thereto execute and deliver (A) the NOLDC
Shareholders/HET Settlement Agreement (as defined in the Plan), executed by all
parties thereto, on or before the Effective Date and (B) this Agreement; (ii)
the Grand Palais Releasees (as hereinafter defined) unless Grand Palais and the
other Grand Palais Releasees which are parties thereto execute and deliver (A)
the Grand Palais/HET Settlement Agreement (as defined in the Plan), executed by
all parties thereto, on or before the Effective Date and (B) this Agreement;
(iii) the HET Releasees (as hereinafter defined) unless each of HET, HOCI, HNOIC
and HNOMC executes and delivers this Agreement; (iv) the HJC Releasees (as
hereinafter defined) unless each of JCC, HJC and HJFC executes and delivers this
Agreement; (v) each Participating Bank (as defined in the Plan) and each
Underwriter (as defined in the Plan) unless each such Participating Bank or
Underwriter enters into, executes and delivers its respective Bank/Underwriter
Release (as defined in the Plan), executed by all parties thereto, on or before
the Effective Date; or (vi) the FNBC Releasees, unless FNBC makes the FNBC
Settlement Election (as defined in the Plan) and executes and delivers the
Bank/Underwriter Release on or before the Effective Date.
(c) This Agreement and the releases set forth in this
Agreement shall be valid and enforceable as among the HET Releasees, the HJC
Releasees and the City Releasors, notwithstanding (i) the failure of NOLDC to
execute and deliver the NOLDC Shareholders/HET Settlement Agreement or this
Agreement, (ii) Grand Palais to execute and deliver the Grand Palais/HET
Settlement Agreement or this Agreement, (iii) the failure of each Participating
Bank
E-3
<PAGE>
and Underwriter to execute and deliver its respective Bank/Underwriter
Release, or (iv) the failure of FNBC to execute and deliver its Bank/Underwriter
Release.
(d) The releases set forth in this Agreement shall not affect
the validity and enforceability of the Amended and Restated Lease, the Amended
and Restated GDA, the Amended and Restated OAP, the Termination Agreement or any
other document executed and delivered pursuant to the Plan.
2. Release. Notwithstanding the foregoing, nothing contained in this
Agreement shall release or waive any rights or obligations of the parties
pursuant to the Amended and Restated Lease, the Amended and Restated GDA, the
Amended and Restated OAP and the Termination Agreement or any allowed claims or
administrative expenses of the City or the RDC in HJC's bankruptcy.
(a) City Release. Subject to the provisions of Sections 1(b)
and 2(f)(iii) hereof, the City Releasors, and each of them, hereby release and
forever discharge the HJC Releasees, the HET Releasees, the NOLDC Releasees, the
Grand Palais Releasees, the Bank/Underwriter Releasees, the FNBC Releasees, and
each of them, of and from any and all manner of Claims (as hereinafter defined)
which the City Releasors, or any of them, now have or may hereafter have against
the HJC Releasees, the HET Releasees, the NOLDC Releasees, the Grand Palais
Releasees, the Bank/Underwriter Releasees, the FNBC Releasees, or any of them,
by reason of any matter, cause or thing whatsoever to the extent such Claims
arose prior to the Effective Date, including, but not limited to, any breaches,
defaults, or events of default under the Original Amended Lease, the Original
Amended GDA, and the OAP occurring at any time on or before the Effective Date.
The foregoing release shall not apply to any Claims to the extent such Claims
arise from or are based on any acts, omissions, events, circumstances or other
matters occurring on or after the Effective Date.
(b) HJC Release. Subject to the provisions of Section
2(f)(iii) hereof, the HJC Releasors (as hereinafter defined), and each of them,
hereby release and forever discharge the City Releasees (as hereinafter
defined), and each of them, of and from any and all manner of Claims which the
HJC Releasors, or any of them, now have or may hereafter have against the City
Releasees or any of them, by reason of any matter, cause or thing whatsoever to
the extent such Claims arose prior to the Effective Date, including, but not
limited to, any breaches, defaults, or events of default under the Original
Amended Lease, the Original Amended GDA, and the OAP occurring at any time on or
before the Effective Date; provided, however, that the foregoing release shall
not apply to any Claims to the extent such Claims arise from or are based on any
acts, omissions, events, circumstances or other matters occurring on or after
the Effective Date.
(c) HET Release. Subject to the provisions of Section
2(f)(iii) hereof, the HET Releasors, and each of them, hereby release and
forever discharge the City Releasees, and each of them, of and from any and all
manner of Claims which the HET Releasors, or any of them, now have or may
hereafter have against the City Releasees or any of them, by reason of any
E-4
<PAGE>
matter, cause or thing whatsoever to the extent such Claims arose prior to the
Effective Date, including, but not limited to, any breaches, defaults, or events
of default under the Original Amended Lease, the Original Amended GDA, and the
OAP occurring at any time on or before the Effective Date. The foregoing release
shall not apply to any Claims to the extent such Claims arise from or are based
on any acts, omissions, events, circumstances or other matters occurring on or
after the Effective Date.
(d) NOLDC Release. Subject to the provisions of Section
2(f)(iii) hereof, the NOLDC Releasors (as hereinafter defined), and each of
them, hereby release and forever discharge the City Releasees, and each of them,
of and from any and all manner of Claims which the NOLDC Releasors, or any of
them, now have or may hereafter have against the City Releasees or any of them,
by reason of any matter, cause or thing whatsoever to the extent such Claims
arose prior to the Effective Date, including, but not limited to, any breaches,
defaults, or events of default under the Original Amended Lease, the Original
Amended GDA, and the OAP occurring at any time on or before the Effective Date.
The foregoing release shall not apply to any Claims to the extent such Claims
arise from or are based on any acts, omissions, events, circumstances or other
matters occurring on or after the Effective Date.
(e) Grand Palais Release. Subject to the provisions of Section
2(f)(iii) hereof, the Grand Palais Releasors (as hereinafter defined), and each
of them, hereby release and forever discharge the City Releasees, and each of
them, of and from any and all manner of Claims which the Grand Palais Releasors,
or any of them, now have or may hereafter have against the City Releasees or any
of them, by reason of any matter, cause or thing whatsoever to the extent such
Claims arose prior to the Effective Date, including, but not limited to, any
breaches, defaults, or events of default under the Original Amended Lease, the
Original Amended GDA, and the OAP occurring at any time on or before the
Effective Date. The foregoing release shall not apply to any Claims to the
extent such Claims arise from or are based on any acts, omissions, events,
circumstances or other matters occurring on or after the Effective Date.
(f) Scope of Releases
(i) The releases effectuated by this Agreement
are intended by the parties hereto to be as broad as the law allows with
respect to the released Claims and, subject to the provisions of Section 1(b)
hereof, are intended specifically to be a compromise and release generally of
all released Claims of the City Releasors against the HJC Releasees, the HET
Releasees, the NOLDC Releasees, the Grand Palais Releasees, the Bank/Underwriter
Releasees, and the FNBC Releasees and all released Claims of the HJC Releasors,
the HET Releasors, the NOLDC Releasors and the Grand Palais Releasors against
the City Releasees.
(ii) The releases effectuated by this Agreement are
intended by the parties hereto include the release of Claims as set forth
in Sections 9.2 and 9.4 of the Plan. To the extent there are inconsistencies
among the releases provided for herein and those set forth in the Plan, the
provisions of this Agreement shall control.
E-5
<PAGE>
(iii) The releases effectuated by this Agreement
shall not effect the release of any
Excluded Claims.
3. Definitions
(a) Bank/Underwriter Releasees. The "Bank/Underwriter
Releasees" shall mean any or all of the Participating Banks (as defined in the
Plan), which on or before the Effective Date execute and deliver their
respective Bank/Underwriter Releases (as defined in the Plan), and, in their
capacity as Participating Banks, any or all of their Affiliates, successors and
assigns and Salomon Brothers, Inc., Donaldson, Lufkin & Jenrette and BT
Securities Corporation in their capacity as underwriters of the Old Bonds (as
defined in the Plan), and any or all of their Affiliates, successors and assigns
in their capacity as underwriters of the Old Bonds, and the shareholders,
parents, subsidiaries, of each of the foregoing, and the officers, directors,
employees, attorneys, financial advisors, lenders, accountants, agents and other
representatives of each of the foregoing when acting in their respective
representative capacities with respect to each of the foregoing, and any or all
of their successors and assigns, but in any event shall not include the FNBC
Releasees, the Excluded Grand Palais Parties, the Excluded HNOIC Parties or the
Excluded NOLDC Parties.
(b) City Releasees. The "City Releasees" shall mean RDC and
the City and any or all of their Affiliates (as defined in the Plan), successors
and assigns, and the shareholders, parents, subsidiaries, officers, directors,
council members, mayor, employees, attorneys, financial advisors, investment
bankers, lenders, accountants, agents (pursuant to a written agency agreement)
and other representatives of each of the foregoing when acting in their
respective representative capacities with respect to each of the foregoing, and
any and all of their successors and assigns, but in any event shall not include
the FNBC Releasees, the Excluded Grand Palais Parties, the Excluded HNOIC
Parties, the Excluded NOLDC Parties or the Bank/Underwriter Releasees.
(c) City Releasors. The "City Releasors" shall mean RDC and
City and any or all of their Affiliates, successors and assigns, and each of the
shareholders, parents, subsidiaries, officers, directors, council members,
mayor, employees and agents (pursuant to a written agency agreement) of each of
RDC and City, and any and all of their successors and assigns and all persons
acting or claiming through or under any or all of the foregoing.
(d) Claims. "Claims" shall mean any action or actions, cause
or causes of action, in law or in equity, suits, debts, liens, liabilities,
claims, demands, damages, punitive damages, losses, costs or expenses, and
reasonable attorneys' fees of any nature whatsoever (including, without
limitation, claims based upon legal fault, negligence, offense, quasi-offense,
contract, quasi-contract, or any other theory) whether fixed or contingent and
including known or suspected claims and Unknown Claims (as hereinafter defined),
which in any way relate to HJC, HJFC and HNOIC, the business affairs or
operations of HJC, HJFC and HNOIC, the issuance by HJC and HJFC of any
securities, the Permanent Casino (as defined in the Original Lease
E-6
<PAGE>
Agreement), the Casino (as defined in the Amended and Restated Lease) or
the Temporary Casino (as defined in the Original Lease Agreement), including,
but not limited to, the licensing, leasing, financing, arranging, development,
construction, promotion, management, or operation thereof, or any matters
related to HJC, HJFC, HNOIC or any successor to any of them in connection with
the Permanent Casino, the Casino or the Temporary Casino, except to the extent
that any of the foregoing arises under any of the Plan Documents (as defined in
the Plan) on or after the Effective Date.
(e) Excluded Claims. "Excluded Claims" shall mean any Claims
related to or arising from (i) any obligations which have not been performed as
of the Effective Date pursuant to the Termination Agreement; (ii) any
obligations pursuant to Sections 5, 6, 7 and 8 of that certain Forbearance
Agreement dated as of ____________, 1997 by and among counsel for the City,
counsel for the RDC and counsel for HJC. Notwithstanding the foregoing, Excluded
Claims shall not include (i) any claim to revoke the Amended and Restated Lease,
the Amended and Restated GDA or the Amended and Restated OAP based on any
action, event or circumstance occurring prior to the Effective Date; (ii) any
claim affecting the rights of JCC under the Amended and Restated Lease, the
Amended and Restated GDA or the Amended and Restated OAP; or (iii) any claim
which is discharged, enjoined or otherwise released pursuant to Sections 5.7,
9.2 or 9.4 of the Plan.
(f) Excluded Grand Palais Parties. The "Excluded Grand Palais
Parties" shall mean any or all of Grand Palais and its successors and assigns,
and the shareholders, parents, subsidiaries (except the JCC Entities, HJC or
HJFC), officers, directors, employees, attorneys, financial advisors, investment
bankers, lenders, accountants, agents (pursuant to a written agency agreement)
and other representatives of each the foregoing when acting in their respective
representative capacities with respect to each of the foregoing, and any or all
of their successors and assigns.
(g) Excluded HNOIC Parties. "Excluded HNOIC Parties" shall
mean any or all of HET, HOCI, HNOIC and HNOMC, and any or all of their
successors and assigns, and the shareholders, parents, subsidiaries (except the
JCC Entities, HJC or HJFC), officers, directors, employees, attorneys, financial
advisors, investment bankers, lenders, accountants, agents (pursuant to a
written agency agreement) and other representatives of each of the foregoing,
when acting in their respective representative capacities with respect to each
of the foregoing, and any or all of their successors and assigns.
(h) Excluded NOLDC Parties. The "Excluded NOLDC Parties" shall
mean NOLDC and any or all of its successors and assigns, and the shareholders,
parents, subsidiaries (except the JCC Entities, HJC, or HJFC) officers,
directors, employees, attorneys, financial advisors, investment bankers,
lenders, accountants, agents (pursuant to a written agency agreement) and other
representatives of each the foregoing, when acting in their respective
representative capacities with respect to each of the foregoing, and any or all
of their successors and assigns.
E-7
<PAGE>
(i) FNBC. "FNBC" shall mean the First National Bank of
Commerce and any or all of its successors and assigns.
(j) FNBC Releasees. "FNBC Releasees" shall mean FNBC and any
or all of its Affiliates, successors and assigns, and the shareholders, parents,
subsidiaries, officers, directors, employees, attorneys, financial advisors,
investment bankers, lenders, accountants, agents (pursuant to a written agency
agreement) and other representatives of each the foregoing when acting in their
respective representative capacities with respect to each of the foregoing, and
any or all of their successors and assigns, but in any event shall not include
any Excluded Grand Palais Party, Excluded HNOIC Party, Excluded NOLDC Party, or
the Bank/Underwriter Releasees.
(k) Grand Palais Releasees. The "Grand Palais Releasees" shall
mean Grand Palais and any or all of its Affiliates (except the JCC Entities, HJC
or HJFC), successors and assigns, and the shareholders, parents, subsidiaries
(except the JCC Entities, HJC or HJFC), officers, directors, employees,
attorneys, financial advisors, investment bankers, lenders, accountants, agents
(pursuant to a written agency agreement) and other representatives of each the
foregoing when acting in their respective representative capacities with respect
to each of the foregoing, and any or all of their successors and assigns, but in
any event shall not include any Excluded HNOIC Party, Excluded NOLDC Party, the
FNBC Releasees or the Bank/Underwriter Releasees.
(l) Grand Palais Releasors. The "Grand Palais Releasors" shall
mean Grand Palais and any or all of its Affiliates (except JCC, JCC Holding, HJC
or HJFC), successors and assigns, and each of the shareholders, parents,
subsidiaries (except JCC, JCC Holding, HJC or HJFC), officers, directors,
employees and agents (pursuant to a written agency agreement) of each of the
foregoing and any or all of their successors and assigns and all persons acting
or claiming through or under any or all of the foregoing, but shall not include
any Excluded HNOIC Party, Excluded NOLDC Party, the FNBC Releasees or the
Bank/Underwriter Releasees.
(m) HET Releasees. The "HET Releasees" shall mean any or all
of HET, HOCI, HNOIC and HNOMC and any or all of their Affiliates (except the JCC
Entities, HJC or HJFC), successors and assigns, and the shareholders, parents,
subsidiaries (except the JCC Entities, HJC or HJFC), officers, directors,
employees, attorneys, financial advisors, investment bankers, lenders,
accountants, agents (pursuant to a written agency agreement) and other
representatives of each the foregoing when acting in their respective
representative capacities with respect to the foregoing, and any or all of their
successors and assigns, but in any event shall not include any Excluded NOLDC
Party, Excluded Grand Palais Party, the FNBC Releasees or the Bank/Underwriter
Releasees.
(n) HET Releasors. The "HET Releasors" shall mean any or all
of HET, HOCI, HNOIC and HNOMC and any or all of their Affiliates (except JCC,
E-8
<PAGE>
JCC Holding, HJC or HJFC), successors and assigns, and each of the shareholders,
parents, subsidiaries (except JCC, JCC Holding, HJC or HJFC), officers,
directors, employees and agents (pursuant to a written agency agreement) of each
of the foregoing and any or all of their successors and assigns and all persons
acting or claiming through or under any or all of the foregoing, but shall not
include any Excluded NOLDC Party, Excluded Grand Palais Party, the FNBC
Releasees or the Bank/Underwriter Releasees.
(o) HJC Releasees. The "HJC Releasees" shall mean any or all
of the JCC Entities, HJC, HJFC and any or all of their Affiliates, successors
and assigns, and the shareholders, parents, subsidiaries, of each of the
foregoing, and the officers, directors, employees, attorneys, financial
advisors, investment bankers, lenders, accountants, agents (pursuant to a
written agency agreement) and other representatives of each the foregoing when
acting in their respective representative capacities with respect to each of the
foregoing, and any or all of their successors and assigns, but in any event
shall not include any Excluded HNOIC Party, Excluded NOLDC Party, Excluded Grand
Palais Party, the FNBC Releasees or the Bank/Underwriter Releasees.
(p) HJC Releasors. The "HJC Releasors" shall mean any or all
of JCC, JCC Holding, HJC, HJFC and any or all of their Affiliates, successors
and assigns, and each of the shareholders, parents, subsidiaries, officers,
directors, employees and agents (pursuant to a written agency agreement) of each
of the foregoing and any or all of their successors and assigns and all persons
acting or claiming through or under any or all of the foregoing, but shall not
include any Excluded HNOIC Party, Excluded NOLDC Party, Excluded Grand Palais
Party, the FNBC Releasees or the Bank/Underwriter Releasees.
(q) JCC Entities. The "JCC Entities" shall mean JCC, JCC
Holding Company, a Delaware corporation, and any of all of their Affiliates,
successors and assigns, and each of the shareholders, parents, subsidiaries.
(r) NOLDC Releasees. The "NOLDC Releasees" shall mean NOLDC
and any or all of its Affiliates (except the JCC Entities, HJC or HJFC),
successors and assigns, and the shareholders, parents, subsidiaries (except the
JCC Entities, HJC or HJFC), officers, directors, employees, attorneys, financial
advisors, investment bankers, lenders, accountants, agents (pursuant to a
written agency agreement) and other representatives of each the foregoing when
acting in their respective representative capacities with respect to each of the
foregoing, and any or all of their successors and assigns, but in any event
shall not include any Excluded HNOIC Party, Excluded Grand Palais Party, the
FNBC Releasees or the Bank/Underwriter Releasees.
(s) NOLDC Releasors. The "NOLDC Releasors" shall mean NOLDC
and any or all of its Affiliates (except JCC, JCC Holding, HJC or HJFC),
successors and assigns, and each of the shareholders, parents, subsidiaries
(except the JCC Entities, HJC or HJFC), officers, directors, employees and
agents (pursuant to a written agency agreement) of each of the foregoing and any
or all of their successors and assigns and all persons acting or claiming
through
E-9
<PAGE>
or under any or all of the foregoing, but shall not include any Excluded
HNOIC Party, Excluded Grand Palais Party, the FNBC Releasees or the
Bank/Underwriter Releasees.
(t) Unknown Claims. "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 release which, if known by him, her or it might have affected his,
her or its decision regarding the releases. Each party hereto acknowledges that
he, she or it might hereafter discover facts in addition to or different from
those which he, she or it now knows or believes to be true with respect to the
subject matter of the matters released, but each such party shall be deemed to
have fully, finally and forever settled and released any and all Claims whether
known or unknown, suspected or unsuspected, contingent or non-contingent, which
now exist or heretofore have existed upon any theory of law or equity whether
such theory of law or equity now exists or comes into existence in the future.
Unknown Claims shall not include any Claim to the extent that such Claim arises
from or is based upon any act, omission, event, circumstance or other matter
occurring after the Effective Date.
4. Representations and Warranties. In connection herewith, the parties
hereto each represent and warrant that the following are true and correct:
(a) Such party has due power and authority to enter into this
Agreement and perform its obligations hereunder.
(b) Such party has taken the requisite action, corporate or
otherwise, necessary to authorize the execution and delivery of this Agreement,
and this Agreement has been duly executed and delivered by such party and
constitutes its valid and binding obligation, enforceable against such entity in
accordance with its terms.
(c) All consents, approvals and waivers from governmental
authorities and other parties necessary for such party to enter into this
Agreement have been obtained.
(d) To the best of such party's knowledge, no suit, action,
investigation, inquiry or other proceeding by any governmental authority or
other person or legal or administrative proceeding has been instituted or
threatened that questions the validity or legality of this Agreement.
(e) This Agreement does not conflict with any law or
regulation applicable to, or with any term or provision of any agreement binding
upon, such party.
(f) Such party has not currently assigned or transferred any
interest in any of the released Claims and such party will not in the future,
assign or transfer any interest in any such released Claim.
(g) Such party acknowledges that it (i) has been given the
opportunity to review all information and documents with respect to the Claims
released hereby prior to entering
E-10
<PAGE>
into this Agreement; (ii) has made an independent investigation in making
its decision to enter into this Agreement; and (iii) is not relying on any
statements or representations by any other party hereto in entering into this
Agreement other than as expressly set forth in the Plan or the Amended and
Restated Lease.
5. Amendments. Any amendment to this Agreement may only be made and
shall only be effective upon written approval of all parties hereto.
6. Entire Agreement. This Agreement, as written, contains all of the
terms and conditions agreed between the parties, relating to the transactions
covered by this Agreement, it being agreed that all understandings and
agreements heretofore and between the parties on the subject matter hereof are
merged in this Agreement which alone fully and completely expresses their
agreement and understanding with regard to the subject matter contained in this
Agreement.
7. Voluntary Agreement. The parties hereto have entered into this
Agreement freely and voluntarily, without coercion, duress, distress, or undue
influence by any other persons or such person's respective shareholders,
directors, officers, partners, agents or employees.
8. Advice From Counsel. The parties hereto understand that this
Agreement may affect legal rights. The parties hereto represent that they have
received legal advice from counsel of their choice in connection with the
negotiation and execution of this Agreement and are satisfied with their legal
counsel and the advice received.
9. Governing Law. This Agreement shall be governed and construed in
accordance with the internal substantive laws of the State of Louisiana,
regardless of the laws which might otherwise govern under Louisiana's or other
applicable concepts of conflicts of law.
10. Captions. The headings on the sections in this Agreement are for
convenience only; they form no part of this Agreement and shall not affect its
interpretation.
11. Interpretation of Words. A masculine pronoun wherever used in this
Agreement shall be construed to include the feminine or neuter where
appropriate. The singular form wherever used in this Agreement shall be
construed to include the plural where appropriate.
12. No Admission of Wrongdoing. Nothing in this Agreement shall be
construed as an admission of liability or fault on the part of any HJC Releasee,
HET Releasee, NOLDC Releasee, Grand Palais Releasee, Bank/Underwriter Releasee,
the FNBC Releasees, or any City Releasee.
13. Successors and Assigns. Subject to the provisions of Section 1(b)
hereof, this Agreement shall be binding upon the City Releasors, HJC Releasors,
HET Releasors, NOLDC Releasors, Grand Palais Releasors, and each of their
respective successors and assigns and inure to the benefit of the City
Releasees, HJC Releasees, HET Releasees, NOLDC Releasees, Grand Palais
Releasees, Bank/Underwriter Releasees, the FNBC Releasees, and each of their
respective successors and assigns.
E-11
<PAGE>
14. Severability. If any provision of this Agreement or the application
of such provision to any person, entity or circumstance, shall be held invalid,
the remainder of this Agreement, or the application of such provision to
persons, entities or circumstances other than those to which it is held invalid,
shall not be affected thereby; provided that the parties shall attempt to
reformulate such invalid provision to give effect to such portions thereof as
may be valid without defeating the intent of such provision.
15. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument, notwithstanding that all of the parties
hereto are not signatories to the original or the same counterpart. In addition,
this Agreement may contain more than one counterpart of the signature pages, and
this Agreement may be executed by the affixing of the signatures of each of the
parties hereto to one of such counterpart signature pages; all of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
16. Pending Litigation. On the Effective Date, the parties hereto
hereby agree to cause the dismissal with prejudice of the action styled City of
New Orleans and Rivergate Development Corporation v. Harrah's Entertainment,
Inc. (f/k/a The Promus Companies, Inc.), Grand Palais Casino, Inc., Embassy
Suites, Inc., First National Bank of Commerce and Ronald A. Lenczycki, Adversary
No. 96-1031, now pending in the Bankruptcy Court by signing and filing an
appropriate order to dismiss with prejudice as to the City and RDC. With respect
to the action styled Harrah's Jazz Company v. A&D Maintenance Service, et al.,
Adversary Proceeding No. 97-1174, pending in the United States Bankruptcy Court
for the Eastern District of Louisiana, the parties hereto hereby agree to cause
the dismissal with prejudice as to all defendants (including, without
limitation, the City and the RDC) except (i) the Non-Participating Banks, and
(ii) any Underwriter which fails to execute and deliver the Bank/Underwriter
Release (as such terms are defined in the Plan) (the defendants identified in
clauses "(i)" and "(ii)," together, the "Remaining Defendants"), as to which
Remaining Defendants there shall be an appropriate reservation of rights by JCC,
by signing and filing an appropriate order to dismiss with prejudice as to all
defendants (including, without limitation, the City and the RDC) except the
Remaining Defendants and by causing the aforesaid order to be entered as soon as
is reasonably practicable after the Effective Date. Such dismissal shall
encompass all claims, counterclaims, cross-claims, third party claims, motions
or other demands brought by the parties hereto with respect to all defendants
(including, without limitation, the City and the RDC) except the Remaining
Defendants. JCC shall defend, indemnify and hold harmless the City and the RDC
from any claims, counterclaims, cross-claims, third party claims, motions or
other demands brought by any of the Remaining Defendants in accordance with
section 5.9 of the Plan.
[SIGNATURE PAGE FOLLOWS]
E-12
<PAGE>
IN WITNESS WHEREOF, the undersigned hereto have duly executed
this Agreement as of the date first written above.
RIVERGATE DEVELOPMENT CORPORATION, a
Louisiana public benefit corporation
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
CITY OF NEW ORLEANS
By:
----------------------------------
Name: Marc H. Morial
Title: Mayor
HARRAH'S JAZZ COMPANY, a Louisiana general
partnership
By: HARRAH'S NEW ORLEANS
INVESTMENT COMPANY, a Nevada
corporation, General Partner
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
By: NEW ORLEANS/LOUISIANA
DEVELOPMENT CORPORATION, a
Louisiana corporation, General Partner
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
By: GRAND PALAIS CASINO, INC., a
Delaware corporation, General Partner
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
E-13
<PAGE>
JAZZ CASINO COMPANY, L.L.C., a Louisiana
limited liability company
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
HARRAH'S OPERATING COMPANY, INC., a
Delaware corporation
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
GRAND PALAIS CASINO, INC., a Delaware
corporation
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
NEW ORLEANS/LOUISIANA DEVELOPMENT
CORPORATION, a Louisiana corporation
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
HARRAH'S JAZZ FINANCE CORPORATION, a
Delaware corporation
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
E-14
<PAGE>
HARRAH'S NEW ORLEANS INVESTMENT
COMPANY, a Nevada corporation
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
HARRAH'S NEW ORLEANS MANAGEMENT
COMPANY, a Nevada corporation
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
HARRAH'S ENTERTAINMENT, INC., a
Delaware corporation
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
E-15
<PAGE>
Exhibit F
September 3, 1998
Terms and Conditions of
Pre-Petition Bank Participation in Reorganization Financing
<PAGE>
Exhibit F
September 3, 1998
Harrah's Jazz Company
Jazz Casino Company, L.L.C.
Terms and Conditions of
Pre-petition Bank Participation in Reorganization Financing
I. Terms of Bank Financing As described in the attached Jazz Casino
Facility Company, L.L.C. Bank Financing Indicative
Term Sheet (the "Bank Financing").
II. Terms of Debtors' Chapter 11 The following shall be effectuated through
Plan (the "Plan") pre-solicitation modifications to the
proposed Plan satisfactory to the banks
participating in the Bank Financing
("Participating Banks"):
A. Allowance of Pre-Petition Claims of Participating Banks (the "Allowed
Claims of Participating Bank Claims") will be granted final
Banks allowance in the Plan in an amount equal to:
(i) with respect to any
Participating Bank which participated in the
pre-petition standby letter of credit issued
by Bankers Trust Company and previously
drawn by the beneficiary (Broadmoor), its
respective share of the amount drawn
($5,000,000) plus unpaid interest and fees
accrued through the effective date of the
Plan (the "Effective Date");
(ii) with respect to any
Participating Bank which participated in the
Standby LC S-10269, which remains undrawn by
the beneficiary (City of New Orleans), its
respective share of accrued unpaid fees
through the Effective Date;
(iii) with respect to Bankers Trust
Company as Administrative Agent, all unpaid
facing fees arising under the Old Bank
Credit Agreement through the Effective Date;
and
F-1
<PAGE>
(iv) with respect to any
Participating Bank which purchases on the
Effective Date additional Convertible Junior
Subordinated Debentures equal to the amount
allowed under this clause (iv), its share of
the fees and expenses of Wachtel, Lipton,
Rosen & Katz as restructuring counsel of the
Administrative Agent (but excluding any fees
and expenses incurred in connection with the
Bank Financing). On the Effective Date, the
Administrative Agent will pay the Allowed
Bank Claims from the Withheld Funds (as
defined in the Plan).
B. Purchase of Convertible On the Effective Date, each Participating
Junior Subordinated Bank will purchase Convertible Junior
Debentures Subordinated Debentures in a principal
amount equal to the sum of (x) its pro rata
share of $11,000,000 based on the ratio of
the fees and expenses paid to it in
connection with the existing credit facility
to the aggregate fees and expenses paid to
all Participating Banks in connection with
such credit facility, plus (y) with respect
to any Participating Bank which elects to
have the portion of its claim described in
Paragraph II. A (iv) above allowed and paid,
the amount of such allowed claim. Any
remaining withheld Funds will be paid over
to First National Bank of Commerce as Old
Bank Collateral Agent to be distributed
according to the Plan.
C. Waiver of all Claims of Except as set forth in paragraph A, all
Participating Banks Participating Banks and affiliated members
of the Bank/Underwriter Group shall waive
any Claims against any Debtor or partners of
Harrah's Jazz Company.
F-2
<PAGE>
D. Settlement and Releases Participating Banks shall exchange releases
with the estate of each Debtor, the Debtors
Group, the HET Group, the Bondholder
Committee Group, the City Group, the State
Group, the NOLDC Group and the Grand Palais
Group, FNBC and other parties receiving
releases from the Debtor on terms no less
favorable than those being granted under the
Plan to Harrah's Entertainment, Inc. ("HET")
or such other parties. Injunctive and other
protections granted to Released Parties (as
defined in the Plan) shall apply on the same
terms to Participating Banks. All of the
foregoing shall be effectuated to obtain the
broadest possible preclusive effect with
respect to all potential derivative or
direct claims.
Participating Banks shall be included in the
group of persons whose collective release is
being solicited from bondholders through the
separate consensual release mechanism.
Consideration for release of Participating
Banks will be, among other things, the
Release Pool stock to be contributed by
HET.)
Any claims against non-participating banks
or other non-settling parties will be
retained by the reorganized debtor, with a
judgment reduction and indemnity mechanism
for settled parties in respect of such
claims.
III. Reimbursement of Attorneys' JCC shall reimburse the Participating Banks
Fees and Expenses up to $750,000 in attorneys' fees plus
out-of-pocket expenses of White & Case,
including local counsel fees, incurred in
connection with the negotiation and
documentation of the Bank Financing.
F-3
<PAGE>
Exhibit A
(to Terms and Conditions of Pre-Petition Bank Participation in
Reorganization Financing)
F-A-1
<PAGE>
JAZZ CASINO COMPANY, L.L.C. - BANK FINANCING INDICATIVE TERM SHEET
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This Bank Financing Indicative Term Sheet does not constitute (and shall not be
construed as) a commitment on the part of, or an engagement of, Bankers Trust
Company ("BTCo") or any of its affiliates and creates no obligation or liability
on the part of BTCo or any of its affiliates in connection therewith. If the
Credit Facility contemplated by this Bank Financing Indicative Term Sheet is
entered into, all terms and conditions not expressly (or to the extent not
expressly) described herein will be subject to the agreement of BTCo and the
respective other parties thereto.
I. Credit Facilities
A. Revolving Credit Facility
Amount: $25 million, with a $10 million letter of
credit sublimit.
Maturity Date: January 31, 2006
Scheduled Amortization: None.
Credit Support: Harrah's Entertainment, Inc. ("HET") and
Harrah's Operating Company, Inc. ("HOC")
shall provide a joint and several
unconditional payment guaranty and/or "put"
agreement. Such guaranty and/or put
agreement shall contain terms and conditions
satisfactory to Bankers Trust Company
("BTCo") and HET, including incorporating by
reference the covenants contained in HET's
existing senior bank credit facility.
F-A-2
<PAGE>
Security: To include a deed of trust and security
interest in the following collateral (the
"Collateral"): the real property comprising
the Casino Project, including improvements
hereafter completed; all personal property,
FF&E, contract rights, equipment leases,
intangibles and all other assets of the
Borrower and its subsidiaries now owned or
hereafter acquired, but excluding, in each
case to the extent not permitted to be
assigned pursuant to applicable law, the
Casino Operating Contract and gross revenue
share payments to the State of Louisiana.
Ranking: The Revolving Credit Facility will be a
senior secured obligation of the Borrower,
ranking junior (except for the right to
receive and retain payments pursuant to HET
and/or HOC guarantees and put agreements) to
the $60 million A Term Loans (as hereinafter
defined), having a senior lien priority to
the $151.5 million B Term Loans (as
hereinafter defined) and the $187.5 million
of Bonds due 2009, which bonds include
contingent payments and the related new
contingent bonds (collectively, the
"Bonds"), and having a senior lien priority
to all other existing and future
indebtedness of the Borrower. The Revolving
Credit Facility will also have a junior
priority to the lien in favor of HET and HOC
as guarantors of the Minimum Payment, as
described in Section II below in the
paragraph entitled "Prior Security."
F-A-3
<PAGE>
Interest Rate: Loans under the Revolving Credit Facility
will bear interest at a rate per annum which
is (i) so long as the "Carry Obligations"
under the Completion Guarantee referenced
below remain guaranteed pursuant to the
terms of such Completion Guarantee and in
accordance with the terms thereof (with the
first date upon which such Carry Obligations
are no longer so guaranteed being herein
called the "Carry Obligation Termination
Date"), at the applicable HET interest rate
and (ii) at all times from and after the
Carry Obligation Termination Date, at a rate
per annum equal to the sum of (a) Libor +
2.50%, plus, if applicable, (b) any
increase, not to exceed 1.0%, in the
applicable interest rate charged under HET's
existing senior bank credit facility ("HET
interest rate") above the HET interest rate
in effect on the Effective Date, except that
default interest rates will apply to
past-due amounts.
B. Senior Secured Term Loans
(the "A Term Loans")
Amount: $60.0 million; with Tranche A-1 comprising
$10 million (the "A-1 Term Loans"), Tranche
A-2 comprising $20 million (the "A-2 Term
Loans"), and Tranche A-3 comprising $30
million (the "A-3 Term Loans").
Maturity: Tranches A-1 and A-2 - January 31, 2006
Tranche A-3 - April 30, 2005
Scheduled Amortization: As shown on Annex I attached hereto. See the
paragraph entitled "Amortization" in Section
II below.
Credit Support: HET and HOC shall jointly and severally
provide an unconditional payment guaranty
of, and/or "put" agreement with respect to,
all amounts owing under Tranche A-2 of the A
Term Loan Facility. Such guarantee and/or
put agreement shall contain terms and
conditions satisfactory to BTCo and HET,
including incorporating by reference the
covenants contained in HET's existing senior
bank credit facility.
F-A-4
<PAGE>
Security: To include a deed of trust and security
interest in the Collateral.
Ranking: The A Term Loans will be senior secured
obligations of the Borrower, ranking senior
to all existing and future indebtedness of
the Borrower (including the Revolving Credit
Facility, the B Term Loans and the Bonds),
but ranking junior to the lien in favor of
HET and HOC as guarantors of the Minimum
Payment, as described in Section II below in
the paragraph entitled "Prior Security."
Interest Rate: Loans under Tranche A-1 and Tranche A-3 will
bear interest at Libor + 1.0%, and loans
under Tranche A-2 will bear interest at a
rate per annum equal to the sum or (i) Libor
+ 2.50%, plus, if applicable, (ii) any
increase, not to exceed 1.0%, in the
applicable HET interest rate above the HET
interest rate in effect on the Effective
Date, except that in all cases default
interest rates will apply to past due
amounts.
C. Secured Term Loans (the "B
Term Loans")
Amount: $151.5 million; with Tranche B-1 comprising
$30 million (the "B-1 Term Loans") and
Tranche B-2 comprising $121.5 million
(the "B-2 Term Loans").
Maturity: January 31, 2006
Scheduled Amortization: As shown on Annex I. See the paragraph
entitled "Amortization" in Section II below.
Credit Support: HET and HOC shall jointly and severally
provide an unconditional payment guaranty
of, and/or "put" agreement with respect to,
all of the amounts owing under Tranche B-2
of the B Term Loan Facility. Such guaranty
and/or put agreement shall contain terms and
conditions satisfactory to BTCo and HET,
including incorporating by reference the
covenants contained in HET's existing senior
bank credit facility.
F-A-5
<PAGE>
Security: To include a deed of trust and security
interest in the Collateral.
Ranking: The B Term Loan Facility will be
subordinated to the A Term Loan Facility
and, in lien priority, to the Revolving
Credit Facility, pari passu with the Bonds,
and senior in lien priority to all other
existing and future senior indebtedness of
the Borrower. The B Term Loan Facility will
also have a junior priority to the lien in
favor of HET and HOC as guarantors of the
Minimum Payment, as described in Section II
below in the paragraph entitled "Prior
Security."
Interest Rate: Loans under Tranche B-1 will bear interest
at Libor + 2.50%. The loans under Tranche
B-2 will bear interest at a rate per annum
equal to (i) Libor + 2.50%, plus, if
applicable, (ii) any increase, not to exceed
1.0%, in the applicable HET interest rate
above the HET interest rate in effect on the
Effective Date on the portion of the loans
under Tranche B-2 in excess of $10 million
and in the case of the first $10 million of
such loans at any time outstanding, the rate
will be the applicable HET interest rate,
except that in all cases default interest
rates will apply to past-due amounts.
II. Terms Applicable to All
Credit Facilities
Prior Security: The security interests in favor of the
Revolving Credit Facility, A Term Loans and
B Term Loans will be subject to a prior
security interest in favor of HET and HOC as
guarantors of the Minimum Payment, as
described in Exhibit B to the Plan of
Reorganization. Intercreditor arrangements
involving this prior security interest are
to be determined.
Borrower A newly formed company, Jazz Casino Company,
L.L.C., to operate the former Harrah's Jazz
Casino project in New Orleans (the "Company"
or the "Borrower")
F-A-6
<PAGE>
Amortization The maturity date for each Tranche of the
Credit Facilities, as well as the
amortization schedule on Annex I attached
hereto, were based on a projected Effective
Date of October 31, 1998 and a projected
casino opening date of October 31, 1999. The
Credit Agreement will set forth an
amortization schedule based on the actual
Effective Date and the projected casino
opening date as of the Effective Date.
The scheduled amortization payments shown on
Annex I attached hereto (x) with respect to
the A-1 and A-2 Term Loans, shall be applied
pro rata to the outstanding A-1 and A-2 Term
Loans (based upon the relative outstanding
principal amounts thereof) and (y) with
respect to the B Term Loans, shall be
applied, first, to the repayment of all then
outstanding Tranche B-1 Term Loans and,
after all Tranche B-1 Term Loans have been
repaid in full, to outstanding Tranche B-2
Term Loans.
Amortization payments with respect to the
B-2 Term Loans shall be applied first to the
portion of the B-2 Term Loans as to which a
credit support fee is payable until such
portion is fully repaid and thereafter to
the balance of the B-2 Term Loans as to
which no credit support fee is payable.
For the first six PIK periods, the scheduled
quarterly amortizations listed in Annex I
attached hereto shall be deferred for the
corresponding PIK period if (i) the
payment-in-kind feature applicable to the
Bonds is exercised such that payments in
kind have been made for the semi-annual
periods ending prior to such quarterly
amortization date, (ii) HNOMC has deferred
base management fees for the corresponding
PIK period, (iii) HNOMC has deferred
incentive management fees for the
corresponding PIK periods, and (iv) HET has
deferred its fees for providing a guaranty
to the LGCB for the corresponding PIK
period.
F-A-7
<PAGE>
If EBITDA is less than $28.5 million for the
twelve month period ending one month prior
to each semi-annual bond interest payment
date beginning with the fourth year after
the Effective Date, the bonds will receive
PIK interest, management fees will be
deferred, scheduled amortization of bank
principal will be deferred (in no case
beyond the scheduled maturity date) and the
HET guarantee fee will be deferred.
At such time as EBITDA exceeds $65 million,
any deferred base management fees and
deferred guaranty fees may be repaid pro
rata out of available cash flow remaining
after application of Excess Cash Flow as set
forth in the paragraph entitled "Priorities
within Credit Facilities and Application of
Excess Cash Flow" in Section II below, and
at such time as EBITDA exceeds $75 million,
after payment of any deferred base fees and
deferred guaranty fees, any deferred
incentive management fees may also be repaid
pro rata out of available cash flow
remaining after application of Excess Cash
Flow as set forth in the paragraph entitled
"Priorities within Credit Facilities and
Application of Excess Cash Flow" in Section
II below.
Use of Proceeds/Funding: To complete, in all material respects, the
Casino Project (the "Casino Project") to be
developed in accordance with the Plans and
Specifications, Budget and Timetable (to be
defined in the Credit Agreement), provided
that the timing of the availability of the
Revolving Credit Facility and limitations on
the uses of the proceeds thereof, in each
case satisfactory to BTCo, shall be
provided.
The A-1, A-3 and the B-1 Term Loans must be
drawn at closing, without subsequent funding
or disbursement conditions, and the proceeds
may be used for the project or held for
future use by Borrower. Any such proceeds
being held for future use will constitute
Collateral.
F-A-8
<PAGE>
After the funding of A-1, A-3 and B-1 Term
Loans, drawings of the B-2 and A-2 Term
Loans and extensions of credit pursuant to
the Revolving Credit Facility will be
subject to conditions precedent that there
exist no default under Section 10.01
(payment) or Section 10.06 (bankruptcy) or
under the Bank Completion Guarantee or the
HET/HOC Guaranty and Loan Purchase Agreement
and that all representations in the Bank
Completion Guarantee and the HET/HOC
Guaranty and Loan Purchase Agreement remain
true and correct in all material respects;
provided that HET shall have an irrevocable
and unconditional obligation to fund any
undrawn amounts under the Bank Completion
Guarantee, subject to its terms.
Tranche B-2 must be drawn prior to Tranche
A-2. If any of Tranche B-2 remains undrawn
on completion of the Casino Project, on such
completion it shall be drawn, to the extent
Tranche A-1 Loans are then outstanding, to
pay down Tranche A-1. If any of Tranche B-2
remains undrawn (or will remain undrawn)
after the actions required by the
immediately preceding sentence are taken,
outstanding Tranche B-1 Loans in an
aggregate amount equal to such undrawn
amount shall be converted into Tranche B-2
Loans.
Upfront Fee: None.
F-A-9
<PAGE>
Completion Guarantee: HET and HOC will also guarantee completion
of the Casino Project in conformity with the
Plans and Specifications, the Budget and the
Timetable. If the Company has insufficient
funds to complete the Casino Project in
accordance with the Plans, HET and HOC will
be jointly and severally obligated to
promptly contribute at the time of such
insufficiency, in the form of junior
subordinated debt maturing in not less than
11 years, all amounts, in cash, necessary to
permit completion of the Casino Project. The
Completion Guarantee will terminate on the
date on which the Casino Project is
completed in all material respects. The
Completion Guarantee shall contain terms and
provisions which are substantially the same
as the provisions of the other Completion
Guarantees furnished by HET or HOC, as the
case may be, in respect of the Casino
Project and, in any event, shall be required
to be satisfactory to BTCo and HET.
HET/JCC Agreement: The Credit Agreement shall contain waiver
and release provisions regarding any
non-renewal of any Guaranty to the LGCB by
HET and HOCI in accordance with the terms of
the HET/JCC Agreement or non-renewal by HET
and HOCI of the HET/JCC Agreement after
March 31, 2004.
Priorities within Credit For purposes of allocating payments among
Facilities and Application the holders of the Term Loans and the
of Excess Cash Flow: lenders pursuant to the Revolving Credit
Facility only, all Excess Cash Flow (to be
defined in the Credit Agreement) will first
be allocated to repayment of Tranches A-1
and A-2 on a pro rata basis until Tranches
A-1 and A-2 have been repaid in full.
Scheduled amortization and other payments
made in respect of the Term Loan Facilities
and Revolving Credit Facility (excluding
payments pursuant to the payment guarantees
and put agreements referenced above) will
first be allocated to any unpaid amounts
F-A-10
<PAGE>
which are then due and payable with respect
to Tranches A and B-1. Payments shall be
allocated to amounts then due and payable
pursuant to the Revolving Credit Facility
and Tranche B-2 only if all amounts then due
and payable with respect to Tranches A and
B-1 have been paid in full.
After Tranches A-1 and A-2 are repaid,
mandatory prepayments resulting from
application of Excess Cash Flow and other
proceeds (excluding scheduled amortization)
shall be applied:
(i) if any principal amortization has been
deferred as set forth above, 75% of Excess
Cash Flow and such other proceeds shall be
applied to first to Tranche B-1 and second
to Tranche A-3 to the extent of the total of
all of such deferred principal amortization
(i.e. the total of deferred amortization on
Tranches A-1, A-2, A-3, B-1, and B-2); and
(ii) otherwise, and after the application of
clause (i) above, 50% of Excess Cash Flow
and such other proceeds shall be applied pro
rata to Tranches A-3, B-1 and B-2 until an
agreed Threshold Amount (determined based on
projected cash flow) for the respective
fiscal year has been so applied to Tranche
B-2. At such time as an aggregate amount
equal to the agreed Threshold Amount has
been so applied in any fiscal year, Excess
Cash Flow shall be applied first to Tranche
B-1, second to Tranche A-3 and third to
Tranche B-2.
The B-1 Term Loans and the B-2 Term Loans
will be secured equally and ratably with the
Bonds, and if, as a result of any
distribution pursuant to the security
arrangements or pursuant to a bankruptcy or
other similar proceeding with respect to the
Borrower or in
F-A-11
<PAGE>
other similar circumstances, amounts are
distributed in respect of Tranche B-2 (other
than payments pursuant to the payment
guarantees and put agreements referenced
above), then the holders of the B-2 Term
Loans shall (and shall agree to) turn such
amounts over to the holders of the B-1 Term
Loans until all amounts owing with respect
to the B-1 Term Loans are repaid in full.
The Credit Agreement and the payment
guarantees and/or put agreements in respect
of the B-2 Term Loans shall contain
subrogation and other provisions
satisfactory to BTCo acknowledging and
agreeing to the foregoing.
Administrative Agent's Fee: $100,000 payable annually in arrears.
Credit Support Fee: So long as the Revolving Credit Facility,
A-2 Term Loans or B-2 Term Loans are
entitled to the respective payment
guarantees and/or put agreements provided by
HET and/or HOC as described above, the
respective Banks shall agree that, from
interest payments actually received by them
in respect of the Revolving Credit Facility,
A-2 Term Loans or B-2 Term Loans, as the
case may be, HET shall be paid a fee equal
to 2% per annum on the outstanding principal
amount of Loans and/or stated amount of
letters of credit outstanding from time to
time pursuant to the Revolving Credit
Facility and Tranche A-2 and B-2 Term Loans
(in the case of B-2 Term Loans, only to the
extent of the aggregate outstanding
principal amount thereof from time to time
is in excess of $10 million); provided,
however, that (i) the fee described above
with respect to the credit support provided
for the Revolving Credit Facility shall only
accrue from and after the occurrence of the
Carry Obligation Termination Date; (ii) for
any time period in which the HET applicable
margin increases by more than 1.0% per annum
above the HET applicable margin in effect on
the Effective Date, the credit support fee
paid by the
F-A-12
<PAGE>
Banks shall decrease by .01% for each such
.01% increase in the HET applicable margin
(in excess of 1.0% over the HET applicable
margin in effect on the Effective Date)
until such credit support fee is reduced to
zero; (iii) for any time period in which the
HET applicable margin decreases below the
HET applicable margin in effect on the
Effective Date, the credit support fee paid
by the Banks shall increase by .01% for each
such .01% decrease in HET applicable margin
(below the HET applicable margin in effect
on the Effective Date).
So long as the Revolving Credit Facility,
A-2 Term Loans or B-2 Term Loans are
entitled to the respective payment
guarantees and/or put agreements provided by
HET and/or HOC as described above, JCC shall
pay a credit support fee equal to .75% per
annum on the outstanding principal amount of
Loans and/or stated amount of letters of
credit outstanding from time to time
pursuant to the Revolving Credit Facility
and Tranche A-2 and B-2 Term Loans (in the
case of B-2 Term Loans, only to the extent
of the aggregate outstanding principal
amount thereof from time to time is in
excess of $10 million); provided, however,
that (i) the fee described above with
respect to the credit support provided for
the Revolving Credit Facility shall only
accrue from and after the occurrence of the
Carry Obligation Termination Date; (ii) for
any time period in which the HET applicable
margin increases by more than .25% per annum
above the HET applicable margin in effect on
the Effective Date, the credit support fee
paid by JCC shall decrease by .01% for each
such .01% increase in the HET applicable
margin (in excess of .25% over the HET
applicable margin in effect on the Effective
Date) until such credit support fee is
reduced to zero.
F-A-13
<PAGE>
Covenants: The Credit Facilities will contain covenants
(which will apply equally to each of the
Credit Facilities) usual and customary for a
financing of this nature.
Intercreditor Agreement: The Administrative Agent (on behalf of the
lenders) and the trustee for the Bonds shall
enter into an intercreditor agreement with a
collateral agent regarding the Collateral
and the rights and remedies of the various
classes of lenders with respect thereto (the
"Intercreditor Agreement"), which
Intercreditor Agreement shall be in form and
substance satisfactory to BTCo. The
Intercreditor Agreement will provide HET
certain limited secured creditor voting
rights if HET is called on its payment
guaranty.
F-A-14
<PAGE>
Miscellaneous: The Credit Facilities will be documented
pursuant to mutually acceptable definitive
loan and collateral documents, including a
Credit Agreement and a satisfactory
Intercreditor Agreement. The Credit
Agreement will contain customary
representations, warranties, covenants,
events of default and other provisions.
Conditions Precedent will include as
conditions precedent to the closing date,
among other things:
(i) BTCo's satisfaction with Harrah's Jazz
Company's Plan of Reorganization, including
without limitation the releases to be
provided in connection therewith.
(ii) All necessary governmental and third
party consents and approvals have been
obtained (including, without limitation, all
approvals of the Bankruptcy Court having
jurisdiction over Harrah's Jazz Company's
bankruptcy case, all approvals by the LGCB
or its successor agency and all necessary
approvals by the people of Louisiana and
Orleans Parish).
(iii) Lender's satisfaction with the Plans
and Specifications, Budget, Timetable and
other Casino Project documents.
The Credit Agreement will include provisions
for:
(i) Payment of any Libor breakage costs,
capital adequacy charges and any applicable
taxes by the Borrower;
(ii) Regular reports as to the progress of
construction of the Casino Project;
(iii) Regular furnishing of unaudited
quarterly and audited annual financial
statements of the Borrower, monthly detailed
operating reports and other reports;
F-A-15
<PAGE>
(iv) Furnishing of the same reports with
respect to HET and its subsidiaries as are
required under the HET Bank Facility;
(v) Indemnification of Lenders as to all
third-party claims relative to the Credit
Facilities (except as to matters involving
the gross negligence or willful misconduct
of Lenders) and environmental law matters;
(vi) Application of New York law (except
certain security documentation that the
lenders determine should be governed by
Louisiana law) and waiver of jury trial; and
(vii) Assignments to customary eligible
assignees permitted with consent of the
Borrower, the Administrative Agent and, in
the case of assignments of interests in the
Revolving Credit Facility and A-2 or B-2
Term Loans, HET (none of which consents
shall be unreasonably withheld), subject to
$5.0 million minimum. No consents will be
required for assignment to existing Lenders
or after an event of default. Participations
permitted without consent of the Borrower or
Administrative Agent, subject to customary
limitations.
(viii) An event of default due to a change
of control of HET as a result of the Board
of HET not consisting of a majority of
Continuing Directors.
(ix) The change of control event of default
in the bank credit agreement will also occur
if HET does not retain at least 51% of the
Class B stock prior to the Transition Date
and 20% of the JCC Holding stock after the
Transition Date.
F-A-16
<PAGE>
(x) The Continuing Director event of default
or the change in ownership of Class B Stock
Event of Default will be deemed cured in
respect of the debt acquired by HET as
guarantor if the guaranteed bank debt is
acquired by HET as guarantor; provided that
such deemed cure shall not affect the bank
debt guaranteed by HET unless and until HET
as guarantor acquires such bank debt and in
any event shall not affect the bank debt not
guaranteed by HET.
(xi) The change of the Casino Manager or
loss of the Harrah's name shall be an event
of default in the Bank Credit Agreement.
Requisite Lenders: Lenders comprising more than 50% of total
commitments under the Credit Facilities;
provided that commitments held by HET, HOC
or any other affiliate of the Borrower shall
be excluded.
Expense and Indemnity Provisions: JCC shall reimburse the Banks up to $750,000
in attorneys' fees plus out-of-pocket
expenses of White & Case, including local
counsel fees, incurred in connection with
the negotiation and documentation of the
Revolving Credit Facility, the A Term Loans
and the B Term Loans.
F-A-17
<PAGE>
ANNEX I TO JAZZ CASINO COMPANY, L.L.C. - BANK FINANCING INDICATIVE TERM SHEET
<TABLE>
<CAPTION>
$30 million $30 million $151.5 million
A-1 and A-2 A-3 Term Loan B Term Loans Total
Term Loans
<S> <C> <C> <C> <C>
July 31, 2000 $100,000 $1,000,000 $1,500,000 $ 2,600,000
October 31, 2000 $100,000 $1,000,000 $1,500,000 $ 2,600,000
January 31, 2001 $100,000 $1,000,000 $1,500,000 $ 2,600,000
April 30, 2001 $100,000 $1,000,000 $1,500,000 $ 2,600,000
July 31, 2001 $100,000 $1,500,000 $2,500,000 $ 4,100,000
October 31, 2001 $100,000 $1,500,000 $2,500,000 $ 4,100,000
January 31, 2002 $100,000 $1,500,000 $2,500,000 $ 4,100,000
April 30, 2002 $100,000 $1,500,000 $2,500,000 $ 4,100,000
July 31, 2002 $100,000 $1,500,000 $2,500,000 $ 4,100,000
October 31, 2002 $100,000 $1,500,000 $2,500,000 $ 4,100,000
January 31, 2003 $100,000 $1,500,000 $2,500,000 $ 4,100,000
April 30, 2003 $100,000 $1,500,000 $2,500,000 $ 4,100,000
July 31, 2003 $100,000 $1,750,000 $2,500,000 $ 4,350,000
October 31, 2003 $100,000 $1,750,000 $2,500,000 $ 4,350,000
January 31, 2004 $100,000 $1,750,000 $2,500,000 $ 4,350,000
April 30, 2004 $100,000 $1,750,000 $2,500,000 $ 4,350,000
July 31, 2004 $100,000 $1,750,000 $2,500,000 $ 4,350,000
October 31, 2004 $100,000 $1,750,000 $2,500,000 $ 4,350,000
January 31, 2005 $100,000 $1,750,000 $2,500,000 $ 4,350,000
April 30, 2005 $100,000 $1,750,000 $2,500,000 $ 4,350,000
July 31, 2005 $100,000 $0 $4,250,000 $ 4,350,000
October 31, 2005 $100,000 $0 $4,250,000 $ 4,350,000
January 31, 2006 $27,800,000 $0 $97,000,000 $124,800,000
Total $30,000,000 $30,000,000 $151,500,000 $211,500,000
</TABLE>
Note: See the paragraph entitled "Amortization" in Section II of the Bank
Financing Indicative Term Sheet to which this Annex I is attached.
F-A-18
<PAGE>
Exhibit G
September 3, 1998
Terms and Conditions of
Underwriters Participation in Reorganization Financing
<PAGE>
Exhibit G
September 3, 1998
Harrah's Jazz Company
Harrah's Jazz Finance Corp.
Harrah's New Orleans Investment Co.
Terms and Conditions of
Underwriters Participation in Reorganization Financing
I. Terms of Underwriters' Donaldson, Lufkin & Jenrette Securities
Financing: Corporation ("DLJ"), Salomon Brothers Inc.
("Salomon") and BT Securities Corporation
("BT Securities") (collectively in their
capacity as underwriters for HJC and HNOIC,
the "Underwriters") subject to the
conditions set forth below agree to purchase
approximately $15 million face value of
subordinated notes (the "Notes") on mutually
acceptable terms and conditions as set forth
in the attached term sheet. The aggregate
amount of the Notes to be purchased by the
Underwriters shall be equal to the aggregate
fees, and expenses paid or reimbursed to the
Underwriters.
II. Terms of the Debtors' The following shall be effectuated through
Chapter 11 Plan (the pre-solicitation modifications to the
"Plan"): proposed Plan satisfactory to the
Underwriters:
A. Waiver of Other The Underwriters agree to waive all of their
Claims: claims against any or all of the Debtors and
the HJC Partners.
G-1
<PAGE>
B. Settlement and The Underwriters shall exchange mutual
Releases: releases with the estate of each Debtor, the
Debtors Group, the HET Group, the Bondholder
Committee Group, the City Group, the State
Group, the NOLDC Group and the Grand Palais
Group, FNBC and other parties receiving
releases from the Debtors, on terms no less
favorable than those being granted under the
Plan to Harrah's Entertainment, Inc. ("HET")
and such other parties. Injunctive and other
protections granted to Released Parties (as
defined in the Plan) shall apply on the same
terms to the Underwriters. All of the
foregoing shall be effectuated to obtain the
broadest possible preclusive effect with
respect to all potential derivative or
direct claims.
The Underwriters shall be included in the
group of persons whose collective release is
being solicited from bondholders through the
separate consensual release mechanism.
(Note: consideration for release of the
Underwriters is, inter alia, the Release
Pool stock to be contributed by HET.) Any
claims against non-participating banks or
other non-settling parties will be retained
by the reorganized debtor, with a judgment
reduction and indemnity mechanism for
settled parties in respect of such claims.
III. No Reimbursement of Each Underwriter shall bear all fees and
Attorneys' Fees and expenses of attorneys acting on its behalf
Expenses related to the original financing, the Exit
Financing (through the closing) and these
bankruptcy cases.
G-2
<PAGE>
FOR DISCUSSION PURPOSES ONLY
Term Sheet for
Convertible Junior Subordinated Debentures (the "Debentures")
To Be Issued By
Jazz Casino Company, L.L.C.
Issuer Jazz Casino Company, L.L.C. ("Jazz")
Principal Amount Approximately $26.637 million
Approximately $15 million purchased by the
Underwriters or their affiliates and
approximately $11.0 million to be purchased
by Bankers Trust. The aggregate amount of
the Debentures to be purchased by the
Underwriters shall be equal to the aggregate
fees, and expenses paid or reimbursed to the
Underwriters.
Purchase Price Par.
Maturity 6 months following the scheduled maturity of
the $187.5 million of new contingent bonds
(the "Contingent Bonds") to be issued to
existing bondholders.
Interest 8.0% per annum payable semi-annually either
in cash, or at the option of Jazz, in whole
or in part, in additional Debentures (i) at
any time during the first five full years
following the issuance of the Debentures,
and (ii) at any time thereafter if during
the immediately preceding full interest
period on the Contingent Bonds, no
contingent interest was paid on the
Contingent Bonds.
Amortization None.
G-3
<PAGE>
Rank Subordinated to the A Term Loan, the B Term
Loan, the Working Capital Facility, the New
Bonds and the New Contingent Bonds, as well
as all debt which would constitute Senior
Debt to the foregoing. The Debentures will,
however, be senior to the repayment of
Jazz's obligations under the Completion Loan
and any other amounts advanced by Harrah's
Entertainment under its completion
obligations.
Collateral None.
Convertible At the Conversion Price in whole or in part,
at any time after October 1, 2002 at the
option of the holder into Class A Common
Stock of Jazz.
Conversion Price $25.00 per share of Class A Common Stock,
subject to anti-dilution and other
appropriate adjustments (which has been
calculated using the 10,000,000 shares of
Class A and Class B Common Stock which are
expected to be issued on the Effective Date,
and a target total market value of such
shares of Class A and Class B common stock
equal to $250.0 million).
Redeemable At the option of Jazz, (i) at any time at
par plus accrued interest in cash, or (ii)
at any time during the 12 months prior to
the maturity of the Debentures, at par in
whole or in part in shares of Class A Common
Stock at the Conversion Price per share if
the Conversion Price per share is greater
than the Current Market Price per share. The
"Current Market Price" of the Class A Common
Stock as of any date will be defined as the
volume-weighted average of the closing
trading or bid prices of the Class A common
stock for the 10 consecutive trading days
preceding such date, with customary
modification if the Class A common stock is
not then traded.
Amortization None required prior to maturity.
Credit Support None.
Purpose Construction financing and other corporate
purposes.
G-4
<PAGE>
Fees None, other than the payment of interest.
Covenants None, other than payment of interest.
Conditions, Representations and None other than basic legality and
Warranties enforceability of the Debentures.
Issuance The Debentures are to be purchased by the
Underwriters or their affiliates and the
banks on the Effective Date of the HJC
Bankruptcy. Jazz to provide demand
registration rights to permit one
underwritten secondary offering of these
Debentures if requested by the initial
holders of the restricted Debentures in an
amount no less than $5 million and no sooner
than October 1, 2002.
Jazz will file the reports required under
Section 13(a) or 15(d) of the 1934 Act and
the rules and regulations adopted by the SEC
thereunder. Upon the request of any holder
of Debentures, Jazz will (i) make publicly
available such information as is necessary
to permit sales pursuant to Rule 144 under
the 1933 Act, (ii) deliver such information
as is necessary to permit sales pursuant to
Rule 144A under the 1933 Act, and (iii) take
such further action as is reasonable under
the circumstances to enable such holder to
sell its Debentures without registration
under the 1933 Act. Upon the request of any
holder of Debentures, Jazz will deliver to
such holder a written statement as to
whether it has complied with such
requirements.
Acknowledgment The Indenture for the Convertible
Subordinated Debenture will contain certain
waiver and release provisions regarding any
non-renewal of the Guaranty (as defined in
the HET/JCC Agreement between HET, HOCI and
JCC in favor of the LGCB) in accordance with
the terms of the HET/JCC Agreement or
non-renewal of the HET/JCC Agreement after
March 31, 2004
G-5
<PAGE>
EXHIBIT H
FNBC SETTLEMENT AGREEMENT
<PAGE>
[LETTERHEAD]
WRITER'S DIRECT DIAL NO. (504) 556-4132
WRITER'S DIRECT E-MAIL NO. [email protected]
NEW ORLEANS, LOUISIANA
APRIL 24, 1997
<TABLE>
<S> <C>
William H. Patrick, III, Esq. Rudy J. Cerone, Esq.
A Professional Law Corporation McGlinchey, Stafford, Lang
365 Canal Street, Suite 2800 643 Magazine Street
New Orleans, LA 70130 New Orleans, LA 70130
Re: Harrah's Jazz Company
Docket No. 95-14545
United States Bankruptcy Court
Eastern District of Louisiana
</TABLE>
Dear Billy and Rudy:
This is to confirm the agreement of Harrah's Jazz Company ("HJC"), Harrah's
Entertainment, Inc. ("HET"), the Official Bondholders' Committee (the
"Committee"), Bankers Trust Company and First National Bank of Commerce
("FNBC"). The consent of these parties is reflected by the respective signatures
below. In reliance upon this agreement, FNBC will withdraw its pending
objections to the Third Amended Joint Plan of Reorganization under Chapter 11 of
the Bankruptcy Code (the "Plan") and will support its confirmation. All
capitalized terms used below have the meanings ascribed to them in the Plan. The
agreement is as follows:
1. FNBC shall purchase $757,150.00 of Convertible Junior Subordinated
Debentures on the Effective Date. Other than this purchase FNBC shall not be
required to participate in any loans or other forms of financing of Jazz
Casino Company;
2. FNBC shall be authorized to retain $100,000 plus accrued interest until the
later of (i) one year from the Effective Date or (ii) the resolution by
final unappealable judgment of any litigation filed against FNBC within one
year of the Effective Date to which FNBC is entitled to indemnity under the
Old Bank Credit Documents and/or Old Bond Documents, at which time the
principal and accrued interest shall be released to Jazz Casino Corporation.
These funds will be pledged to secure the indemnity obligations of HJC under
the Old Bank Credit Documents and/or Old Bond Documents which will be
assumed by Jazz Casino Company as an IN REM obligation limited solely to the
funds held by FNBC;
3. In addition, FNBC shall be entitled to the unsecured indemnity obligations
for costs of defense only as granted in Old Bond Documents and/or Old Bank
Credit Documents from Jazz Casino Company;
4. All services rendered by FNBC as Old Bank Collateral Agent, Old Indenture
Predecessor Trustee and Old Indenture Predecessor Collateral Agent to
consummate the Plan shall be for the account of Jazz Casino Company and
payable to FNBC pursuant to Section 6.18 of the Plan;
5. FNBC shall be included as a Released Party under the Plan;
6. All claims of FNBC for indemnity and the security interests which secure
them (including the charging lien against distributions to the Bondholders)
pursuant to the Old Bank Credit Documents and/or Old Bond Documents shall be
canceled and extinguished on the Effective Date except as provided in
paragraphs 2 and 3, above;
7. The undrawn Standby Letter of Credit S-10269 issued by Bankers Trust Company
in the amount of $1,500,000 in favor of the City of New Orleans shall be
canceled under the Plan as of the Effective Date.
<PAGE>
8. The Unsecured and Secured Claim of FNBC (I.E., Classes A.7 and A.3) shall be
allowed finally and shall be paid in accordance with the attached Exhibit A.
9. All reasonable attorney's fees and expenses of Liskow & Lewis up to
$275,000.00 through the date hereof and other costs (including expert
witness fees and expenses) up to $75,000 through the date hereof and all
reasonable attorney's fees and expenses of Phelps Dunbar, L.L.P. which FNBC
has incurred in connection with this bankruptcy case through the Effective
Date for which it has not received prior reimbursement from HJC shall be
paid by JCC upon approval by the Bankruptcy Court. With regard to these
attorney's fees and expenses and other costs which HJC acknowledges as being
an obligation to be paid, the "reasonableness" of the fees charged by FNBC's
attorneys shall be the only unresolved issue. Upon resolution of any such
dispute whether by agreement or otherwise, FNBC shall be paid by JCC on or
as soon as practicable after the Effective Date.
10. The parties agree to file mutually acceptable modifications to the Plan and
other pleadings as are necessary to effectuate this Agreement.
11. The FNBC shall receive the indemnity from HET in the form attached hereto as
Exhibit B.
12. This agreement may be executed in multiple counterparts, which when executed
by all the parties hereto shall constitute a single agreement.
<TABLE>
<S> <C>
Very truly yours,
Liskow & Lewis
By:
-----------------------------------------
Philip K. Jones, Jr.
Phelps, Dunbar
By:
-----------------------------------------
S. Ault Hootsell, III
Co-counsel for First National Bank of
Commerce
Agreed to:
HARRAH'S JAZZ COMPANY HARRAH'S ENTERTAINMENT INC.
By: By:
-------------------------------------- -----------------------------------------
OFFICIAL BONDHOLDERS' COMMITTEE BANKERS TRUST COMPANY
By: By:
-------------------------------------- -----------------------------------------
</TABLE>
<PAGE>
UNITED STATES BANKRUPTCY COURT
(EXHIBIT "A")
EASTERN DISTRICT OF LOUISIANA
<TABLE>
<S> <C> <C>
IN RE: * CASE NO. 95-14545-TMB
HARRAH'S JAZZ COMPANY, * CHAPTER 11
DEBTOR *
* * * * * * * * * * * * * * * * * * * * * * * * *
IN RE: * CASE NO. 95-14544-TMB
HARRAH'S JAZZ FINANCE CORP., * CHAPTER 11
DEBTOR *
* * * * * * * * * * * * * * * * * * * * * * * * * *
</TABLE>
AGREED ORDER
BEFORE THIS COURT, on this 28th day of April, 1997, at 10:00 a.m., came on
for hearing the objections of Harrah's Jazz Company ("HJC") and Harrah's Jazz
Finance Corp. ("HJFC") to Proof of Claim No. 563 filed by First National Bank of
Commerce ("FNBC") in the HJC bankruptcy and Proof of Claim No. 66 filed by FNBC
in the HJFC bankruptcy (the "Proofs of Claim"), as set forth in HJC's Sixth Set
of Objections to Claims, as amended by the Debtors' Amended Objections to Claims
of First National Bank of Commerce or, in the Alternative, Motion for Estimation
and Valuation of Claims.
By Agreement, HJC, HJFC and the Official Bondholders Committee have agreed
to withdraw their objections to the Proofs of Claim;(1) the parties' stipulation
with regard to the treatment of FNBC's unsecured claims and secured letter of
credit claims is set forth below. (Defined terms below shall have the same
meaning ascribed to them under the Third Amended Joint Plan of Reorganization
and Chapter 11 of the Bankruptcy Code, as modified.)
It appearing to this Court that there exists just cause for the entry of the
Order, as presented:
IT IS ORDERED that the Unsecured Claim of FNBC be, and hereby is, Allowed
finally and shall not be subject to any further objections.
IT IS FURTHER ORDERED that FNBC's Unsecured Claim be, and is hereby,
established in the amount of $42,317.06, and shall be paid under the Plan in
accordance with Clause A7--General Unsecured Claims.
IT IS FURTHER ORDERED that the Secured Claims of FNBC under (i) the
prepetition standby letter of credit issued by Bankers Trust Company in the
amount of $5,000,000 and previously drawn in full by Broadmoor as the
beneficiary (the "$5mm L/C") and the (ii) undrawn Standby Letter of Credit
S-10269 issued by Bankers Trust Company in the amount of $1,500,000 in favor of
the City (the "$1.5mm L/C") shall be, and hereby is, Allowed finally and shall
not be subject to any further objection.
IT IS FURTHER ORDERED that FNBC's Allowed Secured Claims under the $5mm L/C
and $1.5mm L/C be, and hereby are, established in an amount equal to (A) FNBC's
participation interest (5.7142866%) in the $5mm L/C ($285,714.28), plus all
unpaid interest thereon (at the nondefault rate specified in the Old Bank Credit
Documents); and (B) FNBC's participation interest (5.714866%) in the unpaid fees
in respect of both the $5mm L/C and the $1.5mm L/C through the Effective Date.
- ------------------------
(1) The Official Bondholders Committee, which filed a response in support of
HJC's Objections to the Proofs of Claim, joins in this Agreed Order.
2
<PAGE>
IT IS FURTHER ORDERED that, in addition to the amounts established under the
preceding paragraph, to extent that the FNBC's obligations under the $1.5mm L/C
are not terminated and/or cancelled as a result of the occurrence of the
Effective Date, FNBC's allowed Secured Claims under the $1.5mm L/C shall also
include (i) FNBC's participation interest (5.7142866%) in any draws under the
$1.5mm L/C, (ii) interest thereon and (iii) any additional fees or other amounts
to which FNBC may be entitled under the $1.5mm L/C subsequent to the Effective
Date.
IT IS FURTHER ORDERED that FNBC's Secured Claims under the $5mm L/C and
$1.5mm L/C shall be paid on the Effective Date. Such payment shall be made first
from the Withheld Funds by the Administrative Agent, and second, if the Withheld
Funds are insufficient, by the payment of cash by JCC.
IT IS FURTHER ORDERED that FNBC's Proofs of Claim be, and hereby are,
amended to reflect the terms of, and are superseded by, this Agreed Order and
the April 24, 1997 Letter Agreement by and between FNBC, HJC, the Bondholders
Committee and Bankers Trust Company.
IT IS FURTHER ORDERED that HJC's, HJFC's and the Bondholders Committee's
objections to FNBC's Proofs of Claim, as so amended herein, be, and hereby are,
withdrawn.
NEW ORLEANS, LOUISIANA, this day of April, 1997.
--------------------------------------
UNITED STATES BANKRUPTCY JUDGE
3
<PAGE>
AGREED
- ---------------------------------------------
WILLIAM HARDY PATRICK III
A PROFESSIONAL CORPORATION
10636 Linkwood Court
Baton Rouge, LA 70810-2854
Telephone: (504) 767-1460
Fax: (504) 769-0010
ATTORNEYS FOR HARRAH'S JAZZ COMPANY
AND HARRAH'S JAZZ FINANCE CORP.
- ---------------------------------------------
RUDY J. CERONE, ESQ.
FRANK MARTIN, ESQ.
MCGLINCHEY STAFFORD LANG
643 Magazine Street
New Orleans, LA 70130
Telephone: (504) 586-1200
ATTORNEYS FOR THE OFFICIAL
BONDHOLDERS COMMITTEE
PHELPS DUNBAR, L.L.P.
- ---------------------------------------------
S. AULT HOOTSELL III (#17630)
Thirtieth Floor, Texaco Center
400 Poydras Street
New Orleans, LA 70130-3245
Telephone: (504) 566-1311
ATTORNEYS FOR FIRST NATIONAL
BANK OF COMMERCE
4
<PAGE>
LATHAM & WATKINS
ATTORNEYS AT LAW
SEARS TOWER, SUITE 5800
CHICAGO, ILLINOIS 60606
TELEPHONE (312) 875-7700
FAX (312) 993-9767
APRIL 24, 1997
(EXHIBIT "B")
First National Bank of Commerce
c/o Philip K. Jones
Liskow & Lewis
One Shell Square, 50th Floor
New Orleans, LA 70139-5001
and
Mr. S. Ault Hootsell III
Phelps Dunbar, L.L.P.
Texaco Center, 30th Floor
400 Poydras Street
New Orleans, LA 70130-3245
Re: Harrah's Entertainment, Inc. Indemnity Agreement
Dear Kirk and Ault:
On behalf of my client, Harrah's Entertainment, Inc. ("HET"), I am writing
to confirm HET's agreement with regard to several matters for First National
Bank of Commerce ("FNBC").
First, HET hereby confirms that the Stipulation and Agreement of Settlement
executed on April 16, 1997 ("the Stipulation and Agreement of Settlement"),
resolving that certain action captioned IN RE HARRAH'S ENTERTAINMENT SECURITIES
LITIGATION, Master File No. 95-3925, pending before the United States District
Court for the Eastern District of Louisiana (the "Class Action") includes a
release of FNBC on the same terms as are provided for the release of HET.
Second, HET agrees that it will not seek to either eliminate or limit in any
way the release provided to FNBC in the Stipulation and Agreement of Settlement,
including any amendments or modifications thereof, before final approval by the
United States Distric Court.
Third, HET agrees that it shall assure that FNBC is included as a released
party under any amendments or modifications to the Stipulation and Agreement of
Settlement, or any other settlement of the Class Action, on the same terms
provided for the release of HET, without any consideration being paid by FNBC.
Fourth, HET agrees to indemnify and defend FNBC from and against any and all
losses suffered by FNBC if the Stipulation and Agreement of Settlement,
including any amendments or modifications thereof, or any other settlement of
the Class Action, is approved by the United States District Court (i) with the
inclusion of HET, but not FNBC, as a released party therein, or (ii) which
contains a release of HET which is broader than the release provided therein to
FNBC.
This Agreement shall be effective upon the occurence of the Effective Date
of (and as defined in) the debtor's Third Amended Joint Plan of Reorganization
under Chapter 11 of the Bankruptcy Code, as modified (the "Plan"), in the
consolidated bankruptcies captioned, "In the matter of Harrah's Jazz Company,"
Case No. 95-14544, before the United States Bankruptcy Court, Eastern District
of Louisiana. HET acknowledges and agrees that upon the occurrence of the
Effective Date, as defined in the Plan,
<PAGE>
HET shall be liable for any breach of this Agreement by HET that has occurred
after April 24, 1997, and for all damages sustained by FNBC.
Sincerely,
Richard A Levy
APPROVED AND AGREED:
Harrah's Entertainment, Inc.
By:
- --------------------------------------
Name:
Title:
Date:
- ------------------------------------
<PAGE>
Exhibit I
Term Sheet
September 3, 1998
Development Services Agreement
<PAGE>
Exhibit I
September 3, 1998
Term Sheet
Development Services Agreement
This term sheet outlines the principal terms proposed for inclusion in that
certain Development Services Agreement to be entered into by and between Jazz
Casino Company, L.L.C., a Louisiana limited liability company (the "Company"),
JCC Development Company, L.L.C., a Louisiana limited liability company ("JCC
Development"), CP Development, L.L.C., a Louisiana limited liability company
("CPD") and FP Development, L.L.C., a Louisiana limited liability company
("FPD") (the Company, JCC Development, CPD and FPD are referred to collectively
herein as the "Owners") and Harrah's Operating Company Inc. ("HOCI") (the
"Development Services Agreement"). This term sheet is attached to and
incorporated into that certain plan of reorganization in the bankruptcy
proceedings of Harrah's Jazz Company, a Louisiana general partnership (the
"Plan").
1. Documentation. This term sheet is not intended to be a legally binding
agreement but is intended to be the basis for negotiation of definitive
agreements related to the Development Services Agreement in connection with the
Plan. As set forth more fully in the Plan, if the Plan is not consummated within
the time period specified therein, the parties shall have no further obligations
to pursue the matters described herein.
2. Development Services. Under the Development Services Agreement, the Owners,
or any of them, may request that HOCI or an affiliate of HOCI perform any or all
of the following project development and management functions (the "Development
Services") with respect to the Casino, the second floor of the Casino, the
Fulton Street property and the 3CP property (the "Development Properties"):
(a) researching and investigating potential uses for the Development
Properties;
(b) identifying and exploring the professional qualifications of
individuals and companies who may be capable of performing services in
connection with designing, determining appropriate uses for and
developing the Development Properties;
(c) assisting in the evaluation of options as to the Development
Properties; or
(d) assisting in or coordinating activities involved in the development of
the Development Properties.
3. Payment For Development Services. If any Owner requests that HOCI or an
affiliate of HOCI perform any Development Services and HOCI accepts such
request, such Owner shall pay
I-1
<PAGE>
to HOCI or any affiliate of HOCI development
services fees or reimbursements of costs and expenses at market rates as agreed
between such Owner and HOCI prior to HOCI or its affiliate undertaking from time
to time any Development Services.
4. Indemnities
(a) The Owners agree to defend, indemnify and save HOCI and all affiliates
of HOCI completely harmless in respect to any action, cause of action,
suit, debt, cost, expense, claim, or demand whatsoever brought by any
third party at law or in equity, in connection with the performance by
HOCI or any affiliates of HOCI of any and all of its obligations under
the Development Services Agreement, including without limitation, any
damage or injury whatsoever to any employees or other persons,
entities or property arising out of the use, administration, or
control of the Development Properties during the term of the
Development Services Agreement, which defense, indemnity, and holding
harmless shall continue notwithstanding the termination of the
Development Services Agreement with respect to any act or occurrence
preceding such termination; provided, however, that in no event shall
the defense, indemnity and holding harmless extend to any action,
cause of action, suit, debt, cost, expense, claim, or demand caused by
the willful misconduct or gross negligence of HOCI or any affiliate of
HOCI, or to any action taken by HOCI or any affiliate of HOCI in
violation of or outside the provisions of the Development Services
Agreement.
(b) HOCI shall defend, indemnify and save the Owners completely harmless
in respect to any action, cause of action, suit, debt, cost, expense,
claim, or demand whatsoever brought or asserted by any third party, at
law or in equity, arising by way of the gross negligence or willful
misconduct of HOCI or any affiliate of HOCI in connection with the
performance by HOCI or any affiliate of HOCI of any and all of HOCI's
obligations under the Development Services Agreement, which indemnity
shall continue notwithstanding the termination of the Development
Services Agreement with respect to any act or occurrence preceding
such termination.
I-2
<PAGE>
EXHIBIT T3E.28
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
In the Matter of: : No. 95-14545
: Section A
HARRAH'S JAZZ COMPANY, :
: JOINTLY ADMINISTERED
Debtor. : WITH
- --------------------------------- :
:
In the Matter of: : No. 95-14544
: Section A
HARRAH'S JAZZ FINANCE CORP., :
:
Debtor. : Chapter 11
: Reorganization
- --------------------------------- :
:
In the Matter of: : No. 95-14871
: Section A
HARRAH'S NEW ORLEANS :
INVESTMENT COMPANY : Chapter 11
Debtor. : Reorganization
ORDER GRANTING MOTION TO APPROVE FORM
AND EXECUTION OF PLAN DOCUMENTS
AND FOR ENTRY OF ORDER IN AID OF CONSUMMATION
This matter coming before the Court on the Debtors' Motion to Approve Plan
Documents ("Motion"); the Court having considered the Motion and the
documents submitted to this Court for approval; due and proper notice of the
Motion having been given under the circumstances of the above-captioned
debtors' bankruptcy cases; and the Court having jurisdiction over the
above-captioned debtors and their bankruptcy cases,
IT IS HEREBY ORDERED that:
A. All Plan Documents substantially in the form submitted to the Court in
connection with the Motion are hereby approved as being materially
consistent with the Plan.
<PAGE>
B. All of the requirements of Section 6.2(t) of the Plan have been
satisfied, provided, however, that the rights of the Bondholders
Committee, Harrah's Entertainment, Inc. and the Debtors under Section
6.2(t) of the Plan are hereby reserved.
C. Pursuant to Section 1142(b) of the Bankruptcy Code, on the date selected
for the occurrence of the Effective Date, the Debtors are hereby
authorized and directed to execute and and deliver all applicable
documents in substantially the form of the Plan Documents submitted to
this Court, any related documents, and all other documents necessary to
consummate the Plan.
NEW ORLEANS, LOUISIANA this 19th day of October, 1998.
/s/ T.M. Brahney, III
--------------------------------------
T.M. BRAHNEY, III
UNITED STATES BANKRUPTCY JUDGE
2
<PAGE>
EXHIBIT T3E.29
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
In the Matter of: : No. 95-14545
: Section A
HARRAH'S JAZZ COMPANY, :
: JOINTLY ADMINISTERED
Debtor. : WITH
- --------------------------------- :
:
In the Matter of: : No. 95-14544
: Section A
HARRAH'S JAZZ FINANCE CORP., :
:
Debtor. : Chapter 11
: Reorganization
NOTICE TO BONDHOLDERS
RE: 14-1/4% FIRST MORTGAGE NOTES DUE 2001
CUSIP #413623-AA-7 ("OLD NOTES")
---------------------------------
The United States Bankruptcy Court for the Eastern District of Louisiana
has entered an Order approving the Third Amended Joint Plan Of Reorganization
Under Chapter 11 of the Bankruptcy Code, as Modified Through October 13, 1998
(the "Plan") proposed by Harrah's Jazz Company, Harrah's Jazz Finance Corp.
(together, the "Debtors") and others. Each capitalized term used in this
Notice and not otherwise defined herein has the meaning set forth in the Plan.
NOTICE IS HEREBY GIVEN THAT, PURSUANT TO THE PLAN:
A. On the Effective Date of the Plan (which the Debtors currently
estimate will occur on or about October 30, 1998), all Old Notes will be
canceled. In exchange for the Old Notes, ALL RECORD HOLDERS AS OF THE
EFFECTIVE DATE will receive (among other rights granted under the Plan), on
account of each $1,000 in principal amount of Old Notes held as of the
Effective Date:
(1) $431 in principal amount of New Bonds,
(2) a Pro Rata Share of the New Contingent Bonds, and
(3) 8.529 shares of Class A New Common Stock.
B. In addition, ALL BENEFICIAL OWNERS OF OLD NOTES AS OF MAY 5, 1997
(the "Release Pool Record Date") who timely executed and delivered the
releases and proofs of ownership previously distributed to them, will receive
from the Release Pool on account of each $1,000 in principal amount of Old
Notes owned as of the Release Pool Record Date, approximately 3.63 shares of
additional Class A New Common Stock.
<PAGE>
NOTICE TO BONDHOLDERS (CONTINUED)
A current holder of Old Notes will NOT receive a distribution from the
Release Pool UNLESS:
(1) such current holder of Old Notes also was the beneficial owner
of the Old Notes on the Release Pool Record Date (May 5, 1997),
and timely executed and delivered to the Balloting Agent a
release and proof of ownership as to those Old Notes, OR
(2) the current holder of Old Notes has made independent
arrangements with a seller of the Old Notes who meets the
criteria of subsection (1) above for delivery of the Release
Pool distribution to the current holder.
C. Requests for information regarding the distribution of securities
from the Release Pool should be addressed to: D.F. KING & CO., 77 WATER
STREET, NEW YORK, NY 10005-4495, TEL: (800) 847-4870.
Dated: October 21, 1998
Vincent E. Lazar, Esq. William H. Patrick, III, Esq.
Jenner & Block William H. Patrick, III, APLC
One IBM Plaza 10636 Linkwood Drive
Chicago, IL 60611 Baton Rouge, LA 70810
Counsel for Harrah's Jazz Company
and Harrah's Jazz Finance Corp.
